by CIO Staff

The Week’s Top 10 News Stories: Google Pays $1 Billion for 5% of AOL

Dec 23, 20055 mins
Mergers and Acquisitions

1. Google Pays $1 Billion for 5 Percent of AOL, PC World, 12/20.

Speculation was confirmed this week as Google became AOL’s white knight, leaving the other suitor for AOL’s hand, Microsoft, casting about for a partner which rumor has it is Comcast. Under the terms of the deal, Google’s $1 billion five percent stake in AOL will lead to a closer partnership between the two companies notably in relation to graphical online ads, an area relatively new to Google. Users will more easily be able to search AOL content using Google’s technology and the pair committed to achieving interoperability between their instant messaging services, AOL’s AIM and Google Talk.

2. Microsoft Lashes out at European Commission, InfoWorld, 12/22.

Gates Inc. lawyers responded rapidly and strongly to the EC’s accusation that the software giant had failed to comply with its directive on workgroup server interoperability. The Commission has given Microsoft five weeks to comply with the directive or face daily fines of US$2.4 million. For its part, the vendor’s lawyers charged the EC with moving the goal posts whenever Microsoft endeavors to comply with the Commission’s March 2004 antitrust decision.

3. Survey: CIOs Say IT Budgets on the Rise, Computerworld, 12/20.

Now’s a good time to be a CIO, according to the 2005/2006 Harvey Nash USA CIO market survey. Not only are some companies increasing their IT budgets, but 70 percent of those CIOs polled are happy in their current positions and aren’t on the outlook for other jobs. However, due to likely merger and acquisition activity, a fair number of the executives questioned believe they’ll be working for another organization in three years’ time.

4. ABN Amro Eyes Electronic Data Transfers After Tape Loss Incident, Computerworld, 12/21.

No more sending data tapes via standard delivery services for ABN Amro Mortgage Group after the company revealed a tape containing sensitive data on about 2.1 million customers went missing for a month. Although ABN Amro did eventually find the tape, the company decided to encrypt such data and send it over secure networks whenever possible in future or rely on special couriers.

5. Computer Forensics Firm’s Database Hacked, Computerworld, 12/21.

Not a good thing to happen to a company that specializes in detecting computer break-ins, as Guidance Software announced its customer database had been hacked. The database contained the credit card numbers of 3,800 people along with other personal details. Guidance is conducting an investigation into the matter as is the U.S. Secret Service.

6. The Case Against Qwest’s Nacchio, BusinessWeek, 12/21.

Joe Nacchio, former CEO of telecom Qwest, was indicted this week on 42 counts of securities fraud and insider trading. Each of the 42 counts carries a possible fine of $1 million and a 10-year jail sentence. Proving Nacchio’s intent to commit fraud in the case may be tricky, according to legal experts, but the government is hoping to replicate its success in prosecuting other CEOs, notably former WorldCom head Bernie Ebbers.

7. IBM to Make Network Management Buy, Network World, 12/21.

Big Blue’s planned $865 million acquisition of Micromuse was applauded by analysts and heralded by IBM executives as enabling the company to manage the convergence of voice, video and data networks. IBM plans to use Micromuse’s Netcool network management software to complement Big Blue’s existing Tivoli systems management suite which lacks strong distributed network management capabilities. Both CA and EMC have already helped themselves to network management players, with HP likely to make a similar purchase soon.

8. Seagate to Acquire Disk Drive Rival Maxtor, San Jose Mercury News, 12/22.

The largest purchase announced this week came from leading disk drive maker Seagate as it unveiled plans to acquire competitor Maxtor in a stock deal valued at around $1.9 billion. The disk drive business has been consolidating for some time and Maxtor has struggled to restructure its operations and hold on to its CFO, going through three chief financial officers over the past year. Acquiring Maxtor should beef up Seagate’s consumer hard drive business, give it more of an edge in the enterprise storage market and help the company to lower production costs.

9. Spam Wars Still Rage, Critics Say, PC World, 12/22.

Computer users and some antispam software vendors weren’t seeing eye-to-eye with the U.S. Federal Trade Commission this week. The FTC issued a report claiming a leveling off, if not an actual decline, in the amount of spam compared with two years ago, in part due to the CAN-SPAM Act passed by Congress in late 2003. Users and vendors maintain the amount of unsolicited commercial e-mail remains unchanged at an all-time high level.

10. IT Aids New Yorkers During Transit Strike, Computerworld, 12/22.

New Yorkers heaved a sigh of relief late Thursday when the city’s bus and subway strike ended. The strike created chaos for millions of commuters trying to get to work. During the strike, many workers relied on the Internet to find out about sharing rides to work or worked from home.

—China Martens