1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Sally Jones
Sally Jones
Articles (580) 

A Luddite Consumer Perspective - Icahn’s New Mega Buy, NUAN

April 04, 2013 | About:

In 1926 Nikola Tesla, scientist, futurist and inventor, stated: "When wireless is perfectly applied the whole earth will be converted into a huge brain, which in fact it is, all things being particles of a real and rhythmic whole." In the 1960s philosopher Marshall McLuhan’s vision of technology in a media-dominated global village was that it translates "our entire lives into the spiritual form of information" and unifies the entire globe and the human family into a single consciousness.

This week Nuance Communications Inc. (NASDAQ:NUAN) and its new “Voice Ads” realized more of what Tesla envisioned and McLuhan predicted as “the intensification of the world community,” which he postulated before cell phones, smartphones, laptops, Facebook or Google. A few days ago, Nuance Communications unveiled “Voice Ads,” as a new mobile advertising format that lets a billion people have two-way conversations with the brands they love. The question is: Do you WANT to have a conversation with a brand? I don’t. I never talk to my shampoo. Ever.

The company says, “By integrating Nuance’s powerful voice technology, Nuance Voice Ads transforms traditional mobile advertising into an engaging and entertaining conversational experience, and finally gives consumers a say in the way brands advertise to them – literally.” If you read between the lines as did Marshall McLuhan, the question is: Do you want to work for an ad agency without knowing it or without being paid for it? I don’t. And I already have a say in the way brands advertise to me – buy or pass on a purchase.

The company’s advertising copy says, “Nuance Voice Ads present an entirely new set of rules, and a brand new take on mobile advertising. By removing the constraints of the visual interface, Nuance Voice Ads embrace the most natural engagement process known to mankind: Conversation.”

The question is: Since radio also removed visual constraints so long ago and delivers ad content very nicely, and you can turn the radio off, do you really want to converse with ads, keyed to voice recognition, on your personal phone? I don’t. I really don’t. And the “entirely new set of rules” they are referring to probably means that a consumer may have to agree to surrendering privacy and asserting “no personal boundaries” whatsoever, Facebook style. Like our email account providers, maybe they just want your data, and the data of billions?

When you read Nuance’s explanation of their new Voice Ads, and it makes absolutely no immediate sense but sounds really fun, you have to wonder if this is more Homeland Security technology parlaying itself into the commercial realm. Yes, the idea is to move advertising revenue to smartphones. But the selling angle that voice ads are helping consumers “interact with brands” could be marketing spluff hiding a clever misappropriation of the old-fashioned telephone, a machine through which one person talks to another, in relative privacy.

Is this technology just another excuse to use geo-fencing and cell phone spying to not only listen in on consumer conversations but glean data from them, so that someone you don’t know can know you better? Do you really want to HELP them to help you to help them? I don’t.

George Orwell described a "dystopia" held in check by omnipresent surveillance in his classic novel “Nineteen Eighty-Four.” He was right. It’s far worse than we can imagine. As a consumer, I don’t know the full extent of what is coming with smartphone voice ad technologies. As a consumer I don’t want to buy into anymore unrelenting technological interference. But as an investor, apparently activist investor Carl Icahn does:

Near the unveiling of Nuance’s Voice Ads, Guru Carl Icahn made a new buy of NUAN shares, for a total of current shares at 29,329,291, as of March 20, 2013. The stock price range was $19.5 per share.

The makes Carl Icahn of Icahn Capital Management LP the largest Guru stakeholder of NUAN, followed by Pioneer Investments:

Nuance Communications Inc. (NASDAQ:NUAN) has a market cap of $6.66 billion. Its P/E is 36.95; the P/B is 2.37. The company’s 12-month revenue growth rate is 25.3%, annual rate per share.

The current price is $21.06, with a change from average up 8%. The stock is down 17% in the past twelve months.

1365099870707.pngNUAN data byGuruFocus.com

Here’s a summary of Carl Icahn’s top buys, top sells, and top holdings.

Finally, McLuhan said that the objective of advertising is the manipulation, exploitation, and control of the individual. Do you really want that?

GuruFocus "Real Time Picks" reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only. If you are not a Premium Member, we invite you for a 7-day Free Trial.

About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 3.7/5 (7 votes)


Longleaf - 4 years ago    Report SPAM
If Carl Icahn can buy 29 million shares of this company, he definitely saw some potential value there. The company may need cut the cost to lift margin.

Vgm - 4 years ago    Report SPAM
Sally -- you're making a basic error in confusing two things: your own personal preferences and business potential. Carl Icahn's interest speaks to the latter, and you might do well to ask yourself 'What can he see that I cannot?'. Beyond that, your article is a remarkably superficial and one-sided view of NUAN, bordering on the hilarious, lacking intelligence, devoid of insight and essentially missing the raison d'etre of the company - including the huge potential of voice. I suspect neither Tesla nor McLuhan would want their names associated with your piece.

Caveat emptor!

Disclosure: no position

Please leave your comment:

Performances of the stocks mentioned by Sally Jones

User Generated Screeners

borjateyNew Value IPO
ky_chui15 percent rule
canidlakonishok test 1
cyarmeytop holding f scores 2
cyarmeytop holding f scores
rael2222TOP TOP 3
Saab HoldingsSaab other
ky_chuiProfile 1
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat