IBM Will Acquire The Weather Company’s Digital Business

IBM announced this morning it’s acquiring The Weather Company, the parent company to the The Weather Channel, as well as the company’s B2B, mobile and web properties. The deal is being valued at more than $2 billion, according to a report from The Wall St. Journal. The companies are not disclosing the financial terms, however. The deal will see The Weather Company licensing weather forecast data and analytics from IBM under a long-term contract. The Weather Channel is not included in the acquisition.

The two companies were already working closely together prior to the acquisition.

IBM had an agreement in place with the Weather Company to share its data, following a strategic partnership between the two businesses earlier this year. Now for $2 billion, IBM owns the data.

The Weather Company, which is owned by private equity firms The Blackstone Group and Bain Capital, along with NBCUniversal, had also earlier announced that it would host its weather data services on IBM’s cloud computing platform.

According to IBM, the acquisition helps it to harness one of the largest big data opportunities in the world: weather. That’s something that impacts one-third of the world’s GGP and in the U.S. alone, accounts for about half a trillion dollars in impact, the company notes.

The deal will combine two big data platforms, IBM’s cognitive and analytics business with that of Weather. Currently, The Weather Company has the fourth-most visited mobile app in the U.S. and handles 26 billion inquiries to its cloud-based services daily, generating about 4 GB of data per second. Following the acquisition, IBM’s Watson will be able to tap into more data sets, including Weather’s mobile and web properties, which analyze data from 3 billion weather forecast reference points, over 40 million mobile phones, and 50,000 flights per day.

The two companies will also combine their technology and teams in order to serve as the foundation for IBM Watson’s new Internet of Things (IOT) unit and the Watson IOT Cloud Platform, following on a $3 billion commitment the company made in March to invest in its IOT business.

“The Weather Company’s extremely high-volume data platform, coupled with IBM’s global cloud and the advanced cognitive computing capabilities of Watson, will be unsurpassed in the Internet of Things, providing our clients significant competitive advantage as they link their business and sensor data with weather and other pertinent information in real time,” said John Kelly, senior vice president, IBM Solutions Portfolio and Research in a statement. “This powerful cloud platform will position IBM to arm entire industries with deep multimodal insights that will help enterprises gain clarity and take action from the oceans of data being generated around them.”

Following this acquisition, IBM says it will advance The Weather Company’s digital advertising platform on mobile and web through the development of data-driven ads, in order to build ad-sponsored consumer and business solutions. Combined, these mobile and web properties see 82 million uniques monthly.

The deal is not expected to impact The Weather Channel’s current business. “The Weather Channel will continue to be owned and supported by our existing shareholders — Bain Capital, Blackstone and NBCUniversal​ — and operate as a standalone business,” says CEO Dave Shull.

“The Weather Channel operates as a distinct and separate business with its own leadership team, which enables this to be a smooth and seamless transition,” he added.