MICROSOFT, XEROX TEAM FOR ONLINE DELIVERY SYSTEM

Microsoft Corp. will take a stake in a Xerox Corp. spinoff that is developing technology to securely deliver content online.

ContentGuard Inc.'s technology was developed by Xerox, and the copier company will retain a majority stake in the new firm. Other investors are expected to be announced later.

ContentGuard's software is a digital-rights management suite, which includes an electronic publishing clearing service that will be offered jointly with Microsoft partner Reciprocal Inc.

The company's software can protect and manage digital content, including books, sheet music and documents such as patent applications and business reports. The company is working on technology to protect audio and video material.

ContentGuard also allows publishers to release time-restricted content, set up one-time use rules and issue book previews by chapter. Microsoft will use ContentGuard technology in future versions of its own software, including Microsoft Reader—software to display electronic books. Microsoft also plans to use the technology in future versions of Windows Media Player and Windows Media Rights Manager.