ShadowRAM: April 1, 2002

WALMART: NO WINDOWS-SHOPPING, PLEASE

HP'S CARLY FIORINA TAKING A LITTLE BREAK

Venture firm Kleiner Perkins Caufield and Byers is fending off charges in court that it operated a "daisy chain" of leveraged investments in an effort to inflate Amazon.com stock.

The shareholder class-action lawsuit also alleges John Doerr, a Kleiner partner who sits on Amazon's board, made heavy-handed phone calls earlier this year to Lehman Brothers to try and quash a negative report that Amazon feared would drive its shares down further.

The charges are made in a 200-plus-page complaint against Amazon, which has seen its stock drop to a fraction of its all-time high.

In response, lawyers for Doerr and Kleiner Perkins alternately call the allegations "pathetic," "stupid" and "unfounded." However, the complaint, if it goes to trial, has the makings of one of the more explosive cases in high-tech since the dot-com bust.

The lawsuit alleges that as Amazon sought to raise money through the sale of convertible note offerings--at attractive rates, due to its high stock price--negative press and analyst comments began to threaten its plans.

Against this backdrop, the lawsuit claims, several companies controlled or influenced by Kleiner Perkins announced alliances with Amazon that caused investors to believe the company would get guaranteed cash flow. In reality, those deals involved little, if any, cash.

In addition, the suit alleges that Amazon had "Doerr contact top executives at Lehman Brothers

to threaten them to try to get them to halt the [negative report."

Lehman Brothers declined to comment on the allegation. Analyst Ravi Suria, who wrote the negative report, did not return phone calls seeking comment.

Take that, Microsoft. One retail giant is not afraid to dis the software giant. Walmart.com is pushing the how-low-can-you-go PC envelope with a $398 AMD 1GHz Duron Processor-based system that comes with no operating system. That's right, no OS. You know Linux must be catching on when Walmart offers systems without Windows.

Marc Benioff, chairman and CEO of Salesforce.com, reached out to CRN to squelch scuttlebutt about his departure: Salesforce.com hired an executive search firm to find a CFO, not a CEO, he said. "Rumors of my demise are greatly exaggerated."

IBM is trying to capitalize on some of the confusion surrounding the merger of Hewlett-Packard and Compaq Computer by cozying up to the big distributors. In fact, IBM was the only PC maker invited to Ingram Micro's regional meeting.

IBM has also established an executive visibility program with its three top distributors,Ingram, TechData and Synnex,in an attempt to increase PC sales. And the computer giant is hosting weekly product replenishment calls with its top PC distributors to ensure product availability.

Meanwhile, HP Chairman and CEO Carly Fiorina took some time off last week after declaring victory in the merger battle. Word is Carly was staying close to home and spending time with her family after the bruising proxy battle.

Fiorina rival and HP board member Walter Hewlett, who waged a no-holds-barred campaign to kill the big deal, meanwhile, is still on the campaign trail. Last week, he filed a lawsuit alleging HP coerced shareholder Deutsche Bank to vote in favor of the merger or risk jeopardizing future business dealings with HP.