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PointCast planning IPO

"Push" technology firm PointCast is planning to file for an initial public offering this month, jumping on the bandwagon for Net IPOs, sources say.

PointCast is planning to file for an initial public offering later this month, jumping on the bandwagon for Internet IPOs, sources said today.

The company declined comment, citing legal reasons.

But sources said an IPO is in the works. Barring any last-minute hitches, the requisite filing with the Securities and Exchange Commission--a fat document dubbed an "S-1" form--is planned by the end of May, they said.

Assuming Wall Street bites at the proposed IPO, PointCast will join other publicly held Net companies in a booming but brutal market starting this summer. Few Net companies are profitable, but most of their stocks are soaring. Some examples: Amazon.com and Preview Travel, which went public only last year.

All along, an IPO has been a possibility for PointCast, See related profile: 
PointCast pushes a new strategy the six-year-old "push" technology provider. But it was expected later this year or next year--if ever. PointCast's technology, which pushes news and other information to users' desktops, has caught on much slower than originally expected. Its information providers include CNN, the Wall Street Journal, and the New York Times, among others.

Analysts think the timing for a PointCast IPO may be right. They cite the steep run-up in Net stocks, Wall Street's love affair with content-focused Net companies, and the recent IPO filing by software firm Inktomi, another hot IPO candidate in a similar market. (Two-year-old Inktomi is not profitable, but it has an implied market value of more than $250 million, according to regulatory filings.)

More important, perhaps, the analysts cite steady progress on PointCast's part to make the company "fighting trim" for a public offering. PointCast has been beefing up top management and its product lines.

"This is a time they should reconsider doing [an IPO]," Ullas Naik, an analyst with First Albany Corporation, said in an interview recently.

Added Alexis DePlanque, an analyst for META Group: "You have to admit that Internet stocks are at an all-time high and there's a focus on Internet-driven companies. It makes sense."

Still, many analysts have been bearish on PointCast, arguing that the company missed earlier opportunities to go public--or to accept a supposedly lucrative buyout offer from Rupert Murdoch's News Corp. last year. (PointCast never confirmed the News Corp. deal.)

But the renewed focus on gateways or "portals" to the Net, from the likes of Yahoo, America Online, Netscape Communications, and Microsoft, could breathe new life into PointCast, analysts said. The company has an edge on many competitors, too: a large installed base of business users (1.2 million at last count).

A PointCast spokeswoman declined comment on any IPO strategy. "We don't comment on industry rumor," she said.

Partners at Benchmark Capital, one of PointCast's investors, also declined comment. One of them offered this: "In November we hired an outstanding CEO, and his job was to leverage the outstanding asset that had been built into a major enterprise, [and] major enterprises generate a great deal of value."

PointCast has been bolstering its management ranks. It hired David Dorman, 44, former executive vice president at SBC Communications, one of the most hard-charging Baby Bells, as chairman, president, and chief executive officer.

Sources speculated that Dorman received a large number of shares in PointCast to help persuade him to join the privately held company. Dorman stands to make a hefty sum if PointCast goes public, they said. He is not alone in making such a switch. Some examples are as follows: Joseph Naccio, who left a senior-level executive job at AT&T to become chief executive of Qwest Communications; and Tom Evslin, who also resigned from AT&T to become chief executive of ITXC. Both start-ups (Qwest went public last year and ITXC is still private) now are taking on telco giants, including AT&T.

Not only Dorman, but also PointCast's rank-and-file and its venture capital firms stand to benefit from an IPO, however.

Since Dorman came on board in November, he has quickly reshaped the firm's management.

On April 6, PointCast promoted 37-year-old Gary Paranzino to vice president and general counsel from assistant general counsel.

Two days later, it formed a new team to oversee the advertising sales business. Anna Zornosa, formerly senior vice president of advertising sales and affiliate relations, left, and PointCast cofounder Greg Hassett was named a "PointCast Fellow," although he remained on the board.

Late last month, the company made two product-related announcements, intended to bolster the content at its "portal" for business customers. It struck deals that included package searching from the U.S. Postal Service. As part of another deal, CareerPath.com brings employment services to PointCast's users.

On Monday, it shipped version 2.5 of the Pointcast Network, which included increased network efficiency, more frequent news updates, and the ability to broadcast real-time corporate news alerts using multicast technology.

Special projects editor Dawn Kawamoto contributed to this report.