Google Investing $1B to Build 180 Satellites - Analyst Blog

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Reportedly, as a step forward in exploring new ways to offer Internet services to rural and remote locations around the world, Google Inc. ( GOOGL ) is building a fleet of new satellites. Google is planning to spend over $1 billion to build 180 small, high-capacity satellites, as reported by The Wall Street Journal (WSJ).

However, no concrete details were available regarding Google's satellite venture. It is reported that the project will be headed by Greg Wyler, founder of satellite-communications startup O3b Networks Ltd, who recently joined Google. In addition, Google has employed engineers from satellite company Space Systems/Loral LLC to work on the venture. These satellites will orbit the Earth at a lower altitude than conventional satellites.

Google has been working to expand Internet coverage from the sky in an attempt to boost its business on land. Satellites are more adjustable, offer larger capacity and enable wider access than wired connectivity and wireless cellular networks. In addition, the expenses to build and launch satellites have declined in recent years, according Neil Mackay, CEO of Mile Marker 101, an advisory firm.

Therefore, if successful, Google's latest move is expected to bolster its customer base, which will ultimately translate into more revenues for the tech giant.

Furthermore, Google's progress in cost-efficient antennas, built by companies including Kymeta Corp., with the ability to trace multiple satellites as they move across the sky, can be advantageous.

In its pursuit to offer Internet access to unwired regions, Google is contesting Facebook ( FB ), which was supposedly interested in buying Titan Aerospace, a startup that builds solar-powered drones and that Google recently acquired. Apple Inc. ( AAPL ) announced its Connectivity Lab, a plan to connect the world with Internet access using drones, satellites and more.

Google, the world's largest online search engine, is gradually strengthening its foothold in new markets.

Rovi Corp. ( ROVI ), which carries a Zacks Rank #1 (Strong Buy), a from the same sector and therefore worth considering.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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