The American Medical Association, the largest U.S. physicians association, is outraged and contends that this rule, if enforced, means interpretation will cost more than doctors collect for their services. A word doctor to earn more than a medical doctor, can this be so? As usual we ran the numbers. A typical firm charges US $125 per hour for Spanish interpreters and US $160 per hour for Vietnamese interpreters, each with a 2-hour minimum. Thus the cost for interpreting a 10 minute office visit could be as much as US $300 while a physician typically charges US $50 for that same amount of time. So will these numbers increase investment in even more language technologies?

To help promote language technology, Accenture keeps running full page advertisements in world business publications stating “Chinese to become #1 Web Language by 2007.” In addition, one trade journal reports that Microsoft Research is basically involved in trying to teach computers to teach themselves to translate. How? According to Bill Dolan at Microsoft, “the researchers are combining machine learning, applied statistics, and other kinds of computer science techniques to automate the learning process. Researchers still have to hand code a set of grammar rules for each individual language; but they don’t have to hand code new rules for every possible language pair. The machine learns how each language pair matches up.” Dolan says the lab may release a commercial version of the self-training translation software within the next five years.

While the new Microsoft research should encourage investments in language technologies, the press releases issued by Global Words (purchaser of the assets of Logos Corporation) will not. Their releases give the impression of being written by a first generation machine translation system. To wit: “Giant fusion’s like German bank, bankers trust suffers from language barriers, which ignores from the management gladly, by the persons employed for it to be the more strongly felt. Software supported translation services will be on the next years a way out of this linguistic bottleneck of globalization.”

Lernout and Hauspie continue to dominate the news. So much so that a marketing director of a publicly traded localization firm told me that his prime business strategy was “not to go to jail.” He made this comment in May when Gaston Bastiens, ex-CEO of L&H, was arrested by Belgian authorities at his home while sunbathing. The warrant issued by Belgian authorities, charges Bastiens with “financial fraud, insider dealing, stock manipulation, violation of bookkeeping laws and swindling.” Since this saga began last year, L&H has lost US $10 billion in shareholder value. Although tragic, the Financial Times summarized “early optimism in this sector may have been excessive but investors still have faith.”

What’s left for L&H, now in two bankruptcies, to do? It faces debts of US $600 million, so it is basically trying to sell what assets it has like Mendez and Dictaphone. And the Wall Street Journal reports that any plan means that shareholders will get nothing; all funds will go to creditors. L&H owes the most to KBC NV, Fortis NV, Artesia Banking Corp and Deutsche Bank. In addition, L&H also owes nearly US $1 million to 170 smaller creditors. In order to carry out its restructuring plan, it needs the consent of these smaller creditors and thus it has offered to repay 75% of claims totaling US $25,000 or less.

Countering the bad news about L&H, is the good news from Bowne Global Solutions (BGS), part of Bowne (BNE). A BGS spokesperson alerts us not to “confuse Bowne & Co.’s results with BGS’.” BGS reported revenue for the quarter ending March 31, 2001 as US $19.8 million, a 55% increase over the same period in 2000 (US $12.7 million). In prior years, this quarter always was the slowest, but, BGS states “we attribute the change in seasonality from our strategy to derive long term contracts with more predictable revenue streams and careful management of the selling cycle throughout the year. They are proudest of the fact that their revenue growth of 55% only increased cost of production by 20%. BGS sums it up by saying “EBITDA (earnings before interest, taxes and depreciation) of US $1.5 is 8% and represents a year on year saving of over US $4 million. We achieved 10% EBITDA in q4 2000. Before corporate charges, we are again net income positive approximately one-half million dollars. Three consecutive quarters of EBIT profitability—in dramatic contrast to our competitors.” Bowne Global Solutions also continues to make alliances. One is with GlobalSight and the latest is with Dot Global, whereby both companies will provide their services to help companies globalize.

In May, the New York Times brought translation to its readers’ attention by running a feature on the incomes of translators. The article stated the translators’ role is secure even though companies like “Lionbridge continue to grow.”

Lionbridge Technologies, Inc. (LIOX) announced financial results for the first quarter of 2001. First quarter revenue of $27.3 million remained nearly even with revenue of $27.7 million for the fourth quarter of 2000. Revenue for the first quarter of 2001 decreased by 3% compared to revenue of $28.2 million for the first quarter of 2000. Lionbridge provided services to 322 customers during the first quarter of 2001, compared to 314 customers during the first quarter of 2000. New customers during the first quarter of 2001 totaled 81 compared to 88 during the same period in 2000.

Lionbridge reported a net loss of $5.5 million, or $0.20 per share for the first quarter of 2001, based on 27.8 million weighted-average shares outstanding. This compares to a net loss attributable to common stockholders of $8.3 million, or $0.39 per share, for the first quarter of 2000. On a “cash EPS” basis (which excludes only amortization of acquisition-related intangible assets, non-recurring charges, and accrued dividends on preferred stock), the manner in which Lionbridge is carried by First Call, the Company reported a loss of $0.13 per share for the first quarter of 2001, compared to a loss of $0.20 per share for the first quarter of 2000.

First quarter Lionbridge business highlights were:

• VeriTest Revenue Increase of 27%. Through increased activity in software quality and certification testing, as well as interoperability and compatibility testing for global deployment, VeriTest revenue increased by 27% compared to the first quarter of 2000.
• Acquisition of Data Dimensions. Lionbridge has announced its agreement to acquire Data Dimensions, Inc., a software testing business based in Bellevue, Washington.
• Henri Broekmate Named Vice President of Product Sales & Marketing
• Strong Recurring Revenue. During the first quarter, 76% of revenue was derived from customers with four or more consecutive quarters of business activity with Lionbridge.

Alpnet (AILP) announced unaudited results for the quarter ending March 31, 2001. Sales of services for the quarter were US$11.1 million compared to last year’s of US $12.2 for the same period. The fall of the Euro penalized Alpnet’s US dollar earnings by US $660,000 during that period. Its net loss for the quarter was US $996,000. Alpnet also announced it had completed its restructuring which it hopes will save US $3 million in costs.

Of little surprise to anyone, Logisoft announced it was being acquired by eResource Capital Group (RCG). According to the terms of the letter of intent, eRCG will acquire the operating business and assets of the Logisoft Subs. It is anticipated that Logisoft Subs will be spun-out to a group of shareholders led by current management from the publicly traded corporation Logisoft Corp. In calendar year 2000, Logisoft’s revenue increased by $1.8 million, or 43%, to $6.0 million from the previous calendar year. Logisoft’s Internet services revenue in calendar year 2000 exceeded $1.6 million, which represents an increase of $1 million.

SDL’s (SDL) stock price at around 170 pence was in the doldrums in May along with other hi-tech stocks. Also in May, the Industry Standard voted SDL International one of Europe’s five rising tech stars. SDL’s President was asked what’s the secret to being a successful profitable business in the post-dot-com era? “Easy” said Mark Lancaster “we never were a dot-com in the first place.”

Berlitz GLOBANET (BTZ) completed its fourth acquisition during 2000 when it acquired Germany’s Altas. Berlitz GLOBALNET recorded revenues of US $104 million in 2000.

Global Sight and Hewlett Packard (HWP) announced an alliance to bring language technology to the Internet. Increasingly, computer companies like HP are entering the global services sphere to compete with IBM, which already has a large and growing presence.

John Freivalds
JFA Inc.
5160 Colonial Drive
Minneapolis, MN 55416 USA
Tel: +1 763 525 0731
Fax: +1 763 525 0659
E-mail: JFA@worldnet.att.net