IBM

  • Sun Microsystems, which last week agreed to be purchased by Oracle for $7.4bn, reported sharp losses in the opening months of this year, highlighting the impact of the recession on the computer systems company. In a departure from protocol, Sun did not host the usual conference call with investors and analysts following results.
  • IBM responded to the collapse of its own takeover offer for Sun this month with an announcement that it would return more cash to its shareholders instead in the form of a higher dividend and increased stock buy-back plan.

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  • Three months into her stint at the head of Yahoo, Carol Bartz is seeking buyers for the HotJobs employment site. Other ancillary businesses in Yahoo’s portfolio could also be getting prepared for disposal.
  • Twitter is benefiting from all that attention. Visitors to Twitter.com surged 131 per cent in March to 9.3m, suggesting that more than being just a fad, Twitter could in fact be going mainstream.

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  • IBM took its offer to buy Sun Microsystems off the table when the onetime Silicon Valley powerhouse asked for more money, and said it wanted to talk with other potential buyers when IBM balked. People familiar with the negotiations said everything might still be worked out, since no other suitors are expected and the financial difference between the two sides isn’t vast.
  • The Associated Press is hoping to stanch what it claims is the rampant unauthorised republication of its content across the web. Websites – including Google News – will have to seek permission to use the work of the AP or its member newspapers, and may face legal action if they don’t comply.

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  • According to reports, IBM is set to acquire Sun Microsystems, a prominent rival in the server and software markets, for $7bn. The purchase is the largest in Big Blue’s history, and breaks a long dry spell in the M&A arena. The deal could also cement IBM’s hold on some core hardware and software technologies, bringing a sea change in the world of corporate and government datacentres.
  • Research in Motion reported better than expected fourth quarter earnings thanks to strong BlackBerry sales and a healthy jump in new subscribers, sending its share price soaring in late trading. RIM this week launched a BlackBerry application store to rival the popularity of Apple‘s App Store.

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  • Google is looking for the next Google. With Google Ventures, a new venture capital arm, the internet search giant hopes to expand its already outsized influence on Silicon Valley and eventually rival established venture firms such as Kleiner Perkins and Sequoia Capital.
  • Facebook is replacing its chief financial officer as it seeks to balance rapid growth against increased capital needs and a closed IPO market. Speculation about Facebook’s financial health has been rampant of late, but today details emerged that suggested the company is in better shape than many thought.

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  • IBM is said to be in talks to acquire rival Sun Microsystems for about $6.5bn, potentially marking a major consolidation in the computer hardware manufacturing industry. The move would boost IBM’s hardware offerings, but the deal could face major regulatory hurdles.
  • Oracle reported lower sales and profit for the quarter, but the results beat analyst estimates, sending shares higher. Some watchers were predicting a much worse decline. Oracle announced it would pay its first dividend – 5 cents a share – since the company went public in 1986.

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Richard Waters

The tech headlines this week have certainly been eye-catching.

Cisco, which in this downturn is still making a 60 per cent gross profit margin and operating profits of more than 20 per cent of revenues, is risking upsetting long-time allies like HP to get into servers – a business in rapid retreat where profits have collapsed.

Now comes news that IBM is in advanced talks to buy Sun, reversing its steady march away from the hardware business into more consistent and profitable software and services. This amounts to a big change in course: after focussing on small software acquisitions, Big Blue looks like it’s about to become a consolidator in Unix servers.

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  • Cisco‘s open secret is a secret no more. After weeks of rumours speculating as much, the networking equipment powerhouse is entering the server market, posing a potential threat to IBM, Hewlett-Packard, Dell and Sun. Servers are lower-margin products, but analysts say Cisco will be able to charge more by offering bundled products.
  • Apple is unveiling new iPhone software on Tuesday. Watchers don’t expect multimedia text messaging, but other desired features, including copy and pasting and integrated contact books, seem likely. Don’t expect an appearance from Apple chief executive Steve Jobs, who remains on medical leave, or the debut of Apple’s rumoured 10-inch touchscreen tablet.

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