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RespondTV Accelerates with Vendor Buyout

Hoping to sell a broader enhanced-television package to cable operators, RespondTV Inc. last week agreed to acquire AccelerateTV, a new interactive-TV-application vendor.

The deal allows RespondTV to sell MSOs a walled-garden portal solution for digital cable, in addition to the back-end interactive-advertising service it's pitched so far, executives said.

Initially, San Francisco-based RespondTV focused on the sale of enhanced-ad services to advertisers and the delivery of enhanced ads to cable operators. AccelerateTV allows RespondTV to sell such applications as an electronic wallet, a shopping cart and the ability to check orders placed through digital set-tops to MSOs building their own TV-portal applications, executives said.

"This really puts us in a world all by ourselves," said RespondTV president Richard Fisher. "Nobody else can do that-not even close."

RespondTV and AccelerateTV would not disclose the value of the deal, which the companies plan to announce this week. CEO David Kaiser said that RespondTV would issue shares of its privately held stock for the acquisition, plus some cash to cover debts.

Nizar Allibhoy, an engineer on Time Warner Cable's Full Service Network in Orlando, Fla., founded AccelerateTV as Accelerate Interactive Inc. last year. He joins RespondTV as senior vice president and general manager of the "Accelerate Product Suite."

Kaiser said RespondTV will keep the 30 employees at AccelerateTV, along with the company's Los Angeles headquarters, which will be useful for the frequent trips he and other RespondTV executives make to that city.

The AccelerateTV buy comes on the heels of RespondTV's first major cable deal, announced last month, with AT & T Broadband.

The next step will be to offer the applications RespondTV picked up in the acquisition to AT & T Broadband, executives said.

"[AT & T Broadband is] further along in implementing it themselves than any other operator at this point. That said, there are holes in their development project that we're actively talking to them about," Kaiser said.

In a prepared statement, AT & T chief technology officer David Nagel called the Acclerate-TV acquisition "a great strategic move." Nagel also sits the company's board.

While RespondTV's goal is to sell a combined offering of enhanced ad services and AccelerateTV's walled-garden applications, Kaiser emphasized that the company will also offer operators both packages on an a la carte basis.

RespondTV has raised $36 million in equity investments from AT & T Corp., Comcast Corp., Liberty Digital Inc., Showtime Networks Inc., Tribune Media Ventures, United Television Inc., GE Capital Corp., Integrity Partners Inc. and Sequoia Partners.

Kaiser said the company is looking to make more acquisitions, and would also like to partner with a personal video recorder company.

"We think there are very interesting opportunities at the junction of a PRV, walled garden and synchronous enhanced TV," he added.