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

9/2/09Follow @wroush

If you had to pick a birthday for the Internet, September 2, 1969—40 years ago today—would be a good candidate. That’s the day a team of researchers at UCLA sent the first computer-to-computer transmissions using the Interface Message Processor (IMP), the grand-daddy of all packet-switching routers and the foundation of the military-university Arpanet, which paved the way, in later decades, for the Internet. The IMP was built at Cambridge, MA-based Bolt, Beranek and Newman, now BBN Technologies. So the timing of yesterday’s announcement that BBN will become part of Massachusetts-based defense giant Raytheon (NYSE: RTN) seems auspicious, since it seems to guarantee that the firm’s long tradition of innovation will continue under local management.

Originally founded by a pair of MIT professors as an acoustic consulting firm, BBN has had a hand in the development of an eclectic range of important digital technologies, including parallel processing, speech recognition, the Logo educational software language, genetic algorithms, satellite communications, and the @ sign in e-mail addresses. But the firm has traveled a twisty path over the last decade and a half.

GTE bought the company in 1997 and, as a condition of its 2000 merger with Bell Atlantic to create Verizon, spun off BBN’s Internet-related assets under the name Genuity. (Genuity’s 2000 IPO produced disappointing returns; the company went bankrupt and was acquired by Colorado-based Level 3 Communications in 2002.) The remaining parts of BBN were pried away from Verizon in a 2004 deal led by two venture firms, Cambridge, MA-based General Catalyst and Palo Alto, CA-based Accel Partners. Partners from the firms took four of BBN’s five board seats.

Since then, the 700-employee company has focused on bringing more products to market, with at least two notable successes: its Boomerang “shooter detection” system, used by U.S. forces in Iraq and Afghanistan to pinpoint the origin of small-arms fire, and EveryZing, a 2005 spinoff (originally known as Podzinger) that uses speech recognition technology developed at BBN to help media companies monetize their audio and video content by creating machine-readable transcripts that can be found by search engines and ad-placement algorithms.

But venture partners aren’t, as a rule, interested in being long-term corporate overseers, so it isn’t a huge surprise to see General Catalyst and Accel handing over their stake in BBN to Raytheon, a $23 billion defense contractor and electronics manufacturer whose history in Massachusetts goes back even farther than BBN’s. The terms of the acquisition, which is expected to close by the end of this year, haven’t been disclosed. But David Fialkow, managing director at General Catalyst, said in a statement that the sale was an “excellent result” for BBN’s investors and employees. BBN president and CEO Robert “Tad” Elmer said being part of Raytheon would act as “a multiplier on our proven ability to deliver advances to the market rapidly and profitably,” and Raytheon executives said the acquisition would strengthen the company’s capabilities in networking, video surveillance, and advanced sensing applications.

MIT physicist Richard Bolt and acoustics expert Leo Beranek founded the company in 1948, and brought in a former student of Bolt’s, an MIT architecture graduate student named Robert Newman, early enough to include him in the corporate moniker. The company’s first contract was for the acoustic design of the General Assembly Hall at the United Nations headquarters in New York. On the strength of that work, the firm went on to … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.genotrope.com Tom Summit

    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).

  • http://www.scheffelaar.com Jos Scheffelaar

    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

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