One step closer for interactive TV Gemstar-TV Guide-Comcast deal bodes well for sector By David B. Wilkerson, CBS.MarketWatch.com Last Update: 11:49 AM ET Mar 24, 2001 SAN FRANCISCO (CBS.MW) -- The new deal between Gemstar-TV Guide and Comcast is more than just a smart deal for two entertainment companies. Coming on the heels of Gemstar-TV Guide's similar pact with Paul Allen's Charter Communications (CHTR: news, msgs, alerts) last month, Friday's agreement brings interactive television one step closer to becoming a pervasive part of the American media landscape. See full story. Under the 20-year deal announced Friday, Gemstar will supply interactive TV to Comcast, the nation's third-largest cable company. And that bodes well not only for Comcast (CMCSK: news, msgs, alerts) and Gemstar (GMST: news, msgs, alerts) , but for other providers of gate keeping electronic program guides, such as WorldGate Communications (WGAT: news, msgs, alerts) , which rose 7 percent to $4.28. FRONT PAGE NEWS Stocks end week on bullish track Will Oscar steal box office thunder? No smoking gun in coming data Striking a severance package deal NorthPoint deal rattles DSL market Other interactive players advanced Friday. SeaChange International (SEAC: news, msgs, alerts) , a maker of video-on-demand and other digital TV products, rose $1.38 to $14.88, OpenTV (OPTV: news, msgs, alerts) , which makes an ITV operating system, tacked on 31 cents to $11.38; TiVo (TIVO: news, msgs, alerts) , maker of software for a set-top box that records television programs onto a hard drive, rose 10.3 percent to $5.69, and Motorola (MOT: news, msgs, alerts) , the nation's No. 1 maker of set-top boxes, added 31 cents to $15.99. On the downside, Liberate Technologies (LBRT: news, msgs, alerts) lost 13 cents to $7.88. The company makes software that, when downloaded to a TV-set-top box, enables interactive services, such as electronic program guides, e-mail, e-commerce and video-on-demand. In a recent survey of top media executives, Myers Reports Inc. found that the majority of those individuals expected interactive television revenue to top $15 billion by 2005. Some 25 percent of those executives said they see the total surpassing the $25 billion mark. Electronic program guides like Gemstar's, combined with set-tops made by Motorola and Scientific-Atlanta (SFA: news, msgs, alerts) -- utilizing an infrastructure developed by companies like OpenTV -- will provide the path to most interactive services. Gemstar's programming device links to set-top boxes and lets viewers browse for a specific program, or find all the choices in a category of entertainment When most U.S. homes are not only equipped with cable, but have full access to ITV services, the industry will truly have an exciting group of new revenue sources to harvest. Analysts say Gemstar's electronic program guide, though it is gaining momentum, will be a huge catalyst for the company's stock once its advertising business becomes a cash cow. Right now, Gemstar's advanced guides feature clickable ads that appear on the left side of the TV screen as a viewer is searching for programming. Deals like the Comcast and Charter agreements will help convince advertisers of the viability of this particular brand exposure. A more pervasive interactive environment has major implications for ACTV (IATV: news, msgs, alerts) and Wink Communications (WINK: news, msgs, alerts) , which specialize in targeted ITV advertising. Once customers become accustomed to ordering products, movies and many other items over their TV sets, they'll be more likely to respond to pitches made at the bottom of their TV screens by the likes of Wink and ACTV. At a time when TiVo has threatened to change television's advertising model forever, ACTV and Wink are hoping that selective targeting can save it. Needless to say, the industry is waiting anxiously to see if they can, and the kind o