DigitalGlobe’s [DGI] stock price finished down $1.25 per share on NASDAQ Tuesday after news broke of Google’s [GOOG] agreement to acquire satellite imager
Skybox Imaging for $500 million in cash, subject to adjustments.
DigitalGlobe viewed Skybox as a major existing competitor, according to its annual 10-K filing with the Securities and Exchange Commission (SEC). Skybox also listed Google as an existing competitor as an aggregator of imagery and imagery-related products and services. DigitalGlobe said its marketing efforts could be negatively affected by the emergence of new remote imaging technologies or the continued growth of low-cost imaging satellites. Skybox said it built and launched the world’s smallest high-resolution imaging satellite.
DigitalGlobe spokesman Turner Brinton said Tuesday the company has an existing multi-year deal with Google and that it remains in place, but he wouldn’t specify how long the deal lasts. Brinton said in a statement DigitalGlobe believes Google’s purchase of Skybox shows the market for geospatial imagery and analysis is large, dynamic and rapidly growing. Brinton said DigitalGlobe believes the market is moving toward higher resolution, higher positional accuracy and greater spectral diversity. The company also believes a decision from federal government on resolution restriction relief is imminent, Brinton said.
Google said Tuesday in an email that DigitalGlobe and Astrium, now known as Airbus Defence and Space, have been “great partners” in making Google Maps what it is today, and the company doesn’t expect their “strong working relationship” to change any time soon. Airbus in September entered into an agreement with Google to provide imagery in support of Google Maps, Google Earth and other various products and services.
An industry official said Tuesday while Skybox imagery is not nearly the quality of DigitalGlobe imagery in resolution or mapping accuracy, it’s good enough for Google Earth over remote areas of the planet. Even with access to older aerial imagery, the official said Google will likely still rely on DigitalGlobe imagery over urban areas where resolution and accuracy really matter.
Google said Skybox’s satellites will help the keep the company’s Google Maps products accurate with up-to-date imagery. Google also hopes, over time, Skybox’s team and technology will be able to help improve Internet access and disaster relief, which Google said it has long been interested in.
The deal is subject to customary closings conditions, including the receipt of regulatory approvals in the United States.