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iBEAM Files Bankruptcy, Sells Assets

Sunnyvale, Calif.-based streaming communication solutions provider iBEAM Broadcasting Corp. Thursday filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware, and sealed an agreement to sell its assets to Williams Communications for $25 million.

Under the deal, Williams would pick up iBEAM's customer contracts and facility and equipment assets. Concomitant with the deal, Williams will fund iBEAM's operations throughout the sales transition period as a loan to be repaid upon consummation o the asset sale. Williams' acquisition of iBEAM's assets, and the loan, are subject to the bankruptcy court's approval.

"Our agreement, if approved by the court, will benefit customers of both iBEAM and Williams Communications," said Howard Janzen, chairman and chief executive officer of Williams. "iBEAM's impressive list of blue-chip streaming customers and expertise is a perfect strategic fit for the assets that we already have in place, including our network and broadband media platform. We are confident that our proposal offers the best options for iBEAM's customers, employees, and creditors, and that it is a realistic plan which provides significant long-term value to Williams Communications shareholders through added capabilities and increased network utilization."

Williams plans to integrate iBEAM's streaming and Webcasting business into its Vyvx Broadband Media unit, which provides integrated transmission and broadband media services, including fiber-optic and satellite transmission, digital media management, content gathering and distribution, as well as managed Web hosting and streaming.

"The combination of iBEAM's unequalled expertise in streaming communications and Williams Communications' award-winning network and broadband media infrastructure creates the market's most powerful solution for our complementary customer bases," said Peter Desnoes, chairman, president and chief executive officer of iBEAM. "We remain committed to our founding vision that the Internet will develop into a prime medium for audio and video communications. Already, a large number of corporations use streaming on the Internet as a means to effectively and efficiently communicate with distributors, suppliers and employees. Further, the imminent evolution of both streaming and download services promises to make the Internet the most important and exciting medium since television."

Williams' interest in iBEAM does not come out of the blue, and indeed could be seen as a protection of its investment. Williams invested $20 million in cash and $10 million in services in the company on June 25, in exchange for convertible preferred stock representing about a 49 percent ownership stake in iBEAM. iBEAM already has dedicated streaming media and application data centers integrated into Williams' fiber-optic network.

"iBEAM deserves credit, in an extremely challenging marketplace, for successfully capturing a significant share of the emerging streaming market," Janzen said. "We are excited to gain the expertise that has delivered more than 1 billion audio and video streams in the last 18 months alone. We have only begun to see the potential of video and audio streaming, and expect demand to increase dramatically as last-mile network bottlenecks are eliminated and as corporations look for more efficient ways to conduct business."