FRAMINGHAM (03/03/2000) - Stock in 3Com Corp.'s Palm unit blasted off last week following an initial public offering in which its share price rose as high as $160 before returning to about half that level in late trading on Friday. Palm Inc.'s leading position in handheld computing devices and its strong sales drove intense interest in its IPO at a time when many publicly offered companies have little or no track record, analysts said. In the days leading up to the IPO, 3Com adjusted the pre-offering price from $15 per share to $30 per share before settling on $38 late Wednesday. Palm held 66 percent of the U.S. market for handheld devices as of mid-1999, according to IDC, but is facing increasingly tough competition.

EDS last week said it would expand its repertoire of Web-hosting services to include the business of managing shared and dedicated Web servers within EDS hosting facilities worldwide. Prices will start at under $1,000 per month. EDS indicated it is taking on network provisioning of application service providers as well as offering security services. Until now, EDS had focused on managing Web servers at corporate sites.

The ever-lively flurry of events continued at Qwest Communications last week, as it faced new challenges on all sides. First, Solomon Trujillo, chairman, president and CEO of US West, the local carrier Qwest is acquiring, made public his dissatisfaction and said he will quit when the merger closes. Trujillo said he and Qwest CEO Joe Nacchio "have not found agreement on key strategic issues, including leadership appointments, the structure of the organization and the role of the Office of the Chair." Trujillo has long been seen as less willing to fold his tent and quietly fade into the background than most CEOs of acquired carriers are. Yet Nacchio may find himself in a similar position, as reports surfaced that Deutsche Telekom is building up its corporate coffers to try to acquire Qwest. Deutsche Telekom has long coveted a direct stake in the U.S. telecommunications market. It was not known late last week if Qwest is the German carrier's only target, or whether it may be considering others.

Ever want to take your sound and music files on the road? Now you can with the release of Windows Media Player for Windows CE from Microsoft. While Microsoft is targeting consumers looking to download music, the player can be used to play any Windows Media or MP3 audio file. This means corporate users can transfer training and other corporate audio to their player using the Window Media Manager and take it on the road. The player runs on the latest generation of palm-sized PCs from Compaq, Casio and Hewlett-Packard. Both the player and manager transfer agent are free and can be downloaded at windows/windowsmedia/.

The instant messaging wars heated up again last week, as America Online began blocking traffic from iCAST, a music and entertainment Web site in Woburn, Mass. ICAST employs software from Tribal Voice in Denver to support instant messaging between users of AOL's Instant Messenger, Microsoft's MSN Messenger Service, AT&T WorldNet's I M Here and AltaVista's AltaVista Messenger. iCAST went live last Tuesday, and within 36 hours AOL began blocking iCAST traffic to its 45 million AIM users. Tribal Voice officials say AOL has repeatedly failed to return their calls about interoperability between their instant messaging users.

Subscribers to Time Warner's broadband cable services will not be locked into using America Online or an affiliated ISP after Time Warner merges with AOL, the companies announced last week. Furthermore, the merged AOL/Time Warner organization will not set a limit on the number of ISPs with which it will have commercial relationships, and will allow those ISPs to form partnerships with its cable systems locally, regionally or nationally. The new company also will allow ISPs to offer videostreaming, and will allow ISPs and cable operators with which it deals to work directly with consumers to market and sell broadband service, and for billing and collection. The memorandum of understanding between AOL and Time Warner is expected to lead to a binding agreement as the two work toward merging.

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