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By Jeffrey Burt  |  Posted 2004-03-30 Print this article Print

Roger Kay, an analyst with International Data Corp., said before the announcement that he didnt expect many of those executives hired by Gateway last year to stick around after the acquisition. "I never considered many of these guys as longtimers," said Kay, in Framingham, Mass. "A lot of those guys will end up with golden parachutes to spend time with their families."
After Gateway closed the deal on eMachines March 11, spokesman Robert Sherbin said the company would take six weeks or so to sort out some of the larger issues facing the merged company—which now is the third largest PC manufacturer behind Hewlett-Packard Co. and Dell Inc. Among those questions is whether the headquarters will remain in Poway, Calif., or move closer to Irvine, Calif., where eMachines was based.
There also is the question of whether Gateway will keep its 190 retails stores. Gateway executives last year said they planned to bulk up the stores to give customers a greater look at the growing number of consumer products—from digital cameras to plasma TV screens—being offered, and how they integrate together. They also said they would display their new enterprise offerings, from servers to storage devices. But Kay and other industry observers said they expect the new company will shut down the stores, which can be expensive to maintain but dont always result in increased revenues. eMachines sells its systems through retail outlets like BestBuy. "Different [Gateway] stores perform differently," Kay said. "Gateway gets a lot of data about how individual stores have been performing, but I have to bet that some of their stores are real albatrosses. Even the best of them have been marginal." Check out eWEEKs Desktop & Notebook Center at for the latest news in desktop and notebook computing.


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