Microsoft Invests in Xerox E-commerce Spin-off

PARIS (04/27/2000) - Xerox Corp. has found a new investor for its Internet content management spin-off ContentGuard Inc.: Microsoft Corp. is to take a stake in the digital rights management (DRM) subsidiary, the companies announced today.

In addition to investing in the company, Microsoft will use ContentGuard's technology to extend future versions of its applications, including Microsoft Reader, a new software product for displaying eBooks due to be launched mid-year, according to a statement from the companies. Future releases of Windows Media Player and Windows Media Rights Manager will also include software from ContentGuard, according to the statement.

ContentGuard's technology can be used to protect and manage books, documents, music, software and other valuable content distributed over the Web, the companies said. ContentGuard products will enable publishers to create free time-restricted previews, single-chapter previews or one-time use scenarios, in addition to other ways of protecting their property, according to the statement.

Xerox will retain a majority share in ContentGuard, formerly the Xerox Rights Management group, according to the statement, but further financial details of the deal were not disclosed. As an independent entity, ContentGuard will be free to seek further funding from other sources, according to the statement.

Other investors are expected to be announced in the future.

The three companies will collaborate on future development of DRM technology and standards and hope to establish XrML (eXtensible rights Markup Language) as a common standard for all forms of digital information and entertainment. They plan to offer royalty-free licenses for XrML to enable interoperability across rights management systems, the statement said.

The companies will be holding a briefing later today in Palo Alto, California, at which Rick Thoman, president and CEO of Xerox, and Steve Ballmer, president and CEO of Microsoft, are expected to discuss details of the venture. To listen to the briefing via teleconference, media can call +1-888-262-6887 in the U.S. or +1-973-633-1010 from outside the U.S. The briefing starts at 12:30 EDT.

Xerox, in Stamford, Connecticut, is at +1-203-968-3000 or at http://www.xerox.com/. Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or http://www.microsoft.com/.

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