January 20, 2000 10:30 AM PST

Gemstar buys two e-book makers

Gemstar International Group, a Nasdaq 100 company that's planning to merge with TV Guide, has swept into the electronic book business by acquiring manufacturers NuvoMedia and SoftBook.

Gemstar this week paid an undisclosed amount of stock for both companies, which will operate as wholly owned subsidiaries and continue to produce their own e-book readers, according to NuvoMedia spokesman Marcus Colombano. The total number of shares issued amounts to less than 3 percent of Gemstar's shares, and won't affect its planned acquisition of TV Guide, Gemstar said in a statement.

NuvoMedia is the maker of the Rocket eBook, while former rival SoftBook produces the SoftBook Reader. With these acquisitions, Pasadena, Calif.-based Gemstar, a company that focuses on making technology friendly for consumers, has snapped up the two e-book manufacturers.

E-book readers are handheld devices made of hard plastic, able to hold about 4,000 pages of electronic text, or the rough equivalent of 10 books. Users download text or e-books onto the readers and carry them around much like they would paper books or magazines.

"Next to watching television, reading is America's most favorite pastime," Henry C. Yuen, Gemstar's chief executive officer, said in a written statement. "We believe that Gemstar, NuvoMedia, and SoftBook collectively will be in a good position to provide the best technology, broadest distribution, and the most consumer-friendly devices."

But some analysts have said consumers may never embrace e-books the way they do paper books because of the harsh lighting that computer screens give off.

Other companies such as Microsoft have developed technologies that compete with e-book readers. The Microsoft reader is a software application that enhances computer font resolution, easing the strain of reading computer text.

In other news, Gemstar said it is suing TiVo, alleging that the company is selling its digital video recorder with an interactive television listing without Gemstar's permission. Gemstar is seeking an injunction against TiVo and unspecified monetary damages.

TiVo's device has an EPG, or electronic programming guide, that is used to archive programs and "pause" live TV by recording TV signals on a hard disk drive. Gemstar claims that TiVo's EPG is similar to one made and patented by Gemstar but has been marketed without a license. Gemstar's Fremont, Calif.-based StarSight Telecast unit filed the patent-infringement complaint in federal court in San Jose, Calif.

Officials at TiVo didn't immediately return phone calls seeking comment.

Bloomberg contributed to this report.

 

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