Google's (NASDAQ: GOOG) Plan for Space

What the heck is Google (NASDAQ: GOOG) planning now?

That’s the big question following yesterday’s announcement that Google shell company Planetary Ventures LLC has entered into a $1.16 billion 60-year lease agreement for the NASA-owned Moffett Federal Airfield.

The deal is largely charitable, with Google planning to invest an additional $200 million to restore the historic Hanger One and to create an educational facility where the public can explore the site.

But the lease is strategic as well. According to the press release, “Once renovations are complete, Hangar One will again be home to high-tech innovation as Planetary Ventures begins using the historic facility for research, development, assembly and testing in the areas of space exploration, aviation, rover/robotics and other emerging technologies. Hangars Two and Three will be used for similar purposes.”

In terms of monetary cost, the investment is actually quite small. Spread across the full 60-year agreement, Google’s only paying about $17 million annually for the airfield.

For perspective, the company spent $3.2 billion to purchase start-up home automation company Nest Labs back in January.

Further, Google is currently sitting on a $60 million cash horde. Spread out over six decades, this is a drop in the bucket for the Internet giant.

In terms of time, though, the deal is far more significant. The 60-year time frame provides some clarity on how Google views its future relevance. The company can’t rely on search forever, so to stay relevant for years to come, it’s banking on some incredibly futuristic ideas.

Among these have been the increasingly strong themes of robotics, automation, and aerospace. If we piece a few of Google’s recent acquisitions and projects together, we have some hints as to where the company might be headed.

Project Loon

In June 2013, Google revealed Project Loon. The aim is to create a network of solar-powered hot-air balloons that would provide free Internet access to nations without solid Internet infrastructure.

The general idea is that these balloons will hang out right at the edge of space, relaying signals to each other and to Internet service providers on the ground.

The project might seem a little far-fetched at first glance, but in reality, this is just like a satellite network a bit closer to earth. Google has already successfully tested the idea by providing connection speeds on par with 3G networks in a small New Zealand town.

Further, each balloon can provide Internet access to an area of about 13,000 square kilometers, which is roughly twice the size of New York City.

Skybox Imaging

A year after revealing Project Loon, Google announced the purchase of satellite company Skybox Imaging for $500 million. Skybox is best known for having built and launched the world’s smallest high-resolution imaging satellite that tracks changes happening on the earth’s surface.

An obvious benefit of this technology is to service Google Maps and Google Earth, but Google has said these satellites could have other purposes, too. Specifically, Google believes these small satellites could spread wireless Internet much in the way Project Loon would.

Titan Aerospace

In April 2014, Google purchased Titan Aerospace, an Albuquerque-based company manufacturing solar-powered atmospheric satellite drones, or “atmospheric satellites” for short.

Titan’s drones travel at altitudes of 20 kilometers and can have satellite-typical functions, such as weather or space photography. According to the company, the drones can fly continuously for up to five years.

Most importantly, though, these drones are capable of bringing wireless Internet connectivity at broadband capacity directly down to earth.

Death From Above

When we look at Google’s recent delve into Internet space balloons, drones, and satellites, the 60-year lease of Moffett Federal Airfield starts to make a lot more sense.

What’s an Internet company like Google doing up in space?

Making damn well sure every human being on earth has access to the net, that’s what. Because the more eyeballs there are on the web, the more ads Google can sell. It’s really that simple.

Google isn’t the only company with this radical idea, though. Billionaire entrepreneur Elon Musk announced earlier this week that SpaceX is entering into the early stages of a project that will deploy a constellation of nearly 700 small satellites to bring “very low cost” internet access across the globe.

And while we’ve all seen many of Google’s ambitious projects fade away into obscurity, Musk’s highly successful track record with PayPal, Tesla, and Space X should be enough to convince us this can and will be done.

Generally speaking, satellite Internet access has been expensive, slow, and unreliable. Conventional satellite networks have had to cover large areas with a small number of high-altitude satellites because getting large satellites to high orbit is incredibly expensive

But launching smaller satellites into low altitudes could soon prove a much better strategy. The satellites Google and SpaceX plan to launch are much smaller, so the cost of deployment will be far less.

Additionally, the number of satellites put into orbit would be far greater, potentially allowing for connection speeds on par with broadband.

For cable and Internet service providers like Comcast (NASDAQ: CMCS), these projects would be a major blow. Cable has only been able to remain relevant throughout the last two decades because of two things: infrastructure and content.

With the rise of Internet streaming from Netflix, Amazon, and HBO, we all know the content side is waning. Take away the demand for ground-based infrastructure as well, and you’re looking at the end of a $100 billion industry.

Until next time,

Jason Stutman

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