Google Nears $1 Billion Investment in SpaceX (opens in new tab)

While I see your point, I think there are two important things to remember here. (Note: I understand the long term implications of an interplanetary species, just providing context)

A) whatsapp improves the daily lives of hundreds of millions of people. You don't necessarily need an absurd customer lifetime value to get a $19b valuation with that many people using your product.

B) SpaceX provides almost no current value to anybody. And the people it does provide value to are "free riders" in the sense that they love watching space travel and get to watch SpaceX regardless of whether or not they pay for it.

Just an inexact thought experiment. Let's say we poll the roughly 1b people living in first world, and ask them each to pay $10 to see SpaceX do whatever SpaceX does. How many people even think it's worth $10?

Very weird and imo, wrong comparison.

WhatsApp is a consumer product. It lives as it breathes. As long as people/consumer keeps pumping in money & time to it, its value will stay or rise from its current value. Once that stops and people/consumer stop using it, its value will eventually fall.

SpaceX on the other hand is not a consumer product yet, but is aiming to become one. Consider it just like Boeing or AirBus, nobody would have valued them as a multi-billionaire company ( back in 1900s when they were founded). Their technological advancements and the development phase would have been same as SpaceX right now.

But eventually it became a very integral part of human life. They have become a consumer product, their value is now because of people using it daily. And unlike WhatsApp people won't stop using air-travel.

Everyday people do not invest directly into it like they do(?) for WhatsApp, but indirectly by using airline services they are paying for it. Similarly for SpaceX everyday people aren't investing in it right now but eventually ( as per SpaceX's ambition ) people would just like they are doing for air-travel.

SpaceX comes with, well, an astronomical (snicker) level of risk attached to it. So I suppose the idea is that SpaceX might well end up being worth a lot more than WhatsApp, but WhatsApp and its user base are worth a lot now. It is also unlikely that they will end up not being worth anything in the future (if we hit a second dotcom bubble WhatsApp might end up being worth a lot less than their current valuation, but like AOL, it won't be literally worth nothing). SpaceX might.

There is also some level of tragedy of the commons problem going on, in which SpaceX benefits all of us every time they successfully test a new design, but it only benefits their investors when they manage to get mining rights to the moon or set up martian tourism or the like. Goals which are possible - which is the impressive thing - but still very risky bets.

I'm amazed SpaceX is valued so highly.

SpaceX is in an industry with better financed/politically connected companies and an unpredictable revenue stream. It's a risky business by every definition. WhatsApp by comparison is a stable, very popular, growing and strategically important messaging platform.

And if you think that human-human communication is less valuable than putting a few satellites in space (NASA/ESA/ISRO/etc are the real keys to future space exploration) then I would argue your priorities are a bit warped.

I'm surprised it is the top comment. If I remember correctly, it has been discussed a lot of times on HN. And most of the times, people agreed it wasn't a fair comparison.

WhatsApp has had a real, tangible, positive impact on the lives of hundreds of millions of people.

I think WhatsApp potential value caps out at 50B or so. SpaceX potential value might be in the trillions (low probability). So while their current valuations might seem 'wrong', the long term potential value might be closer to your value judgement. There are very few large investors with a 20 year time horizon. I am not sure if that is a fault of capitalism. I am not sure another system of resource allocation would do better, do you?

This has nothing to do with short term interest based capitalism. Whether privately held, a charity, or any other structure, if what you are making is not of general interest to the population at large, it's going to have a pretty hard time. The only way to fix that is to eliminate free markets and democracy so people of average or less intelligence/foresight have no say in the appropriation of resources.

Value to humanity is not highly correlated to economic value. Value to humanity is but a small, often inconsequential segment of demand.

SpaceX is the commercialisation of space exploration and that's just how valuation works in commercial applications. It is, however, remiss to value to science and progress in dollar terms. TCP/IP is far more valuable than all of the Internet companies combined but not in dollar terms.

That's similar to saying a toddler is less productive than a recent college graduate.

That is to say: WhatsApp is much further along its individual trajectory than SpaceX is. In decades, the value of SpaceX is likely to eclipse WhatsApp, which in all likelihood won't even exist any longer.

Valuations are not fixed in time. SpaceX is only starting up. Give it time.

And what value do you place on, say, GNU/copyleft, or HTTP/HTML, or the Fourier transform?

Market capitalization does not indicate importance to the human race, though it's easy to lose sight of that.

My guess is that a part of the issue is that VCs can understand WhatsApp. They feel like that can assess it's worth, associated risk, and come up with a valuation independently.

With science based startups the partner at a VC can't easily make an independent assessment. They have to rely on specialists to do tech D&D and they rarely trust them completely. So they shy away from those deals, or they factor the risk into their valuations.

This behavior somewhat ironically can make these investments higher risk. There is a degree to which fund raising at a lower level makes a company a higher risk, because they have less money to work with and can't afford to make mistakes. (the converse is also somewhat true).

Perhaps it's partly because space is seen as higher-risk than social media? The valuation would then be lower because people lower their expectations based on the risk of failure.

>post-oligarchic

Post?

SpaceX could be higher long term.

It's definitely possible, but he's not in that category yet IMO. If Tesla actually makes a car that middle class Americans want and can afford, then he can seriously disrupt the motor industry and be on par with those guys. At this point though, Tesla could go out of business and it would just be a footnote in automotive history 30 years from now. SpaceX is similar at this point, it's on the path to something great, but right now its just an early competitor in the private space industry.

Quite an illustrious group: https://en.wikipedia.org/wiki/Robber_baron_(industrialist)

Just pointing out some people have a VERY different opinion of those rich men.

You're overestimating the cell connectivity costs. Amazon Kindle is permanently on 3g/4g, and the device itself costs less than $200.

SpaceX is currently charging $61 million per launch. [1] That's a lot of AT&T cell coverage.

[1] http://www.spacex.com/about/capabilities

If there are going to be thousands of Tesla cars in each city, maybe it would make more sense for them to create a mesh network and connect to the internet via Wi-Fi when parked (at Superchargers, at home, etc.). This could drastically reduce the cellular bandwidth required for less than the hundreds of millions of dollars required for a satellite solution.

Yeah I thought about that too. Would be very useful in remote areas. Probably won't work with the current batch of cars however.

With that said, telsa promised 3g free with the model s for another 4 years. Maybe timing with the satellites?

I think it is a lot more about providing communications to mars. They are basically doing a/b testing on earth for blanketing a planet in communication. Also, they could connect that network to mars to have interplanetary communication over something that resembles the internet. Tesla can lease bandwith (or have their users lease bandwith) much easier and cheaper than launching a fully fledged system like this

or even delivering power wirelessly to the tesla cars!!!

that would be the ultimate end game move by Musk.

Most companies that raise money by other means than publicly trading stock frankly don't want the head ache of dealing with shareholders.

A company like SpaceX can raise all the money they need from a small number of like minded investors. It saves them the hassle of dealing with thousands of shareholders with their own risk tolerances, investment goals, etc.

That's all well-and-good for SpaceX but it proved to be pretty catastrophic for the dozens of pump-and-dumps that bankrupted many Americans when we tried that previously.

You can buy Google as a proxy. A poor proxy but proxy nonetheless. The "plus" side is Google might make similar investments in other ventures like this so your bet on space is more diversified.

I wouldn't be surprised to see SpaceX do an IPO in the future. I'll definitely buy in even if I would do that as a kind of kick-starter rather than for the potential return.

If I were him, I would put most of my money in life extension technology.

And here it ain't even his own money. Even better for him.

I'm only familiar with the basics of the networks capabilities per my former position as a technician for WildBlue/Exede. Connecting directly through satellite is certainly possible if more people were interested in it. Our satellite networks are still fairly basic primarily because there's not been a historical abundance of interest in the technology due to its limitations compared to terrestrial networking.

ViaSat-1 is (as far as I'm aware) the most capable satellite currently in orbit, with a rate of 140 Gbit/s. Its bandwidth capacity when launched larger than all of the other North American satellites combined.

I would be VERY surprised to learn that the fundamental issue with this would be spectrum capacity, as the K band satellites operate in is very wide.

The way current satellite technologies typically deal with concurrent data streams is to split up into 'beams' that cover a specific region. Currently VS1 uses 72 bands but they're spread all over Canada and the US. With more satellites and tighter beam placement it's certainly feasible to have millions of simultaneous connections.

I feel like I kind of rambled on there - if there's anything in particular you'd like me to expand upon I'd be happy to (and if someone notices I'm wrong about anything please let me know!).

HughesNet has 600,000-some subscribers. WildBlue has over 300,000. They're satellite ISPs with 12-15mbps residential service.

These are going to be LEO satellites (no higher than a few hundred km), instead of GEO satellites, which would make the lower bound of the latency pretty low (comparable to cable or DSL).

The alternative to the market served by satellite Internet isn't fiber, it's nothing (or in some cases, cell towers). To address your point: The satellite network would almost certainly be in LEO. There's no fundamental reason why LEO satellites should have high latency. They're only a few hundred kilometers out, so round trip times are measured in single digit milliseconds. GEO sats have latency (and bandwidth) issues due to their distance from the surface.

I suspect the initial use case is low bandwidth protocols (email, IM, notifications etc) that don't mind high latency rather than "high" bandwidth stuff (browsing, streaming video etc).

It's certainly better than the alternative in some places, which is zero internet. Look at how widespread "dumb phone" use is throughout Africa. Some incredible and empowering things can happen when unprivileged folks are given what we might consider outdated technologies.

What I'm wondering is how are they going to offer it to the people. Pay per minute? Pay for what you use?

No technological innovation can change basic physics. There will always be propagation delay in satellite networks.

Google Ventures' budget is reportedly nearer $300-$500M/year so I would imagine this is something different. There were rumblings of Satellite internet coming out of GoogleX but this seems to fit with their new Energy / Access group (Where Project Loon ended up) too. So my answer is that it definitely won't maybe end up in Google Ventures.

Yes, and all Comcast sufferers in the US.

Spectrum rights came up in the announcement video for the opening of the Space X satellite branch. The response was that spectrum to satellite is not scarce as long as roof penetration isn't required. Handset to satellite would work against that unless it did some sort of voip satellite/wifi handoff.

EDIT:

Even if he wanted to, Cook doesn't have enough power at Apple, practically, to be actually in a position to do that yet.

I mean clout. He literally can't personally decide to do that (yet) and just do it.

The Apple watch is the first category or undertaking of a similar size and novelty, and has yet to be accepted or succeed. (It will.)

My comment is being misinterpreted so I've clarified above. My comment isn't about what Apple can 'afford to do' it's about what Tim Cook can 'afford to do' (politically and in terms of consequences.)

Spectrum that can penetrate walls/homes is very scarce so that won't happen. It appears these sats will be for lasercom and home internet (requiring a dish/antenna).

What frequencies would this be at? Couldn't the govt restrict this frequency like they do today and auction it off?

You could do it either way, but probably asymmetric due to usage patterns.

Cable and DSL also have an 'outdoors' component, adding an external antenna for either improved bandwidth or to get the thing to work at all should be an option for a new broadband medium.

And when you're on the move that doesn't matter. One way to make it work untethered indoors is to simply bridge the satellite downlink box to a wifi repeater. That would get you coverage indoors and outdoors from regular devices around your house, and if they sell enough of these downlink boxes they could conceivably pool the bandwidth by creating a mesh of them.

All kinds of interesting options, even if it doesn't work directly indoors.

In general, because they're awesome. In particular, because Google also wanted to be in global-internet-coverage business (see e.g. Project Loon).

I don't see why it shouldn't. This has been the case pretty much every day for a long time so clearly it isn't against the rules. I agree that it isn't ideal but it's better to link to a good source than to find a poorly written article that is free to access.

Gosh. Would it be illegal for HN to do this automatically?

I love that this link is here, IANAL, but I'm curious: would pasting this link here violate the CFAA or Web Entertainment Theft Bill since it's bypassing a paywall? Would it count as a misdemeanor in that case to actually follow the link?

Here, have a bookmarklet:

`javascript:document.location.href='https://paywallbypass.org/?q='+document.location.href;`

Google Nears $1 Billion Investment in SpaceX Infusion Would Back Push to Provide Internet Access Via Satellites SpaceX delivered cargo to the international space station last week. SpaceX delivered cargo to the international space station last week. NASA/REUTERS By ROLFE WINKLER, EVELYN RUSLI and ANDY PASZTOR Jan. 19, 2015 5:30 p.m. ET

Google Inc. is close to investing roughly $1 billion in Space Exploration Technologies Corp. to support its nascent efforts to deliver Internet access via satellites, according to a person familiar with the matter. The investment would value SpaceX, backed by Tesla Motors Inc. Chief Executive Elon Musk , at more than $10 billion, according to this person. It isn’t clear what exact stake Google could end up with in the fast-growing space company. If Google completes the deal, it would be the Internet company’s latest effort to use futuristic technology to spread Internet access to remote regions of the world, alongside high-altitude balloons and solar-powered drones. By extending Web access, Google increases the number of people who can use its services. Spokesmen for Google and SpaceX declined to comment. News of Google’s potential investment was reported by tech blog The Information. Google has been considering satellite-based Internet service for more than a year. In late 2013, it hired satellite-industry veteran Greg Wyler, who at one point last year had more than 10 people working for him. Mr. Wyler left Google last summer and is now developing his own satellite-Internet venture. SpaceX builds and launches rockets and spacecraft. Mr. Musk last week described a general concept for SpaceX to launch hundreds of satellites into relatively low orbit to deliver Internet access across the globe. Mr. Musk told BusinessWeek the project could cost $10 billion to build and take at least five years, but gave no details about funding or manufacturing plans. For several months Mr. Musk has been mulling ways to expand SpaceX’s rocket-and-spacecraft manufacturing operations to designing and building satellites, according to aerospace-industry officials who have talked with him. Though short on specifics, his latest comments were the clearest sign yet of a long-term commitment to such expansion plans. It is likely to take years to establish designs and potentially set up a specialized satellite-making facility. But SpaceX already has some important building blocks. Industry officials said the company builds its own navigation and flight-control systems for spacecraft, which could provide some elements for satellites. There also are synergies between parts SpaceX makes today for solar arrays on spacecraft and such devices intended for satellites. One big technical and financial challenge facing the proposed venture is the cost installing ground-based antennas and computer terminals to receive the satellite signals. That issue has bedeviled some earlier Internet-via-satellite projects and threatens to complicate Google’s efforts, satellite industry officials and consultants say. Another unanswered question is how SpaceX plans to transmit Internet signals to Earth. The company isn’t believed to control rights to radio spectrum. Mr. Musk has discussed using optical-laser technology in his satellites, according to a person familiar with the matter. That technology works by beaming information from satellites in space. But lasers wouldn’t be a reliable way to deliver Internet service to Earth because, unlike radio waves, they don’t easily pass through clouds. The talks are somewhat unusual for Mr. Musk, who has resisted most outside investments that could reduce even slightly his control over SpaceX. Industry officials said if problems arise, SpaceX might need additional capital in the next few years to fund new rocket development and more launches. It isn’t clear what terms are under discussion. The Wall Street Journal reported Mr. Musk’s interest in satellite-Internet service in November, saying he was talking with Mr. Wyler. Mr. Wyler last week said his new venture, OneWeb Ltd., had secured funding from Richard Branson ’s Virgin Group and chip company Qualcomm Inc. Mr. Wyler said he hopes to provide Internet service from a constellation of 648 satellites in low-Earth orbit, using a large block of radio spectrum he controls. Mr. Wyler estimated the plan would cost as much as $2 billion. Messrs. Musk and Wyler stopped working together because of disagreements over control of any joint project, according to a person familiar with their discussions.

In case of WSJ, search for the article on Google.

fwiw, in case of Quora, add `?share=1` at the end of the URL.

Are you concerned about overcrowding? I don't know if that number is that big a problem.

For example, there are literally thousands of airplanes flying in the US airspace at any time. Now look up and see if you can spot one.

There's a lot of empty space up there. Even more so 200 miles up.

Why?