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Technology Stocks : Lucent Technologies (LU)

LU 2.415

+1.9%

3:59 PM EST

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To: GVTucker who wrote (14159)	3/24/2000 4:00:00 PM
From: Thomas Scharf	Read Replies (1) of 21876

There is one more factor to consider when comparing internal and acquired R&D. Some R&D ends up fruitless with products that are don't work, are too expensive or just too late to market. When a company acquires R&D, they are buying it at a much later stage when it is easier to see if the product is going to be successful. In essence, failed R&D ends up as losses for the investors in the companies that were not acquired while the acquiring company gets 100% (ideally) successful R&D. Thus, acquired R&D is potentially a much more efficient use of capital.

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