Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) have joined a race to bring the Internet to everyone in the world.
The headlines are all about Google's investment in SpaceX, a $1 billion bill shared with Fidelity Investments valuing the privately held company founded by Elon Musk at $10 billion. The plan will be to launch hundreds of fast-moving satellites around the world that can relay ground Internet traffic and provide broadband access to the 3 billion people in Africa, Asia, and Latin America who presently do not have it.
It's similar to a project Qualcomm (NASDAQ:QCOM) and Richard Branson's Virgin Group have invested in called One Web, but also like a system backed by Motorola in the 1990s, Iridium, which uses 66 satellites for mobile voice service.
Facebook, meanwhile, is backing Internet.org, with a mobile app that delivers a free version of Facebook and some other sites to consumers in Africa and Latin America. It's looking at a variety of ways to expand the footprint, including satellites, but also including solar-powered planes and lasers.
A World Bank map shows the scope of the challenge. Fewer than one in five people in India, Africa or parts of Central America have Internet access, something that is taken for granted in the U.S., Japan and most of Western Europe.
But already there is pushback. The service is limited, leading to charges of colonialism. China insists that anything going over its territory be rigidly censored. One critic has gone so far as to say that Facebook has "killed the Internet."
For all those involved these investments are currently chump change. Google had over $62 billion in cash and short-term paper on its books at the end of September. Facebook had over $14 billion. Both companies see this as a race to new markets conducted on the cheap. The benefits right now are mainly political. Facebook, for instance, has funded a Deloitte report claiming it's worth $227 billion to the global economy each year.
The danger, for investors, is that both Google and Facebook are setting up a confrontation with governments around the world, most of which are trying to replace the U.S.-based ICANN group with something dominated either by global elites or national governments.
Efforts to provide access put Google, Facebook and Qualcomm squarely in the international cross hairs. They may hope that whoever provides the access should get the market, but what they're all going to need is something like a foreign policy or all this money is going to be wasted.
http://seekingalpha.com/article/2836186-shoul...race?ifp=0
The headlines are all about Google's investment in SpaceX, a $1 billion bill shared with Fidelity Investments valuing the privately held company founded by Elon Musk at $10 billion. The plan will be to launch hundreds of fast-moving satellites around the world that can relay ground Internet traffic and provide broadband access to the 3 billion people in Africa, Asia, and Latin America who presently do not have it.
It's similar to a project Qualcomm (NASDAQ:QCOM) and Richard Branson's Virgin Group have invested in called One Web, but also like a system backed by Motorola in the 1990s, Iridium, which uses 66 satellites for mobile voice service.
Facebook, meanwhile, is backing Internet.org, with a mobile app that delivers a free version of Facebook and some other sites to consumers in Africa and Latin America. It's looking at a variety of ways to expand the footprint, including satellites, but also including solar-powered planes and lasers.
A World Bank map shows the scope of the challenge. Fewer than one in five people in India, Africa or parts of Central America have Internet access, something that is taken for granted in the U.S., Japan and most of Western Europe.
But already there is pushback. The service is limited, leading to charges of colonialism. China insists that anything going over its territory be rigidly censored. One critic has gone so far as to say that Facebook has "killed the Internet."
For all those involved these investments are currently chump change. Google had over $62 billion in cash and short-term paper on its books at the end of September. Facebook had over $14 billion. Both companies see this as a race to new markets conducted on the cheap. The benefits right now are mainly political. Facebook, for instance, has funded a Deloitte report claiming it's worth $227 billion to the global economy each year.
The danger, for investors, is that both Google and Facebook are setting up a confrontation with governments around the world, most of which are trying to replace the U.S.-based ICANN group with something dominated either by global elites or national governments.
Efforts to provide access put Google, Facebook and Qualcomm squarely in the international cross hairs. They may hope that whoever provides the access should get the market, but what they're all going to need is something like a foreign policy or all this money is going to be wasted.
http://seekingalpha.com/article/2836186-shoul...race?ifp=0
