Posted on 08/22/2023 7:42:20 AM PDT by Brookhaven
IBM said Tuesday it’s selling its weather unit, including The Weather Channel, Weather.com, Weather Underground and Storm Radar.
IBM will sell the assets to Francisco Partners, a tech-focused private equity firm, for an undisclosed sum. The deal also includes the weather unit’s forecasting science and tech platform, as well as enterprise data services for the broadcast, media, aviation and ad tech industries. Francisco Partners plans to pivot part of the weather business to be more consumer-facing, adding new tools for users related to health and well-being, per the announcement.
As part of the deal, IBM will retain access to the company’s weather data, which it uses to power some of the artificial intelligence models it sells to enterprise clients. That system, which is also trained on NASA’s satellite data, is geared towards parsing ESG data and climate analysis such as natural disaster monitoring.
IBM paid $2 billion for the company in 2016 and has reportedly been exploring a sale since at least April, as it seeks to streamline its business. The company said its weather unit serves an average of 415 million people monthly, and reports in April estimated the coming deal to be valued at more than $1 billion.
The sale aligns with IBM’s strategy shift, as the company narrows its focus to key drivers such as software, cloud services and AI.
One of those bets is Watsonx, the enterprise AI development tool IBM announced in May that’s slated to debut in the third quarter. The company’s goal is to take the lead in user-friendly AI development for businesses, in part because of the massive demand for, and shortage of, human talent in the AI field. The platform includes a feature for AI-generated code, an AI governance toolkit, and a library of thousands of large-scale AI models, trained on language, geospatial data, IT events and The Weather Company’s weather data, which IBM will continue to use.
They lost a billion dollars, the proof is self evident, they got rid of the asset because it was losing money, a billion dollars wasted on something that wasn’t a core business
This reminds me of when the skinny company with a funny name -- Google -- bought the very early days internet search engine Deja News in 2000.
What they really wanted was Deja.com's vast usenet usergroup archive.
For the young, Usenet was the original BBS format from the modem days of "dialing into" the internet before the World Wide Web became mature. The Usenet was similar in concept to Free Republic in that all of the major news stories of the day were uploaded to the Usenet for discussion and research purpose.
In hindsight, acquiring the Usenet archive is how Google began building their index technology for their search engines, and look at where they are today.
I'm not sure what Microsoft hoped to accomplish by buying up the weather data technology -- maybe we'll find out in another 10 years, but I doubt it. They may have tried to recreate the Google experience, and failed.
-PJ
“I’m not sure what Microsoft hoped to accomplish by buying up the weather data technology — maybe we’ll find out in another 10 years, but I doubt it. They may have tried to recreate the Google experience, and failed.”
It was IBM not Microsoft that bought the weather channel. What they got and what they wanted was the whole data collection process for the weather data - world wide and vast, and the data. The sale still gives them access to all that. Vast data collection, managing, and analyzing it are all part of A.I. and A.I. was always IBMS’s target internally for that data - and now part of what IBM thinks it is and will do with A.I. And A.I., internally, is a growing part of what IBM considers a core element of its future plans. That they bought the Weather Channel for $1 billion and now have sold it for $2billion seems, internally, to IBM as less of a loss than the numbers on paper.
“They lost a billion dollars, the proof is self evident, they got rid of the asset because it was losing money, a billion dollars wasted on something that wasn’t a core business.”
They got rid of the “car” - running the channel, but the sale still gives them access to what they built and wanted - the engine - the whole data collection process and the data.
Rationalize it all you, it would be rare for a corporate executive to admit a screw up that cost the company on a non-core business, a billion dollar write off is still a billion dollars no matter how you rationalize it
Still, you know the saying... "Everybody complains about the weather, but nobody does anything about it."
I suppose they can use AI for better weather prediction, but how will they monetize it with so much publicly available information?
-PJ
Interesting. I thought Boeing was going make a play for it.
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