AT&T wants to spin off

Electronics Times, July 24, 2000

Doreen Yochum, CEO of AT&T Laboratories, says the company hopes to learn from Cambridge University's engineering department's expertise at spinning off high-tech firms.

Speaking at the department's 125th anniversary celebrations, she said: "The AT&T Foundation is focusing its philanthropy on perpetuating the sciences. We are further investing in an institution that is extraordinary in its technological contribution and in the calibre of its students.

"It has a marvellous track record in commercialising science. AT&T wants to learn how they do that."

Cambridge University owns an equity stake in 24 companies spun off since 1995. It has also received more than #100m from private companies to carry out research in the past five years. The engineering department has particular expertise in broadband wireless and display technologies, both of which it is developing with private interests.

AT&T announced a #3m investment in the department at the anniversary event (Electronics Times, 17/7/00).

"Having an idea is not enough," said Yochum. "You need to think about application and marketability. You have to get investors to invest and buyers to buy."

AT&T Labs has yet to spin off a high technology company to develop a product. An audit of the company's labs indicated two possibilities: an electronic mail-box capability and a Web directory capability.

"Sometimes a company like ours can be too slow - we're looking at ways to get out to the market quickly," said Yochum.

AT&T Labs has also licenced two concepts. It has formed an agreement with SpeechWorks International to develop its speech processing technology and sold its DjVu scan-to-Web technology to Seattle-based LizardTech.

The AT&T parent has spun-out three companies to date: Virata, which specialises in broadband communications semiconductors; Telemedia Systems, which specialises in networked multimedia; and Adaptive Broadband, which focuses on wireless broadband.

* Ten former employees at Adaptive Broadband founded Cambridge Broadband at the beginning of the year. After failing to keep hold of them, Adaptive decided to invest in Cambridge Broadband instead. Cambridge Broadband, currently looking to recruit 10 people, anticipates trialing its first product before the end of the year.