America Online yesterday signed a three-year agreement to develop a set-top box featuring personal television services from TiVo.
AOL also agreed to invest $200 million in TiVo and received an option to purchase additional shares. AOL made an undisclosed investment in TiVo last year.
Subscribers to the companies' interactive television service, AOLTV, will have the ability to program their own TV schedules.
TiVo allows customers to record programming digitally as it is broadcast. Since the recording is made on a hard disk instead of tape, it allows customers to pause live-action events and control their TV viewing.