Re: Avid says No to NAB 2008

[Ron Lindeboom] "But while Toyotas and Hondas are clearly all over the roads, as a business model, Mercedes and Lexus aren't half bad either."

I'd have to agree with this statement, but I'd say Avid is Mercedes who realized they were losing marketshare to Camrys and Accords with leather interiors. Instead of digging in and re-establishing the high end, Avid has spent some time and money on trying to make things like Mojo mop up some mid-range market instead of letting it go.

I won't repeat my post in the Avid forum, but suffice it to say, Avid "Pro NLEs" are not the only business that Avid "the company" has anymore. Looking at where the bulk of the employee layoffs have come from recently, I can't help but wonder which product lines are most profitable and whether we might soon see a company that changes focus entirely and sells off its flagship business (Sonic Foundry anyone?) to reconstitute itself elsewhere.

You can talk about innovative marketing and I certainly wish them the best as it serves none of us to reduce our choices in the marketplace, but looking at the recent moves made in reducing personnel and changing management faces rather abruptly, I can't help but wonder if the customer support that Avid is deservedly known for can be sustained...

On the other hand, the style of the day in preparing for a sale would be to cut expenses to optimize the paper position of the company or division to garner the best price in a sale, even if it means hurting the company or division's long term prospects for sustained operations should the sale fall through.

Looking at Avid's SEC filings, they've been struggling with their traditional NLE business and their most optimistic revenue producing units have been the acquisitions. One very quick option for putting cash into the system and cutting expenses is to sell off a division. Whether or not you sell a profitable division or a struggling one all depends on what the strategy is...

Good luck Avid. I'm hoping whatever it is you have planned works.




TimK,
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