ViaSat on New Trajectory Following Deal to Create Satellite-Based High-Speed Internet

It was a big deal in October when ViaSat (NASDAQ: [[ticker:VSAT]]), the Carlsbad, CA-based specialist in satellite-based communications technologies, announced it was acquiring WildBlue Communications, a suburban Denver, CO-based internet service provider. The acquisition, once revealed, made a lot of sense. As a satellite-based provider of high-speed Internet service in mostly rural communities, WildBlue made a good fit with ViaSat’s broadband networking business.

But the size of the transaction, a cash-and-stock deal valued at $568 million, was a sign that ViaSat has attained a higher plane of corporate existence. While it did not rank among the 10 biggest M&A deals of 2009 (or even among the tech industry’s 10 biggest M&A deals), it was among the biggest venture-backed M&A deals in the last three months of last year. It serves as one more indication that the 24-year-old company that prides itself on its steady growth and stability changed its trajectory dramatically two years ago when it announced plans to build and launch its own $450 million communications satellite to provide high-speed Internet service.

To get a better understanding of ViaSat’s changing strategy, I recently sat down with chairman and CEO Mark Dankberg, who co-founded the company in 1986 with Mark Miller and Steve Hart. (When we met last month, Dankberg told me the ViaSat-1 satellite, which is being built by a subsidiary of Loral Space & Communications, remains on schedule for launch in 2011.)

The ViaSat co-founders’ initial strategy was to parlay their expertise in military satellite communications into contracts for engineering and proposal support with defense prime contractors on major satellite programs. Over time, they expanded beyond government communications by developing a variety of satellite-based equipment, software, and services for commercial customers.

By 2007, the year ViaSat’s revenue surpassed $500 million for the first time, Dankberg says the company was on the threshold of deciding whether or not to build its own satellite. As Dankberg explains it, the company had been in the satellite business all along, so the core issue that emerged was bandwidth, and the realization that satellite-based Internet users—like Internet users everywhere—have a voracious appetite for more of it.

But the bandwidth that ViaSat could

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.