Intel Corp. today announced plans to spend $200 million to build a worldwide network of digital broadcast centers designed to deliver content such as training classes, concerts, movies and financial briefings via the Internet.
Intel said the Internet Media Services unit will be part of its New Business Group, which was set up to develop Internet-based services and products for the semiconductor maker. A 70,000-square-foot broadcast operations center is due to open in Portland, Oregon, this summer, and a second facility is expected to go online in London by the end of the year.
Erika Klauer, an analyst at Deutsche Banc Alex. Brown Inc. in New York, said the move to create a streaming-media system that competes against the likes of Yahoo Inc. in Santa Clara, California, and Akamai Technologies Inc. in Cambridge, Massachusetts, will help diversify Intel's business and drive demand for its chips. She added that she expects Intel to be very aggressive in competing for broadcast business.
Brian Eisenbarth, an analyst at Collins & Co. LLC in Larkspur, California, also said Intel's entry into the streaming-media market should have a competitive impact because of its name, technology muscle and deep research-and-development budget. "To the other (vendors), this is the 800-pound gorilla jumping in," Eisenbarth said.
However, the short-term financial impact to Intel is likely to be small, Eisenbarth added. "In the big picture of everything they are working on, this is really a small piece," he said. "I know it sounds passé, but ($200 million) is really a drop in the bucket to them."
In addition to announcing the new service, Intel said it had signed up a number of initial customers, including Premiere Radio Networks, The Nasdaq Stock Market Inc.'s Nasdaq.com, Comedy.com and MeTV Network Inc.'s MeTV.com. The company said the broadcast network will be able to handle thousands of live events simultaneously.