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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (72292)	11/19/1999 3:07:00 AM
From: rupert1	Read Replies (1) \| Respond to of 97611

There is a Special Report in the WSJ on the "new paradigm" which ASP are bringing. It involves several articles. The article below is not from that Special Report, but is a commentary on the Cable and Wireless deal. It makes the point that the deal could produce $1 billion in sales per annum for COMPAQ but care must be taken not to alienate other ASP. -------------------------------------------------------------------------------- Compaq, Cable & Wireless Set An Accord for Internet Venture By a WALL STREET JOURNAL Staff Reporter HOUSTON -- Compaq Computer Corp. and Cable & Wireless PLC agreed to jointly fund a new business that will develop and market Internet-based computer services and software for small and medium-size businesses. The agreement teams the world's largest personal-computer maker with the British telecommunications company to target a nascent market projected to reach $10 billion in revenue by 2001. Company Profile: Compaq Computer Cable & Wireless, which will own the business, estimated the total investment at $500 million, with Compaq contributing $200 million over the five-year life of the agreement. Each will share in revenue from the business under terms of the agreement in principle. It will start operations Jan. 1 in the U.S. and Europe, and expand to Asia, the companies said. Compaq estimated it could see as much as $1 billion in sales of equipment and services resulting from its investment. The company will furnish equipment and services to set up the global network and will sell its PCs, servers and services to customers. The scope of the investment also illustrates the race by computer makers to woo so-called application-service providers, or ASPs, which operate corporate Web sites and deliver online applications. These companies are becoming increasingly important computer buyers as "a new paradigm in which companies don't have information-technology departments anymore" emerges, said ABN AMRO Inc. senior technology analyst Jonathan Ross. He said Compaq must be careful not to alienate other ASPs by working too closely with Cable & Wireless. Compaq rose $1.625 to $25, and Cable & Wireless was unchanged at $40.5625 in New York Stock Exchange trading as of 4 p.m Thursday.