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To: Carl Yee who wrote (1352)	7/9/1998 4:21:00 AM
From: Q.	Read Replies (1) \| Respond to of 2506

re. SRCM, here's news that might explain the stock's activity. The analyst cited is with Southeast Research Partners, which is the same outfit that gives a buy on PNDA, so it wouldn't surprise me if they don't own warrants in SRCM too. NEW YORK -(Dow Jones)- Shares of Source Media Inc., a company that has developed a technology to enable cable-TV operators to offer Internet-access service without the use of fancy set-top boxes, surged Wednesday on unconfirmed rumors that it will be acquired by Internet-navigation service Yahoo! Inc. Rumors that Santa Clara, Calif.-based Yahoo (YHOO) could acquire Dallas-based Source Media (SRCM) have been circulating for weeks. The latest rumor has Yahoo announcing a deal when it reports its second-quarter results later Wednesday. In Wednesday afternoon trading, shares of Source Media were up $3, or 16%, at $21.688. Nasdaq volume of 1.4 million shares dwarfed the average daily turnover of 357,200. Source Media develops software and gear that allows people to surf the World Wide Web on a TV set without a cable modem. The technology does not require any installation at the user end since the software can be sent directly over the cable lines into unsophisticated cable boxes. According to Southeast Research Partners analyst Anthony Stoss, Source Media's 12 U.S. patents, if enforceable, are worth "well in excess of $1 billion" to the company. He believes Internet-service providers that offer access over cable lines - like At Home Corp. and Time Warner Inc.'s Roadrunner service - would have to license Source Media'a technology. Stoss said the big Internet-entertainment players have been talking with Source Media about agreements to be default start pages on services that use its technology. Stoss speculated that Yahoo could be interested in acquiring Source Media to prevent the company from entering into deals with its competitors. Last month, Source Media sued WorldGate Communications Inc., which has developed similar technology, alleging WorldGate infringed on Source Media patents. The suit seeks unspecified damages and an injunction against the sale or manufacture of the WorldGate service. In April, Source Media adopted a poison-pill antitakeover plan. The plan is triggered when a person or group acquires 15% or more of its common stock. The company declined to comment on whether the adoption of the poison pill was in response to any known takeover attempt. Source Media and WorldGate are among the many entrants in a race by companies large and small to build a mass market for the Web among consumers who don't have the money or patience to get online using personal computers. For example, WebTV, now part of Microsoft Corp., is rushing down this path with a telephone-based service. Source Media and WorldGate essentially make Internet access just another premium "channel" that consumers can purchase from their cable company.