<BREAKFAST WITH THE FOOL>
Wednesday, November 18, 1998
"Time holds the winning hand." -- John Cougar Mellencamp, Sweet Evening Breeze
Sun 1, Microsoft 0
Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %> won a hard-fought court victory against PC operating systems software giant Microsoft (Nadsaq: MSFT) as a Federal judge in California ordered a preliminary injunction requiring Microsoft to rework its Windows 98 software, Internet Explorer browser, and software development programs to meet Sun's compatibility tests. Bill Gates & Co. have 90 days to comply with the ruling, which the company says is enough time to "ensure there is no interruption in the shipment of any products to customers." The injunction doesn't require Microsoft to recall any existing versions of its products and isn't expected to affect the company's financial results.
The preliminary ruling is part of a highly technical contract dispute between the two companies over the use of Sun's Java technology in Microsoft products. Java was designed to allow programmers to write a single version of software that can run on any operating system. Sun is charging that Microsoft is trying to wrest control of Java away from Sun by "creating a non-conforming, polluted version of the Java language" that will run programs only on Microsoft operating systems. In its defense, Microsoft says it has brought "new and innovative Java technology" to its customers.
In technical terms, the ruling calls for Microsoft to support Sun's Java Native Interface (JNI) in the Microsoft Java virtual machine and requires Microsoft to turn off by default certain Microsoft-specific keywords in its development tools. Microsoft announced it will comply with the ruling and is "reviewing [its] legal options." Sun, which plans to seek monetary damages against Microsoft, is taking heart in the preliminary injunction that bodes well for its case. U.S. District Judge Ronald Whyte said in his ruling that "Sun is likely to prevail on the merits [of the case] and that it may suffer irreparable harm if Microsoft is not enjoined."
News to Go
In what may be another possible setback for Microsoft, The Wall Street Journal is reporting that rival browser company Netscape Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NSCP)") else Response.Write("(Nasdaq: NSCP)") end if %> is in talks with America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %> regarding "a wide range of new partnerships," including a potential deal to embed Netscape's browser into AOL's software "alongside or in place of" Microsoft's Internet Explorer. AOL may even make an equity investment in Netscape and get a seat on its board.
Semiconductor wafer fabrication systems supplier Applied Materials <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMAT)") else Response.Write("(Nasdaq: AMAT)") end if %> reported fiscal fourth quarter earnings of $0.07 a share (before one-time items), down from $0.49 a year ago but better than analysts' mean estimate of $0.02. Revenues fell to $673 million, 47% lower than the $1.28 billion in Q4 1997 and 24% down from $884 million in the preceding quarter. The company said its outlook remains "uncertain" despite some recent favorable developments in the semiconductor industry.
Bell Atlantic Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEL)") else Response.Write("(NYSE: BEL)") end if %> Bell Atlantic Electronic Commerce Services Inc. plans to sell 85% of its stake in Internet portal and search company Infoseek <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SEEK)") else Response.Write("(Nasdaq: SEEK)") end if %>, which is 43% owned by Walt Disney Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %>. With around 1.2 million shares, Bell Atlantic Electronic Commerce is Infoseek's third biggest shareholder.
Removable hard disk cartridges maker SyQuest Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SYQT)") else Response.Write("(Nasdaq: SYQT)") end if %> announced late yesterday that it has filed for Chapter 11 bankruptcy, and that at the same time it has signed a letter of intent to sell "substantial assets to a strategic buyer." The deal would involve SyQuest selling its patents and other intellectual property, manufacturing and development equipment, finished goods, work in process, and raw material inventory for disk drives and cartridges.
Medical devices maker Medtronic Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MDT)") else Response.Write("(NYSE: MDT)") end if %> reported fiscal Q2 EPS of $0.33 (before charges), up from $0.30 a year ago and right in line with analysts' expectations, due to "particularly strong sales performance in implantable cardiac defibrillators and neurological devices."
Saks Fifth Avenue parent Saks Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SKS)") else Response.Write("(NYSE: SKS)") end if %> announced fiscal Q3 EPS of $0.37 (excluding charges), up a dime from last year and meeting Street estimates.
A new study shows that Internet retailing is expected to rake in $13 billion in revenue this year, according to The Wall Street Journal. The study is expected to be released later this week by Boston management consulting firm Boston Consulting Group and shop.org, an association of online retailers.
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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor
</BREAKFAST WITH THE FOOL>