(FORTUNE Magazine) – My friend Mike is a government lawyer, so he often has reason to be in a lousy mood. But I know how to cheer him up. All I do is utter the word "Iridium," and in a perfect Pavlovian reaction he erupts into peals of laughter. Mike isn't the only one who finds humor in the satellite venture's failure. After all, Iridium's flameout was among the most spectacular of 20th-century business debacles. The $5 billion Motorola-backed company launched its service in November 1998, only to declare bankruptcy ten months later. Iridium's 66 satellites were to fall out of orbit and tumble toward earth, burning up in the atmosphere in a glorious light show.

Hopeful stargazers never did get to see that spectacular satellite shower--Iridium actually survived. In December 2000 a group of private investors snapped up the consortium's assets for just $25 million, and commercial services were relaunched the following March. Since Iridium Satellite, as the company is now called, is a private concern, it's not required to disclose exact numbers. But CEO Gino Picasso, a former president of GE Capital Spacenet Services, boasts that Iridium has no debt and will be profitable by mid-2003.

So how did this Icarus-like symbol of corporate hubris manage to become a viable business? CEO Picasso quickly zips through a host of reasons. First, he claims that Iridium Satellite runs at only 10% of the old entity's operating costs. Picasso also says that the operational life span of the fleet is actually ten to 12 years, as opposed to the original estimate of seven years.

Most important, the new Iridium has survived by focusing on different customers from the Iridium of old, which targeted global business travelers. (The old company once said it expected to sign on five million users by 2002, a truly incredible number considering that a handset cost $3,400 and looked like a brick.) Revenues for the new company mostly derive from two sources--its $36 million annual contract with the Department of Defense, and large corporations in the maritime, oil, and aviation industries. Two smaller but faster-growing markets are in short-burst messaging and in rural areas where satellite communications can be more cost-effective than other wireline options. This past spring Iridium announced a deal with Telstra, Australia's largest telecom carrier, to provide service in the Outback.

Analysts are skeptical of any claims of profitability and the long-term viability of the company, particularly because they've been down this road before. Perhaps that's why the new management issued a special press release in December to reiterate that the current company has absolutely nothing to do with the old, bankrupt one.

When I tell my friend Mike that I'm writing about the new Iridium, he takes a few moments to recover from his giggle fit, then says with surprise, "You mean it's still around?" That's exactly the kind of response that Picasso likes. After all, it's a lot easier to impress people when expectations are so low.