Microsoft holds 30 percent of the venture, which is called TAK; Thomson controls the remainder. The companies announced at the International Funkausstellung (IFA) 1999 conference here that the venture plans to roll a CE-based platform and services, initially in France and Germany, in the second quarter.

In collaboration with broadcasters, TAK intends to offer such services as enhanced TV programming, e-mail and Internet access, said Alain Maillard, executive vice president for technology and operations at TAK. Enhanced programming service will tap the vertical blanking interval (VBI).

"TV is becoming a true interactive device," said Thierry Breton, chairman and chief executive officer of Thomson multimedia. "We believe we are at the beginning of a big, big revolution in our industry."

TAK will provide broadcasters with special broadcast servers that synchronize TAK-developed interactive services with TV broadcast programming. Equipped with its own online servers for delivering HTML-based applications, the startup will also operate as a dedicated services company. "We see TAK as an operator of a full interactive platform," said Maillard.

An embedded TAK module inside the TV set will enable services. The module includes Windows CE, a browser designed in cooperation with Microsoft's WebTV team, a 200-MHz processor, flash memory, RAM and a modem, Maillard said.

Thomson-Europe vice president Pierre Mureau said technology for "TAK services will be included on all 16-by-9 [aspect ratio] televisions made for the European market and on all 4-by-3 sets of 28 or 29 inches."

The move reflects Microsoft's long-standing ambition to build a more formidable presence in the consumer electronics market, as well as the desire by Thomson-7 percent of which is now owned by Microsoft-to regain market share in its flagship TV market. Thomson is the only consumer electronics manufacturer, excluding makers of WebTV-based set-tops, to target Windows CE-based TV sets.

TAK's rollout of interactive service in Europe could also further the agenda of the Advanced Television Enhancement Forum (ATVEF), a cross-industry group led by Intel Corp. and Microsoft. TAK's platform will comply fully with the ATVEF specification for HTML-based enhanced TV programming, according to Maillard.

A number of consumer executives who were asked about TAK's initial plan to offer HTML- and VBI-based enhanced TV programming on existing analog TVs called the venture's selection of Windows CE overkill for the application. But Maillard claimed that the well-defined application programming interfaces of the Microsoft OS allows TAK "to offer [a path for] future evolution, and all the software can be upgraded." The use of CE gives broadcasters a platform on which they can expand services in the future, he added.

TAK-enabled applications designed for broadcasters include interactive ads, enhanced programming, interactive game shows and e-commerce.

A platform and services similar to the European offering will debut as eTV in the U.S. market in the second quarter. Services, however, will be offered by a collection of U.S. broadcasters rather than by TAK itself, according to Thomson.

TAK declined to identify broadcasters that may support its platform, though Maillard did say that one broadcaster in one country-presumably France or Germany-has agreed to start working with TAK "for experimentation by the end of this year." He defined that effort not as a marketing trial but as a test of the technology in fully operational mode. The effort is expected to take at least three to six months, he added.

It is unclear how TAK intends to license its technology and services to broadcasters, TV set manufacturers and other Internet-service providers. Although Maillard asserted that the platform is open because it's based on the ATVEF spec, he said the venture would "need an agreement" with those who plan to build TAK-enabled services and client devices.

TAK's launch comes at a time when many European broadcasters and set-top vendors are trying to build momentum around the Java-based, OS-independent Multimedia Home Platform (MHP), an interactive TV version of the Digital Video Broadcast (DVB) standard. Asked whether TAK will compete with MHP, Maillard said TAK will give consumers an option. In launching TAK early next year, TAK hopes to capture analog TV users by providing subscription-free access to many of its services.