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Motorola, OpenTV click
November 14, 2000: 3:43 p.m. ET

Companies extend previous pact to include cable and satellite services
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NEW YORK (CNNfn) - OpenTV Corp., a maker of software for digital interactive TV, said Tuesday it furthered an alliance with Motorola Inc.'s broadband communications unit to boost OpenTV's efforts with cable networks.

The pact includes formation of a joint venture to assist digital interactive TV deployment. The venture's services will include cable and satellite integration, testing and development. It will begin offering its services in 2001.

As part of the alliance, OpenTV and Motorola will reach out to cable and satellite operators through joint market efforts.

graphicShares of OpenTV (OPTV: Research, Estimates) jumped $3.75, or 17 percent, to $25 Tuesday afternoon.

Motorola (MOT: Research, Estimates) shares climbed more $1.88, or 8.2 percent, to $24.69, off its 52-week low of $20.

OpenTV said its software now is deployed in more than 11 million digital set-top boxes worldwide, with over 1.7 million new deployments in the third-quarter largely because of its relationship with satellite provider EchoStar Communications Corp. (DISH: Research, Estimates) in the United States.

The company is trying to build its presence in the U.S., where the interactive television market is in its early stages. Digital TV software lets customers access interactive TV features such as programming guides, video-on-demand and Internet access.

For example, Motorola, which is an OpenTV shareholder, has agreed to make referrals and recommend the services of the new joint venture, when appropriate, to independent software vendors and high-speed data network operators considering interactive software deployments.

Motorola also has named OpenTV its preferred interactive TV software and development partner. Through that relationship, OpenTV has licensed its most widely deployed browser in the U.S. cable TV industry, Device Mosaic Web browser, for use on Motorola digital set-top terminals.

OpenTV also will also connect to Motorola's advanced interactive digital set-top targeted for the European market.

graphicMerrill Lynch analyst Peter McNally applauded the deal, and in a research note Tuesday said Merrill Lynch forecasts that Motorola will have more than a 50 percent share in the set top box supplier market in the US long-term.

"By working together and strategically aligning themselves on a marketing, technology and equity basis, the companies are taking on the industry together," McNally said. "It further solidifies their position as the leaders in the space and lays the path for OpenTV's next generation software that will include the browser technology they acquired from the Spyglass acquisition.

"We are at a point in time where they are effectively hopping over the fence between the low end set top boxes and high end set top boxes and will have an effective solution for both categories," McNally said.

Separately, OpenTV also said it has bought CableSoft Corp., which provides on-demand information software for high-speed network operators, for 1.6 million shares of OpenTV's stock. Motorola was one of CableSoft's primary shareholders.

Under another separate agreement, Motorola agreed to buy OpenTV's equity interest in the Acadia Application Integration Center. The deal brings Motorola's ownership up to 100 percent.

-- from staff and wire reports graphic


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