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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Sully- who wrote (49847)	4/10/2002 12:46:54 PM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

Will The HWP-Compaq Merger Go Through..?? HP Chief's Merger Comments Surface The Associated Press Apr 10 2002 12:02PM SAN JOSE, Calif. (AP) - Two days before Hewlett-Packard Co. shareholders voted on the contested purchase of Compaq Computer Corp., HP chief Carly Fiorina told another executive they might have to take ``extraordinary'' steps to win over two big investors. Fiorina's late-night message to chief financial officer Robert Wayman surfaced Wednesday, when the San Jose Mercury News reported that the voice mail was anonymously forwarded to one of its reporters. The disclosure comes as HP's last-minute moves to win support for the $19 billion Compaq deal are at the center of a lawsuit against the company by dissident director Walter Hewlett. Hewlett, the son of an HP co-founder and the leader of the proxy fight against the deal, claims HP improperly got the investment arm of Deutsche Bank to switch 17 million votes in favor of the deal by threatening to take future business away. Deutsche Bank had helped arrange a multibillion-dollar line of credit for HP just days earlier. Hewlett wants a Delaware judge to throw out Deutsche Bank's votes, which he believes were enough to give HP what Fiorina called a ``slim but sufficient'' margin of victory in the March 19 vote. HP confirmed that Fiorina's message to Wayman - which apparently was retrieved by someone with access to an internal server connected to the company phone system - was authentic. The company said nothing discussed in the message was improper or illegal. However, Hewlett spokesman Todd Glass said Hewlett's lawyers believe the voice mail is relevant to the Delaware case and expect it will be turned over in the pretrial discovery phase. The trial is set to begin April 23. In her voice mail to Wayman, Fiorina said she and HP's proxy solicitor were nervous that Deutsche Bank and Northern Trust, another large HP shareholder, would reject the deal. ``And so the suggestion is that you call the guy at Deutsche Bank again first thing Monday morning,'' Fiorina said in the voice mail, left March 17. ``And if you don't get the right answer from him, then you and I need to demand a conference call, an audience, etc., to make sure that we get them in the right place. So Alan (Miller, HP's proxy solicitor) is feeling like you need a definite answer from the vice chairman, and if it's the wrong one, we have to swing into action. ``So if you would take Deutsche Bank, I'll take Northern Trust, get on the phone and see what we can get, but we may have to do something extraordinary for those two to bring 'em over the line here.'' Wayman released a statement saying top HP executives were constantly assessing whether they had effectively pitched the deal to large investors and ``did in fact make extraordinary efforts'' in the final days, with dozens of last-minute presentations. A source familiar with HP's strategy, speaking on condition of anonymity, told The Associated Press that Fiorina and Wayman had originally thought Deutsche Bank would vote for the deal on the advice of Institutional Shareholder Services, an independent proxy firm that endorsed the acquisition. At the time of Fiorina's voice mail to Wayman, the source said, HP had not yet made a formal presentation to the bank. Deutsche Bank has refused to comment. The president of Northern Trust told the Mercury News its vote did not change in the waning days or split it. HP shares were up 22 cents at $17.63 in morning trading on the New York Stock Exchange, where shares of Houston-based Compaq were up 25 cents to $9.53.

To: Sully- who wrote (49847)	4/10/2002 12:49:45 PM
From: Murrey Walker	Read Replies (5) \| Respond to of 65232

Tim...this is one more example of why I feel like "Bambi in the headlights". While Jimmy's rants are laced with the need to go to metals, I for one can't think of any safe harbor, with the exception of a large piece of PVC tubing that doesn't mind being buried for a while in the back year(said, semi-sarcastically). ;-)

To: Sully- who wrote (49847)	4/11/2002 4:03:12 PM
From: stockman_scott	Respond to of 65232

Economist backs tougher Microsoft antitrust remedies Expert doesn't endorse modular Windows proposal By William L. Watts, CBS.MarketWatch.com Last Update: 2:44 PM ET April 11, 2002 WASHINGTON (CBS.MW) -- Tougher Microsoft antitrust remedies would boost innovation by both the software giant and its rivals, an economist testified Thursday on behalf of the nine states still pursuing the case. "An effective remedy will put greater pressure on Microsoft to innovate to fend off those who would end Microsoft's dominance (while clearly prohibiting Microsoft from using anti-competitive means to defend its monopoly)," said Carl Shapiro, an economics professor at the University of California at Berkeley, in written testimony submitted to U.S. District Judge Colleen Kollar-Kotelly. Microsoft (MSFT: news, chart, profile) has protested that the remedies sought by the holdout states go well beyond the antitrust violations found at its original trial and upheld by a federal appeals court. The company and the Justice Department reached an agreement to settle the case last November. That agreement is under separate review by Kollar-Kotelly. The company has also accused the holdout states, which have called witnesses from competitors including AOL Time Warner, SBC Communications and Sun Microsystems, of doing the bidding of jealous rivals. The states contend the proposed remedies in the federal settlement are riddled with loopholes that would allow Microsoft to continue conduct designed to crush nascent technologies that could eventually pose a competitive threat to its Windows operating system monopoly. Windows runs more than 90 percent of all personal computers. "Microsoft's rallying cry in this case has been 'freedom to innovate,'" Shapiro wrote. "An effective remedy will insure that Microsoft's rivals also are free to innovate." Among the tougher remedies sought, the states are asking Kollar-Kotelly to make Microsoft offer a stripped-down, or "modular," version of Windows that would allow computer makers to swap out so-called middleware components of its operating system, such as the Internet Explorer browser, instant messaging software and Windows Media Player. Middleware is software that could potentially be used by software developers as a platform to run other applications, potentially eroding the role of Windows. The states would also require Microsoft to reveal the blueprints for its Internet Explorer browser and would expand the amount of technical information about Windows that the company would have to reveal to outside software developers. In cross examination, Microsoft attorney Michael Lacovara, however, noted that Shapiro offered no direct support for the modular Windows proposal. Shapiro said he had declined to testify about the specific proposal because he lacked an adequate computer science background. In his written testimony, Shapiro called for forward-looking remedies and rejected arguments by Microsoft and the Justice Department against forward-looking remedies. He said tougher remedies would benefit consumers by lowering the "applications barrier to entry" raised by Microsoft's illegal conduct and offering more encouragement for third party software developers to come up with new products that could eventually pose a threat to Windows dominance, which would in turn benefit consumers. "To the extent that the remedy encourages third parties to invest in software development, consumers stand to benefit greatly from similar new products. Consumers also will benefit from a remedy that enables third party software to interoperate more effectively and efficiently with Windows," he testified. What's more, the competitive threats would also spur Microsoft to speed its own innovations. "Looking ahead, there is every reason to believe that greater threats to Microsoft's monopoly will spur Microsoft to innovate more rapidly," Shapiro wrote. Shapiro is the states' final witness. Microsoft is expected to begin presenting its defense next week. Potential witnesses include more than a dozen company executives, including Chairman Bill Gates and CEO Steve Ballmer. Earlier testimony In testimony Wednesday, Princeton University computer science Professor Andrew Appel disputed Microsoft's contention that the states' modular Windows requirement would doom the operating system. He said the process would be similar to the way Microsoft currently tests Windows to see whether bugs emerge under various hardware configurations. While the company compares various configurations, it doesn't test every conceivable hardware combination. Appel said he didn't believe the increased testing for a modular version of Windows would be "exponential or difficult." Microsoft would merely be required to do "somewhat more testing ... than it does to support just the bound version" of Windows, he said. A federal appeals court last summer upheld U.S. District Judge Thomas Penfield Jackson's finding that Microsoft engaged in anticompetitive acts to illegally maintain its Windows monopoly but overturned two other conclusions and tossed out an order to split the company in two. The appeals court removed Jackson from further participation in the case and returned it to the lower court to refashion a remedy. Kollar-Kotelly was then selected to preside. The nine states still pursuing tougher remedies are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota, and West Virginia , as well as the District of Columbia. Microsoft shares were $1.36 lower at $54.94. ____________________ William L. Watts is a reporter for CBS.MarketWatch.com.