Google Invested $900 Million in SpaceX

Google_logo_newGoogle invested $900 million of the approximately $1 billion in new funds raised by SpaceX last month, according a document the company filed with the Securities & Exchange Commission (SEC) on Monday. This means that Fidelity Investments contributed the other $100 million.
In the filing, Google said it invested the funds “to support continued innovation in the areas of space transport, reusability, and satellite manufacturing.” The money is believed to be focused on a plan to launch 4,000 satellites to provide global broadband coverage.
Google is already experimenting with this technology in Project Loon, which uses high altitude balloons to delivery Internet to remote areas.
“Loon has helped students in Brazil and farmers in New Zealand experience the power of an internet connection for the first time,” the company said in its filing. “And as the program expands, we hope to bring this to more and more people — creating opportunities that simply did not exist before for millions of people, all around the world.”
Google also discussed its $478 million acquisition of Skybox Imaging.
“We expect the acquisition to keep Google Maps accurate with up-to-date imagery and, over time, improve internet access and disaster relief,” the company said. “Of the total purchase price of $478 million, $6 million was cash acquired, $69 million was attributed to intangible assets, $388 million was attributed to goodwill, and $15 million was attributed to net assets acquired. The goodwill of $388 million is primarily attributable to the synergies expected to arise after the acquisition. Goodwill is not expected to be deductible for tax purposes.”

  • Hug Doug

    i wonder if some of this “goodwill” involves launching a few rovers to the Moon?

  • windbourne

    nice thought, but that was the skybox purchase.
    It would be nice if Google helped out on doing those launches. Heck, FH seems like it can send a few of those in their way.

  • Hug Doug

    it says $478 million was for Skybox, and another $388 million was for “goodwill”

    hence my question.

  • Tonya

    “goodwill” means it didn’t buy anything. It’s an accounting term that covers the intangible value following an acquisition.

    Google has bought $478 of tangible assets, the rest is recorded as “goodwill” so that it doesn’t go on the balance sheet as an instant loss.

  • windbourne

    another term for ‘goodwill’ is bluesky, and more of the norm within the VC world.

  • windbourne

    388 is part of the 478, not in addition to.

  • Tonya

    It gets silly when it comes to technology stocks, where the valuations are often 99% goodwill. An alternative and blunter definition of goodwill, is that it’s probably the first pile of money you will lose if you’ve just made a bad investment.

    It was also an area where the accounting was somewhat… creative in the 90’s.

  • Hug Doug

    weird. i would not have figured that out without your explanation.

  • DavidR2015

    You can think of goodwill as an overpayment for something. So you pay $10 for something that can only really be valued at $2. So you add that item to your balance sheet as a $2 asset and $8 goodwill. You then depreciate the goodwill over time, so that it simply disappears.

  • DavidR2015

    FYI
    Goodwill and intangible assets are two different things. Tangible assets are plant and machinery. Intangible assets are things like brands, Intellectual Property and computer software. Goodwill represents an overpayment for something, it doesn’t correspond to anything that exists in real life. For example, in the transaction above, $69m is allocated to intangible assets, and $388m to goodwill.
    Likewise you wouldn’t record a loss on your balance sheet, that would go on your profit and loss statement.

  • Tonya

    I know, but too much accountancy speak makes engineers want to hunt down an accountant and argue with them about their use of language.

    Not that I’ve ever done that…