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Google Fiber buys Webpass to boost its high-speed internet business

Google Fiber, the high-speed internet service owned by Alphabet, is to acquire Webpass, the companies said late on Wednesday, in a bid by the technology giant to bolster its U.S. expansion and compete with big broadband incumbents.

Webpass is a 13-year old internet service provider focusing on businesses and residential connections. Like Google Fiber, Webpass offers speeds of up to 1 gigabyte per second.

The deal – which is expected to close this summer for an undisclosed sum – was announced by Google Fiber in a tweet and followed up by a Webpass blog post.

"By joining forces, we can accelerate the deployment of super-fast Internet connections for customers across the U.S. Webpass will remain focused on rapid deployment of high speed Internet connections for residential and commercial buildings, primarily using point to point wireless," Charles Barr, president of Webpass said in a blog post.

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Julie Denesha | Bloomberg | Getty Images

Webpass said it as "tens of thousands" of customers across five major markets in the U.S. It operates in cities including San Francisco, Oakland, Emeryville, Berkeley, San Diego, Miami, Miami Beach, Coral Gables, Chicago, and Boston.

Google Fiber is present in 55 cities, including San Francisco, and the acquisition will help the company expand its presence there. And the Alphabet-owned subsidiary has also targeted a few further cities it is aiming to be present in soon.

Webpass owns its own infrastructure meaning it doesn't have to rely on phone and cable companies, something that it said has allowed it to grow quickly. Its focus is also on large residential and commercial buildings, something that is hard to for new players to get into because of the multi-year deals often signed by the larger players like Comcast and Time Warner Cable.

The deal will also give a boost to Google Fiber's effort to beam wireless internet to buildings. In an interview with Re/code earlier this year, Fiber's chief executive Craig Barratt said the company is experimenting with "a number of different wireless technologies". This would allow Google to deliver internet to homes where the wires can't go, giving it an edge over large incumbents. This type of technology is something that Webpass has expertise in.

Google Fiber is among Alphabet's "other bets", projects that run separately from the company's core business. Operating losses from these projects were $802 million with revenues of $166 million in the three months to March 31. Alphabet does not breakdown "other bets" results into individual businesses.