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Intel investing in overseas content, Net infrastructure

The company hews to an investment strategy geared at making the Internet more attractive to overseas users by beefing up local infrastructure and laying the groundwork for sites that locals will want to access.

Intel invested $50 million more into a project to bring cable Internet service, set-top boxes, and local Internet content to Hong Kong, but the deal is only the tip of the iceberg.

The company is in the midst of an overseas investment strategy geared at making the Internet more attractive to users by beefing up local infrastructure and laying the groundwork for sites that locals will want to access.

In the past year, for instance, the chip company has sunk equity investments into Rediff on the Net, a portal in Mumbai, India, a Spanish-Portuguese portal in Latin America, and the Chinese equivalent of Yahoo, according to Claude Leglise, vice president of Intel's home product group.

Non-U.S. investing has sped up over the last year, with most of the focus going to Europe and Asia, an Intel spokesman said. The investments average between $3 and $5 million.

In addition, there is an emphasis on developing content and Web sites that are regionally appealling. So far, nearly 80 percent of Internet content gets generated by English-speaking sites, according to the chipmaker.

"In every country, you need to have content in the local language, but also content that is locally relevant," Leglise said. "You can't just translate an English site."

Like other Intel venture investments, the overriding goal of these equity placements is to make PC computing, or set-top box viewing, more compelling--driving sales of Intel-based boxes. But the investments differ in that Intel is flexible about providing support for various kinds of hardware, software, or content companies within the Net industry.

For example, because broadband infrastructures vary by regions, the type of projects the company will invest in will vary as well. If a given nation has an extensive cable operation, as in Asia, for example, cable becomes a focal point.

Yesterday?s deal with Pacific Century Group in many ways demonstrates how Intel operates. Under the deal, the Santa Clara, California, company will invest $50 million in a new joint venture called Pacific Century CyberWorks that will provide a cable Internet service, served in part by satellite transmissions, to Hong Kong and surrounding areas.

Intel will not profit directly from monthly service revenues. Instead, CyberWorks has agreed to adopt Intel servers and set-top boxes. Subscribers will also be able to connect to the network through PCs. The company, of course, also benefits from stock appreciation.

"Cable is the natural way to deliver this infrastructure," Leglise said. "Cable reaches 100 million homes," in the region, he added. Although the venture will initially concentrate on laying the necessary infrastructure, eventually it will work to develop local content.