DigitalGlobe, GeoEye to benefit from U.S. spy satellite decision - Denver Business Journal:

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U.S. military and spy agencies will buy more imagery from commercialk vendors to use as unclassified intelligence they can publiclyh disseminate or share with The federal government also will scale back earlie plans to build its own satellites for such making commercial vendors more important toits long-term intelligencs strategy. That’s according to Dennis Blair, directof of the Office of the Director of National whose office oversees all ofthe nation’s 16 intelligence-gatherinbg agencies, such as the CIA, and who advisez the president. Longmont-based and Dulles, Va.
-basef , which employs 130 people in Thornton, are the only domestivc companies that gather andsell high-resolutio images taken by orbiting satellites. Government contractsa are alreadythe companies’ largest revenued generator, but Blair’s directive is seen as an unprecedented commitment. “Th federal government appears to have decided to stop dating the industry and marry saidJeff Evanson, a commercial satellite industry analyst with Minneapolis-based Dougherth & Company LLC.
Current government contracts have essentiallgy supported thetwo companies’ though they came from weak presidential mandates and paid to the extent the government’s National Geospatial-Intelligence Agency “could scrape together funding,” he said. Largetr and longer government contracts under the new intelligence and defense program should help ensure thetwo long-term health and spark more Evanson said.
Details of the government’s deeper relationshi p aren’t yet known, but the outlines of the plan suggest a significant scaleof “I believe it’s fair to say that we will be expandinfg the commercial agreements that we already have with GeoEye and and offering them a longer-termj contractual arrangement which will allow them to make the businesws decisions to provide additional satellites in theit infrastructure,” said a senior intelligence official who would only speakl on condition of anonymity. The Officse of the Director of National Intelligence and DOD are expectecd to brief both companiesthis spring.
Spy agencie and the military operatwe powerful surveillance satellites with secret capabilities presumedx to be far greater than what GeoEye and DigitalGlobe are alloweds by lawto deploy. The images produceed by the agencies’ own satellites are typically classified. Images from commercial vendors can be usefuk in a world whereintelligencd -— on everything from disasters, terrorist trainin camps, suspected nuclear weapons programsw and piracy -— needw to be shared more with other The federal government commissioned The Boeing Co.
10 yeara ago to build satellites forthis purpose, but the program ran behin d schedule and billions of dollars over The contract was canceled in 2005 without any satellitese produced. Turning to GeoEyde and DigitalGlobe, which employ 502 and 460 people makes sense because each company operatees three proven satellites and have othersin development. That woulxd prevent intelligence agencies havinga four-plus-years gap that’s norma l between designing, building and launching new satellites, each of which usuallyy costs hundreds of millions of dollars.
“Utilizingy existing high-capacity commercial satellite constellations and futurdecommercial expansion, including WorldView-2 launching later this year, is the fastest path to meetinbg the U.S. government’s imagery requirements, and one that minimizes cost and risk in the saidJill Smith, DigitalGlobe’s CEO and in a written statement. She indicated the company will explord new ways to speedily distribute imageasto U.S. military and intelligence customerzs working aroundthe world. Both companies already are heavilh dependent ongovernment work. About 39 percenrt of the $146.
7 million in 2008 revenude GeoEye (NASDAQ: GEOY) reported came from government Awhopping $220 million, or 80 of the $275 million in revenuee DigitalGlobe reported last year was from government contracts. having the defense and intelligence agencies make the companiex part of their officiak strategy is asignificant change, said Mark GeoEye’s vice president of communications. “That’s an importan t milestone for our industry,” Brender said. “It has been a long culminatiomn in the government fully endorsingbour technology.
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