JUPITER, FL (Nov. 16, 1999) -- Iomega (NYSE: IOM) rose 15% today en route to a 39% cumulative gain since last Thursday's $3.50 share price. Once reason behind the move includes the recent hiring of a new chief operating officer, but the main impetus behind the gain has been new business initiatives announced at this week's Las Vegas Comdex Computer show.

A new Iomega ZipCD model was unveiled yesterday in Las Vegas, and new leaps into varying potential businesses were announced today. Many of the leaps are being taken with partners. Primarily, Iomega announced a digital audio strategy that takes advantage of its existing Clik! storage technology.

Ever since the Zip Drive succeeded, Iomega has used the cash flow that the Zip generated to pursue businesses apart from, although related to, the PC data storage industry. The company doesn't want to rely solely on the low-margin, highly competitive PC data storage business when more promising, and often related, industries exist.

Today Iomega shared that it is codeveloping MP3 audio technology that will use built-in Iomega Clik drives. Iomega signed non-binding agreements with three MP3 audio manufacturers -- Addonics Technologies Corporation, Sensory Science, and Varo Vision -- to build players with Clik technology. Using Clik, an MP3 audio players' storage can expand to "virtually unlimited" capacity.

These new products will allow you to download large amounts of music from the Internet onto a removable storage device at a low cost. The compact nature of the Clik disk makes the product not only a storage device, but a convenience device, too. Close to CD-quality music on the tiny disks can be taken with you and played anywhere. Cool? James Bond probably already has one. (Ask the Fool UK.)

Iomega announced several minor partnerships and other small initiatives today as well (links follow this column). All the news is good, except Iomega already faces a consortium of competitors almost everywhere it turns, many of them giants such as $75 billion Sony (NYSE: SNE). So, can Iomega experience yet another revival? Has management read The Art of the Comeback five times? Can Iomega ride the Internet to another, but this time lasting, success?

Selling products that utilize the Internet, an Iomega revival is not out of the question. In fact, an Iomega revival is much more likely than a Grateful Dead revival. Iomega needs strong management at the helm again, and it needs to convince people that they need portable, removable storage even though laptop computers continue to shrink in size and weight, and even though saving files on a network's server can make a great deal of sense. Rather than being a Rule Breaker, Iomega is a potential turnaround story. This probably makes Iomega considerably more risky than your typical in-good-standing Rule Breaker. (Talk about Iomega here.)

No Dread of the Fed

The Federal Reserve raised short-term interest rates. In reaction, the stock market chirped a quick hiccup and then kept going. The Nasdaq National Market scored another record high (it's up 50% this year -- it's second-best year to date) as the stocks of online-based businesses continued to rise. Why? Maybe because investors continue to see the potential for business growth. Nasdaq's volume was so high that the market froze at day's end.

The Rule Breaker port had another strong day itself. We know that this consistently blockbuster performance can't continue indefinitely, but we certainly can enjoy it while it does. In fact, we may change the name of the portfolio to the "Who Wants To Be A Millionaire Portfolio?"

For thoughts on the Fed's meeting and what it means, or doesn't mean, please see Our Foolish Fed Special.

Amazon Books Gain
The stock of online senior citizen Amazon.com (Nasdaq: AMZN) rose substantially, reportedly on word that Amazon's book division should be profitable in the current quarter. This "news" was shared in Amazon's quarterly SEC filing, released yesterday. However, this information was also shared in the company's quarterly conference call last month, and we repeated it here, too, so if Amazon's stock truly reacted to this finally today, and not to something else (or nothing at all), it's surprising.

Either way, the event has implications for the biz. Book retailing is a difficult, low margin industry, so Amazon's book division turning profitable is obviously good news. It's especially good because many people doubted that Amazon could ever make book-selling profitable. However, music is typically a lower margin business than books. Music is Amazon's second-oldest division, so we'll wait to see when this division becomes profitable. Amazon plans to share divisional performance numbers with the public in the future. One by one, if each division reaches enough critical mass to turn profitable, we could end up with a profitable giant. (Talk about Amazon here.)

An American in Brazil
Online access and content leader America Online (NYSE: AOL) is opening shop in Brazil -- its new AOL Brazil service.

All I can say is America Online has done a phenomenal job marketing its "America" brand around the world. When marketing itself outside North America, the company typically shortens its name to just AOL, like "AOL France," to lessen the "America" aspect. Either way, this is brand-building chutzpah at its best, and it shows what a strong brand name can get away with. (Talk about America Online.)

The Words of our Next Prez?
We close with Foolish (?) quotes from Mr. Donald Trump, of Trump Hotels (NYSE: DJT). Trump may largely end his dealings with Trump Hotels to pursue a presidential nomination. And he recently suggested that, if put in office, he would personally handle U.S. trade talks. This being the case, the following are Donald's thoughts on some of our country's trade partners: Japan is "ripping us big league;" Germany "wants to take over the world economically. They failed militarily;" and Saudi Arabians "have houses all over the world, including Palm Beach.... This is getting a little ridiculous. I mean, the money they make."


Well, he would be a spirited president. If elected, Congress will provide bomb shelters for all citizens.

--TMF Jeff on the message boards

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