Do not invest more money than you can afford to lose.
Digital advertising is a rapidly growing industry expected to hit $60 billion in the U.S. this year, according research firm eMarketer. Now that IBM has struck a deal to buy The Weather Company’s digital products and technology business, the company may be positioning itself to take a chunk of that pie.
IBM announced Wednesday that it was acquiring The Weather Company’s B2B, mobile and cloud-based Web properties. It said The Weather Company’s divisions will help construct the new cognitive technology Watson IoT (“Internet of Things”) unit and IoT Cloud platform.
It’s more than being able to create a better weather forecaster. One of The Weather Company’s digital properties is WeatherFX, a marketing platform that uses the weather to determine ideal digital ad placements. Deutsch’s chief channel planning and investment officer, Anush Prabhu, said it has previously worked with The Weather Company to inform media planning for its clients.
Terms of the acquisition were not disclosed, but the deal includes essentially all of the Weather Companys assets other than the Weather Channel television station, including Weather.com, the Weather Channel mobile apps, the Weather Underground website and, perhaps most importantly, Weather Services global, a division that sells weather data to companies such as airlines and the insurance industry.
The Weather Channel – will not be acquired by IBM, but will license weather forecast data and analytics from IBM under a long-term contract, the company added.
According to The New York Times, “the Weather Company’s data is managed on the computing systems of IBM competitors, including Amazon and Google, as well as on the IBM cloud computing system SoftLayer”.
An Apache Spark Starter offering is now available on the Bluemix catalog, to help “data scientists and data analysts deliver insights and business outcomes through interactive analytics powered by IPython Notebooks, Apache Spark and Object Storage”.
“This powerful cloud platform will position IBM to arm entire industries with deep multimodal insights that will help enterprises gain clarity and take action from the oceans of data being generated around them”.
The Weather Co.’s private equity owners – Bain Capital and Blackstone Group – had been shopping the company’s assets for a few time.
Along with the new Spark-as-a-Service, IBM announced it redesigned and simplified the architecture of several software solutions and services using Spark. The three firms acquired the company for about $3.5 billion in 2008. Essentially, it’s probably time to pour one out for the Weather Channel network as we now know it. With its profit center gone, it’s hard to imagine the channel holding on to recent high-profile hires, like Sam Champion and Al Roker, for much longer. In late 2013, the television channel endured a bitter public fight with DirecTV over carriage fees, and earlier this year Verizon FiOS dropped the channel altogether.
But this deal with IBM makes a sense after seeing their existing relationship.
