Digeo Inc. emerged last month as the suitor of Moxi Digital Inc., creating an entity that aims to change the face of set-top box software. Financial terms were not disclosed, but the combined company will assume the Digeo moniker.
The merger will tweak at least two key executive positions. Rita Brogley, the current CEO of Moxi, will become Digeo's vice president of business development and marketing, and Moxi Vice President of Engineering Toby Farrand will become the merged company's chief technical officer.
Paul Allen will continue to serve as Digeo's chairman. Allen and his holding company, Vulcan Ventures, obtained equity stakes in Moxi via earlier investments. Digeo President of Advanced Systems Larry Weber will continue in his role, and Digeo Senior Vice President Bert Kolde will be elevated to chief operating officer.
A bit foggier is what role Steve Perlman, Moxi's founder, might assume at the fused company. Earlier this year, Perlman stepped down as Moxi's CEO to become vice chairman and to devote more time to "creative projects" at Rearden Steel Studios, and was replaced by Brogley, a former Microsoft Corp. executive who has been with Moxi since its inception.
Perlman could take on an advisory role at Digeo, but nothing definitive has been nailed down, said Digeo CEO Jim Billmaier, who will retain that title at the combined company.
Billmaier said the merger with Moxi made technical and operational sense because both companies had a unified vision for advanced broadband applications and services and, together, can bring product to market at a faster pace.
For instance, both Moxi and Digeo were developing reference hardware for broadband-enabled media centers designed to share their resources and feed applications to additional TVs in a house via home networking technologies and relatively inexpensive extension modules.
Richard Doherty, director of research for Seaford, N.Y.-based The Envisioneering Group, said the merger represents a Reese's-class combination, considering Digeo's and Moxi's respective patent portfolios are extremely complementary.
"It's like chocolate dipped in peanut butter–they taste better together," Doherty said.
However, that blend might not taste as pleasant to Digeo's competitors, namely Liberate Technologies, Microsoft Corp. and OpenTV Corp.
Liberate, for one, believes the Digeo-Moxi combination remains a longer-term play, and that Liberate could become a cooperative party with the combined set-top box software entity.
"Although there are overlaps in some places, we can add value in other places," said Liberate Chief Strategy Officer Dave Limp.
While the existing middleware players have some customer traction, Digeo has some strong momentum with Charter Communications.
Charter has deployed Digeo's basic interactive television software platform to about 600,000 customers via widely deployed "thin-client" set-tops.
Digeo middleware is also slated to populate new "companion" Broadband Media Center (BMC) 8000 and BMC 9000 stand-alone boxes, which are being developed through a partnership between Charter, Digeo and Motorola Broadband.
Charter, by the third or fourth quarter of 2002, plans to deploy the BMC 8000, which will sync up with existing DCT-2000 boxes, to offer digital video recording and voice applications and other interactive services. Both BMC models will be showcased at this month's National Cable Show in New Orleans.
Charter has already scotched a plan to deploy Microsoft TV software in Motorola-built DCT-5000 boxes this year. Charter tested that combination in a small, St. Louis-based technical field trial.
Digeo plans to roll out its software to additional cable operators and expand its influence and technology well beyond Motorola. "We're out to create a standard [for media centers]...and we envision that there will at some point be multiple manufacturers of these kinds of hardware devices," Billmaier said.
Although Digeo and Moxi base their software platforms on Linux-based operating systems, it doesn't necessarily mean that Microsoft is completely out of the picture.
"If it's appropriate to have a Windows-based operating system, we'll evaluate it from a technology perspective," Brogley said.
Digeo is presently evaluating Microsoft TV technology, Billmaier said.