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Qualcomm Invests $144 Million in NetZero

Wireless communications giant Qualcomm Inc. Monday took a 10 percent stake in free Net access provider NetZero Inc. worth $144 million.

QUALCOMM bought approximately 11.5 million shares at about $12.50 per share.

As part of the deal, NetZero (NZRO) will distribute Qualcomm's (QCOM) Eudora e-mail management software as the preferred e-mail program for NetZero's users.

Qualcomm released Eudora 4.3 last February, making the e-mail program available to users free of charge when they use the product in sponsored mode, which displays advertising in a small window in the user interface. In the co-branding agreement, Eudora will be included on NetZero CDs and will be part of the standard install program for NetZero's client access software.

NetZero Chairman and Chief Executive Officer Mark R. Goldston said the investment goes along with his company's plan to provide free Net access across a variety of platforms, including narrowband dial-up, high-speed wireless, broadband and cellular.

Goldston added that NetZero's goal is to provide its subscribers access to the Internet, allowing them to navigate and receive e-mail across a variety of devices, including laptop and desktop computers, Internet appliances, mobile phones and Personal Digital Assistants.

Both firms have found reasons to defend their territories in recent months. In February, NetZero accused rival @Home Corp. (ATHM) of aping its "Defenders of the Free World" trademark. In a suit, NetZero said @Home wrongly began advertising "Free World Powered by Excite."

Qualcomm also embarked on a lawsuit. In March, the firm ended a three-year legal battle with Motorola Inc. (MOT) that featured seven separate federal court cases alleging claims and counterclaims for patent infringement, breach of the parties' license agreements, misappropriation of trade secrets and unfair competition.



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