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Streamticker 2007: The Year in Mergers, Acquisitions, and Fundings

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Take Level 3, for instance. The company—which operates an internet backbone connecting more than 175 metro markets in 16 countries—sells transport to wholesale, enterprise, and content customers. Level 3 chose to acquire Dublin’s Servecast Limited, a company providing live and on-demand video management and streaming services for broadband and mobile platforms, for its suite of services. The acquisition, done before the uro’s dramatic rise against the dollar, consummated for about $45 million or 33 million euros.

Throughout the year, Level 3 continued its integration of Servecast’s tools into the core Level 3 network in order to allow content customers to manage, deliver, and track content while also protecting the delivery of the content online.>br>
Alongside the Servecast acquisition, Level 3 also partnered with Move Networks to do a peer-to-peer overlay—a term that some companies are scrambling away from, including some that hold P2P delivery patents—since it is still a bit of a death knell in the content distribution space.

Noting that scale and scope make for a more contented customer, Servecast CEO Darach Deehan said the company, which remained intact in Dublin, could scale its efforts. "We believe Level 3’s scale and capabilities across Europe and North America will provide our customers an important opportunity to access new markets."

Servecast’s data centers in London and Amsterdam were also maintained, giving Level 3 an instant presence in Europe’s burgeoning streaming space.

Another set of big kids, epitomized by Motorola, which used an unlikely candidate, also got into the streaming game. Terayon is a company that’s been around for more than 7 years. I first saw Terayon at Supercomm pitching its wares as the telecoms looked to get into the television delivery business against the cable MSOs. It was acquired by Motorola in a transaction that had a total equity value of approximately $140 million, fully diluted, according to Motorola.

Terayon started in the MSO space with Cherry Picker and Cherry Pruner, tools that would grab particular bandwidths on a cable television digital distribution network and then pare the content down, in real time, to fit within the bandwidth. In practical terms, this allowed for cable providers to charge advertisers for quality of delivery, with some MPEG-2 content moving across the network at as little as 2Mbps while other content was distributed at 6–8Mbps.

The products ultimately turned into ad-insertion tools, which Motorola found appealing.

According to a Motorola company spokesperson, "The integration of Terayon and its software-driven application solutions will enhance Motorola’s video infrastructure and seamless mobility core by providing Motorola with industry-recognized video processing solutions that enable digital ad insertion, motion and graphical overlays, channel branding and channel line-up solutions as well as cutting-edge ad insertion delivery technologies."

Terayon is now a wholly owned subsidiary of Motorola, integrated into the Motorola Connected Home Solutions business unit.

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