ShadowRAM: November 12, 2007

On Gates And Microsoft's Rules
• Two news items crossed the transom this week that warrant mention. Item One: Bill Gates recently sold off 2 million shares of Microsoft, worth about $73 million, and that got us checking the calendar. According to the software giant, Gates will be "transitioning" out of his day-to-day role at the company over the next few months through the middle of next year. He's the richest man in the world, so it's probably not a good idea to start thinking of him as a lame duck. But it may be fun to keep an eye on any jockeying for position in the senior executive ranks at the company. And that leads us to

Item Two: The Stuart Scott era at Microsoft officially came to a close last week after two years. Officially, Microsoft says an internal investigation led it to fire Scott, who had been CIO of Microsoft since 2005, for "violation of company policies." The company didn't say which rules he broke. We'll leave it to other publications to speculate, but consider this: One of Scott's primary tasks since January has been to migrate Microsoft's employees to Vista. Cough-cough-thankless-job-cough-cough.

Dell's Financing Partner Says Buyout Talks Have Begun
• Dell Financial Services contributes about $6 billion a year to Dell's top line, at a nice profit. But the makeup of DFS could be about to change dramatically at a time when the financial services industry is dealing with a crisis in confidence and credit.

Dell is a partner in DFS with Tyco spin-off CIT Group and, under the terms of the partnership, Dell could buy out its partner as early as February. But CIT Group may not be making it easy. According to an SEC filing last week, Dell would have to pay between $100 million and $345 million to buy out CIT's share. Talks have already begun, CIT said.

"Dell and CIT are in discussions regarding the option price calculated by DFS pursuant to the joint venture agreement. Management currently expects that a potential option price would likely be toward the upper end of the above range," CIT said in its regulatory filing.

Seen And Heard
• You didn't hear this from us, but we understand that some PC makers may be rethinking this whole business of integrating wireless broadband capability into notebooks. When units with built-in EV-DO, 3G or EDGE capabilities are sold, only about one in 10 users actually have the capabilities activated, according to some well-placed industry sources. The reason: carrier greed, mostly. AT&T, Sprint and Verizon all charge between $60 and $80 a month for access for coverage that is spotty at best. The timing could be critical. WiMax is finally, possibly, hopefully around the corner—giving PC makers an option instead of wireless broadband in addition to WiFi. Hey Verizon, with your $80-a-month service: Can you hear us now?

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