Disney's Michael Eisner isn't the only one stepping down. NBC's Tonight Show host, Jay Leno, has announced his impending retirement -- when his current contract ends in 2009 (at the end of a 17-year run). And for a second, you had a chance to replace him.... But NBC execs decided on Late Night host Conan O'Brian, who will finally get a pre-insomniac audience. Sorry you missed your chance, but the world of late-night TV moves fast.

In today's Motley Fool Take:

HP Spurns Intel


Seth Jayson (TMF Bent)

Add a chapter to the sad tale of Intel's(Nasdaq: INTC) sorry 2004. Today, longtime partner HP(NYSE: HPQ) admitted it would be dropping the beleaguered, 64-bit Itanium chip from its workstation lineup. Instead, HP will sequester Itanium chips to its high-end servers. At the lower end, it will use a mix of AMD's(NYSE: AMD) 32-64 bit combo Opterons and the similar, backwardly compatible Intel chips.

If that sounds like a small indiscretion to you, remember that HP spent years shacking up with Intel to work on this very chip. HP will continue to use it, but the decision to play the field on this particular line of machines sounds like the beginning of a long, messy affair.

The writing was on the wall some time ago, when AMD's 64-bit chips began selling like crazy because of not only their earlier appearance on the market but also their compatibility with the existing 32-bit software that still dominates the market. In other words, buying Opteron meant businesses didn't need to switch all their system software right away.

In explaining the HP decision, a spokeswoman told TheWall Street Journal that customers prefer this approach. As they say on the playground, "Well, duh."

The Itanium's reception was so frosty that Intel was forced to copy AMD's approach back in February, but by then, server makers such as IBM(NYSE: IBM) had already decided to start using the AMD chip. And it's a good thing, since Microsoft's(Nasdaq: MSFT) 64-bit Windows won't be arriving anytime soon.

While an Intel spokesperson countered today that the workstation market was never that important for the Itanium, it sounds a bit like doubtful, self-soothing posturing of the spurned. After all, in addition to servers, IBM, Sun Microsystems(Nasdaq: SUNW), and others currently offer workstations built on the Opteron.

Intel has already bulked up inventory while watching AMD gain market share. So the financial fallout from today's announcement may be minimal, but investors need to wonder whether the litany of goofs, gaffes, and the recent revenue whiff will be stopped anytime soon.

For more semiconductor Foolishness:

Seth Jayson plays the field, using both AMD and Intel machines, but at the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.

Wanted: Foolish Writers

Do you read the Fool's content and say to yourself, "I could have written that!" Do you post thoughtful arguments on our discussion boards? Do you have an opinion on everything from Amazon.com to Wal-Mart? Then we're looking for you. We're seeking the best and brightest minds out there to contribute to Fool.com. We're taking applications for both full-time positions and freelance Fools. Visit jobs.fool.com and check out the listings under Editorial and Writing.

The $600 Billion Cash Cow


Chris Mallon

Working capital. It's the lifeblood of business, ensuring corporate survival on a daily basis. Yet it's also a huge black hole, sucking up billions in cash on corporate balance sheets -- cash that could be reinvested in the business or even returned to shareholders.

Working capital, simply defined, is current assets less current liabilities. It represents cash tied up in receivables, inventories, and other short-term investments, plus liquid cash, net of short-term financing provided by payroll float (accrued, but not actually paid, salaries); customer payables; and short-term debt.

REL Consultancy Group publishes an annual report on working capital levels, and the latest edition estimates that U.S. companies have nearly $590 billion of excess cash tied up in working capital that could be recaptured without hurting ongoing operations. This cash could easily be redistributed to shareholders, increasing dividend yields while reducing total invested capital and enhancing ROIC. Liquidating this cash would be a win-win situation for companies and investors alike.

So how does a company free up working capital? Well, because much of the cash is tied up in stale inventory and short-term customer credits, reducing cash conversion cycles (CCC) is the best method for liquidating working capital. The CCC essentially represents the number of days it takes a company to turn inventory into cash, and the longer the CCC, the greater a company's working capital requirement.

Compare Dell(Nasdaq: DELL) with rival Hewlett-Packard(NYSE: HPQ). Both sell computers, printers, and other technological commodities. However, thanks to its just-in-time, direct-purchase business model, Dell requires only about a penny of working capital for every dollar of sales, compared with HP's $0.18 and Gateway's(NYSE: GTW) $0.09. Not surprisingly, Dell's cash conversion cycle is negative, which means it collects cash, on average, 40 days before paying for inventory. Gateway, another pioneer of direct computer sales, also collects cash prior to paying for inventory.

Efficient processes are the key to short cash conversion cycles, and process improvements can significantly affect working capital management. By focusing relentlessly on supplier management and logistics, Wal-Mart(NYSE: WMT) managed to reduce its cash conversion cycle to 15 days in fiscal 2004 from 22 days in 2000, squeezing $4 billion out of working capital during that time (Wal-Mart's fiscal year ends January 31).

If you keep an eye on the cash conversion cycle, you'll find companies squeezing every last bit of cash from their business and hopefully claiming their share of the $600 billion cash prize.

For more Foolish number crunching, click to:

Fool contributor Chris Mallon has trouble squeezing a few bucks out of his working capital, let alone 4 billion of them, and he owns none of the companies mentioned.

Discussion Board of the Day: Millionaire Fools

Is the best way to become a billionaire to round up a thousand millionaires? What are the keys to attaining wealth and keeping it? Share your views in the Millionaire Fools discussion board.

Kraft's Diet Pitch


Alyce Lomax (TMF Lomax)

Kraft (NYSE: KFT) has been one of the high-profile casualties of the so-called healthier eating trends taking America by storm. With processed food fare such as Oscar Mayer, Oreos, Chips Ahoy, DiGiorno, and more in its product portfolio, will the company's move to "South Beach" approval bring back its prominence in the cupboard?

According to USA Today, Kraft will execute a marketing push to tie its brands with the South Beach diet, a popular choice among low-carb dieters. Among the products it will say adhere to the dietary restrictions are Louis Rich poultry cuts, Kraft low-fat and fat-free cheese, Jell-O sugar free gelatin, Cool Whip, Planter's peanuts, and Grey Poupon mustard.

It's no secret that Kraft has been floundering as shoppers have begun to steer clear of some of its fatty and sugary snacks. Lackluster financial results and job cuts have been par for the course for Kraft lately. The company's been trying to come up with ways to woo consumers back by addressing health and weight concerns, such as considering scaled-back portions.

There are a few things wrong with Kraft's plan. It's quite possible that the Atkins and South Beach frenzy has come and gone -- six months ago, it was all anyone talked about, but such conversation now seems a little tired. It seems likely that while low-carb diets will never go away, their existence as a "craze" is about to end.

In an interesting development, the Canadian health department has moved to ban "low-carb" labeling, which will take effect in December 2005. The governmental body contends that there's no scientific evidence to support the healthiness of low-carb diets; therefore, "low-carb" labels are not allowed, although companies can make claims pertaining to "low-fat" and "low-sodium" foods.

While no such law applies in the U.S., it may have an impact on major food companies that provide their wares in the U.S. and Canada. Not to mention, it's a precedent that may -- just may -- begin to sway public opinion away from low-carb diets.

For the time being, maybe the South Beach seal of approval will boost Kraft's fortunes. However, one might argue that many people who have been on low-carb diets have probably already identified the Kraft foods in question as acceptable. Kraft's tardiness may just turn into another misstep.

Alyce Lomax does not own shares of any of the companies mentioned. Although her own attempt at the South Beach diet failed miserably, she knows she consumed both sugar-free Jell-O and Planter's peanuts.

Quote of Note

"Only the curious will learn, and only the resolute overcome the obstacles to learning. The quest quotient has always excited me more than the intelligence quotient." -- Eugene S. Wilson, U.S. dramatist and playwright

Samsung Sets Nano Benchmark


Carl Wherrett and John Yelovich

We know from our ongoing search for nano developments and early opportunities that commercial applications are being launched worldwide. But our ears perked up when we heard that Samsung, a South Korean industrial conglomerate, had earned an estimated $779 million in revenue since its nano additive's 2003 launch.

Being Foolish investors, however, we compare that claim to what we know about publicly quoted American "nano" companies. Any group of 10 together would be hard-pressed to muster even $100 million in revenue from their nano products in the past year.

Consider Nanophase Technologies(Nasdaq: NANX), which recorded product revenue of only $1.28 million in its last quarter. Indeed, the company has not even sold $100 million worth of nano materials since it went public in 1997.

Nano toolmaker FEI(Nasdaq: FEIC) recorded $170.8 million in product sales for the last six months. We estimate that less than 10% is from the company's nano tools.

The companies above are not direct comparisons or even in the same nano sector, but their performance further highlights the giant strides Samsung claims to have made. A company can move the research of nano applications into the commercial arena and gain huge revenues from it.

Samsung's nano sales are too insignificant for such a large company to interest investors. But it reminds us that nano products are being developed worldwide and that we must stay on top of evolving events.

Just as eBay(Nasdaq: EBAY) expands across the globe, a clear example of extraordinary growth, the same will take place in the nano universe. As we beat the bushes and scour the nano landscape looking for those growth opportunities in this nascent technology, we'll keep an eye on the U.S. market and abroad. We've already been warned: The competition doesn't have to be a U.S. company.

Carl Wherrett owns Nanophase stock, and John Yelovich owns shares of eBay. You can reach them by email.

More on Fool.com Today

In How to Be a Dividend Investor, Mathew Emmert explains how to build a portfolio of dividend-paying investments.... Bill Mann wonders what happened to yesterday's "winners" in Where Are They Now?

In other news:

For a list of all our stories from today, see our Today's Headlines page.