Geo confirms Ericsson deal for video technology

Ericsson will use Geo Interactive's Emblaze video gateway to enable online streaming of voice, music and video with GPRS and UMTS infrastructure.

Eli Reifman, CEO of Geo Interactive, refused to comment on reports estimating that it will include at least $5m worth of servers. He did, however, say there will be a revenue sharing component in the deal.

"We believe that this deal will have material effects on our financial results in 2001 and certainly in 2002," he said.

The Ericsson deal will use standard technology, but Reifman confirmed that a separate division will be set up within Geo to handle the deal.

Neither party is prevented from forming partnerships with other companies by the terms of the agreement.

Reifman hinted that the company may have other, undisclosed agreements. "We are not announcing every deal that we do," he said. "There would be an announcement every day if we did."

The deal puts Geo ahead of its main rival, PacketVideo, in the race to dominate the market for wireless video, which is expected to be extremely valuable when next generation mobile networks become available.

Trading in Geo shares on the LSE was suspended in mid-morning, following news of the deal being leaked to the Financial Times. Reifman confirmed that he was very upset about the premature disclosure of the deal. "Events like this make me angry," he said.

Geo shares were down below Tuesday's close price soon after the announcement was made public. "You must admit that the markets are crazy," said Reifman. "I am more and more happy [for our share price] to stay stable, and give investors a reason to get back in when the markets are more normal. I wasn't expecting this announcement to double our share price," he said.