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Blogs have become a powerful tool for media organizations – or they will be once we figure out how to use them effectively. At TechnologyReview.com, we think we’ve found one interesting proposition.

We’ve teamed up with Andrew Madden, a former Red Herring editor who now runs his own blog, alarm:clock, covering the business of technology startups. Madden updates his site daily, but starting today and appearing each Wednesday, he will write an in-depth piece about one company exclusively for the TechnologyReview.com, along with a brief synopsis of the week in venture capital and technology.

The outcome, we hope, is to provide the TechnologyReview.com readers with a look at the financial markets influencing emerging technologies while encouraging the growth of the blogosphere.  – By Brad King

Dilithium Networks

Headquarters: Petaluma, CA (with offices in Sydney, London, and Singapore)

Founded: 2002

Management:  Paul Zuber, CEO, was previously President of Solectron Australia, a subsidiary of the electronics manufacturing services company. Zuber ended up at Solectron because it acquired the Bluegum Group, a company he co-founded, which grew to 800-employees before its acquisition.

Dr. Marwan Jabri, co-founder/CTO, is an expert in multimedia communications systems and the founder of Macchina, the predecessor to Dilithium Networks. Jabri has done stints at serious geek think tanks like the Salk Institute of San Diego, California and at Bell Labs in New Jersey.

Investors: Announced on March 14 that it secured $18 million in Series C funding. Round was led by U.S. Venture Partners, with existing investors Motorola Ventures, JAFCO, Deutsche Bank Capital Partners, and CM Capital.

Singapore’s Infocomm Investments, a subsidiary of Infocom Development Authority, also participated. A $10 million Series B was raised in April 2003. Undisclosed Series A of “under $10M,” according to Paul Zuber, raised in 2002. Other investors have included Entrepreneur America, TMT Ventures, and Ericsson Technology Fund.

Business Model:  Dilithium Networks’ core technology reduces the cost of delivering voice and video across telecommunications networks, with a particular focus on emerging 3G networks. Products are designed to facilitate interconnectivity between diverse networks and a range of multimedia network devices.

Also sells diagnostic equipment that helps operators test the quality of their networks. The company likes to think it is solving the “Universal Connectivity Challenge” – allowing every manner of device to connect over every manner of network. Customers include OEMS, system integrators, and major carriers.

Competitors: Major wireless infrastructure manufacturers including Alcatel, Nokia, Ericsson, Motorola, and Nortel. Fortunately, most of these companies are also customers or investors. Also competes with Tekelec.

Dirt: 3G, shorthand for the “third-generation” protocols that can support much higher data rates across wireless networks, has fallen well short of its promise. Have you seen anyone conduct a videoconference over his cell phone yet?

The success of the market ultimately hinges on the continued investment, both in terms of technology and marketing, by the major mobile players, none of which are strangers to Dilithium. The company has already sold products to Ericsson, Nokia, Samsung, NEC, Motorola, Alcatel, Lucent, and Nortel. Research firm IDC anticipates another year or two of waiting for widespread 3G products and services, pegging the timeframe to 2006-2007.

With a fresh $18 million in the bank, Dilithium Networks is in a good position to benefit from this market’s long overdue maturation. Oh, and yes, the company’s name is a Trekkie homage to “dilithium crystal,” the substance that powered the U.S.S. Enterprise.

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Tagged: Computing

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