Interchange's Swoon Brings Back Dot-com Memories

Ingram's Growing Global Flavor Shows in Q1; Cisco Adds to Linksys With Latest Acquisition

TECHNOLOGY

It seems like only yesterday that Laguna Hills-based Interchange Corp. had a market value of $200 million.

Wait, that was yesterday-well, six months ago to be precise.

Looking now at Interchange's market value of around $40 million reminds of a certain Internet grocer (read Webvan) I invested in when its market value was more than a billion bucks.

The catalyst for Interchange's plunge: the Internet advertising company missed Wall Street targets, a misstep accentuated after Google Inc. posted blow-out results.

Interchange, which links online advertisers to Internet searchers, last month posted firstquarter net income of $131,000, which was up big from a year earlier. But analysts were expecting twice that amount.

Sales for the quarter grew to $5.9 million from $3.5 million. Analysts had been expecting $6.4 million.

In the past four months, the company has lost 83% of its market value, standing in stark contrast to the company's public offering last year. Interchange saw its shares shoot up 340% in the weeks following its offering, leading to a $200 million market value late last year.

In April, the company's president and chief operating officer, Michael Sawtell, said he was leaving the company. Interchange said that Sawtell "agreed to resign."

The company said Sawtell's resignation "was the result of strategic planning for the future growth of Interchange, and was not due to a disagreement with the company," according to a release.

Still, Interchange has made several moves it says will boost the company's customer base, including the relaunch of Local.com, a Web site that allows people to search for local businesses. Interchange paid $700,000 for Pasadena-based Local.com Inc. in February.

Interchange's growth plans include ramping up Local.com, and beefing up an operation in Europe. Interchange also acquired Inspire Infrastructure 2i AB, a Swedish Internet and wireless local-search technology company, in January.

Ingram's Global Bet

It's looking like Gregory Spierkel was the right man for Santa Ana's Ingram Micro Inc.

Spierkel, who recently was named to succeed longtime chief Kent Foster starting next month, has said he wants to bring some of the programs he led while overseeing the company's Asian and European operations to North America.

And it was Ingram's business abroad that buoyed its most recent quarter.

"A significant portion of our revenue comes from international operations or new technologies and services," Foster said in a firstquarter earnings release that came out last month. "This diversification mitigates some of the volatility risks in certain markets or segments. We have been cultivating this strategy for several years and it is starting to pay off."

First-quarter sales at the technology products distributor rose 13% to $7.05 billion from a year earlier. Net income also was up 13% to $42.4 million.

Cisco Adds to Linksys

Any ideas that Cisco Systems Inc. might regret getting into the consumer electronics market after buying Irvine-based Linksys two years ago seem moot now-especially since it seems Linksys keeps getting bigger within its San Jose parent.

Cisco recently bought privately held Sipura Technology Inc. with plans to fold it into Linksys. Cisco plans to pay $68 million in cash and stock options for San Jose-based Sipura, which makes voice over Internet phones and adapters.

Linksys has said it plans to target the voice over Internet market. Its goal is to pair Linksys' wireless routers with phones used to make Internet calls.

"The acquisition of Sipura will augment Linksys' lead-. ing position in the rapidly growing VoIP market," said Charles Giancarlo, Cisco's chief technology officer and president of Cisco-Linksys.

Giancarlo oversees Linksys, but Victor Tsao, Linksys cofounder along with his wife Janie, runs the unit's day-to-day operations. Linksys already had been working with Sipura for some time. Tsao was instrumental in the acquisition, according to a Linksys spokeswoman.

This wasn't the first time Cisco has boosted the size of its consumer networking division.

In February, Cisco acquired San Jose-based Airespace Inc., doling out $450 million in stock-its biggest acquisition since it bought Linksys for $500 million two years ago.

Adding to Quest's Tool Chest

Irvine-based Quest Software Inc. also is getting bigger.

The company bought privately held Imceda Software Inc. for $61 million.

Burlington, Mass.-based Imceda makes tools to develop software for databases. Quest's software works alongside databases to make them easier to use.

The deal stands to expand Quest's products that help manage SQL server databases. While Quest's main focus is to develop software for systems based on Oracle Corp. databases, it has been developing products for other database software, such as the SQL standard.

The deal is mainly for cash. Quest will use its stock to pay for about 20% of the acquisition, which is expected to close in the second quarter.