Spyglass sells Net filtering software arm

The transaction, consisting of $17 million cash and $12 million in JSB equity securities, will result in a pretax gain of approximately $27 million.

"The divestiture of SurfWatch gives Spyglass the opportunity to focus 100 percent of our resources on the information appliance market," Spyglass chief executive Douglas Colbeth said in a statement.

Spyglass said it will retain rights to resell SurfWatch software to customers in the interactive-TV market on a worldwide basis. To date, Spyglass has agreements with several interactive-TV customers, including Microsoft WebTV, Comcast, WorldGate, Excite@Home, and American Interactive Media.

Spyglass, one of the first companies to produce an Internet browser, has been long on promise from the start, but it has had its troubles executing. The company's Mosaic product failed to catch on, but it survived by recasting itself as a software provider for Internet devices--non-PC products ranging from enhanced cellular phones to TV set-top boxes.

Spyglass has sought to boost revenue from services so that it's less dependent on software sales, because the market for Internet-connected devices, while growing, is still small and unpredictable.

"We believe it's still [in] the very early stage of adoption" for such devices, chief financial officer Gary Vilchick told Bloomberg recently. "We're moving toward a model with a large services component as well as licensing."

Investor doubts about the company have faded in recent weeks on strong financial statements. The company's stock has doubled since October 21, when it reported earnings of 2 cents a share for its fourth quarter and a 49 percent growth in revenues to $9.2 million.

Separately, Scotts Valley, California-based JSB listed shares today on the Easdaq Stock Market in Europe. The company makes Surfcontrol, an Internet access management software product.

Bloomberg contributed to this report.