Trend Alert: How Facebook Might Supercharge Growth And Seed A Crop Of New, High-Tech Space Start-Ups

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Facebook’s novel methods to achieve growth will assure its growth and the growth of fledgling technology markets.

Facebook ate a chunk of the SMS market with its WhatsApp acquisition.

Maintaining growth of 1 million users a day will mean finding new ways to reach underserved markets.

Facebook’s investments in small space could be a disruptive influence on the small space and UAV markets.

Facebook's (NASDAQ:FB) WhatsApp acquisition is a strategic marker in an unfolding new high-tech saga involving space and robotics. Most of the world's chat traffic previously went through terrestrial mobile wireless operators, but that is being snatched away by companies like Facebook with its $19 billion acquisition of WhatsApp. WhatsApp's biggest challenge is maintaining a growth rate of about 1 million new users a day.

This kind of growth has been vacuuming up the world's available connected users, and in order to keep up the momentum, it will take connecting up the underserved in the world's remote regions. This means that to keep growth going, companies like Facebook and Google (NASDAQ:GOOG), (NASDAQ:GOOGL), who rely on growing connectivity, will have to expand to remote areas that are too costly for mobile carriers to serve effectively. With one stroke of an acquisition, Facebook snapped up the SMS market. But now what? They've got to roll out capacity to the underserved quickly, cheaply, and at a pace never before seen.

But getting there is another story. It requires non-traditional approaches to rolling out new networks. Fortunately for Facebook, the technology is there. A big windfall from heavy Defense spending has been advancement in UAVs (Unmanned Aerial Vehicles/Drones) and micro-satellites. UAVs are not just a viable technology, but their cost profile and technological efficiencies offer alternative business cases for air-to-ground communication links to underserved areas. Communications and remote sensing have come of age through university research and DOD programs like TACSAT and Operationally Responsive Space (ORS). Smallsats (microsats) are the new kids on the block and in the right place at the right time.

Facebook's fascination with solar powered UAVs to provide internet to the "unconnected world" is a bellwether for market niche growth and rapid deployment. Smallsats are quickly overlapping and overtaking UAV value propositions. Industry interest and attention is beginning to move from UAVs to smallsats. MDIF (Media Development Investment Fund), a global fund with a focus on getting internet connectivity to the underserved, is embarking on a cubesat venture that would place hundreds of cubesats in orbit, like flocks of Rubik's cubes, to provide Wi-Fi access to remote regions.

Facebook could gain a lot from a small satellite market that is finally taking off. The day of the private satellite constellation is finally here and ready to challenge traditional value chains. Smallsats weighing-in at less than 500 Kg cost about one-tenth of the price of conventional satellites and can perform technological feats that were once the exclusive domain of governments. Now they're producing new disruptive business models that will upset the status quo. Like the appliance server market, smallsats come in all shapes and sizes. From the size of a refrigerator to the size of a quarter, they include various classes of microsats (cubesats, nanosats, picosats, and femtosats).

Now, small satellites are quickly becoming a new alternative for affordable communications and remote sensing applications. Smaller, less-costly satellites are often better suited to more targeted tasks, unlike their larger heavy-duty cousins. Large communications satellites can weigh over 6000 Kg and cost hundreds of millions dollars to build and launch to geostationary orbit. Meanwhile, many smallsats operate in low earth orbit and have a mass ranging from about 10 grams (about 3 sugar cubes) to around 500 Kg (about the mass of a large refrigerator). Price tags range from thousands of dollars to tens of millions of dollars depending on weight, function, and purpose. These small spacecraft can be scaled-up to being capable multi-function satellites, or scaled-down for more limited functionality, such as low data rate communications.

Smallsats can provide quick, affordable solutions to growing market niches like SMS. Mobile SMS traffic can be offloaded to smallsats. Smallsats can affordably fill gaps in a network-agnostic future 5G world. The future of mobile communications is a meshed network environment having many different networks, including WIFI, WIMAX, satellite links, LTE, and terrestrial fiber.

The focus of future satellites will be on moving data, which makes a microsat look much more like a utility router or internet hot spot. Global technological movement is toward a network-agnostic world, and space is going to be an increasingly BIG part of it. Another reason why smallsats are coming of age is that the small launch market is finally getting affordable and creative. The biggest problem with the smallsat market has historically been access to space -- launch cost and availability. However, with some satellites now the size of footballs, they can be kicked out into orbit from existing structures like the International Space Station.

Space start-ups like Nanoracks and Space Services, Inc. are bringing costs down by offering innovative menus of smaller space services. Space-X recently sent tremors through the launch industry when it announced it was aiming for a $5-7 million launch-cost sweet spot, a harbinger of low cost launches to come.

Smallsats may prove to be more functional and affordable than existing rapid solutions like UAVs. UAVs have been taking off strongly in the global marketplace, providing everything from quick communications solutions to surveillance and imaging. However, small satellites are already aggressively eating into UAV market share. Companies might finally begin incorporating small satellites into their technology environment just as they would mobile phones or appliance servers.

Anyone who thought of Facebook as just a social networking company better think again. Facebook is on track to change how the world is connected and will likely change the communications market in the process.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.