Lenovo buys into Nortel virtual shopping app

Nortel this week said it landed PC maker Lenovo as a customer for its virtual world business application.

The win comes a little over a year after Nortel announced incubation efforts to develop web.alive, a collaborative, browser-based application for enterprises that provides an interactive 3D experience with voice, graphics and avatars. Web.alive is designed to facilitate internal collaboration and customer interactions over the Web and in real time.

Lenovo is using web.alive in an online virtual store as a way to give consumers a new avenue for e-commerce (and perhaps the system can help lessen the load on what will soon be a leaner Lenovo staff, with the company announcing an 11% workforce cutback this week). The Lenovo "eLounge" virtual store allows shoppers to create personalized avatars to walk around the store and browse through products while interacting with other globally dispersed shoppers and sales staff.

Shoppers can also attend product demonstrations or tutorials given by the virtual store staff, and users can build shopping communities and host online meetings with other participants.

For customer service, users walk up to a customer service representative or ask another customer with a high feedback rating, Nortel says. Businesses can use their online stores to test out new store designs or ideas, in a virtual setting.
A prototype of Lenovo's eLounge is located here.

Nortel licensed Epic Games' Unreal Engine platform as the basis for web.alive. The application is the result of an Incubation Program launched by Nortel in late 2007 to encourage the company's developers to think beyond incremental product improvements to the creation of new products, technologies, and business models that will have a "disruptive and transformative impact" on the market, according to the company.

Separately, Radware is reportedly looking to buy Nortel's Metro Ethernet Networks (MEN) business for $30 million to $50 million. The unit, which Nortel put on the block in September, contributes about $2 billion annually to Nortel.

According to Israeli business site Globes, Radware has $137.4 million in cash to help fund the deal. Globes attributed its information to unnamed sources.

Nortel has said it is looking to get a fair deal for the unit but $30 million to $50 million seems to be severely undercutting the value of MEN, even in the current economic downturn. Instead, Radware could be looking to purchase particular MEN assets, such as a product line, observers note.

Three companies, including Cisco, have reportedly made offers for the business.