Facebook Shows Up on Satellite industry's Radar

NEW YORK (The Deal) -- Facebook's (FB) reported $60 million purchase of Titan Aerospace is a minuscule investment for the social networking giant that could have profound repercussions for the commercial satellite and space industry.

Menlo Park, Calif.-based Facebook's planned purchase of Titan, which has been reported by various news sources but not yet confirmed by the company, would be part of the company's broader plan to bring Internet access to parts of the globe that lack connectivity. Moriarty, N.M.-based Titan makes solar-powered drones the company said should be able to go five years between landings.

TechCrunch reported Tuesday that Facebook would like to deploy as many as 11,000 drones hovering 12 miles over the Earth in support of Facebook CEO Mark Zuckerberg's previously announced internet.org initiative.

Providing data access where wires are scarce is now the domain of satellite operators, including publicly traded ViaSat (VSAT)Globalstar and Iridium Communications  (IRDM), and expected expansion of those services is part of the growth story for satellite manufacturers including Boeing (BA), Lockheed Martin (LMT), Space Systems/Loral Inc. and Europe's Astrium.

So far, there has been little evidence that the satellite firms have anything to worry about, and unmanned aerial systems, or UAS, Internet plans like Titan and Google's (GOOG) "Project Loon" proposal to float balloons to connect have plenty of skeptics. But Frost & Sullivan aerospace and defense analyst Michael Blades noted that if Facebook believes in the technology, and is willing to put its cash stockpile behind Titan, it might be time for satellite firms to be concerned.

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