Wednesday, January 18, 2006


Stockz : Whats up with GOOG and SUNW ?

Is SUN Microsystems a take-over target for Google ? Richard Rhodes thinks so. It would be a pretty good way for GOOG to leverage its inflated stock-price dont ya think ?

My bias is technical. And I like the fact that the Chaikin Money Flow into SUNW has turned positive after a long long time. But now, I'm gonna step out of my comfort zone and look at the fundamentals here [like an investment banker would-yeah,right;-)]. So bear with me.

1. This c/net article looks at the escalating power consumption of server farms and SUN's solution to the same. Google, as one of the most server farm dependent companies and Sun, as the designer of the power efficient Ultrasparc T1 processors for servers, have some synergistic possibilities.

2. While its true that Sun's glory faded with the bursting of the dot com bubble, the company still has a cadre of really great programmers and engineers. They were the guys who came up with Java for chrissakes. Despite the fact that Sun in particular has experienced a lot of brain-drain, Sun programmers still command a lot of credibility on the software street. This other c/net article shows how easy it would be for SUNW and GOOG o get along even on a rank and file level.

3. Will the synergy kill Mr.Softee ?

4. Caveat emptor : SUNW has been mentioned as a possible take-over target for years - but nothing happened.

DISCLOSURE : I do not own positions of any kind in either SUNW or GOOG as of writing this post.

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