October 03, 2005
ORBIMAGE Acquires Space Imaging
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Susan Smith - Managing Editor

by Susan Smith - Managing Editor
Each GIS Weekly Review delivers to its readers news concerning the latest developments in the GIS industry, GIS product and company news, featured downloads, customer wins, and coming events, along with a selection of other articles that we feel you might find interesting. Brought to you by GISCafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!

Message from the Editor -

Welcome to GISWeekly! Space Imaging has been for sale for a few months, but no one knew which company would be lucky enough to purchase all their assets. On September 16, ORBIMAGE announced that it had entered into a definitive agreement to acquire the assets of Colorado-based Space Imaging LLC, a leading supplier of space imaged visual information products and services. The total assets come to approximately $58.5 million less amounts paid by Space Imaging on its existing debt prior to closing. Read about ORBIMAGE's plans to maximize those assets in this week's Industry News.

GISWeekly examines select top news each week, picks out worthwhile reading from around the web, and special interest items you might not find elsewhere. This issue will feature Industry News, Acquisitions/Alliances/Agreements, Announcements, Appointments, New Products, Around the Web and Upcoming Events.

GISWeekly welcomes letters and feedback from readers, so let us know what you think. Send your comments to me at

Best wishes,

Susan Smith, Managing Editor

Industry News

ORBIMAGE Acquires Space Imaging

By Susan Smith

On September 16, ORBIMAGE announced that it had entered into a definitive agreement to acquire the assets of Colorado-based Space Imaging LLC, a leading supplier of space imaged visual information products and services. The total assets come to approximately $58.5 million less amounts paid by Space Imaging on its existing debt prior to closing.

Space Imaging has been for sale for a few months, but no one knew which company would be lucky enough to purchase all their assets. In a conversation with Gary Napier of Space Imaging earlier this year, I learned that Space Imaging has a number of assets that other space imaging providers do not have, and that both ORBIMAGE and DigitalGlobe were seriously considering it. ORBIMAGE president and CEO Matthew O'Connell expressed excitement about the Space Imaging acquisition.

Galveston braces for the effects of Hurricane Rita. The weakening Category 3 storm is expected to be the strongest hurricane ever to hit Texas.

Space Imaging's IKONOS satellite took this image of the area September 22, 2005.
“There are three asset groups in Space Imaging: 1) IKONOS and the production system - it's a great satellite and has a great production system; it has a good two more years to run and should run 'til the end of '07. It has one capability that OrbView-3 does not - it has the ability to do pan-sharpened multi - the lay people call it “colorized black and white.” That's a product that's in demand right now. 2) We get a terrific pool of talented employees, that's a great help. We have been growing rapidly and we've been looking for the kind of people that we're going to get at Space Imaging. Here in the (Washington D.C.) beltway we have to compete against all the big aerospace and defense companies and we also have to deal with the high cost of living in Northern Virginia. Picking up a pool of talented employees, many of whom have classified clearances, is a great leap forward for us in the HR world. (3) We can download directly overseas with Orbview 3. Space Imaging can download directly overseas with IKONOS; we have three international affiliates, they have several more international affiliates. We think if we pool those international affiliates, we will have a terrific portfolio of affiliates in the international world and we like to balance our revenue 50/50 U.S. government and regional affiliates in foreign countries. We have a great international
base to build on.”

ORBIMAGE had started a major effort in the international arena, according to O'Connell, “but buying Space Imaging really accelerates that.” What will Space Imaging do with all these assets? “We are very interested in continuing to grow by adding new products,” said O'Connell. “Obviously, if you have a big customer base it's easier to add new products. Acquiring Space Imaging gave the industry a good balance. I think we'll comprise about 60% of the market. I think DigitalGlobe will comprise about 40%. ORBIMAGE has a good value added production capability, and we want to keep working on new products we can sell to people, not just sell pixels.” Although
pixels will continue to be an important part of ORBIMAGE business, ORBIMAGE wants to add to that the sale of more value added products.

O'Connell quoted Bobbie Lencowski, who runs the NGA production facility in St. Louis. When ORBIMAGE won the NextView contract, she said, “we're excited about the future because NextView will produce more and better pixels. With those more and better pixels we can figure out more and better things to do.”

Both ORBIMAGE and competitor DigitalGlobe have created partnerships of interest lately that suggest a move into a more commercial arena -
ORBIMAGE and Microsoft penned an agreement to make ORBIMAGE the exclusive provider of satellite imagery for
DigitalGlobe partnered with Keyhole in a similar agreement. The idea between ORBIMAGE and Microsoft coming together was to bring their two companies together with the sole purpose of combining software and satellite imagery expertise for the developer community to see what they might develop. “Let's make it easy for people to get this terrific information and see what developer community develops,” explained O'Connell.

Four years ago, O'Connell was sent by Merrill Lynch to “clean up” ORBIMAGE and at that time the economy was coming off the cusp of what Alan Greenspan termed “irrational exuberance” in the capital markets. “We had the internet bubble and everyone though we could sell dog food over the internet,” noted O'Connell. “My attitude was, let's cut way back and not promise anything on the consumer side. Now I think we will see more on the commercial side.”

Currently, defense and Intel U.S. are ORBIMAGE's primary group of customers, but equally important are defense and Intel Overseas. O'Connell cited increased interest in agricultural monitoring and environmental monitoring, real estate monitoring, and pointed out what all three satellite companies were doing around the clock during Hurricane Katrina. “We're delivering that imagery to the NGA, but it wasn't for defense and Intel, it was for another threat - an environmental threat. Sen. Allard of Colorado (a supporter of space imaging) was talking today about the fact that the Army Corps of Engineers' maps of wetlands are all out of date. That's something we can help them with.”
O'Connell said they are less interested in the retail consumer who goes to Google to look for their house, for example. “There's revenue there, but we're more interested in business to business information services that we can use our satellites for.”


Yvent Networks, Inc. (Yvent) and AccuWeather.com (AccuWeather) announced a content distribution partnership agreement to provide AccuWeather content to consumers "on-the-go." Yvent's content delivery service, ROBAND(TM), will support all major Personal Media Player (PMP), Windows®-based devices, according to Dr. Fathy Yassa, founder and CEO of Yvent Networks.

MapQuest, Inc. and TomTom Inc. announced the launch of the MapQuest Personal Navigation Device (PND). Combining the latest GPS technology with preloaded detailed maps, the MapQuest PND(R) will deliver highly accurate, turn-by-turn, voice-guided directions in an easy-to-use portable device. With the MapQuest PND consumers simply turn it on, tap in the destination and drive. This announcement further extends the company's popular maps and directions beyond the desktop and builds upon its presence in the location-based services arena.

Pictometry International Corp., digital, aerial oblique imagery and measuring software provider, announced that it has signed an agreement with Blom ASA (Norway) that will license the company's technology to Blom for ten years with the option to renew.

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-- Susan Smith, GISCafe.com Managing Editor.

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