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 : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: RavBruce who wrote (13635)	4/6/2000 3:19:00 AM
From: Hardly B. Solipsist	Read Replies (3) \| Respond to of 19080

I don't know much about Cisco, but I think that it's a mistake to think that a software company can grow by acquisitions. The Borg (CA) does it, but they just suck the life out of the companies that they buy. SEBL is the last case I know of where a successful purchase of one software company by another (where the two companies were of the same order of magnitude in size), and SEBL was still bigger than the company they bought, and neither of them were that big then, and it took quite a while to digest. Cisco is successful at growing by buying things, so clearly it can work outside the software industry. IBM has tried it a few times, and it doesn't seem that successful to me. MSFT doesn't do it. IFMX tried it and choked. Borlund tried it and died. CA is a fungus, not a company. I just don't see how it would work for Oracle, but you might be right to suggest that it means that Cisco can grow faster than Oracle because of this difference.

To: RavBruce who wrote (13635)	4/6/2000 1:42:00 PM
From: jack bittner	Read Replies (1) \| Respond to of 19080

i see the 2 firms in reverse aspect. orcl just jumped its net up 70% year over year when its gross upped only about 22%. that means its expenses are not rising along with its gross, rather that expenses are relatively falling. and we know that they are absolutely falling because they've started to wring out what looks to be 1 billion from expenses - and because of efficiencies created by their own products (and claim they'll reduce 'em by $2 billion, but let's see about that). great advertising for their own products, more important: astounding results: to be able to REDUCE cost when sales increase! try it in your own business. all this before they start to collect on every single transaction when anyone sells anything to Ford/Daimler/GM! - each of whom is buying more and more of the entire world's auto production. when you grow internally it simply means more business, more profit, more for us stockholders in value. when you grow by acquisition, a la Cisco, you dilute the stock. So the new income plus the income you old stockholders had a piece of is now distributed to more stockholders: you, the old stockholders plus the stockholders of the new acquisition. For example: say you are a stockholder of xyz, it nets $1billion, say there are 1 billion stockholders, each one gets $1. Now xyz buys abc, which also nets $1billion, and has 1 billion shareholders. Buys it by xyz issuing 1 billion new shares. Now xyz/abc has $2 billion net income, and has 2 billion shareholders, each getting $1. I've been talking about NET INCOME, dirty words these days. If xyz and abc each have net income of $1 billion, and if they are tech companies, let's say they have 50% profit margins. That means each one had gross revenues (sales) of $2 billion. Combined they have $4 billion in revenues. So xyz, by buying abc has DOUBLED gross revenues. And we schmucks out in the market have kidded ourselves that it is REVENUES that count not NET INCOME. So we say: "Hey, xyz has doubled revenues, it's worth double!!" But our share of the net is still a lousy buck a piece. csco's enormous income is from electro/mechanical/optical routers. 2 - 3 years, with the all-optical network, those'll be buggy whips. csco is desperately trying to get into optical with acquisitions. so desperate they bought Pirelli, which has in the past at times needed JDSU's help to fabricate optical components that were ordered from them. Didn't have the know-how, the delicate skills that JDSU has. So csco is in a desperate race against jdsu and nortel (whose acquisitions i think are stronger), while orcl is the gorilla of its space. JMPO