By: croattty
Janco Partners, Inc. Morning Comments May 11, 2000 -- Over the last week at Cable 2000 in New Orleans, ACTV has made several positive announcements, yet, due to continued market fluctuations, ACTV shares have fallen from $18 1/8 on Friday, May 5th to close at $13 yesterday. First, on Monday, ACTV announced that it was working with Liberate Technologies (LBRT - NASDAQ) to enable ACTV's individualized television applications to run on top of Liberate's software platform. Although this agreement will not provide instant distribution for ACTV's individualized television applications, it will allow MSOs to bundle ACTV's interactive applications with additional third party interactive applications and will also provide invaluable additional marketing opportunities for ACTV. We expect that a similar agreement with OpenTV (OPTV - NASDAQ) may follow in the not so distant future. On Tuesday, ACTV's Digital ADCO subsidiary (provider of SpotOn interactive advertising) announced a strategic alliance with Nielsen Media Research.
Under the agreement, Nielsen will work with ACTV to develop software-metering systems that will be utilized to help accurately measure consumer demographic and response-based data collected from the SpotOn advertising audience. This data can then be combined with Nielsen's audience measurement data to provide advertisers with a complete package of audience data and statistics for both programming and advertising, allowing them to determine the most appropriate times to air advertising and to measure the effectiveness of their current advertising campaigns. Also on Tuesday, ACTV announced an agreement with GSD&M, an Austin-based advertising agency with 1999 billings of $825 million. GSD&M's clients include Agillion, Hoover's Online, Southwest Airlines, DreamWorks SKG, Chili's Grill and Bar, Wal-Mart, MasterCard, Wenner Media (Rolling Stone, US, Men's Journal), SBC Communications, Pennzoil, the U.S. Olympic Committee and Goodwill Industries, among others. Under the agreement, GDS&M and ACTV will work together to create and deliver highly -targeted, addressable advertising for GDS&M's client base. A charter program for SpotOn is expected to begin later this year.
Although the market has not rewarded ACTV for these recent positive announcements (and that between Liberty Livewire and ACTV's HyperTV subsidiary announced a few weeks ago), we believe they represent solid partnerships that will allow ACTV to move forward much more aggressively with the rollout of both individualized television applications and HyperTV applications. We continue to believe that due to ACTV's differentiated interactive technologies that can be easily utilized by the mass market, and its strong patents and solid partnerships, ACTV is well positioned to benefit from digital media proliferation and the growth of the Internet's role in the media marketplace. In our opinion, demand for interactive technologies from both the MSO, in an effort to drive digital penetration, and the consumer, in an effort to gain some control over the content they receive, will begin to increase in the not too distant future. Through the timely distribution of its patented individualized television and HyperTV technologies, we believe ACTV can take advantage of this demand and become a significant player in the emerging world of interactive television. Our meeting with ACTV management at the cable show this week reaffirmed our belief that ACTV represents a very attractive risk/reward scenario and we continue to rate shares of ACTV as a BUY with a 12-month price target of $47.14."
(Voluntary Disclosure: Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy)
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