Business Insight Zone

Reporters — columnists especially — have been doing this forever: You get to the end of the week (or the last column before your vacation etc.), you try to write something like you usually would and . . . bupkis. All day I’ve been working up different ideas, turning them over in my mind — but no. So, here come the disconnected notes! In homage to the late, great Herb Caen, I’m going to write it in “three-dot” style.

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You may have heard of this scrappy little Facebook outfit — what with it being the media/Internet darling of the moment. (And yeah, I’ve contributed to this myself.) They’re making their first acquisition, a small one that should help their platform run a little better, do things a little cooler. This has prompted sage thoughts from John Murrell at Good Morning Silicon Valley:

Is it any wonder people outside the valley think we’ve got the attention span of a hummingbird out here? [...]

But even if you filter out any rhetorical excesses, the purchase of Parakey (assets consisting of the brains of two of the developers of the Firefox browser) clearly signals Facebook’s ambitions [...]

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Am I right? Are you asking yourself that age-old question, “Would now be a good time to be a huge bank?” Indicators are good:

• “Citigroup posts 18 percent jump in 2Q profit.”
• “Wachovia Profit Rises.”
• To quote what I said earlier in the week: “JPMorgan Chase took a hit from bad home-equity loans, but its profits were way up anyway thanks to big fees in investment banking.”
• Let’s see . . . who are we leaving out? Oh yes, Bank of America: “Bank of America 2Q Profit Up 5 Percent.”

There are some scary indicators mixed in with the good news, as this WSJ item reports.

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Coke vs. Pepsi. Hertz vs. Avis. Paper vs. plastic. Those contests are at least usually competitive. And then there’s Intel vs. AMD, a rivalry that has favored Intel heavily over the past, oh, fifteen-plus years.

To give it credit, AMD has been punching above its weight since Hector Ruiz became its CEO a few years back. I once got to interview Ruiz, and I came away impressed by three things: (1) He’s a very nice person to talk to — soft-spoken, self-deprecating, good-humored. (2) He’s super-duper smart. (3) When it comes to business, he plays to win. His smart and his focus have shown through in the improved performance of his company since he took over. But then came the still-ongoing price war with the much larger Intel. It’s been ugly, as my colleague Jeff Dorsch detailed earlier this year at Hoover’s other blog, Bizmology.

Just a year ago, AMD was a favorite on Wall Street. It had Intel on the run with better products and better pricing, and AMD had finally gotten its foot in the door at Dell, which had been an Intel-only house for years. In 2006, AMD had the momentum to challenge Intel’s stranglehold on the processor market for PCs and servers, and it was on the march in mobile electronic devices and other market niches, too.

Then something bad happened. Intel fought back.

What AMD is living through now is, for the most part, just the next verse in the same song. Larry Dignan of ZDNet has more details. The whole item is worth reading, but here’s the punchline:

In other words, many of the building blocks are in place for AMD’s rebound — if you can get over the massive losses and projections that the chip maker will merely break even in the fourth quarter. And as AMD CEO Hector Ruiz noted customers want AMD to do well. After all, two leading chip makers keeps prices low.

My own view is either really subtle or just wishy-washy: AMD is in a world of hurt, given Intel’s brainpower, bankroll, and sheer size — but personally I like the chances of any company with Ruiz in charge.

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Two linked facts that surprised me: (1) There is such a word as “backwardation.” (2) People are using it.

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And finally . . . As a journalist, any day you can use “billionaire” and “underground lair” in the same sentence is a good day. A sentence like this, for example: “Henry Nicholas, the billionaire founder of Broadcom, has been accused by a former bodyguard of having an illegal underground lair under his palatial Santa Monica home, which Nicholas allegedly used for as a safe haven for frequent parties involving prostitutes and hard drugs.”

Allegedly, I say. John Paczkowski has more details here.

Category: Energy, Finance & Real Estate, Technology