Google’s investment of $1 billion in Space Exploration Technologies (SpaceX) for satellite Internet service could enable the search giant to eventually overtake cable companies in the field, a report said.
In a CNBC interview, Daily Mail North America CEO Jon Steinberg and Re/Code Managing Editor Edmund Lee discussed the significance of the investment and how Google can benefit from it, Insider Monkey said.
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Steinberg said that the move by Google would practically leapfrog them over all the cable companies. He mentioned that Google already owns a fiber cable network so it could theoretically acquire some cable company to get into the business. However, by thinking 5-10 years down the line, getting into satellites would be an apt decision, he said, according to the report.
Steinberg added that the relationship between Google CEO Larry Page and Tesla Motors CEO Elon Musk might be another reason for the reported investment. He said it is an ambitious plan by Google that makes sense if they have an unlimited budget for it, according to Insider Monkey.
Meanwhile, Lee said that Google, through its GoogleX division, is currently making hot air balloons and drones in its attempt to get internet to remote parts of the world, but if the investment in SpaceX works, it might be able to leapfrog cable companies, the report said.
“If this works out really well, as Jon pointed out earlier, it could just leapfrog cable and it’s the way to kind of ensure that people get access to their content or their services, which is how they make all their money. Right now, cable is the gatekeeper for all that, ” Lee said.
Steinberg added that Google has nowhere else to go as SpaceX is far ahead in this technology, so the investment in SpaceX makes a lot of sense, the report said.
SpaceX, founded by Elon Musk, said in a statement that it raised about $1 billion in a financing round with two new investors, Google and Fidelity, which will collectively own just under 10 percent of the company, Reuters said.
Google has already a presence in the aerospace sector following a few high-profile acquisitions last year, including that of satellite company, Skybox Imaging, for $500 million in June, said Reuters.