South Carolina House Passes Tax Break for Data Centers

I just saw an article in The State about the South Carolina House passing tax incentives for new data center builds. Basically, it waives sales tax on power consumption, matching similar incentives in North Carolina and Virginia.

This should be interesting to see how South Carolina stacks up versus North Carolina for future builds from the likes of Google, Facebook, Apple, etc. South Carolina taxes are overall lower anyway (NC currently has the 6th highest gas tax in the country – versus 47th for SC), so it should give them a slight advantage. Additionally, the Upstate of South Carolina is very close to Atlanta, which is a major hub for Internet traffic.

Termination of Registrar Accreditation

ICANN has terminated RegisterFly’s Registrar Accreditation. After all of the recent controversy surrounding RegisterFly, I’m not surprised. It will be interesting to see what happens now — it sounds like RegisterFly may be forced to transfer customer domains in bulk to another registrar. If that happens, will RegisterFly get any kind of compensation? Watching this story play out could prove to be very interesting.

Google is now a Domain Registrar

Google is now an ICANN-accredited registrar of domain names, providing it with yet another potential line of expansion. The fast-growing search provider is approved to sell names in seven top-level domains (TLDs) including .com, .net, .org, .biz., info, .name and .pro.

Google’s registrar status, first noted by LexText, is likely to prompt speculation about its ambitions in web hosting and blogging. Google operates Blogger, the free blog hosting service with a huge user base. Cheap or free domain names could prove useful to Google in the notoriously price-sensitive blog hosting sector, where most bloggers use subdomains (i.e. rather than full domain names (

Domain sales have also become an important tool in the business hosting market, where domain registrations have surged in the past 18 months, even as prices have dropped steadily. Hosting providers like Hostway, EV1Servers, Interland and Yahoo have used cheap domains to attract hosting customers.

Those four hosting companies are not domain registrars, however. All buy their domains from wholesalers like Tucows, Go Daddy or Melbourne IT, and have a minimum per-domain cost, usually at least $6.50. Rather than viewing domains as a for-profit business, these providers have approached domain sales as a marketing cost. A recent survey by The Web Host Industry Review found that the keyword phrase “web hosting” was selling for $7.70 per click on Google AdWords and $9.02 on Overture. Not all of those clicks will become new customers, either, making a $1 or $2 loss on a domain sale seem like an affordable way to acquire a customer.

The greatest domain cost efficiencies are available to hosting companies that are also ICANN-accredited registrars, such as 1&1 Internet of Germany, which offers .com domains at $5.99, the lowest non-promotional price of any major hosting provider. As a registrar, Google could have similar flexibility to aggressively price its domain names.

Definately interesting. I’ll be happy to transfer my domains to Google if they have good prices and a good web interface.

The End of an Era

AT&T and SBC announced today their intention to merge. AT&T, founded in 1875, is only a fraction of the massive company it once was.

“Together, SBC and AT&T will be a stronger U.S.-based global competitor capable of delivering the advanced network technologies necessary to offer integrated, high-quality and competitively priced communications services to meet the evolving needs of customers worldwide,” said Dorman.

SBC plans to retain the AT&T brand for its business/enterprise unit. – Share and share unalike

I know this article is old, but I still found it to be interesting.

FASB did, however, manage to make firms include a footnote in their accounts detailing the share options awarded during the year. Smithers & Co., a research firm in London, calculated the cost of these footnoted options and concluded that the American companies granting them overstated their profits by as much as half in the financial year ending in 1998. In some cases, particularly that of high-tech firms (which tend to be generous with options), the disparity is even greater. For instance, Microsoft, the world�s most valuable company, declared a profit of $4.5 billion in 1998; when the cost of options awarded that year, plus the change in the value of outstanding options, is deducted, the firm made a loss of $18 billion, according to Smithers.

Well, I guess even Microsoft has trouble making a profit all the time. 🙂 I hope that companies start using proper accounting practices and declare the cost of stock options appropriately.

AirGate PCS a Step Closer to Merger with Alamosa

AirGate PCS a Step Closer to Merger with Alamosa

Shares in Atlanta-based AirGate PCS, a Sprint wireless retailer, were down about 2.5% in the final hour of trading on Tuesday after Alamosa Holdings, a Texas-based Sprint affiliate, announced that it has entered into a confidentiality agreement with AirGate regarding a potential merger between the two companies. Alamosa said it has completed its due diligence and is extending its merger offer until the close of business on Wednesday. Under the proposal, AirGate shareholders have the option of receiving 2.8 Alamosa shares for each AirGate share, or up to an aggregate of $100 million in cash.

IBM, Lenovo Plan Joint PC Venture

IBM, Lenovo Plan Joint PC Venture
Chinese Firm Would Pay
Up to $2 Billion for Stake
In Big Blue’s Business

December 7, 2004; Page A3

International Business Machines Corp. and Lenovo Group Ltd. plan to create a new U.S. personal-computer company that would own IBM’s PC business, according to people familiar with the negotiations.

The new company would be majority owned by Lenovo, with IBM holding on to a minority stake small enough that its revenues and profit or loss would be excluded from operating results.

While the deal hasn’t been finalized, Lenovo is expected to pay as much as $2 billion for the majority share of IBM’s PC business, say people involved in the talks. The purchase price is only a fraction of the IBM unit’s estimated $10 billion in annual sales, but by dealing with Lenovo, which has little presence outside China, IBM holds on to the ancillary service and financing business, which can be lucrative.

Both companies will have incentive to make the new company successful. IBM wants to continue to get income from financing and servicing the millions of PCs its salespeople sell to big corporate buyers around the world. Lenovo wants the economies of scale it would get by buying the world’s No. 3 PC maker, and needs the valuable IBM brand and access to IBM’s accounts.

The discussions, which have been rumored for weeks, were confirmed by participants. The deal could be announced as soon as today.

A person familiar with the plan said Lenovo will move the new company’s headquarters to Raleigh, N.C., where the IBM PC unit’s design-and-development activities are based. It is expected that 2,500 IBM employees would join the new company. IBM’s PC headquarters are currently in Somers, N.Y., where many other IBM operations are based. IBM doesn’t make PCs, having outsourced those operations almost three years ago.

Although Lenovo is eager to expand beyond its home base of China, in purchasing IBM’s PC unit it risks taking ownership of a marginally profitable business in a commoditized industry. In a worst-case scenario, IBM customers who are unsettled by dealing with Lenovo could quickly switch to Dell Inc. or Hewlett-Packard Co., the industry’s leaders. “If they immediately change the brand from IBM to Lenovo PCs, there’d be customers running for the hills,” said Martin Gilliland, a Gartner Inc. analyst in Singapore.

As a result, the deal is being structured for IBM to continue providing sales, service and financing support for several years, a person involved in the talks said. Lenovo would use IBM’s name and the ThinkPad brand for the widely admired notebook line.

The structure appears similar to that used for the TV manufacturing operations of France’s Thomson SA, one of the biggest takeovers of a Western company’s operations to date by a Chinese manufacturer. The maker of Thomson and RCA brand TV sets, placed its set-manufacturing operations in a joint venture with China’s TCL Corp. earlier this year. While TCL controls the venture, Thomson continues to provide sales and service to its traditional customers and is positioned to convert its stake in the venture into TCL shares.

Shares in Lenovo were suspended from trading on the Hong Kong Stock Exchange yesterday and are unlikely to trade again until the companies either reach a deal or Lenovo makes a formal announcement to investors. A Lenovo spokesman said yesterday morning that the company was preparing an announcement, but the company ultimately made none. IBM said its policy is not to comment on rumors.

A deal would provide Lenovo with an international presence and size, but it will present the company with many execution challenges and is likely to dilute its profits. With only $400 million in cash, Lenovo would likely issue new stock to help pay for the purchase and the earnings from the IBM PC business wouldn’t be enough to offset the potential dilution, wrote Johnny Chan, a JPMorgan financial analyst in Hong Kong, in a research note.

Write to William M. Bulkeley at, Evan Ramstad at and Kate Linebaugh at

Cingular and Triton PCS Complete Transaction

Cingular and Triton PCS Complete Transaction to Exchange Properties in North Carolina, Puerto Rico and Virginia

ATLANTA and BERWYN, Pa., Dec. 2 /PRNewswire-FirstCall/ — Cingular Wireless and Triton PCS (NYSE: TPC) today reported the completion of a previously announced definitive agreement that gives Cingular expanded wireless service in Virginia and Triton PCS added coverage in North Carolina as well as entry into the Puerto Rico MTA.
The definitive agreement among Cingular, AT&T Wireless and Triton PCS regarding the exchange of these operations was signed on September 21, 2004, with the closing contingent on the completion of Cingular’s acquisition of AT&T Wireless as well as regulatory approvals. Cingular completed its acquisition of AT&T Wireless on October 26, 2004.
Under the terms of the definitive agreement, Cingular receives Triton PCS’s network assets and customers in Virginia. Triton PCS receives certain AT&T Wireless network assets and customers in North Carolina and the Puerto Rico MTA, plus $175 million in cash from Cingular. AT&T Wireless and Triton PCS employees in the markets being exchanged transition with the business.
Upon receipt of regulatory approvals expected in the first quarter of 2005, the companies will exchange licenses in Virginia, North Carolina and Puerto Rico.
Customers of AT&T Wireless and Triton PCS will maintain their current rate plans, features and phones without interruption during a transition period. Customers with questions or seeking additional information can access the companies’ websites at or Both Cingular and Triton PCS, which markets its service under the brand SunCom, will soon begin communicating with customers directly.

About Cingular Wireless
Cingular Wireless is the largest wireless carrier in the United States, serving more than 46 million customers. Cingular, a joint venture between SBC Communications (NYSE: SBC) and BellSouth (NYSE: BLS), has the largest digital voice and data network in the nation. Cingular is the only U.S. wireless carrier to offer Rollover(SM), the wireless plan that lets customers keep their unused monthly minutes. Details of the company are available at . Get Cingular Wireless press releases e-mailed to you automatically. Sign up at .

About Triton PCS
Triton PCS is a wireless carrier based in Berwyn, Pennsylvania. The company markets its service under the brand SunCom. After giving effect to the exchange of territories with Cingular Wireless, Triton PCS will be licensed to provide digital wireless communications services in an area covering 14.3 million people in the Southeastern United States and 4.0 million people in Puerto Rico and the U.S. Virgin Islands.
For more information on Triton PCS and its products and services, visit the company’s websites at: and


Forecast: Three of Top 10 PC Vendors Will Exit the Market by 2007

Stamford, Conn. — A new report from Gartner, a Stamford-based technology market research and analysis firm, forecasts that three of the top 10 PC manufacturers will exit the market by 2007, driven out by slow growth rates and reduced profit margins. Gartner forecasts the growth of PC unit sales to average 5.7% annually from 2006 through 2008 — half the 11.3% average of 2003 through 2005. At the same time, revenue growth will average only 2% annually from 2006 through 2008, less than half the 4.7% average of 2003 through 2005, Gartner predicts. The top 10 worldwide PC vendors, by unit shipment, are Dell, HP, IBM, Fujitsu, Fujitsu Siemens, Toshiba, NEC, Apple Computer, Lenovo Group and Gateway. Of these, only Dell has consistently been profitable in the past several years, Gartner said.

Cingular Announces More Divestures

Cingular announced that it has sold 10 MHz of spectrum to MetroPCS in Detroit and Dallas, in addition to reannouncing its deal from last week with Alltel. These deals bring Cingular closer to meeting the required divestures as specified in the FCC and DOJ rulings on the conditions of the merger of Cingular with AT&T Wireless.

I really am not surprised by the announcement. I doubt that Cingular would be interested in selling these assets to Verizon or Nextel because they are major competitors who would benefit greatly from the additional spectrum. The article also mentions that Cingular is interested in selling spectrum in the Knoxville, TN area, and that Sprint PCS might be interested. I think that Sprint PCS will probably make an offer, but if SunCom makes even a remotely attractive offer for the Knoxville spectrum, I would imagine they will get preference, simply because Cingular doesn’t view SunCom as any kind of threat to their customer base.

Should be interesting to see how things progress over the next few months with the remaining required divestures. Would be great if somehow Verizon picked up some of these properties.