Facebook Inc. Looks to the Stars for Growth
When Facebook first announced last summer that it would work with six tech partners on the Internet.org initiative, the project seemed like it was as much about public relations as reality. Bringing the Internet to the world's 5 billion nonconnected folks had a nice, philanthropic sound to it, but the reality seemed a bit far-fetched.
Part of the reason Internet.org felt PR-ish is that Facebook CEO Mark Zuckerberg, at 29 years old and worth a net $28.5 billion, isn't necessarily the first billionaire who comes to mind when the topic of giving arises. A lot of people still think hoodies, youth, and all that money. To his credit, Zuckerberg doesn't belabor his philanthropic efforts, he just goes about his business -- like giving nearly $1 billion to a Silicon Valley nonprofit a few months ago. And if recent rumors prove true, Zuckerberg is taking tangible steps to bring Internet connectivity to the world, while also giving Facebook's long-term growth plans a boost.
Not being able to use the Internet may be hard to fathom for many of us. For a growing percentage of the U.S. population, going to the store or walking the dog without losing ourselves online via a smartphone seems ludicrous. But a full two-thirds of the world's population doesn't have access to the Internet, which is what Internet.org hopes to remedy.
The access roadblocks for most of the world fall into three categories. One is accessibility. In the world's emerging markets, such as large parts of Africa, there simply aren't Internet alternatives available. For those that do, making data plans affordable is another challenge Facebook and team need to overcome. Spending $60 or $70 a month for Internet access, let alone buying the smartphone or other device needed to get online, can be cost prohibitive.
The third challenge is streaming data more efficiently. Providing affordable Internet access to remote areas isn't likely to include the bandwidth and speed most of us take for granted, at least initially. Improving network efficiency and streamlining the sending and receiving of information using data compression technologies will also help to keep costs down.
Rumor has it
You may recall that early last summer Google began testing its Project Loon. Despite its unfortunate name, Project Loon came with good intentions: bringing Internet access to remote and underserved regions of the world. In Google's case, what made Project Loon, well, loony, was it used odd-shaped balloons designed to ride the winds of the upper atmosphere.
Facebook's plan to bring Internet access to the masses, assuming the rumors are true, seem a bit more sensible: use as many as 11,000 solar-powered unmanned aerial vehicles, or UAVs, to start, to circle remote areas just as satellites would, and beam down Internet connections. Facebook, according to the scuttlebutt, is in talks to acquire drone maker Titan Aerospace for an estimated $60 million.
The UAVs would circle above 60,000 feet, thereby avoiding FAA regulatory oversight. Impressively, Titan Aerospace said its drones can fly as long as five years using nothing but the power of the sun. Facebook's Internet access plan is more plausible than Project Loon, though you have to admire Google's willingness to think outside the box.
The business case
When you write a check to your favorite charity, you probably do so because you believe in its mission, whatever that may be. But that doesn't prevent you from taking the tax break that comes along with the contribution, and why not? The same concept applies to Facebook and its Internet.org partners, along with Google and other companies seeking to do good.
Bringing emerging markets into the 21st century is the right thing to do. But there are long-term upsides for Facebook, too. Five billion non-Facebook users is a massive, untapped market. It will be some time before Internet users in Africa and other emerging markets get online, let alone are able to act on Facebook's advertising, but the potential is undeniable. Helping those in need and building long-term value at the same time? Not a bad combination.
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The article Facebook Inc. Looks to the Stars for Growth originally appeared on Fool.com.Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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