Dot-coms had a rough week, as a number of e-commerce sites shut down, cut staff or shuffled their executive deck.
Teen site Kibu.com, backed by prominent Silicon Valley businessmen
including Jim Clark, planned to close. The company laid off most of its 65-person staff. Kibu said that it was going to return its remaining capital to investors and had created a Web site for employees to present themselves to the job market.
Productopia.com, which provides product information and buying advice, confirmed rumors that it would
shut down. Separately, WebHouse Club, an affiliate of Priceline.com that offers a name-your-price gasoline and grocery service, said it is folding, citing the company's inability to raise capital. The news sent shares of Priceline tumbling toward new lows.
Online drugstore More.com laid
off about a third of its staff to "shorten the path to profitability,"
which the company expects to meet sometime in 2001. Online marketplace eSprocket, which hosts buyers and sellers of used
equipment from businesses, cut its
staff by 50 percent. eSprocket's CEO said the layoffs were made to
reduce the company's cash burn rate while the company is "gaining traction"
in the industry.
Nimish Mehta resigned as CEO of
online printing company Impresse, which also laid off an unknown number of
employees. Sources said Mehta left the company last week for personal
reasons and to spend more time with his family. The company laid off
workers in sales and marketing departments.
GreatEntertaining.com, which gives party-planning tips and sells related
items, shed two-thirds of its
staff, including chief executive and co-founder Tanya Roberts. Less
than two years old, the company will revamp its business strategy to focus
less on consumer sales and more on corporate and trade customers, such as
florists and professional party planners.
Internet consulting start-up Gen3 Partners, led by the former head of
Cambridge Technology Partners, laid
off approximately 30 employees from a staff of about 130.
Echoing the current conditions, a group of top stock analysts warned investors not to hold their
breath for most Internet stocks to rebound. Last year was "the anomaly--a
year where things got incredibly euphoric and companies went public at
earlier stages than ever before," said Henry Blodget, a member of the panel
and a well-known financial analyst at Merrill Lynch.
The panel Webcast was jointly hosted by CNET News.com and the
University of Pennsylvania's Knowledge@Wharton.
The government tore into Microsoft's proposed
schedule for hearing its antitrust appeal this week. The government called Microsoft's
proposal "excessive" and said it would "delay resolution" of the appeal. The software giant had filed a
legal response that accused the government of trying to "short-circuit the
In other legal news, a panel of three appellate judges harshly grilled lawyers for both
Napster and the recording industry before adjourning without a decision this week in
the latest round of a closely watched legal clash that pits the Internet
against copyright laws. Napster's legal team faced tough questioning from
the judges on whether its technology deserves the same protection the
Supreme Court granted VCRs in a case involving Sony and the motion picture
industry in the 1980s. Lawyers for the Recording Industry Association of
America (RIAA) came under fire for the industry's contention that Napster controls
the material traded over its system.
The FBI released documents
about its controversial Carnivore technology, but critics blasted the lack
of information and said they still could not determine whether the
email-tapping program would be an invasion of privacy. The FBI also
withheld the source code to the Carnivore system--one of the most coveted
pieces of information for privacy advocates.
Chips are down
Dell Computer said revenues
will be lower than expected for its third fiscal quarter, joining a cascade
of companies in recent weeks admitting that business is not growing like
they thought it would. The company said that revenue will grow only 7
percent over revenues of $7.67 billion in its second fiscal quarter. The
revised figure means that revenue for its third quarter will come to
approximately $8.2 billion.
However, the PC maker escaped without a brutal sell-off like Apple Computer
suffered. Last week, Apple plunged nearly 52 percent after issuing a more
severe profit warning.
Ironically, a new report said semiconductor sales grew 53 percent and hit an
industry high for the month of August. The boom was credited to strong
worldwide demand for Internet and wireless equipment. Chip sales during
August reached $18.2 billion, a jump from $11.9 billion in the same period
a year ago.
Despite the bad news in the industry, Transmeta, which makes chips for
notebooks and portable Net appliances, plans to raise $143.6 million in
an initial public offering later this month. So far, companies that plan to incorporate the
company's Crusoe chip include IBM, Sony, NEC, Fujitsu, Gateway and Hitachi.
Sony, Gateway, America Online, Compaq Computer and several other
manufacturers are also investors in Transmeta.
Cash and confidence
Oracle CEO Larry Ellison guaranteed the company's database
and e-commerce software will run Web sites three times faster than rival
offerings from IBM and Microsoft--or he'll give customers $1 million. Critics dismissed
the bet as a public relations stunt.
Shares of Corel jumped 83 percent after rival Microsoft invested $135 million in the
struggling software maker. The software giant invested in its rival in the
software application market under a new strategic relationship centered on
Microsoft's so-called .Net initiative. Corel has been in dire financial
straits since the collapse of a proposed merger with Inprise.
After Microsoft's investment, Corel elevated Derek Burney to president
and CEO of the company on a permanent basis. Burney had been serving as
interim president and CEO since August, when founder Michael Cowpland
abruptly resigned as CEO.
Also of note
Handspring began selling its
Visor personal digital assistant in Asia, marking the latest move to expand
its distribution channels...Time Warner's decision to scrap its planned acquisition
of record label EMI Group will likely hasten European approval of the media
giant's merger with AOL, although the companies still face additional
hurdles in the United States...Small phone and Internet service providers
are struggling as they try to
launch new services, upgrade their networks and generally compete with the
giants of the communications world...The technology industry breathed a sigh of relief after
the Senate voted to increase the number of high-tech workers permitted to
enter the United States under special visas.