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Technology Stocks : WavePhore (WAVO)- VBI fed WaveTop for WebTV -- Ignore unavailable to you. Want to Upgrade?

To: AJ Berger who wrote (911)	2/24/1998 12:50:00 PM
From: AJ Berger	Respond to of 2843

Opps... WebTV is Owned by MSFT now! I kinda forgot about that. Hmmmm I guess that means that while before, we thought WAVO would get a free ride on Window'98 marketing coat tails, as WaveTop would help Windows'98 sales by being portrayed as a "killer" application. It now seems WAVO will have to share some of it's Ad revenue with MicroSoft for including WaveTop in the WebTV for Windows packaging. I guess the greater penetration potential of WaveTop with WebTV marketed by MicroSoft, far out- weights the alledged ad revenue sharing agreement I'm certain WavePhore had to sign in order to be a part of that bundle. I suppose if all goes well with this new medium, that MicroSoft if further likely to simply Buyout WavePhore like they did WebTV. Unfortunautly, we're already at a pretty rich valuation, so there may not be much premium here that MSFT would be willing to pay for WAVO above it's current trading range. I suppose when we see $16 by this July (my forcast) they'll be more profit takers than new investors if MicroSoft has not made noises about buying WAVO by then... Further concerns here is that with MicroSoft's own VBI related patented technologies already mentioned, and MSNBC available in most cableTV markets, WaveTop using PBS for VBI signal input will become a lot less important to MicroSoft and WebTV expecially when they start coming out with Windows CE based Set Top Cable Boxes. The longer term prospects for WAVO certainly do look muddier unless MSFT eventually buys them. I also wonder how much Ad referral's may be going WAVO's way FROM MicroSoft's existing Ad base from all their content providing mediums. I bet MSFT get's a piece of that pie too. Gosh I hope there's gonna be enough left for WAVO to actually get back into the Black this year. I guess that won't really matter if MSFT buys WAVO, however even WebTV had to show a good quarter before MSFT gobbled them up.

To: AJ Berger who wrote (911)	2/24/1998 12:57:00 PM
From: Ken Turetzky	Respond to of 2843

>Is WebTV likely to develope their own VBI content that eclipses WaveTop?< If Microsoft can steal WAVO's technology, it will. This is Microsoft's history with Stac's disk compression technology and Citrix's Windows terminal technology. Fortunately, both of those companies eventually reached agreement with MSFT and were paid. WAVO had better protect its patents when dealing with Microsoft. Otherwise, look for the moment when MSFT suddenly forgets it ever heard of WaveTop while touting its own neat WebTV VBI technology.

To: AJ Berger who wrote (911)	2/24/1998 1:03:00 PM
From: BGL	Read Replies (1) \| Respond to of 2843

Well said!! My frustration with the forecasted growth of this company is enormous. I perceive WaveTop as their last change and they better make it work... BGL

To: AJ Berger who wrote (911)	2/24/1998 2:09:00 PM
From: BGL	Read Replies (1) \| Respond to of 2843

Sure thing! I don't know why WAVO hasn't made it clear that they are part of WebTV. I have never understood why they have not explicitly stated their relationship and licencing fees with Intel, Intercast, Microsoft, etc. I guess it's technically OK to date, because WaveTop is not officially out and maybe they feel they don't have to explain this relationship to investors until then. However, when it does happen, it should be explicitly stated what the licencing and royalty fees are. I suspect they may not be making this clear because they are getting ripped off by MSFT in order to be included as a one-button link from Win 98. In the long run, I am in favour of this as if will increase market penetration which will be WaveTop's biggest challenge. WAVO research stated that they found their potential clientele willing to pay for WaveTop... I feel the company should take them up on this offer for the sake of shareholder value and cash flow. I believe WAVO should have a couple of free channels (like PointCast) and then have a premium pay service. This is a classic marketing approach done by every video game company. I believe that if WAVO was ever going to be included in WebTV (the pay service one with the TV sets), it would have happened already. Datacasting hasn't got off the ground and already the industry has "shaken-out" from lack of funds. The only reason WAVO has kept afloat is because of Deed's apitude for financing and the split-division business model. God knows how PointCast stays alive. I personally believe that WAVO should get into the TV receiver card business. It would be a way of vicariously bennefiting from their competitor's success and mitigating any inroads into WaveTop's market. Hauppage's stock is low... Upside: * WaveTop Hype * Windows 98 Hype * $14.5 by June/July. Downside: * WaveTop is already half a year late... * Money is running out * Advertizing revenue is always fickle * If the bottom line doesn't get any better and WaveTop underperforms, this stock will get hammered by tax-loss selling ($5.5 by Dec 31). Comments... BGL