To keep the WiMax dream alive, at least in the U.S., Intel needed to toss WiMax a $1 billion lifeline, which along with investments by Google(GOOG Quote - Cramer on GOOG - Stock Picks), Time Warner Cable(TWC Quote - Cramer on TWC - Stock Picks), Comcast(CMCSA Quote - Cramer on CMCSA - Stock Picks) and a few other partners will allow the new Sprint/Clearwire to build the infrastructure for a WiMax network.
A Closer Look
It's intriguing to consider what might have happened if Comcast, Time Warner and Google didn't sign on.
Might Intel have been willing to foot the bill for the entire project?
Intel Capital President Arvind Sodhani wouldn't speculate on that. But he noted that Intel had been in talks with both Sprint and Clearwire for about a year, and had indicated that it was ready to provide a large chunk of the necessary funding.
"We had indicated to both parties that we had a very large ability to invest a very large capital infusion into the combined entity," says Sodhani.
As it is, Intel Capital's $1 billion investment is the largest in its 17-year history. The average deal runs between $5 million and $20 million.
What's more, the total $1.6 billion invested in Clearwire alone now accounts for roughly 19% of the total $8.5 billion of investments that Intel Capital has made since it started in 1991.
According to Sodhani, the WiMax investments are in keeping with Intel Capital's mission of building "ecosystems" that support the adoption of new technology.
But the deal can also be viewed not only as a way to nurture a new technology that might eventually benefit Intel, but as a way to save Intel from poor business decisions.
That's a resource most companies don't have.
The question is whether it's a smart way for a company to make investment decisions.
Alexei Oreskovic
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