Tuesday, January 23, 2007

AOL named an international chief who will work from India and said its European boss is retiring after overseeing the sales of the region's Internet access businesses.

The new head of the Time Warner Inc. unit's international operations is Maneesh Dhir, 42. He was named Monday to replace Joe Redling, who left in the recent restructuring that brought Randy Falco from NBC to become AOL chief executive.

As an executive vice president, Dhir will be based in India's high-tech hub of Bangalore, becoming the latest in a string of executives to work for high-profile U.S. companies from a foreign office. Redling had worked from the company's global headquarters in Dulles, Va.

Dhir already was based in India, as a senior vice president and country manager. AOL's operations there include back-office and call-center functions.

Meanwhile, AOL named Dana Dunne to head AOL Europe, replacing the retiring chairman, Philip Rowley. Dunne, 43, was most recently president of Belgacom, a telecommunications company in Belgium.

The departure of Rowley, 54, follows the resignation in December of AOL Europe's chief executive, Carlo d'Asaro Biondo, who accepted a job with the French media and defense conglomerate Lagardere SCA after less than two months in the AOL role.

Time Warner already has sold AOL's French and U.K. access businesses and is near closing on a deal for its German access operations. In all three countries, AOL will continue to run ad-supported Web portals for the new owners.

It's part of a sweeping reorganization in which AOL stopped actively marketing Internet access services in the United States and began giving away AOL.com e-mail addresses and other services once reserved for paying customers.

Although AOL still gets most of its revenues from selling Internet access, subscriber numbers have been on a steady descent. Instead, online ads account for a growing share of AOL's revenue.

Texas Instruments Inc. is planning to close a small digital chip fabrication plant and make other changes to increase efficiency and profitability as it faces challenges from customers asking for less inventory and a wireless market skewing toward low-priced, basic-featured cell phones.

TI, the world's largest maker of chips for mobile phones, said fourth-quarter earnings rose 2 percent from a year earlier, due to stronger demand for the company's semiconductor and calculator products.

While announcing the gains after the market closed Monday, TI executives also laid out streamlining measures for the coming years. The company already uses a mixture of its own factories and other suppliers to produce semiconductors, and executives said that outsourcing model would be extended to include the development of certain digital chips.

“That level of redundancy no longer makes sense,” said Ron Slaymaker, TI's vice president for investor relations. “This is an area where we realize we can gain further efficiencies.”

The company also said it would eliminate 500 jobs over the coming year by closing the Dallas chip plant as part of a cost-cutting measure designed to save some $200 million annually.

TI shares rose $1.26, or 4.4 percent, to $29.85 as trading opened Tuesday on the New York Stock Exchange. Shares have traded between $26.77 and $36.40 over the past year.

TI said it earned $668 million, or 45 cents per share, in the October-December period, compared with $655 million, or 40 cents per share, in the same period last year.

Revenue was $3.46 billion, up 4 percent from $3.32 billion in the same period a year earlier.

Without a 5-cent-per-share tax benefit from a federal research and development bill passed into law late last year, earnings for the quarter would have come in at 40 cents per share. Analysts surveyed by Thomson Financial expected earnings of 38 cents per share on $3.43 billion in revenue.

Slaymaker said growth in the fourth quarter slowed compared with the third quarter due to a combination of seasonally weaker sales and other factors.

“Challenges continue in the first quarter as we operate in an environment where customers want lower levels of inventory and where growth in the wireless market is skewed to low-priced, basic-featured cell phones instead of higher-priced, full-featured phones,” Rich Templeton, TI's president and chief executive officer, said in a statement.

TI said it believes earnings in the first quarter will range from 28 cents to 34 cents per share on revenue of $3.01 billion to $3.28 billion, just below Thomson Financial analysts' forecast of 35 cents a share. TI will release a more detailed midquarter update in March.

Analyst Cody Acree of Stifel Nicolaus & Co. said the fourth quarter was solid but he was concerned about the company's weak guidance moving into the first quarter. He agreed, however, that TI's decision on chip outsourcing was a more streamlined approach.

He said TI, like other chipmakers, faces the tricky proposition of trying to predict now what demand will be for its chips in a few months.

“Right now there's a lot of second guessing,” Acree said.

For all of 2006, the Dallas company earned $4.34 billion, or $2.78 per share, on revenue of $14.25 billion, compared with earnings of $2.32 billion, or $1.39 per share, on sales of $13.39 billion in 2005.

In this file photo provided by Dell Computers service technicians at Dell staff the company's newest Enterprise Command Center (ECC) which opened Jan. 26, 2006 in Penang, Malaysia. U.S. computer maker Dell Inc. on Tuesday, Jan. 23, 2007, opened its first global business center outside the United States to provide 24-hour engineering and technology support to its branches worldwide.

Computer maker Dell Inc. on Tuesday opened its first global business center outside the United States to provide 24-hour engineering and technology support to its branches worldwide.


Chief Executive Officer Kevin Rollins opened the 200,000 square foot (18,580 sq. meter) center in Malaysia's high-tech city of Cyberjaya. Dell says the center will employ 600 people by year-end and 1,000 within five years.

The center will mostly provide internal support to Dell offices in countries around the world, not so much customer support, Rollins said. It will also include process design facilities, software development and local sales and marketing.

“Malaysia plays an integral part in our global initiative. We can think of no better partner than Malaysia to establish our first global business center outside the U.S.” said Rollins, who was awarded a Malaysian government title equivalent of the English “sir” on Monday.

He said Malaysia was picked over other countries such as China and India because of its skilled work force, conducive business environment, robust infrastructure and the government's commitment to the information technology industry.

Dell, based in Round Rock, Texas, has operated a manufacturing operation in the northern city of Penang since 1995, producing notebooks, desktop computers, servers and storage systems.

In 2005, Dell products accounted for 28 percent of Malaysia's electronics equipment exports and currently employs more than 5,000 people in the country.

Dell is vying with Hewlett-Packard Co. for dominance in the global personal computer market.

For all of 2006, the two companies each registered about 16 or 17 percent market share, according to tallies by IDC and Gartner Inc. But in the fourth quarter, HP had a 17 to 18 percent of the worldwide market compared to Dell's 14 to 15 percent.

The changing fortunes of the two companies have come as HP has retooled itself as a leaner company under CEO Mark Hurd, while Dell has struggled with strategic questions, an accounting investigation and huge laptop battery recall.

Rollins rejected speculation that he might step down. Asked if he plans to stay on with Dell, he said: “I do.”

He declined to say how much Dell has invested in the Cyberjaya center. He said the center is expected to help overall business conditions worldwide for Dell, but would not talk about the company's business issues such as increasing competition from HP.

Rollins said Dell is trying to boost expansion by developing factories in emerging markets such as India and Brazil and that the company is working to balance market share with profitability.

He noted that the Penang plant, which mainly produces notebooks, currently has the ability to expand capacity by 30 to 40 percent, which means it could potentially produce 14 million units per year.