Update: Viewpoint PR told me that the deal is non-exclusive, so other companies can still license the technology. There are some standard restrictions that apply, but none have been made public.
An investment banker who will remain unnamed just wrote to me about the AOL-Viewpoint deal..he believes I may be making the wrong inference about the buyout: “A permanent license for $9 million, plus a services contract for $1 million does NOT constitute the sale of the business. The company still owns its key asset — which it may license elsewhere, since the AOL license is not exclusive.
Furthermore, enhancements to the software may or may not be included in the “permanent license.” And there may be an annual income stream from the services contract. Having such a large, lucrative, and {thanks to you) well-publicized license with AOL will assist the company in closing other licenses. Furthermore, it is possible that the inverse of your suggested scenario was at work. AOL may have tried to buy the company, but was only able to get a license deal. And this permanent licensing arrangement may have been an “optimal” solution for both sides — AOL has permanent access to some technology it wants to use and the company receives a substantial cash infusion without selling ANY equity or losing control of its key asset. It may have been a quietly masterful deal.
I would like to know if there are restrictions or exclusivity conditions in place on the license. Will Yahoo, Microsoft, and other leading websites be able to license the same technology that AOL did?”
InternetNews: Back in August, Viewpoint underwent a restructuring saying that it conducted a reduction of force in line with its plan to achieve a flatter, more nimble business infrastructure. The exercise resulted in the elimination of more than 20 positions, 50 percent of which were senior positions of vice president or higher. Several of the positions eliminated were also among the company’s sales force.
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