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Electronic Data Systems Closing Venture Fund

Posted on: Wednesday, 19 February 2003, 06:00 CST

Source: Seattle Post - Intelligencer

Electronic Data Systems Corp., the world's second-largest seller of computer services, is closing an Internet venture capital fund after U.S. stock indexes fell the past three years.

Since the fund was started in December 1999, Electronic Data has invested $95 million in companies such as Bothell-based Captura, which lost $10.7 million before scrapping an initial public offering in 2001. Originally planned as a $1.5 billion fund, the venture is valued at $6 million, and Electronic Data will sell it, spokesman Kevin Lightfoot said.

Lightfoot said Electronic Data didn't lose money on the fund, which also invested in software companies such as Tradex Technologies Inc., CenterBeam Inc. and ServiceWare Technologies Inc. Electronic Data broke even by selling shares after companies went public or selling stakes back to the companies, he said.

Captura, which raised more than $100 million in venture capital, was sold to Redmond-based Concur Technologies for about $13 million last July.

Chiron cuts jobs in drug research program

Chiron, an Emeryville, Calif., biotechnology company with operations in Seattle, has cut 44 positions. Nearly all of the cuts occurred in the company's antibacterial drug research program.

Chiron continues to employ 100 people in Seattle and 4,000 worldwide. It purchased Seattle-based Pathogenesis Corp. for about $700 million in August 2000. Chiron remains committed to its Seattle office, a spokesman said.

RealNetworks in deal with Sweden's Ericsson

RealNetworks Inc. said Swedish telecommunications company Ericsson will incorporate its Helix digital-media delivery software into Ericsson's own software. That software lets providers of cellular-phone service add data transmission to voice-oriented networks.

Ian Fried, who just became RealNetworks' vice president of mobile products and services, wouldn't estimate the deal's value, but he said revenue from sales of Helix will be "a pretty big business" by year-end.

Snippets ...

Redmond-based Action Engine and Dat Group have formed a joint venture called Action Engine LLP, which intends to help wireless carriers better manage data services.... ClearCommerce Corp. of Austin, Texas, raised $3 million in venture financing, including an undisclosed investment from Seattle-based Voyager Capital.

NATIONAL

Intel invests in more efficient production line

SAN JOSE, Calif. - Intel Corp., the world's biggest computer chipmaker, plans to spend $2 billion to convert an Arizona factory to a less costly manufacturing method.

The plant in Chandler, Ariz., will be Intel's fifth factory to use larger 300 mm wafers. The shift from standard 200 mm wafers cuts production costs by as much as 35 percent by boosting the number of chips built on each slice of silicon.

Intel is one of a few chipmakers that can afford the latest 300 mm equipment as semiconductor orders slip.

The company has budgeted $3.5 billion to $3.9 billion for factories and tools in 2003. Intel will spread out payments for the Arizona project between now and 2005.

Applied Materials may cut work force by 12 percent

SANTA CLARA, Calif. - Applied Materials Inc., the world's biggest maker of computer-chip production equipment, may cut unprofitable products and fire more workers, an analyst said yesterday, citing industry contacts.

Applied may fire up to 12 percent of its 14,000 workers, according to Mark FitzGerald, an analyst at Banc of America Securities. He told clients that Applied may reduce its unprofitable wet-cleaning and ion-implant devices.

Sun says it may dip into healthy cash reserves

SANTA CLARA, Calif. - Sun Microsystems Inc., which has generated cash from selling server computers, software and services for 33 straight quarters, may begin to consume cash without a rebound in sales, investors said.

Chief Executive Officer Scott McNealy vaunts the consistent generation of cash from operations since 1995 as a sign that Sun, which has $5.2 billion in cash and marketable securities, remains healthy as corporate spending on computer products slows.

Sun's revenue dropped 32 percent in the 12 months ended in June.

Quick Hits is written by P-I reporters John Cook and Dan Richman. Send comments to johncook@seattlepi.com. This report includes information from The Associated Press and Bloomberg News.

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