Samsung Acquires Startup Boxee to Add Connected TV Set-Top Boxes

Samsung Electronics Co. (005930), the world’s largest television maker, acquired Boxee Inc., a New York-based startup whose set-top box can record broadcasts and stream online video.

Terms weren’t disclosed. Boxee makes video-streaming applications for phones and tablets based on Google Inc. (GOOG)’s Android and Apple Inc. (AAPL)’s iOS operating systems, in addition to the software that powers its connected TV box. Samsung said closely held Boxee can help it develop Internet-enabled devices.

“Samsung has acquired key talent and assets from Boxee,” a spokeswoman for the Suwon, South Korea-based company said in an e-mailed statement. “This will help us continue to improve the overall user experience across our connected devices.”

Consumers’ living rooms are turning into a major battleground for technology companies this year. Microsoft Corp. (MSFT) and Sony Corp. (6758) are set to release new video-game consoles that emphasize features for streaming and downloading entertainment content. Apple is nearing a deal with Time Warner Cable Inc. to add channels for its TV products, people with knowledge of the negotiations said this week.

Avner Ronen, Boxee’s chief executive officer, and the Samsung spokeswoman declined to comment on terms of the deal. Boxee had raised $26.5 million from venture capitalists, including New York-based Spark Capital and Union Square Ventures as well as the investment arm of Japan’s SoftBank Corp. (9984)

TV Apps

Samsung aims to maintain its lead in TV sales as it develops new apps and ways to control its sets, including an embedded camera -- similar to Microsoft’s Kinect -- for recognizing hand gestures. Critics have praised Boxee, which signed a deal with Wal-Mart Stores Inc. (WMT) last year to sell its Boxee TV product, for the design of its software. Roku Inc., another closely held TV-box maker, has managed to gain some success with its streaming players that are sold for as little as $50.

Boxee has found itself in several battles with media giants since the company was started in 2007. The startup tried to circumvent changes to Hulu LLC’s system that blocked Boxee’s service, which became a topic of questioning for then-NBC Universal Chief Jeff Zucker during Congressional hearings related to its merger with Comcast Corp. (CMCSA) Last year, Boxee butted heads with Comcast and other cable companies over proposed changes to encryption rules by the U.S. Federal Communications Commission.

To contact the reporter on this story: Mark Milian in San Francisco at mmilian@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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