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SonicBlue On the Block?

17 Jan, 2003 By: Holly J. Wagner

Executives at cash-strapped SonicBlue Inc. are exploring the possibility of selling the company, its CEO said today.

"Sonicblue has improved its operational performance and its new product lines are well

poised for 2003," said CEO Gregory Ballard. "The goal of this process is to clear the way for the company's businesses to continue their strong growth in the market, unburdened by the amount of debt now carried on the company's balance sheet. "

Corporate financial advisor Houlihan Lokey Howard & Zukin, is evaluating available strategic options in light of the amount of debt on the company's balance sheet.

Among the various options the board has authorized to be explored is the identification of new financial or strategic partners who might invest in, or acquire, the company, its business units, or assets.

Sonicblue has been struggling to stabilize the company's top leadership and fend off legal assaults from the movie industry over the company's ReplayTV personal video recorder (PVR), which includes ad-skipping and program forwarding capability.

Earlier this week the owner of Planetreplay.com, a Web site for ReplayTV users, halted discussions of program forwarding on his site and posted this message:

“I gave my deposition testimony in the Entertainment Companies' lawsuit against SonicBLUE on January 14th,” site operator Chad Little wrote. “Based on the questions they asked me at my deposition, the fact that I do not want my users to be sued or their privacy put at risk, and that I myself do not want to be sued, the portions of Planet Replay relating to the sharing shows have been taken down until further notice.”

Little's fear is justified. Last year the studio lawyers persuaded a judge to order Sonicblue to track ReplayTV user activities in support of the lawsuit. Another judge later reversed that order, but Little was concerned he might be forced to divulge private site user information.

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