Juniper Networks Inc. (Nasdaq: JNPR) gained in early trading Wednesday on a report that Nortel Networks Corp. (NYSE:NT) is discussing a co-marketing arrangement to use its Internet-communications gear, and may withdraw plans for the development of its own high-speed routers.
The deal would signal the telecommunications equipment company's retreat from the competitive market for now, according to The Wall Street Journal's Wednesday report.
Juniper shares were up 5 7/8 to 207 5/16, or 3 percent. The stock has slipped since the company beatestimates and announced a stock split in April.
Nortel, which also announced a B2B exchange Wednesday, saw shares edge up 1/16 to 58 9/16. The stock has seen rocky trading as the company continues tosnap up optical equipment companies to keep up with competitors Cisco (Nasdaq: CSCO) and Lucent NYSE: LU).
The move to cooperate with Juniper on sales efforts is partly the result of months of delays in the development of Nortel's own high-speed router, according to a spokesman quoted by the Journal.
The report, citing a person familiar with the situation, suggested Nortel's yet-to-be-launched router is likely to be shelved in favor of higher-capacity equipment that Nortel is hoping to bring to market early next year.
Nortel also announced Monday a deal with IBM (NYSE: IBM) that moves it into the B2B space. The collaboration, which includes other companies, will create a global business-to-business Internet exchange called e2open.com.
e2open is expected to begin operations in mid-July 2000 and be fully operational in the 4th quarter. Nortel said it plans to buy goods and services worth $5 billion a year through e2open.com and other initiatives by the end of 2001.
Nortel said the exchange will generate savings from improved supply chain processes and lower inventory costs.