Intel abandons stream

Business once considered a $2.5B category is no longer viable

Lacking a sustainable client base, Intel Corp.'s Internet Media Services division, based in Santa Clara, Calif., is shutting down its streaming-business activities and abandoning ambitions that it had said could be worth $2.5 billion by 2004, according to company literature.

Last May, the company announced that it would spend nearly $200 million over several years and was building two state-of-the-art streaming-media facilities-one in Redding, England, and one in Hillsboro, Ore.

The goal was to allow corporate and media clients to stream everything from company meetings and sales conferences to feature-length movies and online training videos. Given poor initial client response, those efforts have been suspended in an attempt to focus on other core technologies within the streaming-media arena.

"We have announced that we are exiting the streaming-media business, and we're working with our current customers to transition them to other service providers," said spokeswoman Erica Fields.

The nearly 200 employees of the division are being offered other positions within the company, and no layoffs were planned, according to Fields.

Intel will continue with its other initiatives, such as streaming-media software-application development, online Web hosting for live events, and participation in the Advanced Television Enhanced Format (ATVEF) group of companies working to develop standards for interactive-TV advertising and other e-commerce capabilities. The company has also entered into a partnership with RealNetworks in the development of an Internet streaming codec.

"Basically, we looked at many different factors-changes in market conditions and the economic downturn in the U.S.-and we decided to exit this business as a provider of these services. We still believe in rich media," Fields said. "We just felt that there wasn't a viable business for us in content distribution. There are a lot of players in this space. There's also a limited development of related business models for streaming media and the problems with the marketplace. Those are the three things that contributed to our decision."