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Cali high We really hit a high note in California last week, as the deregulated-market energy crisis here induced rolling blackouts. At Red Herring's offices in San Francisco, employees lounged, chatted, and took early lunches on Thursday, the day we were chosen to have our power knocked out for a couple of hours. Though creditors stand to take a massive hit if California electric companies Southern California Edison and Pacific Gas & Electric (NYSE: PCG) go bankrupt (they'd be the largest and third-largest bankruptcies, respectively, in U.S. history), California-based technology companies should get through the mess without much, if any, damage to their businesses.
The Herring also took an in-depth look at chips last week. Chip monoliths like Intel (Nasdaq: INTC), Texas Instruments (NYSE: TXN), and Cypress Semiconductor (NYSE: CY) have been struggling for years to get out of the low-margin PC chip business and into high-growth, high-margin chips based on new processing methods and devoted to powering ever-accelerated communications. Our special report examines the movements of the lumbering chip giants (focusing on Intel), as well as the startups that threaten to outpace them. Transmeta (Nasdaq: TMTA), in fact, has its eye on a chunk of Intel's kingdom: the server market. This year, at least four companies will release rack servers -- slim, pizza box-shaped units designed to be stacked -- based on Transmeta's Crusoe processors. Rack servers formed the fastest-growing segment of the Intel-based server market last year. Online retailers, too, have an extra worry these days: privacy. If e-tailers (the ones still left, anyway) are to thrive, it will be partly because of new technology that gives them better tools to track consumers' Web-surfing and buying habits and to create profiles that are more easily shared among marketers. "But," writes senior writer Luc Hatlestad, "the very innovations that stand to keep online retailing alive also threaten it most. These capabilities have created an intense consumer backlash from an increasingly tech-savvy public." This column ends as it began: on a high note. EBay (Nasdaq: EBAY) beat analysts' fourth-quarter earnings expectations by 2 cents; Apple Computer (Nasdaq: AAPL) closed up 4 percent Friday on expectations that the company will return to profitability in the first quarter; and IBM (NYSE: IBM) beat earnings expectations by 2 cents Wednesday, posting net earnings of $2.7 billion, or $1.48 a share, for the fourth quarter. IBM also grew year-over-year revenues by 6 percent, to $25.6 billion, and company officials agree with 2001 EPS expectations of $4.99 and high single-digit revenue growth. IBM's stock jumped 12 percent on the news and closed up almost 3 percent on Friday. E-NEWSLETTER HIGHLIGHTS IPO Critic takes a look at Align Technology, which makes nearly invisible plastic retainers that could revolutionize orthodontics for adults. Though the company is far from a sure bet, it's a gamble we're willing to take. Fish or Cut Bait digs into Macromedia, whose stock price has plunged on concerns over slowing revenue growth and questions regarding its acquisition of Allaire. The company is in Wall Street's doghouse, which is exactly why we think now is the time to buy. Tuesday's Catch of the Day pondered the energy crisis and distributed technologies. (Do you subscribe to Catch of the Day? If you're serious about technology, you should. Check out the Catch of the Day archive, where you can also subscribe.) FISHWRAP INDEX: THE INTERNET AND ENERGY Percent electricity demand rose per year in the pre-Web era (before 1996): 2.9 Percent it has risen per year since 1996: 2.2 (Center for Energy & Climate Solutions, September 2000) Square feet of retail space that could be made unnecessary by 2007 as a result of B2C and B2B e-commerce: 1.5 billion Square feet of warehouse space made unnecessary: 1 billion Square feet of commercial office space made unnecessary: 2 billion Number of Sears Towers that would make up 2 billion square feet of commercial office space: 450 Estimated energy savings per year from not operating and maintaining 1.5 billion square feet of retail space, 1 billion square feet of warehouse space, and 2 billion square feet of commercial office space: 53 billion kilowatt hours (Center for Energy & Climate Solutions, September 2000) Amount of magazine paper that Internet publishing will save by 2003: 1 million tons (NUA/Boston Consulting Group, September 1999) Cost per thousand to produce and send direct mail: $686 Cost per thousand to produce and send email newsletters: $5 (CNet, March 2000) Discuss today's column, and the past week in tech business, in the Fishwrap column discussion, or check out forums, video, and events at the Discussions home page. -Gwendolyn Mickelson You are currently subscribed to this newsletter with the address lbyington@home.com. If you wish to unsubscribe, please go to our Member Services page, sign in using this exact address, and follow instructions to unsubscribe. Copyright © 2000 Red Herring Communications. All rights reserved.
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