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THE STANDARD'S
M E D I A G R O K
A Commentary on What the Press Is Reporting and Why
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| http://www.thestandard.com |
Friday, April 20, 2001
TOP GROKS:
* Dell: We Are the Champions, Aren't We?
* Bottoms Up for Microsoft and Sun?
* Smile, Dial and Pay More
MORE NEWS:
* Palm Losing Grip on Market Share
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TOP GROKS
~~~~~~~~~
Dell: We Are the Champions, Aren't We?
Poor Dell. It gets named No. 1 PC maker in the entire known universe,
and all anyone can talk about is how lousy its competition is. Of
course, that kind of reaction is pretty much inevitable when news of
anyone pushing past Compaq for the first time in seven years is
released in the same report that says the U.S. PC market shrank for
the first time.
The media clung closely to the report's conclusions, though several
reporters pulled out some cliches to embellish them. Dell is growing
"with a vengeance," wrote News.com's Michael Kanellos, who paraphrased
an analyst as predicting, "The gap between Dell and the Dell-nots will
also increase." Dell's hometown Austin American-Statesman boasted that
the company "has been pouring kerosene on the flames of a computer
price war it started." But reporter John Pletz also added an
interesting caveat that Media Grok didn't find elsewhere: Being the
big cheese doesn't mean so much if you're making a profit of 3 percent
or less, which the American-Statesman says is what many analysts think
is going on at Dell.
That's not likely to cheer up the folks over at Gateway, who were
saddled with the grim task of reporting earnings far worse than
analysts had expected, due to the company's frantic efforts to cut
costs. The logic should be clear to us all by now: Cutting costs down
the road means spending some serious cash now, especially if, as the
Wall Street Journal put it, you are "unwinding sales relationships"
with retailers and getting out of the "high-risk consumer loan
market." (Insert your own slowing-economy comment here.)
Still, CEO Ted Waitt managed to be chipper about Gateway's future, no
matter what goes on outside the company's walls. As the New York Times
reported it, Waitt said, "We are in control of our own destiny. We
feel we can get back into a high-earnings-growth model regardless of
what the market does." - Michaela Cavallaro
Dell Takes Top Spot in PC Sales (AP)
http://www.nytimes.com/aponline/business/AP-PC-Sales.html
(Registration required)
PC Market in U.S. Contracts by 3.5%, Shrinking for First Time in Seven
Years
http://interactive.wsj.com/articles/SB987715159809740635.htm
(Paid subscription required.)
Gateway Reports Net Loss on Restructuring Charges
http://interactive.wsj.com/articles/SB987708168743687333.htm
(Paid subscription required.)
Dell Beats Compaq for No. 1 Ranking
http://news.cnet.com/news/0-1003-200-5670760.html
Gateway Posts Loss on Special Charges
http://www.nytimes.com/2001/04/20/technology/20GATE.html
(Registration required.)
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Bottoms Up for Microsoft and Sun?
We know it's hard to believe, but it's true: This morning, there is
yet more earnings news to read. But today it wasn't just any earnings,
it was Microsoft's. And "the Redmond, Wash. colossus," as the
Washington Post's surprisingly cheeky report put it, beat analysts'
expectations - which had already been lowered - by 2 cents a share.
Please, try to restrain your cheering.
As you might expect when hordes of journos are working with the exact
same material, reports were quite similar; only the analysts' names
were different. The consensus is that Gates & Co. did well because of
what more than one outlet called the "surprising" strength of the
Microsoft Office suite, which is due to be replaced by Office XP this
year, combined with growth in the company's .Net servers and the
Windows 2000 operating system. The company's success was so surprising
that a Goldman Sachs analyst interviewed by the Wall Street Journal
made the unusual admission that he was "a little embarrassed" that he
cut his Microsoft estimates three times in March.
Still, as many reporters were more than happy to point out, what's
good for Microsoft isn't necessarily good for the rest of the
industry. The usual puns - the Journal went with "not so sunny" - were
dragged out in honor of Sun Microsystems' earnings report, in which
the company announced it met Wall Street's lowered expectations.
That's where the good news ended, though; as the San Jose Mercury News
put it, Sun "saw its previously rapid growth rate come to a screeching
halt in its fiscal third quarter as corporations cut way back on
technology purchases." But at least one analyst saw something positive
here, telling the New York Times, "They're sort of at peace with
themselves, which is more than I would have said last quarter."
But inner peace and the (at least momentarily) rebounding stock market
don't necessarily make for a sanguine CEO. In a post-conference call
interview with the Merc, Scott McNealy had this to say, in response to
what seems to have been a question about when the economy's slowdown
will end: "I see a bottom every time I change my 1-year-old's diaper.
That's the only sure bottom I know." - Michaela Cavallaro
Good Times in Redmond
http://www.thestandard.com/article/0,1902,23841,00.html?nl=mg
Sun Comes In a Cent Over Estimate
http://www.thestandard.com/article/0,1902,23838,00.html
Microsoft Navigates Bleak Seas
http://www.siliconvalley.com/docs/news/svfront/ms042001.htm
Microsoft Easily Tops Reduced Forecasts On Strong Demand for Corporate
Software
http://interactive.wsj.com/articles/SB987693018190855351.htm
(Paid subscription required.)
Microsoft Weathers High-Tech Storm
http://www.washtech.com/news/software/9171-1.html
Microsoft Bucking the Trend: Revenues Up 14 Percent as Diversification
Pays Off
http://seattletimes.nwsource.com/html/businesstechnology/134286964_microsoft20.html
Sun Micro's Profit Dropped Sharply in Quarter Amid Slow Sales Growth
http://interactive.wsj.com/articles/SB987694671226024087.htm
(Paid subscription required.)
Sun Meets Lowered Estimates for Its 3rd-Quarter Earnings
http://www.nytimes.com/2001/04/20/technology/20SUN.html
(Registration required.)
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Smile, Dial and Pay More
Let's face it, anything relating to the rules under which telecom
companies pay each other for services is bound to be complex. But the
job of the press is to make the complex comprehensible. After reading
all of today's stories about a recent FCC ruling, you may be left
scratching your head about the details - but the outlets agree the
result may be higher ISP prices.
The beef before the FCC was whether the Baby Bells will have to keep
paying billions of dollars a year to their competitors for phone calls
that the Bells' customers make to ISPs. These payments were set in
place by the 1996 Telecommunications Act. On Thursday the FCC voted to
phase out such payments over a period of years - some outlets said two
years, others said three.
ZDNet's Interactive Week provided good detail on the tangled history
of this dispute. It seems the FCC had issued a similar ruling in 1999,
but a federal court overturned parts of it.
InternetNews reported that yesterday's FCC vote to side with the Bells
and eliminate the "reciprocal compensation" payments was unanimous.
But ZDNet's Interactive Week said the vote was 3-to-1. Both outlets
quoted Harold Furchtgott-Roth, the FCC commissioner whom Interactive
Week fingered as casting a dissenting vote.
Most reports suggested that the end result could be higher prices down
the road. ZDNet and the San Jose Mercury News quoted spokespeople from
small phone companies saying that they had anticipated the FCC ruling
- which means that they may be raising the prices they charge their
ISP customers. SFGate reported that an earlier survey of California
ISPs found that 80 percent of them would pass along any such rate
increases to their customers. Dialup access will cost you about $4 a
month more, SFGate figured. Add in CNET's story on the likelihood of
rising prices for cable Internet access, and resign yourself to paying
more for your Net fix. - Keith Dawson
FCC Phases Out Controversial Telecom Fees
http://www.zdnet.com/intweek/stories/news/0,4164,2709887,00.html
FCC to Revise Reciprocal Compensation Rules
http://www.internetnews.com/isp-news/article/0,2171,8_747401,00.html
FCC Cuts Fees Paid for Internet Phone Traffic
http://www.siliconvalley.com/docs/news/svfront/fees042001..htm
FCC Reduces Company Payments for Internet Phone Traffic (AP)
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/04/19/national1737EDT0729.DTL&type=tech_article
FCC Caps Rates for Local Carriers
http://www.washtech.com/news/telecom/9158-1.html
Could Net Cable Rates Be Headed Higher?
http://news.cnet.com/news/0-1004-200-5667678.html
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MORE NEWS AT THESTANDARD.COM
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Palm Losing Grip on Market Share
http://www.thestandard.com/article/display/0,1151,23850,00.html?nl=mg
Good Times in Redmond
http://www.thestandard.com/article/display/0,1151,23841,00.html?nl=mg
Ericsson to Cut 12,000 Jobs
http://www.thestandard.com/article/display/0,1151,23847,00.html?nl=mg
Market Realities Hit Security Nonprofit
http://www.thestandard.com/article/display/0,1151,23852,00.html?nl=mg
Motorola Linked with Mitsubishi Tie-up
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http://www.internetnews.com/wd-news/article/0,2171,10_747441,00.html
Web Firms Fined for Collecting Data on Children
http://www.washtech.com/news/regulation/9181-1.html
Internet-News Site Launches 'Charity-Style' Plea for Cash
http://interactive.wsj.com/articles/SB987715180185371594.htm
(Paid subscription required.)
BlueLight Nixes Accidental MP3 Discount
http://news.cnet.com/news/0-1007-200-5668095.html?tag=mn_hd
Troubled Mainspring Sees 'Victory' in $80M IBM Deal
http://www.boston.com/dailyglobe2/110/business/Troubled_Mainspring_sees_victory_in_80m_IBM_deal+.shtml
Vice President Cheney: No Net Taxes
http://news.cnet.com/news/0-1007-200-5668698.html
Venture Capital: 'Gray Hair' Trend Gains Popularity in Business
http://seattlep-i.nwsource.com/venture/19501_vc20.shtml
Deconstructing Privacy Notices
http://www.msnbc.com/news/561394.asp
Database Companies Desperately Want to Keep Information Public
http://www.siliconvalley.com/docs/news/svfront/012890.htm
South Korea Links to Future Right Now
http://www.boston.com/dailyglobe2/110/business/South_Korea_links_to_future_right_now+.shtml
AI Is Alive on the Internet
http://news.bbc.co.uk/low/english/sci/tech/newsid_1274000/1274487.stm
The Man Who Saved 'Blogging'?
http://news.cnet.com/news/0-1014-201-5657702-0.html
STAFF
~~~~~
Written by Deborah Asbrand (dasbrand@world.std.com), Michaela
Cavallaro (mcavalla@maine.rr.com),Keith Dawson (dawson@world.std.com),
Jen Muehlbauer (jen@englishmajor.com) and David Sims
(davesims@sonic.net).
Edited by Jimmy Guterman (guterman@vineyard.com).
Copyedited by Jim Duffy (jduffy@thestandard.com).
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