Interview with Craig Barrett from Internet Week Magazine
internetweek.com
October 23, 2000
Intel CEO In The Hot Seat
Barrett plans to diversify as company assumes unfamiliar role
With Intel shares being among the most
closely watched technology issues, the
company's quarterly results were nervously
awaited by investors last week. But on
Tuesday, the company beat Wall Street
earnings estimates, which had been revised
downward. At an Intel e-commerce
conference the week before the earnings
release, company officials were clearly feeling
some heat from the unfamiliar glare of
skeptical investors. InternetWeek senior
managing editor David Joachim caught up
with CEO Craig Barrett just long enough to get
Barrett's take on the situation.
InternetWeek: Four-fifths of Intel's revenue comes from
microprocessors and related products today. How is that going to
change over the next few years?
Barrett: The other businesses we have--networking, communications
and such--are growing faster than our basic, core business. So that 80
percent will go down over time.
InternetWeek: What about on the services side, where you're now
doing Web hosting and application hosting?
Barrett: That will grow percentage-wise very fast, but it's growing off a
very small base, so it's not going to have a huge impact over the next
few years on our total revenue picture.
InternetWeek: Are investors having trouble seeing Intel as a more
diversified company?
Barrett: I don't think it is Intel per se. Just go down the list: Dell,
Hewlett-Packard, Cisco have taken a beating. Poor Apple is down to a
third of what it was a couple of months ago. So it's the whole high-tech
market that's taken a beating. Why? Well, it's been the darling of the
markets for several years. Maybe people are just antsy about valuations
they consider to be too high or that there will be a bit of a slowdown. I
don't know what it is. The reaction is violent.
InternetWeek: We hear a lot about how much Intel is investing in
internal e-business proj-ects. If conditions remain like this for a while, will
that investment be affected?
Barrett: I don't think our market cap is going to have a particular impact
on how much we invest. We make investments where we think the
market's growing; we've got a pretty good cash flow from our core
business. We'll just continue to invest that in R&D and into our capital
investments. So we're investing in the future, we're not investing on the
basis of what the market cap is today. |
