LOS ANGELES -- Broadcom Corp., a maker of specialty microchips, plans to launch a media company that will speed the convergence of television and the Internet, as well as pump up demand for its own products.
Irvine, Calif.-based Broadcom (Nasdaq:BRCM) is partnering with Gotcha International, a privately held maker of surfwear that also produces magazines and TV programs on surfing and extreme sports like snowboarding and skateboarding.
The plan calls for the new company, Broadband Interactive
Group, or BIG, to acquire Gotcha's media assets including the
Gotcha.com Web site and a library of sports footage.
BIG will then develop sports and other programs that need
high speed networking equipment -- such as that currently made by
Broadcom -- to produce full-action video for the Internet and for
newly developing interactive cable TV services.
"We believe this investment will accelerate the creation of
compelling broadband interactive content, thus spurring greater
demand for the advanced cable set-top boxes of our customers,"
Broadcom Chief Executive Henry Nicholas said in a statement.
Good news for broadband "Because we have such a strong position in the market,
anything that is good for the market is good for Broadcom,"
Nicholas told Reuters in an interview.
He declined to say how much Broadcom was investing in BIG,
but said it was poised for success because of the strong standing
of Gotcha in extreme sports and because the target audience of
10- to 24-year-olds was active on the Internet.
"This is taking an existing media company, already
profitable, and optimizing it for broadband," Nicholas said.
"We're taking content people already like and enhancing it."
Merger of media and technology Last week, sofware giant Microsoft Corp. announced an
initiative with several media and technology companies to drum up
support for high-speed Internet content and its own Internet
media software.
Nicholas said Broadcom is looking to gain a foothold in
mainstream sports, too, by trying to gain media rights to the
Anaheim Angels professional baseball and Mighty Ducks hockey
teams owned by The Walt Disney Co.
Nicholas had been named as a possible buyer of the teams, but
last week the billionaire entrepreneur said he was not interested
in buying or managing a sports franchise.
He said Broadcom was trying to help Disney sell the Angels
and Ducks to an unidentified third party that would then give
Broadcom media and interactive rights to the franchises.
"We are interested in getting the interactive rights for
some sport, and no sport is better for that than baseball,"
Nicholas said.
Broadcom specializes in high-tech equipment and microchips
that help make broadband services work. Thus, any enhancement to
broadband might help spur sales of its own equipment.
The move follows similar intiatives by technology companies
to spur broadband, which allows Internet users to connect at
speeds 5 to 50 times faster than the fastest dial-up modems.
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