Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is apparently negotiating an investment deal with Virgin Galactic, the commercial space flight company owned by Virgin Group, the venture capital conglomerate founded by Richard Branson.
Google’s satellite acquisitions / investment plans
Earlier this month, it was reported that Google Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) is planning to invest more than $1 billion to deploy at least 180 satellites to achieve its objective to provide Internet access to underserved regions of the world.
The search engine giant recently acquired Skybox Imaging, the maker of the world’s smallest high-resolution imaging satellite, and Titan Aerospace, the maker of high-altitude, solar powered-satellites that provide access to data services worldwide.
Details of the negotiations
According to Mark Kleiman of Sky News, Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is now discussing investment deals with Virgin Galactic as part of its satellite project to provide Internet access to billions of people globally. If a deal is struck, the search engine giant will reportedly gain access to the satellite launch technology and also an equity stake in Branson’s commercial space-flight company.
Kleiman said the two companies have been negotiating for months, and the discussion is now in an advanced stage. Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) is proposing an investment with two main parts, based on information from insiders. The first part 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, according to the report, “will involve Google spending roughly $30 million (£17.8 million) in return for a small stake in the Virgin Galactic holding company.”
The terms of the partnership between Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) and Virgin Galactic are not yet final and will likely change before the companies eventually sign an agreement, according to the report. One person close to the search engine giant commented that a £17.8 million investment could bring the valuation of Virgin Galactic to as much £1.2 billion. The investment will be equivalent to a 1.5% stockholding, and it could boost the reputation of Virgin Galactic, which has been defending itself against frequent notions that its viability will be reduced by development problems.