Networking giant Cisco has pumped $100m into Liberate Technologies, formerly Oracle's network computer unit and now an interactive television developer.
Cisco, which owns 3.88 per cent of Liberate, becomes the company's third largest shareholder after Oracle, which controls a 34 per cent stake. Global ISP America Online (AOL) also owns seven per cent.
Liberate's software enables TV viewers to receive interactive services and forms the basis of AOL's challenger to Microsoft's WebTV.
Liberate's products, which include TV Platform software and Liberate Connect server software, will be integrated with Cisco's broadband products that combine video and internet services. The two companies will jointly market their products, and plan to introduce new services for consumer devices such as set-top boxes, games consoles and mobile phones.
Liberate was originally set up to produce network computers, first touted by Oracle chief executive Larry Ellison in 1995. The systems, which relied on applications downloaded from servers, failed to make a dent in the desktop market which continues to be dominated by Microsoft and Intel-based PCs. Liberate was later morphed into an internet television technologist.
Despite boasting high-profile service provider customers such as AOL, Qwest and Cable & Wireless, Liberate is running at a loss and is unlikely to be profitable until 2003, according to analysts. The company recently lost $37m on turnover of $9.1m in its fiscal fourth quarter ending 31 May.
The US Securities and Exchange is also likely to investigate why the price of Liberate's shares rose by more than 30 per cent on Friday before the Cisco deal was announced.
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