Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (89490)	10/6/1999 12:12:00 AM
From: puborectalis	Read Replies (1) \| Respond to of 186894

Posted at 8:45 p.m. PDT Tuesday, October 5, 1999 Intel to buy e-commerce equipment maker BY SCOTT HERHOLD Mercury News Staff Writer Intel Corp. announced Tuesday that it was acquiring IPivot Inc., a 2-year-old San Diego-based producer of electronic-commerce equipment, for $500 million in cash. The deal, which extends Intel's Internet-oriented product line, recognizes that the demands of e-commerce have opened up a growing market for products that make transactions smoother and faster. IPivot makes a device that uses a combination of hardware and software to direct Internet traffic to servers -- powerful computers -- that can deliver the best response time to a customer clicking on a Web site. The privately held firm also makes a product that accelerates security operations on the Web, making it quicker to examine an online brokerage account or check a credit card balance. Jim A. Johnson, a co-general manager of Intel's Network Systems Division, said Intel had become interested in IPivot while expanding its networking operations. Johnson said one of the attractions was that IPivot's CEO, Brett Helm, offered a product that could deal with soaring Internet demand now. ''It takes us 18 months to deploy a new function on a switch,'' said Johnson. ''Here, Brett has products that are delivered, solving the problem today . . . We agreed that we could be much more effective together than apart.'' Hal Feeney, an industry analyst for Pathfinder Research in San Jose, said the acquisition was part of Intel's continued effort to assure itself of new markets. ''Intel has the challenge of doing several things,'' Feeney said. ''One is expanding the market for its mainstream products and at the same time finding other ways to drive the marketplace. The more they can grow the indispensability of the Internet, the more they can grow demand for their mainstream products.'' Although some analysts suggested that the $500 million price was less than IPivot might have gotten in an initial public offering, CEO Helm insisted that it was an outstanding deal. ''You bet it (an IPO) weighed in my thinking,'' he said. ''But we think we came out with a spectacular deal. I think Intel got a fantastic deal as well.'' Among other things, the deal was a big success for IPivot's early venture capital investors, Doll Capital Management and Enterprise Partners. Doll's million-dollar first-round investment two years ago is now worth 50 times as much. ''We looked at an IPO very carefully,'' said Dickson Doll, the firm's principal. ''But we're always making real-time determinations about the amount of capital, the risks and so on. We're exceedingly pleased.''