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To: DiViT who wrote (34787)	7/30/1998 3:38:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Microsoft, Thomson in Net TV deal Wow.... By Jeff Pelline Staff Writer, CNET NEWS.COM July 30, 1998, 11:15 a.m. PT Microsoft, NEC, Alcatel, and DirecTV said today that they each plan to acquire a 7.5 percent stake in Thomson Multimedia in a deal that will bring all the companies together to develop and promote interactive television. The alliance also calls for Thomson to sell WebTV set-top boxes under the RCA brand in the United States and the Thomson brand in Europe. Further, the two companies will work to develop products for digital television that combine WebTV technologies with Thomson technologies for satellite and cable. The agreement is one of many to emerge from the much-hyped convergence of television and computing, which is producing partnerships of companies from a broad cross-section of industries. As an indication of the chaotic nature of this new market, two major Japanese electronics firms have just pulled out of the "enhanced TV" market Microsoft and others will seek to develop. Under today's announcement, the companies will work together to promote enhanced television sets, called eTVs or Net TVs, which feature support for interactive, Internet-supplemented TV programs as well as an electronic program guide. Microsoft will provide HTML-rendering technologies based on its Windows CE operating system, according to a prepared statement released by the software company. "Microsoft believes that consumers can only benefit from the fruits of this relationship," Craig Mundie, Microsoft's senior vice president of the consumer platform division, said in the statement. "Thomson's leadership in consumer electronics, combined with Microsoft's desire and ability to provide technologies to enable digital television, is sure to bring products and services to the market that consumers will embrace." Added Thomson chief executive Thierry Breton: "Our combined efforts will accelerate the emergence and the deployment of eTV." Notwithstanding, Sharp and Mitsubishi recently stopped producing enhanced TV models and will exit the market once inventory runs out, according to industry sources quoted the Nihon Keizai Shimbun. Rivals Sanyo and NEC have temporarily ceased manufacturing, the business daily said last week. Sharp sold just 8 ,000 units in Japan in the last 18 months, while Mitsubishi has sold 7,500. None of the four companies has previously marketed a Net TV in the United States. Enhanced TVs "have always been oversized TVs, facing a tricky transition to digital TV, [and] always been at premium price points, well over the price of simply combining the two technologies," Sean Kaldor, International Data Corporation's vice president for consumer research, previously told CNET News.com. Combining technologies that are advancing at different rates is particularly problematic, Kaldor noted of digital TV and Internet usage. The four-way investment in Thomson comes on the same day that billionaire investor and Microsoft cofounder Paul Allen bought Charter Communications, the nation's tenth largest cable operator, for $4.5 billion. It is Allen's second cable acquisition since April. news.com