Alphabet Closes Down Internet Balloon Network Project 'Loon'

Google parent company Alphabet announced Friday it was shutting down "Loon", a high-profile project aiming to deliver wireless internet via flying balloons in the stratosphere, because it is not commercially viable.

The idea behind Loon was to build a network of balloons to expand internet connectivity to underserved areas and disaster zones and was initially part of an Alphabet "moonshot factory" known as X, which aims to create projects to disrupt new sectors.

In a blog, X's Astro Teller announced the decision, adding: "Sadly, despite the team's groundbreaking technical achievements over the last 9 years... the road to commercial viability has proven much longer and riskier than hoped."

Loon was deployed to provide internet in Puerto Rico after Hurricane Maria in 2017, as well as after a major earthquake in Peru.

Last year it announced a partnership with American telecom giant AT&T's infrastructure to keep third-party mobile telecommunications services running in the aftermath of similar disasters.

In July it launched a pilot commercial service in Kenya, prompting the company to proclaim "a new era of stratospheric communications has begun."

But Loon CEO Alastair Westgarth said Friday the company had failed "to get the costs low enough to build a long-term, sustainable business."

Operations will be wound down in "the coming months", with the hope that Loon employees will be redeployed at Alphabet, the firm said.

Local media in Kenya reported that the plans of Telkom, Loon's telecoms partner in the country, were now "in limbo" after the announcement.

On Friday Loon also announced a fund of $10 million "to support nonprofits and businesses focussed on connectivity, Internet, entrepreneurship and education in Kenya."

Loon's giant, transparent plastic balloons are powered by solar panels and navigated using artificial intelligence systems that allow them to ride high-altitude winds to ideal locations, or loop in patterns that create consistent webs of internet coverage in the sky.

Made an independent company within Alphabet in 2018, the venture was a prominent so-called "other bet" for the tech giant, a category which also includes the Waymo self-driving car project and Wing drone delivery.

But Loon is not the first of similar projects to be axed -- in February 2020 Alphabet shut down Makani, which used high-tech kites to tap into wind energy for electricity.