IBM starts $US500m fund for next generation Internet

IBM is giving 500 million reasons for 'Net entrepreneurs to take their ideas to market.

To be more specific, the IBM Global Financing unit on Friday announced it was putting up a half billion US dollars to support Internet technology companies. This expansion shows once again how the 800-pound mainframe gorilla wants to be a player in the red-hot field of Web startups. Indeed, in a rare show of hipness, the company even has established a Global Net Generation Business unit.

However, this is not entirely a risky or an altruistic move, as the firm states the money is slated for companies who will use it to buy IBM services, software and hardware. Moreover, those dollars will be going only to those companies that have already gotten a first round of financing from venture capitalists. IBM says it will work with venture capital firms who have companies in need of a new cash infusion for computer equipment. While the terms of the financing will be left flexible, those companies must be developing business-to-business Internet products.

IBM, which has been putting "e-" in front of as many of its products as possible, could bill itself as the world's biggest and oldest Internet startup company. It claims that in total, it has invested $US1 billion in a variety of cutting edge financing programs. This includes putting money into venture capital firms and acquiring companies with desirable technology. For select 'Net startups, IBM even offers an "incubator" package of services and products, worth up to $1 million, complete with a six-month grace period.

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