AOL is entering a whole new world. First, the company announced plans to bring the Internet to television via cable set-top boxes made by Philips Electronics and Hughes Electronics Corp.'s Direct TV satellite television. While no dates have been announced when the service would be available, the company says AOLTV would bring e-mail, instant messaging and web-browsing capabilities to its users.
Additionally, AOL and Philips selected CyberPro 5000 streaming media processor providing AOLTV users with access to commercial-free cable programs on their TVs, in addition to web capabilities. The CyberPro 5000 chip performs MPEG streaming media post processing, graphics acceleration, video processing, and hardware blending, enabling AOLTV set-top boxes to produce broadcast quality TV output and support advanced effects like transparency.
Utilized in advanced set-top boxes and information appliances from the world's leading OEM manufacturers, the CyberPro 5000 combines a 64-bit hardware graphics accelerator with a fully-programmable NTSC/PAL TV encoder, a video processor that provides integrated scaling, de-interlacing and time-based correction, and an AC97 audio processor.
AOLTV was a sizable step toward challenging Microsoft's online television efforts. However, the company took an even bolder step toward conquering the Internet biz today when it signed a $35 billion deal with Time Warner to form a new company called AOL Time Warner. The deal will combine AOL's online services with Time Warner's wide range of media and cable assets to create an unrivaled multi-media superpower.
Raymond James analyst Phil Leigh, in a C-NET article, described the deal as "probably the most significant development in the Internet business world to date." Leigh added, "If it hasn't been evident to most of us yet, it should be obvious to us now that the Internet is about audio and video and not just merely text and graphics."
Combining AOL's subscribers, and Time Warner's cable and magazine customers will give the new company more than 100 million paying subscribers, according to C-NET. The deal is subject to regulatory and other closing conditions.