Briefs, Dec. 20-27, 2004


TippingPoint will operate as a division of 3Com, with TippingPoint CEO Kip McClanahan taking on the role of division president. He will report to 3Com CEO Bruce Claflin.

The deal is expected to close during 3Com's current quarter, which comes to an end late February. 3Com last week also reported an earnings loss of $49 million, or 13 cents per share, and revenue of $151 million for its second quarter, ended Nov. 26. Claflin attributed the shortfall to increased competition in the North American 10/100 switch market.

Siebel Systems has agreed to buy Edocs for an initial payment of $115 million in cash.

Additional payments are based on achieving revenue and other contractual milestones may be paid in 2006. Edocs provides e-billing and customer self-service software solutions.

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Siebel said that excluding the impact of a one-time, merger-related charge of an estimated $8 million to $10 million, the transaction will reduce first-quarter earnings by about 1 cent a share. Siebel expects the transaction to be approximately neutral to earnings for the remainder of 2005.

Analysts surveyed by Thomson Financial/First Call expect Siebel to earn 6 cents a share in the first quarter, and 27 cents a share in 2005.

The boards of both companies have approved the acquisition, which is expected to close early in the first quarter of fiscal year 2006.

Intradyn has announced a new data backup and recovery service for small and midsize businesses, offered through its network of certified managed service providers.

The solution combines off-site backup services with Intradyn's RocketVault backup and archiving appliance. According to the company, the service provides both greater data security and faster, simplified backup and restore than traditional e-vaulting solutions.

The RocketVault appliance provides both on-site and off-site backup. The device encrypts user data using AES 256-bit encryption and stores it locally, while also sending it to the service provider's remote site for disaster-recovery purposes. With up to 4 Tbytes of storage for redundant on-site backup, the RocketVault appliance can be used for extremely fast local recovery when off-site recovery is not required.

Motorola will start the new year by reorganizing its various units into a "seamless mobility company" as Chairman and CEO Ed Zander reshapes the firm. Four major business groups will be created and no layoffs are expected to stem from the reorganization.

The new structure will consist of the following units: Personal Devices, Networks, Connected Home and Government and Enterprise.

"Aligning our organization with our vision of seamless mobility takes it to the next level," said Zander in a statement. "With a more streamlined structure, Motorola will boost its flexibility and speed to capitalize on new opportunities, allowing us to deliver seamless mobility to our customers and consumers worldwide."

Some smaller company units will be shuffled around. The reorganization will be carried out during the first quarter of 2005 and additional details will be announced later, said a Motorola spokesperson.

Handsets and devices for now will be the biggest group, the spokesperson said, noting that handsets alone currently make up about 40 percent of Motorola's business. They will be included in the Personal Devices business group, which will consist of the company's personal communications businesses and its phone-centric devices for the enterprise and the home. In an example of the "seamless mobility" concept, the group will connect with other business groups. Ron Garriques will head the group as its president.

Nortel Networks reported a loss of 6 cents per share in the third quarter and predicted lower sales for 2004 than in 2003, providing some of its first concrete figures for the year after accounting issues led the company to delay financial reports.

The telecommunications equipment maker said the earnings figure includes charges from a wireless contract in India, a charge from restructuring and a gain from asset transfers. Excluding these items, Nortel would have broken even per share, matching estimates from analysts surveyed by Thomson Financial/First Call.

Nortel estimated third-quarter sales at $2.3 billion, below the analyst estimate of $2.47 billion. "While customer support remains strong, the ongoing restatement activities and the internal restructuring and realignment programs initiated in August have impacted business performance in the third quarter, but this impact is temporary," President and CEO Bill Owens said in a statement. Owens pointed to a wireless contract with India, Nortel's first in that country, as a sign of growth. Wireless networks accounted for 46 percent of sales in the third quarter.

The company said it expects fourth-quarter revenue of $2.8 billion to $2.9 billion and 2004 revenue of $10.1 billion to $10.2 billion. Nortel said these results will come in below 2003 sales, after a restatement adds about $460 million to the year-end total.