Until recently, you might have lived a life blissfully unaware of the online #Gamergate movement. But last week, computing giant Intel pulled its ads from an independent game-development site thanks to the gaming lobby. Now that major companies are taking sides, it's time to figure it out. Let us be your guides.
Apple's got the iPhone. Google's got Android. Even Amazon has the Kindle. After flirting several times with the ooohs-and-aaaahs gadget business, Intel convened a brain trust last week to work on their own mobile phone.
• UBS will make a fourth round of job cuts and is closing several divisions. [BN]
• A class-action lawsuit has been filed against Bank of America for failing to disclose the risks associated with the acquisition of Merrill Lynch. [Reuters]
• More BoA-Merrill trouble: It seems the bank accelerated bonus payments last month so it could hand out the cash before the bank changed hands. [FT]
• The SEC has filed charges against missing hedge funder Arthur Nadal. [NYP]
• Win Bischoff's goodbye email to Citigroup employees. [Deal Journal]
• A record $152 billion was pulled from hedge funds in the fourth quarter. [DB]
• In other bad news, Microsoft is cutting 5,000, Intel is laying off 6,000, and Sony says it lost $2 billion more than expected last year. [WSJ, CNN, BN]
Intel launched its new Core i7 chip today. John Markoff's behind-the-scenes report in the Times is a good alternative to the technical-stats posts you can Google up anywhere. Intel — and several thousand miserable business reporters — want to spin Core i7 as as a sign of new hope for the tech industry's future. Truth is, there are three reasons Core i7 can't save us all:Forrester CEO George Colony listed them last week:
Where's the debt crisis in Silicon Valley? The knock-on effects are all too real, but frozen credit markets have had little direct effect on business operations, aside from possibly scotching the debt-fueled sales of Alltel and Nextel. That's because technology companies are run by paranoid sorts who like to keep large cash reserves, in case some upstart renders their market obsolete. In good times, activist shareholders whinged about their parsimonious habits, but the cash hoarders are now sitting pretty — and could be set for acquisition binges.One company which listened, to its detriment, to shareholders was Microsoft. When Bill Gates ran the software company, he liked to keep a year's worth of expenses on hand, in case things went awry. Microsoft is no longer quite so stingy with its cash; it dribbles some out in dividends, and gave shareholders a $32 billion payout a few years back. Good thing it didn't shell out $44 billion for Yahoo; that deal would have left it cash-poor and debt-ridden, at exactly the wrong time. Even so, Microsoft's balance sheet is no longer the most sterling in tech. So who's got cash on hand? Here are the 10 richest tech companies, from a Yahoo Finance screening. (I left out companies, like IBM, whose cash was matched by equally outsized debts.)
Intel's revenues for the most recent quarter were flat, but its profits were up 12 percent on expense cuts. (Read: layoffs!) Intel CEO Paul Otellini says the company expects to "outpace" its competition. Right: That would be AMD, the chipmaker which is trying to shed its chipmaking facilities. Outpacing AMD is like running a three-legged race against a double amputee. [WSJ]
$50 million of venture capital down the drain. A fraudulent set of books, going back to 2004. How did this happen? Entellium, a Seattle-based software company, saw CEO Paul Johnston and CFO Parrish Jones resign, days before the two were charged with wire fraud. What no one has explained: How on earth were the two executives able to get away with overstating the company's revenues to investors by a factor of four?Ignition Partners, which put in $19 million of the $50 million in venture capital, is playing dumb, insisting it never would have invested had it known the company's true financial condition. But Entellium, which started in Malaysia in 2000, was trouble from the start. It went through a period, after the popping of the bubble, when employees went unpaid. Since then, it attracted investments from Ignition and others, including Intel Capital, West River Capital, Sigma Ventures, and Mavcap, a Malaysian venture fund. Are we to believe that all of these investors committed their limited partners' money without a thorough audit? Silicon Valley Bank, a tipster tells us, loaned Entellium millions of dollars and acted as the company's bank. It examined the company's books quarterly for the past three years — part of the normal loan-review process — and surely was aware of how much money was flowing into its accounts — or rather, not flowing in. Montgomery Securities and Cascadia Capital helped Entellium raise money. Were they, too, deceived as to the company's financial condition when they presented venture capitalists with its numbers? It is possible that Johnston and Jones are very clever fellows. But a scenario where they simply got away with defrauding every financial institution they dealt with beggars belief. The alternative scenario: That at least some of Entellium's backers were aware of the fraud, and invested in the hope that it would become someone else's problem soon enough.
As a born Californio who proudly packs my "U.S. out of California" tee from Mule Design whenever I leave the state, it comes as no surprise that Cebit conference organizers have, for the first time, selected a state instead of a nation as a partner in the world's largest information technology conference and trade show. Like many Americans, I could use a few euros and some free healthcare right about now. Governor Arnold Schwarzenegger dropped by Intel yesterday to promote the relationship with his deutsche sprechen comrades. And while the conference is held in Hanover, I recommend stopping by Berlin, which I hear is cheap, kinky and open for business. The state and conference are even offering financial assistance for first-time attendees. California uber alles, indeed.
In a deal worth more than $3 billion, Venezuela has agreed to purchase 1 million mini-laptops from Portugal. The Intel-designed Classmate laptops were licensed to Portugal for manufacturing and are similar to Nicholas Negroponte's One Laptop Per Child project that Intel once backed. The Venezuela contract is bigger than all OLPC orders combined from the past two years. [International Herald Tribune]
Just when you blew your IT budget on quad-core servers, Intel has a six-core Xeon 7400 processor that'll be available from Sun Microsystems, Hewlett-Packard, and Dell starting September 15th. I'm a bit disappointed, because I was hoping they'd also boost the 7400's L3 cache to 32 megs. But that's just me.
Let's face it, the world of Web development and production is a glamorous sham. The real science is in semiconductors. That cute Ajax script kiddie with the asymmetrical haircut? Ask him to design a microprocessor cache bus. Learn a little ActionScript? Go ahead and try to get a job pinning Intel chips to nuclear reactor control systems or laser-guided bombs. Even if you're a C++ jock or MapReduce expert, your gonads shrink when an actual electronic engineer is in the room. It's okay, you can admit it. We will.We've been focused too much on software and content, even though we know there's someone from SanDisk who just flipped their lid on the playa. Likewise, there must be some poor pacifist at PA Semi who, all too happy to get sold to Apple, learned they had to continue engineering chip fab designs for jets, subs and choppers. I mean, c'mon, AMD minions, can you come up with no good dirt on Intel executives? I yearn to hear the stories from the actual front lines of technology, and not from the front of the line at the British Bankers Club or 111 Minna. Do tell. (Photo by Marcin Wichary)
When former Varian engineer Wayne Cox reached out his driver-side window to push the dying Oralia Puga Ramirez, 75, and Enedina Oliva, 70 off the hood of his car, a 1994 Infiniti, did he have to roll down his window first or was it already open? I wonder, because that's a detail that matters — a detail that delineates between confused and calculated cruelty. You're driving along, you hit someone by accident, your window's already open, you reach out to see if the person is OK, they aren't, so you freak out and drive away — that's callous and wrong, but not calculated. Hit someone you didn't see, see they're dying, press the button to send your power window down, wait the three or four seconds for the window to sink all the way, then reach out and push two dying people from the car's hood? That's callous, wrong and calculated — criminal in a way you'd only expect from an engineer. Or least from an engineer like the nine bad guys we list below:
Intel is one of several companies which have quietly converted their pension plans into vehicles for financing wealthy execs' deferred compensation. The majority of the tax-advantaged assets in Intel's pension plan are now dedicated not to providing pensions for the rank and file, but to paying IOUs issued to the chipmaker's most highly paid employees. The financial sleight-of-hand reportedly saved Intel $65 million in taxes in one year alone. Intel maintains that its practices — which in effect get taxpayers to help finance Intel's executive compensation — "feel consistent" with both the spirit and letter of the law that gives tax benefits for providing pensions. Our reaction: There's a Valley company which still offers a pension plan?
Since 2005, when Apple first announced plans to switch to Intel, the companies have been joined at the microchip. Intel even tweaked its chip designs, reducing the size of the circuitry surrounding a cutting-edge chip to accommodate the tight confines of Apple's new MacBook Air. But a new report suggests Apple is getting antsy about Intel. AppleInsider says that while Apple will continue to use Intel CPUs, it will start designing its own custom chipsets — the motherboards on which processors sit and which houses all the supporting silicon. Could this have anything to do with Apple's recent purchase of chip designer PA Semi?
"Intel announced its second quarter results (PDF) today, with numbers that beat analyst expectations and set revenue records for the company. Total Q2 revenue for 2008 was $9.5 billion, with an operating income of $2.3 billion, net income of $1.6 billion, and earnings-per-share of 28 cents. Total revenue fell two percent from the first quarter's results, but improved nine percent year-on-year, while net income rose by 11 percent compared to Q1 2008, and 25 percent compared to Q2 2007." [Ars Technica]
Tired of fielding lawsuits from patent trolls and scared of court injunctions like that faced by RIM which nearly shut down the company's BlackBerry service, Google, Hewlett-Packard, Cisco, Verizon and Ericsson are among the companies rumored to be behind the formation of the Allied Security Trust. Ponying up $250,000 down payments and $5 million in escrow to make purchases, the trust seeks to buy patents before they fall into the hands of patent trolls. (That's the polite name the group's founders use for companies which seek to make money litigating infringers rather than by create products.) But the real bogeyman here is the rise of a possible patent troll to rule all patent trolls, Intellectual Ventures, which has close ties to Microsoft.
Back when Vista launched, Microsoft predicted corporate clients would adopt the new operating system at twice the rate of its predecessor, Windows XP. Hasn't happened. Now even longtime Microsoft partner, chipmaker Intel, has decided to not upgrade its 80,000 employees to Microsoft Vista. An IT buyer at the company told the New York Times that, after "a lengthy analysis" Intel's "information technology staff just found no compelling case for adopting Vista." Instead, Intel will keep its employees on the same OS they've used since 2001, XP.
