The search giant is in talks about a deal to take a stake in Sir Richard Branson's space tourism venture, Sky News learns.
Google is in talks with Virgin Galactic about a deal that will hand it crucial access to satellite-launch technology and an equity stake in Sir Richard Branson’s $2bn (£1.2bn) space tourism venture.
Sky News can exclusively reveal that the discussions with Virgin Galactic are part of Google’s ambitious project to put hundreds of satellites in low-Earth orbit in an attempt to extend internet access to billions of people.
Negotiations between the two companies have been taking place for months, and are said to be at an advanced stage.
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 deal could be reputationally valuable for Virgin Galactic, which has had to defend itself against frequent suggestions that problems with its development will curb its viability.
The company has insisted that flights should begin this year, although there is no firm date, while rivals such as Elon Musk, the billionaire businessman, are developing competing projects.
Celebrities including Ashton Kutcher, Katy Perry and Sir Richard himself are said to have paid $200,000 (£119,000) to secure seats on the venture’s inaugural flights.
News of the talks with Virgin Galactic comes a day after Google said it was buying Skybox Imaging, a start-up satellite venture, for $500m (£297m).
Skybox has developed small, comparatively cheap satellites which are capable of taking high-quality photographs and videos of the Earth.
Google is engaged in a race with internet rivals to extend web access to the billions of people who do not currently have it, by using balloons, drones and satellites.
Doing so contains powerful commercial incentives for Google, which would see usage of its services and advertising revenues benefit from a significantly-enlarged customer base.
Its other acquisitions aimed at broadening internet access include Titan Aerospace, which it bought in April with the aim of building jet-sized drones which would utilise solar power to fly uninterrupted for years. The drones
could be used to provide online access in remote parts of the world.
Virgin Galactic is about one third-owned by Aabar Investments, an Abu Dhabi-based group, which paid about $280m (£166m) for a 32% stake in the venture’s holding company.
That deal valued Virgin Galactic at approximately $900m (£535m), meaning that the transaction with Google, if it is completed, would mean that the company’s equity value had more than doubled since 2009.
Sir Richard and Larry Page, Google’s co-founder, are close friends, and have registered the name Virgle for use on potential future business collaborations.
Google and Virgin Galactic both declined to comment.
See original article by Mark Kleinman, City Editor on Sky News HD HERE.