Peachier Than Peach
"Maybe our technological superiority is the reason we sold for more than Peach's $74 million" So says Ami Miron, cofounder of MoreCom, which was sold to US company Liberate for $561 million.
Let's say an entrepreneur comes to you with a record including 26 years of work experience with Philips and General Instruments, development of technology for eliminating ghost images, development of a technological basis for high definition television (HDTV), the first MPEG system for Internet video compression, and Picture-in-Picture technology. If he told you he wanted to set up a company to merge television with the Internet, would you invest?
That is exactly what Yoram Oron, manager of the Vertex venture capital fund, did in a friendly meeting three years ago with MoreCom cofounder Ami Miron. He decided then to invest, and today he is reaping a handsome profit before tax of $110 million on a $3.5 million investment.
We spoke today with Ami Miron, 47, born on Kibbutz Ruhama, near Sderot. Miron received $112 million in Liberate shares.
"Globes": MoreCom cofounder, chairman, president, and CEO Ami Miron, congratulations on your good luck in your successful deal.
Ami Miron: "Luck? I've always had luck. But thanks anyway. In any case, money was never my aim in life. My goal is to create success, and my chief consideration in deciding to sell lay in long-term concern for the customers and my shareholders".
If you think in long-range terms, why did you sell?
"The solution we aspire to offer requires marketing and assimilation capabilities by the type of customers served by large companies with deep pockets. If we're the first in the market with the best technology, we'll have a problem at the implementation stage. The moment the market recognizes the potential of the field and of our product, we'll need people to realize the sale. That is where Liberate contributes.
"Liberate will of course contribute to the level of the technology. It has the same product concept, but their people, who came from Oracle and Netscape, have an Internet and database background. MoreCom's team comes from the field of video, converters and broadcasting. Our solutions are therefore mutually complementary both at the product level and at the level of capabilities of the work teams.
"Tradeability was important for the shareholders, especially the funds that entered at the beginning, even if they had no intention of immediately realizing their investment. There was, however, absolutely no pressure on me to sell. I got unusual trust and support from the investors".
There are several companies in the field, like Peach and Worldgate, and each of them has its own concept.
"Absolutely. I think that when I identified the question of combining Internet with television in 1997, I wasn't the only one. We, however, have built a platform that operates both through a server located in a cable company broadcast center and through a digital converter.
"Our solution has software in the converter, which translates HTML pages (Internet pages - E.A.), and also contains an Internet browser and prepares the television presentation. The product's uniqueness is that it enables the user to receive both a normal television picture and an Internet window at the same time. I think this is the most significant difference between us and Peach. Perhaps our technological superiority is the reason Peach sold for $74 million, while we were sold for $561 million.
Why is that important?
"Because we don't want to make the television viewer, the final customer, get up off the television couch and go to his study or the children's room whenever he wants to check on his shares or his e-mail. With Peach, he has to choose: television or PC. Peach takes an Internet page and treats it like a video page, compressing it into the channel.
"We, on the other hand, combine the Internet data with the digital broadcast, giving the consumer the best of both worlds. MoreCom's goal is to build a bridge between the convenience of sitting in the television lounge and the convenience of the Internet world.
"For example, if you see an MTV video clip and you want to buy the CD, you can do it with the press of a button, and you get confirmation of the order on the spot. Call it TV-commerce. Everyone says they do it, but the difference is that we really do it. Through Liberate, we want to reach a billion interactive television customers.
Published by Israel's Business Arena on March 29, 2000
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