Digital interactive television software maker OpenTV said it will buy internet software developer Spyglass for $2.5bn in stock.
Silicon Valley-based OpenTV, which provides the software for BSkyB and BT's interactive TV service in the UK, said it will acquire all of Spyglass' outstanding stock in a tax-free, stock-for-stock transaction. Spyglass shareholders will own 18 per cent of OpenTV.
"By combining these two industry leaders and technology pioneers, we will drive the future development of the digital interactive television and wireless communications markets," said Jan Steenkamp, chief executive of OpenTV.
OpenTV, which also provides software for TPS in France, will combine Spyglass' software into its TV service as part of the agreement. The companies said this will allow customers to send email and connect to the internet through television sets.
"In our view there are a very limited number of companies that have all this technology," said Randall Livingston, chief financial officer of OpenTV. "One of the things we value about Spyglass is that it has an excellent services division."
Livingston also said that about 85 per cent of the 6.1 million set-top boxes sold by OpenTV are used in Europe, adding that OpenTV - whose competitors include Microsoft and Wink Communications - will double the company's revenue.
OpenTV, which went public last year, had fourth-quarter revenue of $8.4m and Spyglass reported revenue of $8.2m for its fiscal first quarter ending 31 December 1999.
Doug Colbeth, chief executive of Spyglass, said the company's product can sit at a content aggregator, content provider or traditional wireless carrier. OpenTV said it plans to expand its services and build on Spyglass' foundation in the wireless communications market. Spyglass wireless internet technology translates and delivers traditional internet content for wireless devices such as internet-enabled mobile phones.
The joint company will leverage its key partnerships such as OpenTV's recent deal with Echostar to bring personal video recording to the home. Investors include America Online, Liberty Digital and Time Warner.
Successful attack could result in harm to patients and financial loss, warns NHS governing body
Bug means Siri can be asked to read aloud all your hidden notifications