Crowding the wireless space

With a name like OpenTV and a portfolio of digital interactive TV-enabling software for satellite and cable operators, it's hard to envision the company as a serious wireless player. However, by acquiring Spyglass for $2.5 billion last week, OpenTV intends to position itself and its technology in the competitive wireless communications market.

OpenTV is confident that a combination of its interactive TV platform and Spyglass' Internet products and services will provide a more robust solution for its cable and satellite customers, as well as for those wireless operators wanting to expand their application offerings.

"Combining our strengths will provide us the opportunity to deliver more compelling interactive viewing to our customers and Spyglass customers while expanding our position into the emerging wireless communications market," said Jan Steenkamp, president and CEO of OpenTV.

Recent Spyglass activity contributed to OpenTV's decision to grab it. Spyglass just extended an alliance with Inktomi to deliver a content transformation solution that adapts formatted Web content to match the capabilities of multiple mobile devices. With OpenTV, which has provided software for TV set-top boxes and counts America Online, Sun Microsystems and Time Warner as investors, Spyglass can enhance its offerings.

"The merger will create a leading entity in terms of delivering an end-to-end interactive platform for enhanced TV to be extended to wireless devices," said Doug Colbeth, chairman and CEO of Spyglass. "The combination of our offerings will enable organizations to provide comprehensive interactive capabilities to satellite, cable and broadband customers around the world."

The OpenTV/Spyglass merger is expected to close within three to four months.

OpenTV competitor Liberate Technologies, which provides a software platform for delivering Internet-enhanced content and applications to set-top boxes and game consoles, also expanded last week, acquiring MoreCom for $561 million.

According to recent industry reports, Liberate's acquisition of the standards-based interactive TV infrastructure provider was in direct response to OpenTV's move. But David Limp, senior vice president of corporate development at Liberate, denies any relationship between the two announcements.

"We are competitive in terms of interactive TV, but the timing of the announcements is a coincidence," he said.

Liberate is considered a neutral player in the broadband wars, he added. The company currently does not have any wireless plans. However, it could move forward with wireless broadband with the approach of 2.5 generation or third generation technology.