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February 19, 2021 07:00 am

Why Google's Internet Balloon Project Loon Failed

Alphabet announced last month that it was winding down Loon, a nine-year-old project and a two-and-a-half-year-old spin off firm, after failing to find a sustainable business model and partners for one of its most prominent moonshot projects. Business Insider shares more details on why the project failed. From the report, which may be paywalled: CEO Alastair Wingarth told The New York Times last year that the team chose Kenya because it was open to adopting new technologies, yet it took two years for Loon to get the project off the ground. Meanwhile, a contract to bring internet to users in Peru remained stuck in a similar regulatory hell. "To get these government sign-offs and actually put our balloons on the stratosphere? That was hard," said one former employee. "That was really hard." Unlocking more airspaces would have also allowed Loon to share balloons between countries. For example, if a balloon in Kenya flew off course, it could be rerouted to Mozambique and used there. Clearing these aerial pathways meant Loon could also deliver its balloons to their destinations efficiently -- surfing any particularly good stratospheric winds that appeared en route. But as time went on, Loon realized how tough it was to land these agreements. The company tried to get clearance to fly balloons over Venezuela, which would have made it easier to travel to other parts of South America, but the country's authoritarian government would not allow Loon to do so, one former employee said. Some governments were also suspicious of allowing Loon in their airspace. Employees say it was not uncommon for foreign dignitaries to visit Loon's sites and offices to inspect their balloons for surveillance technology. As Loon wrestled with sticky geopolitics, SoftBank's money was fast drying up, and the company spent most of 2020 trying to attract new investment. Loon had some leads, the most promising of which was a new deal with SoftBank for a second cash injection, according to two former employees familiar with the negotiations. The amount Loon hoped to get from the new deal could not be learned, but one said they expected it would have had to be at least $100m to be worth it.

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