Here’s a column I posted at globeandmail.com about RIM’s partnership with Palm:
“For something that seemed like a blockbuster deal, the announcement that Research In Motion would license its BlackBerry email software to handheld maker (and competitor) Palm Inc. did surprisingly little to boost RIMÃ¢â‚¬â„¢s stock price. After spiking by a small amount on Monday, the shares drifted back down to about where they were a week ago, which is about 20-per-cent lower than they were in September, and in fact isnÃ¢â‚¬â„¢t that far off the 52-week low of $60 (U.S.) the shares hit in March. Why would a deal to license its software to Palm — a company that virtually invented the handheld market, and has one of the hottest devices going in its Treo 650 smart-phone — cause such a muted reaction from the stock market?
There are a couple of possible explanations. One favoured by some analysts who follow the company is that this deal has already been Ã¢â‚¬Å“priced in” to the stock, which means that investors were more or less expecting RIM and Palm to do a deal. After all, RIM just recently signed a similar arrangement with cellphone-handset leader Nokia, so Palm shouldnÃ¢â‚¬â„¢t have come as a surprise. ThatÃ¢â‚¬â„¢s difficult to rationalize, however, considering the companyÃ¢â‚¬â„¢s share price is down by about 20 per cent. What else was being Ã¢â‚¬Å“priced in” to the stock that isnÃ¢â‚¬â„¢t being priced in any more? Another possibility is that investors are more concerned with the ongoing litigation between RIM and NTP, the U.S. company that claims it holds a patent on wireless e-mail technology. Continue reading
Here’s a column I posted at globeandmail.com on the hype over “Web 2.0”:
This idea was the backdrop for the recent news that Google and Sun Microsystems had decided to work together on… well, something. If Web 2.0 fans were hoping for a blockbuster announcement that would add some fireworks to the concept — and itÃ¢â‚¬â„¢s clear that they were, given the amount of speculation that preceded the Google-Sun press conference — what they got was more of a Ã¢â‚¬Å“damp squib,” as someone put it. Even though the actual news was underwhelming, however (Sun agreed to bundle GoogleÃ¢â‚¬â„¢s toolbar with its Java engine), the two hinted that there would be more, and some observers see Google eventually offering desktop-style applications in addition to its web-based email and satellite photo services. Continue reading
Here’s a column I posted at globeandmail.com about Delphi filing for bankruptcy:
“To the ancient Greeks, Delphi was the place where the high priestess of Apollo would foretell the future in return for the right number of gold pieces. General Motors just got a glimpse of its future from something called Delphi too, but this one isn’t an oracle — it’s a bankrupt auto-parts company that GM spun off a few years ago, one that has continued to be a millstone around the neck of the giant company. And this particular Delphi is going to cost General Motors a lot more than a few gold pieces and some incense. In the worst-case scenario laid out by some industry analysts, Delphi’s woes could force the car-maker to file for bankruptcy protection.
Those concerns pushed shares of GM down by almost 11 per cent on Monday, on huge volume, to a new 52-week low. Although the stock rebounded somewhat on Tuesday, it is still down almost 40 per cent from the peak of $42.22 (U.S.) it hit in late July, and is more than 50 per cent lower than it was in January of last year. The car-maker has lost about $15-billion in market value in less than two years, and — in a striking illustration of the market’s perception of this giant company — GM’s market capitalization of a little over $14-billion is now less than 10 per cent of the company’s annual revenue of $190-billion, and also less than the amount of cash GM has on hand, which amounts to about $16-billion. Continue reading
Here’s a column I posted on globeandmail.com about rumours of a tie-up between AOL and MSN:
“Earlier this year, reports started filtering out that Microsoft and Time Warner were considering a merger of the software giant’s MSN division and the cable and entertainment conglomerate’s America Online unit. Nothing much came of the rumours, however, and sources said later that the talks had fallen apart as a result of disputes over technical issues, as well as the question of who would control the combined entity. Now, the Wall Street Journal and others say the talks are back on, and that the two sides hope to reach a deal by the end of the year — a deal that might even lead to the merged company going public.
There are a couple of ways of looking at this news. One is that such a deal would create an on-line colossus, one with the content provided by AOL and Time Warner, and the reach and muscle of Microsoft — a combination that could easily go head-to-head with both Yahoo and Google. The cynical (or perhaps more realistic) view is that this proposed deal isn’t so much about a merger of giants as it is a marriage of convenience — a partnership between two tired and slow-moving behemoths, one a faded relic that never managed to capitalize on a market it virtually invented, and the other a money-losing oaf that has consistently failed to gain any ground despite spending billions. Continue reading
Here’s a column I posted at globeandmail.com about rumours of a deal between Google and Sun:
“In the late 1990s, senior executives at Microsoft — including then-CEO Bill Gates — were obsessed with what they saw as the biggest threat to the company’s domination of the software industry. That threat was the combination of a Web browser called Netscape with software called Java, developed by Sun Microsystems. Starting with the infamous “Internet tidal wave” memo in 1995, Microsoft spent a great deal of time and energy trying to combat this threat. Why? Because the software giant saw it as having the potential to dethrone its desktop hegemony, by moving what people did with their desktop PCs onto the Internet.
That threat was defused by a combination of market power and savvy marketing from Microsoft, and also — if the truth be told — by some fumbling on the part of Netscape and Sun. Microsoft started giving away its own browser, and began offering “Web-friendly” software. Netscape was acquired by America Online and gradually became irrelevant, and Sun failed to build on the potential of Java for a number of reasons. Among other things, the company was blindsided by competition from open-source server software and the popularity of the Linux operating system. Continue reading