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Hewlett-Packard (HWP) says that its DeskJet 670TV printer, which allows the printing of Internet pages accessed via television sets, should be available in the U.S. beginning October 31.

Hewlett-Packard said the printer, which targets non-PC customers who use the television to browse the Web, is expected to sell for about $229.

The DeskJet 670TV will connect to the WebTV Network's entire line of set-top Internet devices.

Last March Hewlett-Packard offered the first printing solutions for non-PC customers in the form of DeskJet 400 and 600 series printers. These were the first printers to be compatible with television devices such as WebTV.

Story Copyright © 1997 Reuters Limited. All rights reserved.

update In an announcement that has some industry watchers scratching their heads, CitySearch, which competes with Microsoft's (MSFT) localized content service Sidewalk, announced today that it has cut a deal with WebTV.

That might lead some to ask why a Microsoft property--WebTV, which was purchased this spring for $425 million--would partner with a company competitor.

CitySearch also said today it made a deal with Planet Direct, which provides content to Internet service providers.

In both nonexclusive deals, WebTV will provide local content for the services.

These kinds of alliances emerge practically on a daily basis. But with competition so heated among localized services, the CitySearch-WebTV news seems a bit baffling.

Of course, it makes perfect sense for CitySearch, which is doing everything it can to extend its brand in cyberspace. Moreover, as one of the only start-ups leading the space--the other local sites are ventures or spinoffs of large media, Internet, and telecommunications companies--CitySearch needs those eyeballs.

It also makes sense for WebTV, whose strategy is to deliver the best content it can to its viewers, according to WebTV CEO Steve Perlman.

In fact, Perlman emphasized that WebTV has been talking with Sidewalk about a partnership "even before the acquisition [of the company]," he said. He added that WebTV is much more like a broadcast network hunting for the best programming from wherever it comes.

"When it comes to content creation, the channel's a little different than shows. You certainly don't want to limit a channel to just the shows your parent company owns. At the same time, you don't want to put your parent stuff at a disadvantage."

Frank Schott, general manager at Sidewalk, downplayed the competitive conflict of the partnership. "It's actually not a big deal at all. It's a short-term, nonexclusive deal. Sidewalk is focusing on the high-volume distribution deals. We're a featured offering on Microsoft Network. We signed an interactive neighborhood deal with MSNBC, and I'm sure we'll do something with WebTV now that they're part of the family."

One of Microsoft's weaknesses is that it keeps signing deals with itself and its offshoots, said Mark Mooradian, an online analyst with Jupiter Communications. "My biggest criticism [with MSN] is that when you go on there, it's almost all Microsoft content," he said. "It becomes this forum for Microsoft properties. I think that's something that eventually has got to change."

This deal may indicate that at least where WebTV is concerned, the software giant is broadening its horizons, even taking on potential competitors. "It's a sign that Microsoft is moving in the right direction rather than the wrong direction," Mooradian said.

CitySearch and its content will be featured in the AroundTown area of the WebTV service. While WebTV Internet terminals offer access to the whole Net, its users are more likely to surf to sites featured on the service because they tend to be novices, according to Charles Conn, CEO of CitySearch.

Conn acknowledges that on the face of it, the deal seems strange. But he added that CitySearch and Sidewalk only compete in one arena: arts and entertainment. While CitySearch tries to be all-inclusive, offering everything from information on local doctors and pharmacies to listings for restaurants and movies, Sidewalk focuses exclusively on arts and entertainment.

In addition, the two services cover different cities. "Even where we do overlap, our content is quite different," Conn said. As far as competition goes, "we're not as head-to-head" as CitySearch is with other local sites. Sidewalk is "more focused on national advertising," he added.

update After a "thorough investigation," the Justice Department said today that it has approved Microsoft's proposed acquisition of WebTV Networks.

Determining that the acquisition would not violate antitrust laws, the department decided not to challenge the estimated $425 million deal announced in April.

Approval of the deal clears the way for Microsoft's official entry into the convergence of computer and television technologies for Internet uses. Seen as key to the growth of the Internet among new users, the market has led to other major developments, such as Sun Microsystems' plans to acquire set-top box maker Diba.

The clearance is the second high-profile victory for Microsoft on antitrust issues this week. On Tuesday, it was disclosed that the Federal Trade Commission said it has officially rejected three senators' request to reopen an investigation of Microsoft's alleged antitrust practices. (See related story)

The WebTV deal and the request for an FTC investigation have been viewed as key barometers for those concerned about antitrust issues involving Microsoft and other companies that have rushed headlong into the emerging new media and relative technologies.

Sources on Capitol Hill have said there is growing concern about media monopolies in general, extending well beyond any one company or suspected violation. The Senate Commerce Committee could "very likely" hold hearings on media convergence as early as the end of this summer, said the staff member, who asked not to be identified.

"Technologies are converging and one way they're going to converge is through the PC," said an aide to Sen. Conrad Burns (R-Montana) in a recent interview. "If a company has a monopolist position over what appears on the screen and can pick winners and losers in content, that is a real concern."

WebTV issues specifications that allow TV set-top boxes and built-in television connections to access the Internet. The company offers Internet service through agreements with ISPs nationwide.

Microsoft's interest in the company is at least twofold: to acquire another vehicle to extend its Windows CE operating system and, more broadly, to find another outlet for its expanding media and content operations, which range from the joint cable venture MSNBC to the Microsoft Network online service.

Although WebTV's 115,000 subscribers are not expected to notice immediate changes from the Microsoft merger, WebTV spokesman Aaron Mata predicted that the integration of Microsoft's CE operating system will result in what he called a "wealth of content" for customers. He added that "we are very excited but not at all surprised" about the Justice Department decision.

Microsoft spokesman Greg Shaw described the investigation as a routine review applied to any merger above a certain size. Such reviews are conducted to determine whether mergers will result in unfair competition or monopolies in a given industry.

"This is a competitive, innovative marketplace," Shaw said, citing Sun-Diba deal as an example. The WebTV acquisition "is good news for consumers," he added.

Sun declined to comment on today's announcement, but spokesperson Jenny Johnstone touted her company's commitment to "an open system that will provide consumers and manufacturers with choices." That, she said, stands in stark contrast to Microsoft's closed, proprietary system.

The acquisition had drawn opposition from the Committee to Fight Microsoft, which has warned that the software giant was using its technology "as a way to injure competitors." It is this prospect of empire-building that has caused some nervousness in Washington.

"You have to look at essential facilities--in other words, if you have facilities that your competitors need to get into market, you have to give them access. Microsoft says that Windows is not an essential facility; others say it is. And you have to look at abuse of dominance, where a company uses its monopoly position in one market to unduly influence another market," one official told CNET's NEWS.COM in early July. "These are questions that belong in front of Congress or the Supreme Court."

Since President Clinton signed the Telecommunications Reform Act on February 8, 1996, media, telecommunications, and other technology companies have made an astonishing number of mergers, alliances, and competitive thrusts into each other's traditional markets. Outgoing Federal Communications Commission chairman Reed Hundt has publicly questioned the wisdom of such mergers, including the recently quashed AT&T-SBC union.

Reporters Suzanne Galante and Alex Lash contributed to this report.

update Sun Microsystems (SUNW) has announced that it will acquire Diba, a maker of Internet set-top boxes, in a deal that could pose a threat to Microsoft (MSFT) just as it is poised to enter the set-top market.

Terms of the deal were not disclosed.

Sun's Microelectronics division will acquire Diba's technology, engineering, products, and brands, as well as all of Diba's 79 employees.

Diba will be renamed the Consumer Technologies Group, within Sun's Microelectronics division. The division will work with consumer electronics companies to provide Internet-ready TVs, set-top boxes, satellite boxes, and smart phones, according to Sun.

Diba founders Farzad and Farid Dibachi will report to Microelectronics division president Chet Silvestri, the company said.

The move may pose a challenge to Microsoft, whose acquisition of set-top box maker WebTV Networks is currently pending.

In a conference call this morning, Diba and Sun officials denied that the acquisition was a calculated move against Microsoft. Farzad Dibachi claimed that conversations between Diba and Sun began prior to discussions between Microsoft and WebTV.

However, officials at both Sun and Diba touted the superiority of their set-top box plan to the one expected from Microsoft and WebTV, citing Sun's commitment to an open and Java-based architecture.

"We're not going to have any problem with Microsoft," said Sun president Silvestri. "Microsoft is going after the server, client, content--the whole nine yards. The difference between us and them is we're providing enabling technology."

Officials with both companies described the deal as mutually beneficial. "If we hadn't acquired Diba we would have had to figure out how to do this ourselves, either through research and development or by working with others in the industry," said Silvestri.

Sun would not comment on whether it had approached other set-top box makers. But Diba said it hadn't shopped its wares to any company but Sun.

"We need Sun as a big brother to provide resources, means of distribution, and to preach our sermon to the world," said Farzad Dibachi. "We've got the best technology, the best philosophy catering to openness, and that's what the Internet is all about," he added.

RCA Network Computers Slated For Labor Day - -July 18, 1997
By Greg Tarr
After months of product development Thomson took the wraps of its first two home-based Network Computer terminals that will use TV service provider (TVSP) NetChannel's system for accessing the Internet.

The devices will allow conventional TV sets to access the NetChannel user interface to Internet access and news services. The TVSP's service will send and receive email, surf the World Wide Web and most importantly provide "push'' technology to gather personalized information from the World Wide Web.

Using a TV terminal, all functions can be accommplished without having to shell out thousands for a powerful PC. The terminals avoid many of the costly hardware components in PCs by using NetChannel's server to store and gather content. The Network Computer software platform developed by Oracle, which is also attempting to drive a market for similar systems in corporate enviroments.

Lou Lenzi, Thomson multimedia products and services VP, said both devices will be available at retail around Labor Day at expected street prices of $299 (NC-1010 which includes a wired keyboard) and $349 (NC-1020 which includes a wireless IR keyboard).

The NetChannel service will ask a $19.95 per month subscription fee for unrestricted access.

Although the Network Computers are arriving on the market a year after Sony and Philips delivered the first WebTV terminals, Lenzi said the Network Computer system will offer some unique benefits.

The most intriguing aspect of the NetChannel offering is the use of push technology to deliver content tailored to user preferences.

"We view the Internet as an information resource, not a destination," Lenzi stated.

Instead of making users go out and search for information from Web site to Web site, the service is designed to automatically go out and select stories of interest to a user, based on a list of personal preferences input during the setup of the system. News and information is then tailored to that user profile and presented on screen for immediate access.

Information is continuously updated, and will typically include such timely items as local weather reports, local team sports scores and financial market updates, using just the stocks and funds in a user's investment portfolio.

Each NetChannel account makes provisions for up to five different users per household. Each user can input different information preferences and send and receive email privately.

Additionally, the system provides an interactive electronic program guide (EPG) that lets users direct tune to TV shows from the onscreen channel grid. Data for the grid is automatically downloaded and updated from the Internet and stored to flash memory in the Network Computer terminal. This way, viewers can use the EPG portion of the service without logging on to the Internet.

The EPG offers many of the latest features found in the channel guide in RCA's third generation DSS receiver. Viewers can use a "Scout" function to search for particular programs, program subjects or shows featuring particular actors.

RCA's "AlphaSort" feature is added to help users call up a program by keying in the first few letters of the title. The system includes the one-button VCR record programming and one-button direct tuning features found in the existing StarSight EPG.

Users can also link to a TV network's Web site by clicking on its logo in the channel grid.

After setup, when a user turns on the device the NetChannel home page appears. It is laid out with a tool bar on the left side of screen, offering links to such categories as: news, finance, sports, learning, lifestyle, entertainment, shopping, TV program guide, help, search, and chat rooms.

Icons for items of most importance to an individual user are displayed on the main portion the screen.

Both Network Computer devices will be shipped with universal remote controls that control TVs, VCRs and cable boxes in addition to operating all of the functions of the NetChannel service. Both RCA models include full-size keyboards, but users can also hunt and peck letters and numbers when inputting text via the remote control and a software-based on-screen keyboard.

According to the Network Computer specification, the terminals also provide a standard printer port for most popular PC printers. Users can download the appropriate printer driver from the NetChannel service and print out text and graphics without the need for add-on connectors.

Both Network Computers include a VGA connection that will enable information to be presented on conventional non-interlaced computer monitors, but RCA anticipates most users going with standard composite A/V connection to NTSC TV sets. The VGA connection bypasses the anti-aliasing and image filtering systems necessary to view documents on a TV set without flicker.

The RCA terminals are equipped with the following: 33.6 mbps modem, Advanced RISC Microprocessor 7500FE, 5MB RAM, 8MB ROM, and a PC slot for future software upgrades.

The "jack pack" includes composite and S-video connections, PS-2 keyboard/mouse connector, VGA connection, printer port, RJ-11 phone line jack, and IR extender output to control video components through the EPG.

Down the road, Lenzi said that Thomson is looking at future adaptations of the Network Computer tailored to needs found in different rooms in the house. He cited as an example a Network Computer terminal for the kitchen that might add a word processor function for recipes and links to different cooking Web sites.

To insure against the possibility that NetChannel would ever leave the TVSP business and render the terminals useless, and to give users a future selection of TVSPs, Lenzi said the NetChannel and Thomson authored a "managed access" software layer ontop of the Network Computer platform. This allows the future inclusion of other service providers as they become.

"NetChannel will undoubtedly be faced with other NetChannel-like services and it's important that we have an open playing field in that regard," stated Lenzi.

Lenzi said that Thomson isn't planning any major consumer advertising campaign around the devices, as it did with the introduction of the Digital Satellite System. But he added Oracle offshoot company, Network Computer Inc (NCI) has planned a $20 million marketing campaign to support the various players in the camp.

"We will be concentrating on the education aspects of marketing these products," Lenzi said. "We will concentrate on ways we can partner with retailers to drive store traffic."

Donald Metzger, NetChannel channel management director, said other manufacturer partners should be announcing NetChannel-ready Internet devices before the end of the year.

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