In May of last year, chipmaker Intel [NASDAQ:INTC]
was planning to spend $200 million to build a global network
that would serve as a backbone for Internet audio and video
broadcasting. However, this week, the Santa Clara, Calif.,
company said it is shutting down that business and
disbanding the Intel Internet Media Services unit that runs
it.
The network of streaming-media operations centers and
"edge" servers distributed around the globe so as
to place them close to Internet users will be phased out as
Intel's customers are migrated to other providers, company
spokesman Bill Calder told Newsbytes today.
Calder, at Intel's offices in Oregon, said the transition
is expected to be wrapped up by the end of the second
quarter of this year, but added the company would keep its
content-distribution network running "as long as it
takes to make sure the customers are taken care of."
One such customer, streaming media software and service
provider Media 100 Inc., told Newsbytes that the competitive
nature of the content-distribution market means it won't be
difficult to fill the gap left by Intel's departure.
"Essentially, what Intel was providing to us was
bandwidth," said Jim Baker, Media 100's vice president
for streaming services. "They were able to offer a very
good price on bandwidth, which enabled us to pass on a very
competitive price to our customer base. But bandwidth is for
sale from a number of high-end vendors in the streaming
media space.
"But what's a shame here," he added, "is
that Intel had invested a lot of money in building an
absolutely world-class network, and (now) they feel that
they can't make a go of it."
Still, Baker said, "It was certainly no huge
surprise to me. Obviously, Intel - like any other company in
this space - had a belt-tightening operation, and I guess
that this was a pretty significant part of their business
that they could do without."
Available to pick up the slack for Intel are such
competitors as the content distribution leader, Akamai
Technologies Inc. [NASDAQ:AKAM].
Calder said that the closing of Intel Internet Media
Services doesn't mean its 200 or so workers will be out of a
job. He said staff will be able to spend much of their time
until the unit is completely closed to find new positions
within the company.
Likewise, he said, much of the equipment used for the
network is likely to be repurposed within the company.
Calder said the company had considered the possibility of
selling the unit as a stand-alone business, but determined
that simply disbanding it was the best approach.
He said Intel is not currently revealing exactly how much
it spent on starting up the business nor what its revenues
have been to date.
