Polaroid to be sold for $US426 million
Polaroid, owner of the camera brand that pioneered instant photography, said yesterday that it was being bought by the Petters Group Worldwide for about $US426 million, with Polaroid shareholders to receive $US12.08 a share in cash. The acquisition price is 13 percent more than yesterday's closing price of $US10.70.
The New York Times/Bloomberg report (8 Jan) that One Equity Partners, the private equity unit of J. P. Morgan Chase & Company, bought 53 percent of Polaroid in 2002 for $56 million, and One Equity has agreed to vote in favor of the acquisition by Petters.
A Polaroid spokesman said Petters began licensing Polaroid's consumer electronic products like DVD players and plasma television in 2002.
U.S. Appealing W.T.O. Ruling on Internet Gambling
The United States has just announced that it plans to appeal a ruling by the World Trade Organisation that the country is violating its international trade obligations by prohibiting residents from gambling over the internet.
The New York Times reports (8 Jan) that the notice of appeal, filed in Geneva by the United States trade representative, asserts that the country's position on internet gambling is consistent with its longstanding trade agreements. The trade representative plans to file the substance of the appeal next week with the W.T.O.
The paper says that the appeal stems from a case brought in 2003 by the Caribbean nation of Antigua and Barbuda,with the US arguing that American trade policy that went into effect in 1995 permits internet gambling within its borders.
A panel of three W.T.O. judges agreed, and last November they issued findings siding with Antigua and Barbuda.
According to the NYT., the case has potentially significant implications for the growing business of internet gambling, which allows people to place wagers from their computers. While the United States government has deemed such gambling illegal, about half of the roughly $US7.6 billion lost in wagers last year came from American bettors, according to industry analysts.
Online casinos based overseas would like to see the American market opened up and legitimised, and under the preliminary decision reached by the W.T.O. panel, the United States could theoretically be forced to change its laws to allow internet gambling, or face punishments.
Officials from the trade representative said that Antigua and Barbuda, as well as the W.T.O., were interfering with United States sovereignty. In the agreement that went into effect in 1995 - the General Agreement on Trade in Services - the United States excluded internet gambling from the types of commerce it would allow within its borders, trade officials said. Specifically, under the agreement, the country said it would exclude sporting, a designation that trade officials said the Clinton administration meant to include Internet gambling.
DirecTV Machine Will Compete With TiVo
TiVo, the company that created the market for digital video recorders, received a serious challenge to its business last week when DirecTV, the satellite provider, announced that it would begin offering its own brand of digital video recorder later this year.
The New York Times reports (7 Jan) that the move ends an exclusive relationship between the companies that supplied TiVo with two million of its three million subscribers, andd the satellite company hopes that many of its customers who now use machines with TiVo technology will switch to DirecTV's machine.
The Paper reports that for its part, TiVo remains optimistic about the change in relationship, fully expecting to compete for DirecTV's business. TiVo executives said that the company competed against the Microsoft UltimateTV product for DirecTV subscribers when TiVo started its service in 2000.
The new DirecTV digital video recorder is being designed by NDS, which is based in Britain and owned by the News Corporation, which owns a minority interest in DirecTV.To encourage subscribers to switch, DirecTV will offer advanced features on its device, including longer recording capacity and the ability to use interactive services.
The NYT reports that DirecTV has said that it would offer local high-definition TV broadcasts in 12 markets beginning later this year, and to increase its channel capacity the company will launch several satellites designed to carry HDTV programming.
Small US Cellphone Companies may be merger targets
The New York Times reports (7 Jan) that With some of the US's biggest cellular phone companies having announced mergers in recent months, investors are now turning their attention to the smaller cellphone companies that dot rural and suburban America.
The paper sayus that the news that Alltel, the largest of the regional wireless providers, is in negotiations to buy Western Wireless for about $US4 billion further fueled speculation that the next round of consolidations will involve smaller carriers.
The report says that news of the impending deal between Alltel and Western Wireless, which was first reported in The New York Times, came after several weeks of heavy trading in shares of regional carriers, a sign that investors have been betting that more deals are on the way.
Growth in the US $100 billion wireless industry has slowed in recent years as the market moves closer to saturation. More than 61 percent of Americans now have cellphones, almost twice as many as in 2000. And the customers who have yet to get cellphones are costly to acquire in terms of marketing expenses and, worse, are likely to spend less on cellphone services, according to the NYT.
Investors need convincing on Symantec-Veritas deal
Executives from Symantec and Veritas Software have been scrambling this week to persuade investors that their proposed $US13.5 billion deal, the largest in the software industry, makes sense, reports The New York Times (7 Jan).
However, the paper reports that the share price of Symantec has continued to slide since word emerged a few days ago that the company was in talks to acquire Veritas, making the sales pitch for the transaction, an all-stock deal, even more of a challenge.
The NYT says that investors' apparent lack of confidence in the deal, which is expected to close in the second quarter, has prompted analysts to speculate that a rival bidder may swoop in with a counteroffer for Veritas. Hewlett-Packard, Computer Associates and EMC, a top Veritas competitor, have all been identified as possible suitors, although none of those companies have stated any interest in Veritas.
Symantec estimates that the merged company will grow 18 percent a year, which analysts described as the fastest of any software company with at least $US3 billion in revenue.
According to the NT,the skepticism over the deal stems from the fact that the two companies are not in the same part of the software market. Symantec, one of Silicon Valley's oldest companies, is the leading seller of security software for personal computers, with roughly half of its sales coming from antivirus software. Veritas sells lines of data-storage and data- management products, helps companies organize their corporate information, archive it and manage it.
SAP Takes Advantage during Oracle-PeopleSoft Battle
The Mercury News reports (9 Jan) that while Oracle and PeopleSoft clashed for 18 months, German business-software maker SAP sat comfortably on the sidelines, cutting deals and gaining market share.
However, the paper says that the purchase of PeopleSoft by Oracle, which was completed last Friday, unites the No. 2 and No. 3 makers of business applications, and reports that the $US10.3 billion deal creates a newly fortified software giant that could turn the heat up on SAP, the king of business software. The Mercury says that from now on, it's a contest between Oracle Chief Executive Larry Ellison, one of the fiercest competitors in American business today, and Henning Kagermann, who has quietly led SAP of Walldorf, Germany, to become a trusted supplier of software to the world's biggest corporations.
The paper says SAP is well-positioned to continue picking up steam as Oracle executives begin the Herculean task of combining two companies that never liked each other.During the 18-month Oracle-PeopleSoft takeover battle, SAP gobbled up business from its competitors in the United States, with the company's overall sales in the third quarter rising 8 percent from a year earlier, and U.S. software sales jumping 6 percent.
Analysts say that in acquiring PeopleSoft, Oracle is adding 12,000 customers to its own stable of about 13,000.
The Mercury says that Oracle, whose core business is database software, has long been criticised for its lack of focus on applications software, the layer of programs that run atop the database and are used to manage business operations ranging from finance to inventory to human resources. License revenue for applications jumped 57 percent in the most recent quarter, to $215 million.
The paper adds that the database business is maturing, so Oracle is looking for new growth in the applications market, with its strategy to become a ``one-stop'' business-software provider.
IDC analysts said that the combination of Oracle and PeopleSoft will represent a very big threat to SAP in a number of markets -- public sector, financial services, high-tech electronics, although Oracle, which has annual sales of about $10 billion, is facing a competitor whose primary business is applications software.
SAP, with annual revenue of nearly $10 billion, controls an estimated 39 percent of the applications market, up from 35 percent in 2002, according to AMR Research. A combined Oracle-PeopleSoft will own a 25 percent slice of the market.
Oracle Completes PeopleSoft Takeover
Oracle has now completed its acquisition of rival business software maker PeopleSoft, bringing a formal end to a tumultuous takeover saga.
The Mercury News reports (8 Jan) that Oracle closed the deal last Friday after announcing late Thursday that that 97 percent of PeopleSoft's stockholders had accepted a $US26.50-per-share takeover offer. Oracle needed at least 90 percent of PeopleSoft's stockholders to tender their shares to avoid a more cumbersome deal-closing process that might delayed the merger by more than a month.
The paper says the takeover has been a foregone conclusion since mid-December, the turning point when PeopleSoft abandoned 18 months of staunch resistance to Oracle's unrelenting advances and accepted its bitter rival's all-cash offer.
Oracle initially valued the bid at $10.3 billion, but now believes it will cost $10.5 billion to complete the takeover, according to a filing last week with the Securities and Exchange Commission.
The Merc ury says thaty getting the deal done empowers Oracle to begin the daunting task of combining two of the world's three largest makers of business applications software -- the computer coding that automates a wide range of administrative tasks.
Oracle believes the combination will boost its profits and help the company gain ground on the business applications software market's leader, Germany-based SAP. Oracle expects the PeopleSoft takeover to increase its profits by about $400 million, or 8 cents per share, in its fiscal year ending in May 2006.
Police charge Sydney students with global internet scam
Four Sydney high school students have been charged in connection with a Russian-based Internet scam that stole people's banking passwords and siphoned their cash into accounts in eastern Europe, Associated Press reported (7 Jan).
The four students were promised a cut of the profits for letting their bank accounts be used for laundering money stolen from internet bankers via a computer virus that dropped a program for secretly recording passwords, according to Sydney police.
Police said that 13 Australians, including the students, have so far been charged. New South Wales police on Thursday said the four students, ages 15-17, cannot be named for legal reasons.
The suspects allegedly robbed 61 people of at least $US457,000, but police say the total could ultimately reach millions, and more arrests are expected.
New HP lineup targets home entertainment
Hewlett-Packard has just announced that it plans to continue its push into home entertainment hubs for the living room, including one that HP designed for people who want a simple device that operates independent of a personal computer.
The Mercury News reported just prior to the annual Consumer Electronics Show that HP had unveiled its lineup of products, including its first digital televisions. In October, HP also introduced the HP Digital Entertainment Center series, designed around Microsoft's Windows XP Media Center Edition 2005, which seeks to turn the PC into an entertainment center for the living room.
Analysts said sales of these entertainment hubs combining PC technology have been sluggish so far, but HP disagrees.
The paper says that in an acknowledgment that not all consumers want to meld the PC and the TV, HP is developing a non-PC hub for the living room. The company is seeking to make its products simpler to use, and it is developing the new platform using the Linux operating system for consumers who are not interested in computer technology.
For these consumers, HP is working on a media hub that will eliminate the need for the cable box. HP has also designed an electronic programming guide that lets consumers find and record content. A music database service will give consumers access to song titles, CD artwork and other artist information, reports the Mercury.
The paper reports other updates of HP's home electronics lineup, including:
'¢ Additions to its Digital Entertainment Center, with two new models aimed at PC enthusiasts who want to combine e-mail, Internet access and digital entertainment.
'¢ A new technology for its line of digital televisions, which it first launched in August. Later this year, HP will introduce 17 flat-panel and rear-projection high-definition TVs and projectors, with a technology called ``wobulation,'' which provides a screen resolution two times higher than other TVs at the same price.
PC recycling coalition formed
Online auction giant eBay said a few days ago that it has formed a coalition in the US with several major computer makers and environmental groups to help consumers get rid of used and obsolete computers, with one option of selling them on eBay.
The Mercury News reports (7 Jan) that disposing of old computers has become a huge problem for the computer industry, and it is causing problems in the environment. Some companies ship boatloads of old computers to Asia, where the PCs are taken apart for their lead, gold and other valuable metals. The plastic is sometimes burned, and the whole process can dump harmful chemicals such as lead, cadmium, chromium, mercury and toxic fumes into the air and water.
The industry says U.S. users replace about 133,000 personal computers a day.
The coalition program, called the Rethink Initiative, has participation from Apple Computer, Gateway, Hewlett-Packard, IBM and reseller Ingram Micro. The U.S. Environmental Protection Agency, the Silicon Valley Toxics Coalition, United Parcel Service and the U.S. Postal Service also are participating.
The eBay Web site www.ebay.com/rethink will offer consumers the option of selling or donating computers that still work. Consumers can click on links to eBay, Intel, Apple and other participating PC makers to sell their PCs or find out how to recycle them.
For computers that are no longer working, consumers will be given a list of recyclers from the Silicon Valley Toxics Coalition, which will recommend recyclers who say they do not dump the items in a landfill, export them, burn them or use prison labor to take them apart.
Industry observers estimate that 50 to 80 percent of all old computers are still being exported to China, where, they say, low-paid labourers perform the dangerous work of taking them apart.
Sprint and Virgin considering IPO for wireless venture
In the US, Sprint Corporation and the Virgin Group are reportedly considering an initial public offering for their U.S. wireless joint venture, Virgin Mobile USA.
The Wall Street Journal, quoting anonymous sources, is reported in The Mercury News (7 Jan) as carrying a report that said Friday that Virgin Mobile USA has asked a number of investment banks for proposals detailing how it could take a wireless venture public. The Journal said the banks are to submit their reports in a few days, but its sources said no final decision has been made.
Spokesmen for both companies refused to confirm or deny the report to The Associated Press on Friday.
Virgin Mobile, which began service in 2002, is one of several partnerships for Sprint in which other companies introduce their own brand of cell service using Sprint's network. These include deals with AT&T Corp., the ESPN unit of Walt Disney Co., and Qwest Communications International.
Sprint is America's third-largest cellular provider with about 23 million subscribers. Earlier this month, Sprint and Nextel Communications said they will combine in a $US35 billion deal that would create a company with 38 million wireless subscribers.