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Big firms have vision for VDOnet

Microsoft and US West's Media Group purchase stakes in VDOnet, a maker of video and other multimedia technology for the Internet.

Microsoft (MSFT) and US West Media Group (UMG) have purchased stakes in VDOnet, a maker of video and other multimedia technology for the Internet.

Microsoft has also agreed to license VDOnet to use its NetMeeting video, audio, and data conferencing tools and NetShow for live and prerecorded multicasting over the Net. The software giant has also embraced VDOnet's video, audio, and data sharing tool called VDOWave.

The technology, which allows video connections across low-bandwidth networks using compression tools, cuts down on data loss that can affect image quality, according to VDOnet. The move aims to bring video viewing to rank-and-file Netizens, the companies said.

For US West, which purchased its stake through its subsidiary US West Interactive Services, the acquisition is part of its bid to become a prominent Internet player, according to the company. It is set to merge with Continental Cablevision and already owns a quarter of Time Warner Cable. US West has embarked on a strategic relationship with VDOnet that will be "pivotal" to its plans for cable television-based Internet services.

The three companies said they will step up industry efforts to speed adoption of video standards, especially the H.323 audio and videoconferencing standard and new versions of the MPEG standard.

Microsoft and US West have received one seat each on VDOnet's board of directors, the companies said. While they did not disclose the size of the stakes acquired, the Wall Street Journal reported today that the combination may amount to as much as 20 percent in VDOnet.