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Motorola to Buy Another IPTV Startup

Stirring another Internet-protocol-TV specialist into the mix, Motorola plans to acquire MPEG-4 video-compression startup Modulus Video for an undisclosed amount.

Founded in 2002, Modulus develops MPEG-4 Advanced Video Coding compression systems designed to deliver video content over IPTV, cable, broadcast and satellite networks. Key investors in the 57-employee company include Thomas Weisel Venture Partners and Trinity Ventures.

Modulus has worked closely with Motorola since 2005 to jointly deliver MPEG-4 AVC encoders to telco customers, including AT&T, Bell Canada and CenturyTel.

The deal is Motorola's fifth IPTV-related acquisition in 18 months, following its deals for video-on-demand server maker Broadbus Technologies, IPTV set-top maker Kreatel Communications, IPTV encoding-equipment provider Tut Systems and digital-subscriber-line gateway vendor Netopia Systems.

"As consumers demand more high-definition video and interactive services, the need for advanced compression technology is increasingly important,” Motorola Home and Networks Mobility business president Dan Moloney said in a prepared statement.

Modulus CEO Bob Wilson said his company will give Motorola a “software-centric platform that ensures flexibility, reduced cost and fast development time.”

Motorola intends to maintain Modulus’ operations in Sunnyvale, Calif., and operate it as a wholly owned subsidiary within Motorola’s Home and Networks Mobility business unit.

The companies expect the deal -- subject to routine closing conditions -- to be completed before the end of the third quarter of 2007.