Gemstar Shows Financial Mettle After Failed Uvsg Bid

Computergram International, July 31, 1998

After United Video Satellite Group Inc's $2.8bn bid for Gemstar International Group Ltd finally bit the dust last week, Gemstar has come out with a strong first quarter with sales up 32.3% to $33.9m. Profits were also up to $14.1m from losses in the year a go quarter of $3.2m, but down 25.6% compared with its fourth quarter net profits of $19.5m.

Gemstar has also launched a patent infringement suit against Prevue Networks Inc, a wholly owned subsidiary of UVSG. Gemstar has filed the suit claiming treble damages for deliberate use of its patents in the Prevue Interactive Electronic program guide, which has approximately 650,000 customers with 8-10,000 new users gained per day. The patent suit joins another one launched against UVSG last year by Starsight, which was inherited by Gemstar after its acquisition of the company. This battle for control of the electronic programming guide space seems to be ready to run and run, EPGs give broadcasters another spot for advertising to consumers, on satellite, cable, terrestrial TV and on internet enabled set-top boxes. For the internet market Gemstar has formed an alliance with Microsoft Corp to pool advertising revenues and products. This agreement was announced during UVSG's abortive takeover bid. News Corp and Microsoft have been openly hostile for a few years, and this deal squares up the two camps Gemstar with Microsoft against TCI with News Corp.