(COMTEX) B: Motorola deal lifts Spyglass
B: Motorola deal lifts Spyglass
Word that Spyglass Inc. has cut a multimillion-dollar licensing deal
with Motorola Inc. to supply technology that gives televisions,
telephones and other consumer devices Internet access sent stock in the
Naperville, Ill., software maker shooting up 12 percent on Monday.
Income from the Motorola agreement contributed $1.8 million to Spyglass
in its most recent quarter alone, about one-third of the company's $5.4
million in revenues, according to a Spyglass filing with the Securities
and Exchange Commission.
Spyglass stock closed Monday at $11.25, up $1.37, on the NASDAQ
exchange.
Chief Executive Doug Colbeth said the total value of the deal was
''multimillions'' spread over at least three quarters.
Spyglass is supplying Motorola with a version of the Mosaic Internet
browser that can be used in non-PC appliances.
In addition, Spyglass will provide software that lets business
equipment send information via the Internet. Using this technology, a
vending machine, for example, can tell its owner how much money it's
holding, or whether it needs to be restocked.
Motorola would not comment on specific plans for Spyglass software, but
speculation has been that the Schaumburg, Ill.-based company is working
on, among other things, its version of a set-top box that combines
television and the Internet.
Spokesman David Rudd declined to discuss Motorola's arrangements with
Spyglass. However, he said Motorola would make an announcement
concerning its use of Spyglass technology at the International
Broadcasters Convention next month in Amsterdam, the Netherlands.
The deal between the two local companies was struck June 25, but came
to light only last Friday in Spyglass' SEC filing.
Spyglass shares lost 9 cents for the quarter ended June 30, compared
with a loss of 45 cents per share for the same quarter in 1997.
The $5.4 million in revenue for the quarter was an increase of 145
percent over the $2.2 million booked in the year-ago quarter.
The agreement with Motorola ''is fairly significant,'' said analyst
Abhishek S. Gami, who follows Spyglass for William Blair & Co. in
Chicago. He noted that while the current agreement appears to be
focused on a specific project or two, Motorola has several initiatives
under way for Internet-enabled devices, giving Spyglass ''a chance to
ferret out more opportunities'' for its technology.
''It's a big, well-known customer. It's a nice reference for them,''
observed Frank Sparacino, a Chicago-based analyst for Barrington
Research, which rates Spyglass a ''strong buy.''
Sparacino noted that the deal includes ongoing engineering services,
which means continuing income for Spyglass. ''It gives you some
confidence in your revenue because you have that backlog of business,''
he said.
The current stock uptick is the latest gyration in a decade-long
roller-coaster ride for Spyglass.
The company began the 1990s as a supplier of data visualization
software for scientists. In 1994, it shifted its focus to the Internet
and became a Wall Street darling with the release of Mosaic, the first
commercial browser _ the set of instructions needed to pilot through
the Internet. The company's stock septupled in value in 1995.
Spyglass licensed Mosaic to Microsoft Corp., which used it as the basis
for Internet Explorer, and then decided to give it away for free,
destroying the market for browsers.
Microsoft was Spyglass' biggest customer, providing $13 million-plus in
revenue in 1996 and 1997. But since Microsoft fended off any
requirement to pay royalties, Spyglass was left with neither a market
nor a revenue stream, forcing the company to reinvent itself anew.
Since late 1996, Spyglass has trained its sights on so-called
microbrowsers and other software that enable Internet connections for
non-PCs, which in many cases are small, handheld devices.
The trick to producing microbrowser software is to figure out how to
cram the needed instructions in much smaller files, because in handheld
equipment, neither the operating systems nor the storage capacities are
as great as in full-blown desktop computers.
Spyglass Chief Executive Officer Colbeth said other deals had been
struck and would be made public soon. ''We anticipate more
announcements,'' he said. ''We're really on the road back.''
Colbeth said that while the Microsoft agreement remains Spyglass'
biggest single contract to date, the one with Motorola contains a vital
component missing from the earlier deal. This time, said Colbeth, once
Motorola products hit the store shelves, ''we'll be receiving
royalties.''
(c) 1998, Chicago Tribune.
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AP-NY-08-17-98 2006EDT< -0-
By Andrew Zajac
Chicago Tribune
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