Marina Company Buys E-Storage Rival

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Marina Company Buys E-Storage Rival

Technology

by Christopher

Keough

Xdrive Technologies Inc., the Internet storage company from Santa Monica turned software supplier from Marina del Rey, has acquired competitor FreeDrive Inc. for an undisclosed price.

FreeDrive, based in Chicago, was the first service to provide general Internet users with a place to store, retrieve and share information online. Xdrive President and Chief Executive Karl Klessig refused to disclose the specifics of the acquisition. Both companies are private.

Xdrive, which has taken its hits over the months as the dot-com bubble burst, has changed its business and laid off workers as it struggled to survive, and Klessig said it would only be adding select employees from the Chicago operation to its 80-employee staff.

Both companies had moved into application software and have been selling their technology to businesses looking to store information with third parties on an Internet platform. The software includes varying degrees of compression and security technology.

Tim Scannell, an analyst at Mobile Insights Inc. of Mountain View, said the market for storage technology still is growing because of the proliferation of e-mail and e-mail attachments that take up company server space. With more companies outsourcing data storage, software that helps move information from internal to outside servers such as that offered by Xdrive and FreeDrive will continue to find a market, Scannell said.

Xdrive has raised $140 million in four rounds of venture capital since its founding in 1999. Klessig said the company would be profitable by the end of 2002.

Interactive TV Connection

In other acquisition news, Interactive television company Gold Pocket Interactive has acquired a major competitor in Mixed Signals Technologies’ ITV Professional Services Group.

Gold Pocket officials claimed to secure 75 percent of the interactive television market a market that varies according to how you classify it. Interactive television encompasses things as simple as interactive program guides to full-on synchronization of television and PC so viewers can play along at home in real time.

Mixed Signals was the leading provider of interactive television programming for set-top boxes.

Gary Arlen, president of Arlen Communications, a Bethesda, Md., research company that specializes in interactive media, said both companies are important in the still forming interactive television industry.

“They are being very aggressive,” Arlen said. “Gold Pocket now has the resources and ambition to take advantage of a lull in the industry and step in and gobble up business.”

Gold Pocket President and Chief Executive Scott Newnam refused to disclose the terms of the deal.

Cynthia Brumfield, president of research and analysis company Broadband Intelligence Inc., said the deal was a bit of a surprise as she thought Mixed Signals was gearing up to take the lead in nascent interactive television.

Brumfield and Arlen concurred that interactive television will be in development for at least another three years.

Newnam said the deal was attractive to Gold Pocket as an opportunity to take a commanding control of the market and introduce standards to the television industry.

“We believed if you could get high enough market share you could get standards out there,” Newnam said, adding that those standards would be introduced at next month’s annual conference and exhibition sponsored by the National Association of Broadcasters.

“Now we have the market share and we can drive efficiencies and we’ll be launching standards for everyone to write to.”

Standards would allow the television studios and interactive television content creators to concentrate on the content that will be universally functional across digital television providers.

Gold Pocket relocated to Marina del Rey from Boston on Thanksgiving Day 2001 to be in the middle of the entertainment industry. The company, founded in 1999, has raised more than $60 million since 2000 from venture capital companies, including WaterView Advisors, which is led by former Universal Studios head Frank Biondi.

Monitor Maker Funded

ViewSonic Corp., the Walnut-based maker of computer display equipment and high definition television technology, received an undisclosed amount of money from Intel Capital to continue development of digital display products for home and business applications.

The company was founded in 1987 and claims worldwide sales of more than $1 billion.

Chief Financial Officer Jim Morlan refused to disclose the actual amount of the investment and said there was no specific target for its use.

Intel Capital spokeswoman Laura Anderson said the investment arm of the chipmaker has previous investments in ViewSonic. Anderson would not discuss the investment other than to say typical investments range from $1 million to $10 million. Anderson said Intel Capital does not take more than 20 percent stake in any company.

Staff reporter Christopher Keough can be reached at (323) 549-5225, ext. 235, or at

[email protected].

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