GeoEye Signs Exclusive Deal with Google Earth

September 2, 2008 at 8:45 am | Posted in Remote Sensing Law Current Events | Leave a comment

by Joanne Irene Gabrynowicz with the blog faculty

Source: Space.com

GeoEye has struck a new agreement with Internet search engine company Google to make Google Earth and Google Maps the sole online mapping services to receive images from the GeoEye-1 satellite set for launch Sept. 4.

The launch of GeoEye-1 will come almost five months after a costly launch delay for Dulles, Va.-based GeoEye and after a summer of financial shuffling forced a restatement of earnings for the past three years. 

GeoEye-1 will be launched on a Delta 2 rocket from Vandenberg Air Force Base, Calif., with a Google logo emblazoned on its first stage. Google expects to begin receiving half-meter resolution images 45 to 60 days after the launch, said Google spokeswoman Kate Hurowitz.

“Google is interested in collecting the highest quality commercial satellite imagery available and as a symbol of this commitment agreed to put the company logo on the first stage of the GeoEye Inc. launch vehicle,” Hurowitz said in an e-mail to Space News. She would not disclose financial terms of the contract, other than to say that Google does not have any direct or indirect financial interest in the satellite or in GeoEye.

GeoEye already provides images to Google via the Ikonos satellite launched in 1999. That satellite also provides images to Virtual Earth and Yahoo Maps. GeoEye’s exclusive agreement with Google on imagery produced by the GeoEye-1 spacecraft will not affect Ikonos customers, GeoEye spokesman Mark Brender said.

In addition, Google will continue to purchase images from other services, including GeoEye’s primary competitor DigitalGlobe of Longmont, Colo., Hurowitz said.

GeoEye and DigitalGlobe both have contracts with the National Geospatial-Intelligence Agency (NGA) under the NextView program to ensure the government has access to commercial satellite imagery.

NGA spent $266 million that went for construction of DigitalGlobe’s WorldView-1 spacecraft, which launched in November 2007. The agency also spent $237 million that went toward GeoEye-1’s construction. 

Matt O’Connell, president and chief executive of GeoEye, toldSpace News July 24 launch schedule conflicts that pushed the GeoEye-1 launch to late summer likely caused NGA to hold off on buying images from GeoEye until the new satellite was launched. In a Jan. 14 filing with the U.S. Securities and Exchange Commission (SEC), GeoEye disputed a contention by Delta 2 launch provider Boeing Launch Services of Huntington Beach, Calif., that GeoEye-1 was not ready for the April launch. In an Aug. 12 press release, company officials said they believe NGA may have reallocated imagery orders to DigitalGlobe because of the launch delay.

The result: GeoEye’s revenue for the first half of 2008 was $68.6 million, compared to $85.1 million for the first half of 2007.

To complicate financial matters, GeoEye this summer studied its tax accounting methods and found it should restate its earnings in 2005, 2006, 2007 and the first quarter of 2008 to include the NGA contribution for GeoEye-1. In an Aug. 12 press release, GeoEye said it had not correctly included the cost-share payments. 

GeoEye controller, Tony Anzilotti, resigned Aug. 1. In previous SEC filings, the company said it would delay claiming the NGA money for constructing the satellite as income until after the GeoEye-1 launch.

GeoEye announced Aug. 19 that the complexity of the restatements would force a two-week delay in filing its second quarter statement and restatement of earnings to the SEC, a move that prompted staff with the Nasdaq Global Market Exchange to notify GeoEye that it was subject to delisting. That delisting was suspended pending a hearing, Brender said Aug. 29, adding that the restated earnings and quarterly report would soon be completed.

Nasdaq spokesman Wayne Lee said Aug. 29 that delisting proceedings are dropped once overdue reports are filed.