by Playfuls Staff |
14th March 2006
Looking forward to expand itself in the broadband peer-to-peer content services area, VeriSign announced this Monday that it will acquire Kontiki for $62 million in cash. The transaction is expected to be over in the first quarter of the year and Kontiki will become a part of VeriSign's communication services business division.[more]
Founded in 2001 by several Netscape alumni, Kontiki has 34 employees and is based in Mountain View, California. Its profits have reached a sum of about $46.5 million so far and among the investors are companies like The Barksdale Group, Benchmark Capital, and Adobe Ventures.
"In today's 'any era' where consumers are driving demand for how, when and where content gets delivered, VeriSign is investing in building an intelligent infrastructure for operators, Internet portals, media companies and consumer brands to use to deliver content to all... screens", Vernon Irvin, general manager of VeriSign Communications Services, declared in a statement.
Kontiki's system will help power VeriSign's broadband content services technology to enable it to deliver rich media over broadband networks to computers, TV sets and portable gadgets, according to the companies.
Kontiki distributed such content for some of the biggest names in the business, including United Kingdom satellite television firm Sky, a subsidiary of Rupert Murdoch’s News Corp which announced in January that it would make more than 200 movies available for no additional fee to its 8 million UK subscribers who use Kontiki.
Among the larger companies that deliver video to customers' desktops based on Kontiki’s technology are also AOL and Verizon, as there are clear economic advantages to using this distribution method and the system protects both content owner and distributor rights.
"It was a kind of an ideal match on both sides", said Kontiki CEO Todd Johnson. "It takes the alternative approach of Kontiki to delivery of digital content and nests it inside the security and scale of VeriSign."
Referring to the deal, Stifel Nicolaus analyst Todd Weller said that it makes sense for at least two reasons.
"First, we believe there is a clear trend towards more digital content being delivered over IP networks, and second, this acquisition enables VeriSign to provide infrastructure capabilities in this area, which is consistent with its core competency."
