Three sources told Bloomberg that Liberty Global was in early stage negotiations to buy the online pay-TV service of Intel Corp which is still currently being developed. According to one of the sources, Liberty Global's John Malone would utilize the system of Intel Corp located outside the US. Liberty Global is a European cable operator based in London. It also has operations in Germany, Belgium and other areas in the region. The company is the owner of Virgin Media in the UK. The sources did not comment on the price tag for the deal but said the negotiations could still crumble.

According to a Bloomberg report, Intel had been developing its advanced set-top box early last year. The interest expressed by Liberty Global has created competition for Intel's product. Last month, people with knowledge of the transaction also told Bloomberg that Verizon Communications was also in discussions to purchase the project. Intel had pledged to make the service available this year but looked for partners instead of making its own programming investments, the report added.

Compared to US providers, European pay-TV service operators were more aggressive in offering Web-based features to their clients. UK-based BT Group started giving free access to broadband customers to premium sports programs. Meanwhile, Virgin Media said it would be offering the subscription-streaming service of Netflix Inc together with its cable TV package.

The world's biggest chipmaker tapped Eirk Huggers to handle Intel's digital media operations two years ago. A former executive of British Broadcasting Corp, Huggers said in February that Intel would roll out the service called OnCue this year to allow consumers to have access to content across mobile devices, TV sets and smartphones.

In an October 15 interview with Bloomberg, Intel Chief Financial Officer Stacy Smith said about the pay- TV project, "Key for us is going to be to have the content lined up so that it's a great experience, and then to have the right partners in place so we can scale it fast. At the end of the day it's all going to be about getting those subscribers and those viewers."