The recent announcement of Google Inc (NASDAQ:GOOGL) of its intent to spend over $1 billion on a fleet of new satellites to better connect the world is a way for the internet giant to expand its market, Yahoo! Finance’s Rick Newman and Aaron Task discussed.
Task started the discussion by mentioning that Google Inc (NASDAQ:GOOGL) has revealed that it will be spending $1-3 billion to buy new satellites to give better internet access to underserved regions in the world. Task also noted that the Mountain View, California-based company has about $57 billion in cash at the moment.
Newman reacted to the news by playfully saying that he keeps forgetting what industry the internet giant is in. He mentioned that the company has interests in cars, in robotics, in space and in phones aside from their main business which is search and advertising. Newman said that the new move by the tech star is actually a trend he sees with the company and with Facebook Inc (NASDAQ:FB): He told Task:
“I think what’s interesting about this is [that]Google, like Facebook, they’re not just fighting for market share any more [than]they are actually trying to expand their market. They have basically saturated every place where they operate [and]can’t get any more customers that way so they’re trying to get more customers by going to places where [people]don’t have easy internet access.”
Newman said that Google Inc (NASDAQ:GOOGL) may be looking at Africa and lots of other places in Asia to provide better internet access. However, he added that this new plan by the internet giant does not have a guarantee that it will work but the company may think that it is worth a try.
Task reacted by saying that the company does like to experiment with projects and that he thinks this is smart. An example he gave was Google Fiber. He added that the company certainly has a lot of resources available to them so why not try.
The Wall Street Journal reported recently based on information from unnamed sources that Google Inc (NASDAQ:GOOGL) plans to invest in an initial batch of 180 satellites for the project with the prospect of adding more crafts in the future. Greg Wyler, founder of satellite company O3b, will reportedly spearhead the project. The internet behemoth has a stake in Wyler’s company.
Watch the video below where the two also discuss what challenges the company has to face with this new project and what benefits it can give.
Notable shareholders of Google Inc (NASDAQ:GOOG) includes Eagle Capital Management of Boykin Curry, which has 797,297 shares of the company, with a value of about $8.89 billion. Alex Snow’s Lansdowne Partners also owns 713,751 shares of the company as at the end of the first quarter, worth $7.95 billion. Fisher Asset Management, led by Ken Fisher, owns 653,831 share of the tech giant with a value of $7.29 billion.