Many of us have discussed that the really large potential of Gemstar lies in its ability to eventually generate e-commerce and advertising revenue. In that regard, Gemstar is forging a new industry just as AOL began to do roughly ten (is that right?) years ago. For a better appreciation of that potential, consider what the Fool's Jeff Fisher (one of my favorite investing writers) wrote about AOL's success:
"Advertising, commerce, and related revenue jumped 95% to $609 million [in the quarter just reported] and totaled nearly $2 billion for the year. Now this revenue stream's back-log is $3 billion, up 100% from last year.
This strength in advertising sales is important because many investors feared a slowdown due to cash crunches at dot.com companies, which used to be big spenders. However, similar to Yahoo!, AOL's high traffic is making wealthy, long-established companies advertise or sell products (for a fee) on AOL. Coca-Cola, Target Stores, Office Depot, Pizza Hut and many other leaders are dishing out money to AOL."
Those are some pretty big numbers that will take a very long time for Gemstar to achieve, if ever. But hey, I'm a long-term investor. Not a problem.
--Mike Buckley |
