Report: Google in Talks with Virgin Galactic on Equity Share, Satellite Launcher Deal

Google_logo_newAs I reported here exclusively back on May 11, Google has been in talks with Virgin Galactic for acquisition of its LauncherOne satellite technology and an equity stake in Richard Branson’s space tourism company. Sky News reports:

The talks are likely to lead to a deal with two main elements, according to insiders.

The first will see Google inject hundreds of millions of dollars into a joint venture, with Virgin Galactic folding in the technology it has developed as part of its efforts to build the world’s first space tourism business.

The second component will involve Google spending roughly $30m (£17.8m) in return for a small stake in the Virgin Galactic holding company.

The terms of the alliance have not yet been finalised and could yet be altered before a deal is struck.

A person close to Google said, though, that its £17.8m investment could value Virgin Galactic at as much as £1.2bn, equating to a shareholding of approximately 1.5%.

The hundreds of millions is likely a reference to Virgin Galactic’s LauncherOne, which is a project to air launch small satellites from the WhiteKnightTwo mother ship. One possible scenario involves Google purchasing the Newton engine technology and moving development activities up to Moffett Field in Northern California from their current location at the Mojave Air and Space Port. A Google subsidiary is in the process of leasing the former Navy Air Station, which is now managed by NASA Ames Research Center.

Google is reportedly willing to spend up to $3 billion on a project to provide global broadband services via satellite. The company is WorldVu Satellites Ltd., which has proposed a constellation of 360 small satellites weighing 250 lbs each. LauncherOne is designed to loft payloads weighing 500 lbs into low Earth orbit.

Google has also invested in Titan Aerospace, which makes high-altitude drones that can be used for providing broadband communications. The company also is working on Project Loon, which would provide the same services using high-altitude balloons.

Rival Facebook is also looking to provide broadband services on a global basis. The goal is to reach billions of people not able to routinely access the Internet. Satellite broadband could also allow these companies to get around censorship by national governments.

Google also announced this week that it will spend $500 million to Skybox Imaging, which provides satellite images of the Earth that can be used in Google Maps and Google Earth.

The equity stake would be a financial boost to Virgin Galactic and assist the company in completing its flight test operations, which are set to resume with flights of the SpaceShipTwo tourism vehicle by late summer. The company is hoping to launch Branson and his two children on the first commercial flight from Spaceport America in New Mexico by the end of this year.

Sources report Virgin Galactic is under a deadline from Aabar Investments to fly Richard Branson to space in 2014. Otherwise, the investment company — which is owned by the Abu Dhabi government — would cease funding to the program after contributing $390 million to it. Virgin Galactic denies that it is under any such deadline.

It’s not clear whether the Google investment would relieve any of the pressure the company is under to fly this year. Company officials have talked about a very short flight test program prior to beginning commercial operations. Some observers have expressed fear that the flight test program will be too short. They are also concerned about the company’s decision to switch from a rubber to a plastic engine, which they fear will not be sufficiently tested on the ground prior to powered flights.

  • cdevboy

    Virgin Galactic is indeed in a mess with getting to launch status. The really interesting statement made here is that Google could create an internet access point owned, operated, and controlled only by them. The monetary benefits to both Google and poorly developed countries can not go understated. Access to broadband information is a major necessity for growth in any scenario which goes beyond localism. Google would reap entirely new information markets to mine. Even more interesting, governments could not cut their people off from the outside streams. Imagine how this could effect closed countries like North Korea.
    What equipment would a user on the ground need to uplink to this satellite constellation or orbiting UAVs? This equipment should be pre-planned to be affordable in third world countries.

  • mfck

    Deleted. Need to practice reading comprehension.

  • windbourne

    🙂

  • windbourne

    However, if Google is smart, they will NOT outsource it, but keep it local. Otherwise, China will be building their own network to not only compete, but take out Google.
    But, they know that better than anybody.

  • windbourne

    I think that what so many are missing is that the Google Boys are about to massively expand commercial space.
    They are investing into multiple sat companies, multiple launch companies, and even going for trips to space.
    This is about to trigger many many many new rounds of space investments.
    No doubt FB is looking to invest into similar companies, but I would be shock if MS is not looking as well (still the last thing that I want to do is be in a space system that depended on Windows. it is not even capable of DO-178D, let alone B ).

    Likewise, if BA gets BEAM going early next year, then I suspect that BA and ILC Dover will enjoy loads of money chasing BOTH companies.

    And as I see all of this going on, well, all of the damage that the house GOP has caused may be about to finally be stopped. I would not be surprised if SpaceX simply says enough is enough and quits taking NASA money on human launch.
    Simply get money from others and move forward. At that point, they could be ready in less than 1 year.

  • cdevboy

    Strange to think that Google and Facebook would end up as the major drivers in Space Access as opposed to SpaceX and other providers of the actual capabilitiy. It is like the old rule of software never really being used as it was purely intended. Most of its final use is determined by the users and new ways they find to utilize it. In this example the launch providers are focusing on access while customer partners will begin to alter and expand the uses to new unforeseen opportunities.