Google is thinking about putting hundreds of millions of dollars into a joint venture that would take advantage of Virgin Galactic's rocket technology, and perhaps eventually investing roughly $30 million for a small stake in the Virgin Galactic holding company.According to skynews, 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.
Skynews talks to insiders and saying, 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.
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.
