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22

Oct

Back to this blog - will tech spur its growth rebound ?

Twitter, Facebook and Delicious have been my focus of late but I decided it was time to get back to this blog to put down a few thoughts I’ve been sharing for the past weeks.

Post-Sep 15, we’ve all been living in a bizarro world where tomorrow has become so uncertain that talks of Depression (as in ‘29) have become commonplace. For my part, I’ve tried to maintain a historical perspective, cheered on Warren Buffett’s $13billion buying spree ($4.7bi for CEG, $5b on GS, $3b on GE) and have been wondering what part the tech industry will play in spurring its growth.

A few facts: quick tally of cash (“a terrible long term asset,” according to W. Buffett, “one that pays virtually nothing and is certain to depreciate in value.”) held by some of the largest tech firms:

MSFT: $23 billion

INTEL: $11.5 billion

APPL: $25 billion

CSCO: $24.4 billion

GOOG: $14 billion

HPQ: $14 billion

ORCL: $12 billion

NOK: 7.2 billion euro=$9.2 billion

TOTAL : $133.1 billion in CASH !!!!!

MSFT and HP announced stock buy-back program but the silence from self-professed Buffett students GOGG has been quite defeaning. Why is GOOG they not defending their stock and/or acquiring more mid-size companies at fire-sale prices ?

All well-managed companies need cash on hand but this hoarding is getting in the way of growth and innovation.  

Shouldn’t these tech giants spur their rebound via timely acquisitions during this downturn, as well as boost R&D ?  It seems to me that the large tech players need to think through their role in the ecosystem and support their growth by supporting the ecosystem, ie investing in it through acquisitions, new products, etc..

On the active side, Nokia has recently announced some a mid-size acquisition (Oz Communications) as well as interesting investments in China through Nokia Ventures (Madhouse). MSFT is still pondering its move with Yahoo (come on Ballmer, it’s trading at $12 !!) and Intel is committed to keeping R&D stable.  

The question therefore remains, what are Apple, Cisco, HP and Oracle doing with all their cash and more importantly to spur growth ?

Please comment/add and I’ll monitor and update this post.