From the Fool:
When companies lay claim to having the "next big thing," a Foolish dose of skepticism always comes in handy. However, On2 Technologies, winner of the 2006 Frost & Sullivan Award for Technology Innovation, may actually have something to hang its hat on.
According to many, On2's TrueMotion codec allows services to deliver streaming video with unmatched image quality. I'm no tech guru, but when names such as Adobe (Nasdaq: ADBE), Electronic Arts, Skype, and even XM Satellite Radio are wholeheartedly adopting a company's technology, the stock is definitely worth a second (or even fifth) look.
On2 has yet to turn a profit, but the stock has more than doubled in the past year -- fueled primarily by 200% revenue growth. In addition, On2 was recently recommended by Merriman Curhan Ford -- one of CAPS' and Wall Street's best.
CAPS All-Star upanddown100 also thinks On2's on to something:
On2 makes the best codec for the ubiquitous FLASH video and sells encoding platforms for social networking sites and individual developers. ... The revenue model here is "back-end loaded" (in other words royalties, royalties, and more royalties) so once On2 hits critical mass in the mass media -- the profitability of the company will go through the proverbial roof.