NEW YORK (CNNfn) - Billionaire investor and Microsoft Corp. co-founder Paul Allen said Monday he will invest $300 million in Go2Net Inc. and seek a controlling interest in the Internet firm.
The deal marks the further convergence of Internet and cable-television services, as Allen will leverage his cable holdings with the Seattle-based company.
Under terms of the deal, Vulcan Ventures, Allen's investment organization, purchased $165 million of convertible preferred stock, with the remainder to be purchased upon shareholder approval.
If Vulcan purchases all the tendered shares, Allen will hold a 54-percent stake in Go2Net (GNET).
Go2Net operates a network of community Web sites as well as the MetaCrawler Web-search service.
Allen's backing will enable Go2Net to work with his cable holdings: Charter Communications Inc. and Marcus Cable Co., which combined in July to form seventh-largest cable operator in the United States.
Allen is also a significant shareholder of Denver-based High Speed Access Corp., which provides high-speed cable-based Internet services.
"Comprehensive portal services such as Go2Net delivered directly to set-top boxes will be a critical component in the future of cable," Allen said in a statement.
Cable-based Internet service has been gaining momentum as companies cite a growing demand for high-speed online access, and high-speed service providers are increasingly looking to leverage content from third-party providers to attract customers.
In January, @Home Corp. (ATHM) acquired Web portal Excite Inc. (XCIT) for $6.7 billion in stock. Last month, News America Digital, News Corp. 's (NWS) interactive media division, signed a deal to provide online service Road Runner with news and sports programming content.
Road Runner's partners include MediaOne Group (UMG), Microsoft Corp. (MSFT), Compaq Computer Corp. (CPQ) and Time Warner Inc. (TWX), which is also the parent company of CNN and CNNfn.
Russell Horowitz, Go2Net chief executive officer, said the company's existing management team will continue to run the company.
Go2Net shares were up 17, or 19.5 percent, at 104 in midday trading.