WORLDGATE EXITING ITV BIZ, EYES PHONES

BY SHIRLEY BRADY WorldGate Communications chairman and CEO Hal Krisbergh expects to get a green light today from his shareholders to launch the company in a new direction: videophones. WorldGate’s shareholders vote today whether to approve a deal to sell off the company’s interactive TV business assets for about $3 million. That money will launch Ojo, a new product that incorporates real-time, full-motion video transmissions with telephony services from cable or DSL providers. WorldGate’s business has stalled as the cable industry focuses on video-on-demand, HDTV and other advanced services. The company downsized and in August entered an agreement to sell interactive program guide developer TVGateway, a joint venture between Comcast, Cox, Charter and Adelphia. As part of the deal WorldGate will sell its own stake in TVGateway and other ITV-related intellectual property, but will license back technologies so it can continue servicing existing ITV customers, primarily in Latin America. “This funding will take us into next year,” says Krisbergh of the decision to exit the U.S. ITV business. “We’ll have product ready for trials by the end of the year and we will be in full production by next summer.” At a recommended price point of around $300, the Ojo phone uses less than 3% of available bandwidth upstream, plugs into cable or DSL modems and uses existing phone numbers. In order to offer the product with quality of service technology so customers can use Ojo as a primary line, a cable system must be upgraded to DOCSIS 1.1. As with cable modems, cable operators can sell Ojo or lease it to their customers at a recommended monthly charge of under $20, of which WorldGate will not take a cut. Consumer electronics retailers are also expected to sell the product, Krisbergh adds. “We’ve worked on getting our manufacturing sourced and we’re now working…with strategic players in the marketplace for distribution and retail sales.” WorldGate’s former president Gerard Kunkel stepped down last month when the company announced its intention to quit the ITV business and has just launched nautics tv, which will develop new ideas in user interfaces and navigational menuing for ITV applications. “IPG, VOD, NVOD, HD and PVR offerings need to be coordinated with a seamless navigation and common look and feel,” says Kunkel, who plans to help operators and vendors integrate different digital technologies for a unified look and experience. “Nautics tv is platform- and technology-agnostic,” he adds. “We will work with each operators’ technology, new product, marketing and programming departments to build an integration plan, navigation system and U.I. that brings the best possible product to the consumer.”