SpaceX Gets $1 Billion From Google and Fidelity

SpaceX Gets $1 Billion From Google and Fidelity
Google likes its ambitions sky high. This time, it has gone a little further.

The Internet giant, along with Fidelity, has invested $1 billion (roughly Rs. 6,172 crores) in Space Exploration Technologies (SpaceX), the private rocketry company founded by Elon Musk. The move could help Google achieve its aim of bringing satellite Internet to remote corners of the world while giving SpaceX more money for its founder to pursue dreams of going to Mars.

In addition to a payoff on its investment, Google may be seeking to put itself into orbit. Last year, Google bought Skybox Imaging, a maker of small, high-resolution imaging satellites, for about $500 million (roughly Rs. 3,086 crores). Google already offers satellite imagery in its Google Earth product but must purchase these images from multiple sources, often receiving what company executives have said is uneven image quality.

Google may also be interested in developing satellites with other kinds of sensors, like infrared detectors that show the health of crops, or lasers that can pierce forest canopies to show underlying terrain.

Google founders Larry Page and Sergey Brin are both personally interested in space exploration. Early in the company's history it offered employee lectures on building so-called space elevators that could theoretically launch objects off Earth more cheaply than rockets could.

More practically, the company has been trying to transform the Internet connectivity business with high-altitude balloons that people can use to get online from remote locations. That same transmission technology could conceivably be put on satellites as well. Google is in competition with Facebook, which is also interested in advanced means of connectivity and which last year purchased a drone company whose products are potentially capable of carrying Internet devices.

Google and Fidelity will collectively own 10 percent of SpaceX because of the investment, SpaceX said in statement.

"Space-based applications like imaging satellites can help people more easily access important information, so we're excited to support SpaceX's growth as it develops new launch technologies," Don Harrison, Google's vice president for corporate development, said in a statement.

Harrison will join the SpaceX board.

With this investment, Google is hopping on a crowded bandwagon. Last week, Virgin Group, along with Qualcomm, a maker of communications semiconductors, announced they had invested in a constellation of 648 Internet connectivity satellites. Also Tuesday, Planet Labs, a maker of shoebox-size satellites that offer Earth imagery, announced it had received $95 million (roughly Rs. 586 crores) in financing.

SpaceX grew out of Musk's desire to land plants - the green, photosynthesizing type of plants - on the surface of Mars. As Musk tells the story, he started looking for feasible rockets, but he found the pickings to be too risky or too expensive, so he decided to start his own rocket company.

It almost went out of business. The first three launches of SpaceX's small Falcon 1 rocket from Kwajalein Atoll, a small island in the middle of the Pacific Ocean, failed. But after a successful launch in September 2008, the company was able to continue development of the larger Falcon 9 rocket, part of a contract from Nasa to develop the capability for taking cargo to the International Space Station.

Today, SpaceX is sort of the Southwest Airlines of rocket launchers - reliable and cheap. So far, Nasa represents the biggest slice of the company's business. SpaceX has a $1.6 billion (roughly Rs. 9,876 crores) contract for space station cargo and last year won a $2.6 billion (roughly Rs. 16,048 crores) contract to fly astronauts to the station beginning in 2017. It also has contracts to launch commercial satellites.

Recently, the company has come close to innovative breakthroughs, almost landing the first stage of a Falcon 9 rocket on a floating platform in the Atlantic Ocean. The company is also planning the inaugural launch of its much bigger Falcon Heavy rocket this year, two years behind schedule.

But it is not clear how SpaceX could obtain the financial resources to fulfill Musk's more ambitious pronouncement, which is that the company would take people to Mars in a decade.

The company could raise a large pot of capital through an initial public offering - that is, if shareholders would countenance such an extraordinarily expensive venture with uncertain payoffs far in the future. Musk has said SpaceX would remain privately held for now.

And even with its successes, the company has not launched as many rockets as quickly as it promised.

The Google investment appears to be a different approach: to bring in an influx of dollars without Musk's yielding ironclad control.

© 2015 New York Times News Service


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