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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Mike Buckley who wrote (4836)	8/14/1999 11:08:00 AM
From: NY Stew	Respond to of 54805

Mike, Maybe Stew has reaction to my ideas. Ain't this fun? :) Gemstar has its footprint on the internet side of the convergence equation with the AOL and Microsoft agreements but the more important platform presently is the TV itself. The cable litigation is way overblown IMO. Cable STBs are attached to less than 20% of the TVs in the U.S. The 40 million cable STB market would be nice but don't dismiss the 200+ million TV market that Gemstar is NOW penetrating. from www.internetstocks.com ... Keith Benjamin & Michael Graham - GEMSTAR'S NEW GUIDE WORKING Gemstar reported June-quarter results this week, highlighting the strong acceptance of its new electronic program guide (EPG). The company added five new television brands that have started shipping with the EPG, including Sony, JVC, Zenith, and Magnavox. In addition, RCA, an existing licensee, has started including the EPG in lower-end models in addition to larger, feature-rich sets. We believe these developments point to the EPG being shipped in nearly every new television set within a year or so, giving us greater confidence in Gemstar's future success as an advertising platform as the EPG reaches more households. We believe our current estimate of a 5 million-unit installed base for the end of C2000 could be low by 50%. We expect more advertisers to participate. Gemstar signed a new pilot advertising deal with ABC, following the deal with NBC. While these agreements are currently small in terms of revenue, we expect them and others to get larger as programmers view the Guide Plus EPG as a competitive edge to attract viewers. This progress makes us less focused on cable-related litigation, as we believe there is considerable upside to our numbers with or without cooperation from TV Guide, General Instrument, and others. However, we continue to believe the chances are favorable that the GI arbitration and TV Guide litigation will be resolved within the next month or two in a manner favorable to Gemstar. We believe now is the time to own Gemstar, ahead of potential positive news. GIC decision (breach of contract arb) due in the next few weeks. Regards Stew