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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (24866)	8/9/2003 12:02:43 PM
From: stockman_scott	Respond to of 89467

Interesting perspective...Thanks for sharing...Great firms are built in tough times. -s2 btw, I expect Google to go public...they are a solidly profitable powerhouse with a ton of momentum and mindshare...it all comes down to timing...here's an article on the firm... arstechnica.com

To: Lizzie Tudor who wrote (24866)	8/9/2003 12:31:16 PM
From: stockman_scott	Respond to of 89467

Jim Clark: Silicon Valley's "Funk" ____________________________ While the dot-com pioneer believes "technology will still be vibrant," he's happy to be "no longer part of it" AUGUST 25, 2003 BusinessWeek Online businessweek.com Jim Clark, founder of high-end computer workstation maker Silicon Graphics (SGI ) and Web-browser pioneer Netscape, is an entrepreneurial legend in Silicon Valley. But lately he has lost his ardor for the Valley, which he now calls an "insanely depressing place." In fact, he's relocating to Florida. Clark shared his thoughts on the future of technology recently with BusinessWeek's Steve Hamm. Following are edited excerpts of their conversation: Q: Do you spend much time in Silicon Valley these days? A: I have been out of Silicon Valley for five or six years. I go there for board meetings, then I split. I find the place depressing. Q: Why do you find it depressing? A: There's nothing going on that's of interest. There are only very few things. It used to be a vibrant, happening place. I'm speaking pre-1995. Once Netscape went out and the place turned into rocketland, everything got so insanely out of whack -- salaries, demand for people, commercial real estate. It became an insane place. And now it's an insanely depressing place. Now it's in such a funk. It will survive, probably, but I'm no longer part of it. We just moved out. We're now developing real estate in south Florida. I'm in a group called Hyperion Development Group, and we're developing four or five real estate condominums and rental apartments. The city of Miami is booming. It's vibrant in the real estate business. So we're developers now. [Laughs] We've gone back to making money the old fashioned way. Q: So you're not in technology at all anymore? A: Not at all. I mean I'm an investor in Shutterfly, and that's doing quite well now. I'm in Neoteris, which is doing very well. Beyond that, MyCFO got acquired. All the other things I was involved in essentially wound down. I'm in the process of selling all of my property out there. I just don't want to be there. California is not very interesting to me. Q: Do you think the tech industry is going to come back? A: Of course it is. Technology mutates. New areas of interest and invention and entrepreneurship [will spring up]. You never know quite where that's going to be, but I'm willing to bet it's going to be some blend of information technology with other things. The computer world, for the foreseeable future, is controlled by the players in it now. They have all carved out their niches. You have Microsoft (MSFT ) dominating the PC, the personal desktop. You have skirmishes going on in certain areas where IBM (IBM ) and Microsoft are competing. But who the hell else is there? The big vendors, Dell (DELL ) and so on, have longevity only as long as they have a [much] better business model to make commodity products. The semiconductor industry isn't changing much. It's established. Technology is a very big word. Technology means anything technical. It could be computer, physics, biology. When you combine computer science with other forms of science, you're going to yield new things. One area is biomedical -- molecular biology. There will be new things that constitute new opportunities. Technology will still be vibrant. Q: What about in information technology? Do you think there will still be opportunities for startups? A: I don't know. I tend to think there will be some. But it won't be like the wild wild West. It's like, there was a period when new states were being formed in the U.S. That's over. In the same way, there won't be significant new computer companies born. Computer software companies, perhaps. But it's hard to see. Microsoft has the strength and the position and the control in the marketplace to wait until somebody creates a billion-dollar industry, but once they decide to take it, they'll take it. I hate saying things like this, because in my nature I believe in the inventiveness of the human spirit. In the late '90s so many companies were formed, and most of them are going to crash. I'm not aware of any industry where it doesn't eventually consolidate to an oligarchy with a few dominant players. We have the dominant players in the software business, with Microsoft and Oracle (ORCL ) and PeopleSoft (PSFT ), etc. And in networking we have Cisco (CSCO ), Nortel (NT ). Q: You don't plan on doing another info-tech startup? Is that what you're saying? A: I'm completely out of it. The only things I'm still invested in are the ones I was invested in while the boom was still happening. I'm not in the venture-capital business. I'm not a Silicon Valley player. I'm not putting money actively to work in any technology sector. I'm on the back end of the power curve. I'm taking time, enjoying. In fact, right now I'm lying in the sun in Santa Monica [Calif.], on the shore. It's too hot in Florida right now.

To: Lizzie Tudor who wrote (24866)	8/9/2003 12:38:19 PM
From: stockman_scott	Respond to of 89467

Survey shows tepid tech-spending plans ____________________ Plus: Net stocks pull back sharply from highs By Bambi Francisco, CBS.MarketWatch.com Last Update: 11:02 AM ET Aug. 8, 2003 SAN FRANCISCO (CBS.MW) -- So much for the back-half-of-the-year pick-up. That may be the latest thinking drawn from a new survey of chief financial officers that indicates demand for technology is far lower than expectations earlier this year. This means projections have to come down, demand has to pick up or the dollar has to depreciate to narrow that gap, according to analysts at Sanford Bernstein who authored the report. "The level of optimism has waned," wrote Vadim Zlotnikov and Toni Sacconaghi, tech analysts at Sanford Bernstein, about their recent survey of 50 chief financial officers from Fortune 1000 companies regarding their spending plans. The respondents expect IT spending to be up 3 to 4 percent this year, or roughly half the 7-percent growth projected in February. Reflecting a cautious stance into next year, the CFOs taking part in the survey project IT spending to rise by 3 percent for all of 2004. "In absence of a weaker dollar, this could present a discrepancy as current bottom-up consensus estimates for systems, software, services, and storage companies call for 8-percent sales growth in 2004, and significant margin expansions," wrote the analysts. If revenue doesn't materialize, companies are compelled to look for growth through acquisitions. Acquisitions and financial de-leveraging remain the top priorities for incremental cash among CFOs, according to the analysts' report. "This supports our view that evidence of reflation is needed to drive a significant pick-up in capital spending," said Zlotnikov and Sacconaghi. The analysts also found that few respondent CFOs, while viewing technology as an enabler and expecting IT to account for a greater share of capital spending, appear willing to pay for leading-edge technology. A large number of CFOs appear uncertain about the ability to measure the return on investment for technology. So, what's an investor to do? Zlotnikov, who is Bernstein's tech strategist, said he's shifted his emphasis to larger-cap names with "demonstrable, attractively valued cash flow, and achievable second-half expectations." Weakness in tech spending indirectly affects highly volatile consumer and advertising Internet stocks, many of which are likely to be sold by fund managers amid any downward turn in sentiment. Internet stocks have given back significant gains since reaching 52-week highs all through July. The question is: have they given back enough? That answer depends largely on how robust the online commerce and online advertising market shapes up to be. Shares of Yahoo (YHOO: news, chart, profile), at $29.15 in recent dealings, are down 18 percent from a 52-week intraday high of $35.70, struck on July 9. InterActiveCorp (IACI: news, chart, profile), at $35.11, is down 18 percent from July 8's intraday 52-week high of $42.88. Likewise, EBay (EBAY: news, chart, profile), at $102, is down 13 percent from the 52-week intraday high of $117.86 reached on July 24. Amazon.com (AMZN: news, chart, profile), at $39.36, is down 9 percent from its intraday 52-week high of $43.10, also hit July 24. Backing off its July 30 intraday 52-week high of $4.80, LookSmart (LOOK: news, chart, profile) stands at $3.56, down 26 percent. And Ask Jeeves (ASKJ: news, chart, profile), at $15, is 22 percent below $19.19, a 52-week high it touched July 14. Further illustrating this trend, CNet Networks (CNET: news, chart, profile) is down 31 percent from the $8.29 level, a 52-week intraday high it struck on July 15.

To: Lizzie Tudor who wrote (24866)	8/9/2003 1:00:40 PM
From: stockman_scott	Respond to of 89467

THE FUTURE OF TECH -- THE BIG PICTURE Mark Zandi: "Tech Will Return" Economy.com's chief economist says the sector's rebound will be subdued, but it will still hit 6% over the next five years BusinessWeek Online AUGUST 25, 2003 businessweek.com Economists are often accused of being slow to appreciate the impact of technology. Not so Mark Zandi, chief economist of the consulting firm Economy.com in West Chester, Pa. While he thinks the post-1995 surge in Web-related productivity growth will inevitably slow down, he says tech investment will continue to keep it at healthy levels. And "we're already beginning to see a rebound in tech investment," he adds. BusinessWeek's Timothy J. Mullaney recently picked Zandi's brain on a wide-ranging series of issues related to tech and the economy, today and tomorrow. Following are edited excerpts: Q: Is the tech industry mature? A: I don't think it's a mature industry, and I think technology gives companies tremendous comparative advantage. I think the flaw in Carr's [Nicholas Carr, author of a widely cited Harvard Business Review article titled "IT Doesn't Matter"] thinking is his analogy between electricity and railroads. Technology is rapidly evolving, not standing still. The same can't be said for railroads and electricity. Once invented, they didn't change by very much. What we mean by technology changes almost daily. In tech, there's tremendous value to learning by doing. Unless you get down and dirty with the technology, you're not going to understand the strategic opportunities. This is changing and extraordinarily complex. Unless you're continuously investing, you will lose advantage. The problem is thinking about technology only as a way to attack the cost structure. Companies have been forced to do it [by the recession]. Otherwise they'll end up in bankruptcy. But ultimately it's a mistake. The winners are going to be the ones who invest and take chances. American corporations have said, "we don't have the will or capacity to innovate, so we'll treat tech as a way to cut costs rather than grow revenue." And that's what's wrong. The pendulum has completely swung from, "let's buy everything and not worry" to, "it's the end of history." And that makes no sense. Q: Is this e-biz on a shoestring? A: Yes, but each new chip enables new applications and new technologies, and those seem to be coming very quickly. And those will take e-biz to the place where the shoestring gradually goes away. Q: Do buyers today feel duped? A: I don't know that people felt like they got duped. They got carried away. Most realized going in that they were taking a step they didn't know what the results would be. Business leaders are now much more realistic about IT and understand it better. But one problem Corporate America has is that it's run by people who don't understand technology at all. I don't think most senior managers or CEOs understand the power of the tech they have at their fingertips. I don't understand it. I don't think people are duped, it's just hard to get their hands around it. If they blame anyone, it's the Street, not Big Tech. If they didn't show they were investing in tech, their stock would be pummeled, and they would be out of a job. And they knew it was a bunch of hokum. They knew they were making bad decisions, but they had no choice but to make them, The stock market tail was wagging the Corporate American dog. They made mistakes because they had to move quickly, and they had to make decisions. But now they can take their time. And investment will pick up once the economy improves. Tech is no different than anything else business invests in. Information processing investment is 48.5% of total capital spending in first-quarter 2003, and its bottom was first-quarter 2002, 45.5%. We're already beginning to see a rebound in tech investment. We're still living off the investment boom. It's key to the productivity boom now. But they're going to run out of ways to do it if they don't start investing. If it doesn't happen by year's end or this time next year, productivity is going to come down pretty sharply. Q: How will the recovery be different from those in the past? A: The coming rebound will be more subdued than recoveries past, in part because businesses will stay more cautious in their total spending. They won't come roaring out of the gate because of what they've been through. Real estate didn't get going [after its 1990-91 bust] until 1996-97. It took five years for the animal spirits to get going. It will take a good, solid five years from the '01 bottom before things really come roaring back, unless some pathbreaking new technology comes on that no one is anticipating. Q: What are the greatest threats to a robust tech recovery? A: The thing that concerns me the most is the potential that the rest of the global economy never really kicks in and provides a source of demand for U.S. tech production. Europe is arguably back in recession, Brazil is back in recession, Japan never really got out. Even heretofore healthy economies like the U.K., Canada, and Australia are struggling. U.S. tech companies are going to rely on stronger growth in other countries, and I don't know if they're going to get it. Q: Will technology grow faster than the economy? A: Tech will grow significantly faster than the economy. Real GDP growth should be about 3%, and tech should be at least twice that over the next five years. And that's a period of relatively subdued growth in tech because of the memory of what we've been through. Q: Is 6% enough? A: That will be a basis for nice growth in Silicon Valley and will support other tech centers across the country. Tech will return to being one of the leading growth sectors of the economy. Q: Economy.com forecasts productivity growth to slow sharply this decade, by about 1% from 1995-02 levels. Why do you have productivity slowing down so sharply? A: I see the world of productivity growth somewhere between what we experienced between 1973-95 and 1995-2003. We've had tremendous growth because of a confluence of events that won't be repeated: low cost of capital and a lot of tech coming at the same time. It's going to be tough to get those gains going again, but it will be substantially greater than most of what we've had post-'73. Q: Will Silicon Valley come back when tech comes back, or will it lag severely and not really be the same? A: I think its prospects are fine. It's a boom and bust economy that has busted and will boom again. Its fundamental strengths are its people and its institutions, like Stanford University. And I can't imagine a nicer place to live. So people will stay.