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To: Straight Up who wrote (4392)	12/9/1998 6:59:00 PM
From: Alan Edgett	Respond to of 10081

Could this affect us? Interesting post on SI: Wednesday December 9 9:47 AM ET 3Com's enahmou sees more acquisitions By Duncan Martell SAN FRANCISCO, (Reuters) - As the convergence of voice and data on computer networks marches onward, the number two maker of computer networking equipment 3Com Corp. will step up its pace of small acquisitions, its chief executive said Tuesday. ''We'll be making lots of acquisitions,'' Eric Benhamou told Reuters in an interview in San Francisco. The purchases will range from tens of millions of dollars to a few hundred million, he said, adding the deals will add to its efforts with telephone equipment maker Siemens AG to speed the convergence of voice and data on the same computer network. Just last week, 3Com said it bought closely held EuPhonics Inc. for $8.3 million in cash to get its software for sending audio signals over the Internet, enabling it to send voice, music and other audio signals over networks with higher quality. 3Com, along with industry leader Cisco Systems Inc. (Nasdaq:CSCO - news), Northern Telecom and Lucent Technologies Inc. (NYSE:LU - news), are racing to sell the gear that will digitize voice as well as video and send it over computer networks. Sending voice over networks is far cheaper and many, including Cisco Chief Executive John Chambers, expects voice service to someday be free. ''This is the most important thing that's happened to our industry in a long time,'' Benhamou said. ''This is not a fad.'' While often referred to as convergence, what really is happening is that old-world voice networks are being translated and transferred to the digital language of computers. That means it is going to be a steeper climb for companies like Lucent, North America's largest maker of telephone equipment. ''The voice people have to reinvent themselves, and they have to do that without missing a beat,'' Benhamou said, because technology advances occur so rapidly. Northern Telecom, a Canadian maker of telco equipment bought Bay Networks earlier this year for just that reason. Contrary to Cisco's approach of going it alone and developing its own voice technology to add to its own data- networking expertise, 3Com is pursuing a series of partnerships as data, voice and video converge. Already, it is working with Siemens, the largest vendor of PBX, or public branch exchange, phone systems in the world. ''To be able to harness their expertise is pivotal,'' Benhamou said. ''Siemens is actually much more powerful than Lucent.'' Benhamou also sought to put to rest persistent rumors that is an acquisition target of companies such as Intel Corp. (Nasdaq:INTC - news), the world's largest chipmaker, and others. ''Our acquisition now is not in the cards,'' he said. ''I resolve to do it alone but with the help of a few strategic partners.'' 3Com, based in Santa Clara, Calif., has seen its stock rally from the low 20s in September to its close of $43.38 on Tuesday. The stock has rallied, analysts said, as 3Com has at last ironed out the difficulties of its acquisition of US Robotics announced two years ago and in September reported fiscal first-quarter earnings that surpassed analyst forecasts. ''We really turned the corner on that at the end of our last fiscal year,'' which ended in May, Benhamou said.