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Technology Stocks : LBRT - Liberate -- Ignore unavailable to you. Want to Upgrade?

To: Larry Kagan who wrote (402)	5/16/2002 8:12:17 PM
From: agent99	Read Replies (2) \| Respond to of 409

Liberate CEO eyes independence in merging market (Reuters 05/16 20:05:21) By Bob Tourtellotte LOS ANGELES, May 16 (Reuters) - The chief of interactive TV software provider Liberate Technologies Inc. <LBRT.O> said on Thursday Liberate wants to remain independent if, as expected, the industry undergoes a round of mergers and acquisitions. Chief Executive Officer Mitchell Kertzman said he expects a wave of consolidation among companies that provide interactive technology to cable television operators after last week's move by John Malone's Liberty Media Corp. <L.N> to buy a controlling stake in Liberate rival, OpenTV Corp. <OPTV.O>. Kertzman's industry outlook was echoed earlier this month by Jean-Marie Racine, chief executive of a third company, Canal Plus Technologies. All three provide software that allows cable television operators to deploy and operate interactive TV, or iTV, services like video on demand. Canal Plus is a unit of French media giant Vivendi Universal <EAUG.PA>. While Kertzman said that he would look at any offer that came to Liberate, the best way to optimize shareholder value would be for Liberate to remain independent. "If there is going to be a combination, (we want) to be the acquiror, to add value that way," Kertzman told Reuters in an interview. "If you have confidence in your business, which we do, that is the way." He admits, however, investors may be losing patience in iTV's future as European cable operators suffering under heavy debt and restructuring and as U.S. cable TV operators are only slowly rolling out digital, interactive services. That impatience can be seen in Liberate's stock price, which is trading at or near all-time lows. It ended down 24 cents at $4.35 a share on the Nasdaq system, and touched a low of $4.07 earlier this week. Those numbers make investors cringe after seeing Liberate shares hit $148.50 in December 1999. But that was in the days of Internet investing, when iTV promised Web-like functions for TV sets with high-speed cable and satellite connections. "We're frustrated. I'm sure shareholders are frustrated. But I always say I think we've done our part by executing," Kertzman said. "I've been doing this long enough to know that eventually our execution will be reflected in the stock." Indeed, Liberate has been able to regularly beat quarterly forecasts for deploying its software in digital set-top boxes, and Kertzman backed the company's past guidance in terms of deployments and earnings. Liberate has said, among other guidance, that it expects to become profitable on a pro forma basis by the end of the second quarter of its fiscal 2003, which ends Nov. 30, 2002. "Ultimately, we feel pretty good about the company and about the U.S." Given the cable restructuring in Europe, he sees the focus of Liberate's business shifting to the United States, and his company is seeing its revenue mix moving from licensing fees for software deployment to service fees from cable operators that deploy advanced digital set-top boxes and iTV services. "We had thought that in the quarter in which we breakeven, the mix would be 60 percent licensing to 40 percent services. Today, we believe it will be more like 50/50," he said. Kertzman said as deployment growth has flattened, Liberate has been able to continue boosting its sales by providing services for what he called "the almost insatiable market demand" for Liberate's services by cable TV companies. Whereas, Liberate used to encourage investors to watch deployments and market share for signs of growth, it is now looking to revenue and earnings as benchmarks, Kertzman said. ((Bob Tourtellotte, 213-380-2014, Los Angeles bureau))