Some reports emerged that Google Inc (NASDAQ:GOOGL) is very close to investing $1 billion in Elon Musk’s SpaceX for internet via satellites. What does this investment mean for Google Inc (NASDAQ:GOOGL)? Daily Mail North America CEO, Jon Steinberg and Re/Code Managing Editor, Edmund Lee talked on CNBC about the significance of this investment and how Google Inc (NASDAQ:GOOGL) can benefit from it.
Steinberg feels that this move from Google Inc (NASDAQ:GOOGL) practically leapfrogs them over all the cable companies. He mentioned that Google Inc (NASDAQ:GOOGL) owns a fiber cable network and one might think that they can acquire some cable company to get into the business, but he feels that thinking 5-10 years down the line, getting into satellites would be the apt decision.
Steinberg thinks that relationship between Google Inc (NASDAQ:GOOGL) CEO, Larry Page and Tesla Motors Inc (NASDAQ:TSLA) CEO, Elon Musk might be another reason for this investment. Steinberg thinks that this is a big ambitious plan from Google Inc (NASDAQ:GOOGL) and he feels that it makes sense if they have an unlimited budget for it.
Google Inc (NASDAQ:GOOGL) through its GoogleX division is making hot air balloons and drones are trying to get internet to remote parts of the world. Amidst all these efforts why are they trying to buy into the satellite technology. Lee thinks that the GoogleX projects might expand Google Inc (NASDAQ:GOOGL) globally, but he feels that if the investment in SpaceX works, it might leapfrog cable companies in one stretch.
“The other thing to look at is, for the hot air balloon type ideas around delivering internet to people. Thesis has been it’s the way to deliver internet to areas that don’t have it, poor areas or parts of the world that don’t have hookups. But, if this works out really well, as Jon pointed out earlier, it could just leapfrog cable and it’s the way to kind of ensure that people get access to their content or their services, which is how they make all their money. Right now, cable is the gate keeper for all that,” Lee said.
Steinberg added that Google Inc (NASDAQ:GOOGL) has nowhere else to go as Elon Musk’s SpaceX is so far ahead in this technology. So he feels that Google Inc (NASDAQ:GOOGL)’s investment in SpaceX makes a lot of sense.
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