Several hundred people worked at data centers around the world
SAN JOSE — Chip-making giant Intel Corp. on Tuesday said it plans to shut down its Web hosting service and as a result will take a $100 million charge in the second quarter.
Intel Online Services operations will be phased out over the next year. The company said it will work with customers to ensure a smooth transition to other providers.
“While IOS has been successful in attracting new customers, market trends and financial projections for the hosting services industry lead us to today’s decision,” said Dalibor Vrsalovic, the subsidiary’s president.
The business employed several hundred people at eight data centers around the world, according to Intel spokeswoman Christine Chartier. Many will be absorbed into Intel’s other divisions, she said.
Intel never disclosed how much money the hosting division generated since its launch in the late 1990s during the height of the dot-com boom.
The $100 million charge, which was not part of the company’s second-quarter forecasts, reflects the write down of capital assets and other costs associated with phasing out the business.
In recent months, the maker of Pentium and other microprocessors has been refocusing on its core chip-making business.
In October, Intel announced it was exiting its computer gadget business, which included digital cameras, digital music players and a toy microscope that plugged into PCs.
Shares of Intel lost 54 cents, to $22.02, in Tuesday trading on the Nasdaq Stock Market. After the announcement, shares lost another 87 cents in extended trading.