The companies said they will jointly market and sell products that support new Internet-enabled appliances such as set-top boxes, game players, thin clients and wireless devices.
In return for its $100 million investment, Cisco said it will receive a 3.88 percent stake in San Carlos, Calif.-based Liberate and will further its product, marketing and sales relationship with Liberate.
Early Liberate investors include America Online, Hambrecht & Quist, Oracle and Sun Microsystems. Liberate is the Oracle unit formerly known as Network Computer.
As part of the nonexclusive deal, Cisco's core high-speed, or "broadband," Internet equipment will be integrated with Liberate's interactive-TV and server software. The combined product will include Cisco directory services and its Data Over Cable Service Interface Specification (DOCSIS). The DOCSIS standard aims to make cable modems compatible with any cable network to increase the spread of cable-modem technology.
Like numerous network equipment providers, Cisco has been scrambling to tackle an explosion of interest in accessing the Internet over high-speed cable or digital subscriber lines (DSL). As the delivery of services over broadband networks continues to grow, Cisco and Liberate said they intend to work closely together to extend Internet Protocol-based services to support the new range of networks and consumer devices such as TV set-top boxes.