Alphabet Said in Talks to Sell Skybox Satellite Business
Planet Labs may buy Skybox and gain new employees from deal
(Bloomberg) -- Alphabet Inc. is in talks to sell the Skybox Imaging satellite business it acquired for $500 million less than three years ago, another sign the technology giant is ratcheting back grand ambitions to blanket the globe with internet service.
Planet, a satellite imaging startup former known as Planet Labs, may acquire Skybox, according to people familiar with the situation. Some employees from the Alphabet division, renamed Terra Bella last year, would move to Planet as part of the deal, while others may get different positions at Google, according to these people. They asked not to be identified because the transaction is private.
Representatives from Planet and Alphabet’s Google unit declined to comment.
The move signals an ambitious agenda for Planet, which has raised more than $150 million. In contrast, Google parent Alphabet has been curbing once-audacious plans to blanket the globe with internet access, partly through networks of small satellites. In October, the company cut about 9 percent of staff from its Fiber fast internet service.
In June 2014, when Google acquired Skybox, the search giant said its equipment would help keep Google Maps accurate with up-to-date imagery. It also hoped to use the technology to improve internet access and disaster relief. The division operated within Google’s mapping business and it launched a small number of satellites, each about the size of a refrigerator.
Alphabet seems to be switching from a strategy of developing its own satellite businesses to investing in other companies pursuing similar goals. The Skybox sale to Planet is an equity transaction, which means Alphabet will own a stake in the latter startup, according to some of the people familiar with the situation.
In 2013, Google hired satellite industry pioneer Greg Wyler to work on a $1 billion-plus project for the internet giant, but Wyler left in September 2014 to start his own company, OneWeb. Soon after, Google bought a stake in Elon Musk’s SpaceX, which launches a lot of satellites.
Fierce Rivals
Skybox and Planet were fierce rivals in the emerging market for small, yet capable satellites. Both hoped to surround the Earth with dozens -- possibly hundreds -- of satellites that can take near-constant pictures of the planet’s surface. The technology has been billed as helpful for things like tracking deforestation and counting the number of cars in retail store parking lots to gauge sales.
The companies differed in their approach. Skybox aimed to make larger satellites with higher image resolution, while Planet has looked to use more, smaller satellites. Skybox’s momentum seemed to slow following Google’s acquisition, while Planet Labs has continued to raise money and send many satellites into space.
Both companies compete against the heavyweights of the satellite imaging business: DigitalGlobe Inc. and Airbus Defence & Space, a unit of Airbus Group SE.
To contact the reporters on this story: Mark Bergen in San Francisco at mbergen10@bloomberg.net, Ashlee Vance in San Francisco at avance3@bloomberg.net. To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Andrew Pollack