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

To: Mike Buckley who wrote (45011)	7/31/2001 12:22:24 AM
From: tinkershaw	Read Replies (1) \| Respond to of 54805

It was made very clear months and months ago by John that the ad revenues are part and parcel to the licensing agreement because without the licensing agreement there are no ad revenues and vice versa. Hello, Bizarro Superman!;) With all we do our debate of about a year ago is probably forgotten. But at that time I was making the argument that is practically identical to your statement above, and you were taking the position that GMST was both Gorilla (candidate) and Godzilla (candidate) and that these were two different aspects. Seems we have a bit of juxtapositioning going on here! I think Rambus may have turned the light on me a bit. I never in a thousand years expected the DRAM market to fall to $14 billion. Even at if RMBS takes over the whole market it will have a hard time being a gorilla at these valuations because the market is just too darn small for a Gorilla to swing in for long. As such, my more heightened sensitivity to the Godzilla aspect of Gemstar. I agree that the ads are part and parcel of the licensing. GMST gets no ads without the licensing. What I disagree on though is that the ad money is necessarily correlated in a manner that would enable us to determine whether or not Gemstar does reside in a large enough jungle to be a Gorilla. GMST could grow licenses into the 100 million range, yet if the ad market remains much smaller than predicted, GMST will never justify its current valuation. So we can predict that GMST will dominate the market in retaining licenses, but obtaining these licenses (even in a tornadic fashion as seems to exist now) will not guarantee that Gemstar ad revenues will ever tornado in response. So one does not follow the other. So I guess that is my distinction. Unlike MSFT, or BEAS, we can judge future gorilla market potential by just watching the marketshare and licensing revenues and knowing how big hte market is. But with Gemstar just knowing the licensing aspect doesn't really evidence the real big money in ads. Thus I now subscribe to the Abomination theory (the cross-breed animal). Tinker