Google Inc (GOOGL) Investing $1 Billion in SpaceX for Satellite Internet

Google (GOOG)

Google Inc (NASDAQ:GOOGL) is poised to invest as much as $1 billion in rocket maker Space Exploration Technologies Corp. in its bid to provide low cost internet connection to billions of people around the world who don’t have access to the web yet. The investment from the search giant would value SpaceX, which is backed by Tesla Motors Inc (NASDAQ:TSLA)’s Elon Musk, at $10 billion. The rocket maker previously announced last week about launching a high speed satellite internet infrastructure to bring the web to the world’s underserved regions.

Google’s planned venture into satellite internet is just one among bets from  various tech companies that expressed interest in developing satellite internet capabilities. The social networking giant Facebook Inc (NASDAQ:FB) is working on drones, lasers, and satellites. OneWeb Ltd. of Greg Wyler, a satellite industry veteran who formerly worked for Google, is planning to launch 648 low Earth-orbit internet satellites. On the other hand, Google Inc (NASDAQ:GOOGL) “needs to find additional sources of revenue,” according to Greg Sterling, vice president of strategy and insights for Local Search Association, as quoted by Bloomberg.

Google (GOOG)Back in 2013, Google Inc (NASDAQ:GOOGL) has unveiled the Project Loon, its efforts at providing internet access by making use of balloons. The balloons in Project Loon are similar in nature to internet satellites, making web access possible by sending and receiving information to and from receivers and specialized antennas stationed on the ground. They are remote controlled, solar powered, and can fly at stratospheric winds 12 miles above earth’s surface.

With internet satellites, Google Inc (NASDAQ:GOOGL) may face difficult technical challenges, however, apart from financial hurdles. The cost of installing antennas and computer terminals on the ground to receive satellite signals is known to have doomed earlier satellite internet ventures. And of course, there is the technical question regarding how SpaceX will beam internet signals from space to earth. SpaceX currently does not have any right to a radio spectrum, and if ever it intends to use laser beams, it would be presented with the impediment of passing the laser beams through the clouds.

This article has been written by Nonito Guntan.

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