PointCast strategic investor becomes buyer

Telcos, portals lined up as potential PointCast owners

Internet push technology specialist PointCast is set to announce its acquisition by an unnamed Internet backbone provider, according to reports in the US media quoting "knowledgeable" industry sources. The revelation follows the company's announcement last week that it was close to signing a strategic investor (see PointCast finds investor -- at last), and its launch of UK and German offshoots earlier this week (PointCast launches UK, German editions). The UK version is sponsored by British Telecom, which could easily be described as an Internet backbone provider. PointCast was formed to pioneer an Internet broadcasting system, the PointCast Network, that automatically 'pushes' information to Net users as an alternative to forcing them to go out on the Web and actively 'pull' data to them via a browser. However, bandwidth limitations have long since prevented push technology from becoming the dominant data delivery system as companies like PointCast originally predicted. Instead, users have turned to portals like Yahoo! Excite and Infoseek, and online services like AOL to place all the information they need in one single site. That has left PointCast struggling for funding -- efforts to overcome that included an aborted attempt to sell the company to News Corp, and last July's IPO, cancelled at the eleventh hour. Since then, the company has been talking to possible investors, seeking a cash injection in return for a minority stake. While the latest news doesn't advance the overall situation from last week's 'strategic investor' announcement, talk of a buyer suggests the investor may have decided they want a controlling interest rather than the much smaller stake originally discussed. Given the bandwidth issues that have so far held back PointCast's technology, an Internet infrastructure company would, if the rumours are correct, seem a sensible partner -- allowing content and content delivery to be brought together. However, it's worth remembering the current keenness of portal companies to buy in differentiating technologies, ideally with large bases of users attached, such as MSN's purchase of LinkExchange. PointCast would be a good source of both technology and users. The British Telecom link is also worth watching. BT is pushing hard to ramp up its online services, particularly from a content perspective, and has the bandwidth to make a service like PointCast work. While its content efforts have so far been aimed more toward consumers, the company isn't unaware that businesses are more into information delivery than home users. PointCast's technology would allow them to build a high-cost, targeted service for business. ®