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Aug 22 2008 1:07PM EDT

Intel: Entertainment Company?

Blaise Zerega wonders if we've seen this show before.  Did Intel reinvent itself this week? Yesteday, the chip maker announced a partnership with Yahoo to make it easier for TVs to connect to the Internet and display Web content alongside TV programming. And on Wednesday at its developers forum, Intel and Dreamworks Animation announced a 3D technology based on Intel's graphics chips that will be used to produce the studio's upcoming movies beginning with Monsters v. Aliens next year.

Both moves are an example of Intel moving to the proverbial "higher ground" by helping to pioneer new uses for its semiconductors even as it cedes low-hanging markets to commodity chip makers. It's a strategy that the chip goliath has used in the past, most often successfully.

The interesting question today, however:  As Intel gets bigger and bigger, by dint of its sheer size, does it rally the Internet -- and now TV and Hollywood, to its vision of the future of computing? The same can be asked of Cisco with its dominance of communications equipment market. It had, of course, been asked of Microsoft.

In the latter case, the courts found monopoly. In the former  situations -- Intel and Cisco, I'd argue that it's a virtuous circle of innovation. Both companies keep raising the technological bar to keep ahead of their competitors.

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