As I reported here exclusively back on May 11, Google has been in talks with Virgin Galactic for acquisition of its LauncherOne satellite technology and an equity stake in Richard Branson’s space tourism company. Sky News reports:

The talks are likely to lead to a deal with two main elements, according to insiders. The first will see Google inject hundreds of millions of dollars into a joint venture, with Virgin Galactic folding in the technology it has developed as part of its efforts to build the world’s first space tourism business. The second component will involve Google spending roughly $30m (£17.8m) in return for a small stake in the Virgin Galactic holding company. The terms of the alliance have not yet been finalised and could yet be altered before a deal is struck. A person close to Google said, though, that its £17.8m investment could value Virgin Galactic at as much as £1.2bn, equating to a shareholding of approximately 1.5%.

The hundreds of millions is likely a reference to Virgin Galactic’s LauncherOne, which is a project to air launch small satellites from the WhiteKnightTwo mother ship. One possible scenario involves Google purchasing the Newton engine technology and moving development activities up to Moffett Field in Northern California from their current location at the Mojave Air and Space Port. A Google subsidiary is in the process of leasing the former Navy Air Station, which is now managed by NASA Ames Research Center.

Google is reportedly willing to spend up to $3 billion on a project to provide global broadband services via satellite. The company is WorldVu Satellites Ltd., which has proposed a constellation of 360 small satellites weighing 250 lbs each. LauncherOne is designed to loft payloads weighing 500 lbs into low Earth orbit.

Google has also invested in Titan Aerospace, which makes high-altitude drones that can be used for providing broadband communications. The company also is working on Project Loon, which would provide the same services using high-altitude balloons.

Rival Facebook is also looking to provide broadband services on a global basis. The goal is to reach billions of people not able to routinely access the Internet. Satellite broadband could also allow these companies to get around censorship by national governments.

Google also announced this week that it will spend $500 million to Skybox Imaging, which provides satellite images of the Earth that can be used in Google Maps and Google Earth.

The equity stake would be a financial boost to Virgin Galactic and assist the company in completing its flight test operations, which are set to resume with flights of the SpaceShipTwo tourism vehicle by late summer. The company is hoping to launch Branson and his two children on the first commercial flight from Spaceport America in New Mexico by the end of this year.

Sources report Virgin Galactic is under a deadline from Aabar Investments to fly Richard Branson to space in 2014. Otherwise, the investment company — which is owned by the Abu Dhabi government — would cease funding to the program after contributing $390 million to it. Virgin Galactic denies that it is under any such deadline.

It’s not clear whether the Google investment would relieve any of the pressure the company is under to fly this year. Company officials have talked about a very short flight test program prior to beginning commercial operations. Some observers have expressed fear that the flight test program will be too short. They are also concerned about the company’s decision to switch from a rubber to a plastic engine, which they fear will not be sufficiently tested on the ground prior to powered flights.