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The contest invites private teams from around the world to build a robotic rover capable of roaming the lunar surface for at least 500 meters and then sending video, images and data back to Earth, among other feats. The idea behind the challenge is to urge private industry to develop new robotic and virtual-presence technology to reduce the cost of space exploration.

"The Google Lunar X Prize calls on entrepreneurs, engineers and visionaries from around the world to return us to the lunar surface and explore this environment for the benefit of all humanity," said Peter Diamandis, chairman and CEO of the X Prize Foundation, a nonprofit prize-generating group. "Having Google fund the purse and title the competition punctuates our desire for breakthrough approaches and global participation. We look forward to bringing the historic private space race into every home and classroom."

The X Prize Foundation staged a splashy event to announce the contest here at the Wired NextFest conference at the Los Angeles Convention Center. Diamandis, Google co-founder Larry Page and former astronaut Buzz Aldrin were all on hand to talk about the prize. The press conference also featured video commentary from Google co-founder Sergey Brin, Tesla Motors backer Elon Musk and filmmaker James Cameron, who applauded new private industry efforts in space exploration.

"We're going back to the moon not because of a massive government program...This is Moon 2.0 with private industry...kick-starting the future of space exploration," Cameron said.

The contest comes at a time when NASA is working on new spacecraft and technology to take man back to the moon within the next 12 years. At a recent artificial-intelligence conference, Peter Norvig, the former head of computation at NASA's Ames facility who is now Google's director of research, suggested that the space agency is taking the more expensive approach in trying to send astronauts to the moon and that it should focus on robotics.

Page, who is a trustee of the X Prize Foundation, said that he and Google co-founder Brin were excited to fund the prize because they wanted to get kids around the world excited about engineering, math and science.

"I gave a speech recently, saying that science has a serious marketing problem. This is solution to that," said Page, who began conversations with Diamandis in March about backing the prize. "These kinds of contests are a good way to improve the state of...humanity in the world."

To that end, Google and X Prize launched a Web site for classrooms to learn about the project at Googlelunarxprize.org.

The challenge is the largest ever for the X Prize Foundation and the first major prize event for Google, which earlier this year threw a party at the Googleplex to benefit the nonprofit. The X Prize is best known for the $10 million Ansari X Prize, in which 26 teams from seven countries competed to fly a reusable spacecraft 100 kilometers above the Earth.

In 2004, Paul Allen-backed SpaceShipOne won the prize, and the craft has become the model for Richard Branson's Virgin Galactic space tourism company.

More recently, the X Prize Foundation has launched the $10 million Archon X Prize for Genomics, one of the largest such medical prizes. The challenge calls on private companies to create new technology that can map 100 human genomes in 10 days--a breakthrough that could lead to a new era in personalized preventive medicine. The foundation also has an automotive challenge, calling on inventors to build an energy-efficient vehicle that can drive 100 miles on 1 gallon of gas.

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Separately, Google has backed contests like the California Clean Tech Open, which will award six fledgling, environmentally conscious businesses with start-up kits worth $100,000 in cash, office space and professional services.

The Lunar Prize will be broken into segments: a $20 million grand prize, a $5 million second prize and another $5 million in bonuses. To win the $20 million, a team must land its rover on the moon by December 2012; thereafter, the prize drops to $15 million until December 2014, when the contest will end.

To win second prize, a team must land its rover on the moon and send data back to Earth, but it's not required to travel 500 meters. A team can collect bonus money for traveling farther than that distance.

X Prize officials said that they expect to see the first teams attempt the challenge within the next four to six years. Teams must be at least 90 percent privately funded in order to compete.

In an answer to a question about whether X Prize is working with NASA's efforts to go to the moon, Diamandis said that he hopes to start a conversation with the space agency about that. "We hope NASA will be a customer of the winning rover," Diamandis said.

Google and X Prize have teamed with several partners to support the contest, including Space Exploration Technologies (SpaceX), run by PayPal founder Elon Musk. SpaceX will be the preferred launch provider for competing teams. Google and X Prize also have partnered with the Allen Telescope Array, operated by the SETI Institute, to enable the communications downlink from the moon.

Musk, who also spoke at the event, echoed Page's sentiment about inspiring people around the world. "This is the greatest thing we can do for science, engineering and math," he said.