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To extend Internet access, Google eyes SpaceX stake

SAN FRANCISCO — Google wants everyone connected to the Internet and an investment in Mr Elon Musk’s SpaceX could help further that cause.

SAN FRANCISCO — Google wants everyone connected to the Internet and an investment in Mr Elon Musk’s SpaceX could help further that cause.

Google is close to investing in Space Exploration Technologies, which wants to use satellites to spread online services to every corner of the world, in a funding round that values the closely-held company at more than US$10 billion (S$13.4 billion), technology news website The Information reported. The Web-search provider is nearing an investment of about US$1 billion, The Wall Street Journal said. Google and SpaceX representatives declined to comment on the reports, which cited people familiar with the talks.

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 is looking to gain an edge over rivals such as Facebook, which is working on projects to deliver Internet services to underserved regions by building drones, satellites and lasers. WorldVu Satellites, backed by Qualcomm and Virgin Group, has begun a similar effort.

“Google needs to find additional sources of revenue,” said Mr Greg Sterling, vice-president of strategy and insights for Local Search Association, whose members operate in the location-based advertising market. “If it can expand into new markets, obviously, it can expand its revenue and keep investors happy.”

In an interview with Bloomberg News on Jan 12, Mr 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 US$2 billion” on satellite activities.

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 company said the acquisition last year of satellite start-up Skybox Imaging may eventually help improve Internet access.

Mr 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.

SpaceX, based in Hawthorne, California, is attracting new investors, who will be made known at the end of this month, Mr Musk said in the interview.

SpaceX’s goal is to advance rocket and spacecraft technology and eventually, establish a city on Mars.

“If Google is committing money to SpaceX, it is likely to be a major investor and a real partner,” said Mr 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,” he said. BLOOMBERG

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