Privatizing Space Exploration

On Wednesday a subcommittee of the Senate Commerce Committee that deals with space issues held a hearing in Houston that featured several witnesses talking about the potential of privatizing parts of NASA’s new space exploration initiative. The Houston Chronicle summarized an idea from one of the witnesses as follows:

So far, NASA’s Spirit and Opportunity robotic missions to Mars have produced a record 6 billion “hits” on the agency’s Web sites since early January. If only 5 percent of the Web site visits spurred the purchase of a $1 screen saver featuring an image of the Martian landscape, NASA would have earned $300 million.

The problem with this analysis is that the witness confused “hits”–recorded each time any file, be it an HTML file, image, or style sheet, is downloaded–with visitors. A single visitor can be associated with hundreds of hits, depending on the number of files associated with each page and the number of pages that visitor views. Speedera, a company providing web hosting support to NASA, noted in late January that the NASA web sites at that time had four billion hits but just 33 million unique visitors. (This makes sense when you recall that the world population barely exceeds six billion.) This converts that $300 million figure into $1.65 million through January and perhaps $2.5 million by now. Moreover, costs like the high transaction fees associated with credit card purchases, particularly for cheap items like $1 screensavers, would eat away at a significant part of that $2.5 million.

This doesn’t mean privatizing space exploration isn’t always a bad idea. For example, some aspects of the Bush plan like robotic lunar missions might be ripe for partnerships with the private sector, given the existence of entrepreneurial ventures like Transorbital and LunaCorp who have been planning private lunar missions for years. However, people have to be aware that many privatization schemes simply don’t make much business sense.