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Ten irrelevant technology companies

These 10 public technology companies were once important, even exciting. Now they're well on their way to obscurity.

The great corporate graveyard is filled with hundreds, maybe thousands, of technology companies that managed to go public and then fizzled. Still, most of them weren't going anywhere and never should have gone public to begin with.

But venture capitalists funded them, investment banks underwrote them, analysts wrote glowing reports about them, and you and I bought into it, gullible lemmings that we are. Sorry for being such a negatron; that's just the way it is.

Anyway, what's different about these 10 companies is that they were once important, maybe even exciting. And now, for one reason or another, they're fading slowly and tediously into obscurity. Like people, most companies go out, not with a bang, but with a whimper.

Depressing, isn't it?

Why bother looking at this stuff? Well, it's fun--at least for me it is--and it's also instructive; we can always learn from others' mistakes. After all, companies don't go bad, executives who run them and boards that oversee them are always responsible.

While this process is admittedly subjective, it is based on metrics, primarily chronic revenue decline or stagnation, the more red ink the better.

Ten irrelevant technology companies

Vitesse--This 24-year old communications chip company was once valued at $20 billion. Now, thanks to the bust, stock options backdating and accounting scandals, and general mismanagement, Vitesse is falling apart at the seams and running out of cash.

Silicon Graphics--Once a $3.6 billion computer powerhouse, last year's sales were down to $341 million and dropping precipitously. It's also been bleeding like a stuck pig for nine of the last ten years. One foot in the grave ...

Zilog--Zilog is the poster child for great, famous companies now doomed to obscurity. Revenues have been continuously declining and the company's been losing money for as far back as I can remember. Taking it private, taking it public again, management changes, restructurings, nothing has worked.

Transmeta--Valued at $11 billion in an overhyped IPO, it was all downhill from there for this low-power microprocessor company. Then it cut a licensing deal with Intel last year. Still, last quarter's revenues were 44 thousand--that's right, thousand--dollars.

Conexant--Rockwell didn't just saddle its chip spinoff with a bad name. In its ten years of existence this communications chip company has lost an aggregate $4.7 billion on sales of $8.2 billion. Amazingly, its market cap was once $60 billion!

hi/fn--With a market cap of $2 billion during the tech bubble, this data security company was going places. Well, not exactly. The company hasn't been in the black and annual sales have been stuck in the $40 million range since 2000. Dumb name, too.

Neomagic--This was once a hot young company with annual sales of $250 million, solid profit margins, and a $1.5 billion market cap, and that was before the tech bubble. That was also before demand for its embedded memory technology dried up. Last year's sales were less than a million bucks.

MIPS--Spun off from Silicon Graphics 10 years ago, this licensor of embedded processor technology is a real enigma. According to the company's Web site, its technology is everywhere. Still, there's no consistent profitability or growth. Revenues topped out at just $89 million back in 2000.

Sigmatel--Can you say "flash in the pan"? Sales rocketed from $30 million to over $300 million in three years, then fell off a cliff the following year while swinging to a $109 million loss. Just announced a sale to Freescale for a paltry $110 million.

Cirrus Logic--There was a time when this company's graphics chips and storage controllers were everywhere. That was a long time ago. Annual sales have declined from their peak at $1.1 billion in 1996 to $183 million last year. That said, Cirrus is profitable. Irrelevant, but profitable.

Where do these companies go from here? They'll either get swooped up for bargain-basement prices, like Sigmatel, or die an agonizingly slow death. There's always a slim possibility of a turnaround, but that'll require at least a management and board shakeup. Don't hold your breath.

One more thing: this may raise a few eyebrows, but here are a few companies that I think are well on their way to making the list if they don't watch it: Atmel, National Semiconductor, On Semiconductor, Pixelworks, Silicon Image, Sun Microsystems, and Virage Logic. Mark my words.