A class-action lawsuit in Indiana challenges a potential new revenue stream for Vizio Inc. as it weighs an initial public offering.
The suit, filed by Trent Strader, contends the Irvine-based company monitored and tracked his viewing habits through his smart TV, unbeknownst to him, concealing the tracking software and the method for disabling it.
The Business Journal in September reported that Vizio paid $50 million for complete ownership of San Francisco-based Cognitive Media Networks Inc., which makes software that identifies content displayed on a smart TV, notifies the content provider of viewership, and enables the TV to launch interactive apps, ads and other content directly to the consumer.
The data captured includes ZIP codes, allowing marketers to zero in on consumer behavior in defined geographic areas and to target viewers with specific branding messages, promotions or other product offerings.
Consumers can disable the software through their TV settings menu, according to Cognitive Media’s website, but it’s cumbersome, nonintuitive and difficult to access, according to the lawsuit.
Vizio plans to “aggressively defend against this matter,” according to a company spokesman.
“We believe the lawsuits are factually wrong, based on inaccurate speculation, and legally without any merit,” Vizio told the Business Journal in an email statement.
Cognitive Media’s automated software is an integral component of Vizio’s Inscape data services, which aim to monetize data collected from millions of consumers who own Vizio TVs. The top seller of smart TVs in the U.S., with annual sales of about $3.1 billion, highlighted the new revenue stream in regulatory documents in July as part of its IPO filings.
Vizio is seeking to raise up to $172.5 million in a very dry IPO market in the tech sector. Share price and dates associated with the move haven’t been disclosed.
Software Maker Bought
Costa Mesa-based billing software maker NWP Services Corp. was acquired for $68 million by RealPage Inc. in Texas.
NWP, which provides cloud-based residential billing, electronic payments, energy management, back-office accounting and IT services, will add about $45 million in revenue and $5 million in adjusted profits to the NASDAQ-listed company, which offers similar services.
NWP, which employs about half of its 300 workers in Costa Mesa, posted revenue of $58 million and adjusted profits of about $6 million last year. RealPage recorded revenue of $404.5 million and lost $10.2 million last year.
NWP Chief Executive Ron Reed under the deal will become senior vice president of resident billing services and report to William Chaney, executive vice president of enterprise solutions.
The deal will create the leader in resident billing, energy management and back-office services in the U.S. rental housing industry, the company said.
Ex-Emulex Exec to Lantronix
Former Emulex Corp. executive Sanjeev Datla was named chief technology officer of Irvine-based networking equipment maker Lantronix Inc. in a newly created position.
Datla, 42, most recently served as chief executive and founder of Moxtreme Corp., a Silicon Valley startup developing a cloud-based Internet of Things and virtualized real-time messaging service. He served as vice president of cloud initiatives at Costa Mesa-based Emulex from 2010 to August 2013.
Lantronix Chief Executive Jeff Benck, who took the top post in December, was president and chief executive of Emulex from July 2013 until Avago Technologies Ltd. acquired it for $660 million in May.
Avago, which is based in Singapore and has its U.S. headquarters in San Jose, closed its $37 billion buy of Irvine-based Broadcom Corp. about a month ago.
