COMMENTARY -- Quit already and make our lives easier.
So declares well-known PC analyst Andrew Neff, of Bear Stearns & Co. Neff's "Manifesto for Change" -- sounds like something by Marx and Engels -- calls for IBM (NYSE: IBM), Gateway (NYSE: GTW) and Compaq Computer (NYSE: GTW) to pack their bags and sell the luggage to Dell Computer (Nasdaq: DELL) and Hewlett-Packard (NYSE: HWP). He wants Apple (Nasdaq: AAPL) to move to Intel (Nasdaq: INTC) architecture.
The Bear Stearns blueprint for revolution details impressive historical precedents such as Napoleon's failure to defeat Tsar Alexander I. He also cites that legendary computer expert, Dr. Seuss. Neff, with help from associates Naveen Bobba and William Hand, was even careful to append a "Random House, 1990" note beneath the quote from Oh, The Places You'll Go!
Such careful research methodologies should be emulated and applied to the rest of the technology industry. With that in mind, ZDII submits for your approval:
- The tech industry has a lot of lousy stocks.
- It is time for consolidation and it is better to eat than be eaten.
- From an investor standpoint, the tech industry will be an unattractive segment until the stock mutts disappear, because investors are obviously too feeble-minded to separate good companies from bad ones.
- Our recommendations:
-- Everyone in the software industry should sell out to Microsoft (Nasdaq: MSFT) or Oracle (Nasdaq: ORCL).
-- Advanced Micro Devices (NYSE: AMD) should merge with the microprocessor operations of Intel, which should, in turn, sell its communications chip business to Broadcom (Nasdaq: BRCM) and focus exclusively on chipsets.
-- Hyundai should unilaterally turn its DRAM operations over to Micron Technology (Nasdaq: MUEI), in return for a deal to sell cars for Micron's corporate use.
-- Verizon (NYSE: VZ) should merge with SBC Communications (NYSE: SBC). BellSouth (NYSE: BLS) should end the seemingly-infinite speculation surrounding itself and bow at the feet of Qwest Communications (NYSE: Q). AT&T (NYSE: T) should break into four companies and ... nevermind.
-- AOL-Time Warner (NYSE: AOL) and Earthlink (Nasdaq: ELNK) should compile a list of all Internet service providers and divvy them up in alternating fashion: AOL gets the third-largest ISP, Earthlink gets the fourth, AOL gets the fifth, Earthlink the sixth, and so on.
-- The entire Web content industry should give it up and gather beneath the umbrella of Yahoo! (Nasdaq: YHOO), to erase all that unwanted online ad inventory and guarantee outrageously high advertising rates.
-- Brick-and-mortar retailers should buy a nuclear device from the Russians and detonate it beneath the headquarters of Amazon.com (Nasdaq: AMZN).
-- Leave network equipment makers, storage networking vendors and their related suppliers alone for now, because they're still growing rapidly. But those fields experience more than three quarters of declining growth, everyone should run to Cisco Systems (Nasdaq: CSCO) or EMC (NYSE: EMC) and beg for food and shelter.
-- The technology arms of investment banks should combine: Bear Morgan Merrill Goldman Lehman Robertson Montgomery Hambrecht Wit Prudential & Co. One-stop shopping for IPO and M&A advice. Also makes an easy target for bitter investors.
Sergio G. Non, Sergio_Non@zdnet.com
ZD Inter@ctive Investor Equity Commentary
The Tech, Communications and Internet Industries: A Manifesto for Change
a.k.a. My Market Fantasies.
It is time for bold moves. Think of all the shareholder pain that will be spared by this plan for action.
However, this is only a rough outline. Feel free to amend it in the TalkBacks below. 22GO
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