NEW YORK — Rupert Murdoch’s News Corp. has been conspicuous in its lack of interest in the Internet except through TV Guide Inc., which it now jointly controls with John Malone’s Liberty Media. Yet News has quietly emerged with an interest in a startup company planning to offer Internet access via satellite.
And Wall Street’s interest in the new company, KaStar Satellite Communications, is likely to heighten in coming days when venture capitalist Kleiner Perkins Caufield & Byer announces a significant investment in the company. Kleiner Perkins co-founded cable Internet access provider @Home Corp. and has taken stakes in other major high-tech companies.
Kleiner Perkins plans to buy about 18% of KaStar, joining TV Guide, which already has an 18% stake, execs said.
KaStar is expected to announce details of the investment in the next few days, execs said. A Kleiner Perkins partner, Russell Sieglman, confirmed the investment Thursday but declined to give details.
Sieglman said KaStar’s plan was a “great opportunity,” noting that the satellite venture could complement cable Internet offerings. KaStar, which plans to launch satellites offering high-speed Internet access by 2002, is expected to target residential homes not initially wired for cable.
Analysts believe its service may be widely embraced because cablers are unlikely to upgrade all cable systems for high-speed Internet access.
TV Guide, which owns the TV Guide cable channel and magazine, could use its interest in KaStar to offer Internet access to its customers and put its electronic program guide on the ‘Net, execs said.
KaStar joins satcaster DirecTV among a number of companies planning to offer Internet access via satellite. But Kleiner Perkins partner Sieglman said KaStar’s business plan was “the most focused on residential deployment.”
KaStar is expected to go public eventually, and one possible route for such a public offering is a merger with shell company TCI Satellite Entertainment, whose chairman is John Malone.
Malone claimed last week that he had no idea what TCI Satellite would end up doing and laughed off questions about whether it might pursue a transaction with Liberty Media.