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

To: JRH who wrote (38099)	1/18/2001 9:45:20 AM
From: techreports	Read Replies (3) \| Respond to of 54805

Information that I am looking for in order to convince me to add a company to the W&W includes the following: 1.) What market will this company's products displace (i.e. There must be discontinuous innovation for a gorilla to emerge)? Liberate plays in the ITV sector. They create a OS for set-top-boxes. Not sure if this is a discontinuous innovation, but i view LBRT alot like PALM or MSFT. While, Liberate may not dominate their market yet, they create an operating system. Not sure if they have a network effect going like Windows or the PalmOS has. 2.) What's the current market size and what are the 3-5 year projections for this marketplace in terms of size / growth? (i.e. is there a Tornado?) According to Forrester Research, "Interactive Television Will Generate 20 billion In revenues By 2004"(8/4/99) Their report estimates that by 2004 ITV will generate: -11 billion in ad revenue -7 billion in commerce ("T-commerce") -2 billion in subscription revenue According to Josh Bernoff, principle analyst for TV research @ Forrester: "As an advertising medium, it will rival the Internet within three years." The report also says that the main benefactors will be cable and satellite operators as well as technology vendors. The three applications that it says will increase and expand revenue streams within 5 yrs.are: -EPGs or electronic program guides (reaching 55 million households by 2004 with 3.2 billion ad rev, 1.1 billion in commerce.) -enhanced broadcasts (reaching 24 million households by 04' with 6.2 billion in ad rev. and 3.8 billion in commerce) -tv based internet access (13 million homes, 5 billion in total rev. including subscriptions, ads, and commerce) 3.) What other industries could potentially tie into this market and create value chains to the industry leader? (i.e. Gorilla's develop value chains). Not sure what this criteria is. 1.) Evidence that this company currently has a commanding market share or is becoming a standard. Microsoft has made a 5 billion dollar investment to AT&T to get their OS loaded on ATT's system, but Microsoft was late and AT&T turned to Liberate (very big win). In addition to Netscape and Oracle, the original investors in this venture included Sony, Acer, Sega, Nintendo, and NEC. Today, through its acquisition of Netscape, America Online is also an investor (now TimeWarner is also an investor). In 1999, eleven additional companies invested: Comcast, Cox Communications, Motorola, Hambrecht & Quist, Lucent Technologies, Marubeni Corporation, MediaOne Ventures, Rogers Communications, Shaw Communications, Sun Microsystems, and Wind River Systems. Barry M. Schuler, President of Interactive Services Group at America Online, is on the board. Liberate also has a AT&T board member on its board as well (David C. Nagel CTO and President, AT&T Labs). Also Bradley P. Dusto, VP and CTO of Comcast Cable Communications, is also on the board. 2.) What is the company's market cap? (Hopefully greater than $300 million). $1.69 billion 3.) Who are the main competitors, and what do they (the competitors and the company) do differently? OpenTV is a competitor. They are much stronger in Europe and they've been trying to enter the US market. Not sure how successful they've been, but i don't think it's been good. Obviously, Microsoft is also a competitor as well. Scientific-Atlanta (SFA), the second biggest STB (settopbox) maker in the US, is going to spin off it's own OS company which will also compete with Liberate. 4.) What will it take for this company's products to cross the chasm? Hmm..not sure. Cable companies are expected to upgrade their networks in 2001 and 2002 to offer more advanced digital services.

To: JRH who wrote (38099)	1/18/2001 1:21:31 PM
From: hueyone	Read Replies (1) \| Respond to of 54805

Since UF has mentioned before that discussion on this thread should be limited to profitable companies with market caps greater than 1 billion, I believe that should also be a criteria for appearing on the W&W list. Companies with market caps under 1 billion are highly speculative as candidates at best. Huey

To: JRH who wrote (38099)	1/19/2001 12:13:19 PM
From: Pirah Naman	Read Replies (2) \| Respond to of 54805

Justin: I have one piddling thought or question. It seems to me that the requirements for getting on the list as a potential King kind of lend themselves to the accumulation of shiny pebbles on the list. I wonder if it might fit in better with the general philosophy of the thread if the W&W list was restricted to only Gorilla candidates (and the less widely held Gorillas). By setting the requirements higher in this way and focusing on architecture, we might do a better job focusing on the companies on the list, both before and after making the list. Does this make any sense? - Pirah