Monday, July 24, 2006


I don't understand business, not even the tech kind. But since it has an impact on my day to day life and more so on my job I keep tabs on it and remain confused!

For e.g. Nortel and Lucent decide to merge. Now, these are two huge corportations and the resulting company is gonna be one massive player. Yes, this is what all would expect. But what turns out is very very different. The day the deal was decided, both their stocks fell and Alcatels went up. nose smile Now, if the "street" thinks its such a bad deal then why did the big honchos of the company go for it? As this was happening or maybe slightly earlier, Lucent decided to buy Riverstone. Now, as nice a company as Riverstone is(they pay very well), their products didnt have the market penetration and were going to file for bankruptcy. But here comes the already bleeding Lucent to buy it over and pay quite a fortune for it! Why?

The latest buyout doing the rounds is the AMD-ATI deal for 5.5B. Now, I have an AMD at my home and in my laptop, and I have integrated graphics from ATI on both. I like both these companies, but cant make sense of how this deal will help either. With Intel concentrating on multimedia apps, AMDs forte was/is gaming. The gamers go for dedicated graphics cards from ATI and nVidia and there is no clear winner. But with this deal going through, anyone who has bought nVidia or likes nVidia can forget about AMD integrating well with it. Why would AMD want to alienate its bread-and-butter community? I am a believer that no matter how much the small fish(startups) moves, its the big fish that makes waves. If buying a graphics card company made economic sense, wouldnt Intel have already thought of it and lapped up ATI or nVidia?

Sometimes all the business sense in the world does not translate to common sense as understand by mere mortal techies. The world of business, the more clarity you seek, the more murkier it gets? straight face
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