IBeam Files For Bankruptcy; Sells Assets To Williams
IBeam Broadcasting, one of the pioneers in Internet streaming services, has run out of cash.
Marking another casualty of the tech economy slump, the streaming media hosting provider filed for Chapter 11 bankruptcy protection on Thursday, Oct. 11.
At the same time, iBeam said it has signed an agreement with network operator Williams Communications, under which Williams will buy iBeams assets for $25 million in cash. The deal includes a loan from Williams to iBeam that will fund iBeams operations through the sales transition period and which must be repaid when the asset sale is completed.
Williams and iBeam have already been financial dancing partners: In June 2001, Williams invested about $30 million in iBeam for a 49 percent ownership of the company.
IBeam said it intends to continue to provide service to its customers. One of the Sunnyvale, Calif., companys largest customers is Merrill Lynch & Co., which is using iBeams Internet broadcasting services to distribute its analysts research to clients.
Once the purchase of iBeams assets is complete, Williams plans to integrate iBeams operations into its Vyvx Broadband Media unit, which provides broadband media services, including managed Web hosting and streaming.
"The promise of the Internet as a significant medium for communications is real, and Williams Communications vision is to be one of the pre-eminent providers of services for this market," Howard Janzen, CEO of Williams, said in a statement. "The addition of iBeams streaming services, as well as the expertise of its employees, is a winning combination that will allow us achieve that reality."