What is Behind Google Inc's Satellite Project?

The Internet giant plans to go into space to expand web access.

Jun 6, 2014 at 9:00AM

Is this more looniness from Google (NASDAQ:GOOG) (NASDAQ:GOOGL)? There are new reports that indicate that the web search giant wants to use a network of small, low-orbit satellites to help expand Internet access across the globe.

While the developed world is mostly connected, only a third of the population of developing economies, where traditional infrastructure is lacking, goes online. If Google is to continue growing its advertising revenue derived from search, part of the strategy might involve a plan to increase the number of people who surf the web.

If the report is true, what does it mean for Google investors and those of its primary competitors in search here in the U.S., Yahoo! and Microsoft (NASDAQ:MSFT)?

It's a balloon. It's a plane. It's a satellite.
Other airborne contraptions might be needed to boost coverage worldwide before the satellite system, estimated to cost $1 billion, becomes fully operational. 

One way consists of a group of hot air balloons that beam wireless signals to users on the ground. Project Loon, as it is known within the company, is being implemented right now in New Zealand. 

Solar-powered drones would eventually replace the balloons in providing Internet service to some areas. Google recently announced that it will acquire Titan Aerospace of New Mexico, a maker of unmanned aerial vehicles.

Eventually drones and satellites would work together to comprise the complete, high-altitude Google Internet service.

Searching for growth
Today, Google dominates the world of web search with a market share of more than 68% in desktops and 91% in mobile. Google has nothing to fear from its competitors. But if it wants to grow advertising revenue, its main cash cow, it needs to get more users connected. 

Expansion of Internet coverage doesn't appear to be a big part of the strategies at either Microsoft or Yahoo!. The techies are focusing on other things. 

Microsoft, although it has performed poorly in hardware in the past, wants to sell more Windows Phones and Surface Pro tablets. It also wants to get more involved in cloud computing under new CEO Satya Nadella, an expert in the burgeoning field. In addition, the company will continually upgrade its Office suite of products, which generates a significant portion of overall revenue and profit. Microsoft just released Office for iPad to take advantage of the trend away from PCs to mobile computing.

Yahoo! plans to grow by focusing on mobile, making deals with Apple to put more content on iPhones and iPads, and through its $14 billion investment in Alibaba, the Chinese e-commerce giant. The Asian company, which is readying for its IPO, might be worth as much as $168 billion, according to one estimate. Expanding into China would probably be worthwhile for Yahoo!, which has been reporting flat revenue growth and declining profits recently. 

Foolish conclusion
While it might look a little loony on paper, Google's plan to try to increase Internet access using balloons, drones, and satellites could be important for its main business of web search down the road. The more users, the more search. The more search, the more advertising revenue, at least in theory. 

Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play" and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.

Mark Morelli has no position in any stocks mentioned. The Motley Fool recommends Google (A shares), Google (C shares), and Yahoo. The Motley Fool owns shares of Google (A shares), Google (C shares), Microsoft, and Yahoo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers