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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (84938)	1/6/2000 4:11:00 AM
From: Amy J	Respond to of 1573759

RE: "what accounts for Intel's sluggish revenue growth since 1996?" Hi Tejek, We initially focused on what accounts for Intel's sluggish revenue growth, but you changed topics to acquisitions (I think because you assumed Intel's sluggish revenue growth was equated and due to its acquisitions, so you made a jump). RE: "To me revenue growth would be the ultimate indication that my acquisition program is successful." Only if the strategy of your company's growth was completely an MNA strategy. (Not really, but Cisco begins to come to mind). However, if your goal is to make your own product-lines or service-lines or ASPs be your growth model, then an MNA strategy could simply be an augment strategy to fill any gaps. And, sure, if nothing else were going on, like a semic recession, and if the acquisition was larger than the rest of the company's revenue, you could reasonably judge the acquisitions by the company's revenue growth. However, where this isn't the case, you can't mix apples and oranges. You have to analyze the acq growths (pre and post) and any potential incremental add-on growths to the core, if it applies. Also, if Intel was hit by a recession in 1997 which caused a dip in 1998, prior to any potential impact of any acquisition, then the issue would be the recession (or a combination of other factors, such as lower ASPs in consumer market). RE: "1996: 20% 1997: 5% 1998: 8% 1999(year to date): 9% Recognizing that 1997 was the year of the semi recession, there doesn't seem to be any real Intel recovery to 1996 levels." True. For 1997 we know for sure it's not the acquisitions (since they happened a year later). For 1998, one really wouldn't know, but can see indicators it's still the recession. For 1999, one could finally say, "yes, it's got to be those acquisitions." However, looking at the numbers as far back as 1997, it looks like there was another trend underfoot which was more significant. RE: "If the acquisition program is adding to the bottom line, the amts appear to be minuscule. And this is after billions have been spent to acquire." I'm of the impression Intel doesn't even come close to spending the wild-eyed money which the other Gorilla company spends. Nor, do I think Intel's acquisitions add up significantly in revenue, only marginally, relative to the entire company. Also, there's a difference between buying a product to sell on its own, vs as an add-on to the core. And, if there's an issue with the core, then it's time to diversify. RE: "Having said that, Kash may have overstated the problem by stating that the acquisitions program is poor but not by much." I disagree because after my analysis, I've determined that it is too early to tell. RE: "I consider CSCO to have a very successful acquisition program." Stratacom? Valuations? Having said that, I think Cisco has a good MNA strategy, however, I see their strategy serving a different purpose. RE: "The acquisitions do not seem to be benefiting Intel where it needs it most....its bottom line." This sounds like you know (or are assuming you know) the market time-line of the expected impact of these acquisitions? Do you know the market pulse of these? RE: "I mention all this only because this whole issue seems to get swept under the proverbial carpet over at the Intc thread." I agree the topic of MNAs aren't discuss nearly enough on the INTC thread. Best regards, Amy J