Google teams with SpaceX for possible optical-laser powered wireless Internet service

Google (NASDAQ: GOOG) has signed on to fund SpaceX, a startup from billionaire and Tesla CEO Elon Musk that could use optical-laser technology to offer high-speed, satellite-based Internet service across the globe. Now, Google and SpaceX stand as a direct counter to a similar effort--OneWeb--that last week received funding from Qualcomm (NASDAQ:QCOM) and billionaire Richard Branson.

SpaceX and OneWeb both want to build a network of satellites to offer cheap Internet service to every corner of the globe. Musk told Businessweek last week that SpaceX will use its aerospace expertise to build "hundreds" of low-orbit satellites to offer cheap, fast Internet service. He said the service would offer Internet speeds similar to those provided by fiber optic cables. "The speed of light is 40 percent faster in the vacuum of space than it is for fiber," Musk told Businessweek. "The long-term potential is to be the primary means of long-distance Internet traffic and to serve people in sparsely populated areas."

According to an unnamed source cited by the Wall Street Journal, Musk has discussed using optical-laser technology to transmit information using the satellites. However, the WSJ noted that lasers can't pass through clouds like radio waves do. SpaceX does not appear to own any spectrum, the WSJ reported.

For now, though, it seems Musk's SpaceX at least has more funding to reach its goal. The company said Google, along with Fidelity, will provide SpaceX with $1 billion in new funding. SpaceX did not provide details of the investments by Fidelity and Google, but noted the two companies together would own slightly less than 10 percent of SpaceX. Google and Fidelity join SpaceX's existing investors Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners and Capricorn. The WSJ reported that the latest round of funding into SpaceX values the company at $12 billion.

Musk told Businessweek it might take as much as $10 billion to fund SpaceX's Internet service ambitions. He said the company likely wouldn't launch commercial services for at least five years. Musk said revenues from SpaceX's Internet service would help fund the company's plan to build a city on Mars (that last part is not a joke).

Google's investment into SpaceX adds another layer onto the company's wide-ranging efforts to offer cheap Internet service via innovative mechanisms. The company has discussed offering Internet via solar powered drones, and with its Project Loon it hopes to offer cheap Internet via balloons. Google has said it expects to sign up Project Loon customers next year.

Google's investment into SpaceX essentially represents the company's response to the departure of Greg Wyler. Wyler reportedly joined Google early last year as part of Google's investment into Wyler's O3b Networks, which planned to deploy satellites to offer inexpensive Internet service. Wyler abruptly left Google late last year to eventually found OneWeb--when we left he took O3b's licensed spectrum with him.

Wyler's OneWeb last week announced it wants to deploy a fleet of 648 micro satellites to offer low-latency, high-speed Internet access across the world by 2018 in an effort that the company estimated could cost between $1.5 billion and $2 billion. OneWeb, headed by Wyler, owns spectrum to offer such a service.

For more:
- see this SpaceX release
- see this WSJ article
- see this Businessweek article

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