What Happens to Macrovision's Media Dream?

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It's official: Gemstar-TV Guide (Nasdaq: GMST) and Macrovision (Nasdaq: MVSN) are marching down the aisle for real. Shareholders of both companies approved the proposal on Tuesday and set the stage for a heartfelt merger ceremony tomorrow.

Content-management expert Macrovision's $2.8 billion bid for the entertainment-information powerhouse is financed in part by $650 million in new debt and an as-yet undisclosed amount of stock swaps. Former Gemstar owners who choose the option get 0.2548 Macrovision shares per Gemstar share.

Macrovision also spun out some of its software lines to raise cash for this deal. RealNetworks (Nasdaq: RNWK) took game-publishing network Trymedia off its hands for $4 million, and the InstallShield software-management suite and some lesser lights passed hands to a private-equity group for $200 million.

The new two-headed MacroStar beast will keep the Macrovision name and position itself for a bigger role in our increasingly digital entertainment future. The dream of becoming everything but the kitchen sink for your living-room needs has already infected the likes of Microsoft (Nasdaq: MSFT) and Sony (NYSE: SNE), which designed impressive media-hub features into their latest game consoles. Processor rivals AMD (NYSE: AMD) and Intel (Nasdaq: INTC) also got into that game with their Live and ViiV platforms, respectively -- though it's safe to say that you rarely hear those terms in consumer-level advertising anymore, two years after their conception.

It will be intriguing to see how Macrovision figures into this jigsaw-puzzle market with Gemstar under its belt. Perhaps the company would settle for becoming the DRM protection and media-guide combination of choice for the competition. Or does the dream explode?

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