IBM Buys Sterling Commerce, Engages in Aggressive Takeover Strategy
International Business Machines, or IMB as it is known colloquially, has announced the purchase of Sterling Commerce. IBM, a computer services provider, will pay out $1.4 billion in cash for Sterling Commerce, from which it will gain e-commerce software.
IBM will buy Dublin, Ohio-based Sterling from AT&T Inc., the biggest U.S. phone carrier, according to a statement from the companies today. Its software helps businesses share information and transfer files to other companies.
IBM Chief Executive Officer Sam Palmisano plans to spend $20 billion on takeovers in the next five years as he bolsters the software business, IBM’s most profitable. Sterling’s programs allow companies to manage and create their networks on external servers, a business known as cloud computing — which IBM expects to reach $3 billion by 2015.
“Plugging this gap was crucial for IBM,” said Ken Vollmer, an analyst at Forrester Research Inc. in Syracuse, New York. “IBM will be able to take the technology and meld it together with theirs.”
The transaction will likely close in the second half of 2010, the companies said. AT&T probably will record a pretax gain of $750 million on the deal once it’s completed. About 2,500 Sterling employees will join IBM’s software division.
IBM has engaged in a rapid and aggressive takeover strategy ever since CEO Palmisano came on board. It appears to be working for them, $20 billion and 100 purchases later.
Oil Prices Rise to $82
Everyone’s favorite commodity has risen in price–Oil rose to $82 a barrel today. It appears that the signals of recovery being sent by the economy have caused consumer confidence to increase, which naturally causes the black gold to rise in price. Optimism about the economy naturally means there will be more consumption of oil in the U.S., the largest consumer of energy.
“The EIA data tends to suggest that oil demand in the U.S. is recovering, particularly gasoline, but it’s still at low levels,” said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. Crude oil “went below the $80 level and it attracted a bit of buying at that lower level.”
So, just in case you were prepared for economic recovery–be ye forewarned, oil prices just rose! Rest assured, the effects of these slow rises in oil prices won’t be felt for a while.
Virtual Black Friday
Black Friday is a term we use to refer to the day after Thanksgiving, which has, in recent years, been a bargain bonanza, a coupon carnival, a sale celebration. On this day, hoards of soccer moms crowd around WalMarts, BestBuys, World Markets, and Office Depots in order to get the best deals on the gifts they are buying for Christmas. Literally thousands of women will line up in the wee hours of the morning in order to wait for the stores to open up, so they can have the first chance at various gifts they intend to by. As anyone who has been to a Rod Stewart concert knows, a crowd of soccer moms is cause for concern–people can easily be trampled in their stampedes.
If you think I’m exaggerating–please consult last year’s Black Friday. A Walmart employee was, quite literally, trampled to death. That is why many people will be taking their Black Friday shopping spree to their computers this Friday. As a result, many Internet merchants are stepping up their advertising and their bargains in order to attract a larger share of the shopping crowd.