Paul Allen apparently is expecting more from Digeo, his Kirkland set-top-box company that's been unable to fulfill some of the big promises...

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Paul Allen apparently is expecting more from Digeo, his Kirkland set-top-box company that’s been unable to fulfill some of the big promises it made to the consumer-electronics crowd.

Digeo announced Tuesday that it is restructuring the company, replacing its chief executive, dropping plans to retail a digital-video recorder and laying off 80 of its 160 employees.

The company was one of the largest local companies owned by Allen. Digeo began in 1999 when Allen was still investing heavily in his vision of a wired world.

Before that vision become mainstream, Allen faced the dot-com collapse and the souring of his biggest investment, in St. Louis-based Charter Communications. Allen retrenched and stepped up investments in Seattle real estate.

But he continued to pour money into Digeo, most notably with the 2002 acquisition of Moxi, a promising California startup developing digital-media centers.

Digeo will now focus on licensing its technology to other companies and building set-top boxes for cable companies. About 400,000 units of Digeo’s current cable box are in service and a new version, supporting the new CableCard standard, is due later this year.

Chief Executive Mike Fidler, a former Sony executive, said he has decided to resign. Greg Gudorf, president and chief operating officer, will take his spot.

“We had a number of different projects in play, and I think that stretched our resources to a level that didn’t allow us to keep our focus on a narrower set of product strategies,” Fidler said. Digeo was developing two versions of its consumer-focused digital video recorder and “they were more difficult than we had anticipated,” Fidler said.

About four months ago the company began assessing its options. Employees were notified Tuesday of the change. Fidler said the reductions were mostly in administrative and support positions; engineering work will continue.

Clouds have been forming over Digeo for some time.

The digital-video recorders for consumers were supposed to go on sale in November but were delayed, with no word on availability.

At last week’s Consumer Electronics Show, Digeo made a deal with Monster Cable, an electronics-accessory company that’s expanding into home-theater components. Monster will use Digeo’s software in a home media server product expected this fall.

Fidler said the Monster partnership made sense: Digeo has the technology and Monster has a big retail presence.

Brier Dudley: 206-515-5687 or