January 20, 2000
Web posted at: 5:05 p.m. EST (2205 GMT)

(CNN) -- Two small pioneers in the electronic book industry have been bought by Gemstar International Group, a Pasadena, California, business that invented the VCRPlus technology and which last year bought TV Guide Inc.

Gemstar is buying NuvoMedia Inc., maker of the Rocket eBook, and SoftBook Press Inc., maker of the SoftBook Reader. Both acquisitions are stock-for-stock transactions and closed last week.

"Gemstar’s goal has always been to make technology consumer-friendly," said Henry C. Yuen, chairman and chief executive officer of Gemstar. "Next to watching television, reading is America’s most favorite past-time. We believe that Gemstar, NuvoMedia and SoftBook collectively will be in a good position to provide the best technology, broadest distribution and the most consumer-friendly devices to consumers for enhancing their reading experience and hence, the enjoyment of their leisure time."

Seamus McAteer, an Internet analyst and the director of web technologies strategies with Jupiter Communication, said the move will help push the fledgling electronic book industry towards adoption of a standard for their product.

"The big issue is content, and to get publishers to develop for a platform," McAteer said Thursday.

NuvoMedia and SoftBook developed different architecture to do the same thing, he said. "SoftBook wanted to be a storefront, while NeuvoMedia wanted to be a provider. Both of them were forced to get into the device business."

With both firms coming under the same umbrella, McAteer suggested that one of the e-book technologies -- or a technology not yet seen -- will come to be dominant, though he pointed out that "Microsoft is still looking to own the standard."

"It's a bold gesture" for Gemstar, McAteer said. "They'll definitely get a seat at the table in dealing with publishers, Microsoft, device vendors."

The future of reading?

"Gemstar, NuvoMedia and SoftBook all believe that electronic books are the future of reading and content distribution, whether it is a best seller novel, magazine, newspaper or a business document," said James Sachs, CEO and co-founder of SoftBook Press. "The combination of SoftBook Press with Gemstar and NuvoMedia will catapult the eBook category from a novelty to a necessity and help realize the vision that we outlined at the inception of the first eBook to make it an ubiquitous reading device."

But McAteer said it "make absolutely no synergistic sense for Gemstar" to buy these two companies. "Maybe there's some intellictual property they've spotted."