Alphabet's Google division acquired Skybox for roughly $500 million three years ago. Skybox's satellites record and provide access to high-definition video of landscapes and detailed imagery.
Google used Skybox for Google Maps imagery, and at the time of the acquisition had ambitions to use the satellites to help improve internet access and disaster relief.
If the sale goes through to Planet Labs, another satellite-imaging startup, it's not clear how much equity Alphabet would receive. Bloomberg reported some employees will move to the new company and others will be reassigned to parts of Google.
Alphabet has been scaling back expensive projects, including Google Fiber. It also spun its self-driving car division into a separate company called Waymo in December 2016.
Gallery: Google's Waymo shows self-driving van with plenty of sensors