Deal :Berkshire to Pay $4.5 Billion for Pritzkers' Marmon

Warren E. Buffett may be a choosy shopper, but when he sees a firm he likes, he moves fast.
After just two weeks of negotiations, Mr. Buffett, who has been looking for acquisitions on which to spend his company’s billions of dollars, snagged an industrial conglomerate in a deal announced Tuesday. The Pritzker family of Chicago will sell to Mr. Buffett’s firm, Berkshire Hathaway, a 60 percent stake in Marmon Holdings for $4.5 billion.
The deal would go a long way toward unwinding the business holdings of the Pritzkers, a process that started in 2001. For Mr. Buffett, the deal represents his largest acquisition outside the insurance industry and suggests that he is finally finding some deals he can get excited about.
Berkshire will acquire the remaining 40 percent of Marmon over the next five or six years at a price that will be based on the future earnings of the company. In 2006, Marmon posted revenue of $7 billion and profit of $1 billion from operations like wire and cable, railroad tank cars and water treatment systems.

Dec. 26 (Bloomberg) -- Billionaire Warren Buffett's Berkshire Hathaway Inc. will pay $4.5 billion for 60 percent of Marmon Holdings Inc., adding another family run company that prospered without shareholder demands for short-term profits.
Chicago's Pritzker family, which controls Global Hyatt Corp., built Marmon into a group with $7 billion in annual sales and 125 units including operations serving the railroad and energy industries. Operating income more than tripled from 2002 to 2007, Omaha, Nebraska-based Berkshire said in a statement yesterday.
Marmon has ``businesses that are fairly niche-oriented where they have dominant positions established over time,'' said Thomas Russo, who manages about $3.5 billion at Gardner Russo & Gardner in Lancaster, Pennsylvania and counts Berkshire as its largest holding. ``They have a history under the Pritzkers of being liberated from the quarterly earnings game.''
Buffett, 77, built Berkshire over four decades, buying out- of-favor stocks and manufacturers to transform a failing textile maker into a $210 billion holding company. His biggest investment last year was the $4 billion purchase of Iscar Metalworking Cos. from Israel's Wertheimer family.
Marmon is ``our kind of company,'' Buffett said in an interview with CNBC today. ``It's in some very basic businesses but good businesses.''
Berkshire, which had more than $45 billion in cash as of Sept. 30, is as prepared as it has ``ever been'' to buy a ``big business outright,'' Buffett told shareholders at an annual meeting in May. He's said he'd be willing to spend as much as $60 billion on the right company.
The Marmon acquisition is set to be completed in the first quarter of 2008, with Berkshire acquiring the remainder of the company by 2014 at a cost based on future earnings.
Trains, Cranes
Marmon employs 21,500 people, mostly in North America, the U.K., Europe and China, according to the company's Web site. Its businesses include a dozen companies that manufacture wire and cable products for energy and construction use.
The Chicago-based group also has a transportation-services operation that produces railroad cars and leases tank containers in China. Operating income was $794 million last year, according to the Web site.
The businesses ``are not prone to widespread technical obsolescence,'' Russo said. ``They would have a relationship with their suppliers and customers that give them an ongoing partnership.''
Berkshire had about 217,000 employees as of Dec. 31 in businesses ranging from auto insurer Geico Corp. and carpet manufacturer Shaw Industries to ice cream company International Dairy Queen Inc. and business-jet fleet operator NetJets Inc.
Largest Since 2005
The Marmon takeover is the largest announced by Buffett since 2005, when Berkshire's utility company agreed to buy PacifiCorp from Scottish Power Plc for $5.1 billion in cash and assume $4.3 billion in debt. Buffett has also been investing in railroads, disclosing in April that he purchased a $3 billion stake in Fort Worth, Texas-based Burlington Northern Santa Fe Corp., the second-largest railroad in the U.S. after Union Pacific Corp.
Buffett prefers buying companies outright rather than investing in stocks because ``that way he can control the reinvestment decisions,'' Russo said. ``He would have the appetite and the balance sheet to underwrite almost limitless investments through their operating entities.''
Marmon has an ``impressive record of growth and profitability,'' Buffett said in the statement. ``The decision to purchase and work out the details of this transaction was done without delay.''
Berkshire spokeswoman Jackie Wilson and Chief Financial Officer Marc Hamburg didn't return calls seeking comment. David Dees, a spokesman for Marmon, had no comment.
Pritzker Breakup
The Pritzker family has discussed breaking up its holdings since the 1999 death of Jay Pritzker, who began the hotel company in 1957 by buying the Hyatt House in Los Angeles. The family's investments range from a global credit-check company to a maker of artificial joints. Marmon was acquired in 1953 by Jay and his brother Robert, according to the statement.
``This transaction is being done in the context of the previously reported restructuring of our family business interests,'' Marmon Chairman Tom Pritzker said in the statement.
In August, the family said it would sell a minority stake in Global Hyatt to investors including Goldman Sachs Capital Partners for $1 billion. In 2006, the family agreed to sell snuff maker Conwood for $3.5 billion to Reynolds American Inc.
In January 2005, actress Liesel Pritzker and brother Matthew Pritzker, settled a $2 billion suit accusing Tom Pritzker and other relatives of cheating them out of their inheritance.
Inheritance Suit Settled
The siblings claimed their trust-fund assets were being transferred to accounts benefiting other relatives and the family foundation. Terms of the deal weren't disclosed.
Tom Pritzker was ranked by Forbes as the 117th wealthiest person in the U.S. with a net worth of $3 billion. Buffett was second with $52.4 billion, the magazine said.
Buffett will work with Tom Pritzker, Marmon Chief Executive Officer Frank Ptak and former CEO John Nichols over the next five to six years ``in continuing to build Marmon,'' Berkshire said in the statement.
Berkshire, which traded at $2,950 on Dec. 31, 1987, is poised to post its 17th annual gain in 20 years. It climbed $3,980 Dec. 24 to $137,980 in New York Stock Exchange composite trading. The stock is up 25 percent in 2007, outpacing the 5.5 percent gain for the Standard & Poor's 500 Index.
The company's largest purchase was the acquisition of General Re, the largest U.S. reinsurance company. The stock deal was valued at $16 billion when it was completed in 1998.
`Simple' Businesses
Buffett's investment criteria include companies with ``good returns on equity,'' little or no debt, ``simple'' businesses that he can understand, and consistent earnings, he said in Berkshire's latest annual report. Buffett doesn't participate in auctions for companies and can tell prospective sellers within five minutes of an offer if he is interested in completing a deal, he said in the report on March 1.
The Marmon acquisition ``was done just the way Jay would have liked,'' Buffett said in the statement. ``No consultants or studies.''

Merrill raising up to $6.2 billion:

Investment Contract :Merrill Lynch & Co. will raise up to $6.2 billion to be invested by Singapore-based investment firm Temasek Holdings Pte. Ltd. and U.S.-based Davis Selected Advisers L.P., the investment bank said Monday.
Along with the private placement of common stock, Merrill (MER:Merrill Lynch & Co., IncNews, chart, profile, more Last: 53.90-1.64-2.95%
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MER 53.90, -1.64, -2.9%) said it's selling its middle-market commercial finance business for an undisclosed amount. New York-based Merrill said the placement of newly issued stock is expected to close by mid-January. Chief Executive John Thain, who assumed Merrill's top position in November, said the private placement will bolster Merrill's capital position. Thain came to Merrill from NYSE Euronext (NYX:NYXNews, chart, profile, moreLast:
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:NYX, , ) more than one month ago, amid a difficult period during which Merrill sustained significant write-downs related to troubles in the U.S. housing market. The private placement also creates a strategic partnership with Temasek, Merrill said in a statement, describing Temasek as having "sizable investments across Asia, particularly in Singapore, China and India." Temasek will invest $4.4 billion in Merrill common stock, with the option to buy an additional $600 million in stock by March 2008. Its ownership position in Merrill won't exceed 10%, Merrill said. Davis, meanwhile, will make a "long-term investment" of $1.2 billion, Merrill said. Neither Temasek nor Davis will have any "role in the governance" of Merrill, the firm said. Meanwhile, Fitch Ratings maintained a negative outlook on Merrill following news of the investment, saying in a statement that it believes "there is a high probability that additional losses will be recognized in fourth-quarter 2007 fiscal year which collectively may result in [the firm] posting a loss for its 2007 fiscal year." Fitch had lowered Merrill's long-term issuer default rating in October. Following an initial rise early in Monday's abbreviated trading session, Merrill shares closed nearly 3% lower, ending at $53.90. Also Monday, Merrill said it is selling Merrill Lynch Capital, the firm's middle-market commercial finance business, to GE Capital (GE:GENews, chart, profile, moreLast:
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:GE, , ) . Financial terms were not disclosed. Merrill's commercial real-estate finance unit is not part of the unit being sold, the firm said. Fox-Pitt Kelton said in a note to clients that the sale should "free about $1.3 billion [in] capital for Merrill. Thus, the total capital 'raise' is $7.5 billion." Fox-Pitt Kelton had previously estimated that Merrill's write-downs related to subprime and other troubled mortgage markets amounted to $8.6 billion. Merrill's sale of Merrill Lynch Capital "continues to signal that problems are significant, but that [management] is taking steps to get beyond it," the firm told clients

Albert Fert & Peter Grünberg, Physics of Hard Drives Wins Nobel

Two physicists who discovered how to manipulate the magnetic and electrical properties of thin layers of atoms to store vast amounts of data on tiny disks, making iPods and other wonders of modern life possible, were named winners of the Nobel Prize in Physics yesterday.

Albert Fert, of the Université Paris-Sud in Orsay, France, and Peter Grünberg, of the Institute of Solid State Research at the Jülich Research Center in Germany, will share the $1.5 million prize awarded by the Royal Swedish Academy of Sciences.

They will receive the money in a ceremony in Stockholm on Dec. 10.

Dr. Fert, 69, and Dr. Grünberg, 68, each working independently in 1988, discovered an effect known as giant magnetoresistance, in which tiny changes in a magnetic field can produce huge changes in electrical resistance.

The effect is at the heart of modern gadgets that record data, music or snippets of video as a dense magnetic patchwork of zeros and ones, which is then scanned by a small head and converted to electrical signals.

"The MP3 and iPod industry would not have existed without this discovery," Börje Johansson, a member of the Royal Swedish Academy, said, according to The Associated Press. "You would not have an iPod without this effect."

In remarks broadcast over a speakerphone at the academy in Stockholm, Dr. Fert said: "I am so happy for my family, for my co-workers. And I am also very happy to share this with a friend."

Experts said the discovery was one of the first triumphs of the new field of nanotechnology, the science of building and manipulating assemblies of atoms only a nanometer (a billionth of a meter) in size.

The scanning heads in today's gizmos consist of alternating layers only a few atoms thick of a magnetic metal, like iron, and a nonmagnetic metal, like chromium. At that small size, the strange rules of quantum mechanics come into play and novel properties emerge.

The Nobel citation said Dr. Fert and Dr. Grünberg's work also heralded the advent of a new, even smaller and denser type of memory storage called spintronics, in which information is stored and processed by manipulating the spins of electrons.

Engineers have been recording information magnetically and reading it out electrically since the dawn of the computer age, but as they have endeavored to pack more and more data onto their machines, they have been forced to use smaller and fainter magnetic inscriptions and thus more and more sensitive readout devices.

It has long been known that magnetic fields can affect the electrical resistance of magnetic materials like iron. Current flows more easily along field lines than across them. The effect was useful for sensing magnetic fields, and in heads that read magnetic disks. But it amounted to only a small change in resistance, and physicists did not think there were many prospects for improvement.

So it was a surprise in 1988 when groups led by Dr. Fert at the Laboratoire de Physique des Solides and by Dr. Grünberg found that super-slim sandwiches of iron and chromium showed enhanced sensitivity to magnetic fields - "giant magnetoresistance," as Dr. Fert called it. The name stuck.

The reason for the effect has to do with what physicists call the spin of electrons. When the magnetic layers of the sandwich have their fields pointing in the same direction, electrons whose spin points along that direction can migrate freely through the sandwich, but electrons that point in another direction get scattered.

If, however, one of the magnetic layers is perturbed, by, say, reading a small signal, it can flip its direction so that its field runs opposite to the other one. In that case, no matter which way an electron points, it will be scattered and hindered from moving through the layers, greatly increasing the electrical resistance of the sandwich.

As Phillip Schewe, of the American Institute of Physics, explained, "You've leveraged a weak bit of magnetism into a robust bit of electricity."

Subsequently, Stuart Parkin, now of I.B.M., came up with an easier way to produce the sandwiches on an industrial scale. The first commercial devices using giant magnetoresistance effect were produced in 1997.

Dr. Grünberg was born in Pilsen in what is now the Czech Republic and obtained his Ph.D. from the Darmstadt University of Technology in Germany in 1969. He has been asked many times over the years when he was going to win the big prize, and so was not surprised to win the Nobel, according to The A.P.

He said he was looking forward to being able to pursue his research without applying for grants for "every tiny bit."

Dr. Fert was born in Carcassonne, France, and received his Ph.D. at the Université Paris-Sud in 1970. He told The A.P. that it was impossible to predict where modern physics is going to go.

"These days when I go to my grocer and see him type on a computer, I say, 'Wow, he's using something I put together in my mind,'" Dr. Fert said.

iPods, Better laptops Stemmed from Nobel Prize Discovery
The 2007 Nobel Prize in Physics goes for the discovery of Giant Magnetoresistance, a nanotechnology that enables more compact disks to be squeezed into laptops, iPods, and other such devices.

The 2007 Nobel Prize in Physics has been awarded to two researchers for their discovery of Giant Magnetoresistance (GMR), a sort of nanotechnology that enables more compact disks to be squeezed into laptops, iPods and other such devices.

The discovery was made separately in 1988 by Albert Fert of France and Peter Gr|nberg of Germany, though the technology didn't really take hold until the late 1990s.

GMR technology allows for data to be read from very compact disks. Here's a description from the Royal Swedish Academy of Sciences, which doles out the Nobel Prizes:

"A hard disk stores information, such as music, in the form of microscopically small areas magnetized in different directions. The information is retrieved by a read-out head that scans the disk and registers the magnetic changes. The smaller and more compact the hard disk, the smaller and weaker the individual magnetic areas.

"More sensitive read-out heads are therefore required if information has to be packed more densely on a hard disk. A read-out head based on the GMR effect can convert very small magnetic changes into differences in electrical resistance and therefore into changes in the current emitted by the read-out head. The current is the signal from the read-out head and its different strengths represent ones and zeros."

More background about the discovery is available here.

Last year, the prize went to John Mather and George Smoot "for their discovery of the blackbody form and anisotropy of the cosmic microwave background radiation."

The real Nobel Prizes are being announced a week after the quirky Ig Nobel Prizes for weird science were announced at Harvard University.

Research into the mystery of wrinkles on bed sheets, the bottomless bowl of soup and the effect of Viagra on hamster jet lag dominated those awards.

For more on network-oriented research, read our Alpha Doggs blog.

Technorati : Albert Fert, Peter Grünberg

Google looking at privacy protections for users

Critics say the DoubleClick buyout may give Google too much power over online advertising

Google Inc. the world's Web search leader, told U.S. Senate lawmakers yesterday that the company is pursuing new technologies to protect the privacy of Internet users as it seeks to acquire advertising company DoubleClick Inc. ("see: Congress to scrintinize Google-DoubleClick acquisition")

Google's chief legal officer, David Drummond, testified that the company was looking at the Internet display advertising business with a "fresh eye and evaluating whether changes can be made to innovate on user privacy in this space."

Critics say Google's $3.1 billion acquisition of DoubleClick, an advertising tools supplier, may give the company too much power over online advertising. Google stores mounds of data on Internet-surfing habits of users and uses the information to make money by selling advertisements.

As a general matter, Drummond also sought to address antitrust concerns about the deal, describing it as pro-competitive.

Drummond sought to assure the lawmakers that Google was exploring new privacy protection technologies.

He cited as an example a possible new technology that Google called "crumbled cookie" in which information about an Internet user would not be connected to a single piece of identifying code, known as a cookie.

Google was also exploring better ways of providing notice within advertisements to identify who was responsible for them, Drummond said.

"We have consulted with numerous privacy, consumer and industry groups in developing these ideas and have endeavored to be responsive to their concerns," he said in written testimony for a Senate Judiciary subcommittee.

Technorati : Google, forusers, looking, privacy, protections

The ecosystem of the mobile phone and iPhone,

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Just 74 days after launching its iPhone, Apple announced it had already sold 1 million of the things - a milestone that its previous blockbuster product, the iPod, took almost two years to reach.

And yet, to judge by the industry's chatter, the iPhone is already old news. More excitement swirls around rumours that Google, the Web-search giant that is Apple's neighbour in Silicon Valley, could enter the market with its own "gPhone." Google's boss, Eric Schmidt, has already said that the firm plans to bid for a prime slice of the wireless spectrum in a forthcoming auction, something Apple is also said to be considering.

In short, both mobile operators and handset-makers could soon be confronted with two of the world's sexiest brands as direct rivals. Publicly, Apple and Google are being diplomatic.

The industry is a stool with three legs - network service, devices, and the software and content that goes on them - and "I don't think any player in the ecosystem trying to glue it all together will be very successful," says Dipchand Nishar, who leads Google's mobile-phone strategy.

By this he may simply be conceding the obvious, which is that Google would not build hardware, even if it made the other two legs.

But Google seems to be up to something. It bought a company called Android in 2005 that specializes in mobile-phone software. It has Google Talk, a free Internet-calling service. In July it bought GrandCentral Communications, a firm that gives users one single phone number for life. And it recently filed a patent application for a new mobile-payment technology.

It would certainly be tempting to tie all these bits together into a new software "platform" for mobile phones and offer it to handset-makers as an alternative to existing smart-phone operating systems such as Symbian, Palm or Microsoft's Windows Mobile.

Naturally, Google's search, email and document services would be tightly integrated, along with its advertising technologies, which might pave the way for mobile service that is partly or wholly subsidized by advertising.

As a strategy, this might be just different enough from Apple's to assure harmony with its ally.

It would suit neither firm to open hostilities. So Google may concentrate on software for cheaper, mass-market devices, leaving Apple to make elegant, high-end hardware.

Technorati : ecosystem

Web TV show

MySpace still has a few cards up its sleeve -- including the connections it has to some of the top names in traditional media, thanks to its parent company, media and entertainment giant News Corp.

The social-networking site announced today that it has signed an exclusive deal with Ed Zwick and Marshall Herskovitz, the Hollywood duo that produced such hit TV shows as Thirtysomething and My So-Called Life, for the rights to a new Internet drama the pair are working on, called Quarterlife.

Episodes -- or webisodes -- of the show, which follows a group of twentysomethings through the eyes of one young girl with a video-blog, will appear first on MySpaceTV, and then on the Quarterlife.com website.

Jeff Berman, the general manager of MySpaceTV, said in an interview that the show was a "landmark moment" for MySpace, and that it would be "the highest-quality serialized content ever to appear on the Internet. We're talking about the same production values as 24 or Prison Break."

There have been a number of episodic TV-style shows created for the Internet, including the popular Lonelygirl15 show, which was developed by a trio of unknowns and also appears on MySpaceTV. More recently, former Walt Disney CEO Michael Eisner's company created a show called Prom Queen, which aired on MySpaceTV and drew a large following.

Entertainment websites have been speculating for several months about a possible Internet offering from Mr. Zwick and Mr. Herskovitz, after a number of reports leaked out about TV writers and production staff working on something called Quarterlife. The Hollywood duo had a traditional TV show of the same name that ran briefly in 2005.

"We've been talking to [Zwick and Herskovitz] for the past several weeks, and we're delighted to be able to announce this," Mr. Berman said. The first "webisode" will be posted on MySpaceTV on November 11, he said.

Under the terms of the deal, the social-networking site has a 24-hour window during which the webisode will only be available on MySpaceTV. After that, it will appear on Quarterlife.com. Both sites will have interactive features, Mr. Berman said, but on MySpace viewers will be able to interact with the cast through their MySpace pages.

MySpace users and bloggers on other sites will also be able to "embed" the webisodes in their pages by pasting in a small chunk of code, as they can with video clips on other sites such as YouTube, Blip.tv and DailyMotion.

When asked whether the new show would have a mobile component involving cellphones, Mr. Berman said "stay tuned." He also said that MySpaceTV was working on several other projects with content creators in the entertainment community.

According to Mr. Berman, more than 50 million users stream video each month from their MySpace webpages, and the social-networking site as a whole produces 500 million individual video streams

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Faced with Facebook's exponential growth, MySpace hopes to keep its users onside with what it says is the first network-quality television series produced directly for the internet.

The social network announced today it had secured the exclusive international distribution rights for Quarterlife, a new series from Emmy award-winning producers Marshall Herskovitz and Edward Zwick.

MySpace Australia spokesman Darain Faraz said the deal was just the first of many shows it planned to offer through MySpace TV, which up until now has consisted mainly of user-submitted clips.

He said within the next few weeks the site would announce a number of "local content sharing deals" with Australian content providers.

"We are on the verge of announcing some fairly huge stuff," he said.

MySpace has 3.8 million registered Australian users but its growth rate now lags well behind Facebook's, which earlier this year surpassed 200,000 Australian users.

But where Facebook's expansion is now being driven by third-party applications, which have rapidly expanded the functionality of the site, MySpace is looking to hold on to its users through new features such as MySpace TV and Instant Messenger.

Quarterlife, which will premier in seven languages on MySpace's global sites on November 11, delves into the lives of six people in their 20s and charts their "coming of age as a part of the digital generation".

The show was unashamedly written to appeal to today's tech-savvy youth - the central character, a young woman named Dylan, is a blogger whose video diary divulges a few too many of her friends' closest secrets.

It purports to be a "truthful depiction of the way young people speak, work, think, love, argue and express themselves".

To that end, Herskovitz and Zwick - the force behind My So-Called Life, thirtysomething, Legends of the Fall and Blood Diamond - will invite their audience to participate in the ongoing development of the series "through writing and video submissions".

There will be 36 episodes in total and the producers plan to create a mini social network around the show through a website, quarterlife.com. It will also have its own profile page on MySpace, which MySpace says will include bonus content such as character profiles, behind-the-scenes video footage and storyline secrets.

Herskovitz and Zwick said the fact Quarterlife was an independent project meant they had full "creative autonomy", which isn't always possible when producing shows for traditional TV networks.

"For better or worse, Quarterlife is truly our own vision," Herskovitz said.

The Quarterlife concept was originally conceived three years ago as a TV pilot called "¼ life", developed for the US network ABC. The project was axed due to "creative differences" between the producers and ABC, after which the script was completely rewritten for an internet audience.

"When Emmy award-winning producers come to MySpace TV - you know this is reaching a whole new level," Myspace CEO Chris DeWolfe said in a statement.

In the US, MySpace has already dabbled extensively in digital broadcasting, securing the rights to a number of smaller series and short clips including the web series Prom Queen, a teen-oriented serial drama made by a US studio owned by former Disney boss Michael Eisner.

Technorati : Myspace, Web TV

AMD with quad-core processor -Intel new invention

24hoursnews : Intel is aiming to extend its performance lead over AMD with the introduction of the industry's first quad-core processors designed for multi-processor servers.
The chip giant has rolled out six quad-core Xeon 7300 series processors, which deliver more than twice the overall performance and more than three times the performance per watt of its previous generation of dual-core server chips. The chips are the last to be converted to Intel's Core micro-architecture, a process that has been under way since 2006.
The 7300 series are more energy efficient than previous chips. It comprises chips that run at clock speeds of up to 2.93GHz at 130W, several 80W processors and a 1.8GHz, 50W version that is targeted specifically at four-socket blade servers.
In addition to having twice as many cores, the 7300 chips come with up to four times the memory capacity of the dual-core multi-processor platforms, which Intel maintained will allow businesses to consolidate their server environments to reduce space, power and running costs.
"Intel Xeon-based multi-processor servers are the backbone of the enterprise," said Tom Kilroy, Intel vice president and co-general manager of the digital enterprise group.
"With the Xeon 7300 series, Intel is delivering new levels of performance and performance per watt, and is driving the Intel Core micro-architecture into such innovative systems as four-socket, 16-core blades that use less energy than our older models."
The Xeon 7300 series means IT managers can pool their single, dual- and quad-core Core-based servers into a dynamic virtual server infrastructure that allows for live, virtual machine migration. This should improve situations including failover, load balancing, disaster recovery and server maintenance.
Brian Byun, VMware's vice president of global partners and solutions, said: "VMware and Intel have worked together to optimise VMware ESX Server on the Xeon 7300. Our partners and customers benefit from increased platform choice and performance headroom from the quad-core four-socket server systems."
Intel said that the 7300 series running the VMmark benchmark designed for measuring virtualisation performance, achieved the highest single server result so far. Results from key server manufacturers testing the 7300 series are also proving encouraging.
HP has proclaimed world-record results for a ProLiant DL580 G5 server running the TPC-C benchmark for database performance, while IBM claimed its 7300-based, System x3850 M2 server using the SPECint*_rate_base2006 benchmark for integer throughout, also set a new world record.
Intel claims silicon crown despite AMD Barcelonaa.

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AMD's Barcelona Chip to Get Speed Boost This Year.

On the same day that Advanced Micro Devices Inc. officially released its Barcelona server processor, the company said it would have a faster version of the quad-core Opteron device out by year's end.

Initially, the top clock speed on the quad-core chip is 2 GHz. But Randy Allen, vice president and general manager of AMD's server and workstation division, said at the Barcelona launch event here Monday evening that the company will have a 2.5-GHz version ready for shipment in December.

The confirmation of the planned speed bump may have been the most significant bit of news out of the product launch, which was held at the Letterman Digital Arts Center on the grounds of the Presidio, a former U.S. Army base that now is part of the Golden Gate National Recreation Area.

The announcement mostly featured a long list of executives from hardware vendors offering support and praise for AMD without taking any shots at its main processor rival, Intel Corp. That was left to AMD officials, but even they rarely if at all mentioned Intel by name.

Hector Ruiz, AMD's chairman and CEO, said the company's initial development in 2003 of an x86-compatible Opteron that could run both 32-bit and 64-bit applications raised the bar "for what an industry should expect from a processor company."

Ruiz claimed that the new Opteron would have "a similarly profound effect on computing," even though Intel turned the tables on AMD and beat it to market with quad-core processors by 10 months. Last week, Intel released a new Xeon 7300 line of quad-core chips with clock speeds of up to 2.93 GHz.

Executives from IBM, Hewlett-Packard Co., Sun Microsystems Inc. and Dell Inc. appeared at AMD's launch event in person or via video to announce plans to add the Barcelona chip to their server product lines, with shipments scheduled to begin as early as next month. Among them was Dell Chairman and CEO Michael Dell, who said his company intends to double its lineup of AMD-based systems by year's end.

Jonathan Schwartz, Sun's president and CEO, said his company is aiming to use the quad-core Opteron to double its AMD-based server business. However, Sun in January announced a deal with Intel to develop a full of line of Xeon-based servers and workstations. That ended a two-year-old strategy under which Sun had exclusively used Opterons in its x86 systems.

Technorati : AMD, quad-core

Investment pushes GDP higher

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WASHINGTON (24hoursnews) - Robust business investment helped push U.S. second-quarter growth ahead at a 4% annual rate, a faster pace than reported a month ago, the government said Thursday.

The Commerce Department revised its estimate of gross domestic product - the measure of total goods and services output within U.S. borders - up from a 3.4% rate that it published a month ago. The revision was in line with Wall Street economists' forecasts and far outstripped the first quarter's anemic 0.6% rate of expansion.

Key sources of the upward revision in second-quarter growth were healthier business investment and a better trade performance than the department estimated a month ago.

The growth rate was the strongest pace in more than a year despite weakness in housing.

But the growth spurt could be short-lived. There are concerns that the recent turmoil in financial markets, a result of a spreading credit crisis, could seriously dampen economic activity in the second half of this year.

GDP growth may have slowed to just above a 2% annal rate in the current quarter and many analysts believe growth will slow even further in the final three months of this year as the full impact of the recent market turmoil is felt.

The worry is that the roller coaster ride in stocks and spreading credit problems will shake consumer and business confidence and cause cutbacks in spending and hiring plans.

However, analysts believe the Federal Reserve will act to avert a full-blown recession. If financial turmoil persists, they think the Fed will wield its major policy tool, cutting its target for the federal funds rate, the interest that banks charge each other. That rate has been at 5.25% for more than a year, but investors are starting to hope that the Fed will begin reducing it in quarter-point moves starting at their next meeting on Sept. 18.

The Fed on Aug. 17 cut a less economically significant rate, its discount rate, and has injected billions of dollars into the banking system in an effort to keep credit markets operating in the face of the turmoil. Federal Reserve Chairman Ben Bernanke may offer hints about the Fed's next policy moves when he delivers remarks at a Fed conference on Friday.

There was scant evidence of any inflation problem in the second quarter. So-called core prices that exclude food and energy items rose at a low 1.3% rate instead of 1.4% as previously thought, down from 2.4% in the first quarter and the lowest since a matching 1.3% in the second quarter of 2003.

In other economic news, the Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose to 334,000 last week, an increase of 9,000 from the previous week. That gain caught analysts by surprise. They had been expecting a decline of around 2,000.

Wall Street worries about Fed

Futures still point to negative start despite strong GDP data as investors ponder whether central bank will cut rates; jobless claims rise more than expected.

U.S. stock futures were weaker Thursday despite encouraging data on the health of the economy as investors pondered whether the Federal Reserve will cut short-term interest rates.

At 7:06 a.m. ET, Nasdaq and S&P futures were lower, pointing to a pullback for stocks at the open.

The Commerce Department on Thursday reported that the economy continued to expand at a healthy pace.

According to the latest government read, the U.S. economy grew at 4 percent in the second quarter, its fastest pace in more than a year.

Economists surveyed by Briefing.com had forecast a 4.1 percent annual rate of growth for the second quarter, up from its previous estimate of 3.4 percent.

Separately, the Labor Department reported that the number of newly laid off workers filing for unemployment benefits rose to 334,000 last week, an increase of 9,000 from the previous week. However, economists were forecasting a decline of 2,000 new claims to 320,000.

Stocks had rallied Wednesday on hopes that the central bank would intervene in markets. In a letter sent to Sen. Charles Schumer (D-N.Y.), Bernanke said the Fed was monitoring the trouble in financial markets and prepared to step in and take action if necessary.

The comments raised expectations that the Fed will cut rates and helped the Dow Jones industrial average gain nearly 250 points. Asian stocks rebounded overnight, and major European markets rose in early trading on Thursday.

Investors will look for more clues about what the central bank intends to do with rates on Friday, when Bernanke is due to give a speech about monetary policy and housing in Jackson Hole, Wyo.

Hopes that the Federal Reserve will cut rates were hit after a report in The Wall Street Journal said the central bank may not rush to the rescue of investors.

Fed Chairman Bernanke wants to break the assumption that central bank will cut rates whenever there is turmoil in financial markets, the report said.

In major corporate news, private equity firm Kohlberg Kravis Roberts is in talks with banks over the terms of its pending buyout of First Data (Charts, Fortune 500), according to the Journal.

Toyota (Charts) President Katsuaki Watanabe said problems in the U.S. subprime mortgage market could affect the car maker's sales there.

Yahoo's (Charts, Fortune 500) top sales executive is leaving the company in the latest reorganization move by President Susan Decker, said the company.

On the earnings front, Sears Holdings (Charts, Fortune 500) reported a steep 40 percent drop in second-quarter profits, although sales were essentially in line with Wall Street estimates. H&R Block (Charts, Fortune 500) said its losses ballooned, and Tiffany (Charts) reported lower profits.

Freddie Mac, the nation's second-largest mortgage buyer said its second-quarter profit fell 45 percent.

Also due before the bell are earnings from Del Monte (Charts). PC maker Dell (Charts, Fortune 500) is scheduled to post results after the market close.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 4.54 percent from 4.57 percent late Wednesday. Bond prices and yields move in opposite directions.

Oil prices gained, with U.S. light crude for September delivery adding 35 cents to $73.86 a barrel

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