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Technology Stocks : Corel Corp.

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To: dan pearson who wrote (6473)	3/31/1999 4:57:00 AM
From: BrightFuture	Read Replies (1) of 9798

interesting article: Berst Alert WEDNESDAY, MARCH 31, 1999 Can Anything Save Corel WordPerfect? Jesse Berst, Editorial Director ZDNet AnchorDesk Loyalty rates high with me. Probably why I love my dogs. I can be away on a business trip for days on end and they're not pouty because I neglected them. Corel knows a thing or two about loyalty too. Legions of loyal customers have kept its WordPerfect software alive against incredible odds. Yesterday the struggling Canadian company announced a deal with PC Chips Group to ship WordPerfect 8 with every computer containing a PC Chips motherboard. The company shipped 15 million motherboards in '98 and expects to hit 18 million this year. Corel hopes this deal will help it regain momentum. But it won't be easy. HOW BAD IS IT? The Canadian software company faces huge hurdles. Its problems include: Incurring the wrath of Genghis Gates. Corel was a Microsoft friend when it created the popular CorelDraw. Then it bought WordPerfect and became 'the enemy.' Erosion of market share. Corel bought WordPerfect just as Microsoft Office started to dominate the market. WP sales dried up. Today it has a meager cadre of loyalists in specialty markets -- about 22 million users in the U.S., according to InfoBeads. Lack of focus. CEO Michael Cowpland couldn't resist taking the company in new directions. He dabbled in multimedia CD-ROMs. Bought Ventura Publisher to compete with PageMaker. Tried making PCs. Tried making PCs with video systems. Tried making terminals. Even Java tools. None of which had anything to do with his core business. And most of which had to be sold at a loss. Increasing competition. While Corel was dabbling, others were nibbling at its market share in the graphics category. Today Visio has the lock on the market for enterprise drawing tools -- an area you'd expect Corel to compete with more vigor and success. Internal dissension. Has made for some unhappy campers. CAN COREL REBOUND? Cowpland tried to resuscitate WordPerfect before: By focusing on retail (except corporations don't buy through retail anymore) and undercutting Microsoft's prices By converting to Java (though the technology wasn't ready for the desktop) By offering a Linux version Now it is virtually giving away WordPerfect in the PC Chips deal. OEM bundles are a great way to build new products in new categories. When buyers don't already have a favorite product, they take what comes for free. Bundles don't work for existing products in existing categories. If you've already got a favorite word processor -- and who doesn't -- you're not going to switch to a new one when you buy a new computer. Can anything save Corel and WordPerfect? I hope so; the industry needs its energy and bright ideas. This latest move is gutsy and smart ... but probably not enough. Worse, I have yet to see signs Corel has fresh ideas for reviving its graphics franchise. Loyalty is a two-way street. I reward my dogs' faithfulness with treats. Likewise, WordPerfect users have been loyal and they deserve something in return. Is Corel giving it to them? Use the TalkBack button to tell me what you think. Or jump to my Berst Alerts Forum and talk it over with other readers.

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