Don't remember seeing this before....mentions GNET, CHTR, CLKS, Digeo, RCNC...etc. This before the INSP merger announcement...
KLP
bizjournals.com
Week of May 15, 2000 :
From the Puget Sound Business Journal
Allen's next firm: Digeo
Pushing for interactive TV
M. Sharon Baker Staff Writer
Paul Allen is building a new company aimed at weaving together several pieces of his Wired World.
Kirkland-based Digeo Broadband Inc. is hiring at least 30 people as it ramps up a plan to create next-generation content for interactive television and computers. In addition to its in-house staff, Digeo is collaborating with other Allen portfolio companies, including Seattle-based Go2Net Inc. and Charter Communications Inc., the nation's fourth-largest cable company.
Officials aren't saying much about Digeo's plans, and declined to be interviewed for this article. But mentions in the Securities and Exchange Commission filings made by Allen's various companies offer a sneak peek at what Digeo is hatching.
It plans to finish testing the services this year, and the first to view it will be customers of Charter and RCN Corp., a provider of bundled phone, cable and Internet services in which Allen recently invested $1.65 billion.
Heading up the Digeo effort is Jim Billmaier, whom Allen tapped from another of his companies, Click2learn.com Inc. of Bellevue. Billmaier, previously chief executive of Click2learn, is credited with turning around the online learning company after he was brought in from Sun Microsystems.
Allen first began pursuing the promise of interactive television back in 1992 with the creation of Starwave Corp.
By marrying computers with television, Allen and others envision a day when everyone can surf the Internet over a television, and watch movies on demand with VCR-like features such pause, rewind and fast forward. At the same time, consumers could access e-mail, shop from a video catalog, and run some software programs, among other things.
In the early '90s, however, cable, computer and telecommunications companies fought over the direction of the nascent industry, significantly delaying its arrival. Meanwhile, the Internet caught fire.
Although Starwave quickly changed its focus to build on the potential of the Internet, Allen didn't give up on his vision of interactive television.
Now he hopes to deliver on interactive television with Digeo Broadband. The company evidently aims to be an early leader in what Jupiter Communications predicts will be a $10 billion market serving some 30 million households by 2004.
Digeo is jointly owned by Allen's Bellevue investment company, Vulcan Ventures, Charter Communications and Go2Net. Allen owns 30.3 percent of publicly traded Go2Net, thanks to a $419 million investment last year.
Billmaier is in the midst of ramping up his operation, listing 30 job openings on the company's Web site, digeo.com. His team will work closely with Go2Net, which is helping to build an interactive destination site.
Go2Net, run by co-founder Russ Horowitz, has created an Internet destination site, offering such services as a search engine, online gaming, investor areas and an online mall for small businesses, among other features.
Go2Net plans to build on that foundation and create a starting page for Charter's cable subscribers, who will be accessing the site through high-speed connections. Such connections will allow Digeo and Go2Net to create a site with rich, interactive features including sound and video.
Safa Rashtchy, a stock analyst with U.S. Bancorp Piper Jaffray, ran some preliminary figures and estimates that Go2Net could reap as much as $30 million from the Digeo and Charter partnership due to the increased traffic that the company will be able to sell to advertisers.
"They're not investing cash but resources," he added. "It's a tight partnership, and they are getting reimbursed for their share of the expenses."
Go2Net, which holds a 19.9 percent stake in Digeo, is getting reimbursed by Vulcan Ventures for any work the company does over its budget on the Digeo interactive site for the first four years, according to SEC documents.
Vulcan Ventures is also funding Charter's contributions to the partnership for the first four years. In return, Charter has agreed to use Digeo's services for the first six years. Charter also can't engage in any business outside of cable transmission with the exception of the Digeo joint venture, according to SEC documents.
Charter owns 24.9 percent of Digeo, while Vulcan Ventures owns 55.2 percent. The joint venture partnership is for 25 years.
If Digeo can create a site that's up and running by the end of this year, it has the potential to be seen by 7 million Charter customers. That's how many customers will have access to Charter's digital cable infrastructure by the end of the year.
Just how many elect to pay anywhere from $3.95 to $8.95 a month for access to the Internet and other interactive services remains to be seen.
Copyright 2000 American City Business Journals Inc. |
