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Google To Lease and Refurbish Naval Air Base For Space Exploration
Taco Cowboy writes Google has signed a long-term lease for part of a historic Navy air base, where it plans to renovate three massive hangars and use them for projects involving aviation, space exploration and robotics. The giant Internet company will pay $1.16 billion in rent over 60 years for the property, which also includes a working air field, golf course and other buildings. The 1,000-acre site is part of the former Moffett Field Naval Air Station on the San Francisco Peninsula. Google plans to invest more than $200 million to refurbish the hangars and add other improvements, including a museum or educational facility that will showcase the history of Moffett and Silicon Valley, according to a NASA statement. The agency said a Google subsidiary called Planetary Ventures LLC will use the hangars for "research, development, assembly and testing in the areas of space exploration, aviation, rover/robotics and other emerging technologies." NASA plans to continue operating its Ames Research Center on the former Navy site. Google will take over operations at the runways and hangars, including a massive structure that was built to house dirigible-style Navy airships in the 1930s. NASA said the deal will save it $6.3 million in annual maintenance and operation costs.
Elon Musk makes a move towards cubesats, Google can't help themselves but to throw money after him. What's next, google's electric car, the google watch?
starfleet would be started by a search engine.
Looks like NASA finally figured out a way to deal with the Hazmat situation at the hangar.
...how can a publicly traded company possibly justify such investments to stockholders?
Now that Google has a military robotics subsidiary, surely they need a suitable location to house their growing army of robotic minions, no?
It has a golf course. Hangers make great party rooms.
$20MM per year in rent for an airfield, golf course, and of course the hangars! Google got a steal; they likely paid more for parking rights for their planes.
This airfield was one of MythBusters prime filming locations for large scale tests!
1000 acres = 4 square kilometers or 404 hectares
Video of some good progressive thrash music
$20MM per year in rent for an airfield, golf course, and of course the hangars! Google got a steal; they likely paid more for parking rights for their planes.
Because a golf course clearly adds value to a company like Google. [/sarcasm]
I'm a little mystified by this. If I was a shareholder (I'm not) my eyebrows would have shot up hard over a purchase like this. They may have a perfectly logical explanation but whatever the reason for this transaction is needs to be explained to the board and probably the shareholders because at first glance this doesn't seem to be a responsible use of cash. "Because it's cool" isn't an adequate answer when you are committing nearly half a billion dollars over the next 50 years. Google makes their money on advertising so it's not immediately clear how this transaction furthers that business. I understand that some of what they do indirectly drives advertising traffic but an explanation is in order.
This is what a mega-corporation can afford to do when it doesn't pay taxes.
You can lead a horse to water, but you can't make it dissolve.
Many former air bases have been turned over to private companies, or city/county development. Pease, NH, Griffiss, NY, Loring, ME, etc, etc.
...how can a publicly traded company possibly justify such investments to stockholders?
They may have a good explanation but I had exactly the same question. On first pass this seems like a very irresponsible investment. If I was a significant shareholder I would definitely want an explanation why they committed tens of millions of dollars to something so far outside their core business. Might be fine but an explanation is in order at least to the board and the shareholders.
When you make people 250% gains in 4yrs, you can do whatever the hell you want... they aren't taking their money out.
Maybe not over this specifically but if I'm a shareholder and I see a number of "investments" like this which aren't explained and I don't understand then I would be nuts not to reconsider whether it remains a good investment. I've seen plenty of companies get successful and then start throwing lots of money at stupid stuff just because they can. Google has had a good run but there is no guarantee that it will continue or that management won't drop the ball. Only an idiot invests their money in a company doing seemingly irresponsible things without explanation.
Business Judgment Rule + Loads of Capital (this is less than .5% of their current market cap spent over 60 years) + calling it R+D = no problem for the execs/board.
Their market cap is irrelevant here. They are spending a billion dollars (over 60 years) of CASH on this transaction. Even for a company like Google that is not a trivial amount of money. If I was a shareholder I'd definitely want some sort of explanation regarding what the heck they are up to. They've got a good track record so benefit of the doubt would likely be granted but the reason for this isn't immediately obvious to most of us.
Honestly, the biggest issue the shareholders would probably have is the museum/educational facility, but even that will probably be easily justified the same way that public outreach and charitable donations are.
The biggest issue the shareholders *should* have is how/when this will impact future company profits. If there is a good reason for the investment (even an indirect one) then fine. But if the only explanation is that it is a place for management to park their toys then I'd be rightly pissed.
...is your stock's earnings being pissed away. If I were a Google shareholder I'd be furious. Happily, I am not. These yahoo's are blowing money that belongs to shareholders. Google is and always will be an advertising platform. That's it. Let the billionaires go on a lark on their own nickle.
It's the next logical extension of internet search. "...to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before"
Moffett is the place that Mythbusters conducts their more messy experiments such as crashing cars, etc. I wonder if google will still be amicable to them blowing up /crashing / setting fire to stuff.
Likely they won't have access to the giant hangar anymore...
Yes Francis, the world has gone crazy.
A few years back when the Navy was still at Moffat, I went to the open house during Fleet Week. They had a lot of interesting stuff going on. Some of the displays were set up in hanger 1, so I wandered in a side door and was looking at displays -- then I heard what sounded like the burner for a hot air balloon. When I looked toward the sound, I noticed it *was* a hot air balloon. They had a couple of balloons set up in a back corner, and they were giving people hot air balloon rides *inside* of hanger 1. And that wasn't the first thing I noticed. Hanger 1 is big.
What a spectacular deal!!
For less than $20mm/yr, a relative pittance, Google gets 60 years on a square mile of land right next to Silicon Gulch.
There is surely a longer term plan to make this into GoogleWorld, just extend the lease in a few decades.
Google leadership has not lost its smarts.
- From Contact Movie
Google already committed to NASA land near the Stephens creek trail for a new million + sf building. Lot of environment concerns delayed that. Then Nokia went under and they got that campus across 101 and all those buildings on shoreline became available, the NASA land although escavated was not needed and not developed. With the lease, google gets the whole campus. There is much more land there than hangers. The baseball fields, the old crappy buildings, the golf course, the commissary, it's all theirs. Google has been buying neighborhoods in mtn view for affordable housing for employees.. Now they don't have to. Best thing is, they don't have to worry about overusing the runway for their jet fleet, for delivering celebrities to the breakthrough awards ceremony, I mean for NASA missions.
This is a federal land grab. Now NASA doesn't have to worry about the problems of moffet field, the MEW superfund, the TCE in the ground seeping to the bay.
It's just a shame to see this go to the highest bidder, and for the rest of NASA's 99 year lease on the land.
...how can a publicly traded company possibly justify such investments to stockholders?
Most of google voting stock is owned by company insiders. I hear 3 people basically control the voting rights to the company. Modern stock issues are a scam.
The new Class C shares have no voting rights. The Class A shares have one vote each, but collectively those votes are dwarfed by the 10-votes-per-share Class B shares. Those shares, which do not trade in the public market, are owned by Google insiders, who will also get Class C shares in the distribution ...----... The split was first proposed nearly two years ago as part of a plan to "preserve the corporate structure that has allowed Google to remain focused on the long term." ...---.... As originally proposed by the company, the move would have made it easy for Google’s founders, Larry Page and Sergey Brin, and the chairman, Eric E. Schmidt, to cash in a large part of their holdings without giving up their voting control. But that ability has been limited after the company settled a class action suit filed by angry (Class A) shareholders, and reached agreements with the three top officials to limit their sales.
Basically they want the benefits of a public corp without the responsibilities. So yeah, they don't have to justify jack to stock holders. Remember, if you don't know who the sucker in the room is after 5 hands, the sucker is you.
http://money.cnn.com/2014/04/03/investing/google-stock-split/ http://economix.blogs.nytimes.... http://www.businessweek.com/ar... http://investorplace.com/2014/...
Of course you gotta be really die-hard to watch that Voyager series...
It will probably all start with a run-down shopping mall, using partially decommissioned airforce bases (like the Presidio) will come later...
Where is Mythbusters going to film their episodes now?
Most companies give their CEOs a private plane. Google gives their CEO a private airfield. Moffett is right next to Google headquarters which means Larry and Sergei can walk to catch a plane to anywhere. Of course this being a military base being used by NASA you can't just sell it to a private corporation as a private plaything so you need to dress it up in Research as a motive. Any corporation which needs to say "Do No evil" is suffering from a guilty conscience.
the stars. Now we just look down and worry about our place in the dirt.
From the Mel Brooks documentary, History of the Googleplex, Part I:
Welcome to the Panopticon. Used to be a prison, now it's your home.
404 not found. ;)
Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
Rightly pissed about what? You've got your dividends, and they're free to do whatever they please with what's left of their profits
Let me guess, you've never owned a company right? Because if you had you couldn't possibly say something so stupid unless you were trolling.
The shareholders own the company. All of it. Not just the dividends. If the management spends money irresponsibly then that is money that comes out of the hide of the shareholders. Sometimes people (such as yourself) forget this fact and the results are almost always bad for the company. The company isn't run for the benefit of management. The company is there first and foremost to bring a return to the shareholders.
Shareholders don't have control over all a company's doings and thanks the heavens for that.
100% incorrect. The shareholders OWN THE COMPANY. If 50%+1 shares of the company vote to do something they can do whatever they want so long as it is legal. If the shareholders cannot agree regarding what should be done then that is a separate issue. All the management reports to the board and the board reports to the shareholders. That is how it works.
It's not irrelevant at all. It's a measure of the company's size, health, and revenue generating potential.
Wrong! Market cap is a measure of EXPECTATIONS about the company's size, health and revenue generating potential. The key word there is expectation and that word makes all the difference in the world. Market cap is in no way shape or form tied directly to the performance of the company. It is a second order characteristic of a secondary market. It is quite literally the sum of a bunch of people betting on how good they think the future prospects of the company are much like betting on a horse race. It has NOTHING inherently to do with the performance of the company and market cap can be wildly out of line with the real world performance. (See Tesla Motors for an example of inflated stock price)
So if you are a Google shareholder, go ahead and speak up at the next meeting, and see how many people stand with you. Or better yet, bring a shareholder derivative suit against the execs/board. see how far that gets you. See how far you get.
If you own just 100 shares that would be pointless. I'd either keep them or vote with my feet and sell them and let some other dummy take the risk. If I owned a substantial percentage of stock (5% plus) then I assure you that my voice would be heard.
Just under 17 million dollars per year to rent an enormous amount of space in one of the most expensive real estate markets in the US seems like a bargain.
And why does an advertising company need to rent an airfield? There are plenty of good deals to be had but that doesn't mean Google should be chasing them all.
And if it was such a bargain then one might fairly ask why no one beat Google to it? Not like it hasn't been there for the last 30 years.
Google has long been interested in using stratospheric stations to get around the last mile problem
That would not solve the last mile problem for places with existing infrastructure. Even in places without it you'd need some specialized gear and the performance wouldn't likely be amazing. Furthermore it still doesn't explain why they needed to purchase an airfield lease for 60 years for a rather substantial sum when their business is advertising.
(and probably put Comcast and Verizon out of business)
Riiiight... I wouldn't hold your breath for that to happen any time soon.
Building a Hindenberg sized drone that could stay on station 60 miles above Salt Lake City and provide Internet service to every household in the Pacific and Mountain time zones could be done today, using yesterday's technology.
I think you are grossly underestimating the technical problems involved. Such a solution has most of the same problems satellite internet has. Internet service is two way which means that devices have to transmit as well as receive. A transmitter that powerful requires quite a lot of power so you are immediately eliminating a lot of mobile devices due to battery life problems. You would have to have a LOT of transmitters so there are spectrum issues. The latency is substantial. Weather is an issue. We don't have any drones that fit your description nor any near term prospects for getting them.
Not to mention that it's unclear how Google will achieve any ROI on any of this. I honestly cannot figure out what the heck Google is doing with all this work in robotics. Their investments are all over the map and if there is a common thread it isn't readily apparent. The only explanation I can think of is that it is some sort of defense against disintermediation but that's a bit of a stretch. Google is a public company and eventually they have to justify all this to the shareholders. Perhaps they can but so far they aren't being forthcoming.
I'm sure that Google has something in mind that uses contemporary technology, and perhaps plans to develop some new airship technology, too.
Why are you so sure of that? You've taken a few research projects of Google and extrapolated. Google is an advertising company and you think they are going to start developing airships? If you can explain to me a (realistic) scenario whereby Google achieves a reasonable return on investment trying that I'll be deeply impressed.
You keep saying that. Do you really think if you say that enough, it will magically become true?
I say it because it is true. Google makes well over 90% of its revenue from advertising. Everything else they do is a rounding error from a revenue and profit perspective. What else would you call them? They might become something else someday but they ARE an advertising company. Virtually every product they make is based on enhancing or protecting their advertising business. Email, maps, search, etc are all about increasing context sensitive ad revenue. Android is a defensive play to keep phone makers (Apple & Microsoft especially) from locking them out of mobile platforms. Set top boxes? Same thing - a defensive play. If you don't see it then you aren't looking at the big picture.