MAID (Market Analysis and Information Database) has sold its hotel Internet technology to 4th Network in return for a 10% stake in the company and 10% royalties for the next 30 years.
MAID will now concentrate on its core business, which is to supply corporate business intelligence services. The company's flagship product Profound includes market research reports, business news, company statistics and up-to-date stock information.
"We developed the hotel Internet technology almost by accident," admitted Dan Wagner, CEO of MAID. "It was an anomaly and it didn't fit properly.
That's why this deal made good sense."
Wagner believes the two companies have a complementary approach to the Internet business. "When pitching to hotels, the competition I was coming up against was 4th Network," he explained. However, 4th Network's main interest in providing hotel Internet access was to sell advertising, while MAID wanted to leverage its business intelligence services.
However, Wagner stressed MAID was "not just walking away" from the Internet market. Through its stake in 4th Network, the company will continue to be involved in the Internet, and will become the agent for 4th Network in Europe.
Under the terms of the deal, the UK-based MAID will receive 10% of all 4th Network Internet access revenue for the next 30 years and will be given a 10% stake in 4th Network, worth about $7.5 million (#4.7 million).
MAID is guaranteed royalties of at least $5 million this year from 4th Network and of $6 and $7 million in the next two years.
4th Network will take over MAID's Internet on TV technology. Unveiled at the Grosvenor House Hotel in London last November, this enables the delivery of Internet access to hotel rooms using TVs. Key to the service was MAID's partnership with Thorn Business Communications, who provided the in-room infrastructure. That contract has been handed over to 4th Network.
"This alliance firmly establishes us as the premier in-room Internet service provider in the world today," said Scott Lewis, 4th Network's president and CEO. "We will be able to offer a global service to hotel groups and business travellers which is integral to our long-term strategy."
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