Happenings in our industry

Jamie Erbes (jamie@erbes.com)
Thu, 23 Jul 1998 00:52:19 -0700

If I may deviate from the recent flame-fest and IP law discussion, there was an interesting
burp in our industry today. Even the big guys are going down in flames. Seems PictureTel's revenues are half of what they were last year. I guess the pressure from other videoconferencing players such as Polycom, 8x8, and First Virtual is catching up to them. Is any video-related venture going to create a viable business? What's next for us?

------------ Press Release follows --------------

PictureTel Buys Starlight Networks

In hopes of reversing its declining fortunes, PictureTel Corp.
agreed to acquire Starlight Networks. The company also
announced a second quarter loss and declining revenues.

PictureTel has been the leading supplier of videoconferencing
systems for the better part of this decade, however, analysts
have long predicted that with the advent of lower-cost systems
including IP-based offerings, the company could lose the lead
by year's end.

Starlight Networks is regarded as a leading supplier of
streaming multimedia software and video-on-demand servers.
Starlight could be what PictureTel needs to bring the
conferencing and IP-based streaming video worlds together,
said Al Lill, an analyst at the Gartner Group, Stamford, Conn.

"It's clear they are coming together pretty quickly; instead of
going to one set of vendors to get videoconferening and
another to get video-on-demand [technology], customers will
be able to go to one vendor," Lill said. "PictureTel also gets
some development guys who really understand the IP world."
By Jeffrey Schwartz