Facebook, Google in a Space Race?

March 4, 2014 by Paul Ausick

FB-droneFacebook Inc. (NASDAQ: FB) is reportedly in discussions to acquire start-up drone maker Titan Aerospace for $60 million. According to the report at TechCrunch, Facebook would use the drones to provide Internet access to areas of the world that are currently not connected as part of its commitment to the Internet.org initiative to bring cheap Internet access to some 5 billion people who do not already have it.

The drones would fly above 60,000 feet and could replace more expensive satellites in near-earth orbits. Getting the drones up there is still an issue, however.

The drone plan would compete with a similar plan from Google Inc. (NASDAQ: GOOG) called Project Loon that uses balloons to achieve the same purpose. Last week Google launched the 10 of its high-altitude balloons from New Zealand’s southern island, and the aircraft are presumably making their way toward South America at a speed of about 20 knots. A previous launch of 30 balloons last June to test whether the balloons could be guided to a preselected recovery zone resulted in the loss of 14 balloons when the winds off New Zealand played havoc with the craft. The current trial is meant to test whether Google can establish a zone of uninterrupted Internet access around the 40th southern parallel.

Neither of these projects is an instant moneymaker, even if either or both worked perfectly. Both Facebook and Google are looking at a long-term outcome where giving two-thirds of the world’s population cheap and decent Internet access could help move those folks into the modern information economy where they could eventually spend more money. That day may be a long way off, but if the report of Facebook’s interest in Titan Aerospace is accurate, you have to give the two companies some props for trying.

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