Long Island Technology Briefs October 17, 2003

What's the value of 1-800-Flowers.com?

That question nagged Wall Street analysts, who always are assessing the worth of companies, more than usual after a rival, FTD Inc., was acquired by a private investment group Oct. 6.

In that deal, Green Equity Investors will take Downers

So where does that leave Flowers?

Kathleen Heaney, an analyst at Maxim Group LLC, noted that Green Equity is paying 1.1 times revenue or 1.0 times enterprise value for FTD.

Using a similar revenue multiplier for Westbury-based Flowers yields a price of $622 million, 4 percent higher than the recent price of $9 per share. Using an enterprise-value multiple (that's market capitalization plus total debt minus cash and marketable securities), Flowers would be worth $647 million, or $9.50 per share, Heaney found.

Having worked the math, Heaney cautioned that the companies are not identical. FTD, which has no inventory, handles orders over the phone and on the Internet for a network of florists.

Only half of Flowers' business, meanwhile, is in flowers and the company stocks a varied inventory of gift and home items.

Heaney judged that the inventory risk of Flowers is more than offset by the advantages of diversification and its faster growth than FTD. She has a 12-month price target of $11 on the stock.

An inventor clones Segway for himself

Segway, the uber-hip $5,000 balancing scooter made by Rockville Centre native Dean Kamen, has competition.

At least a little.

The upright, two-wheeled scooter, unveiled with huge fanfare in 2001, has been copied by Mountain View, Calif., inventor Trevor Blackwell.

On his Web site, Blackwell describes building a Segway-like scooter for about $2,000 from off-the-shelf parts such as wheelchair motors and car batteries.

Blackwell acknowledges that his clone is not quite the same as a Segway. For instance, unlike the Swiss-watch precision of the Segway gearbox, Blackwell says his sounds like the starter motor on my old Dodge Dart. Rrrrr-rrrr-rrrr-rrrr.

And unlike the Segway, which has many safety and redundancy features, mine has none whatsoever, Blackwell acknowledges.

Though Kamen's company has patents covering such scooters, Blackwell says his version suggests that there's room for a Henry Ford of balancing scooters to develop and sell a low-cost everyman's version.

Comverse unveils 'push-to-show' service

Comverse Technology, Inc. is taking the wraps off a range of new products at a major industry expo, ITU Telecom World in Geneva Oct. 12-18.

Taking the push-to-talk craze a step further, the supplier of systems for wireline and wireless providers is demonstrating a walkie-talkie video service.

The service streams live video to individuals or groups on a user's instant-messaging-style buddy list.

Comverse also is demonstrating video-call answering, which allows video callers to watch an outgoing video greeting and then leave a video message.

Will Optimum Online share space on the cable?

In a victory for Verizon Communications and other telecom companies, the Ninth U.S. Court of Appeals has ruled that providers of cable modem service, like Cablevision's Optimum Online, should abide by the same rules as phone-based Internet service providers.

Verizon and others have long been required to open their phone infrastructure to competing online service providers and they argued that the exclusivity enjoyed by cable companies put them at a competitive disadvantage.

The Federal Communications, whose rule was overturned by the court, said the Court of Appeals threw a monkeywrench into efforts to create broadband policy and that it would appeal the decision.