University of Applied Sciences

Telematics / Communication Engineering

SEMINAR PAPER

Economic aspects, risks

and opportunities of
Googles project Loon

Author:

Ameen Ghalib

Matriculation Number:

1234567890

Tutor:

Joachim Werner, Prof. Dr.

Deadline:

13/05/14

Name:

Ghalib Ameen, BCs.

Matriculation Number:

1310287020

Date of Birth:

23/05/87

Address:

Lueger str.8 Klagenfurt

Adavit

On the basis of this statement I declare to have issued, produced and compiled this seminar
paper solely by myself. All means and sources used are quoted accordingly.

Declaration Date:
Location:
Signature:

FH Kareanten, Klagenfurt

Abstract

In the last two or three decades, the increasing demands on the internet have required more
developments and improvements. In this seminar paper, the history of the famous search engine
and the founders of this company will be discussed from the very beginning. The impact and the
contributions of Google, one of the largest internet companies of all times, is highlighting mainly
their latest invasions, the Loon project. The technical part of Loon (the structure, altitudes, power
supply, envelop and the transceivers used) is also included. The main points of this seminar
paper revolve around emphasizing the ultimate goal behind this project, the economic aspects of
it, and the process that Google will go through in order to make this project affordable to the
common users, not to mention hoe Google generates a huge amount of profit out of it. Also we
will go over the business model of Google and where project loon fits in to it. Finally, the threats
and obstacles that may delay or limit the growth of this project are being discussed while focusing
upon the potentials/prospects of Googles project loon.

Keywords
Google, loon, altitudes, power supply, envelop, transceivers, business model.

Contents
Abstract

1 Introduction

2 General view of Google

2.1 History of Google .2

2.2 Google Services 3
2.3 Google Projects .3
2.3.1 Google Glass 3
2.3.2 Driverless Car ..6

3 Technical Parts of Project Loon

3.1 How Loon Works? ...........................................................................................................................8

3.2 How Loon is designed? ....................................................................................................................9
3.2.1 The Envelope ...9
3.2.2 The Solar Panel ....9
3.2.3 The Electronics ....9

4 Economic Aspects of Loon

13

4.1 Business Model .13

4.2 Future Aspects of Project Loon ..15
4.3 Advantages and Disadvantages of Loon....16
4.3.1 Advantages........................................................................................................16
4.3.2 Limitations....17

5 Conclusion

18

6 List of Figures

19

ii

Chapter 1

Introduction
Google is the most famous name or brand on the internet, there is not a day passes by without using it
on our laptops or PCs screens. One of the complements that comes up with the greatly used internet, is
Google Inc. Google Inc. is an American internet search engine, founded in 1998 by two PhD. Students
Sergey Brine and Larry Page. Google search engine handles almost 80 percent of the users online
search requests or in other words queries, which makes Google the most visited search engine on the
internet itself. Google started as a search engine, which uses a special search algorithm to help the users
reaching their query as fast as possible compared to other search engines at that exact time. After a short
period of time, the growth of this engine was tremendous and was dramatically being a worldwide
attractor. Nowadays, it offers more than 50 internet services and products, starting from e-mail and
online document creation to software (Android) for mobile phones and tablet computers. Google
became an international and public company with franchised offices all over the world, from Europe,
America, and Asia. The work atmosphere is like no other, its informal style hasnt stopped the
corporation from rising to a great success with no single doubt. The working conditions have
contributed ultimately in the improvements of technology that we are witnessing nowadays. Dont be
evil is one of their many slogans that reflect the work ethics at Google. To summarize the above,
Google mission revolves around organizing the world information by making it accessible and useful.
In this paper we will focus on the company itself and their latest cyber invasions, which is the Googles
project loon.
The structure of this paper will be organized as follows: Beginning with a short history of Google and
their background and little glimpse about the founders of the company moving towards the projects they
have created over the years. The second chapter highlights their latest projects Googles loon project,
the purpose behind creating it, and the technical part of loon from the main parts of hardware structure
to the mechanisms of how the balloon moves and relocate itself in the vast atmosphere over the globe.
The last part of this paper will discuss the business model of Google and the economics aspects of the

loon project starting from many questions, for example, what is expected from this project?, how does
this project generate great revenue over the years? And what are the future visions for this project?

Chapter 2

General View of Google

In this chapter we will be introducing a glimpse of Googles history background, their internet provided
services over the years, and their latest projects or in other words their vital inventions.

2.1 History of Google

PhD. Students Larry Page and Sergey Brine began Google as a research project in January 1996 while
attending California Stanford University. By developing a technology called page rank, they were able
to create a search engine that estimate a website importance based on its incoming links. Initially named
BackRub, the google.com domain name was registered on the 15th of September 1997 and the company
was incorporated on the 4th of September the following year [1].
Its IPO (initial public offering) came out on the 19th of August 2004. The founders and the CEO of the
company Erick Schmidt remained in control. As a result of the IPO, many of the company employees
became millionaires and this led some to wonder if Google would live by its Dont be evil model.
Like many Silicon Valley startups Google was first based out of a garage, today it corporate headquarter
is in Mount view, California known as the Googolplex. The offices are informal and the work
atmosphere is casual, all the employees are encouraged to spent 20 percent of their time on personal
interests [2].

2.2 Google Services

Google most popular services is the online is its online search engine Google search. Users employ
this tool to look for information by typing key words into the search bar, the incoming results come from
the billions webpages indexed by the company and the order of the results is partly based on page rank.
Google has expanded is search results and paid listings on to other websites, through AdSense. AdSense
and AdWord form the engine of Google multibillion dollar revenue machine. Google also offers to the
marketers a free service called Google Analytics, which produces website visitors statistics. Thanks to its
innovation the company is now one of the biggest brokers in the online advertising market. Google search
has branched out to offer other types of services in many different languages as well, these include
Google image search, Google video search, Google maps and Google translate. Google has also released
several internet productivity tools, the most well-known of these is Gmail, Gmail was the first free web
mail service to of the users a 1 GB of free storage. Today Gmail offer unlimited storage (about 25 GB)
for a small fee. Google has also worked on other products such as the open source web browser Google
chrome, the mobile operating system Android and the social networking service Google+ [3].
Google also has Google.org, this not for profit organization main goals revolve around developing
renewable energy, improving access to health services and reducing wide world poverty.

2.3 Google Projects

In this section, the discussion revolves around two of the most intellectual projects that Google had
lunched over the years. brief information about Google glass and Google driverless car will be given
below.

2.3.1

Google Glass

About two years ago, Sergey Brine wore the first prototype of Google glass in a Foundation fighting
Blindness event in San Francisco. But what is Google glass?
3

Google glass is an OHMS (optical head-mounted display) wearable computer. You can easily display
most of the information that you want and normally seek to evince through the internet on your smart
phone, but the uniqueness that lays behind this glasses, is that you can display those information on a
smart glass -hands free-. Google glass was developed in the super secrete lab Google [X], which is
devoted to technological advancement breakthroughs [4]. But what are the reasons behind creating this
brilliant contrivance? The answer to that obvious question is time and effort themselves. In order to
check some information on your smart phone e.g. e-mails, messages, phone calls or even using your
favorite apps which are installed on your device, surely, you need to reach your phone, unlock it,
browse through your apps, and then you will gain what you are seeking for which may take
approximately from 20 to 30 second. Based on this contrivance, the whole process has dramatically
changed, and with that Google tried to reduce the time between the intention and the action itself. Lastly
yet undoubtedly, they achieved what was absolutely impossible to even think of [5]. This device allows
you to use many features, like getting directions, taking a picture, recording a video etc. instantly
through communicating with your glasses via voice. All you need to do is: connect the glasses to your
smart phone via Wi-Fi or data tethering, install the Google glass app on your smart phone, and finally,
you are ready to go. Eventually, the need of this kind of technology is always in an expansion as long as
human beings look for intellectual easiness and technological satisfaction.

Figure 2.1:

Features of Google glass

Source: http://www.cnet.co.kr

Figure 2.2:

Google glass

Source: http://www.publimetro.com.mx

2.3.2

Driverless Car

When we talk about driving cars, it's a normal and regular thing to discuss; cars are an old invention
that has settled in our lives long time ago. However, if we talked about a driverless car, that would be
an extremely different and vital subject. Let's think about the concerned phrase itself, driverless, so
basically, there's no driver. As we mentioned previously, the vital impotence of technology, the one and
only goal of this, is to experience easiness and vitality throughout our lives. It might be really hard to
understand the developments that the technology is witnessing nowadays, but it's not that hard to accept
it in our lives; it's all about being up to date with whatever comes up on the intellectual technological
surface.
One of the major goals that Google is striving is fame and superiority among other companies that have
similar considerations regarding their goals. One way to reach this goal is obviously inventing new and
terrific contrivances like the driverless car in order to dramatically change the aspects of life itself.
According to [6] a Driverless car is a vehicle equipped with an autopilot system, which is capable of
driving from one point to another without input from a human operator.
The Google driverless car was designed to implement AI (Artificial Intelligence) software plus a
specific set of hardware including a radar and motion sensors that can simulate or in other words mimic
the driving experience as if the car was driven by a human being. With a driver behind the steering
wheel and a technician in the passenger seat, seven test cars managed to exceed the one thousand mile
margin without any human intervention. Despite the success of all the trials that Google has made, this
project is still in its beta version, which means its not ready for mass production yet [7].
The main lead guys behind this project are Stanford University professor Sebastian Thrun and Google
engineer Chris Urmson. But how does the car work? The system contains a laser range finder devise
mounted on the roof of the test car, this devise is responsible for providing a detailed 3D map of the
surroundings environment; the car combines the laser measurements with high resolution maps of the
world producing different types of data models that allow it to drive itself while avoiding obstacles and
respecting traffics lows [8].

Figure 2.3:

Google Driverless Car

Source: Google, Articlebase.com, Wheels.ca

Chapter 3

Technical Parts of Project Loon

Many people dont realize this, but the majority of the world is not connected to the internet. So the
big question is how do we get a cost-effective, inexpensive and reliable connectivity to the remaining
7

five or six billion people in the world who dont have access to the world wide web? The answer to that
is Google project loon. But what is Loon project? Its the idea that we could create a network of highaltitude balloons that float about twenty kilometers up, and through this network we can connect people
to the internet with the entire world. The balloon is about fifteen meters in diameter, but youd have to
have a telescope if you want to see one up in the sky [9]. Those Balloons have been used for years for
military communications. However, Google engineers had to develop this idea and overcome some
technical hurdles. All of this was developed and was worked on in secret for two years.
"I couldn't even tell my parents about it, so I'm excited for them to know today," said Cassidy, the
Google project director.
In this chapter, the introduction to the technical part of this project is being discussed. For example, the
movement of the balloons, the coverage, the transmitting, and receiving with much more details.

3.1 How Loon Works?

Lets begin with the balloon movement, as I have mentioned before, the balloon is about twenty
kilometers up in the sky, which means the balloon is actually in the stratosphere. And this layer of the
atmosphere is different because we have different layers of wind that go in very particular directions.
By moving the balloons up and down through these different layers we can steer. So by catching the
right wind, we can keep these balloons together enough to give good coverage on the ground. We can
sail with the winds; shape the waves and patterns of the balloons, so that when one balloon leaves,
another balloon is set to take its place. How does Loon connect? The balloon communicate with
specialized internet antennas on the ground, so the antenna points up at the sky and communicate with
the balloons, and each one of them talks to their neighboring balloon, and then back to the ground
station, which is connected to the local internet provider. What is the main creator of network up in the
sky? The radios and the antennas were designed specifically to receive signals from project loon only,
in order to achieve the high bandwidth over long distances involved. For instant, if these signals
werent filtered, this technology will not work. The balloons are completely solar-powered and
controlled through loon mission control. We can direct balloons to land in various collection points
around the world in order to reuse and recycle their parts. Lastly, the main goal of project loon is
simply to bring the technology of access to everyone on the planet Loon for all [10].

3.2 How Loon is designed?

As it was mentioned previously, Google is providing this Internet access to rural and poor areas with
no fees or what could be described as much cheaper than ever. Through such services, Google won't
make money immediately but Google said "We pursue these 'Moon Shot' ideas with the aim of solving
big problems and creating breakthrough technologies that ultimately will bring more users to their
services."

Mike Cassidy, who directed Project Loon, aimed to provide almost free and accessible Internet
connections around the entire world.

Mainly, loon has 3 essential parts:

The Envelope.

The Solar Panel.

The Equipment.

In this section the design and the work principle of each of these parts will be explained briefly.

3.2.1

The Envelope

As it was mentioned in [11] the inflatable part of the balloon is called a balloon envelope. Loons
balloon envelopes are made from sheets of polyethylene plastic, and they measure fifteen meters wide
9

by twelve meters tall when fully inflated. The goal of these balloon flights is to stay aloft for 100 days,
or three laps around the globe. The most important part about keeping the balloons in the air for a long
time is making sure that they are leak proof. Thats a very difficult challenge. The surface area of the
balloon is vast, about 500 square meters, and it provides a lot of opportunities for little pinholes and
leaks, which can shorten the life of the balloon flight. During day time, the balloons gets warmer and
the controllers of the balloons stress the balloon with altitude control maneuvers, pumping air in and
out, and changing the internal pressure. During night time, the balloons gets very cold, and they
become contacted and brittle. For instant, using the right materials and making them more durable is
very important to make sure that the balloon completes the intended 100 days.

Figure 3.1:

The Envelope

Source: http://www.designboom.com/technology/googles-project-loon-balloon-powered-internet/

3.2.2

The Solar Panel

When it comes to the power supply of the balloon, the balloons electronics are powered by an array of
10

solar panels. Solar array is mounted at a steep angle to effectively capture sunlight even during short winter
days. Designing the power system for Loon requires taking common components and using them in strange
and unusual ways. The engineering department is trying to fly a communication tower in the sky, which
needs to run 24 hours day, 365 days a year only on sunlight. So they use whatever amount of sunlight they
get every day, and the balloon has to survive on the lithium ion battery pack all night. And beyond that, the
balloon is operating in an extremely cold temperature environment; its about -70 C degrees in the
stratosphere and lithium ion batteries dont do very well in the cold. It's obvious that staying warm is a top
priority to keep the battery from losing its effective energy capacity. The entire system is isolated to reflect
and trap heat thats coming off from the electronics, and this way itself provides heat kind of for free. As
long as the heat is transferred in the stratosphere while it's mostly done through radiation; the designers
started to use multi-layer isolation, which is a type of space blanket material similar to what goes on NASA
space craft. Also the designing team did some experiments with specially formulated electrolytes and
cathode materials for better cold temperature performance. But there is a tradeoff that goes against the
achievable energy density in the battery [12].

Figure 3.2:

The Solar Panel

Source: http://www.designboom.com/technology/googles-project-loon-balloon-powered-internet/

11

3.2.3

The Electronics

As it is mentioned in [13] the box or the electronics A small box containing the balloons electronics
hangs underneath the inflated envelope, like the basket carried by a hot air balloon. This box contains
circuit boards that control the system, radio antennas to communicate with other balloons and with Internet
antennas on the ground, and lithium ion batteries to store solar power so the balloons can operate
throughout the night. In other words, the box is our flying communication tower that was mentioned
previously. The lower part of the balloon contains the radio antenna, sensors, altitude control systems,
processor, and the battery. Its approximate weight is about 10 kilograms.

Figure 3.3:

The Equipment

Source: http://www.designboom.com/technology/googles-project-loon-balloon-powered-internet/

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Chapter 4

Economic Aspects of Loon

In the past five to six years, Google has lunched many moonshots projects like Google glass,
the driverless car and their latest Google loon project. All of the mentioned projects are still in their
beta forms; thats mean they are in the testing phase and they are not feasible or ready for mass
production, hence generating revenue. All these projects are predicted to not adding anything to
Google business at least not for the time being. In this chapter Im going to explain what do we
mean by business model, what is Google new business model and finally the future of Loon
project.

4.1

Business Model

According to [14] A business model describes the relation of how an organization creates, deliver and
capture values.
Google generates over than 96% of its revenue through advertising. The company offers its services for
free to all internet users, but how can they gain outcome out of it? Google makes the revenue from the
advertisers who want to reach out to the online users. Google offers them to create text-based ads through
Google AdWord -a self-serve auction-. The ad appears at the top of the result on the right side of the page,
13

so in brief words; a user does a search, he/she eventually clicks on an ad, the owner of the ad will pay
Google every time a user click on their ad (CPC) cost per click.

Figure 4.1:

Google business model

Source: http://bmimatters.com/2012/03/29/understanding-google-business-model/

Beside all the services that Google from g-mail, YouTube, Google maps, translate and so much
more, Google business has 4 key costs elements. According to [15] the 4 elements are: R&D, Data center
operations, Traffic Acquisition, and Sales & Marketing. Google invests heavily into R&D to create new
products and improve existing products. Google is estimated to have over 1 million servers in data centers
around the world that process nearly 1 billion search requests every day. Google has invested heavily in
these data centers and managing their operations continue to be a key cost element. Traffic acquisition
costs comprises of money paid to the Google Network websites under the AdSense program and to the
distribution partners who distribute Google Toolbar and other products or drive traffic to the Google
websites. Google Sales & Marketing costs include the cost of managing global sales and support teams as
well as advertising and promotional expenditures.
But now the big question is where project loon fits in that business model? Google offers online services;
and online means that in order to have these services you need to be connected to the world wide web, so
thats where loon steps in. tow out of three persons in the globe are not connected to the internet, so Google
14

started this project to cover the remote and rural areas to support the people that they dont have the access
to the internet or to reduce the cost of having the internet. By increasing the number of users connected to
the internet Google will increase its revenue or in other word the more users connected to the internet, the
more Google makes.

4.2

Future Aspects of Project Loon

The extreme heights at which Google's Loons can flexibly operate suggest a lot of questions. Where
will they go? To what restrictions are they subject? Who regulates the stratosphere? Are they going to
face a physical intervention? And what will it mean for the world when Google breaks paranormal
restrictions, and achieves a stable stratospheric communications structure where everyone else has
failed?
To answer the entire above question, we have to give a look to similar projects. MIDF (Media
Development Investment Fund) which plans to formally request NASA to use the International Space
Station in order to test their technology in September 2014. Manufacturing and launching of satellites
would begin in early 2015, and Outer net is planned to begin broadcasting in June 2015. Indian
company Specify Inc. is the first private non-profit company that is working with Outernet to provide
global free Wi-Fi access. Forget the Internet - soon there will be the OUTERNET: Company plans to
beam free Wi-Fi to every person on Earth from space.
The New York Company plans to ask NASA to test their Outernet technology on the International
Space. An ambitious project known as Outernet is aiming to launch hundreds of miniature satellites
into low Earth orbit by June 2015. Each satellite will broadcast the Internet to phones and computers,
providing billions of people across the globe with free online access. Citizens of countries like China
and North Korea that have limited and expensive online activity could be given free and unrestricted
cyberspace. You might think you have to pay through the nose at the moment to access the Internet.
But one ambitious organization called the Media Development Investment Fund (MDIF) is planning to
turn the age of online computing on its head by giving free web access to every single person on Earth.
Known as Outernet, MDIF plans to launch hundreds of satellites into orbit by 2015. And they promise
that the project could provide unrestricted Internet access to countries where their web access is
censored, including China and North Korea [16].
One other example or project is under development, the Facebook drones. This project is similar to
loon and Outernet but instead off balloons and satellites, they are using drones (Unmanned aerial
15

vehicles (UAVS), also known as drones, and are aircraft either controlled by pilots from the ground or
increasingly, autonomously follow a pre-programmed mission) [17]. So from all the information that
is placed in our hand we can see that the future of Access is heading to the sky, beaming, transmitting
or communicating Wi-Fi from the space to the ground and Google has a big slice in this upcoming
market. Googles Loon Project has created great press when it was launched in June 2013 and clearly
has lifted the stock price. So they already made money out of it, but can the revenue meet the cost?
Clearly Google is multi billions company so building such innovative projects is for the future, they
dont expect to generate revenue in the next1,2 or maybe 3 years from now, because they can afford
these experiments. Its not the same for other companies that want to do the same, because they need to
generate money to cover the cost and hence make a profit, its not feasible for them. They have a plan
and its time managed so after a certain period of time with no earnings, the company will consider the
project as a failure and most likely this project will be terminated.

4.3 Advantages and Disadvantages of Loon

Every technology has both advantages and disadvantages. So loon also has some disadvantages.
Experiments are advancing so that they can avoid above disadvantages.

4.3.1 Advantages

The price of Internet data in many parts of the world continues to be unaffordable for the
majority of global citizens.

Project Loon will offer worldwide access to information to everyone, including those who
today are beyond the geographic reach of the internet or cant afford it.

Project Loon will guarantee this right by taking a practical approach to information delivery.

Project Loons near-term goal is to provide the entire world with broadcast data, Internet
access for everyone.
16

Wireless connection to the Web available for free to every person in the world.

Project Loon will also offer a humanitarian communications system, relaying public service
transmissions during emergencies in places where there is no access to conventional
communications networks due to natural disasters or man-made restrictions on the free-flow of
information.

4.3.2

Project Loon will use a network of balloons to transmit selected internet data audio,
video, text and applications to any Wi-Fi-enabled device, including mobile phones,
anywhere in the world.

Limitations

Cost was high as we have to take permission, buy antenna and fix it in home.

Maintenance cost will be very high as the total equipment is very costly and complicated.

Balloons must be replaced for every two to three weeks. As they must be refilled the gas and
should correct the balloons equipment if any damages occurs when they are moving at
stratosphere.

17

Conclusion

I have presented in this paper a general overview about one of the most successful companies in the
world Google Inc., by giving a brief history about the founders and how it all began in the first place.
Moving on to the growth of the famous search engine to be the most popular and all the online services
offered by the company. I have highlighted some of innovative or break-away projects like Google glass
and the driverless car, but focusing more on their latest and the core of this paper Googles project loon.
Stating with technical parts such as the balloon envelopes used in the project which are made by Raven
Aerostar, and are composed of polyethylene plastic about 3 mil or 0.076 mm (0.0030) thick, the box
contains circuit boards that control the system, radio antennae, and a Ubiquity Networks Rocket M2 to
communicate with other balloons, with Internet antennae on the ground, and batteries in order to store solar
power so the balloons can operate during the night and each balloons electronics are powered by an array
of solar panels that sit between the envelope and the hardware. In full sun, the panels produce 100 watts of
power, which is sufficient to keep the unit running while also charging a battery for use at night. And
finally the economic aspects of the loon project and how its going to be in the future with some predictions
based on similar examples.

18

List of Figures

2.1

Features of Google glass.4

2.2

Google glass..5

2.3

Google Driverless car7

3.1

The Envelope10

3.2

The Solar Panel.11

3.2

The Equipment..12

4.1

Google Business Model.14

19

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