Wall Street Beat: Investors shrug off Google Talk

Google Inc. once again dominated the week’s headlines, thanks to its Wednesday launch of a new instant messaging service, Google Talk. The fledgling service has fewer bells-and-whistles than those from key Google rivals Yahoo Inc., Microsoft Corp. and America Online Inc., but because it’s built on open standards (unlike its rivals, which use proprietary technology), it holds promise as a development platform. The widely covered news had little effect on Google’s stock (ticker symbol: GOOG), though, which closed Wednesday up 1 percent on the Nasdaq exchange, at US$282.57.

Infrastructure software company BEA Systems Inc. struck a deal on Monday to acquire struggling portal maker Plumtree Software Inc., for around $200 million in cash. BEA offered $5.50 cash per Plumtree share (ticker symbol: PLUM), an 18 percent premium over Plumtree’s Friday closing price, and Plumtree’s shares quickly rose to reflect BEA’s offer. Plumtree’s stock closed Tuesday at $5.42, up 12 percent from its closing price on Monday before the deal’s announcement.

BEA’s shares (ticker symbol: BEAS) also gained slightly on news of the deal, closing Tuesday up 1 percent, at $9.01, on the Nasdaq exchange. Financial analysts generally praised the acquisition as a good move for BEA, which picked up Plumtree cheap, in their view. One of the last independent vendors of portal software, Plumtree was struggling for profitability and had long been viewed as acquisition bait.

Accounting software maker Intuit Inc. reported 2005 fiscal year results on Wednesday showing 13 percent revenue growth, to $2 billion, and net income of $381.6 million, up from the prior year’s $317 million. Despite the solid results, investors knocked Intuit’s share price (ticker symbol: INTU) down 6 percent on Thursday, letting the stock close at $43.73 on the Nasdaq exchange.

For its ongoing first quarter, Intuit forecast a higher per-share loss than analysts were anticipating, and its revenue estimates weren’t as bullish as they’d hoped. One big uncertainty the company faces is the effect Microsoft Corp.’s entry into the small-business accounting market will have on Intuit’s QuickBooks business, which drove more than a third of its revenue last year. Microsoft’s new Office Small Business Accounting, scheduled for a September release, is aimed straight at QuickBooks’ audience.

Hewlett-Packard Co. (HP) said late Thursday that its board has earmarked $4 billion for share repurchases. The repurchase is partially aimed at offsetting dilution from stock issued to employees through option plans.

HP ended its last quarter on July 31 with $14.4 million in cash on hand. In September, the company authorized a $3 billion share repurchase program; since then, $2.1 billion worth of shares have been reclaimed, HP said. Ahead of its repurchase announcement, HP’s (ticker symbol: HPQ) shares ended Thursday trading up 1 percent, at $26.90, on the New York Stock Exchange.

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