On Tuesday, Intel made it public; a new alliance will be born, bringing Intel together with the telecom giant Verizon. This mutually beneficial alliance will allow Intel to harness Verizon’s vast communications network to help sell its TV business while allowing Verizon to have an edge in the marketplace- leveraging Intel’s media technology to deliver video over both its Fios fiber-optic home broadband service and its 4G wireless network service. The deal amount was undisclosed; both companies were mum on the topic of the deal price but earlier reports say that the price was between $200 and $500 million.
“The OnCue platform and team will help Verizon bring next-generation video services to audiences who increasingly expect to view content when, where, and how they want it,” according to Verizon Chairman and Chief Executive Lowell McAdam in a statement. “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, capability efficient engine for future growth and innovation.”
Intel spent years developing hardware and software that would let users watch live TV and was ready to sign deals with big content companies when they decided to focus on Intel’s core chip business. Intel wanted to find a partner for it’s TV service. Samsung, AT&T and Verizon spoke with Intel about its TV business. Verizon emerged as the leader because the plan for their Web-based TV market is pretty close to what Intel’s vision is. Good business synergy is hard to achieve but hopefully in this case, we’ll all hear beautiful music. Verizon and Intel negotiated for about three months to reach a deal. As far as media is concerned, video is already becoming a big part of mobile and web usage by most consumers.
Verizon has a huge subscriber base. Fanning from it’s 173,000 Fios Internet connections, and the 135,000 Fios video connections they gained in the third quarter of this year. Not including the huge Mobile subscribers that could be interested in the TV services. The 350 Intel employees will remain in Silicone Valley but as Verizon employees. The campus is located in Santa Clara, California. Relative to the joining up of these two giants, partnerships can add alot of value to the economy. Investors will also see the fruits sewn on their annual statements, and will look eagerly towards the partnership. For jobs at Intel and Verizon, click here and here.
Image credit: Morning Whistle