Intel to Sell Internet TV Biz to Verizon
Intel's TV efforts were born more than two years ago out of former CEO Paul Otellini's desire to expand the vendor's reach beyond its core PC and server businesses. Intel officials in early 2013 said the business would launch later in the year, despite reports of problems the company was having securing content to stream from programmers. After taking over as CEO, Krzanich's approach to the streaming TV initiative was tepid, telling Reuters in June 2013 that Intel engineers are "experts in silicon, we're experts in mobility, in driving Moore's law. But we are not experts in the content industry, and we're being careful." Erik Huggers, a former British Broadcasting Corp. executive hired by Intel to run the cloud TV unit, said the sale to Verizon was "the next logical step." "Intel provided us with the technological know-how and resources to develop products and services that will fundamentally change the way we experience TV, and now Verizon gives us access to the marketplace and the ability to scale," said Huggers, corporate vice president and general manager of Intel Media.The deal was announced the same day Verizon announced fourth-quarter revenues of $31.1 billion, a 3.4 percent increase over the same period in 2012 thanks to growth in its broadband and mobile businesses. It also comes less than a week after Intel officials announced the company will cut 5 percent of its workforce—about 5,000 jobs—after a so-so fourth quarter and a forecast of flat revenues for 2014.
Reports have been circulating for months that Verizon was interested in buying Intel's business. In a statement, Verizon Chairman and CEO Lowell McAdam said that the deal "will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where and how they want it. Verizon already has extensive video content relationships, fixed and wireless delivery networks, and customer relationships in both the home and on mobile. This transaction provides us with the capabilities to build a powerful, capitally efficient engine for future growth and innovation."