<BREAKFAST WITH THE FOOL>

Thursday, March 4, 1999

"I solemnly promise and declare that every customer that comes within 10 feet of me, I will smile, look them in the eye, and greet them, so help me Sam." -- Wal-Mart employee pledge

Latest Market Numbers

Dell & IBM Sign Mega Deal

PC makers Dell Computer (Nasdaq: DELL) and IBM (NYSE: IBM) will announce a multi-billion dollar strategic agreement, "believed to be the largest agreement of its kind in the information-technology industry," at a news conference today at 10 a.m. Eastern time. A press release will be posted on Dell's website at 9:30 a.m., and the press conference will be webcast live by broadcast.com.

According to The Wall Street Journal, the deal could generate significant revenue for IBM in the short term and boost Dell's customer support services. Dell has been moving to provide larger computers, such as servers and workstations, but has been hindered by its lack of a comprehensive service business to support these machines. IBM's $30 billion service business is one of Big Blue's fastest-growing sectors and provides everything from computer consulting to installation and maintenance. In addition, Dell's other rivals Compaq Computer (NYSE: CPQ) and Hewlett-Packard (NYSE: HWP) also already have well-established service businesses that operate in the U.S. and abroad.

Today's new conference follows yesterday's launch of Dell's new online superstore, gigabuys.com, which offers more than 30,000 computer-related products and services including printers, digital cameras, personal digital assistants, scanners, games, and imaging and educational software. Shares of Dell and IBM were trading up in European markets. U.S. trading will probably be delayed until after the press announcement.

News to Go

Casual clothing retailer American Eagle Outfitters (Nasdaq: AEOS) said its February same-store sales jumped 33% from the same year-ago period.

Paris-based telecommunications equipment company Alcatel (NYSE: ALA) announced it will acquire privately held Assured Access Technology Inc. in a cash deal valued at $350 million, which includes the equity purchase price as well as a technology development incentive plan. Assured Access, which develops remote-access products for the Internet, will keep its name and CEO and continue to operate out of Milpitas, California.

Germany's Siemens AG is in preliminary talks with networking company 3Com (Nasdaq: COMS) regarding a $1.2 billion offer to buy the 3Com unit that sells networking equipment to phone companies, The New York Times reported. Siemens is reportedly set to form a new U.S. data-networking subsidiary after it acquires two privately held companies, invests in a third, and hires a senior executive from IBM to head the new venture.

Discount airline Southwest Airlines (NYSE: LUV) will announce plans to begin flying to North Carolina's Raleigh-Durham airport (RDU), The Wall Street Journal reported. Such plans would give Southwest its first city between Baltimore and Florida and allow the company to move in on the turf of Midway Airlines (Nasdaq: MDWY), currently the biggest carrier at RDU.

Women's apparel retailer Liz Claiborne (NYSE: LIZ) announced plans to buy back up to an additional $100 million of common stock.

The nation's largest online bank Net.B@nk Inc. (Nasdaq: NTBK) said it's adding new accounts faster than it had expected thanks to a new advertising campaign. The company signed up 2,800 customers in February and anticipates it will top that number this month.

Applied Micro Circuits (Nasdaq: AMCC), which makes semiconductors used in communications networks, said it has agreed to buy privately held Cimaron Communications Corp. for around $115 million in stock to expand its high-speed digital communications business.

Goldman Sachs announced that its management committee has approved a plan to go public that will be submitted to the investment bank's partners for a vote next Monday. Barring a repeat of the stock market drop that undid its plans last fall, the bank said it will make an initial public offering (IPO) by early summer. The IPO is expected to raise $2.5 billion to $3.5 billion.

More Foolishness

David Gardner dispels some myths about the now-infamous online auctioneer eBay in the latest Rule Breaker report... And in the Rule Maker report, Phil Weiss discusses the importance of brand names and mindshare... Check out this week's Dueling Fools for a debate on the merits for investing overseas.

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor