Edited by Douglas Harbrecht

After a two-year courtship, Boeing and Teledesic have teamed up to create a giant "Internet in The Sky." On Apr. 29, Boeing announced that it will invest $100 million for 10% ownership of Teledesic, a satellite communications company founded by Craig McCaw and Bill Gates. Together, the two companies plan to offer the same voice, data, and video capabilities via satellite that are available through fiber-optic cable.

The giant jetmaker's imprint on the $9 billion project is already apparent. A Boeing team of 70 engineers has been helping Teledesic streamline its system of low-earth orbiting satellites from 800-plus to a mere 288. Now, as prime contractor, Boeing will help Teledesic refine the system architecture, plus build and launch the satellites.

Having recently acquired Rockwell International, Boeing is quite capable of building satellites, says aerospace analyst Wolfgang H. Demisch of Bankers Trust. Boeing CEO Phil Condit says Teledesic is the perfect catalyst for melding the company's recent investments in Sea Launch, Rockwell, and McDonnell Douglas.

Combining Sea Launch -- a floating platform for rocket launches developed by Boeing and Eastern European partners -- with McDonnell Douglas' arsenal of rockets, Boeing could launch many of Teledesic's satellites. In addition, the company will look to partners to help. Both Boeing and Teledesic are working on designing a launch system that can carry multiple satellites into space, says Dave Ryan, project manager for Boeing.

The Federal Communications Commission signed off Teledesic's search for a prime contractor two months ago. Ryan says Boeing and Teledesic won't stray too far away from the proposal recently approved by the FCC. But with the Boeing relationship official, Teledesic now intends to seek more investors and telecom partners for the ambitious endeavor.

By Seanna Browder in Seattle