Monday, October 19, 2009

Google's bandwidth bill is probably not zero.

Here's a good question for finance students. Based on this article, is Google's bandwidth bill for youtube really zero?

The article argues that Google has soooo much fiber optic cable that it basically trades bandwidth with other ISPs and never pays for bandwidth. So if you're doing a cash flow analysis on youtube would assume that band width cost was really zero?

For a bonus, use the words "opportunity cost" and "sunk cost" correctly in your answer.