Share markets show they are easily swayed -- on both sides of the Pacific

Takeover rumours boost LibertyOne sharesLibertyOne, when asked to explain why its share prices started to climb last week, could only shrug and tell the Australian Stock Exchange the rises were due to the rumour mill. "LibertyOne is part of a rapidly growing industry that is subject to constant speculation and rumour about joint ventures, licensing deals, mergers, and takeovers", explained the company's statement.

"Since listing in December last year, LibertyOne has been subject to a steady stream of takeover rumours." And while the company acknowledged it had been discussing strategic relationships with major Internet players, "none of these discussions have progressed to the point where LibertyOne needs to make an announcement to the market."

The rumour that inspired last week's share rise was an impending takeover bid by China.com, an Asian Internet player that recently floated on NASDAQ. The market believed China.com was about to mount a bid, financed by a share swap, that valued LibertyOne at about $A875 million.

By the end of the week LibertyOne shares, which had been trading around $A1.60 on the strength of the rumors, had fallen to $A1.32.

US job site opens Australian operation

US e-commerce player HotJobs.com has set up an Australian operation under director James Garvey, a former staffer of Deloitte Touche who established the Delta Associates consulting firm in the early 1990s. The new operation has acquired the hotjobs.com.au URL, which currently redirects visitors to the US home page but which will be replaced by a localised version before the end of October.

The company also intends to begin an advertising campaign on October 1, with an employment section and banner advertisements on OzEmail. HotJobs.com.au has offices at Bondi Junction, and can be reached by phone at 02 8383 1677.

Apple warns of grim Q4 performance

Apple Computer has warned Wall St that its profit and revenue in the fourth quarter, which ends on September 30, will fall below those of the previous Q4 because of problems meeting demand for recently announced Power Mac G4 systems. Reports from the US indicate that Apple laid the blame for the problems on Motorola, which builds the high-performance processors.

Apple told investors it expects its profit to fall to between $US75 million and $US85 million, which is down substantially from the $US106 million for the fourth quarter of the previous year.

The company claims it has received orders for 150,000 Power Mac G4s since they were launched late in August, and hopes to overcome its backlog of orders early in the next quarter.

Ballmer quip dumps on NASDAQ

The value of the NASDAQ stock market took a tumble last week after Steve Ballmer, president of Microsoft, said stock valuations, including those of Microsoft, were absurdly high. Speaking to members of the Society of American Business Editors and Writers (SABEW) in Seattle, he explained that the overvaluations are bad for the long-term worth of the economy.

When asked in a follow-up question about what Microsoft's stock should actually be worth, the SABEW quoted Ballmer as simply replying "less".

Microsoft's stock price fell after Ballmer's comments, closing down $US4.87 at US$91.19 per shareThe NASDAQ, which closed an hour after Ballmer's comments were reported on US wire services, ended the day 108.33 points lower at 2749.83 points.

Xerox buys Tektronix printing division

Xerox has mounted a challenge to Hewlett-Packard's dominance of the colour printing arena by agreeing to pay $US950 million in cash to buy Tektronix's Colour Printing and Imaging Division. Xerox CEO Rich Thoman said the acquisition is "another of a series of strategic moves" to lead the digital document marketplace.

"What makes this news so significant for Xerox is that colour is the most profitable segment of the office printer market. The bottom line is the marriage of complementary products, distributions, channels, people and technology", he added.

Xerox will set up a new business unit and will add Tektronix colour printing technologies to its existing black and white workgroup printers. The company believes colour printing is no longer a niche area and is preparing an aggressive rollout of new "ground-breaking" colour products, a spokesman said.

Oracle and HP talk turkey on CRM

Oracle and Hewlett-Packard have agreed to a deep-reaching alliance on customer relationship management software, which both believe is a vital market. "We are addressing CRM because it's the fastest growing in the market today, growing three times as fast as the overall market", explained Carly Fiorina, newly appointed CEO of HP.

Under the agreement the two companies will develop and use Oracle Internet software for HP's hardware platform. "By using technology and the Internet and specifically CRM, Hewlett-Packard and Oracle are going after this market together", noted Oracle CEO Larry Ellison. "Oracle is going to market all CRM software and HP hardware and we're not doing that with anyone else".

Corporate Quarters

Recently-listed open source software supplier Red Hat lifted second quarter sales 95 per cent from $US2.3 million to $US4.4 million. In the first half of its financial year Red Hat lost $US5.2 million, compared with a loss of $US3.1 million a year earlier. During the quarter the company negotiated revenue-sharing agreements with IBM Global Services and Compaq in which Red Hat will provide support for the Linux operating system.

Strong sales of networking equipment and handheld computer products pushed 3Com's first quarter profit from $US93.7 million to $US137.5 million, but could not counter a decline in sales of network systems products, which dragged overall revenue down from $US1.406 billion to $US1.387 billion. "Strong first quarter earnings represent another milestone in the company's transformation", claimed Eric Benhamou, 3Com's CEO. In September the company announced it would spin off its Palm Computing operation early next year.

Cabletron has made a net profit of $US12.5 million on sales of $US356.6 million in its second quarter to August 31. A year earlier the company made a net profit of $US10.5 million on sales of $US370.6 million. "This is a fundamentally different company today that it was six months ago", noted CEO Piyush Patel. "Cabletron is reasserting our position as the industry's technology leader. We have a clear strategy and direction, we are focused on execution, and we now have a clear visibility into our business fundamentals".

Canadian software developer Cognos lifted second quarter revenue from $US70.6 million to $US88.1 million, but saw its net profit slip from $US14.1 million to $US12.8 million.

Software developer Corel made a net profit of $US17.6 million in its third quarter, compared to a loss of $US7.8 million a year ago. Revenue was static at $US71.3 million, compared with $US71.1 million a year earlier.

Business Briefs

Expedia, Microsoft's online travel site, has filed for an initial public offering. After the float Expedia will operate as a separate company in which Microsoft will hold majority ownership. As part of an ongoing contractual arrangement with Microsoft, Expedia will continue to provide services to MSN.com.

Intel is busy in the networking arena where it has agreed to take over the development group of Danish company Olicom and to buy a division of Stanford Telecommunications, a US company that designs chips and other components for use by telcos and cable companies.

Computer Associates has bought Snare Networks, which designs security software and provides associated services. CA was attracted by Snare's virtual private network technology, which will be incorporated in the CA eTrust product line.

Ever-more acquisitive Cisco Systems has agreed to by privately-owned WebLine Communications through a share swap valued at $US325 million. WebLine produces software that assists in the establishment of online customer service and e-commerce applications. When the takeover is completed, WebLine's products will be integrated with the call centre offerings of GeoTel, which Cisco bought in April.

At the same time, Cisco has completed the acquisitions of TransMedia Communications, StratumOne Communications and MaxComm Technologies, and has received clearance from regulatory authorities to proceed with its $US6.9 billion purchase of Cerent Corp, which specialises in optical transport telecommunications systems.

IBM has agreed to buy Web-based enterprise security technology developer Dascom Inc. Technology from Dascom's IntraVerse enterprise access control and authorisation system is already included as part of IBM's SecureWay Policy Director and SecureWay FirstSecure solution for e-business.

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