ActiveVideo Networks has reached an agreement to acquire Avinity Systems BV, bringing together the two leading providers of cloud-based interactive TV platforms and applications, and expanding the reach and availability of the Web-based user experiences that are redefining interactive television (iTV 2.0).

The transaction, which was announced at the ANGA Cable Trade Fair here, strengthens ActiveVideo Networks' technology and application offerings and creates a global leader in the fast-growing market for delivery of cloud-based services to televisions around the world. The acquisition combines two companies that will have deployed interactive services to more than five million homes worldwide by the end of 2009. Post-acquisition, ActiveVideo Networks will have publicly-disclosed deployments with a wide variety of service providers, including Oceanic Time Warner Cable and Grande Communications in the United States; Tele2 and Reggefiber in Europe; and PCCW in Hong Kong. In addition, the acquisition will significantly expand ActiveVideo Networks' list of content relationships and middleware and infrastructure integrations.

ActiveVideo Networks and Avinity have consistently advocated that the future of content delivery -- including VoD navigation, Web-based video, interactive advertising and other services -- will be driven by server-based technologies. Both platforms use an ultra-thin client in the set-top box to pass user keystrokes to servers in the network. The servers create compressed video streams in response to user interaction and unicast them over IP or cable back to the home to be decoded and displayed by the set-top box. When combined, the ActiveVideo and Avinity RenderCast platforms will be capable of delivering Web-like personalization and interactivity to a worldwide television audience through both legacy and next generation digital set-top boxes and broadband-connected devices.

In conjunction with the acquisition, ActiveVideo's European operations will be relocated to Avinity's headquarters in Hilversum, The Netherlands, near Amsterdam. Ronald Brockmann, director of Avinity, will serve as Managing Director for ActiveVideo Europe. Adding a strong European team to the ActiveVideo teams on the East and West Coasts of the United States builds on the company's philosophy that local knowledge and experience are required to create television applications that appeal to audiences that increasingly demand localization and personalization of their content.