IBM Is in Talks for Services Deal
That May Be Worth Over $2 Billion
interactive.wsj.com
Excerpts:
Such contracts are becoming the main engine of IBM's growth. IBM's services division is its fastest-growing business, racking up 22% sales growth in the second quarter from a year ago. The company views services as the binder that holds all of the giant's software, hardware and other products together and allows it to act as a one-stop shop for corporations.
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In a meeting with analysts in May, Chairman Louis Gerstner Jr. spent a good deal of time discussing the prospects of IBM's services business, which has been growing much faster than the industry overall. But as IBM's services portfolio grows -- it accounts for 25% of the company's $78.5 billion in annual revenue -- there has been concern IBM won't be able to crank up that business as fast as it did in recent quarters. Mr. Gerstner said he expects the services business to sustain 20%-plus growth.
Most analysts have expected services to continue to grow in the high teens. Mr. Gerstner told them that even if they stick to that model, the sheer growth in services demand will lead IBM to double-digit revenue growth overall. Among reasons for his optimism, he said, were IBM's recent wins of computer-outsourcing contracts in Japan, a potentially huge market where companies have historically kept work in house, and a backlog in services contracts that stands at $44 billion.
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Microsoft Co-Founders Gates, Allen
File to Sell Millions of Firm's Shares
interactive.wsj.com
Excerpts:
On Aug. 3, Mr. Gates said he intended to sell as many as one million shares; three days later, he filed to sell an additional 1.5 million shares, according to Federal Filings News Service. The 2.5 million shares of Microsoft stock are valued at more than $250 million.
Mr. Allen said on Aug. 6 that he intended to sell one million shares; the next day, he filed to sell an additional 20,000 shares. A spokeswoman said Monday that Mr. Allen had completed the sales.
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U.S. Chip Industry Announces
Program of Research Efforts
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The centers will focus on long-term improvements in chip technology, which probably wouldn't be commercially available for a decade, the SIA spokesman said. The centers "will help keep the United States and U.S. semiconductor firms at the front of the global microelectronics revolution," Craig Barrett, chief executive officer of Intel Corp. and head of the SIA's technology strategy committee, said in a statement.
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