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Friday, April 9, 1999
"A gossip is one who talks to you about others, a bore one who talks to you about himself, and a brilliant conversationalist is one who talks to you about yourself." -- Lisa Kirk
IBM to Boost Online Sales
Following the lead of rivals Dell Computer (Nasdaq: DELL), Gateway (NYSE: GTW), and Compaq Computer (NYSE: CPQ), IBM (NYSE: IBM) will begin selling its full line of personal computers and small computer servers via the Internet starting in May. The company said broadening online sales will help reduce handling costs by about 5% at its PC unit, which lost $992 million before taxes last year. Currently, online sales make up some 20% of sales at IBM's PC unit. The company is aiming to raise that number to around 40% in the next two years.
Right now, the company's "Shop IBM" area of its website sells some laptops, PCs, servers, and software directly to consumers. (Business PC systems, servers, and workstations are also available but through a dealer.) IBM's hoping that its expanded line of products available for direct sale over the Internet will win over small business customers. In December, the company's online sales totaled $38 million, but only 7% of that came from small businesses and consumers. IBM also plans to market services that will help companies do business online.
In response to speculation that IBM would ditch its money-losing PC unit, the company posted a note on its website assuring customers that it "remains committed" to its PC business and customers and is determined to return the unit to profitability. "The PC industry is strong, and we're in it to win. Analysts are projecting near double-digit revenue growth for the PC industry through 2002," it said. "IBM is committed to not only staying in this business but to leading the industry."
News to Go
Australia's antitrust officials blocked Coca-Cola's (NYSE: KO) proposal to buy Cadbury Schweppes PLC's (NYSE: CSG) beverage brands in that country, but the companies said they were already discussing an amended offer with regulators there. In addition, Mexico has already expressed opposition to the deal, and Germany's cartel office reportedly also plans to veto the purchase.
Entertainment and media giant Walt Disney Co. (NYSE: DIS) plans to launch a new cable and satellite TV channel that would feature repeat airings of ABC's four daytime soaps -- All My Children, One Life to Live, Port Charles, and General Hospital -- as well as movies and original shows. ABC's daytime lineup has ranked No. 1 among women aged 18 to 49 for more than two decades.
The world's largest auto maker General Motors (NYSE: GM) raised its second-quarter North American production target by 1%, or 15,000 vehicles, to 1.512 million to meet stronger-than-expected demand. Of that increase, 6,000 will be cars while 9,000 will comprise light trucks -- pickup trucks, sport utility vehicles (SUVs), and minivans.
Biotechnology firm Genentech (NYSE: GNE) announced that late-stage clinical trial of the company's recombinant human nerve growth factor for use in treating patients with diabetic peripheral neuropathy did not meet its goals, so it won't be filing a biologics license application with the Food and Drug Administration. Genetech also said it's in talks with a U.S. attorney regarding a possible $50 million settlement to end the government's investigation into the company's promotion of human growth hormone between 1985 and 1994 for uses that had not been approved by FDA. Any settlement would be recorded as a one-time charge and would not have "any ongoing financial impact."
Medical technology company Medtronic (NYSE: MDT) said it has won FDA marketing clearance for its GFX2 coronary stent system for use in the treatment of coronary artery disease. The company said the new device will be available to U.S. interventional cardiologists immediately. Medtronic also announced that it has obtained the right to affix the CE ("Confirmite Europeene") marking to its S670 coronary stent system for sale in all countries of the European Union and the European Free Trade Area.
Online community theglobe.com (Nasdaq: TGLO) announced a 2-for-1 stock split, effective May 14.
RSA Acquisition Corp. increased the purchase price for shares of American Safety Razor Co. (Nasdaq: RAZR), which makes Burma Shave shaving cream, to $14.20 a share from $14.125 and extended the deadline on its tender offer to April 23.
Get a rundown of the March retail sales figures... Check out this week's StockTalk interview with the CEO of Internet relationship management software maker Vignette Corp... Daily Double: Bed, Bath & Beyond... It's a Kodak moment in this week's Dueling Fools.
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