Buy on the rumour, sell on the news . . . the stock market is more about psycology than reality. In other words, perception is the idea. If it seems that a company is growing, then partially that will be down to the emphasis on products and services that are growth industries, or perceived as growth industries. Kodak was literally a small player in the commercial printing and graphic arts supply business, then they bought Creo and a few other companies, and suddenly they are the largest player in the industry. This is also where many of their current charges originate. SEC reports are quite long, and need to be read in the context of past reports, though the variations of how divisions are grouped and reported can also influence the perception of any company. Articles written based upon SEC reports, or quotes, or sound bites, will always fail to give the big picture reality behind any company.

So Kodak want to loose the public perception of being a film company, much like IBM worked hard at getting away from the public perception of being a computer company. When revenues from film are only 1/3 of total revenues, it seems to me they have achieved that, though changing public perception is slower. This is an era in which the propoganda of oft-repeated terms eventually drives perception; again that buy on the rumour, sell on the news idea. So when statements are made about Kodak being a digital company, this is much like so many companies only a few years ago adding dot com to their names to emphasize they were hip to technology . . . driving public perception.

In reality, when you look at how fast the GCG division of Kodak is growing, mainly fueled by purchasing other companies, then such claims as Mr. Perez makes are not in error. Whether the constant push of terminology will push public perception is too early to tell. Recall that some people still used the term IBM compatible long after software boxes did not use those words. Commercial printing and graphic arts supplies are not sexy, but they can generate lots of revenues and profits.

Personally I think Kodak would have a better run of altering perception if they pushed that they are an imaging company. This is much closer to reality, and can eventually avoid that dot com mentality. Eventually the term digital will be as meaningless in business as dot com is today, and the future is coming up fast.

Ciao!

Gordon Moat
A G Studio