MS and Nokia deals help Spyglass prospects

Small company, small browsers, smaller loss

Spyglass has reported a 49 per cent Q4 revenue growth for the quarter ended 30 September, and a financial year net loss of $1.9 million on revenue of $30 million, compared with a loss of $10 million the previous year. After three quarters in profit, it seems that Spyglass has now transformed itself since it changed its strategic focus in 1996 to the device market. Microsoft ran into trouble with Spyglass when it was accused of not making proper payments under the terms of the agreement between the companies for Microsoft to license Spyglass Mosaic, which formed the basis for Internet Explorer. Microsoft's preferred way of getting around what it would no doubt see as minor legal problems with intellectual property, and what others would call techno-piracy, is usually to make an investment in the harmed company, or give it a contract. In April, Microsoft contracted with Spyglass to give it $20 million over three years to develop CE software and to "to license technology". The next day, Spyglass announced the acquisition of the privately held Navitel Communications. According to Spyglass CEO Doug Colbeth, Navitel had been a key contributor to Microsoft's Hermes Web-enabled telephone platform for CE that was previewed at CeBIT in March. Acer, Daewo, Panasonic, Philips and Vestel demonstrated prototypes with some data capability. The coincidences are considerable. Philips had also licensed Spyglass technology for its handhelds, until they were recently discontinued. In the quarter just reported, Spyglass formed an exclusive partnership with Nokia to accelerate the acceptance and implementation of the WAP standard, for set-top box software, and to distribute Nokia's WAP browser. It also licensed its Prism Internet Content Delivery platform to Seiko Epson. With Toshiba, Spyglass partnered to produce a telephony card and CE software for Web-enabled telephony. Spyglass also has a contract to supply Motorola with set-top box software. Spyglass' main enthusiasm at present seems to be over its Nokia relationship, so providing another possible bridge between Microsoft and Symbian, if Microsoft accepts that CE is a non-runner in smart phones. ®

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