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Microsoft’s Luster, BEA’s Gambit
Microsoft reports stellar earnings, and investors finally take note. BEA Systems offers to sell itself for $8.2 billion, but Oracle says no. And as fires rage, one more reason to wish you were filthy rich.
 

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EWS AT A GLANCE

Microsoft upgrades profile

Microsoft shares jumped more than 11 percent in early trading, rising above $35 for the first time since 2001, after the software giant reported its best first quarter in eight years. Microsoft’s profits rose 23 percent, to $4.29 billion, boosted by stronger-than-expected sales of its new Vista operation system, its Office suite, and the video game “Halo 3.” (MarketWatch) Microsoft also raised its earning guidance. (Reuters) Sanford C. Bernstein analyst Charles Di Bona blamed “bad psychology” for Microsoft’s stagnant share prices in recent years. “Maybe this is the catalyst where people start to take notice and stop being bored with the stock,” he said. (BusinessWeek.com)

BEA plays hardball with Oracle

Business software maker BEA Systems agreed to be purchased, but lone bidder Oracle rejected the $21-a-share price as “impossibly high.” Earlier this month, Oracle made an unsolicited offer of $6.7 billion, or $17 a share, for the company. (AP in CNNMoney.com) Analysts think a deal is still possible, or even likely: BEA’s largest shareholder, billionaire investor Carl Icahn, has been pressuring the company to sell itself, and Oracle CEO Larry Ellison has been eyeing BEA for years. “I think there is a lot of posturing,” said Bart Narter at financial consulting firm Celent. “Nobody is more interested in this than Oracle.” (Reuters)

Vonage settles with Verizon

Internet phone company Vonage settled a patent dispute with Verizon, agreeing to pay $80 million or $117.5 million, depending on an appellate court ruling. Vonage’s shares jumped 72 percent on the news, to $2.62, in after-hours trading last night. (The Wall Street Journal) Vonage settled a patent lawsuit with Sprint earlier this month, while AT&T files suit last week. But analysts warned that Vonage now faces a greater threat from cable-company competition. “Getting this litigation behind it gives Vonage a new lease on life,” said Sanford C. Bernstein analyst Craig Moffett, “but it does not change the dynamic of the industry.” (The New York Times, free registration required)

Firemen of the rich and famous

If you’d agreed to pay $10,000 a year to have private firefighters come save your $1 million-plus house in Malibu, you’d be feeling pretty smart about now. Firefighters with AIG’s Wildfire Protection Unit, which serves only the wealthiest neighborhoods, sprayed fire retardant on more than 160 houses in Southern California this week, claiming to have saved a dozen homes. AIG says the service saves it money. “You can’t fault businesses for seeing an opportunity, and you can’t fault individuals for wanting to protect their property,” said disaster-capitalism author Naomi Klein, adding, “But survival shouldn’t be a luxury item.” (Los Angeles Times, free registration required)
 

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