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Liberate lands another deal as shares soar

Liberate Technologies, a provider of software for interactive television, continues its upward trajectory as the company announces a new deal to supply software to Star TV in Asia.

Liberate Technologies, a provider of software for interactive television, continued on its upward trajectory today as the company announced a new deal to supply software to Star TV in Asia.

Since Liberate's first day of trading in August, the stock has shot up more than 700 percent. Shares closed up 9.19 percent today to 160.44.

Liberate is the renamed former NCI subsidiary of Oracle. Oddly enough, Oracle chief executive Larry Ellison has decided to revive the NCI name as well as the original vision for the company. Speaking at the Oracle OpenWorld trade show in Los Angeles Tuesday, Ellison introduced the Network Computer Version 2, a sequel to Network Computing Incorporated's original.

Ellison promised that a new chief executive and management team will be announced soon, along with several companies that will manufacture the NC2 for the new company.

Liberate, which also announced a deal to supply Cable & Wireless in the United Kingdom last week, said that Star TV has started using its software in technical trials and will begin offering interactive television services in the first quarter of 2000. Star TV is a subsidiary of Rupert Murdoch's News Corporation and is one of the largest TV service providers in Asia. It has 300,000 subscribers in Hong Kong alone, where the trials are taking place.

Liberate's software is used to provide email, Web browsing and e-commerce through a TV set-top receiver. The company has modified the software for use in Asian markets, displaying information in the local language.

Liberate's chief executive Mitchell Kertzman said in an interview that the deal is another strong validation of the company's technology, especially because News Corp's BSkyB satellite service was using technology from another competitor, OpenTV. OpenTV is one of the top interactive TV service providers, counting nearly over 3.5 million subscribers that are using its software.

"This is a significant design win that will help make our platform the standard for interactive TV," said Kertzman.

One factor in Liberate's favor, say analysts, is Oracle.

"No doubt, having Oracle behind Liberate is helping them to really leverage their technology, and to make all these partnerships with other companies," said Sean Badding, vice president with research firm Carmel Group. But Badding thinks that the deal doesn't necessarily mean OpenTV is in disfavor with News Corp., compared to Liberate. He said the company is just using different technologies in different markets as he takes regional differences in product usage into account.

Liberate's deal adds an interesting twist to the competitive landscape in Hong Kong. Cable & Wireless HKT entered into a deal with Microsoft to create a broadband portal which was launched in late October. The new service allows subscribers with PCs or televisions to choose movies on demand, videoconferences, view news video clips and shop via the Internet.

Meanwhile, HKT and Star TV formed a joint venture last week to provide entertainment and information services for PCs and TVs. Liberate's deal with Cable & Wireless as well as Star TV may help get its foot in the door as the new venture brings its products to market.