Safe Bet
Commentary
by Rick Reiff
I’VE ASSERTED THAT A COMBINATION OF EVENTS OVER THE PAST TWO YEARS,The “tech bust,” the bear market, the corporate accounting scandals and the continuing shockwaves from Sept. 11, 2001,will mean a future economy that is more cautious and less entrepreneurial the one we enjoyed in the ’90s.
One example that I think fits this premise is last week’s acquisition of Irvine-based Access360 by IBM Corp. Acess360 makes software that serves as a “gatekeeper” for computer networks. The company has attracted venture capital easily, and as recently as February, CEO Paul Gigg told our Andrew Simons that Access360 could go public before year’s end. We and others were suggesting Access360 could become Orange County’s “next Broadcom.” By that tag, we meant a company capable of achieving explosive growth, a market cap well in excess of a billion dollars and status as a darling of Wall Street. We didn’t mean a company, that like Broadcom more recently, has watched its stock deflate, suffered losses amid a chip industry-downturn, trimmed staff and contended with lawsuits from disgruntled shareholders.
But that’s the point,the rosy outlook for tech upstarts that fueled optimism, public offerings and the creation of overnight fortunes looks like a thing of the past. That doesn’t mean all the vitality has been drained out of companies such as Broadcom and Acess360. Broadcom appears to be weathering its tough economy, waiting for the upturn, sooner or later. While Access360’s takeover by IBM could be bad news for Orange County if Big Blue merely folds Access360’s products and technology into its existing lines, it could be good news for OC if IBM decides to expand Access360’s operations.
But whatever happens with Access360, this transaction supports the argument that a hot, innovative company is less likely in the future to embark on the risky waters of an IPO, and more likely to seek safe haven in the embrace of an established corporation.
Summer’s Revenge
A BREEZY EDITORIAL IN LAST WEEK’S ISSUE ABOUT THE END OF SUMMER HAS been hit with a hot blast of reality. Thus this correction:
In listing some of the things that have and haven’t occurred this summer, the editorial stated that this summer hasn’t brought triple-digit days. The item was written before the Labor Day weekend when, as we all know, the temperatures finally reached 100 degrees.
So it is noted here, for the record, that summer has brought triple-digit days, as well as an over-heated editor.
, Rick Reiff
TWO-PAPER TOWN
Times, Aug. 30, California section page 1:
O.C. Students Improve Stanford 9 Scores; 58% Beat National Average
Orange County students outperformed their peers statewide for the fifth year in a row
Register, Aug. 30, front page:
Most O.C. students fall short in state test
