A VeriSign Move Into Digital Content
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VeriSign today said it is entering the market for delivering broadband content services by agreeing to purchase Kontiki for $62 million in cash.
Kontiki makes Delivery Management System (DMS), a grid software platform designed to pipe video, software and other forms of digital content to employees, partners and customers over the Internet.
In grid fashion, Kontiki DMS uses existing PCs on the network as video content delivery "microservers" that deliver large files efficiently and quickly to those who request them.
But unlike other digital media delivery providers, the Mountain View, Calif., company's value proposition is that its software actually gets better at moving video and other large files as demand grows.
VeriSign will use Kontiki's system as the cornerstone of its broadband content services platform, shuttling content over broadband networks to personal computers, television sets and portable devices.
"From our standpoint, there is a convergence happening, not on the device side but on the network side," said Jeff Treuhaft, senior vice president of digital content services for VeriSign.
"We really see folks, whether it's a content owner, a media brand or an operator, wanting to take advantage of tying together the mobile handset, the PC and IP-connected television experience into something the consumer gets really excited about," Treuhaft said in a phone interview.
Treuhaft said the deal puts the company in a leadership position in the broadband content services market, noting that Kontiki has strung together a number of successful consumer experiences on the enterprise and consumer sides.
AOL, BSkyB, Verizon and others use Kontiki's DMS to deliver branded video content to desktops.
VeriSign expects the deal to close in the first quarter of 2006, with most of Kontiki's 34 employees joining VeriSign's headquarters around the corner in Mountain View.
Delivering massive loads of digital content has been kicked around as a concept for a few years. So has the technology to do it. But there have been a couple of limitations, including the inability to provide software that can scale enough to send large amounts of content.
Another pitfall has been the lack of broadband connections in residences.
But many Internet experts say broadband demand is growing, which should change the game for vendors who have the chops to pipe the content to homes and offices.
VeriSign is banking on this with the Kontiki buy, and should be able to use it to complement its already strong mobile content services offerings.
The company, which has been evolving from the leading domain name registry to an information and entertainment services business, is already providing a variety of services for large brands across mobility networks in Europe and the U.S.