Nortel acquires DiamondWare for $7 million

OTTAWA, CANADA – Nortel [NYSE/TSX: NT] announced on Thursday that it has acquired DiamondWare, a pioneer in high-definition, proximity-based 3-D positional voice technology that brings life-like sound to virtual web and voice communications. The acquisition furthers Nortel's drive to transform communications to allow people to collaborate in more interactive and immersive ways.

Arizona-based DiamondWare has a background in supplying technology to sectors ranging from gaming to the military. The deal, announced on Thursday, will see Nortel gain voice-communications systems that can give listeners a sense of proximity and positioning; such as when people are talking in a virtual meeting space, listeners will be able to hear them in relation to their virtual positioning in that space.

According to a statement, Nortel will start using DiamondWare's technology in its multimedia, voice-conferencing and internet-telephony (VoIP) products. The company said the technology will also find its way into one of Nortel's research projects, a "3D web-networking" system called “web.alive,” which is for virtual visual and audio collaboration within a secure corporate network.

"A key goal of Nortel has always been to use technology to replicate the richness of a real-world communications experience," Nortel's chief technology officer, John Roese, said in the statement. "The acquisition of DiamondWare strengthens Nortel's position in the converging telecommunications and IT landscapes and gives us another building block to create the ultimate communications experience for our customers."

DiamondWare's chief executive, Keith Weiner, said in the same statement that Nortel would be able to use the technology in traditional telephony and conferencing, or even in mobile unified communications and online virtual worlds.

Nortel bought DiamondWare for $7 million in cash, plus "up to an additional $3 million to DiamondWare security holders based on achievement of future business milestones over the next 40 months," according to Thursday's statement.

The deal was the second acquisition by Nortel in as many weeks. The Toronto-based multinational bought the unified-communications software maker Pingtel last week.