Motorola, OpenTV Expand Interactive Ties

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OpenTV Inc. last Tuesday broadened an earlier arrangement with set- top manufacturer Motorola Broadband Communications Sector when it agreed to pay $34 million in stock for a dormant Motorola asset, CableSoft Inc., in exchange for a multiyear suite of business arrangements.

The new deal also includes: a joint-venture company focused on interactive-television integration; a Motorola license of OpenTV's Web browser; a Motorola purchase of the remaining equity in its Acadia set-top software integration facility; and expanded porting arrangements for OpenTV on more of Motorola's digital boxes.

The new joint venture, as yet unnamed, will focus on interactive-deployment issues, including cable and satellite integration, testing and development.

OpenTV gets "preferred" status from Motorola for interactive-television software and development. OpenTV licensed its "Device Mosaic" Web browser to Motorola, which it picked up through the $2.5 billion acquisition of Spyglass Inc. in March. Motorola said it would use the browser on digital set-tops.

Motorola also picked up OpenTV's interest in the Acadia Application Integration Center, a Lexington, Mass.-based integration shop, for an undisclosed sum.

The lab had been a joint venture of Motorola and Spyglass. It's where most interactive-TV software providers seek technical integration into Motorola's "DCT"-series digital set-tops.

The revised software porting arrangements latch OpenTV's software to Motorola's European-centric digital box, the"DVi-4000," and its high-end, domestically targeted DCT-5000. That follows last year's deal to port OpenTV's software to the DCT-2000.

OpenTV runs on 11 million set-top boxes, mostly outside the United States.

Preferred status with the top U.S. set-top maker would help OpenTV expand its presence here.

Motorola, which bought about half of privately held CableSoft during its days as General Instrument Corp., has not been able to add on to CableSoft's single cable market, Jacksonville, Fla. As a result, some industry observers figured the CableSoft sale was a key condition for Motorola.

"This looks like one of those 'You want a better deal? Take this off my back' situations," said one industry observer, who asked for anonymity.

CableSoft, in its mid-'90s heyday, provided interactive applications for advanced analog set-tops, including community yellow pages and classified ads. Paul Kagan, chief executive officer of Paul Kagan Associates (which was sold on Oct. 10 to Primedia Corp.), is also a large CableSoft shareholder.

OpenTV said it "has future plans" for CableSoft, including local interactive content for cable and satellite operators.

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