Week in review: Tech stocks tumble
Of course it wasn't just technology stocks that took a dive this week, but industry leaders are doing some serious worrying about what lies ahead.
Day after day this week, technology stocks got hammered: the CNET Technology Index, which tracks 66 publicly traded tech companies, dropped for the fourth straight day Thursday to hit its lowest level in more than three years.
Of course, tech stocks were not alone. Just when it seemed like it couldn't go any lower, the Dow Jones Industrial Average on Thursday, and the Nasdaq and S&P 500 indexes all continued to slide.
But tech industry leaders, some of whom had thought their industry might be immune from the financial crisis, are seeing the week as a critical wakeup call. Even the healthiest of companies have seen. Google, for example, finished trading Thursday at about $329 per share, a new 52-week low and less than half the asking price for a Google share in November 2007.
So CNETto ask "How long and how bad this will be for the tech industry, and what should companies do about it?" Not so surprisingly, there was no consensus.
While nearly everyone interviewed is concerned about the economy, their reaction to it and their plans to deal with it are across the map. Experienced investors like Silicon Valley venture capitalist Ron Conway and venture capitalist Larry Augustin of Azure Capital Partners are cautious, while some executives (at least in their public comments) are downplaying the risks to their businesses.
Conwayto the 130 start-up companies he's invested in: now is the time to hunker down.
"In 2000 and 2001, the companies that hunkered the fastest were the companies that survived," said Conway in an interview with CNET News. "Get costs under control; make sure you have plenty of runway."
And on the other end of the spectrum is Sprint Nextel CEO Dan Hesse.
"We think there will be some impact on our business," he said during an event toin Baltimore on Wednesday. "But compared to most other industries, we are relatively well insulated."
? Enterprise software maker SAP, which is particularly vulnerable to end-of-quarter deal cancellations, has already run into trouble, as have other notables such as Sun Microsystems and Netflix.
But it's not yet clear what will happen to consumer sales and online advertising. The monthly CNET-Consumer Electronics Association consumer confidence index showed surprising bullishness in late September. Internet Advertising Bureau statistics for the first half of the year, but the IAB data did little to shed light on what will happen in the fourth quarter.
We also checked in with Web 2.0 start-ups to see just how freaked out they are this week. Again, the answer, according to, ranges from very freaked out to the point of losing some serious sleep, to energized and looking forward to grabbing share while others falter. Many, however, reported having just three to six months of cash on hand, which poses some significant challenges given the credit crunch.
CNET Webware Editor Rafe Needleman wondered. (Remember Kozmo, the munchie messenger service from the last bubble? Not a person who used it didn't love it.) He warns that some Web 2.0 start-ups that are well loved and well used by many are in serious danger of falling off the cliff.
Needleman has come up with. Twitter lovers, be warned!
Click here for a roundup of the latest financial news and its impact on the tech sector.
New BlackBerry storms in
In a diversion this week from the economic black clouds, a different type of Storm made landfall this week--the BlackBerry Storm. Considered by many to be the first true rival to Apple's insanely popular iPhone, Verizon Wireless and Research in Motion on Tuesday night , the first touch-screen BlackBerry, which is expected to hit the shelves in time for the holiday season.
The Storm features a touch-sensitive display that's unlike that on any other touch-screen smartphone available today. Rather than provide haptic feedback (or none at all), RIM developed something completely new called ClickThrough. It consists of a suspension system that lies beneath the display, so that when you go to select an application or enter text, you actually push the screen down like you would any other tactile button.
That technology appears to be an answer to those "CrackBerry" addicts who are intrigued by the touch-screen technology, but can't wean themselves off the traditional keyboard feel.
Other highlights including dual-mode functionality, integrated GPS, BlackBerry OS 4.7, and more. A specific release date and pricing have not yet been announced.
It still remains to be seen, however, just how fiercely the Storm will be able to compete with the iPhone. At least one industry watcher, CNET blogger Don Reisinger, says, although he tips the hat to RIM for the neat new touch-screen design.
"I still don't see how the BlackBerry Storm will be able to compete on any level with the iPhone 3G," he wrote. "I just don't see how BlackBerry's first touch-screen device can compete against the iPhone if the vast majority of 'mainstream' users simply don't know anything about it."
Maybe it's a still a little early to tell, since consumers can't get their hands on a device yet. CNET Editor Bonnie Cha got a sneak peek. Clickfor a video, in which she shares her impressions.
Also of note
Microsoft ...Seagate is turning its eyes ...Apple sends out invite for ...Alleged Sarah ...Judge keeps ...Google launches ...Government biometrics use still ...Feds propose ...New pictures of Mercury and ...A for Advanced Micro.