Here's a report that might create either competition or more business for Secure Digital:
Microsoft, Xerox to create spinoff
Software giant will invest in new Xerox venture
By Mike Tarsala, CBS MarketWatch
Last Update: 5:23 PM ET Apr 27, 2000 NewsWatchPALO ALTO, Calif. (CBS.MW) -- Microsoft and Xerox have createdÿ a new Internet company to offer digital rights management software for digital books, documents and music, the companies announced Thursday.
ContentGuard Inc. will be a spinoff of Xerox (XRX: news, chart), and executives said it is on track to go public by early 2001. The new joint venture is the most important and far-reaching pact between the companies to-date, executives said.
Microsoft (MSFT: news, chart) made an undisclosed investment in ContentGuard and will collaborate with Xerox on product development. Microsoft's stake is less than $100 million, analysts said, and Xerox will retain controlling interest in the venture.
In a coup for Xerox, Microsoft will endorse and incorporate the ContentGuard technology and attempt to forward it as an industry standard. Microsoft plans to include the ContentGuard technology in its upcoming reader software for electronic books. The software giant has plans to put ContentGuard in its Windows Media Player for running audio and video on computers. And Microsoft executives said ContentGuard will eventually be included in the Microsoft Office applications suite, as well as Microsoft operating systems.
"If we do this right, there are benefits for everybody," said Steve Ballmer, Microsoft's chief executive. "There are benefits to content owners, benefits to businesses ... and there are benefits to consumers through higher quality content."
At a meeting at Xerox's famed Palo Alto Research Center, executives said ContentGuard promises publishers more control over the way they package books, documents and software. It will let authors move information around the Internet without fear of plagiarism, said Rick Thoman, Xerox's chief executive. Also, it will more easily allow creators to collect royalty payments from their works, Thoman said.
"Distribution content is fast, easy - - it's even free," said Rick Thoman, Xerox's chief executive. "But if you're that artist, author, musician or movie maker, that idea scares you to death."
Xerox executives said ContentGuard software soon will be offered for free to consumers to drive adoption of the technology as a standard. Also, the software doesn't depend on Microsoft, as it will work with other operating systems, and media viewers and players.
Without offering a list of names, Microsoft and Xerox claim to have 20 companies already supporting Content Guard, and they say more supporters are forthcoming.
Analysts point out that Thursday's announcement isn't the first between Microsoft and Xerox. The two companies announced plans last year to work together to make Xerox's network scanning equipment compatible with Microsoft's Exchange software. But the digital content pact is a move with far more sizzle.
Microsoft and Xerox for years were an unlikely pair as Microsoft had been accused of stealing Xerox's technology to build a software empire. Ballmer and Microsoft's Bill Gates, visited PARC some 20 years ago, when they were accused of borrowing ideas from Xerox's software technology while they were developing the Windows operating system. Apple's Steve Jobs, inventing the first Mac operating system, also was accused of borrowing from Xerox.
Necessity has helped Xerox get over any lingering animosities, analysts say. ÿXerox has been looking for a major software company to help it distribute some of its most recent inventions, said Gregory Gieber, analyst with Brown Brothers Harriman in New York.
"If Xerox is going to penetrate the broad market with its software technology, they need someone that knows the consumer market, Gieber said. "With Microsoft, they've got it."
Xerox says that ContentGuard is the first of several other Internet ventures to come. The company formed an "Internet interest group" late last year, and ContentGuard is its first spinoff. Others will follow, Xerox's Thoman said.
Microsoft shares (MSFT: news, chart) rose 1 13/16 to 69 13/16 on Thursday. Xerox (XRX: news, chart) shares fell 15/16 to 27 1/16. |
