WorldGate Update

11:20 AM -- The long and winding road of interactive television-pioneer-turned-videophone-company WorldGate Communications Inc. (Nasdaq: WGAT) has taken yet another turn… and this might be the last one for quite awhile.

WorldGate, which was on the verge of shutting down for good back in February before securing critical payments from its largest customer, announced this week that telecom services firm ACN Inc. has inked a deal to acquire a controlling interest in the Trevose, Pa.-based maker of the Ojo videophone. (See WorldGate Locks Up Funding.)

WGI Investor, a private investment fund with connections to ACN, nabbed 63 percent of the common voting equity in WorldGate. ACN has also agreed to purchase more than $50 million worth of Ojo gear over a two-year period. (See ACN Takes Control of WorldGate.)

WorldGate, founded in 1995, cut its teeth on interactive television services before entering the videophone biz in 2003. Before getting out of iTV for good, it was linked to TVGateway LLC, an interactive program guide (IPG) consortium formed in 2000 with Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Charter Communications Inc. , and what was still Adelphia Communications. WorldGate sold its iTV assets to TVGateway in October 2003 for $2.5 million and applied the proceeds toward the Ojo project.

WorldGate's videophone play got some help in May 2004, when Motorola Inc. (NYSE: MOT) signed on as the exclusive distribution and marketing partner for the Ojo. But the deal didn’t last. Motorola and WorldGate scuttled their partnership in April 2006.

— Jeff Baumgartner, Site Editor, Cable Digital News

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