Microsoft is disavowing knowledge of a 'Team Seattle' America's Cup tilt involving Bill Gates - but what say the next regatta is being lined up as a launch platform for Gates' "Internet in the Sky?"
The story that a Seattle-based syndicate involving Gates has been offering lucrative contracts and American citizenship to members of the victorious Team New Zealand was broken over the weekend by the UK's Observer newspaper.
As New Zealanders absorbed the news on Monday, the Washington Post fingered another alleged backer of the new team - mobile telephony entrepreneur Craig McCaw.
What Gates and McCaw have in common - apart from being enormously wealthy and hailing from Seattle - is Teledesic, a privately-held low earth orbit (LEO) broadband satellite venture which has trademarked the phrase "Internet in the Sky".
The appeal of LEO satellite networks has been tarnished since Gates and McCaw first formed Teledesic in 1995, with the bankruptcies of both Iridium and ICO Global Communications last year, and some commentators have wondered if Teledesic's long-planned launch date of 2004 might be too late, given likely advances in earthbound fibre technology.
But Gates and McCaw have been able to attract some heavyweight investors, including Saudi Prince Alwaleed Bin Talal (the savvy tech investor who bought into Apple Computer at its trough and has since seen his 5% share of the company appreciate nearly tenfold), Motorola, and Boeing.
And it now appears that the failures of the two early entrants may have convinced McCaw to move earlier. Last September, McCaw's co-CEO Bill Owens confirmed rumours that Teledesic had "decided to explore a variety of early-entry opportunities … these new opportunities may enable Teledesic to more quickly establish a leadership position in the satellite communications marketplace while also generating early revenue."
One of those opportunities became clear the following month, when McCaw unveiled a $US1.2 billion bailout of ICO to be led by his private investment company Eagle River Investments, the final stage of which is due to be completed this quarter.
This final round includes the participation of original ICO contractor Hughes Space & Communications, from which Teledesic recently hired two senior executives. Teledesic investor Boeing also provided the Sea Launch platform for the - failed - launch of ICO's first satellite in March. ICO is promising a network by mid-2001.
Although analysts disagree over the viability of leveraging parts of ICO's narrowband voice and fax network into Teledesic's broadband plans, the two enterprises are clearly moving in step. Even if Teledesic can't hurry the launch of a fully-fledged broadband service, it may see advantage in bringing forward the commercial debut of its brand.
Forward to when? The next America's Cup series is due to be held over the summer of 2002-2003.
A high-profile challenge out of Seattle would go a long way as a marketing launch for either a Teledesic service (live satellite uplinks from the yacht, perhaps?) or for a public offering, as Teledesic's key investors seek the balance of the $US9 billion required to complete the network.
Gates and McCaw wouldn't be obliged to declare their backing for a Seattle challenge until March next year. But if they really are putting together a team, they will make Prada's AC2000 backing look like lunch money, and they will really, really want to win.