Xerox and Microsoft in Internet Joint Venture

FRAMINGHAM (04/27/2000) - Microsoft Corp. and Xerox Corp. today announced a joint partnership in an e-commerce spin-off, named ContentGuard Inc., that will design software to protect digital documents, books, music, entertainment and other media.

The two companies said ContentGuard will be based in McLean, Virginia, with about 40 employees. Mike Miron, formerly the president of the Xerox Internet business group, will leave Xerox to become co-chairman and CEO of the spin-off.

Dick Brass, Microsoft's vice president for technology development, will also serve as co-chairman while continuing to hold his job at Microsoft.

The announcement is scheduled to be made this afternoon at Xerox's Palo Alto Research Center (PARC) in Palo Alto, California. A Xerox spokesperson said technology developed at the PARC facility was the foundation for ContentGuard's first product release.

ContentGuard will collaborate with Microsoft and Xerox on future development of Microsoft's proprietary digital rights management (DRM) technology. Microsoft has been promoting its Windows Media files and DRM technology as a secure alternative to MP3 files. Future ContentGuard products will bundle the Microsoft Reader, a new product for displaying e-Books.

ContentGuard will also work with the two companies to establish and promote its XRML (Extensible Rights Markup Language) technology as a standard for securing digital information and entertainment. XRML would be licensed to users for free, Xerox and Microsoft said.

To date, however, no application for XRML has been made to the World Wide Web Consortium, which certifies new versions of XML. The Xerox spokesperson confirmed that but said an application should be submitted "in the next couple of weeks." She added that the XRML plan has been endorsed by companies such as Intel Corp. and IBM.

However, certification can be a lengthy process, and analysts cautioned that implementing proposed standards before they're finalized risks fragmenting future user bases.

Joshua Walker, an analyst at Forrester Research Inc. in Cambridge, Massachusetts, said the ContentGuard announcement should get a lot of attention given the buzz about MP3 files and Napster. But he said he is dubious about the proposed standard's efficacy. "As a standard that gets adopted by other vendors and as something that's effective in working to curb the illegal printing of materials, the jury is still out on that," Walker said.

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