America Online Inc is in discussions to acquire internet-over- television access and content provider Net Channel Inc, according to a Wall Street Journal report. The combined company, with AOL’s content and massive subscriber base and NetChannel’s television- based content distribution technology, would create an instant and formidable competitor for Microsoft Corp’s WebTV unit. The acquisition would expand AOL’s reach beyond the realm of PC users – a space where it already has a dominant position – and into a potentially huge market. AOL’s recently soaring share price also gives it great leverage for a stock-based acquisition. Sources quoted by the Journal indicate the two have been talking merger for some time and that NetChannel engineers are already coding an AOL project. NetChannel wouldn’t confirm the report. It says it’s been in discussions with a number of major media companies and has talked with AOL about a range of topics, but stopped short of discussing any possible partnerships or mergers. The company does say it plans an announcement later this spring but won’t give any details on the nature of it. AOL wouldn’t comment on the matter at all.
