Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
DD Mobile Search Triple Play (from moconews.com email)
Interview With Fast CEO (http:www.fastsearch.com) : Mobile Search Triple-Play
by Peggy Anne Salz
A flurry of activity and a raft of announcements, involving market giants including Google, Yahoo and Microsoft, since the start of the year point the way to the industry's next mega-trend: mobile search. Mobile search is indisputably a potent way to generate value. Consumers find what they want; marketers gain traffic by providing relevant offers and advertising; and mobile operators and service providers capture increased revenue as a result of the increase in mobile content purchases by consumers.
However, the much more lucrative business opportunity may be in combining search, personalization, and recommendation (modeled on Amazon - this technology suggests content on the basis of the individual user's past preferences or on the basis of what a user's peers consumed, or both). The end-game is to boost content sales by providing users personalized and relevant results - as well as the tools to discover other cool content they might not have otherwise known existed.
I refer to this as a kind of "mobile content triple-play" and (after interviewing some 40 C-level execs at search, discovery and personalization companies - as well as mobile operators - for my own report on the topic) I see evidence that the mobile content industry is ripe for it. In fact, many these companies have told me they fear mobile search - particularly the big-name brands like Google. Content owners want users to come directly to their sites and not be directed by search engine results to explore their competitors' portals. In a D2C play, they tell me, it's all about improving the accessibility and discoverability of their content.
In view of the increasing importance of personalization and recommendation in the search mix, I caught up with John Markus Lervik, CEO of FAST. His take on search: Close, but no cigar. He confirmed that more operators and content owners are embracing a triple-play approach, relying on personalization and recommendation (through social networks) to monetize their content.
In a nutshell, mobile search has moved on. It's not about delivering what users ask for - it's about delivering relevant content before they ask for it, Lervik said. "Search is really [about] pushing content to you that's personalised, contextualised, and localised to your needs at the moment."
On Vodafone/Google [Google also has a partnership with FAST]: "We hope to remain partners with Vodafone, but we also understand that they are planning to work with Google....In the longer term, we are confident that operators will see little benefit from partnering with Google beyond the immediate PR effect, and that over time they [Google] will threaten the business."
Mobile content capabilities: Like the days of the Web, when all companies had to publish, mobile content companies need to master search. "They need these competencies, and they definitely also need competence on how they build the good search-based user experiences, both explicit search experiences and implicit."
Search on the device: I think from the start, you should offer that as an option....It may make sense in a number of cases to have maybe lightweight client applications as well that help you to be even more effective with your mobile searching."
High on the radar: Content companies are "starting to use the search engine as the way to handle the content. Not just for searching the content, but also for handling the content, so you actually build a portal on top of the search engine and then have the search engine personalise and contextualize the content on the fly as the user navigates the mobile portal."
You can download the audio of the interview here (6.9 MB, 30 mins).
http://www.fastsearch.com/l3a.aspx?m=516&amid=3677
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SS9173
OT Beam11, sorry to hear about your broken ankle. Hope you have a quick recovery. Tomorrow is another day. Get some rest.
SS9173
Come on Neom Management: Give us a darn good reason to vote for those additional 4 billion shares. So far you haven't IMO. The 10Q results aren't going to convince me to change my mind from voting "NO". Give us one or more significant developments to help justify it or if you can't do that quickly, we again reiterate our request for a Letter to Shareholders prior to the June 28 meeting.
SS9173
There definitely are some positives in the 10Q, especially when one considers the proforma results. It will be interesting to see how the market values Neom tomorrow.
Now that the 10Q is out I am hopeful that we will get some encouraging news between now and the SHM.
SS9173
JP, the statements regarding NMPR do appear to be encouraging. However, it is hard to know how significant the revenue forward looking statements really are since they are in comparison to 2005 for which there were no acquisitions ...so, in other words, it is not surprising that these acquisitions will enable Neom to realize a material increase in revenue...the big question is "how much of an increase?"
SS9173
I am surprised at Mobot's low revenues - only $85K for Q1.
It appears all those partners (see their website) aren't spending much money buying Mobot's services. Hope this improves soon.
SS9173
OT...going home from work now and having dinner. Will check back in a couple of hours.
SS9173
YJ, those are 2005 results...look above on that page for 2006 results.
SS9173
OK...so sorry about dragging this along, but just want to make sure I understand it for NMPR.
Net sales were $377K with $825K deferred = $1,202K
Cost of sales were $419K plus $560K inventory = $979K
Gross profit = 23% (Again sorry...not used to accounting for deferred revenue)
Is that right?
SS9173
YJ, Thanks for pointing that out. Can you determine how much inventory that is to determine a new COS number and gross profit?
SS9173
P.S. I am not an accountant so I appreciate the help.
Disappointing news: BSDS lost money for Q1
Net sales of $2,366,000 with net loss of 137,000.
SS9173
Nothing new on Scanbuy:
On January 23, 2004, NeoMedia filed suit against Scanbuy, Inc. (“Scanbuy”) in the Northern District of Illinois, claiming that Scanbuy has manufactured, or has manufactured for it, and has used, or actively induced others to use, technology which allows customers to use a built-in UPC bar code scanner to scan individual items and access information, thereby infringing NeoMedia’s patents. The complaint stated that on information and belief, Scanbuy had actual and constructive notice of the existence of the patents-in-suit, and, despite such notice, failed to cease and desist their acts of infringement, and continue to engage in acts of infringement of the patents-in-suit. On April 15, 2004, the court dismissed the suits against Scanbuy for lack of personal jurisdiction.
On April 20, 2004, NeoMedia re-filed its suit against Scanbuy in the Southern District of New York alleging patent infringement. Scanbuy filed its answer on June 2, 2004. NeoMedia filed its answer and affirmative defenses on July 23, 2004. Discovery is ongoing.
SS9173
Beam11 or anyone: Can you please explain these paragraphs in layman's terms (from page 47)?
Gain and loss on extinguishment of debt. NeoMedia incurred a loss on extinguishment of debt of $1,964,000 for the three months ended March 31, 2006 in connection with the Series C preferred stock issued and sold to Cornell on February 17, 2006. A loss was incurred on the surrender of a certain promissory note to Cornell dated March 30, 2005 in connection with the preferred stock sale. During the three months ended March 31, 2005, NeoMedia recognized a gain on extinguishment of debt of $138,000, resulting from the payment of debt at a discount to the book value of the debt. These gains resulted from a difference between the cash or market value of stock issued to settle the debt and the carrying value of the debt at the time of settlement.
Gain on derivative financial instruments. Gain on derivative financial instruments was $4,768,000 for the three months ended March 31, 2006. The gain is on the derivatives associated with the preferred stock sale on February 17, 2006. Certain derivatives were created at the time of the offering and those derivatives are recorded at fair value on the accompanying balance sheet. The gain for the three months ended March 31, 2006 is the reduction in value of the derivative from February 17, 2006 to March 31, 2006 and is due almost entirely to a reduction in NeoMedia’s stock price from February 17, 2006 to March 31, 2006. There was no such gain or loss on derivative financial instruments for the three months ended March 31, 2005.
Net Loss. The net loss for the three months ended March 31, 2006 was $1,317,000, which represented a $98,000, or 8% increase from a $1,219,000 loss for the three months ended March 31, 2005. The increase in net loss is due to the increase in loss from operations coupled with the loss on extinguishment of debt and was offset to a large degree by the gain on derivative financial instruments.
Thanks in advance.
SS9173
And more good news: If we include the deferred revenue for NMPR, their net sales would be $1,202,000 with cost of sales of $419,000 = 35% gross profit.
SS9173
More good news based on the proforma...the net loss was reduced from 67% in 2005 to 36% for Q1 2006. That's a $1.2M improvement.
SS9173
Good news: Both Sponge and 12snap were profitable for Q1
Sponge: $811K sales with $112K net income - 13.8% profit
12snap: $3.0M sales with $542K net income - 17.8% profit
I like it!
SS9173
Page 18 just answered my concern. It is the proforma for all the businesses as if they were part of Neom since January 1. That shows net sales of $7,627,000 which annualizes to be $30.5 million. OK...I feel better now.
SS9173
Lesnshawn, that was the 10K not the 10Q. The 10K was for fiscal 2005. Today's 10Q is for the first quarter of fiscal 2006.
SS9173
Unless we get some significant news event, I will be deciding my vote selection at the ASM. If I were voting today, it would be against authorizing the 4 billion share increase. It is going to take a lot of "convincing" to change my mind but I am willing at this point to give Neom time to do so.
SS9173
Looking forward to the 10Q to be filed later today. I will be analyzing it with a fine tooth comb - Hope Beam11 and others will contribute to the analysis as well - Stay tuned.
SS9173
Andrew138 and YJ, I agree with your thoughts as well. Is there any way to get another voting option on the proxy for authorizing 2 billion shares? I am not ready to approve 5 billion right now based on the information we have, but would vote for 2 billion if that option was available.
SS9173
Cjzak, Yes, Management has acknowledged receiving the list of questions. They appreciated the input and said the questions were well thought out. I think we have done our part in communicating the issues and concerns we would like addressed at the SHM. Now it is up to them to adequately prepare and respond to this request. I look forward to hearing first-hand what they have to say on June 28. I plan to prepare a "no spin" summary assessment of what transpired shortly thereafter for this board.
SS9173
DrMyke, I will be at the SHM. Look forward to meeting you and others there.
SS9173
Steeler Fan, Yes at about the same time via TD Ameritrade.
SS9173
Shareholder Meeting Questions
FYI, I have submitted the following questions to Neom Management and recommended that they address these concerns during their presentations at the June 28 SHM:
1) What are the goals and objectives of the business for the next 3 years?
* What are the critical success factors (CSF's)? What are the corresponding metrics for each of these CSF's?
* What are the strategic areas for improvement to achieve the CSF's?
* What initiatives are planned or underway to reduce / control expenses?
* Is Neomedia committed to increasing shareholder value? If so, what are the primary initiatives being undertaken to achieve increased shareholder value? Are there any active plans to get listed on one of the major stock exchanges and if so, what is the timing?
2) Provide a convincing argument for shareholder approval of item no. 3 of the proxy card (increase in the number of authorized shares from 1 billion to 5 billion)
* The proxy states:
Additionally, an unfavorable vote on this proposal could have negative ramifications for NeoMedia. Pursuant to the investment agreement entered into between NeoMedia and Cornell in connection with the sale of the Series C Preferred Shares, NeoMedia is required to reserve 100 million shares for conversion of the Series C Preferred Shares, and an additional 75 million for conversion of the warrants. NeoMedia is also required to effectuate an increase in its authorized shares on or before July 1, 2006, such that it has sufficient shares to reserve an additional 250 million shares for conversion of the Series C Preferred Shares. Failure to increase the number of authorized shares constitutes an event of default under the investment agreement, at which time the principal and any accrued interest or dividends become immediately due and payable in cash. For presentation purposes only, as of April 28, 2006, the total amount due in cash to Cornell if an event of default had occurred would have been approximately $22.3 million. Alternatively, under an event of default, Cornell has the right, but not the obligation, to immediately convert all outstanding Series C Preferred Shares into shares of common stock instead of cash.
* Why are we in this position of default? Did we not adequately anticipate this situation during the planning process for funding acquisition purchases?
* If item 3 is approved, how many additional shares does Neomedia plan to register with the SEC within 30 and 90 days of the approval?
* What is the anticipated level of outstanding shares by January 1, 2007?
* Based on 2005 financial results, Neomedia is presently a $24M business with an approximate 50% net loss. Employment level is approximately 180. What are the revenue and profit projections for each business entity and in total for each of the next 3 years?
* What actions are being taken and what is the timing for Neomedia to achieve positive cash flow to minimize further share dilution?
* How will this dramatic increase in authorized shares impact the timing and ability to get relisted on the NASDAQ?
* Are there any immediate or short-term plans to eliminate Cornell financing and utilize a more shareholder friendly type of financing?
* Has Neomedia been approached concerning a takeover, 20% equity agreement, or buyout?
* Is Neomedia considering a reverse split?
* Are there any future plans for a stock buyback?
3) Provide a comprehensive update on the launch of Paperclick including:
* Are technical issues (e.g., camera lens, new java software availability, etc) inhibiting either its release or acceptance by the market? If so, what actions are in process or planned and what is the timing for resolving these issues?
* How will Paperclick be integrated into the new acquisition companies' offerings?
* Are there any commercial issues inhibiting the release or acceptance by the market?
* When will Paperclick be launched? When will it begin generating significant revenues?
* When will it be widely available to consumers?
4) Provide a comprehensive update on Keyword Registry and Go Window including:
* Has Neomedia sold keywords to anyone other than Virgin? If so, whom?
* Are there still plans to hold a Word Auction? If so, what is the timing and planned pricing structure for keywords?
* What, if any, significance do the keywords which appear to be "activated" in the Go Window on your website have in terms of actual, current relationships with those companies? (Examples of keywords that appear to be "activated" include "weather", "msn", "hotmail" and "eBay").
* Has Silicon Space completed their work on the Paperclick WordRegistry interface?
5) Provide a comprehensive update on patent infringement including:
* An update on the Scanbuy case. Are we pursuing a settlement with Scanbuy or do we expect that the case will have to wait for a judicial ruling?
* Are there any other noteworthy patent infringement issues that we are investigating?
6) Provide a comprehensive update on NMPR including:
* Profitable growth plans
* Current and future sales and profit projections for this business
* Are there any near-term or long-term plans to divest of this business to enable Neomedia to focus all of its efforts and resources on the exploding mobile marketing industry?
7) Other questions / concerns:
* Check 21 was supposed to generate a significant amount of revenue for Neomedia. What is the current status?
* What is the status of the Intel alliance / agreement?
* Given the suspected level of naked shorting of NEOM, will Neomedia consider going to a "custody-only" trading system? See http://www.investopedia.com/terms/c/custodyonly.asp
* When will the HipCricket acquisition be completed?
* Have there been any discussions with Microsoft? Yahoo? Google? NewsCorp?
* Is it possible for all news releases of subsidiaries to begin indicating that they are a Neomedia Technologies Company? For example, "Mobot, A Neomedia Technologies Company", etc. This change will provide more outside exposure and awareness for Neomedia.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Thanks to all who contributed these questions in prior postings.
SS9173
OT Nutsoc, noted and will do. EOM
OT Clawmann, Thanks. Feel free to PM me when you are ready.
SS9173
Clawmann, good idea. How can we best offer these proposals? How can we help draft them? Are you willing to champion this effort?
SS9173
Cabernet, Excellent and well thought out post. There is no doubt in my mind that Chas, Chuck and the rest of the leadership team are working very hard (and long hours) to make the vision you painted become a reality. Those are all the positives to remain invested in Neom.
But, there are concerns:
* Principally, the delay in major launch of Paperclick and Word Registry is disturbing as we have not been given good reasons, whether they be technical, commercial or both, for the delay to market.
* Neomedia is presently a $24M business with a 50% net loss and 180 employees. The only way to fund this is through a lot more share dilution. We are now being asked to authorize another 4 billion shares and that is worrisome to some of us. IMO, Neomedia needs to provide us with additional information - preferably financial guidance or a presentation of their business plan - to better understand and assess the risks and rewards of having potentially 5 billion shares outstanding should there become a need to utilize them once they are authorized.
Per an email I received from Chuck Jensen yesterday, Neom has setup the shareholder meeting in a small theatre with a banquet room across the hall. Each of Neom's subsidiaries will have a display in the banquet room manned by the Executives of that business. He indicated that time will be allotted at the meeting for discussions and questions. I look forward to meeting Management and fellow shareholders, learning more about Neom's business and their future plans, and will push hard for good answers to the above concerns.
SS9173
Mae, the SHM is next month EOM
Updated Neomedia Financial Summary
Sales (Millions) Net Income (Millions)
Neomedia $2.1 -$9.1
BSDS $8.6 $0.5
12snap $7.4 -$1.5
Sponge $4.6 $0.3
Gavitec $0.8 -$1.1
Mobot $0.3 -$1.5
TOTAL $23.8 -$12.4
DD Mobile Payments to rise from $155m in 2005 to $10bn Total Revenue by 2010, with Increasing Consumer Adoption of m-Payment Schemes
http://www.juniperresearch.com/
Hampshire, UK – May 2006: Mobile payments are set to rise to $10bn in total revenue by 2010, thanks to the entrance of new players offering m-payment schemes and subsequent consumer demand, according to Alan Goode, senior analyst and author with Juniper Research. And following the announcement of the expansion of PayPal services into the micro mPayment and mRetail sector, this will only serve to facilitate a fundamental shift in global consumer payment services now and into the future.
This new prediction by Juniper Research follows media reports that PayPal has decided to enter the fray of mobile payments, offering a new texting service called PayPal Mobile. This new service will offer its users the freedom of sending money, donating to charities and purchasing items via a mobile payments platform.
Juniper’s forecasting of the advancing adoption of mobile payment services – with the total number of m-payments forecast to rise from 78m to 175m in the coming year alone – can be seen as a realizing trend, with Paypal’s statement of intention. This mirrors the trend seen with the implementation of card based vending solutions - a method that normally increases the average transaction value.
Certainly with their i-mode FeliCa™ service, transaction data captured by NTT DoCoMo in Japan suggests the average transaction value for mobile payments will surpass the traditional sub $5 micro-payment seen with cash-based payments. Author and analyst of the latest Juniper report into mobile commerce strategies, Alan Goode states: “cashless purchases made using NTT Docomo’s i-mode Felica™ scheme are currently averaging $6.20, about 25% more than purchases made with prepaid e-money cards and cash”.
For a free white paper, further details plus report spotlight from Ericsson, of the new study ‘Mobile Commerce Strategies: Ticketing, Retail, Payment & Security (second edition)’ visit www.juniperresearch.com. Alternatively contact Michele Ince at michele.ince@juniperresearch.com, Telephone +44 (0) 1256 830002/476200.
Juniper Research provides analytical services to the global hi-tech communications sector, providing analyst reports, consultancy and industry surveys.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
My note: Gavitec offers a mobile payment service. Hopefully, they will capture some portion of this business.
http://www.gavitec.com/Mobile_Payment.251.0.html
SS9173
Personalizit, I could be wrong but I was making the assumption that this deferred compensation clause was to give some strive for a higher level of profitability ...that Sponge was already profitable or at least breakeven. We will know soon.
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=3985175
5. DEFERRED CONSIDERATION
5.1 As further consideration for the sale of the Shares, the Purchaser
shall, subject to the terms of this Agreement, pay to the Vendors a sum
(the "Deferred Consideration"), which shall be apportioned between the
Vendors as shown in Column 5 of Schedule 1, calculated according to the
Net Profits as follows:
(a) if the Net Profits are equal to or exceed (pound)1,300,000, a sum
equal to (pound)2,500,000 plus (pound)1 for each (pound)500,000
of Net Profits over (pound)1,300,000;
9
<PAGE>
(b) if the Net Profits are less than (pound)1,300,000, no Deferred
Consideration shall be paid.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SS9173
Clawmann, that's a reasonable assumption although it would be great if we had access to 12snap's 2003 financial results to confirm that there was not any extraordinary event that led to profitability that year. We probably won't get that so it's kind of a mute point.
I still believe that this week's first quarter 10Q report will show increased sales, and that the second quarter 10Q will continue to show growth.
I don't want to speak for all longs, but most I believe invested in Neom based on the strength of their IP, the quality of their Management talent and vision, and for the long term potential of the rapidly exploding mobile marketing industry. I am not overly concerned about these 2005 financial results. What we need IMO is some financial projection or guidance for revenue growth, profitability, cash flow and EPS from Management that we can hold them accountable to going forward.
SS9173
It appears my $43.7M sales estimate in the M&A Acquisition Summary spreadsheet is going to be significantly overstated (unless Sponge's revenues are a lot higher than what I originally estimated).
http://www.investorshub.com/boards/read_msg.asp?message_id=10448956
http://www.investorshub.com/boards/read_msg.asp?message_id=11018512
As I previously stated, I will update the spreadsheet after Neom issues their 10Q, which is due tomorrow. We will also get Sponge 8K results later today.
SS9173
In reviewing the 12snap 8K, they were not profitable in 2004 or 2005. I guess we were all hoping that based on that PR they were still profitable, but now we know the real story.
The PR was issued Sept 9, 2004 so you would hope that they were profitable at the time of that PR release (otherwise the wording IMO would be misleading), and the financial results were negatively impacted by the acquisition or some other unforeseen event.
SS9173
$19.2 million sales, with net loss of $12.7 million. Again, this does not include Sponge or HipCricket. And these are 2005 results with the exception that I annualized BSDS FY06 results. I expect Sponge to have better financial results, but we will have to wait for the 8K to confirm.
Hope this clarifies my previous post for all.
SS9173
($) is negative EOM
Here is a summary of the 2005 financial results as we know them today (excludes Sponge and HipCricket):
Sales Net Income
Neom $2.1M ($9.1M)
BSDS $8.6M +$0.5M
12snap $7.4M ($1.5M)
Gav. $0.8M ($1.1M)
Mobot $0.3M ($1.5M)
TOTAL $19.2M ($12.7M)
I guess the lesson learned is to not make your travel arrangements based on a preliminary proxy. I made my arrangements shortly after the preliminary proxy was issued to enable a low cost airfare. Now, I got stuck with the $100 change fee for non-refundable airline tickets plus a higher plane fare...not a big deal in the grand scheme of things, but frustrating nonetheless since I was combining this trip with other activities that I had to change as well.
SS9173