3Com buys Net radio supplier Kerbango

To kickstart Web appliance biz

3Com is to buy Net radio hardware developer Kerbango for $80 million.

The comms giant's plan is to use Kerbango to kickstart its Internet appliance business. 3Com is working on a series of machines designed to provide homes with convenient Net access, with the focus very much on alternatives to the PC for Web surfing tasks. The Kerbango acquisition, however, shows a new side to the strategy: leveraging the Net as a medium rather than something users will browse through.

In that respect, 3Com's plan mirrors Sony's PlayStation 2 strategy. Sony wants the console to be used as a gateway to broadband digital entertainment services. This approach treats the Net less as a repository of content and more as just the medium used to distribute that content - an alternative to cable TV, if you like. It's putting the focus on the content rather than where that content is kept.

Kerbango's radio hooks up the Net and uses a Web-style interface to navigate the various channels on offer - some 5000-odd stations from around the world. The company licenses its radio technology to third parties - this week France's Thomson Multimedia signed up to rebadge Kerbango kit under its US-oriented RCA brand. 3Com said it will continue to seek licensing partners once the acquisition is complete. Kerbango's business model also takes in advertising sales through its Web site (for PC users) and Tuning Service (for owners of its radio hardware).

The acquisition will see Kerbango become 3Com's Internet Audio division, part of the company's Consumer Networks operation. 3Com said the deal will be accounted for as a purchase and will not adversely affect the company's fiscal 2001 results. ®

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