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Space ventures struggling in a dot-com world
Some companies aiming for new goals after setbacks

SEATTLE, Nov. 18 —   “No bucks, no Buck Rogers.” Twenty years after that observation on the realities underlying space flight first surfaced in “The Right Stuff,” rocket entrepreneur Gary Hudson quotes it anew to explain why it’s harder for space ventures to get off the ground in an Internet age.

WE DON’T need any more technology,” Hudson, president and chief executive officer of Rotary Rocket, told scores of space enthusiasts at a Space Enterprise Symposium in Seattle last weekend. “We’ve got lots.”

Rather, the lack of bucks is the key problem facing not only Hudson’s company, but dozens of other small ventures trying to stake a claim on the final frontier. And in his view — a view shared by many of the other groups seeking investments — one of the big factors has to do with the Internet gold rush.

The dot-coms have hijacked the institutional funding markets,” he complained. It was “a sorry commentary,” he said, when the second quarter’s biggest Bay Area investment went to “a company that distributes pet food on the Internet” — an apparent reference to San Francisco-based

Internet-related companies took in almost 60 percent of the venture capital doled out in 1999’s third quarter, according to the PricewaterhouseCoopers Money Tree Survey. But Hudson and other rocket executives acknowledge that there are deeper reasons why the revolution in commercial space hasn’t happened yet.

Many of the companies developing new launch vehicles had pinned their hopes on a seeming boom in satellite-based telecommunications. In recent months, however, that boom has gone bust: It turned out the consumer appetite for “anytime, anywhere” communications wasn’t as strong as expected, leading the Motorola-led Iridium satellite venture to file for bankruptcy protection in August.

Debt woes also have bedeviled ICO Global Communications, which is in the process of being bailed out by telecom magnate Craig McCaw and two of his affiliated companies, Teledesic and Eagle River Investments.

All this has caused investors to question the wisdom of investing in companies associated with building low-Earth-orbit satellite networks.

That was the target market for all of us at one time,” said said Mike Kelly, chairman and chief technology officer of Kelly Space and Technology.

Iridium’s setback “has caused us fits,” he said. “We have been associated with that failure.”