Information Technology

Ebay should buy back stock

14 Jul 2006

The shares have been hammered by declining growth rates, rising competition and confusion over strategy. Announcing a major stock buyback when eBay discloses earnings next week would begin the difficult process of restoring investor confidence.

Amazon grocery drive won’t fatten margins

7 Jul 2006

The internet giant has fed the minds of its customers with books. This month it began filling their stomachs by selling food items in bulk. But becoming an internet Costco is a recipe for pain unless it mimics Costco s success with membership fees. There's no sign of that yet.

Google payments plan carries new risk

30 Jun 2006

But the arrangement could spark antitrust scrutiny if Google is accused by competitors of unfair business practices. By linking payment processing to ad spending, Google Checkout gives merchants enticing incentives to hawk their wares on the search engine.

Misys shareholders over a barrel

14 Jun 2006

The UK software group has little option but to talk to the management buyout group, given Misys' poor share price performance. But Misys would not be in this weak position if the board had turfed out CEO Lomax last year before things got so bad.

Forget the algorithm, Google’s edge rests in hardware

14 Jun 2006

The search company s competitive advantage comes from its global network of PCs that produce instant responses to queries. This belies the notion that a company with better searchengine technology could break Google s monopoly.

Microsoft should merge MSN with Yahoo

3 May 2006

A better solution would be to put all of Microsoft s internet operation into Yahoo. The software giant mulled taking a stake in the internet group. Shareholders are worried that Microsoft will blow a fortune fighting Google.

Steve Jobs kissed goodbye to $2.5bn

20 Jan 2006

How come? After all, the Apple chief s Pixar stake is worth $3.6bn. And he ll pick up another $800m when his restricted Apple stock vests. But had Jobs not exchanged his underwater Apple options before the iPod s success, these options would be worth $3.3bn.

Earnings confusion reigns at US tech companies as accounting change nears

16 Dec 2005

From January, companies will have to expense the cost of stock options compensation. Microsoft already does so. However, consensus earnings estimates at many tech giants continue to ignore the cost of options.

Disappointment awaits euphoric Google investors

25 Nov 2005

Google s stock is impossible to value on a fundamental basis. However, by comparison with Microsoft during its early years, the internet company is very expensive.

PC industry stares decline in the face

23 Aug 2005

This may seem premature when the number of computers sold is expected to rise by 13% this year. But total revenues will probably be stagnant at best. And today s unit growth may be borrowed from future purchases.

HP’s growth slower, but healthier, than Dell’s

17 Aug 2005

The US tech group s revenues grew 10% in the latest quarter good, but still a third slower than rival Dell. But Dell s growth is being pumped up by vendor financing of rapidly depreciating goods. This sort of stimulant can have nasty side effects.

Intel faces multi-billion lawsuit by AMD

28 Jun 2005

The chipmaker s rival has accused it of threatening and "kneecapping" computer makers to maintain an illegal monopoly. Even if the suit doesn t damage Intel, it s likely to take years for management to settle the issue.

Carry trade unwinding pushes growth stocks

23 May 2005

Lust for yield has pushed up defensive stocks to multidecade highs relative to growth stocks. The unwinding of carry trades in the past two weeks may be reversing this trend. Tech stocks are flying.

European IT service problems are structural

19 May 2005

Rising sales at the top three firms LogicaCMG, Atos Origin and Capgemini point to a welcome cyclical upturn for the beleaguered sector. But the industry still faces longterm structural challenges from new technology and third world programmers.

Apple can’t bear whispers

14 Apr 2005

The group s Q2 net income was 70% higher than what the company had predicted. Yet the group s shares were down. Looks like the most irritating boom time excess, whisper numbers, are back in play.

Carly Fiorina quits HP over strategy

9 Feb 2005

Walter Hewlett got it right. The Compaq merger was a mistake and Fiorina pegged her fortunes to it. The promised operational benefits from the deal never materialized. The stock languished. Value was destroyed.

US protectionism threatens IBM PC sale

24 Jan 2005

US regulators may block the purchase of IBM s PC operations by Chinese manufacturer Lenovo on national security grounds. This looks like straightforward protectionism.

Apple feeding off iPod

13 Jan 2005

Roaring sales of the US technology company s iconic music player are flowing through to its computer business. The group s market share for computers has risen for the first time since 2000. This trend looks set to continue.

Blackberry-maker squashed in court appeal

15 Dec 2004

Research In Motion, which makes the ubiquitous mobile phones, has lost a court case relating to a key patent. At best it will be forced to start paying royalties. At worst it could be barred from further US sales. Its stellar rating could be history.

Has IBM found a buyer for its PC business?

6 Dec 2004

The US technology company is in talks to sell its PC business to Lenovo, a Chinese computer company for $1bn$2bn. But it is hard to see where Lenovo will find the money. A joint venture may be the way forward.