Valley Ally: Oracle Eyes Investment


Silicon Valley is looking hungrily at cable again.

This time, it's Oracle Corp. and Network Computer
Inc., the joint venture Oracle co-owns with Netscape Communications Corp., and formerly
known as Navio Communications.

Last week, sources said Oracle is discussing plunking a
sizable investment into merging high-speed data services Road Runner, which Time Warner
Cable owns, and MediaOne Express.

Following a deal, if it happens, the new company will be
ripe to go the route of an initial public offering, as @Home Network so successfully did
last year.

Involved executives have said that they will structure the
new company so as to accept an outside third-party investor. Executives have also
discussed the possibility of an IPO.

Last week, officials on all sides flatly refused to comment
on what they called "rumor and speculation."

Two weeks ago, company officials with Road Runner confirmed
that when the merger is complete, the new company will take up residence in the Dulles
corrider near Fairfax, Va.

No further details have been released about what the merged
company will be called or who will run it. Those decisions were originally earmarked for
mid-March publicity, but the normal processes of pulling everything together has pushed it
back to perhaps the National Show next month, executives have said.

For months, however, sources close to the situation have
mentioned the existence of a "secret technology partner" headquartered in the
San Francisco Bay area.

If Oracle, through NCI, does enter the broadband mix via
Road Runner and MediaOne Express, it will likely be to find a market for the sub-$300
"network computers" vaunted by Oracle's CEO Larry Ellison. So far, network
computers have been dogged by lackluster sales in the retail market.

The merging data arm, if the deal happens, gets the cash
and a strategic technology partner to assist in navigating the fledgling ground of
broadband services to personal computers and TVs.

Another strategic element to Ellison's broadband plan
lies in the fact that NCI's top executives -- president Jerry Baker and CEO Wei Yen
-- quit in February.

Sources have said that departures were partly caused by
disagreements about NCI's future, with Yen wanting NCI to pursue a hardware and
software platform only, and Ellison viewing the company more as an entree into cable.

NCI's technology platform also lines up with that of
Time Warner and MediaOne. At the Western Show last December, NCI showed its
software-product suite on Scientific-Atlanta Inc.'s Explorer 2000 line of digital
boxes. Time Warner is S-A's biggest client for the Explorer 2000 line.

Last summer, when NCI was still known as Navio, executives
joined the flurry of high-level meetings with cable, spending an afternoon at Cable
Television Laboratories Inc. in Louisville, Colo., pitching MSO brass, then subsequently
holding private, one-on-one MSO meetings.

At the time, MSO executives who had been briefed said they
were "intrigued" by NCI's platform, which aims to use common
Internet-software tools to produce enhanced TV broadcast content.

NCI's pitch for its client-server software that runs
on headend servers and in set-tops: Using it will sidestep any "loss of control"
issues that could be troubling MSOs who at the time were considering rival Microsoft
Corp.'s offer.

NCI scored its first win in the United Kingdom earlier this
month, through a deal with London-based Cable & Wireless plc.

NCI's system, called DTV (Digital Television)
Navigator, is slim enough to run in less than 1 megabyte of RAM (random-access memory)
within a set-top, with most of the thrust located in a headend-based server and database.

All applications running on the DTV Navigator will be
written with commonly used Internet tools, like HTML (HyperText Markup Language) and
JavaScript, NCI has said, and will translate to the TV screen almost in the way
"plug-ins" work with Internet browsers today.

Likely applications that plug into DTV-enabled set-tops
included enhanced information from TV shows, synchronized TV and Web programming, e-mail
and Web browsing, among others.