The Week in Review
Greater Bay holdings grow
San Francisco Business Times
Greater Bay Bancorp, which owns nine community banks in the Bay Area, said it will buy The Matsco Cos. in Emeryville. The Palo Alto bank holding company will pay $6.5 million in cash and up to an additional $6 million if certain earnings levels are met for the financial services company. Matsco leases equipment and provides loans to the dental and veterinary markets.
Informix to restructure
Database software maker Informix Corp. announced restructuring plans that include cutting about 12 percent of its work force and consolidating its businesses. The changes are the first major move by Peter Gyenes, who replaced Jean-Yves Dexmier as CEO last month. Dexmier was fired following a 77 percent drop in the Menlo Park firm's stock and slowing revenues. Informix said the restructuring will eventually save $70 million to $80 million a year.
Software firms spar
Macromedia Inc. of San Francisco, led by CEO Rob Burgess, is being sued by graphic design software maker Adobe Systems Inc. of San Jose. Adobe claims that rival Macromedia's Flash 5 web development software is based on technology it has patented. "Adobe will not be the research and development department for its competitors," Adobe president Bruce Chizen said in a statement.
Phone.com to buy Software.com
Redwood City-based Phone.com Inc. announced it will buy Santa Barbara's Software.com for $8.24 million in stock. The two companies will combine to develop software that can send phone calls and email messages to wireless devices via the Internet. Donald Listwin, executive vice president at Cisco Systems Inc. will become chief executive of the yet-to-be-named company.
IDG buys Hungry Minds
IDG Books Worldwide Inc. announced it had purchased San Francisco startup Hungry Minds Inc. in a deal worth between $4 million and $6 million. While Hungry Minds had sought to become an online consumer marketplace for distance education courses, the combined company will aim to tap the $63 billion market for corporate training. Foster City-based IDG is known for its popular "Dummies" self-help books and "Cliff Notes" study guides.
Gap sales still slipping
Following slower sales at its Old Navy Stores, San Francisco retail giant Gap Inc. reported its earnings could continue to slip through the end of the year. Gap officials said that its third-quarter earnings could drop below those for the comparable period last year, and that fourth-quarter earnings could also be disappointing. The report came after preliminary data on July Old Navy sales showed that traffic continued to lag. Gap's discount clothing arm has been plagued by distribution problems.
Red Hat to buy C2Net
Red Hat Inc. agreed to buy Oakland-based C2Net Software Inc. for $42.1 million in stock. Durham, N.C.-based Red Hat will add C2Net's web server security software, Stronghold, to its line of products for the Linux operating system. The deal is expected to be completed by the end of the month.
Web wine sellers merge
Wine.com in Fremont and WineShopper.com in San Francisco announced they will merge to become the largest online wine shopping site under the address wine.com. Wine.com president and CEO Bill Newlands will remain CEO of the combined company, which will be headquartered in Napa. Wine.com intends to take advantage of Wineshopper's technology, content partnerships and wholesale network. Wineshopper seeks financial security from the more established Wine.com.
Bluelight sees further funding
Kmart, Softbank Venture Capital, and Softbank Capital Partners announced they would jointly invest an additional $80 million into Kmart's San Francisco-based e-commerce web site Bluelight.com. Kmart is expected to invest $55 million in the venture, with Softbank providing the remaining cash. The money is expected to fund further web site development. The Bluelight site is scheduled to fully launch this fall.
Flagship Banana Republic reopens
The San Francisco retailer Banana Republic reopened its largest store, complete with free valet parking, personal shoppers and complimentary cell phone charging services. The flagship store, at the corner of Grant Avenue and Sutter Street, recently completed an extensive renovation and expansion project that nearly doubled its floor space from 32,000 square feet to 62,000 square feet. The larger store includes an expanded women's, men's and home sections, and features coat and bag check rooms.
Murdoch adds KBHK
KBHK Channel 44 will become another asset of media mogul Rupert Murdoch's company, News Corp. KBHK, a UPN affiliate, is one of 10 that News Corp. will acquire as part of its purchase of Chris-Craft Industries Inc. of New York. The deal raises regulatory questions about the reach of Murdoch's company, which also has a majority stake in Fox. In the Bay Area there is also speculation over whether KBHK will drop UPN programs in favor of Fox's.
Contract woes over
San Francisco-based Catholic Healthcare West (CHW) and Blue Cross of California (BCC) announced that they have reached a multi-year agreement to continue to provide medical services to BCC members at CHW facilities. Both companies had said that the contract, serving BCC's 5.4 million members through 40 CHW facilities throughout the state and three CHW-affiliated medical groups in Sacramento and Santa Cruz, would expire at midnight, Aug. 14.
Chiron buys rival
Emeryville-based Chiron Corp. announced it will buy PathoGenesis Corp. of Seattle for $700 million in cash. Chiron, which develops drugs to combat cancer, will gain PathoGenesis' inhaled antibiotic for cystic fibrosis.
iOwn to lay off 100
San Francisco-based online mortgage lender iOwn.com announced it will lay off more than 100 employees and will not accept any new loan applications. The 4-year-old company will refer prospective customers to local mortgage brokers from its web site. IOwn CEO Ned Hoyt said the company is committed to closing existing customer loans that have locked-in rates and an escrow closing date.
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