Phoenix to Give PCs a Web-Surfing Makeover

Through a series of alliances announced Monday, Phoenix Technologies Ltd. hopes to take the first click away from surfing, and shopping, the Web.

Phoenix (Nasdaq: PTEC) will integrate six different Web portal pages into its BIOS computer operating system, giving the portals a chance to become the personalized face of an individual computer.

Though each agreement varies slightly, the deals together signal a concerted effort to move the personal computer closer to a personal Web surfing machine, apparently recognizing the growing importance of the Internet to everyday computer use.

Fueling Phoenix’s new push into the Internet world is an investment by Softbank Holdings in Phoenix’s new Internet subsidiary ebetween. Softbank signed a letter of intent to acquire a 20 percent stake in ebetween. Softbank Holdings, which also holds significant financial interests in E-Trade, Softbank Comdex, Yahoo!, and Ziff-Davis, gets shares of a company that is widely rated a “buy” on Wall Street.

Analysts are expecting the company’s earnings to grow exponentially over the next three years, with estimates at 66 cents (U.S.) per share this year after just 3 cents in 1998. For 2000, Phoenix is expected to earn 95 cents per share.

In exchange, Phoenix gets control of Softbank’s Marketing Solutions subsidiary. SMS, based in San Francisco, is an electronic registration service for original equipment manufacturers, independent software vendors and computing device manufacturers. Through that deal, Phoenix will provide its six new Internet portal partners simple and quick online registration services to offer to new computer owners.

Unique?

Phoenix lined up agreements with Yahoo! Inc. (Nasdaq: YHOO), EarthLink (Nasdaq: ELNK), CNET, Inc. (Nasdaq: CNET), Lycos, Inc. (Nasdaq: LCOS), NBC and CNET’s Snap.com and cable Internet service [email protected] (Nasdaq: ATHM), to give them immediate signage on the computer screen.

While each of them claim the deal will place their icons “in a unique ‘first look’ position on the desktop of new PCs,” the simple fact that there are at least six Web portals involved in the deal suggests the will look anything but unique. It is unclear whether the icons will appear next to each other on every PC or whether Phoenix will market different BIOS chips – with different Web portal icons – to each manufacturer.

Residency on Phoenix’s BIOS chip, a chip on the computer’s motherboard that gives the first set of commands to the computer when loading such basic information as the correct date and time, gives the Web portal companies an early chance to catch the computer user’s attention. They will use that opening to encourage the user to customize their computer’s screen, for example, as a Yahoo! computer or an EarthLink computer.

More than a dozen motherboard manufacturers, supplying about 30 percent of annual worldwide desktop PC motherboards, have agreed to put the new Phoenix Internet-ROM chips on their motherboards. The chips are expected to be available in the fourth quarter of 1999, and Phoenix predicts the agreements with the Web portal companies will generate $10 million to $15 million (U.S.) in revenue in the first year.

Anti-virus Also Included

Phoenix did not stop at Internet access. Another in its slew of announcements this week involves Trend Micro Inc., a developer of corporate and personal virus protection software. Trend Micro’s ChipAway Virus protection product will be integrated with Phoenix’ Internet ROM chip on the motherboards of non-name-brand computers. With the Trend Micro anti-virus program built onto the motherboard, anti-virus scanning will start when the computer boots.

Trend Micro will also get the “first look” icon on the computers’ desktops to give the users access to Trend Micro’s HouseCall, a free on-line virus scanning service. At that site, Trend Micro will push sales of its more advanced PC-cillin 6 antivirus software and subscription services to update virus libraries regularly.

About Phoenix

Phoenix’ BIOS chips are installed in more than 70 million PCs sold this year. The San Jose, California, company, founded in 1979, launched its new ebetween subsidiary to increase the company’s activity in the Internet access and browsing arena. ebetween’s initial products and services provide Internet companies the potential to significantly increase consumer reach, dramatically increase Internet user sign-up, and reinforce user loyalty and retention.

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