Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : HAUP - Hauppauge Digital -- Ignore unavailable to you. Want to Upgrade?

To: AJ Berger who wrote (779)	5/25/1999 5:41:00 AM
From: westes	Read Replies (1) \| Respond to of 1149

First, it was a pleasure to finally read a literate post for the bear side of this argument. These boards are really a mixed blessing because 95% of the content is about as thoughtful as camel drool. Your key point is this: <So even if HAUP announces some miracle allience with Yahoo <and Broadcast, or even MSNBC...what difference <would that actually make? WaveTop had excellent names backing <them including MicroSoft and Intel themselves, yet the standard <failed simply because it was too difficult and too expensive There is a big difference. The difference is potentially free distribution and advertising pushed as part of the primary business of the advocating company. Microsoft included some APIs to support Wavecast and TV on a PC in Windows, and that's great. But they didn't spend millions advertising it, and it wasn't one of the top corporate objectives to make that initiative successful in the market. Intel was just looking for some other ways to burn some CPU cycles with video and create an extra consumer market for the PC, but it was never their primary focus. Yahoo! is different. Anyone with two eyes can see that there is a coming collision between broadcast TV networks and the major portals. Yahoo! will become the TV/data broadcast network of the 21st century. But they aren't going to do that quickly if they have to rely on Real Networks and other digital broadcast over the net. Even DSL is too slow to get full screen video at 30 frames per second, and DSL isn't going to have even 10% market penetration for a few years. So it is in Yahoo!'s interest to shape the coming revolution by forcing an accelerated adoption of technology. And with 50 million users tied to their pages, it is well within their power to shape this revolution in a very real way. The broadcast.com acquisition and the Yahoo! Radio initiatives are just the first steps in doing that. What it boils down to is that this potentially isn't just an experiment for Yahoo! This is the whole business at stake here. It's really a critical, strategic thing for them to figure out a way to get a better-quality video image than what is available on broadcast TV distributed through an Internet-based data service, and to do this at a consumer price point. HAUP is just lucky enough to be the first company with a product that allows this, and they are the market leader in PC to TV today. I grant fully that HAUP is not proprietary. I grant completely that once the market becomes a mass market that HAUP might get its behind handed to them. But that isn't going to happen until AFTER this is a mass market. And in the meantime if Yahoo! does a deal with them that provides sufficient advertising and consumer incentives to buy the technology, there is a potentially massive effect to their earnings over the next two years. It isn't hype. And reasonable people can differ over the size and timing of the effect that such a deal might have on earnings. Someone posted here that HAUP was saying the deal might have a $1.60 incremental effect on earnings over two years. It doesn't take very aggressive math to calculate ways that such a deal could have a $3 incremental effect on earnings over even one year. Personally, I want to read the press release very carefully before I come to any rash judgements. I don't think you can say a priori that the deal won't benefit HAUP massively. As for HAUP disappointing shareholders, this company has been growing earnings and sales at over 40% clip for two years. If that's your definition of disappointing, I would hate to see how high you raise the bar in defining success.