First Virtual, CUSeeMe merge

(Telephony) A merged First Virtual Communications and CUSeeMe Networks plans to attack a “rich media” market with more than five times the potential of standard videoconferencing, company officials said last week.

“The traditional videoconferencing market would be about $6 billion by 2004. The rich-media collaboration market is a $34 billion market,” said Bob Scott, CUSeeMe’s chief operating officer.

The combined company, which will be called First Virtual Communications when the deal closes in the second quarter of this year, melds the strengths of its participants and takes the videoconferencing concept to a higher level, said Ruth Cox, FVC’s chief marketing officer.

“We [FVC] have excelled in certain aspects of rich media networking, and they have been very focused on the software side of video communications,” she said.

That video expertise is evident in CUSeeMe’s introduction today of Videoware, which includes both client server technologies for enterprise-wide deployment of Web-based voice and video communications and group collaboration to the desktop. It also interoperates with existing videoconferencing resources.

Simplified videoconferencing to the desktop is the key to both the product’s success and to encouraging companies to take a more proactive approach when it comes to video, said Scott.

“If you’re going to get to this mass deployment market, you need to start integrating video communications into normal work force and applications that people use, as opposed to trying to force them to learn something that’s foreign to them,” said Scott.

Videoware leverages desktop applications such as Microsoft Outlook, so “anybody who knows how to turn on a PC and is using Outlook can do it,” he said.

FVC will issue shares of its common stock representing about 47% of the combined company at an exchange rate of about 1.254 shares per share of CUSeeMe, the companies said. The merged company will be headquartered at FVC in Santa Clara, Calif., although CUSeeMe will continue to maintain a presence at its Nashua, N.H., headquarters.

“What we’re doing is not necessarily a revolution for people, it’s an add-on, an extension for what they currently do,” Cox said.