Ericsson Acquires Redback and Hires a Streaming Media Pioneer

Sandwiched into the holiday season at the end of 2006, a year already marked by a significant uptick in streaming media mergers and acquisitions, was Ericsson’s announcement that it was acquiring Redback Networks, a company that manages wireline DSL connections for 15 of the top 20 DSL carriers worldwide, for approximately $2.1 billion. With a total broadband connection portfolio of approximately 50 million DSL end users, Redback had made a name for itself in providing VoIP, IPTV, and on-demand video services to a total of about 50 DSL service providers across the globe.

Even more interesting to some industry watchers than the acquisition, though, was the announcement late last week that Dr. Alan Lippman was joining Redback as chief video architect. Lippman is best known for his work at RealNetworks, where he was one of the first five employees and where he provided a significant amount of the code for the core RealAudio and RealVideo codecs. Lippman left RealNetworks in 2000, when, in his words, "a lot of the challenge was gone."

Not content to while away his time, Lippman returned to the video space in 2003 with the launch of Trusted Networks, a company whose mission was to push the boundaries of streaming video for web users to a "no wait" or "instant channel changing" model. Trusted accomplished this by using latent bandwidth to push content to an end user’s machine, and its primary focus was the advertising space.

Speaking about the announcement, a senior Redback executive noted in a press release that video is key to Redback’s future growth, even as an Ericsson subsidiary.

"Video is the biggest game-changer in network routing today. It is also the single biggest force driving network upgrades worldwide. We're thrilled Alan Lippman is joining our Redback team," said Scott Marshall, senior vice president of engineering and product management at Redback Networks. "Redback is laser-focused on accelerating video network innovation on behalf of our carrier customers."

That Lippman is joining Redback after the acquisition was already announced may mean Ericsson is shoring up its presence in the video space on both the wireline and wireless sides of the house. The move to acquire Redback already puts Ericsson in direct competition with two of its partners, Cisco and Juniper, who have also announced intentions to make IPTV and VoIP prime target verticals for the 2007 earnings year.

"As one of the original developers of streaming media, Lippman adds a very unique set of skills to Redback," says Marshall, "focused on the delivery of IP-based audio and video over broadband networks. Lippman is a recognized expert in managing video and audio delivery in both multicast and unicast network environments."