AT&T to Expand Content Distribution

AT&T (NYSE: T) said on Tuesday it is creating a new business unit focused on content delivery and named executive Cathy Martine as the leader of that section.

The company said it wants to expand its business of delivering online media, moving into more direct competition with specialized content delivery companies such as Akamai Technologies (NASDAQ: AKAM) and Limelight Networks (NASDAQ: LLNW).

As more companies launch Web sites with video and interactive features, AT&T said it will spend nearly $70 million by the end of the year to bolster its network infrastructure across the United States, Europe and parts of Asia.

Content delivery is not entirely new to AT&T, which has customers such as Forbes.com and AccuWeather.com; but it said it will start selling more of these services to help companies deliver digital media to consumers’ computers and mobile phones.

The company said its strength is in its international reach and experience dealing with security issues.

AT&T shares fell 0.1 percent in morning trade to $34.35, while Akamai shares fell 1.6 percent to $34.66 and Limelight fell 0.8 percent to $3.84.