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Google Inc wants everyone connected to the Internet, and an investment in Elon Musk’s SpaceX could help further that cause.
Google is close to investing in Space Exploration Technologies Corp, which wants to use satellites to spread online service to every corner of the world, in a funding round that values the closely held company at more than $10 billion, technology-news website The Information reported Monday. The Web-search provider is nearing an investment of about $1 billion, according to the Wall Street Journal. Google and SpaceX representatives declined to comment on the reports, which cited people familiar with the talks.
Mountain View, California-based Google is racing to spread Internet access as it looks for new ways to boost its user base and sell more digital advertising. By teaming up with SpaceX, Google would be seeking to gain an edge over rivals such as Facebook Inc, which is working on projects to deliver Internet service to underserved regions by building drones, satellites and lasers. WorldVu Satellites Ltd, backed by Qualcomm Inc and Virgin Group, has begun a similar effort. “Google needs to find additional sources of revenue,” said Greg Sterling, vice president of strategy and insights for Local Search Association, whose members operate in the location-based advertising market. “If they can expand into new markets, obviously they can expand their revenue and keep investors happy.”
In an interview with Bloomberg News on January 12, Musk spoke of the need to launch smaller, more advanced satellites with greater frequency, and said SpaceX would expect to “spend at least a billion, maybe $2 billion” on satellite activities.
‘Loon’ balloons
Google has already unveiled Project Loon, a network of balloons designed to connect people to the Web in hard-to-reach areas of the world. The Internet company also said the acquisition last year of satellite start-up Skybox Imaging Inc may eventually help improve web access.
Musk has gained a reputation as an innovator and successful entrepreneur, first as a co-founder of digital-payments provider PayPal and more recently as the leader of Tesla Motors Inc. SpaceX, based in Hawthorne, California, is attracting new investors, Musk said earlier this month.
“There are a couple of new investors that — because of their disclosure requirements, we’ll — will have to become publicly known, I think toward the end of this month,” Musk said in the January 12 interview.
SpaceX’s goal is to advance rocket and spacecraft technology and eventually establish a city on Mars. Musk said he has no immediate plans to hold an initial public offering for SpaceX, given the long time frame for a Mars settlement and the pressure that many public companies face.
“If Google is committing money to SpaceX, they are likely to be a major investor and a real partner,” said Marco Caceres, director of space studies at consultant Teal Group.
“Google brings the applications for the satellites to the table, and SpaceX has the technical know-how and the launch capacity.”
