Monday, December 18, 2006

Calls of Note Part 4

- Bear Stearns comments in TiVo (NASDAQ:TIVO) saying they can foresee several scenarios where the company is able to capitalize on its technological superiority, partnership agreements,
and the recent rapprochement with the advertising community. However, a number of significant challenges remain, which are unlikely to be resolved in the near-term, in firm's view, and they would prefer to wait for better visibility.

While the company may be displaying the Comcast solution at the upcoming CES in January 2007, the real value of the agreement is in 1) helping TiVo garner more distribution partnerships as other MSOs, they think, are likely to wait to evaluate Comcast's success before they make a commitment, and 2) the advertising potential that the significantly larger distribution presence offers, which will be impacted by long sales cycle and lead-times, as well as technological issues before a much broader cable advertising solution can be deployed.

Also, channel checks indicate that sales of TiVo DVRs have picked up in the last four weeks, which may be a function of the improved value proposition to the consumer, or better marketing, or just seasonality of the strong 4Q.

Maintains Underperform rating.

Notablecalls: The comments sure sound more positive than negative. Note that there has been some blog-level talk of a possible partnership with GOOG. Not actionable (although I would not be surprised to see TIVO close higher today).

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