BY KURT HANSON
The former Apple Computetr execs who designed the Kerbango radio -- the Internet radio appliance you read about first in RAIN last February (here) -- have sold their company to Santa Clara-based 3Com for an astonishing $80 million, they announced yesterday.

They also revealed, in a separate announcement that the parent company of RCA, Thomson Electronics, has signed a licensing deal with Kerbango to build Internet radios under the RCA brand name.

In the press release on the deal, 3Com CEO Eric Benhamou said, "One of the most exciting next waves of networking connectivity will take place in the home with Internet appliances. 3Com is pioneering radically simple home networking solutions for the digital home that let families conveniently enjoy the lifestyle benefits of the Internet.

"The Kerbango Internet radio -- and the services it offers -- is the industry's best example of a simple, personal Internet appliance."

The release noted that "3Com is the only company that provides every connectivity element required for the digital home, including cable and DSL modems, home networking, residential gateway products and PC web cams."

The acquisition follows an investment made previously -- but not, as far as I know, ever formally announced -- by 3Com Ventures, a venture capital group within 3Com that invests in emerging technology companies. Kerbango employs 28 people in Cupertino, CA.

Kerbango's CEO, Jon Fitch (pictured at left above with co-founder Jim Gable), will become VP/GM of 3Com's Internet Audio division.

RAIN visited Cupertino immediately
I will brag that RAIN saw the potential in Kerbango early on. The week they revealed the prototype, I left my desk in Chicago for the first time since launching RAIN to visit Cupertino, meet the founders, and see the device first-hand. (See story here.)

Forbes analyzes 3Com/Kerbango deal
From Forbes.com: "The Kerbango software and tuning services will be more valuable to 3Com over the long term than the radio itself.... Internet radio is now more popular than short-wave radio, points out Kerbango's Fitch. But consumers aren't exactly crowding around Web music machines yet.

"'This industry has yet to have its inoculation event -- the thing that forces people out to the store to buy a piece of this hardware,' says Ric Dube, a music industry analyst with Webnoize in Cambridge, Mass. 'It needs the equivalent of a Pamela Anderson Lee home movie, which made a critical mass of people download media players...' Read the full piece here.

Kerbango coming to home stereos, too
From RCA's press release: Eventually, everything comes from the Internet, and since many radio broadcasters around the world are already streaming their programs over the Internet, it makes sense that consumers should be able to enjoy these programs now, away from the computer. That's why Thomson will offer the tabletop RCA Internet Radio and will soon integrate this functionality into other products, said Mark Redmond, Vice President of Worldwide Audio for THOMSON multimedia. Were planning to offer Internet Radio as a feature in both the RS2539 bookshelf audio system and in the new RCA Digital Media Manager announced last week.

At last weeks MP3 Summit in California, Thomson unveiled five new products that will utilize the popular MP3 music format -- including the RCA Digital Media Manager, which is now in development. The Digital Media Manager is a home audio/video product that utilizes a hard disc drive with the capability of storing a collection of more than 2,000 songs in the MP3 format.

The product connects to a consumer television set and includes a built-in TV Electronic Program Guide, allowing it to display titles and cover art for compact discs and DVDs, and permits consumers to build playlists of favorites music selections. It allows a consumer to seamlessly navigate and interact with music with built-in software to make it easy to compress CD music in the MP3 format on the integrated hard-disc drive, build playlists, and sort by artist, album, or genre.

The Digital Media Manager is expected to be available later this year and will play Internet Radio channels, DVD discs, compact discs, and MP3 files.



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Point and Click Radio
From Gavin: "With 100 million Americans online, stations that aren’t on the web are missing a tremendous opportunity...One station that I worked with had one jock on-line at all times, chatting with the listeners. In the broadest sense, this is like opening up 1000 new request lines that offer your audience more direct access to the airstaff..." Read an excellent essay from Clifton Radio VP Paige Nienaber in Gavin.com here.

Radio Finds Static On The Web By Mindy Charski, Inter@ctive Week June 27, 2000 11:32 AM ET Not too long ago, progressive radio stations were streaming music on the Web. Today, thousands of radio stations replay their content on the Web. But already, the idea of listening to the same broadcast that's available on a nearby radio is getting stale, particularly because music networks such as Spinner Networks and Yahoo! Broadcast offer continuous streams of various genres, according to a new report by market researcher Nielsen//NetRatings. "Every single site that's offering some kind of

here

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July 13-16	Upper Midwest Conclave, Minneapolis
August 3-5	Morning Show Bootcamp, New Orleans
September 20-23	NAB Radio Show, San Francisco
October 5-7	Billboard/Airplay Monitor Seminar, New York
October 9-12	QuickTime Live! Conference, Beverly Hills (NEW)
November 5-7	NAB European Radio Conference, Berlin
Nov. 28-Dec. 1	Radio Ink Internet Conference, Santa Clara, CA

xxx

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