Intel invests in web 2.0 tech company

INTEL’S LONG ARM of global investment, Intel Capital, said it will shell out $20 million for a stake in social software company Telligent Systems.

Telligent, based in Dallas, makes software for the .NET and SQL Server platform with its claim to fame being the creation of the Community Server - a social not-working platform consisting of a core blog, forums, photo gallery, file sharing system and a whole plethora of other add-ons.

The first transaction between the firms has already been completed but Intel Capital says it will pick up the rest of its undisclosed stake within the next year.

Telligent reckons Intel’s cash would be best spent expanding its sales team, expanding its marketing and advertising efforts and lobbing a bit at product development plans. Alternatively, they could have a big party.

Already boasting some 3,000 customers for Community Server including Chipzilla, Microsoft and Dell, Telligent believes its software could form the base for many a Software Network Support Forum web site.

From Intel’s perspective, the investment shows the firm is interested in web 2.0 companies, something it already showed back in January by investing $10 million in Endeca Technologies. Endeca, which creates information access software is built around access-optimized databases and competes with Google and IBM.

The reason for Intel wanting in on web 2.0 is that it ultimately benefits chip development, because the firms building web 2.0 technologies need huge data centres. The bigger the data centre, the more server processors needed to support them.

After the deal was announced, Intel shares went up by 23 cents to $18.86. µ