To be sure, the company will face formidable competition from RealNetworks, Microsoft and others. But our research indicates that On2 is perhaps a year ahead of everyone else technologically. That s a long time in the Internet business, and should allow On2 to establish a formidable position. It s also enough to make the firm an acquisition candidate. There s plenty of Internet money out there, and we can imagine one of the big players seeing On2 as a strategic fit.
Management is well connected in the industry.
We know that they have talked to most of the big media companies and many of the small ones. From our conversations with management, we expect On2 itself to make at least some small acquisitions and to enter more joint ventures or partnerships. The company already has several important deals, including one with Road Runner. On2 is a selection of our sister service Ground Floor . But the opportunity here was too attractive to ignore.