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Diba lets ISPs try before they buy

Diba will deliver its set-top boxes to ISPs so that they can sample TV-based Internet access before they buy in large quantities.

Set-top software maker Diba today announced a new program to deliver set-top Internet access boxes to ISPs for testing, figuring that users will want to sample TV-based Internet access before they buy.

Diba makes an operating system, email client, and browser for non-PC devices but relies on third parties--ISPs and consumer electronics makers--to integrate the software, market it, and ship it to end users. This approach contrasts with WebTV, which markets its own technology directly and acts as the sole Internet service provider for purchasers of the WebTV box.

Diba's new program for the Internet Set-Top Starter Unit is aimed at getting the boxes into the hands of third-party resellers for market testing. If the resellers--and more importantly their customers--like what they see, they'll be able to order larger volumes of the devices from Diba's hardware partners.

"To make these [set-top] units is a big commitment," said Diba spokeswoman Ellen MacDermid. "Once they decide to sell either these exact units or similar ones, they can call our manufacturing partners who will then make the units with Diba's ware."

Once touted as a start-up with promise, Diba made a big splash last year when it struck a deal with Zenith Data Systems to bundle its software with Zenith's Netvision Internet TV sets. After Netvision missed its shipping deadline last Christmas, the companies decided to end collaboration on the project.

"They're still our largest equity investor, but they felt they should be in the ISP business and wanted to launch a Zenith service," something that Diba wasn't interesting in supporting, said vice president of marketing Joe Gillach. The two companies are still working together, but Gillach would not divulge details.

Diba since has inked agreements with other third parties. Samsung will soon release an Internet TV in Korea, although no plans for U.S. or Japan release have been announced, according to Diba. Pay-per-view provider LodgeNet has also agreed to use Diba's software to add Internet access to the movies and games it offers in several hotel chains. NEC and Mitsubishi have also ported the Diba software system to processors specialized for non-PC devices.

Despite the recent deals, at least one analyst remained skeptical.

"The LodgeNet deal is an interesting implementation where we think this technology is best suited," said Greg Blatnik, vice president of Zona Research. "But the whole soup-to-nuts solution needs to be in place. Diba's strategy seems to have changed two or three times, and they've gotten to the point where they need to license something to somebody."

The company will announce hardware partners for the new plan in two weeks, said Gillach. The partners should be able to provide volume shipments of Diba-enabled devices by this summer, Gillach said.

The test units announced today include the company's own Web browser and mail software, a 33.6-kbps modem, Ethernet connection, infrared remote control, and keyboard.

The company also announced bundling deals with three Internet service providers. OpenTel Communications, Prism Communications, and ViewNet plan to sell the boxes as part of Net access accounts to new users. But users who eventually buy a device with Diba inside can hook up through any ISP, the company said.

No pricing was announced. Diba said prices to ISPs will vary depending on the size of orders.