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Week in Review: Let's make a deal

After a week of rumors that Excite@Home's content unit would be sold, AT&T--the Net-over-cable firm's largest shareholder--confirms that it is considering a variety of business deals for the company.

After a week of rumors that Excite@Home's content unit would be sold, AT&T--the Net-over-cable firm's largest shareholder--confirmed this week that it is considering a variety of business deals for the company.

Stock in Excite@Home got a boost earlier in the week when rumors first surfaced that AOL--among other firms--could be interested in purchasing Excite, the firm's content division. An executive management reorganization, which aligned the company along content and network lines, only served to fuel speculation that Excite@Home would be split, despite only having merged in May.

After AT&T and Excite@Home executives denied that AOL would buy what was once the Excite Web portal, AT&T, in an official statement, said it is considering a variety of internal options for Excite@Home, including discussions with third parties. Microsoft and Yahoo also have been identified by sources as possible partners.

A board meeting to discuss splitting the company was set for next week but later canceled, according to published reports.

Net moves
Amazon announced plans to launch a new service, dubbed zShops, which lets small businesses rent space on its site to sell goods and services. The move marks a major shift in the company's business model--and analysts say it may prove troubling for the retail behemoth.

Playboy Enterprises plans to spin off part of its Internet business unit early next year, in the latest attempt by a media giant to profit from the Net. The company intends to sell a minority portion of its Playboy Online unit, which operates Playboy.com, in an initial public offering of common stock.

And AltaVista will finally get a chance to follow its Web portal rivals onto Wall Street with a public stock offering early next year, the site's new owners said. The decision marks a quick turnaround for Web holding company CMGI, which completed its $2.3 billion dollar purchase of a majority share in AltaVista just last month.

CMGI also agreed to buy free Internet service wholesaler 1stUp.com this week, further cementing its plans to create a full-service Web access and content powerhouse.

Meanwhile, Chase Manhattan sought the shortest route into the lucrative business of underwriting high-tech IPOs--it opened up its checkbook and bought its way into the market. But shelling out nearly $1.4 billion in cash for San Francisco investment bank Hambrecht & Quist may prove to be the easy part.

Chip plays
Following its architectural triumph with the Athlon chip, Advanced Micro Devices plans to detail the K8, a 64-bit chip that will compete against Intel's Merced. The K8, along with the upcoming Athlon Ultra chips, will constitute AMD's attempt to get into the lucrative market for server and workstation processors, a segment that the struggling chipmaker has long coveted.

A new patent reveals that a top-secret Silicon Valley start-up, Transmeta, apparently hopes to offer Intel-compatible chips while sidestepping legal landmines. The result: Transmeta could be able to sell its chips at a lower, more-competitive cost by avoiding fees it would otherwise have to pay to license Intel patents, an independent patent consultant said.

Executive shuffle
George Shaheen's abrupt departure from Andersen Consulting to online grocer Webvan sent chills throughout the staid consulting industry, where key executives who once dismissed the start-ups are now joining them.

It is perhaps Shaheen, the no-nonsense chief of the $8.3 billion management consulting powerhouse, who is the most glaring example yet of an industry in flux--its key leaders trading suit and tie for the lure of stock options that accompany a start-up challenge.

Meanwhile, Eckhard Pfeiffer, the former Compaq Computer chief executive who was dismissed by its board in April, was named chairman of growing e-commerce company Intershop Communications.

Coming soon
Palm Computing will launch its Palm Vx and wireless Palm VII handheld computers on Monday, sources say, adding new products to an increasingly crowded segment of the market. Although Palm is still far and away the most popular handheld computer by almost any count, the soon-to-be independent company faces more competition now than at any time in its existence.

Microsoft's announcement last week touting a first version of its Millennium operating system was a bit premature, but the company has finally shipped the first beta of its next consumer operating system to testers.

In related news, PC makers are grappling with a customer service nightmare following the recall of 400,000 hard drives. Western Digital voluntarily recalled about a half month's production of Caviar hard drives, its flagship product, manufactured between August 27 and September 24. Although the initial problem may be Western Digital's, PC manufacturers must face the ire of customers and the expense of replacing affected drives, analysts said.

Legalese
Network Solutions, the world's domain name sales leader, forged agreements with the Commerce Department and the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit company appointed to oversee administration of the domain name system. The agreements signal the end of a long-standing impasse between ICANN and Network Solutions (NSI).

The New York Attorney General's office confirmed that Stephen Houck, one of the lead government lawyers in the Microsoft trial, has resigned. The landmark antitrust case, in which the Justice Department and 19 states allege Microsoft unfairly used its Windows monopoly against browser rival Netscape, is before U.S. District Judge Thomas Penfield Jackson.

Sony's new Walkman will be able to play illegally copied songs, a decision that puts the consumer electronics powerhouse in the middle of the industry-wide firestorm over how to protect music copyrights in the online era--and apparently at odds with the company's public stand on the issue. Although the new product is designed to play files coupled with piracy protection technology, it also is capable of playing any MP3 songs, including illegally copied tunes, the company confirmed.

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