USE TV TO SURF WEB WITH LOW-COST DEVICE.

Byline: George Avalos Knight-Ridder Tribune News Wire

A Silicon Valley start-up has fashioned a low-cost device that will let couch potatoes use their TV sets to surf the Internet's World Wide Web.

WebTV Networks Inc. is joining forces with Sony and Philips to produce and sell machines that contain WebTV's technology. The machines, which are the size of a cable box, will marry a TV with a telephone line to connect to the Internet. The package will also include a device that's like a TV remote to operate the system.

Analysts said a smart box and a remote package are expected to sell for about $200 to $300. WebTV's partners intend to begin selling the units this fall.

You can lounge on your couch and surf the Web,'' said Ira Machefsky, vice president with Giga Information Group, a Santa Clara-based market researcher.

The WebTV system, some analysts said, could help solve a problem that has begun to vex high-tech leaders. Although personal computer sales have soared in recent years, a PC resides in only about one-third of the nation's homes. In stark contrast, telephones and TV sets are almost ubiquitous.

``This could be the information appliance for the other two-thirds of U.S. homes,'' Machefsky said.

If that happens, the device, and others like it that may emerge later, could revolutionize the way people access the Net.

WebTV also appears to have jumped ahead of companies such as Oracle that are promising a $500 Internet box that would be a limited-memory computer to cruise through the Internet.

Still, analysts warned that WebTV has plenty of challenges to surmount before it can capture the hearts - and pocket books - of mass consumers who for the most part have shied away from the Internet.

Price is one major hurdle, Machefsky said. Consumers not only will be asked to pay up to $300 for the equipment, they also will have to pay $20 a month to subscribe to the WebTV service that provides them with Internet access.

But the equipment's price is expected to come down fairly quickly. The device eventually could be embedded in TV sets, cable boxes and satellite receivers. The cost could drop to $100 by next year.

``I would think that people will pay a hundred bucks for this thing,'' said David Coursey, an Oakland-based technology analyst. ``They have challenges. But with the right luck, the right partners, this may turn out OK.''

WebTV also appears to have solved the problem of displaying computer data from the Internet on a TV set.

``Most of the content of the Web is not designed for TV,'' said Richard Shaffer of Technologic Partners. ``With their servers and technology, WebTV has reformatted Web data so it looks pretty good on TV.''

WebTV's primary investors include Microsoft Corp. co-founder Paul Allen, and some venture capitalists. Perlman and the other two founders of WebTV are former top engineers at Apple Computer Inc.