Boca Research To Supply Aol With Design For Tv Boxes
The Palm Beach Post
[ America Online ] will compete with [ Microsoft
Corp. ] in the market for set top television boxes
to connect to the Internet, and it will use [ Boca
Research ] 's design for those boxes, the
companies announced Tuesday.
The deal sent Boca Research stock to its highest
level in more than 18 months. Boca Research
(Nasdaq: BOCI) closed at $8, up $1.88 a share,
a 30 percent jump. This past October, the stock
was as low as $1.38 a share.
AOL (NYSE: AOL) stock also rose, closing at
$141.44 a share, up $13.13.
It is the third major announcement in two weeks for Boca Research. On
April 29, it announced the sale of a 20 percent stake in the company to the
German firm Infomatec Integrated Information Systems AG. Last week,
Boca disclosed the deal to license technology to Dutch giant [ Philips
Electronics ] . Since the announcements, Boca's market capitalization has
increased by almost $26.3 million.
In the AOL deal, Boca Research is selling its hardware design plans for set
top TV boxes to Philips. Philips will build and sell the boxes to AOL, and
pay Boca Research a royalty on each box sold. AOL's TV set top box will
use software developed by [ Oracle Corp. ] 's Network Computer Inc.
In a second part of AOL's plans, it will provide Internet access to satellite
TV subscribers through [ Hughes Electronics ] ' DirecTV satellite network.
The deal comes a week after [ AT&T ] announced a deal for cable company,
[ MediaOne Group ] , with an eye toward offering high-speed Internet and
telephone services through cable. At one point, AOL considered entering
the bidding for MediaOne as a partner to [ Comcast Corp. ] , but decided
against it. The giant on-line service was viewed as one of the losers in the
MediaOne deal.
But now AOL will tap its 17 million subscribers to sell its Internet boxes,
entering a market that has been largely held by Microsoft and its WebTV
product.
"We want to enhance the TV experience. When we roll out AOL TV, we
believe it will enhance TV viewing," AOL spokeswoman Wendy Goldberg
said.
AOL won't introduce the product until sometime next year, Goldberg said. It
hasn't said how much the boxes will sell for or how much it will charge
subscribers for the service. The companies also won't say how much Boca
Research will receive from the deal.
Boca Research spokeswoman Sandra Humphrey said the company doesn't
expect to begin booking revenue from the deal until the third quarter this
year. Boca Research employs 260 people in Boca Raton, where it makes
computer modems, Internet TV set top boxes and other computer parts.
(Copyright 1999)
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