Cobalt Networks to buy Bellevue's Chili!Soft

MOUNTAIN VIEW, Calif. - Cobalt Networks agreed to buy Bellevue-based Chili!Soft for about $70 million in stock to add software products to its computer servers.

Charles Crystle, chairman and former chief executive of ChiliSoft, said he plans to donate about $11 million of the $15 million he expects from the sale toward boosting high-tech education opportunities in Central America.

Cobalt will pay 1.15 million shares of its common stock and assume all stock options of closely held Chili!Soft. Shares of Cobalt rose 18.8 cents to $60.938 in Nasdaq trading yesterday. They've almost tripled since the company first sold shares to the public in November at $22 each.

Chili!Soft's software allows developers to use Microsoft products to create Web pages with dynamic information such as real-time stock quotes. Cobalt said it will add the software to its servers as a bridge between the Microsoft offerings and the Linux operating system that Cobalt uses.

Mountain View-based Cobalt makes servers that businesses and organizations use to set up Internet operations. The company has a five-year agreement with Gateway, the No. 2 direct seller of personal computers.

Information from CNET electronic news service is included in this report.