Gemstar Shares Rise on Microsoft Deal

Gemstar International Group shares rose 19% after Microsoft Corp. said it will use Gemstar’s video-programming technology in its updated Windows software. Gemstar rose $4.63 to close at $28.63 in Nasdaq trading. Earlier, the shares touched $29.50. Microsoft said it will use Gemstar’s programming technology, including the VCR+ that makes it easier for consumers to record TV shows, in its Windows 98 operating system for personal computers. One analyst estimated that Pasadena-based Gemstar could get as much as $28 million in the agreement. Microsoft shares rose $2.63 to close at $132.13, also on Nasdaq. Joe Arsenio, an analyst at Hambrecht & Quist, said he expects Redmond, Wash.-based Microsoft to pay Gemstar about $20 million in cash upfront and royalties of $9 for each software package, or about $8.1 million, based on estimates Microsoft will sell 900,000 copies of Windows by March 1999. Analysts expect Microsoft to use Gemstar’s technology as part of its TV Viewer feature in Windows 98. Microsoft will also incorporate interactive programs in its WebTV boxes.