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June 10, 2014

Google Pulls the $500 Million Trigger on Skybox


It was just two weeks ago, the Memorial Day holiday only just rendered a memory, when we first heard that Google had taken an interest in Skybox Imaging, a company with a cluster of satellites located above the Earth's surface. But this interest, at the time, was still somewhat theoretical, until a new report emerged saying that the interest had gone tangible, as tangible as only a $500 million offer can be.

Naturally, Google's big interest in Skybox, according to word from the company, is in Skybox's imaging capabilities. Those small satellites that the company built and parked over the planet's surface are going to put a real punch in Google's mapping capabilities, keeping the maps, as one spokesman put it, “...accurate with up-to-date imagery.” Indeed, that spokesman carried on, noting that the company “...also hope(s) that Skybox's team and technology will be able to help improve Internet access and disaster relief—areas Google has long been interested in.” Reports not, however, that the purchase price involved was “subject to adjustments,” and would need to meet the approval of United States regulators before going forward.

These are certainly areas Google is interested in, and areas that have plenty of commercial application. But the long game is shaping up to be somewhat different. While mapping software will always have a place for as long as anyone has to leave the house for anything from work to play to carrying out the basic functions of life, there's something more at stake here. Google has long had an interest in getting Internet access to more places, particularly remote places, and satellite Internet access may well provide the necessary infrastructure to get that access out. While satellite Internet access often isn't suitable for some applications like video conferencing or streaming video in general, it often does the job well for more text-based applications like email, search functions, or even online shopping.

It's this combination of short-term and long-term benefit that makes Google's move to buy Skybox a smart one. Not only can Google augment its map functions in the short-term, but it can also step up its offerings in the long-term as well. In the short-term, Google can make it easier for users to find brick-and-mortar businesses in the area, which has a distinct value not only for customers of said businesses but for said businesses as well. Customers get an easier time finding bookstores or restaurants—or anything else that can't be immediately replicated online—and businesses in turn can better tell where to, or where not to, open a new location. That makes Google more likely to be turned to for such determinations, which means more users, more eyeballs, and a better appeal to advertisers. Long term, meanwhile, this trend continues as Google makes an even better appeal to advertisers by allowing more users to connect and use services like Gmail or Google Maps. If Google were to manage to find a way to offer Google Fiber-grade service—at a price at least comparable to Google Fiber—by satellite, it would probably effectively own the United States market for Internet service provision—potentially that of the world as well.

This is a deal that could mean some very big things ahead for not just Google, but for a large swath of the world as well. Only time will tell just what possibilities actually make the jump to reality, but Google has what looks like a big deal here, and one that has the potential to destabilize several industries as known today.




Edited by Maurice Nagle


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