Profile: A Management Pro Plots Future of DigitalGlobe

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  Space News Business

Profile: A Management Pro Plots Future of DigitalGlobe

By MISSY FREDERICK
Space News Staff Writer
posted: 12 June 2006
01:14 pm ET


Profile: Jill Smith

President and CEO, DigitalGlobe

PRIVATE tabstops:<*t(13.500,0,” “,)> W hen a woman with a reputation on Wall Street as a builder and mover of companies took the reins of Longmont, Colo.-based DigitalGlobe from Herb Satterlee in November, the inevitable speculation throughout the industry was that she was brought in to facilitate a quick sale or Initial Public Offering (IPO).

PRIVATE tabstops:<*t(13.500,0,” “,)> Jill Smith’s background screams “shareholder value” — a lot more than it does aerospace. She last served as chief executive officer of eDial, a software company eventually acquired by Alcatel, and as chief operating officer of Micron Electronics where she drove its PC manufacturing business to profitability and made its Web hosting unit a major player in that industry. Her challenge now is to maximize DigitalGlobe’s presence and value in a rapidly changing market. “We’re a private company and every private company in the world is for sale, or looking for some sort of investment,” Smith said. Right now DigitalGlobe’s focus is in the direction of an IPO, but one that will probably not be happening for the company overnight.

She is just as focused on some of the other challenges ahead, such as completing the company’s WorldView 1 and WorldView 2 satellites, shifting the company in new business directions and maybe even changing its satellite architecture. Smith discussed these and other issues in a recent interview with Space News staff writer Missy Frederick.

PRIVATE tabstops:<*t(13.500,0,” “,)> In what direction do you intend to move DigitalGlobe?

PRIVATE tabstops:<*t(13.500,0,” “,)> We are a leader in a marketplace that traditionally has been very focused on the U.S. government as a primary customer, and as a primary source of funding for the industry. We believe we have a very significant and emerging industry in the commercial sector, and so our vision for the business is aimed directly at realizing and transferring the leadership we have today over to the commercial marketplace.

PRIVATE tabstops:<*t(13.500,0,” “,)> There are two very important components of our ability to help define and grow our market in that commercial sector.

First, is what we call the completeness of our imagery and archive. We need more capacity, higher revisit rates, and to be able to create a complete map of the world. So we are looking at the most effective ways to materially redefine the completeness of our imagery set.

The second piece is accessibility. It’s everything from ease of use to how easily I can find the imagery. How easily I can imbed it, how easily I can update it and manage imagery. This is almost certainly a web-based strategy. So we are placing a high priority and an investment focus on improving ease of access to imagery.

PRIVATE tabstops:<*t(13.500,0,” “,)> You’ve made some public remarks about companies needing to get away from the “Big Bird” model of satellites and consider launching constellations of smaller imaging satellites. Can you expand on this?

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We believe the available market has been artificially limited by the inherent economics of launching large satellites one at a time. When you launch large satellites your ability to price and produce a product for different markets is limited.

PRIVATE tabstops:<*t(13.500,0,” “,)> One solution is changing the economics of what we call the factory — after all, a satellite in the sky is a factory producing imagery.

Our job as content providers is to find the best way to create products and disseminate them. Having a lot more capacity in a constellation with a better revisit rate is critical for this. We cannot afford to have several satellites of the ilk of the current commercial satellite industry. We believe in a fundamental shift in model from one-at-a-time to many satellites in the sky at once.

PRIVATE tabstops:<*t(13.500,0,” “,)> What are Digital Globe’s plans to shift things in that direction?

We have no comment on that, but stay tuned.

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PRIVATE tabstops:<*t(13.500,0,” “,)> Do you have any plans for a possible sale for the company or an Initial Public Offering?

PRIVATE tabstops:<*t(13.500,0,” “,)> At some point, all private companies are potential acquisitions or are seeking an IPO. Our core strategy is towards an IPO and we will make the decision with regard to the timing of that as we see both the market and our evolution take shape. Our fundamental priority is to ensure we’re an extraordinary company which leads in this sector, with the outcome to ensure whether we have an exit strategy for our investors.

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PRIVATE tabstops:<*t(13.500,0,” “,)> How soon will this decision be made?

PRIVATE tabstops:<*t(13.500,0,” “,)> Certainly not this year, but in the medium term.

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PRIVATE tabstops:<*t(13.500,0,” “,)> What are the most recent timelines for WorldView 1 and WorldView 2?

PRIVATE tabstops:<*t(13.500,0,” “,)> We have no revisions to what we’ve said over the last three months — we expect WorldView 1 to be operational in mid 2007, and Worldview 2 to replace Quickbird by the end of 2008.

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PRIVATE tabstops:<*t(13.500,0,” “,)> Do you expect to be the first to the market in producing half-meter imagery.

PRIVATE tabstops:<*t(13.500,0,” “,)> We don’t have any insight into the timelines of our competitors; our focus is getting WorldView 1 up successfully.

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PRIVATE tabstops:<*t(13.500,0,” “,)> Have you secured your financing for WorldView 2? How is it being financed?

PRIVATE tabstops:<*t(13.500,0,” “,)> I can’t comment on it, but it is important to note that the financing doesn’t change the timeframe or the path to launch. We have been building this for some period of time, and the financing is running on a separate but parallel path to WorldView 1.

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PRIVATE tabstops:<*t(13.500,0,” “,)> Do you anticipate an extension of the NextView program?

Obviously we don’t have any inside information to the probability that the government would take that step. There is a very high level of support for commercial imagery. Whether another program is coming, it will certainly be informed by the fact that imagery has established its role and it importance to the U.S. government.

PRIVATE tabstops:<*t(13.500,0,” “,)> We’re not placing bets, but there are many forms it could take. It will be up to the government whether a new NextView program would be another satellite or whether it’s a data buy like the ClearView program. We’re not dependent on this for funding. But we hope such an award is made, and hope to qualify for it should such a thing happen.

PRIVATE tabstops:<*t(13.500,0,” “,)> What is the current breakdown of your business and how do you expect it to change?

PRIVATE tabstops:<*t(13.500,0,” “,)> Out commercial business is growing over 40 percent a year. That growth is happening both domestically and internationally. It’s about 50 percent international and 50 percent domestic.

PRIVATE tabstops:<*t(13.500,0,” “,)> As it stands right now, about 40 percent of the business is commercial. If not for the upcoming NextView program, I think you’d start seeing a swing to about 60 percent of business being commercial. But when NextView kicks in, more than 70 percent of our business will be for the government. But that’s not because there isn’t commercial growth; NextView is just so big it largely defines things.

PRIVATE tabstops:<*t(13.500,0,” “,)> How has Google Earth changed things for the remote sensing industry?

PRIVATE tabstops:<*t(13.500,0,” “,)> This is an observation not made by me but by quoting tens of customers – Google Earth did for the industry in six months what the industry hasn’t been able to do for years, opening up people’s eyes to the value of imagery in terms of its ability to enhance core applications.

PRIVATE tabstops:<*t(13.500,0,” “,)> As a result, there are many more applications which yesterday used line maps and now use imagery, and many which didn’t have maps at all but now are looking at imagery to enhance the value of what’s being presented and prepared.

One we’re all personally aware of would be real estate. Yesterday, it was all about data – if I wanted to find mortgage info for homes sold in my area, I would print it out in words. Today, I get a rich experience in terms of understanding the value of my real estate, where it fits in relative to the local pond, where locations of schools are.

We’ve just seen a very rapid evolution from info in the form of words to rich media applications.

PRIVATE tabstops:<*t(13.500,0,” “,)> Have you ever been faced with a customer or assignment you have been uncomfortable with and refused their request for imagery?

PRIVATE tabstops:<*t(13.500,0,” “,)> No. Our job is not to monitor and have a point of view on imagery. Fundamentally there are regulatory requirements with regard to the way we disseminate imagery. We first and foremost live by the regulations that define the disseminations. Never has there been a situation where we compromised that.

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For a longer version of this Profile please see www.spacenews.com