THE WALL STREET JOURNAL. Wednesday, January 11, 2017 |B
TECHNOLOGY WSJ.com/Tech
Alphabet Inc.’s Google is in
talks to sell its satellite busi-
ness to competitor Planet
Labs Inc., a satellite-imagery
startup that is seeking a new
round of funding to help pay
for the possible acquisition,
according to people familiar
with the talks.
The sale of its satellite-im-
agery unit, Terra Bella, would
be a rapid about-face for
Google, which has recently
shed some of its bolder ven-
tures. Google bought the com-
pany for $500 million in 2014,
when it was known as Skybox
Imaging.
Discussions about the pos-
sible acquisition, which were
earlier reported by Bloomberg
News on Monday, are focused
on a possible cash-plus-equity
deal, the people said. Planet,
founded in 2011, is seeking to
raise funds to help finance the
deal and pay for continuing
operations, one of the people
said.
Terra Bella has launched
seven relatively small satel-
lites—each weighing roughly
220 pounds—to capture aerial
images of earth. The company
uses those images to collect
BYROLFEWINKLER
ANDJACKNICAS
data it can sell, such as traffic
at a cargo port or the size of
stockpiles at a copper ore
mine. The images also helped
augment Google’s mapping
service, said Tim Farrar, head
of satellite-research firm TMF
Associates.
But building, launching and
operating a fleet of satellites
is expensive, and Google has
decided it can save money by
purchasing similar imagery
from third parties, one of the
people said.
Mr. Farrar said purchasingsuch satellite imagery would
likely cost Google $10 million
to $50 million a year. “They
don’t need to own satellites,”
he said.
The move to shed a seem-
ingly superfluous unit from
the sprawling Alphabet empire
fits into the recent era of fi-
nancial discipline at the tech
giant that began nearly two
years ago with the arrival of
finance chief Ruth Porat from
Morgan Stanley. Alphabet has
also recently pared back ef-
forts in high-speed internet,robotics and modular smart-
phones, for instance.
Planet sells imagery of the
earth from its own fleet of sat-
ellites. The San Francisco com-
pany has dozens of satellites—
weighing roughly 10 pounds
each—in orbit, enabling it to
take pictures more frequently
of the earth’s surface, but the
resolution of the images is low.
Terra Bella’s larger satel-
lites can take higher-resolu-
tion images, but having just
seven satellites limits how fre-
quently it can take photos.GoogleSatelliteUnitforSale
Planet Labs is in talks
to buy the business,
which captures aerial
images of the earth
A satellite image collected by Skybox Imaging shows the aftermath of explosions at a warehouse
in Tianjin, China, in 2015. Google bought Skybox in 2014 for $500 million and renamed it Terra Bella.GOOGLE/SKYBOX IMAGING/REUTERSalysts estimate its annual mer-
chandise volume is larger than
that of eBay Inc. and Ama-
zon.com Inc. combined.
In December, the U.S. Trade
Representative put Alibaba’s
largest shopping platform back
on a list of marketplaces linked
to “significant infringement of
American businesses’ intellec-
tual property rights,” saying
that tens of millions of U.S. jobs
and several trillion dollars of
economic growth depend on
this intellectual property.
The agency criticized Ali-
baba’s bazaar-like Taobao
shopping site for the large vol-
ume of fake goods sold and
the difficulty that global
brands have getting infringing
listings removed. Alibaba said
it was disappointed with the
decision, given the company’s
efforts to clean up its plat-
forms and questioned whether
the move was motivated by
the U.S. political climate.
Alibaba also faces U.S. regu-
latory scrutiny over its ac-
counting practices. Alibaba
has said it is confident in its
financial numbers and is coop-
erating with the Securities and
Exchange Commission on the
accounting inquiry.
Wall Street lawyer Jay
Clayton, Mr. Trump’s nominee
to head the SEC, was among
those who worked on Ali-
baba’s IPO in 2014, which
raised $25 billion.A pledge by Jack Ma, the
billionaire founder of Alibaba
Group Holding Ltd., to create
American jobs by selling U.S.
goods through his e-commerce
platforms comes weeks after
Washington’s trade adviser
identified the Chinese com-
pany as undermining U.S. in-
dustry by failing to stamp out
sales of fake goods.
During a meeting with Pres-
ident-elect Donald Trump in
New York on Monday, Mr. Ma
discussed efforts to add one
million U.S. businesses to Ali-
baba’s online-shopping plat-
forms. He praised Mr. Trump
as “very smart, very open-
minded” and said he wanted
to improve trade and relations
between the U.S. and China.
Mr. Trump said, “Jack and I
are going to do great things.”
The meeting brought to-
gether Mr. Trump and an en-
trepreneur who embodies
much of what the president-
elect criticized during the U.S.
election campaign, when he
excoriated China for stealing
American manufacturing jobs.
Mr. Ma’s outreach to Mr.
Trump coincides with con-
cerns among U.S. regulators
and policy makers about Ali-
baba’s operations. The com-
pany dominates online shop-
ping in China through its
various marketplaces, and an-BYKATHYCHUMa Vows To Help
Create U.S. Jobs
Yahoo’s worth is tied to its
stake in Alibaba, while 13% is
linked to Yahoo Japan Corp.,
Mr. Sena wrote.
Six Yahoo directors will be
leaving after the Verizon sale,
including Ms. Mayer.
Ms. Mayer was named CEO
of Yahoo after she came over
from Google in 2012. She is
expected to remain with Yahoo
after it becomes part of Veri-
zon.breaches could be a material
event that would allow Veri-
zon to change the terms of the
deal, executives have said.
Still, analysts say most of
Yahoo’s value stems from its
stakes in Alibaba and Yahoo
Japan, not the core business
sold to Verizon. The core busi-
ness accounts for 10% of Ya-
hoo’s market value, Evercore
ISI analyst Ken Sena wrote in
a Dec. 15 note. About 61% ofthe closing of the roughly $4.
billion sale to Verizon, which
has been endangered by two
huge hacks of Yahoo’s user
data. In the filing, Yahoo said
Verizon could terminate its pur-
chase of Yahoo or renegotiate
the terms because of the hacks.
Verizon has become less
certain that the deal will go
through after a second breach
of one billion accounts was re-
vealed last month. Thehoo’s board last March and is
the former chief financial offi-
cer of Broadcom Corp., will
become chairman of Altaba,
according to the filing. He will
be joined by four other direc-
tors who are currently on Ya-
hoo’s board, including Thomas
McInerney, who was part of
the independent committee of
Yahoo directors running the
auction process last year.
The moves would occur afterternet business, the company
will change its name to Altaba
Inc. from RemainCo, Yahoo
said in a regulatory filing on
Monday. Altaba’s remaining
assets include Yahoo’s stake in
Alibaba Group Holding Ltd.
and Yahoo Japan. The name is
a combination of the words
“alternate” and “Alibaba,” a
person familiar with the mat-
ter said.
Eric Brandt, who joined Ya-Yahoo Inc. said it will whit-
tle down its board after com-
pleting its deal with Verizon
Communications Inc., and
several longtime directors, in-
cluding Chief Executive Ma-
rissa Mayer and co-founder
David Filo, will step down as
directors.
After the sale of its core in-
BYDEEPASEETHARAMAN
ANDMARIAARMENTAL
Yahoo’s CEO Will Exit Board After Sale to Verizon Happens
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