Google thinks its internet balloons will be a $10 billion business

Project loonScreenshot/Project LoonOne of Google’s Project Loon balloons

When Google first announced its ambitions to use high-altitude balloons to beam internet to the most remote parts of the world, it seemed like a pie-in-the-sky kind of idea.

About four years later, Project Loon is starting to look a lot less crazy.

On Monday, the company’s “floating cell towers in the sky” are capable of staying aloft up to six months and Google envisions its efforts eventually turning into a business that could make tens of billions of revenue dollars a year, according to The Verge’s Ben Popper.

Google will partner with telecommunications companies, beaming their LTE services to places they don’t usually reach, via the balloons. That saves the companies from having to build out their own infrastructure like cell towers or fibre optic cables to reach remote areas.

Google has already run tests with several different telcos — Vodafone in New Zealand, Telstra in Australia, and Telefonica in Latin America — and is working on commercial deals with other new network operators.

Google will split the revenue from any new customers with the telecommunications company providing the LTE spectrum.

Here’s how Project Loon lead Mike Cassidy describes it to The Verge:

“Think about it — with 4.5 billion people without internet access, take 5 per cent; you’re talking 250 million people,” he says. If those people pay just a small portion of their monthly income, say $US5 a piece, “you’re going to be in a billion dollars a month in revenue, tens of billions a year in revenue. So it’s good business, too.”

Right now, each of Google’s balloons cost tens of thousands of dollars to fly, but as Google pushes its research forward, that price will likely go down. Google believes Project Loon could be an enormous business — even bigger than YouTube, which currently pulls in about $US4 billion in revenue per year.

Cassidy also pointed out that developed regions could be interested in Project Loon’s services, too: Google met with Japanese officials interested in the project’s potential for providing Internet service if infrastructure was ever compromised due to another typhoon.

Although many people consider Google X (the branch of Google sprouting projects like smart contacts, self-driving cars, and Project Loon) as just a research lab for moonshot ideas, Cassidy made sure to dismiss that idea.

“Very early on in the project analysis it has to have a viable business model,” he told Popper, “And they are tough on the business model.”

Read the whole Verge piece here.

Project Loon stands to be an enormous business for Google. (YouTube currently pulls in about $US4 billion in revenue per year.)

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