Intel exits Online Services Web-hosting business - The Circuit - Brief Article
INTEL CORP. LAST WEEK SAID IT PLANNED TO discontinue its Web-hosting business, Intel Online Services (IOS). As a result, the chipmaker expects to record a pretax charge of $100 million during Q2.
Intel said it would continue to provide services to existing customers over the next 12 months, but no new customers will be taken on.
"While IOS has been successful in attracting new customers, market trends and financial projections for the hosting services industry led us to today's decision," said Dalibor Vrsalovic, president of IOS. "Our focus now will be to fully support customers and ensure a continued high level of service while we assist them in their transition plans."
The Intel-developed technology that automates and standardizes Web-hosting functions as well as operational expertise will be absorbed into the Santa Clara, Calif.-based company's worldwide information technology operations to support its goal of becoming a 100 percent e-corporation.
The $100 million charge will primarily affect cost of sales, Intel said, and is related to the write-down of capital assets and other costs associated with phasing out the business.