Qualcomm Picks Up $144 Million Piece Of NetZero - InformationWeek

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Qualcomm Picks Up $144 Million Piece Of NetZero

Digital wireless technology pioneer Qualcomm Inc. on Monday invested $144 million in free dial-up Internet service provider NetZero Inc. in a move that could benefit the ISP more than the investor. Qualcomm said in a statement the move will help drive adoption of the wireless Internet, while NetZero says the funding will help it provide a wide range of Internet-access options from a variety of access devices.

"From the NetZero perspective, it's great to get this cash infusion," says Bruce Kasrel, an analyst at Forrester Research. "But this doesn't seem to make sense for Qualcomm, which is a technology and carrier-infrastructure company." As part of the deal, NetZero will resell Qualcomm's Eudora E-mail client to its roughly 3 million ISP customers.

Qualcomm is best known for pioneering Code Division Multiple Access digital-wireless technology, which is incorporated in a number of products the vendor sells to wireless service providers and for use in vertical markets. The vendor says it has licensed its wireless patents to 75 telecommunications equipment makers worldwide.

NetZero, in contrast, has built a sizable customer base of its free dial-up Internet access in 2,500 cities across the country. The company makes money by selling ads as part of its service.

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