Novell rumored to be in talks with Compaq-Barron's
Reuters Story - March 07, 1999 13:43
NEW YORK, March 7 (Reuters) - Barron's reported that Novell Inc. is rumored to be in talks with
Compaq Computer Corp. to create a new range of products.
In its latest issue, Barron's said that Eric Schmidt, the top executive at Novell, which makes network
management software, is rumored to be in "deep negotiations" with the world's largest PC maker to
create a new range of "cache products."
The products would give organizations the capacity to store local versions of popular websites on
their office networks, eliminating the need to repeatedly download information from the Internet.
If the rumors prove to be true and a deal can be struck, Novell could be "propelled to the top of this
promising new market," Barron's said.
Last year, sales of caching devices totaled just $207 million, but could mushroom to a $4.1 billion
business by 2002, Barron's quoted.
Bullish analysts say the deal could turn out to be a "huge success," adding also that the company is
"well positioned" to cash in on the explosion of Internet business over the next few years.
Some analysts expect it to double its earnings from 29 cents a share in the fiscal year ended October
to 55 cents for the current fiscal year, while sales of certain core software applications could
continue to grow by 40-50 percent a year, Barron's reports.
Its stock could rise to $30 from $20 before long, reaching $80 in the next five years or so, Novell's
fans told Barron's.
Novell closed at 20-1/8 on the Nasdaq on Friday.
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