Stock Soars as TiVo Wins Key Patent

TiVo Inc. said Thursday that it won a patent for key technologies in the emerging field of personal video recorders, where TiVo is in fierce competition with Microsoft Corp. and others.

The news sent TiVo’s battered stock up more than 70%, or $3.56, to $8.50 in Nasdaq trading. Later in the day, the San Jose-based company reported a $50.2-million first-quarter loss, more than double the $23.4-million deficit of a year ago but down from an $89.2-million deficit in the fourth quarter of 2000.

The patent comes at a critical time for TiVo, which has attracted 200,000 subscribers but is burning through its cash. Company officials said they expected their cost-cutting efforts to keep TiVo going through the end of the year without needing to raise more money.

TiVo and ReplayTV Inc. were the first companies to market a personal video recorder, which uses a high-capacity hard drive rather than magnetic tape to store programs. Because they can record and play back simultaneously, these devices enable viewers to pause, rewind and replay live TV.

The patent relates mainly to TiVo’s software and the most significant element applies to the simultaneous recording and playback of TV signals.

James Barton, TiVo’s chief technical officer, said all of the company’s competitors--including Microsoft, which is aggressively marketing a new UltimateTV personal video recorder--may be infringing on the new patent. The company plans to sell licenses to its technology, opening a potentially significant new source of revenue.

Microsoft officials declined to comment.

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Patent Boosts TiVo

TiVo’s shares jumped 72% on Thursday after the company won a patent for personal video-recording software. But losses at the San Jose-based firm continue, and shares remain well below their high of $37.50 in June.

TiVo shares, weekly closes and latest on Nasdaq

Thursday: $8.50, up $3.56

Source: Bloomberg News