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WORDSTAR STILL A CONTENDER Emphasis shifts to acquisitions


NOVATO, Calif. -- Wordstar International Inc. may have lost the word processing battle during the 1980s, but it will remain a contender through acquisitions and a focus on new markets, said Chairman Ronald Posner.

"You'll be reading about more acquisitions in the coming months," he said recently. "You'll also see a series of acquisitions and co-partnership announcements that will show why we're going to be successful."

Mr. Posner, a software company turnaround specialist, has made some bold strokes since 1990, when he took over Wordstar, the one-time king of word processing software.

Last week, the company completed an agreement with Elron Electronic Industries Ltd. to set up a Wordstar subsidiary in Israel. The agreement will allow Wordstar to receive as much as $8 million in capital from the Israeli software company over the next four years, Wordstar said.

Mr. Posner has been hunting for business partners and strategic alliances. On July 15, the company announced it would buy Marietta, Ga.-based ZSoft Corp., a privately held maker of graphics, paint and imaging software.

In May, Apple Computer Corp. said it would sell Wordstar's writing tools, Correct Grammar and the American Heritage Dictionary, with all its Macintosh computers sold to educational institutions.

Not all of Mr. Posner's attempts to form alliances have worked. In April, negotiations to merge with Toronto-based Delrina Corp. collapsed in a dispute over accounting and management practices.

Mr. Posner said he's looking at other opportunities to acquire document management and retrieval products. "We're looking at forms software, fax programs, anything that affects document processing." When Mr. Posner joined Wordstar two years ago, the former president of Peter Norton Computing Inc. said his strategy was to keep large word processing makers such as WordPerfect Corp. and Microsoft Corp. from taking more Wordstar customers. Market analysts say WordPerfect has about 70 percent of the MS-DOS word processing market while Wordstar has about 6 percent.

"We've stabilized the revenue, and we're not losing market share anymore," Mr. Posner said.

Before he took the helm, Wordstar was on the verge of becoming extinct. After it was founded in the 1980s, it quickly capitalized on the personal computer revolution and became the leading word processing software maker. But by 1982, rival WordPerfect had entered the market with a splash. The easy-to-use product developed a virtual cult following and many Wordstar users defected to WordPerfect.

By 1987, the privately held WordPerfect's sales had quadrupled to $100 million from $23 million in 1985 and the company had grabbed 60% of the DOS word processing market.

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