40 Years After Sparking the Internet, BBN’s Long Search for a Home Ends…At Home

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ups and downs in the 1970s and 1980s, and was largely unprofitable. In the early 1990s, under CEO George Conrades, it evolved into one of the first national Internet service providers, focusing first on corporate and university customers and then on consumers; in 1995-1997 its BBN Planet division signed agreements with America Online to provide more than 400,000 telephone modems to AOL’s customers.

But the company was still operating at a loss in 1997, when Stamford, CT-based GTE purchased it in an effort to compete with AT&T and MCI for the center of the then-exploding Internet market. BBN Planet was merged with GTE’s fiber networking division, but was spun out again in 2000 under the Genuity brand when it turned out that FCC regulations meant GTE would have to shed some of its long-distance networking operations before it could merge with Bell Atlantic. The forced spinoff led to a market flop for Genuity, whose technology was eventually absorbed by Level 3. BBN’s non-Internet operations, which remained as part of Verizon, languished for several years, until Accel and General Catalyst acquired them in 2004.

General Catalyst’s Fialkow and his counterparts at Accel said at the time that they saw an opportunity to help BBN monetize many of the communications technologies it had been gestating for years. The company set up a new “Delta Division” to look for commercialization opportunities. One of the first pieces of intellectual property to be peeled off was the speech-to-text technology originally developed for the Department of Defense, which became the core platform at Podzinger, later renamed EveryZing. The spinoff started off as a podcast search service, but has evolved into a provider of broad search and indexing technology that helps media companies like NBC Universal earn more revenues from their digital audio and video properties.

Internally, BBN has focused on specific products such as Avoke, a software suite that uses speech recognition to help companies manage large call centers, and Boomerang, a multi-microphone system mounted on military vehicles that uses signal processing software to determine the range and elevation from which nearby snipers are firing. The company also continues to work on advanced research and development for the defense community, with strengths in areas such as quantum cryptography and ad hoc wireless networking. But despite the establishment of the Delta Division nearly five years ago, BBN hasn’t been a source of numerous new commercial products, and may have been in search of a deep-pocketed parent organization like Raytheon in order to continue its operations.

Raytheon is one of the few existing Massachusetts technology organizations whose roots are even deeper than BBN’s. It was launched in Cambridge in 1922 by one-time MIT roommates Vannevar Bush and Laurence Marshall, to commercialize a “gaseous rectifier” invented by the third co-founder, scientist Charles Smith; the device made it possible to run household radios on alternating current rather than batteries. The company went on to produce transformers, auto parts, and vacuum tubes, and grew into a defense giant during World War II, when it won a contract to mass-produce magnetrons, the microwave-generating tubes at the heart of radar technology. Soon after the war, it employed magnetrons as the core of the first microwave oven, called the Radarange. In recent decades, Raytheon has been most famous as the manufacturer of the controversial Patriot surface-to-air missile system.

In a statement yesterday, Raytheon chairman and CEO William Swanson said BBN’s rich history of innovation makes it a “natural fit” with Raytheon. “We expect all of our businesses to benefit from the application of BBN’s research and development expertise and technologies across our product lines and programs,” Swanson said. Given the two firms’ common origins at MIT and the military’s ongoing need for better networking and computing technology, Raytheon indeed seems to be a logical—and perhaps, finally, a long-term—home for BBN.

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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4 responses to “40 Years After Sparking the Internet, BBN’s Long Search for a Home Ends…At Home”

  1. Tom Summit says:

    Great article Wade. I really enjoy stories about Boston tech legacy companies and their contributions to the marketplace.

    xBBN employees also contributed to startups like Wellfleet and VideoServer.

    My wish list for future articles: Apollo, Wellfleet, Powersoft, Symbolics(first .com domain).

  2. I may be nit-picking, but debt-loaded Genuity was actually not acquired by Level 3 Communications as stated in the beginning of the article. For $137 million, Level 3 only acquired the assets and operations of Genuity, after which Genuity Inc. was allowed to die peacefully.

    Former Genuity employee