The Washington Post reported in October that 4.4 billion people in the world still don’t have access to the Internet. That’s 4.4 billion people that could be using Google products like search, Gmail, maps and more.
That’s why Google is leading a round of funding through which SpaceX is raising $1 billion. Besides an investment in SpaceX, this is also an investment in Elon Musk. He’s the billionaire who sold PayPal toeBay (NASDAQ: EBAY), founded SpaceX, became involved with Tesla Motors (NASDAQ: TSLA) and soon after became CEO, and helped form SolarCity (NASDAQ: SCTY).
He’s been busy.
You might be wondering what Google’s desire to blanket the world with Internet coverage has to do with SpaceX, a private space contractor. The answer is simple: Elon Musk recently announced that he wants to use SpaceX’s expertise in delivering supplies and payloads to space to set up a network of satellites to blanket the globe with Internet coverage.
“Our focus is on creating a global communications system that would be larger than anything that has been talked about to date,” Musk told Businessweek.
Though details are hard to come by, what we know comes from SpaceX’s prepared statement on the matter.
To be clear, we don’t know exactly how much money each company invested in SpaceX in the financing round. We also don’t know if any of SpaceX’s existing investors contributed to the round. But considering that recent valuations pegged SpaceX’s value at around $10 billion and Google and Fidelity now collectively own 10% of the company, we can deduce that this funding came largely – if not entirely – fromGoogle and Fidelity.
A Trifecta of Innovators
We see Google’s investment in SpaceX and Elon Musk as a bullish sign for the company and the stock. For starters, this is the first significant stake in an Elon Musk venture that we know of from Google’s co-founders Sergey Brin and Larry Page. The trifecta of Page, Brin and Musk should be an exciting idea for tech investors and space enthusiasts. But the opportunity to bring more than 4 billion more people onto the Internet is important for Google.
NetMarketShare.com reports that Google search’s global search market share is 66.44%. Even if Googleis significantly less popular amongst the newer populations it intends to serve, it could easily add more than 2 billion users if it succeeds in bringing Internet to the 4.4 billion globally who are currently un-served or underserved by Internet access.
We also know that Google has been very interested in space for some time now, this could be the marriage of some incredible talent and energy in the area of private space travel and exploration.
The company has made recent investments in the Internet of Things, automation, robotics, and much more. It doesn’t take a huge leap of faith to imagine a not-too-distant future in which these investments pay off handsomely.
This article is brought to you courtesy of Jay Taylor from Wyatt Research.