News

TOP 10 - HP-EDS Buy, Icahn Strikes Again, China Quakes

By Nancy Weil

May 16, 2008 — IDG News Service —

This was a big IT news week, with the massive earthquake in China on Monday showing once again the role that the Internet plays in connecting us all, in good times and bad, and the importance of telecommunication, particularly for rural areas. HP opened the week with word that it is buying EDS. And the Microsoft-Yahoo saga was back in headlines, thanks to investor Carl Icahn, who hasn't enjoyed a good proxy fight lately and so decided to try to shake up Yahoo's board.

1. Update: HP to buy EDS for $13.9B: Hewlett-Packard is buying IT outsourcer Electronic Data Systems for US$13.9 billion, in a deal that drew mixed reactions from customers and analysts alike. Some lauded the move, saying it makes a lot of sense, and others were left scratching their heads wondering why HP would make such a move now, given the state of the economy, and whether the combination will be as potent as HP CEO Mark Hurd insists it will be. Everyone seemed to agree that if the deal passes regulatory scrutiny and goes through -- and there's no suggestion it won't -- at the least it will keep IBM on its toes.

2. Icahn takes on Yahoo board; Update: Yahoo tells Icahn that its own board knows best: Investor Carl Icahn scooped up about 59 million shares and share-equivalents of Yahoo in the past couple of weeks, then put together a group of 10 buddies he proposes should replace all of Yahoo's board of directors. He spelled out his dismay that Yahoo rebuffed Microsoft's acquisition attempt in a snippy letter to Chairman Roy Bostock. Bostock responded with a stern missive, telling Icahn "unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal." It also sought to remind Icahn that "there is currently no acquisition offer on the table from that company or any other party." Even so, Yahoo has been "crystal clear" that it will "consider any proposal ... that offers our stockholders full and certain value." Microsoft bid $44.6 billion for Yahoo on Feb. 1, but withdrew the offer on May 3 when the two companies couldn't agree on financial terms.

3. Big quake takes out mobile network in Chengdu, Did Twitter beat media with earthquake news? and Telecom: Nice to have or basic necessity?: A 7.9 earthquake (initially reported as 7.8) on the Richter Scale shook Sichuan province in China on Monday, hitting the city of Chengdu and outlying regions particularly hard. The mighty quake -- the largest in China in three decades -- knocked out mobile-phone service in some areas for a time, underscoring how vulnerable communication systems are in times of disaster, and yet how critical they are. The earthquake also highlighted the role that online social-networking communities can play in getting news out, with Beijing-based Twitter users among the first to post word that the ground was shaking. Initial media reports also were out of Beijing, some 1,500 kilometers from the epicenter, which experienced a 3.9 earthquake just after the major Sichuan temblor, which led to some immediate confusion about what was going on. By week's end the official death toll was 21,000, with at least 14,000 victims still buried in rubble. Some 4,400 aftershocks -- and still counting -- had been recorded.