Fast Breaks Newsfront: June 25, 2001
House Majority Leader Dick Armey, R-Texas, wants a short-term ban on electronic commerce sales taxes, but negotiations in the Senate over a compromise bill have faltered. A moratorium on the imposition of new or discriminatory taxes will expire in October. If lawmakers fail to pass legislation by then, states could impose new levies.
A group of Texas investors called Ranger Governance announced plans to launch a proxy fight to replace Computer Associates Internationals current board at its annual meeting Aug. 29. The investment group, led by Sam Wyly, complained that CA has alienated its customers, employees and shareholders.
Microsoft plans to bundle new capabilities and services into its upcoming Windows XP operating system, and that has competitors and regulators worried that the Redmond company is up to its old monopolistic tricks. State attorneys general expressed dismay after an annual meeting, chastising the company for arrogantly ignoring the lessons of the ongoing antitrust case.
Cendant, a real estate and travel company, has agreed to acquire Galileo International for $2.9 billion. New York-based Cendant, which owns Avis Rent A Car System and Ramada Inn, plans to merge its online travel portal with Trip.com, Galileos site specializing in business travel, and relaunch the site by the end of the year.
Licenses Up in the Air
An appeals court ruled that the Federal Communications Commission was remiss in taking back wireless licenses once won by bankrupt NextWave Telecom. The licenses were reauctioned to companies including Verizon Wireless and entities supported by AT&T Wireless and Cingular Wireless. The companies may have to return the licenses, for which they pledged a total of $17 billion.
Exodus Communications shares plummeted almost 50 percent, to $1.56, on the news of reduced second-quarter and 2001 revenue projections. Analysts noted that even though management has advised Wall Street that the company would consider any acquisition offers, buyers might be cautious, given Exodus high debt and the soft telecom economy.