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

To: NY Stew who wrote (1929)	5/13/1999 12:30:00 PM
From: Teflon	Read Replies (2) \| Respond to of 54805

Stew, we can agree to disagree on this one, so far. You may yet change my mind. Regardless of how many channels there are in the new age of broadband, 100, 150, 200, etc., it will not change the fact that most people watch no more than four or five programming sources for more than 90% of their viewing. And I never turn on the TV without the remote, so I agree with your comments regarding the habitual nature of TV viewers like myself. A channel guide is not a key link in this process. And furthermore, as the internet portal grows in its interactivity, the lines between GMST's GUI and other platforms will become less clear. BTW, here's a bullish article on GMST (just to show I am objective in my analysis and always willing to change my mind if provided a compelling enough argument!!! <ggg>): FOOL PLATE SPECIAL An Investment Opinion by Louis Corrigan Gemstar Still a Gem As the leading provider of electronic program guides such as VCR+ Plus and Guide Plus+ Gold, Gemstar (Nasdaq:GMST - news) still looks like one of the best bets on interactive television. That's because the company's collection of patents and licensing deals simply continues to deliver increasing returns as Gemstar moves closer to establishing its service as an ad and commerce driven portal from the TV side of the convergence of television and the Internet. The stock rose $5 3/4 this morning to $123 3/4 following last night's report of fourth quarter earnings. For the quarter, revenues increased 26% to $54 million. The leverage in its high-margin licensing business allowed net income to jump 37% to $26.7 million. However, an 8% boost in shares outstanding left EPS up just 24% to $0.46, which was $0.02 ahead of the consensus estimate. Selling and marketing expenses rose by just 15.2% to $9.5 million while general and administrative expenses edged up just 8.6%. R&D spending was flat. With 60 issued U.S. patents and 130 pending, the research has mostly been completed. For the full year, revenues shot up 32% to $166.5 million, with net income up 50% to $75.8 million (after excluding the cost of fending off a takeover attempt last spring). EPS rose 36% to $1.35. That means Gemstar has a stunning net profit margin of 45.5%. It's also got some $214 million in cash and no debt. Of course, the market's now put a $7.1 billion price tag on the stock, which has doubled since the end of March thanks to all the feverish activity around AT&T's (NYSE:T - news) push into broadband. With analysts looking for $1.67 per share in earnings for FY 2000 ending next March, Gemstar carries a forward P/E of 74. That might seem rich, but the story here is that Gemstar is like a major Internet portal, only better -- and, even now, cheaper. Though Gemstar is best known for its consumer-friendly VCR Plus+ that makes it easy to program a VCR to tape your favorite TV show, the future is the Plus+ Gold system, which amounts to a souped up TV preview channel. It allows a consumer to use a remote control to get info on a TV show and to select shows to record later. Viewers can continue watching the current program in a corner screen while previewing the other offerings. While the revenue is now pouring in from TV and set-top box manufacturers licensing this technology for $10 per unit, the ultimate pay-off will come from interactive advertising. The average American watches 7 hours of TV a day, checks a program guide 4 times per hour, and could visit 3 Gemstar ad pages per visit. That's 84 page views per person per day. Plus, Gemstar's technology, among other interactive features, can track viewer habits to narrowcast the ads. So it's the promise of the Internet delivered to the television masses. And all via a proprietary technology. Gemstar enjoys strategic partnerships with Microsoft (Nasdaq:MSFT - news) , which has licensed the system for its WebTV, and with General Electric (NYSE:GE - news) , whose NBC unit has started advertising on the service. In January, consumer electronics giant Thomson announced plans to incorporate the Plus+ Gold technology into 50 TV models. Sony (NYSE:SNE - news) and U.S West have licensed the technology for use in their digital set-top boxes. Set-top box maker Scientific-Atlanta (NYSE:SFA - news) has even sued Gemstar on antitrust grounds. That alone should suggest how well-positioned Gemstar is. I hope this is informative. Thanks for the insight. Teflon

To: NY Stew who wrote (1929)	5/13/1999 9:16:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Thomson's team of industrial psychologists found that a person 4 feet from a TV will walk 10 feet to get the remote. And that's especially sad considering that most of those people were five feet tall or taller. All they had to do was lie down. Didn't even have to take a step. LOL!!!!!!!!!! --Mike Buckley

To: NY Stew who wrote (1929)	5/14/1999 6:18:00 AM
From: Teflon	Read Replies (1) \| Respond to of 54805

Stew, regarding our conversation on MSFT, GMST and ATHM: "AtHome Teams With Microsoft To Accelerate Growth REDWOOD CITY, Calif. (Reuters) - AtHome Corp Thursday said its new AtHome Solutions division has teamed with Microsoft Corp. (Nasdaq:MSFT - news) to help speed the introduction of its high-speed Internet services into small markets. It said the companies would incorporate Microsoft's operating system into AtHome's network and also provide support to help market AtHome's service. ''This is an exciting step that will further accelerate the wide-scale availability of broadband services for both consumers and businesses,'' said Thomas Kroll, vice president of the Network Solutions Group at Microsoft. AtHome formed AtHome Solutions earlier this year to help it reach homes that were served by small and mid-sized cable operators. AtHome, which delivers high-speed Internet access over cable lines, estimates about 15 million U.S. homes are served by small, local cable operators. The company already has partnerships with 21 major cable service providers, and plans to pursue similar relationships with some of the smaller players." Like I said, these lines will become less clear as time progresses. Teflon