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 : IBM -- Ignore unavailable to you. Want to Upgrade?

To: art slott who wrote (3825)	9/14/1998 10:43:00 PM
From: treetopflier	Read Replies (2) \| Respond to of 8218

Isn't the IBM Information Network a profitable endeavor for them? If not, shed it. If so, what might they have as a better investment alternative for their $5B? They can't be too worried about their borrowing at rates like these. It doesn't look like they need the cash to reduce debt, although their debt is massive. Would a worldwide sales slowdown force them to have to raise cash and are they preparing for this? The timing just seems odd to me. What could they be swapping this business for? Agree about telecom companies being likely buyers. ttf

To: art slott who wrote (3825)	9/15/1998 3:02:00 PM
From: ToySoldier	Respond to of 8218

I would say that it is not a core-competency for IBM. Even though IGN is a large global network, the economy of scale to maintain and promote its service is not worth the revenue they can get out of it. Only the scale of a large telo can likely make a good profit on this service sector. This will mean a lot of internal restructuring of systems as well as a re-think of how IGS sales and services might be structured. i.e. all of IBM's internal systems and access to most of the 270K+ employees are via the IGN. Also, questions as to new deals involving the inclusion of IGN vs better pricing from now competing VAN carriers will have to be considered. Interesting thoughts.... Toy