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Technology Stocks : Gemstar Intl (GMST)
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To: 100cfm who wrote (6321)3/2/2004 11:15:35 AM
From: tinkershaw  Read Replies (1) of 6516
 
I cannot be certain here, but pursuant to Merrill Lynch, they believe the Comcast $250 million was an upfront payment for 10-15 years of licensing fees. This deal looks rather similar, and if the Comcast analysis is correct then it is highly likely this is a one-time, up-front license fee payment as well.

Which again puts more and more and more emphasis on the Guide advertising model as GMST's future as the Guide licensing is being paid up-front by the biggest players. Which is great for immediate cash flow, looks good on accrual accounting, but is already set in stone, no upside surprises possible.

Think advertising. Think CE licensing fees on HDTV and DVDRs and PVRs.

Tinker
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