Intel Spends $500 Million on E-Commerce Firm

Looking to tap into the growing e-commerce industry, Intel Corp. Tuesday acquired IPivot Inc., an e-commerce equipment manufacturer, for about $500 million in cash.

IPivot designs and manufactures Internet commerce equipment — special function devices that work to improve the performance of server farms, Web sites and e-commerce applications. IPivot systems determine where data should be processed and send the request to servers that can deliver the best response time. The company also provides products that accelerate certain security functions.

Under terms of the acquisition, IPivot will be integrated into the network systems division within Intel’s (INTC) communication products group. Brett Helm, CEO of IPivot, will become general manager of the commerce equipment operation. Intel will sell IPivot Internet commerce equipment directly to original equipment manufacturers (OEMs) and through its Internet service provider channel program.

“Customers will return to the e-commerce sites that deliver the best performance and service,” said John Miner, vice president of Intel’s communication products group. “Because information must always be available and response times instantaneous, new devices are needed to manage ever larger workloads securely and efficiently. IPivot’s lineup of Internet commerce equipment, combined with our current communications product portfolio, help service providers meet these expectations.”

IPivot marks Intel’s third acquisition in the Internet commerce equipment market segment. Intel gained first acquired Dayna Communications in 1997 and virtual private network firm Shiva Corp. last year.

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