OMELEK ISLAND, Kwajalein Atoll M.I. — A privately developed rocket that carried the hopes of cheap access to space was lost minutes after launch from the Marshall Islands on Tuesday - but the millionaire behind the launch called it a success.

The rocket was launched by Space Exploration Technologies - a company based in El Segundo, Calif., founded by Elon Musk, who became a multimillionaire when he sold the company he started, PayPal, to eBay for $1.5 billion in 2002.

The rocket lost contact with the ground several minutes into the launching. Video from the launchpad and on board the rocket showed a smooth ascent. Mr. Musk's brother, Kimbal, wrote an entry on his blog that used an exhuberant profanity and then called the launch "awesome beyond words." But the rocket began to shimmy, and the video signal and other information were lost.

Since the rocket did reach space and went through stage separation and second stage ignition, Mr. Musk called it "a very good day for SpaceX" in a conference call with reporters after the launch. "We're really good, actually," he insisted, because the rocket had passed many of the riskiest milestones of launching and entering space.

The roll problem, he said, is fixable, and "we have learned everything we need to know to deliver a satellite" to orbit. " It's hard to characterize that as anything but a success, at least in my book," he concluded.

The rocket, which burns liquid oxygen and rocket grade kerosene, did not reach its desired orbit of some 425 miles however, and Mr. Musk said that the rocket probably reentered the atmosphere after less than a full orbit.
The first attempt to launch one of Mr. Musk's Falcon 1 rockets last year also ended in failure a half-minute into its flight because of a fuel leak.

Despite that initial setback, the company has retained the interest of government and companies, said Gwynne Shotwell, the company's vice president of business development, in a conference call with reporters on Monday. "We didn't lose any customers," she said, and added that the company has about $400 million in orders for 12 flights, including funding for NASA as part of its Commercial Orbital Transportation Services Program, an initiative to bring private companies into the business of bringing cargo and people to space. But, she acknowledged, "we have to demonstrate success at some point."

The new flight, dubbed Demo-2, was launched from Omelek Island in the Kwajalein Atoll. It carried a set of experiments principally devoted to recording flight data for the main customer, the Defense Advanced Research Projects Agency, as part of its efforts to find lower-cost ways to reach space.

Commercial launching for satellites can cost $30 million or more; Mr. Musk has pledged to do the job for about $7 million, and has invested some $100 million of his own money in the effort.

Mr. Musk, who was born in South Africa, is now a citizen of the United States. He is one of a number of wealthy entrepreneurs pursuing dreams of space flight. Paul Allen, a founder of Microsoft, paid for the development of SpaceShipOne, the small rocket built by aircraft designer Burt Rutan. That craft was the first privately funded craft with a human aboard to reach the edge of space, and won the $10 million Ansari X Prize competition in 2004. Sir Richard Branson is having Mr. Rutan design a larger version of that craft for his Virgin Galactic spaceflight company, which he has said will be launching flights by next year. Jeff Bezos, the founder of Amazon.com, has a company, Blue Origin, that is testing a rocket of its own. Robert Bigelow, who made a fortune in budget hotels, is trying to loft a hotel into orbit, and John Carmack, a computer game maker, is building rockets at his Armadillo Aerospace outside of Dallas.

Charles Lurio, a space consultant and booster of the so-called "new space" industry, wrote in an email summary of the Falcon flight, "Given the history of rocket development, to start from all new hardware and do this well on just the second flight is more than amazing; it's mind-boggling."

In the conference call, Mr. Musk said that customers who have signed on for the next three launches had already gotten in touch with him to say they are still enthusiastic. The company is planning to launch two satellites this year. "They are very excited, very happy and very optimistic," he said.

Ultimately, he said it was "not a perfect day, but a good day."