NOTHING BUT NET
Byline: Valerie Seckler
VIRTUAL SPENDING SPREE? The financing faucet isn’t exactly gushing, but there are signs that firms will start allocating funds to their Internet units more freely in the next 12 months than in the previous 12. An e-mail poll of more than 1,000 chief information officers and 3,000 readers of CIO magazine, taken June 14-23, found the group expects to spend 16 percent of their information technology budgets on B2C and B2B ‘Net endeavors in the next 12 months, on average, up from the 14 percent planned for the prior-year period; 42 percent aim to hike spending on e-business software going forward.
“The results suggest the technology slump has hit bottom,” noted Ed Yardeni, chief investment strategist at Deutsche Banc Alex Brown, who launched the monthly poll, along with CIO magazine, last August. “Now, it’s a question of the strength of the rebound.” Overall, the IT executives expect to generate 11 percent of revenue, on average, in the next 12 months via Internet ventures, versus the 8 percent produced online a year ago. “Their renewed spending confidence seems associated with the fear of playing catch-up during an anticipated economic recovery,” observed Gary Beach, group publisher of CIO magazine. The projected uptick is the first sign of a ‘Net spending pickup to surface in seven months, in the poll begun last August.
i2’s CLASS (ACTION) SCHEDULE: It will be at least a month before fur starts flying in a case brought this April against e-business software supplier i2 Technologies by a class of shareholders in the Dallas-based firm, said Jake Perkinson, partner in the law firm Johnson & Perkinson of So. Burlington, Vt. — one of two lead counsels recently named in the case. The suit charges i2 sold more than $97 million in stock to the public without revealing the trouble Nike was having implementing i2’s inventory-management programs. Following Nike’s widely publicized criticism of those systems, which came on Feb. 26, i2’s stock lost 22 percent of its value in one day, falling from the prior day’s close of $35.50 to $27.56. On Friday, i2 shares closed at $15.76, off 44 cents, in Nasdaq trading, after losing $2.37 Thursday, following the firm’s second-quarter warning.
So far, the U.S. District Court for the Northern District of Texas has named New York-based Milberg Weiss, along with Johnson & Perkinson, as lead counsels representing the plaintiffs. Next, a putative class will be defined, and Perkins estimated that by early August, that group will file an amended complaint. Subsequently, Perkins said, the defense will move to dismiss the case, and the litigation will be held up until the judge rules on that motion.
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ORGANIC’S EQUITY EROSION: Organic Inc., a high profile San Francisco-based Web site designer and Internet consultant founded in 1993, said last week it has been notified by Nasdaq that it has failed to meet the $1 minimum-bid price rule over a 90-day period and thus is subject to delisting from the Nasdaq National Market. The digital services firm — whose clients include Tommy Hilfiger, Target Corp., Federated Department Stores, — has requested a hearing before the Nasdaq Listing Qualifications Panel to review the ruling on the minimum-bid rule. The panel has 45 days to set a hearing date; Organic’s stock will continue to trade during that time. The firm’s shares eased 2 cents to close at 36 cents Friday.
DOT’S ALL: Buffeted by the ‘Net’s shakeout, e-consultant Razorfish said Thursday it has closed its office in Finland. The action follows the firm’s restructuring in February and decision by former chief executive Jeff Dachis to step down from the helm in May. He remains co-chairman … Action sports chain Blades on July 3 launched an e-commerce site, run by Global Sports, at blades.com.