Back to top

Image: Bigstock

Alphabet (GOOGL) Winds Up Internet Balloon Company Loon

Read MoreHide Full Article

Alphabet (GOOGL - Free Report) plans to close project Loon, which was set up to build giant balloons for connecting rural areas through Internet.

Founded in 2011, Loon was a subsidiary of Alphabet that used high-altitude balloons to provide Internet access to rural and remote areas.

Google stated that it was unable to find a sustainable business model and secure partners for this project. Also, regulatory challenges had been leading to a delay in the execution of the project.

Though the technology had earlier proved successful in certain places like Peru and Puerto Rico where cell towers were downed by natural disasters, it has not been that profitable for the company as earlier expected.

Astro Teller, the CEO of X and chairman of Loon’s board said,” The road to commercial viability has proven much longer and riskier than hoped. So we’ve made the difficult decision to close down Loon.”

Google’s Other Internet Connectivity Efforts

Alphabet’s other efforts in this space include the execution of high-speed Internet service, Google Fiber, which is already available in a few cities. It remains a promising long-term business idea for Alphabet and is bundled in the other bets division.

Last September, Google launched a plan that doubles the download speeds on Google Fiber and comes with a next-generation WiFi 6 system.

Another project by Alphabet’s Google is building a new subsea cable called Equiano to connect Africa with Europe, since it boosts its cloud computing infrastructure. Equiano is Google’s third private international cable. According to the search engine giant, Equiano will be the first subsea cable to integrate optical switching at the fiber-pair level instead of the traditional approach of wavelength-level switching.

Google stated that a contract to build the subsea cable with Alcatel Submarine Networks was signed in fourth-quarter 2018. The first phase of the project, which connects South Africa with Portugal, is expected to be completed in 2021.

Intensifying Battle

Digitization holds the key to growth of businesses, be it brick-and-mortar or purely web-based. This is why technology giants like Facebook, Inc. (FB - Free Report) ,, Inc. (AMZN - Free Report) and Microsoft (MSFT - Free Report) are rushing to bring the majority of the world’s population together through Internet connectivity.

These companies have been scaling up their efforts to provide Internet services around the world, particularly to rural and remote areas.

Facebook is building a huge underwater cable around Africa in order to bring Internet connectivity to the continent’s 1.3 billion inhabitants. It has partnered with companies such as China Mobile, South Africa’s MTN, France’s Orange and Britain’s Vodafone, along with local network operators on the project.

Markedly, Amazon is looking for a space-based web service. The company’s Project Kuiper plans to launch more than 3200 satellites into space to offer low-cost Internet services around the globe.

In fact, Amazon is one of the key players in a bankruptcy bidding game for the assets of the OneWeb satellite venture. OneWeb has launched 74 satellites in orbit for providing high-speed Internet service, starting in the Arctic and then going around the world.

But the major challenge is to provide such fast Internet connections in remote and rural places on earth, where ground-based connection systems haven’t been established yet. Also, customers aren’t just confined to these places. Passengers in ships and airplanes, and those seeking real-time data from ocean buoys and oil rigs, are part of the target list too.

So, let us wait and watch which company can make the most out of it in this space.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>