Loon, Alphabet’s subsidiary that used giant balloons to beam the Internet to people in remote areas around the world, has announced that it is closing its operations.
It used to be part of X, Alphabet’s innovative “moonshot” factory.
In a Medium post announcing the news, Loon CEO Alastair Westgarth explained that the company’s business model was ultimately unsustainable.
“While we have found some willing partners along the way, we have not found a way to keep costs low enough to build a long-term sustainable business,” he wrote.
“We talk a lot about connecting the next billion users, but the reality is that Loon is chasing the most difficult connectivity problem of all: the last billion users: the communities in areas that are too difficult or remote to reach, or the areas where service is provided with existing technologies is simply too expensive for ordinary people. “
Loon was born in 2011, with engineers using what they described as a “garbage bag-like” balloon for an early prototype. The company conducted tests for many years and in 2018 it was spun off from X to become Alphabet’s own subsidiary.
The company based its technology on a striking premise: that balloons would act as “floating base stations,” which could cover a much wider area – about 200 times more – than a station on the ground. ITS balloons were generally placed about 20 kilometers (12 miles) above the Earth.
Loon had made a name for itself in recent years by connecting people during natural disasters. In 2017, the Internet helped tens of thousands of people in Peru after massive floods, and after Hurricane Maria, it helped about 200,000 people get online in Puerto Rico.
Last year, the company also brought its balloons to Africa, marking the first commercial launch of a service of its kind in the region. Telkom Kenya, the mobile service provider it has partnered with, said Friday it would end its pilot with Loon in March.
The news also marks the end of another strategic partnership. In 2019 SoftBank (SFTBF) HAPSMobile’s unit invested $ 125 million in Loon. The companies said they would work together to bring “more people, places and things online”. HAPSMobile did not immediately respond to a request for comment on Friday.