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Software deal continues convergence fight

Marantz and Denon cut a licensing deal for Mediabolic's convergence software. The move points to a fight between consumer-electronics firms and PC makers over home-entertainment turf.

Consumer-electronics makers Marantz and Denon have agreed to include start-up Mediabolic's convergence software in some of their high-end products.

The deal points to a fight being waged by makers of home-entertainment devices to keep computer companies from encroaching on their turf.

San Francisco-based Mediabolic makes a program that links televisions, stereos and other home-entertainment devices to PCs so they can share content such as music or video files.

As interest in home networking has grown and computer sales have shrunk, PC makers have increased their efforts to make their machines the center of home-entertainment setups. Microsoft, its hardware partners and other nontraditional consumer-electronics companies have been developing convergence devices to merge computing and entertainment technologies. Prior attempts have had limited success, but with the popularity of digital video recorders and similar technologies, computer makers are taking another shot at convergence.

Attempts by consumer-electronics companies to fend off such efforts have been hampered by the lack of necessary software, analysts have said. Mediabolic Chief Executive Daniel Putterman agrees.

"The (consumer-electronics) industry needs to add advanced software capabilities to devices to remain competitive with PCs, and there is a dearth of software out there," Putterman said. "We can help them differentiate themselves and help them to get on board this quiet revolution."

Mediabolic's software can be used in currently available, as well as future, consumer-electronics products, according to the company. The software lets devices be networked via a wired or a wireless connection.

The multiyear licensing deal, announced Wednesday, includes a minority investment by the parent company of Denon and Marantz, D&M Holdings. Financial terms were not disclosed.

Hewlett-Packard is a Mediabolic licensee, as is Pioneer, which is experimenting in the United States with products that use the start-up's software.

Putterman said the three-year-old privately held company is about to have its first profitable quarter.