Microsoft, Xerox Forge New Company To Secure Online Property Rights



Microsoft's stake in a Xerox spinoff created to manage digital rights for online content could lead to new tools for enterprise customers trading sensitive documents, the software vendor says.

Xerox said today it will create a new company, ContentGuard Inc., to develop and sell technology for securing books, music, and other content distributed over the Internet. Microsoft will take an undisclosed minority stake in the venture. The new company's first deliverable when it begins operations in about two months will be the ContentGuard software developed at Xerox's Palo Alto Research Center. The technology, based on PARC's Extensible Rights Markup Language (XRML), lets companies track how music, text, and other files are downloaded, paid for, and redistributed by pairing a document's rights with its content as the file travels from servers to PCs on the Net.

Microsoft plans to support ContentGuard as the standard for digital rights management and will distribute the software with its Microsoft Reader product for electronic books, due this summer. Eventually, ContentGuard and XRML support will find their way into other Microsoft products, including Windows Media Player, development tools, and the upcoming BizTalk Server for the secure exchange of files through extranets. Steve Ballmer, Microsoft's president and CEO, says that "there needs to be a set of services that live out on the Internet" that provide authentication and billing for these transactions.

Microsoft's presence could unify a digital-rights-management market that's fragmented among small vendors, says Alan Weintraub, a research director at Gartner Group.

CEO Rick Thoman says Xerox plans to take ContentGuard public late this year or early next year.

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