Tech Index December 11 2009
The Battle Road Tech Index™ fell 0.9 percent for the week ended December 11, 2009, closing at 1604. For the week, 16 of the 25 Index components fell in value. Year-to-date, the index is up 60 percent, having started at a value of 1000.
The following companies were notable movers for the week:
Research in Motion (NASDAQ: RIMM, $63.84) rose 8.7 percent this week. On Monday, December 7, RIMM announced it would form a partnership with Digital China to expand availability of the BlackBerry smartphone in the world’s largest cellular market based on subscribers. On Tuesday, RIMM announced a deal with China Mobile to expand services to consumers and small businesses. The entry into the Chinese mobile market allows RIMM to expand its customer base by more than 508 million potential subscribers. RIMM is reporting quarterly earnings next Thursday.
Yahoo! (NASDAQ: YHOO, $15.74) gained 3.6 percent this week. Late last week, the company announced that its search agreement with Microsoft (NASDAQ: MSFT, $29.85) from July had been finalized and is now on the fast track towards starting implementation in early 2010. The deal also requires regulatory approval from the Justice Department. Once implementation starts, the companies expect full integration in 24 months. The agreement will make all Yahoo! searches powered by Microsoft’s Bing, and the ad inventory for the two companies to be shared. The goal of the agreement is to revitalize each company’s search business against Google (NASDAQ: GOOG, $590.51). Yahoo!’s goal is to focus more on display advertising, which it believes is a more effective solution than competing with Google in search advertising.
Shares of Salesforce.com (NYSE: CRM, $63.26) declined 4.1 percent after business software giant SAP AG (NYSE: SAP, $44.78) announced its intent to offer a competing on-demand salesforce automation product in 2010. Salesforce.com has been growing its market share in this space, largely unabated, since its launch in 1999. Much of its share gains have come against SAP, a traditional software company reluctant to offer a competitive on-demand product due to fear of cannibalization. While the announcement could indicate a change in SAP’s strategy, the company previously tried to enter the on-demand software space in 2008 with Business ByDesign, a product which has fallen fall short of expectations.
