DigitalGlobe slated to launch latest satellite this week

Longmont-based company plans to improve images for Google Maps and other clients

By Alicia Wallace

For the Ledger

If all goes as expected, there’s going to be another high-octane eye in the sky on Thursday when Longmont-based DigitalGlobe Inc. is slated to launch its latest imaging satellite into orbit.

Weighing in at 3.1 tons, WorldView-2 will have the ability to capture up to three times the Earth’s landmass on a yearly basis.

Its images of land will be used by the U.S. government for purposes such as defense and disaster relief. The company’s colored snapshots could very well play a key role in the average Joe’s road trip.

“The big news around the launch for us is capacity,” said KC Higgins, a DigitalGlobe spokeswoman. “What we get with that third satellite is a pretty amazing capability.”

If everything goes as planned, WorldView-2 will become DigitalGlobe’s third high-resolution imaging satellite in orbit, joining QuickBird and WorldView-1, which launched October 2001 and September 2007, respectively.

WorldView-2′s expected lift-off comes just months after the 15-year-old DigitalGlobe (NYSE: DGI) executed a $279.3 million initial public offering and also comes amid a time when interest in satellite imagery has blossomed. The U.S. government’s interest in the content is increasing, as has the chatter about eventual growth for consumer uses — such as Google Maps and Microsoft Virtual Earth.

Capacity leader

In 1993, WorldView Imaging Corp. — DigitalGlobe’s predecessor — received the first license to build and operate a satellite to take high-resolution imagery of the Earth for commercial sale.

The result was the EarlyBird-1, designed to collect 3-meter resolution panchromatic and 15-meter multi-spectral imagery.

The satellite was constructed a couple years later under a company called EarthWatch, created when WorldView Imaging merged with Ball Aerospace’s remote sensing unit.

However, the avian-monikered spacecraft’s life-span was short-lived.

Four days after its launch in 1997, EarlyBird-1 suffered a power system failure that caused a loss of communications. Three years later, EarthWatch launched QuickBird-1, but the satellite failed to reach orbit.

The following year EarthWatch’s fortunes turned for the better with the launch of QuickBird-2. With a high-resolution satellite in the skies, and seeing the commercial potential for creating an image archive, EarthWatch in 2002 became DigitalGlobe.

Five years later, DigitalGlobe successfully launched the first of its next-generation satellites, WorldView-1.

WorldView-2′s launch window on Thursday is from 12:38 p.m. to 12:52 p.m. Mountain Daylight Time. The eight-band multi-spectral satellite is launching on a Boeing Delta II rocket from Vandenberg
This image of the University of Colorado campus was taken by a DigitalGlobe satellite last year. Image courtesy of DigitalGlobe.
Air Force Base, along the Central Coast of California. The launch will culminate three years of work for Boulder-based Ball Aerospace & Technologies, which helped construct it with ITT.

“I kind of liken it to watching your child go off to the first day of kindergarten,” said Jeff Dierks, program manager for Ball’s work with WorldView-2.

If the launch and subsequent commissioning are successful — a result that analysts, company officials and the satellite’s engineers are quite optimistic about, in part because of the Delta II vehicle’s successes during the past 12 years — the first images from WorldView-2 could be available in 90 days, DigitalGlobe officials said.

The satellite is expected to nearly double DigitalGlobe’s collection capabilities — to close to 2 million square kilometers per day — and have the ability to visit a specific geographic place twice in the same day, officials said. The satellite also will have a “more robust color palette” with the abilities to analyze non-visible characteristics of the Earth’s surface and underwater, officials said.

“With the successful commissioning of WorldView-2, DigitalGlobe … it will have, far and away, the world’s greatest amount of imagery capacity,” said Jeff Evanson, an analyst who follows the company for Dougherty & Company LLC.

WorldView-2′s success, combined with an improving economy, could help vault DigitalGlobe’s 2010 revenues to upwards of $353 million, Evanson and colleague Charlie Anderson estimated in an August research report. DigitalGlobe reported $275.2 million in 2008 and posted sales of $137.2 million through the first half of 2009.

By 2011, DigitalGlobe’s three-satellite constellation could reach full capacity and the company might very well have revenue greater than $400 million, said Chris Donaghey, a director at SunTrust Robinson Humphrey, who follows DigitalGlobe.

But if a worst-case scenario plays out either during the launch or commissioning phase, and WorldView-2 is damaged or destroyed, it most likely will harm DigitalGlobe’s stock and revenue in the near-term, and not be a long-term hit on the company, Donaghey said.

DigitalGlobe most likely would speed up plans for a WorldView-3 to meet the satellite imaging needs of the U.S. government, a demand that is expected to continue to grow, he said.

“All indications are from the military that they want more of those capabilities, not less,” he said.

Hunger for imagery

In an April 7 memo, Dennis Blair, President Obama’s national intelligence adviser, announced intentions to increase the use of imagery available through U.S. commercial providers — essentially the “duopoly” of DigitalGlobe and the Dulles, Va.-based GeoEye.

GeoEye, which was formed in 2006 through Orbimage Holdings Inc.’s acquisition of Thornton-based Space Imaging, launched its sub half-meter imaging satellite GeoEye-1 in September 2008. GeoEye-2, the company’s next generation satellite that is being designed to discern objects as small as 0.25 meters, is expected to launch in the 2012-2013 time frame.

“DigitalGlobe and GeoEye are the only two companies in the world that operate such capable systems, and it’s really important that both companies do well,” said Mark Brender, a GeoEye spokesman. “Our government has come to rely upon commercial satellite imagery and has a huge appetite for it.”

That appetite, financially, could be a more than $300 million budget for the government’s recently announced EnhancedView program, which set up to be similar to the current imagery contracting program called NextView, said SunTrust’s Donaghey.

“The Department of Defense has been pretty vocal over the past nine months about wanting to buy larger quantities (of images). … I think the positioning of (DigitalGlobe) is very, very good for a constrained budget environment,” he said.

Despite the weakened economy, the satellite industry remains healthy, because of increasing demand for capabilities including high-resolution images and communications, said Daniel Longfield, industry analyst for research firm Frost & Sullivan.

“Because of a lot of different factors, it seems to have been recession-proof compared to other industries over the last two to three years,” Longfield said.

Generally, satellite companies have experienced 20 percent to 24 percent year-over-year increases in revenues during the past five years, he said.

“I would expect that to continue,” he said.

Also expected is for both DigitalGlobe and GeoEye to move their technologies from the “black world of intelligence to the white world of commerce,” GeoEye’s Brender said.

Both companies already have dipped their toes into the market: DigitalGlobe’s images are used by the likes of Google, Microsoft and Nokia; GeoEye’s are used by Google, and in industries such as oil and gas and real estate.

WorldView-2 will place DigitalGlobe in a solid position to further capitalize on the growing interest of the private sector by allowing it to provide “more images, better, faster and cheaper,” said Higgins, company spokeswoman.

But for now, the commercial business is only a small part of the industry, said James McIlree, director of research for finance adviser group Collins Stewart.

“I think that’s one of the interesting things about this industry, they’re searching for applications that would be relevant,” he said. “There haven’t been any killer applications out there.”

Both DigitalGlobe and GeoEye remain bullish that will change. GeoEye’s Brender likened the potential growth to looking through a pair of binoculars and having a desire to see farther and have a sharper image.

“Everyone wants to see and know more,” he said.

Thursday’s activities at Vandenberg, Higgins said, should help that need.