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Thursday, August 12, 1999 < Prev Next >

Tepid Visio Hopes To Catch Fire

Company Creates New Software, Strategy

In a year when technology stocks' spasms on Wall Street have left investors with jaws dropped, Seattle-based Visio's performance barely has triggered a yawn.

Even as Amazon.com, RealNetworks and others hit highs in April, Visio hovered around $30 a share. And as Amazon.com, RealNetworks and others have dropped to sharp lows, Visio still is hovering around $30.

But the graphics-software company hopes its newest product and revised strategy will recharge customer interest and investor enthusiasm.

The company yesterday launched Visio 2000 Standard Edition, its latest version of drawing and diagramming software for personal-computer users. The software is touted as faster, easier to use and compatible with new versions of operating software. Visio 2000 also can recognize and support more Internet functions, such as Web links within drawings, allowing users to tap the power of the Internet for drawings and diagrams.

"It's the start of a new beginning," said Michael Molendijk, marketing director for Visio 2000. The company even has revised its software motto, calling Visio 2000 "the visual language of business."

The company is trying to expand the software's attractiveness to users beyond its base of engineers and technical designers. It also is focusing on agreements in which companies license the software for their employees' use as opposed to individual retail sales.

Visio also is spreading its name by making the software available over the Internet as well as through sales of boxed copies.

"We're really talking about the game plan for us to become Visio everwhere," Molendijk said.

The shift to embrace the Internet is a smart move, said Jay Vleeschhouwer, an analyst with Merrill Lynch. But Visio is not as far along in its repositioning as it would like to be, he said.

Merrill Lynch already had upgraded its opinion of Visio, anticipating the product launch.

Visio's new strategy reflects how the world has changed since the company was founded in 1990.

Started by Chief Executive Jeremy Jaech, Executive Vice President Ted Johnson and former employee Dave Walter, Visio launched its first product in 1992.

Although engineers were early users of the program, they weren't the only ones.

Both sides arguing the O.J. Simpson murder trial in 1995 used the software to diagram the crime scene.

The company is profitable but faces challenges. Visio reported sales of $50.3 million for its third quarter ended June 30, about $4 million below expectations. It reported a profit of 31 cents a share, below some analysts' expectations of 35 cents a share.

Visio's product launch didn't bolster its stock price today. At the close of trading, the stock was down $1 to $30.50.

Helen Jung's phone message number is 206-464-2742. Her e-mail address is: hjung@seattletimes.com

The Seattle Times

Source page: http://community.seattletimes.nwsource.com/archive/?date=19990812&slug=2977010