Silicon Graphics, AT&T; Join in TV Venture
Silicon Graphics Inc. announced Wednesday that it is combining forces with AT&T; Corp. in an interactive-TV joint venture, giving it a boost toward creating an industry standard for the next generation of television.
No financial terms were disclosed for the venture, called Interactive Digital Solutions.
The agreement gives Silicon Graphics a better chance of having its technology become the model for interactive television, which will allow customers to select what they watch on TV from menus.
The venture could help Silicon Graphics develop such technology for regional telephone companies and cable television before Oracle Systems Corp. or Microsoft Corp. does.
“I can’t imagine anybody having landed a plum as big as this one,” said veteran technology analyst Laura Conigliaro, who tracks Silicon Graphics for Prudential Securities Research. “This is enormous.”
Silicon Graphics shares rose $2.75, or 14%, to $21.75 on the news. AT&T; rose 12.5 cents to $55.50.
Some analysts are less enthusiastic. The Baby Bells will be the major delivery systems in interactive TV, one lane of the information superhighway. Any move by AT&T; to create an industry standard could raise eyebrows among the regional Bell operating companies, which are wary of being dependent on AT&T; technology.
“It is not clear to me that AT&T; and Silicon Graphics will be able to put this together,” said Michael Balhoff, an analyst with Legg Mason Wood Walker.
