December 17, 1996 11:00 AM ET
Fujitsu inks deal with WebTV in Japan
By Margaret Kane

  WebTV Networks Inc. has signed a deal with Fujitsu Ltd. to bring set-top boxes and the Internet television model to Japan.

Under the terms of the deal, Fujitsu will build a network operations center for WebTV and provide Internet access and some online content for the service.

WebTV Networks, based in Palo Alto, Calif., will own 65 percent of the joint venture, and Fujitsu will own the rest. The two companies said they plan to form alliances with other companies to produce the service.

The WebTV set-top boxes were introduced earlier this year in the United States. Using the box, consumers can access the Internet through their televisions with a remote control.

The agreement is a sign of the high level of interest the IT world has shown in such devices, an interest that has so far not been echoed by consumers.

A study released yesterday by Dataquest Inc., of San Jose, Calif., showed that 93 percent of the households surveyed had no plans to purchase an Internet-enabled television or a set-top box.

"The Internet television in its current form does not have significant market potential," said Van Baker, director of Dataquest's Digital Consumer program. "The interface and usability of the devices leaves a lot of room for improvement."

But Fujitsu and WebTV are pinning their hopes on Japanese consumers being more accepting of the devices.

"Fujitsu's leadership in consumer online services and Internet-related industries in Japan will help provide WebTV customers with the best and most cost-effective way to connect their televisions to the World Wide Web," said Steve Perlman, CEO of WebTV.

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