Weather Channel parent sells digital ops to IBM

By Michael E. Kanell, AJC.com Staff Writer

Atlanta - Sonali Pandey (left) and Sam Hiatt pitch their team's app to a panel of judges during The Weather Channel's Hack-A-Thon at the Atlanta Marriott Northwest at Galleria on Friday, December 12, 2014. The purpose of the event is for employees of the company to come up with innovative ideas that are relavent and profitable in the digital age. JONATHAN PHILLIPS / SPECIAL

Atlanta – Sonali Pandey (left) and Sam Hiatt pitch their team’s app to a panel of judges during The Weather Channel’s Hack-A-Thon at the Atlanta Marriott Northwest at Galleria on Friday, December 12, 2014. The purpose of the event is for employees of the company to come up with innovative ideas that are relavent and profitable in the digital age. JONATHAN PHILLIPS / SPECIAL

The Atlanta-based Weather Company is selling its data and digital businesses, including the weather.com website and mobile apps, to IBM.

The sale does not include the Weather Channel television channel, which has grappled with the profusion of internet and mobile-based weather information services. Under the deal, the channel will license forecast data and analytics from IBM.

The 33-year-old Weather Company has roughly 1,400 employees, about 900 of them in metro Atlanta. The deal with IBM, set to close next year, will transfer about 950 to IBM, although it is unclear if they will move.

The company’s business of selling weather information and analysis to companies and government will be folded into Armonk, N.Y.-based IBM, which plans to use them to bolster its cloud-based Watson data-crunching unit.

The price wasn’t disclosed, but an earlier Wall Street Journal report had estimated that the deal was worth more than $2 billion.

The businesses IBM is buying collect, analyze, distribute and sell enormous amounts of data about the weather. Some of that information goes to consumers, for example, via smart phones. The Weather Company said that its mobile app is America’s fourth most-used. But the bulk of the business – and the bulk of the profit potential – is in selling more customized and sophisticated data to other businesses.

Clients include airlines, energy traders and television stations that can use data to formulate their own forecasts. That is likely to expand, IBM said in a statement, because the ability to predict weather can be profitably useful to many companies.

Airlines, for example, can “optimize fuel consumption, reduce delays and airport congestion, and improve passenger safety during disruptive conditions,” IBM said.

Officials said there are no plans to downsize, but that those kinds of decisions may not be made until the closing of the transaction in 2016.

Most Weather Channel employees are in Atlanta, while many of the tech-centric operations are elsewhere, including San Francisco, Massachusetts and Wisconsin.

IBM and the Weather Company had been in a partnership since earlier this year. The Weather Company is currently majority-owned by private equity firms Blackstone Group and Bain Capital, with NBCUniversal holding a minority stake.

Barry Lee Myers, chief executive of rival AccuWeather, said the deal indicates “that The Weather Company is up for sale and it is being broken up into parts and pieces, some of which are going to IBM.”

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