Intel Corp. sells its online TV unit to Verizon

Intel Corp. announced that it agreed to sell its online TV products and services development business unit to Verizon Communications Inc. The sum of the deal has not yet been announced. Although the counterparts did not disclose any of the terms of the deal, Intel was said by some media reports to be seeking about 500 million dollars.

The two companies made a joint statement today, saying that the intellectual property rights of Intels cloud TV platform will be bought by Verizon Communications. The latter is also expected to offer jobs to about 350 employees working for the Media division of Intel, which is based in Santa Clara, California.

The deal is expected to be finalized by the end of the first quarter of 2014 and it will require some regulatory approvals.

Brian Krzanich, Intels Chief Executive Officer, said in the statement, cited by the Wall Street Journal: “This sale enables Intel to further align our focus and resources around advancing our broad computing product portfolio.”

Recently, Intel Inc. has become more focused on building its data-center business, and showed a great deal of interest in the “Internet of Things” – a concept that refers to a network of smart devices that communicate with one another with little human intervention. The announcement of the sale comes only a few days after Intel said last week that it planned to cut its workforce by 5% and forecast flat revenue for the current fiscal year.

The deal will be beneficial for Verizon Communications, too. It is expected to provide the company with the opportunity to speed up the availability of next-generation video services at a time when the traditional fixed line services revenue is decreasing. Lowell McAdam, Chief Executive Officer of Verizon Communications, said in the joint statement: “We will have the opportunity to enhance, expand, accelerate and integrate our delivery of video products and services to better serve audiences on a wide array of devices.”

Intel Corp.s shares fell by 0.74% to $25.66 14:35 GMT, and its one-year return rate is up 26.48%. The 38 analysts offering 12-month price forecasts for CNNMoney have a median target of $24.00, with a high estimate of $32.00 and a low estimate of $16.00. The median estimate represents a -7.16% decrease from the latest closing price of $25.85.