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Facebook Looking Into Buying Drone Maker Titan Aerospace

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Basis Goes To Intel For Around $100M

Facebook, one of the primary backers of the Internet.org initiative, which aims to bring affordable Internet access to the 5 billion people in the world who still lack connectivity, is in talks with a company that could help further that agenda. TechCrunch is hearing that Facebook is buying Titan Aerospace, makers of near-orbital, solar-powered drones which can fly for five years without needing to land. According to a source with access to information about the deal, the price for this acquisition is $60 million*.

From our understanding, Facebook is interested in using these high-flying drones to blanket parts of the world without Internet access, beginning with Africa. The company would start by building 11,000 of these unmanned aerial vehicles (UAVs), specifically the “Solara 60″ model.

You can see an example of these UAVs, first introduced last year, here on YouTube. As the video explains, these drones are “atmospheric satellites” that can conduct most of the operations of an orbital satellite, but are cheaper and more versatile. The drones could potentially have many uses, including weather monitoring, disaster recovery, Earth imaging, or communications, the company has said, but clearly Facebook would be interested in that latter part.

The Solara 50 and 60 models can be launched at night using power from internal battery packs, then when the sun rises, they can store enough energy to ascend to 20KM above sea level where they can remain for five years without needing to land or refuel. Such capabilities make them ideal for regional Internet systems, like those that Internet.org would be focused on. (For those interested, Ars Technica took a more in-depth look at the technology and history behind Titan’s aircraft last August).

Titan Aerospace is a privately held venture with R&D facilities in New Mexico. The company has raised an undisclosed amount of funding through seed and Series A and A-1 rounds, and had announced in October 2013 it would open a B round soon.

Titan is currently led by CEO Vern Raburn, previously founder and CEO of Eclipse Aviation. The company was founded in 2012 by Max Yaney (CTO), in order to produce what it refers to as “atmosats,” new types of UAVs that do the work of near-Earth satellites at a fraction of the cost.

The designation of “satellites” is important here, as the idea has been to position these aircraft above the airspace that the FAA regulates in the U.S. Class A airspace ends at 60,000 feet stateside, and above that the U.S. doesn’t regulate, Fortune had pointed out last summer. That means the only issue in launching these in the U.S. would be the initial climb. In other parts of the world, the laws will, of course, vary. But in the developing markets Internet.org is focused on, it’s likely they’re not as far along in regulating such new technology.

Following the acquisition, all of Titan Aerospace’s production would be for the Internet.org project only, according to a source familiar with the matter.

Facebook’s Own “Project Loon,” Worth Less Than WhatsApp?

The Internet.org project competes with Google’s own R&D effort called “Project Loon,” which would involve balloons, not aircraft. TechCrunch had previously heard that Facebook has its own counterpart to “Project Loon” in the works, and this could be a part of that agenda.

In any event, if you’re keeping score at home, that’s $60 million to bring Internet to the world, and $19 billion for WhatsApp. That may seem odd, but this acquisition and WhatsApp would share the same broader goal of making the Internet more accessible, from Facebook’s point of view.

If Facebook could project weak but free Internet to developing nations via Titan Aerospace drones, it could then make a basic version of WhatsApp available to those users. They may not be able to send or view photos, but they likely could send messages and view status updates without having to pay for the Internet. While phones are getting cheaper, it’s the data costs that make the web unaffordable to much ofthe world. Titan’s drones could help Facebook fix that.

Facebook’s acquisition of Onavo could lend a hand, too. We hear the team is hard at work on data compression technologies that would allow the same functions to require less transmitted data to complete. Onavo-optimized WhatsApp or Facebook apps could run on a weaker Internet signal, such as from drones, because they don’t need to send or receive as much data.

Many ask why Facebook would even care about getting these parts of the world on the Internet if they currently have such little buying power that it’s hard to make money off of ads shown to them. There’s the altruistic side of Internet.org, but when it comes to business, Facebook is playing the long game. It hopes that with time, everyone in the world will gain affordable access to the Internet and smartphones, which could help them join the knowledge economy and gain more buying power.

If Facebook can use Titan’s drones to be someone’s first experience on the Internet, they’re likely to get deeply hooked into the social network’s service and eventually become a lucrative lifetime user.

*Our initial tip on the deal came from someone outside the company who had unauthorized access to this information. We have since confirmed discussions are taking place, and have spoken to Titan board member, Asher Delung, about the unauthorized access, without revealing sources.