Forbidden steals lead in online video market race

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The Independent Online

The race to dominate the online video market fast-forwarded yesterday when Forbidden Technologies pledged to launch high-quality video over the internet by the end of the year.

The race to dominate the online video market fast-forwarded yesterday when Forbidden Technologies pledged to launch high-quality video over the internet by the end of the year.

Forbidden, which is headed by Stephen Streater, who also founded Eidos, the birthplace of techno-babe Lara Croft, saw its shares soar 55p to 252.5p on the news. The rise put the group's value at £187m.

The company, which floated at 20p a share on AIM just four months ago, said it aimed to produce a product that would give people with standard computers access to real-time video by December.

Mr Streater, who abandoned his PhD in artificial intelligence to set up Eidos in 1990, owns 85 per cent of Forbidden. He reaped a £5m fortune from Eidos.

He revealed his latest target yesterday when he said that initial trials of the company's new technology had succeeded.

"We still have to work on the picture quality but we are now producing video over the internet and it is high resolution," he said. The company will now test the technology on its 1,800 shareholders' computers and will put it on its website within the next three months.

The technology compresses computer files that stores video by more than 2,000 times, allowing them to be delivered down a phone line to anyone with internet access, removing the need for special technology to download the file.

Analysts said the jump in the share price of Forbidden - which has only five staff, including Mr Streater, and is being run on a shoestring budget of £200,000 a year - reflects confidence in the market that it is about to streak ahead of rivals.

Judith Makenzie, of Bell Lawrie White, said: "Forbidden has developed its own technology whereas others, like GEO Interactive, use existing MPEG technology, which has constraints and is difficult to modify."

The Israel-based GEO Interactive, which is also developing video over the Net, has boasted that it is up to a year ahead of its rivals. Yesterday it announced a deal to provide technology behind a portal for video access for mobile phone users.

However, experts fear that GEO's technology - which creates 10 frames a second - offers only a jerky picture. Its share price dropped 10p to 1,162.5p yesterday. Forbidden has developed the capability to create 25 frames a second, which is the same as a normal VHS video. It is understood to be in preliminary talks with some providers.

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