RCA Corporation

RCA originated as a reorganization of the Marconi Wireless Telegraph Company of America, commonly called "American Marconi". In 1897, the Wireless Telegraph and Signal Company, Limited, was founded in London to promote the radio—then known as "wireless telegraphy"—inventions of Guglielmo Marconi. As part of worldwide expansion, American Marconi was organized as a subsidiary in 1899, holding the rights to Marconi patents in the United States and Cuba. In 1912, American Marconi took control of the assets of the bankrupt United Wireless Telegraph Company, and from that point forward, was the dominant radio communications company in the United States.

When the United States entered World War I in April 1917, the federal government took control of most civilian radio stations to use them for the war effort. Although the government planned to restore civilian ownership of the radio stations once the war ended, many United States Navy officials hoped to retain a monopoly on radio communication even after the war. Contrary to instructions it had received, the Navy began purchasing large numbers of radio stations. When the war ended, Congress rejected the Navy's efforts to have peacetime control of the radio industry and instructed that the Navy return the stations to the original owners.

Due to national security considerations, the Navy was particularly concerned about returning high-powered international stations to American Marconi, since the majority of its stock was in foreign hands, and the British already largely controlled the international undersea telegraph cables. This concern was increased by the announcement in late 1918 of the formation of the Pan-American Wireless Telegraph and Telephone Company, a joint venture between American Marconi and the Federal Telegraph Company, with plans to set up service between the United States and South America.

The Navy had installed a high-powered Alexanderson alternator, built by General Electric (GE), at the American Marconi transmitter site in New Brunswick, New Jersey. It proved to be superior for transatlantic transmissions to the spark-gap transmitters that had been traditionally used by the Marconi companies. Marconi officials were so impressed by the capabilities of the Alexanderson alternators that they began making preparations to adopt them as their standard transmitters for international communication. A tentative plan made with General Electric proposed that over a two-year period the Marconi companies would purchase most of GE's alternator production. However, the U.S. Navy objected to the plan, fearing British domination in international radio communications and the national security concerns this raised.

The Navy, claiming support from U.S. President Woodrow Wilson, looked for an alternative that would result in an "all-American" company taking over the American Marconi assets. In April 1919, two naval officers, Admiral H. G. Bullard and Commander S. C. Hooper, met with GE president Owen D. Young, and requested a suspension of the pending alternator sales to the Marconi companies. This would leave General Electric without a buyer for its transmitters, so the officers proposed that GE purchase American Marconi, and use the assets to form its own radio communications subsidiary. Young consented to this proposal, which, effective November 20, 1919, transformed American Marconi into the Radio Corporation of America. The decision to form the new company was promoted as a patriotic gesture. The corporate officers were required to be citizens of the United States, with a majority of the company stock to be held by U.S. citizens.

Upon its founding, RCA was the largest radio communications firm in the United States. Most of the former American Marconi staff continued to work for RCA. Owen Young became the chairman of the board of the new company. Former American Marconi vice president and general manager E. J. Nally become RCA's first president. Nally was succeeded by Major General James G. Harbord, who served from 1922 until January 3, 1930, when Harbord replaced Owen Young as chairman of the board. David Sarnoff, who was RCA's founding general manager, became its third president on the same day. RCA worked closely with the federal government and felt it deserved to maintain its predominant role in U.S. radio communications. At the company's recommendation, President Wilson appointed Rear Admiral Bullard "to attend the stockholders' and director's meetings... in order that he may present and discuss informally the Government's views and interests".

The radio industry had been making technical advances, particularly in the area of vacuum tube technology and GE needed access to additional patents before its new subsidiary could be fully competitive. During this time American Marconi had been steadily falling behind others in the industry. The two companies then proceeded to negotiate a series of mutually beneficial cross-licensing agreements between themselves and various other companies in the industry. On July 1, 1920, the American Telephone & Telegraph Company (AT&T), agreed to purchase 500,000 shares of RCA—although it divested these shares in early 1923. The United Fruit Company held a small portfolio of radio patents, and signed two agreements in 1921. GE's traditional electric company rival, the Westinghouse Electric & Manufacturing Corporation, had also purchased rights to some critical patents, including one for heterodyne receiving originally issued to Reginald Fessenden, plus regenerative circuit and superheterodyne receiver patents issued to Edwin Armstrong. Westinghouse used this position to negotiate a cross-licensing agreement, effective July 1, 1921, that included a concession that 40% of RCA's equipment purchases would be from Westinghouse. Following these transactions, GE owned 30.1% of RCA's stock, Westinghouse 20.6%, AT&T 10.3%, and United Fruit 4.1%, with the remaining 34.9% owned by individual shareholders.

In 1930, RCA agreed to occupy the yet-to-be-constructed landmark skyscraper of the Rockefeller Center complex, 30 Rockefeller Plaza, which in 1933 became known as the RCA Building (renamed the GE Building in 1988 and currently known as the Comcast Building after Comcast acquired NBC). This lease was critical for enabling the massive project to proceed as a commercially viable venture—David Rockefeller cited RCA's action as being responsible for "the salvation of the project".

In December 1985, it was announced that General Electric would reacquire its former subsidiary for $6.28 billion in cash, or $66.50 per share of stock. GE's acquisition of RCA was the largest non-oil company merger in history up to that time and was completed on June 9, 1986. Despite initial assurances that the combined forces of GE and RCA would create a technology, manufacturing and entertainment behemoth, over the next few years, GE proceeded to sell off most of RCA's assets. It was revealed that GE's main motivation for purchasing RCA was to acquire the NBC Television Network and the corporation's defense related businesses. In 1987, GE disposed of its 50% interest in RCA Records to its German partner Bertelsmann and RCA Records became a division of Bertelsmann Music Group; the NBC Radio Network was sold to Westwood One; RCA Global Communications Inc., a division with roots dating back to RCA's founding in 1919, was acquired by the MCI Communications Corporation.

In 1988, the rights to manufacture consumer electronics products under the RCA and GE brands was acquired by Thomson Consumer Electronics, in exchange for some of Thomson's medical businesses. Also in 1988, its semiconductor business (including the former RCA Solid State unit and Intersil) was bought by Harris Corporation. That same year, the iconic RCA Building, known as "30 Rock" at Rockefeller Center was renamed the GE Building.

In 1991, GE sold its share in RCA/Columbia to Sony Pictures which renamed the unit "Columbia TriStar Home Video" (later further renamed to Columbia TriStar Home Entertainment, now Sony Pictures Home Entertainment).

Sarnoff Labs was put on a five-year plan whereby GE would fund all the labs' activities for the first year, then reduce its support to near zero after the fifth year. This required Sarnoff Labs to change its business model to become an industrial contract research facility. In 1988, it was transferred to SRI International (SRI) as the David Sarnoff Research Center, and subsequently renamed the Sarnoff Corporation. In January 2011, Sarnoff Corporation was fully integrated into SRI.