Oracle wins Retek battle for US$670 million

Business software maker Oracle HAS beaten out German rival SAP in its bid to buy Retek, reaching an agreement to purchase the retail software maker for about US$670 million. Oracle said Tuesday.

The New York Times/AP report (22 Mar.) a statement by Oracle that its offer of US$11.25 per share was accepted and SAP has dropped out of the bidding.

"Oracle has the largest applications business in North America and we intend to expand that leadership position," Oracle CEO Larry Ellison said in a statement. Combining Oracle with Retek is an important step in that direction, and it strengthens our position in the retail applications market globally."

The NYT reports that in Germany, SAP said that expansion "must happen at a price that does not cause damage to SAP's good financial performance."

"As a responsible investor, SAP made an appropriate offer," SAP chief executive Henning Kagermann said in a statement. "Neither SAP's investors nor the present and future customers in the trade segment would have benefited from a further bidding battle -- and nor would it in the long term have brought the success that we expect.", reported the NYT

The paper says that SAP thought it had reached a deal to buy Minneapolis-based Retek for US$8.50 per share late last month before Oracle topped the offer, starting a bidding war between the two rivals.

The gamesmanship pitted the world's two leading makers of business applications software -- the computer coding that automates a wide range of administrative tasks, says the NYT, adding that SAP has long been the industry leader, but Oracle closed the gap two months ago by buying PeopleSoft for US$10.3 billion after a heated battle that dragged on for 18 months.

With just US$174 million in annual revenue and 525 employees, Retek is a niche player in the industry. Nevertheless, the company holds tremendous appeal for both SAP and Oracle because its 200 customers are retailers -- a group that hasn't bought as much business applications software as many other industries, says the NYT.

Time Warner-SEC settle for US$300 million
 
Time Warner has agreed to pay US$300 million to settle a complaint by the US Securities and Exchange Commission that the company's AOL unit overstated revenue for nine quarters.

The New York Times reports (22 Mar.) that Time Warner had initially settled with the SEC staff in December. Yesterday's final settlement with the SEC's commissioners neither admitted nor denied the allegations in the complaint, the SEC said, the paper reported.

The paper says that at the same time, the company agreed to have an independent examiner, who would either be an accountant or would hire one, determine if the company's historical accounting for some transactions was in accordance with generally accepted accounting principles. The examiner is to report findings to the board within 180 days. Those findings could force the company to further rewrite historical results, says the NYT.

According to the NYT., the settlement mirrors a similar settlement reached in December that resulted from a separate investigation by the Justice Department.

The total cost of the two agreements is US$510 million, but the settlements are slightly different. For example, the Justice Department's settlement required that AOL hire a person in its offices to monitor its accounting practices for at least 2 years and possibly as long as 30 months. As part of yesterday's settlement, Time Warner has agreed to restate earlier advertising revenues by US$500 million and to reflect more accurately the consolidation of AOL Europe, among other adjustments, reports the NYT.

Thde paper says that in a separate administrative action, three Time Warner executives reached settlements with the SEC in which they neither admitted nor denied wrongdoing for improper accounting related to US$400 million that Bertelsmann paid Time Warner.

The SEC and the Justice Department could still file additional complaints against individuals involved in AOL's accounting scandals, and yesterday's settlement did not rule out further actions from both agencies related to other individuals, according to the NYT.

The NYT says the settlement puts a difficult period behind Time Warner. While under investigation, it was barred from some financial activities, including issuing stock. The paper says the chief executive, Richard D. Parsons, is eager to acquire more cable systems and has made a joint bid with the Comcast Corporation for the cable operations of Adelphia. The settlements allow the company to pursue those bids.

Diller bets on internet in Ask Jeeves bid

The New York Times says that for years, Barry Diller of IAC/InterActiveCorp has been searching for the right blend of companies that will realise his lofty predictions about the future of internet commerce. Now the latest object of his search is ... search.

The paper reports that Diller announced yesterday that his company would buy Ask Jeeves, a distant fifth in the search market dominated by Yahoo and Google, for stock valued at US$1.95 billion.

InterActiveCorp shareholders wondered whether the acquisition was a sign of Mr. Diller's brilliant deal making or a bad bet on a small player that will never be able to compete with its far bigger rivals, says the paper. but adds that one sign that the deal may bolster Mr. Diller's reputation was the complaints that ensued among Ask Jeeves shareholders who said that the price was too low.

The NYT reports that as part of the deal, InterActiveCorp agreed to exchange 1.2668 of its shares for each share of Ask Jeeves. Based on the closing stock prices Friday, that valued Ask Jeeves at US$28.24, a 16 percent premium over Ask Jeeves's closing price of US$24.24 on Friday. The bid is still well below the company's 52-week high of US$44.66, the paper says.

Diller, who has long resisted the idea of tying his properties together with some sort of portal or overarching site, dismissed the idea that Ask Jeeves would push customers to his other companies, the NYT says.  He said in an interview that IAC's companies would receive no preferential advertising treatment from Ask Jeeves.

The NYT says whether the deal ultimately pays off may depend on the ability of Ask Jeeves to match the product-development and marketing power of Google and Yahoo.

But, Diller said the acquisition did not depend on Ask Jeeves catching up to the search engine leaders with their larger technology investments, says the NYT.

The paper says Nielsen/NetRatings calculates Ask Jeeves' share of total internet searches at 5 percent, compared with 47 percent for Google and 21 percent for Yahoo. No. 3 is MSN from Microsoft, and No. 4 is the America Online unit of Time Warner.

But Ask.com, the flagship site of Ask Jeeves, has a far smaller audience than those numbers would indicate, with only 1.8 percent of total searches. Ask Jeeves's remaining searches come from sites acquired last year as part of its purchase of Interactive Search Holdings, including Myway.com, Iwon.com and MySearch.com, the NYT reports.

Qwest-Verizon duel of letters, trying to buy MCI

In the US., the takeover fight for MCI has taken another twist when the chairmen of Qwest Communications and Verizon Communications both released letters stating their cases for being permitted to buy the troubled long-distance carrier.

The New York Times reports (22 Mar.) that Qwest's chairman, Richard C. Notebaert, sent a letter to MCI expressing his concern that his company's latest bid was being ignored. That came a few hours after Ivan G. Seidenberg, Verizon's chairman, made public a 10-page letter that dismissed Qwest's projected cost savings from an MCI purchase as "modern fiction."

The paper says the letters were the latest volley in the increasingly bitter fight between the companies for control of MCI. In mid-February, MCI's board agreed to sell the company to Verizon for US$6.75 billion, despite an US$8 billion bid Qwest had made a few days before. Last Wednesday, Qwest raised its offer to US$8.45 billion.

The NYT says several influential MCI shareholders have filed lawsuits demanding that the company consider Qwest's higher offer. MCI's board, which spent the two weeks that ended 17 March re-evaluating Qwest's bid, is expected to meet as early as this week to decide on the latest offer, says the paper.

Investing firms to offer US$10.5 billion for SunGard
 
A consortium of seven private investment companies is close to a deal to buy SunGard Data Systems for more than US$10.5 billion, executives involved in the negotiations in the US said yesterday.

The New York Times reports (22 Mar.) that the consortium - Silver Lake Partners, Kohlberg Kravis Roberts & Company, the Carlyle Group, Bain Capital, the Texas Pacific Group, the Blackstone Group and Thomas H. Lee Partners - is hoping to reach an agreement by the end of this week, the executives said.

The paper says the transaction would be one of the largest leveraged buyouts since Kohlberg Kravis bought RJR Nabisco in 1989 and would be the biggest deal ever involving a team of multiple firms.

SunGard, which provides software and services to top financial companies, said yesterday that its board had authorised its advisers and management to engage in discussions to sell the company but did not identify the potential buyer, says the paper.

SunGard employs more than 10,000 people, has long been viewed by rivals as a takeover target but had been considered less attractive because its two businesses appealed to different suitors, sasys the paper.

The NYT adds that a company spokesman said that over the last year it has focused on its plans for growth. The data recovery unit competes directly with IBM., while the software unit, the bigger of the two, faces a more fragmented market.

Licensing settlement ends Rambus patent suit

Ending a long-running patent dispute over computer memory, Rambus and Infineon Technologies settled all of their legal claims against each other on Monday, reports AP and the New York Times (22 Mar.).

The NYT and AP say that under the deal, Infineon, the German memory chip maker, will pay Rambus a quarterly license fee of US$5.85 million, starting 15 November and ending two years later. After that, Infineon could continue to pay up to an accumulated total of US$100 million if certain conditions are met.

The paper says that Rambus, meanwhile, was granted a perpetual license for Infineon's memory interfaces and agreed to treat the company as a "most favored" customer.

Rambus does not manufacture chips but licenses designs that improve communication between a computer's microprocessor and its memory. The interfaces are critical to avoid data bottlenecks between ever-faster processors and memory chips, says the paper.

The paper says the settlement comes three weeks after a federal judge in Virginia dismissed Rambus's patent claims. At the time, Rambus said it had a strong case on appeal. Under the settlement, Infineon will make quarterly payments that will not change even if the number of memory chips incorporating Rambus technology increases, said Christoph Liedtke, an Infineon spokesman.

Symbian gets synch software from rival Microsoft

British mobile phone software maker Symbian has agreed to license synchronisation software from long-time rival Microsoft in an effort to win more corporate customers, the company has just announced.

The New York Times/Reuters report (22 Mar.) that as a result, users of smartphones that run on Symbian software, over 20 million devices, will be able to wirelessly receive emails via network computers that run Microsoft's Exchange Server software. These servers are used mainly for Microsoft's Outlook email and calendar applications.

The paper and Reuters also report that Nokia, which sells most of the Symbian-based smartphones, last month signed a deal with Microsoft to license the same software, called ActiveSync, for use in its enterprise devices such as the Communicator.

The collaboration is intriguing, say Reutersa/NYT., because Symbian was set up by the world's biggest mobile phone makers in the late 1990s as a force against Microsoft, which handset makers believed was aiming to dominate the cell phone industry in the same way it had become the de facto operating system for personal computers.

But six years on, says the paper/Reuters, Microsoft's market share in operating software for mobile phones has not crossed 1 percent. Meanwhile, corporate employees have to come to expect email on their mobile devices as it was pioneered by the Blackberry device, from Research In Motion.

Symbian continues to support a wide range of other email synchronisation protocols such as RIM's Blackberry Connect as well as the Open Mobile Alliance Data Synchronisation protocol, the NYT/Reuters report.

MIT backs open source for Brazilian poor

In the US., the director of MIT's Media Lab has recommended that Brazil install open-source software on thousands of computers that will be sold to the poor, saying proprietary software programs like ones offered by Microsoft may be less attractive.

"We advocate using high-quality free software as opposed to scaled-down versions of more costly proprietary software," Walter Bender, director of the Media Lab at the Massachusetts Institute of Technology, said in a letter to the Brazilian government obtained by Reuters on Thursday and reported in the New York Times (22 Mar.).

The paper and Reuters say that President Luiz Inacio Lula da Silva and several ministers may decide as early as this week whether free software or a simplified version of Microsoft Windows will be installed on computers for a new effort called PC Conectado, or the Connected PC.

According to the report, the effort aims to sell up to 1 million computers, with costs partially subsidised by the government, to lower middle income Brazilians this year.

The paper and Reuters say a final decision on which software to install has been delayed several times. Some cabinet members think consumers should have a choice between buying a computer with open-source software and paying slightly more for a machine with Microsoft software.They think this approach would make sense to reach consumers who are already familiar with Microsoft software.

Brazil, the world's fifth most populous country and a growing economic power, has taken a prominent role in the so-called free software movement, an effort that champions free computer operating systems like Linux as an alternative to Microsoft's Windows program, say Reuters and the NYT.

The paper and Reuters say many government agencies are migrating to Linux to cut millions of dollars in software licensing costs.

Sony gears up for US PlayStation portable launch

There is no doubt that Sony will have a hit on its hands in the PlayStation Portable video game and media player which launches next week -- and there is no doubt the industry needs it, reporets the New York Times and Reuters (22 Mar.)

The paper and Reuters say demand is so high for the PSP in the United States that the unit has become virtually unavailable in Japan and Sony has postponed the European launch by months to boost US supply. The paperback-book sized unit launches 24 March in North America.

The NYT and Reuters say Sony is counting on the PSP for much more than its gaming capabilities. In addition to games, the PSP plays movies and digital music files and also acts as a photo viewer. It could be Sony's best chance yet to challenge the ever-increasing dominance of Apple Computer iPod digital music players, says the report by the NYT and Reuters.

The paper and Reuters say that foremost, though, the PSP is for video games, and its release could not have come at a better time for the US$10 billion US video game industry. Handheld games -- for the PSP as well as Nintendo Co. Ltd.'s Game Boy Advance SP and DS -- are expected to be the primary driver of US software sales this year. Analysts expect sales to be flat to up 5 percent.

The impending release of the PSP has helped cheer video game stocks. For the year to date, shares in THQ are up 26 percent, Take-Two Interactive Software shares are up 17 percent, Activision shares are up 15 percent and Electronic Arts shares are up 8 percent. In comparison, the Nasdaq is down 7 percent, the paper and Reuters report.

HP to buy closely held Snapfish

Hewlett-Packard has just agreed to buy closely held online photo service company Snapfish as the computer and printer maker aims to capitalise on the fast-growing online photo printing market.

The New York Times and AP report (22 Mar.) that financial terms of the proposed acquisition of Snapfish, which claims more than 13 million registered users, weren't disclosed. HP said that Snapfish is the largest online photo service firm, leading Eastman Kodak's Ofoto, closely held Shutterfly, dotPhoto and others.

According to the report, San Francisco-based Snapfish provides free online photo sharing, photo storage and management, free editing and software, as well as online print ordering, and some 70 photo gifts such as picture-emblazoned coffee mugs, T-Shirts and other items.

HP said that Snapfish's members are growing at a rate of more than 500,000 members per month and said that 90 percent of Snapfish's customers recommended the service to others, the NYT and AP report.

An HP spoklesman said the company thinks online digital photography will be a multibillion dollar opportunity and it intends to get its fair share of that.

The NYT and AP say the move also comes after Yahoo agreed earlier on Monday to buy Ludicorp Research & Development and the popular Flickr photo-sharing web site it created.

The report says the imaging and printing business is considered the crown jewel of HP, which is the world's largest computer printer company, but faces stiff competition from Lexmark International. HP's printing business, which also consists of selling replacement ink cartridges that are highly profitable, still accounts for the lion's share of HP's operating profits, the paper and AP add.

HP said that, for the time being, it will keep the Snapfish brand name, but that could change over time. Current users of the HP Photo web site will be moved gradually over as Snapfish customers.

The paper and AP say that Snapfish was founded as a venture backed company in 1999 and was acquired in 2001 by closely held District Photo, which on its web site describes itself as the world's largest direct-to-consumer photofinisher.