Internet

Intel investing in all of Net

Entertainment and technology continue to cozy up with the Internet and digital delivery devices, an Intel executive says.

SANTA MONICA, California--The entertainment business and the technology industry continue to cozy up with the evolution of the Internet and digital delivery devices, an Intel executive told members of both camps today at the Herring on Hollywood conference here.

Intel's answer to that call is to have its fingers in a variety of pies, with investments in content creation, infrastructure, and platforms, according to Ron Whittier, the company's senior vice president and general manager of the content group.

The fact that the chipmaker has a content group at all is telling. Just a few years ago, technology companies were on one side of the spectrum and entertainment firms were on the other. These days, these once-disparate sectors are finding their interests crossing each other. A good example is software giant Microsoft, with its many content ventures--which so far have brought mixed results.

An overarching theme at the conference, hosted by the Red Herring magazine, has been convergence--although for Whittier even that term has become passé.

"There really is a sense of urgency in getting going on this whole issue of convergence," he said.

Whittier added the new term for what has been called "convergence" should be "integration," which fits in with Intel's strategy to be involved in many aspects of computing and the Internet. He elaborated that the firm wants to be sure there is good content to be had online--and that technology and bandwidth will be ready to support that content.

He noted Intel looks to invest in companies and projects that "are distinct in their category." (Intel is an investor in CNET: The Computer Network, publisher of News.com.)

"You don't have to argue over the fight for eyeballs," Whittier said, adding that the winners in the content race will be those who "do the best job of integration."

Investment firm representatives who spoke following Whittier's address joked that now that "convergence" is old news and "integration" is in, they would have to go back to their clients and have them change all their literature.

One of the panelists, Paul Nadel, president of East West Capital Associates, said that content and technology are equally important. He gave the example that the movie Terms of Endearment would not have done better at the box office if it had been presented in 3D. In addition, the movie Toy Story, for all its technical effects, would not have been as successful if the story, cast, or performances had been lacking.

Among Intel's investments in the content space are Broadcast.com, which launched an IPO earlier this month; women's community site iVillage; and this month's Intel New York Music Festival, which used streaming technology to Webcast band performances and offered samples and purchasing of songs via Liquid Audio's online delivery technology, among other features.

In terms of infrastructure, Whittier pointed to Intel's interest in transaction services, "content protection" such as digital watermarking, and other security areas, including encryption.

On the platform front, the executive spoke of transportation and distribution of content via broadband capabilities, such as competing platforms cable and DSL (digital subscriber lines), as well as broadcasting via digital TV and cable as interests of the firm.

For example, Intel is part of a broad alliance announced earlier this year that is seeking to simplify and standardize ADSL (asymmetric digital subscriber line) technology. It includes heavyweights such as Compaq Computer and Microsoft, along with several Baby Bells and other telecommunications players.

Some members of the financial community attending the show expressed opinions about Intel's strategy that seemed to follow another theme of the show, which essentially says it is too soon to tell what the outcome will be. Panelists and individual speakers alike pointed out the activity in the online entertainment space today represents just the tip of the iceberg for the future.

Some said Intel's strategy to be involved in an array of Internet projects will give it an edge in all its areas, provided it stays focused on content and technologies that complement each other. Others expressed concern about the giant spreading itself too thin and getting into areas too far removed from its core business.