steve, what is your opinion of MICRON buying an ISP PROVIDER,
when do you expect DELL,GATEWAY and others to make their play
and who are the likely candidates apart from MINDSPRING AND EARTHLINK
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Tuesday July 20, 10:37 pm Eastern Time
Computer maker Micron buying
Internet service firm
SEATTLE, July 20 (Reuters) - Computer maker Micron
Electronics Inc. (Nasdaq:MUEI - news) said on Tuesday said it
plans to buy an Internet service provider as part of its accelerating
shift in what the company's top executive called its ''e strategy.''
Micron Electronics said it signed a letter of intent to buy Micron Internet Services from its parent
company, Micron Technology Inc. (NYSE:MU - news), for book value, which was not disclosed.
The deal should close within a few days pending approval of both boards, Micron Electronics
Chairman and Chief Executive Officer Joel Kocher said.
Micron has been among the most aggressive of the major computer makers offering so-called ''free''
computers for the price of a multiyear commitment to buy Internet services.
Earlier this month, the Nampa, Idaho-based direct seller became the first manufacturer to announce
plans to buy a Web hosting service, indicating its intention to focus on business customers.
''We're seeing a huge secular shift toward an e-services-driven profit model,'' Kocher said in an
interview.
''Frankly the computer industry has matured to a point where people shouldn't find this shocking,'' he
said. ''What's shocking to people is the rapidity with which this is happening.''
Kocher said the company would be making an aggressive effort to sign up small to medium-sized
businesses for Web hosting and other Internet services and then cross-sell them Micron computers.
He said some Web services carry gross margins as high as 80 percent, which could be a significant
boost to profitability.
''What it all boils down to from my perspective is very simple -- gross margins,'' he said.
More Quotes
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Micron Electronics Inc (Nasdaq:MUEI - news)
Micron Technology Inc (NYSE:MU - news)
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