Ash and friends discovered the lighthouse after Ash's Krabby disappeared after he caught it. Brock explained to Ash that Krabby was being sent to Professor Oak's Laboratory. Ash then wanted to call Professor Oak to see if Krabby made it safely. When the gang spotted the lighthouse, they decided to trek there for a phone.
When finding Bill, Bill tells them about how there are many Pokémon in the world and that he is tracking one Pokémon. The same night, a giant Pokémon came close to the lighthouse.
Team Rocket wanted to catch it and failed, causing it to swim away.
Although he was upset at not being able to discover more about the Pokémon, Bill was very excited that he had been able to see it, and told the gang to be on the lookout for more undiscovered Pokémon.