While Gemstar International Group Ltd.’s proposed $7.7 billion acquisition of TV Guide, announced last week, was neither long strategized nor long hatched, it’s probably the move that will catapult the Pasadena technology company into the big time.
The agreement was pounded out in the 11th hour, when an Oklahoma state judge ordered the two companies, which have been duking it out in court over patent-infringement issues for almost six years, to make another reconciliation attempt.
While the outcome wasn’t the simple legal win that Gemstar had originally desired, it’s far, far better: Gemstar will get a prime piece of real estate in the rapidly expanding digital cable empire.
Tulsa, Okla.-based TV Guide is best known for its print publication, but the company also runs TV Guide Interactive, a popular interactive electronic program guide offered to digital cable television subscribers. The guide lets viewers check listings by channel, program name, time or category. TV Guide already has agreements to provide its interactive electronic program guide to the majority of digital cable operators, including AT & T.;
The service has about 2.3 million users, many of whom have responded in surveys that the interactive guide is their favorite benefit of digital cable, according to Paul Kagan Associates analyst Leslie Ellis. Meanwhile, the number of users is increasing on a weekly basis as digital cable companies rush to roll out services in more areas.
Because the number of program choices in the cable/satellite age is already exploding, analysts expect viewers to rely more heavily on interactive guides, which are likely to become the TV equivalent of Internet portals.
For the Pasadena company known primarily for its VCR programming system, “This is pretty tasty territory,” Ellis said.
TV Guide has 1,700 employees, many of whom are stationed at the Tulsa headquarters, compared with Gemstar’s 211 employees in Pasadena. Gemstar Chief Executive Henry Yuen will remain CEO of the new entity, to be called TV Guide International; Gemstar and TV Guide will each appoint six members to the new 12-member board.
Packaged chat
Is the new breed of online traders willing to pay for amateur stock advice? That’s the hope of the folks at iexchange.com, the latest startup to come from the Idealab mill. Formed by former Jefferies & Co. Executive Vice President David Eisner and Idealab founder Bill Gross, iexchange.com wants to “commodotize” the type of information that has been floating around stock market chat rooms and message boards for free.
“There are kernels of brilliance out there right now, and what we’ve figured out is a way to sort the information in a way that allows those with successful insights to profit,” Eisner said. “We’re certainly not going to replace Wall Street research. We’re providing a resource that complements what is already out there.”
On iexchange, amateur “analysts” write up their stock picks and predictions and put a price on their write-ups. The site’s software keeps track of the person’s accuracy rate. As Eisner envisions it, most of the analysts will start by charging nothing. As their reputation and track record grows, their prices can edge up.
For those with poor track records, the price they can command will likely stay at zero.
Revenue will come from splitting the paid fees 50/50 with the analyst. “We don’t have illusions,” Eisner said. “This will take time to build up revenue.”
News and notes
Billionaire international financier George Soros filed with the Securities and Exchange Commission to sell off $8.6 million of EarthLink Network Inc. stock that he and one of his hedge funds personally owned. Soros filed the SEC documents on Sept. 27, four days after EarthLink and MindSpring Enterprises Inc. announced their intention to merge
Atomic Pop, the Santa Monica-based Internet music company founded by music-industry veteran Al Teller, will receive a $10 million investment from New York-based Internet services company Rare Medium Group Inc. and Miami-based New Valley Corp. Atomic Pop also has signed a long-term, exclusive digital distribution deal with 4AD, one of the U.K.’s leading independent record labels.
Sara Fisher writes a weekly technology column for the Business Journal. She can be reached at [email protected].
Web Site of the Week Bizbuyer.com
Call it eBay for small companies. Potentially relegating the time-consuming process of gathering competitive bids as a thing of the past, Santa Monica-based Bizbuyer.com (www.bizbuyer.com) runs an online marketplace for small and mid-sized businesses in search of professional services.
There, a small-business owner undertaking comparison shopping on anything from computer equipment and lease financing to legal services and office movers need only spend five minutes to fill out an online request for proposals.
Bizbuyer then sends out the requests to the appropriate, vetted companies, which e-mail back their bids directly to the small biz owner. The owner can then call back only those companies that submitted attractive bids. The entire process takes a fraction of the time that the same process does when done the old-fashioned, offline way.
