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8:30 AM EST Friday, October 6, 2006: Not too long ago, Intel's stock was nearly $80. Now it's around $20.



There is only one reason for this abysmal performance. Intel has awful management. It remains the world's largest one product company -- namely the chip for the IBM (and now Apple) PC. Everything else it has tried has failed -- from video conferencing to telecommunications and in between.

All this is known. What you're about to read is not known.

Many years ago, I published a magazine called Computer Telephony. As editor, I was very close to the pre-eminent supplier in that industry -- a company called Dialogic Corporation. In 1999 computer telephony was hot. And Intel bought Dialogic in 1999 for close to $1 billion. It proceeded to bury the company within the gigantic Intel bureaucracy. Most of Dialogic's senior management quickly left.

By the Spring of this year, I was reading in the trade press that Intel was cleaning house and divesting itself of various businesses it had bought over the years and turned into drek -- also called Reverse Midas Touch. On June 27, 2006 Intel announced it was selling its communications and application processor business to Marvell Technology Group for $600 million. I knew that didn't include Dialogic. I got to thinking. Maybe I could buy Dialogic? I contacted two of Dialogic's original founders, who were now rich, semi-retired and bored, and said "Let's buy Dialogic back." They loved the idea.

Where to start? Intel has over 100,000 employees. I started at Andy Bryant's office. He is Intel's CFO. I never got to speak to him, nor his administrative assistant, Debbie Ulmer, despite many attempts. The closest I got to talk to anyone in Bryant's office was a secretary called Sheri Wysocki, who said "Send an email and I'll pass it on." She received this email from me on July 5, 2006 (note the date).

Dear Ms. Wysocki,

You mentioned that you would pass on our conversation and my email to Ms. Debbie Ulmer, administrative assistant to Andy Bryant. I haven’t heard anything from Ms. Ulmer. Here is copy of my early June email.

======

Dear Ms. Wysocki,

Thank you for being so helpful.

Our group is interested in what Intel has for potential sale in the telecom/communications/telephony businesses. We understand from reading the financial press that you may be contemplating the sale.

Thank you.

Never hearing anything, eventually I gave up on Andy Bryant's office. I scrounged some more and eventually found a woman called Trina van Pelt, who carried the title (I believe) of Senior Treasurer Manager in Intel Capital, the part of Intel that does work in acquisitions and divestitures. She didn't return my phone calls. But I begged her cell phone from someone (probably her secretary) and actually reached her one day in July. I have notes suggesting it was July 21.

She blew me off. She said she couldn't discuss anything. There is no opportunity. And she doesn't know when there might be. She promised to get in touch with me if there was ever a deal. I sent her my contact information.

On August 9, Intel released this:

Eicon Networks Corporation (“Eicon”) and Intel Corporation today announced that they have signed an agreement for Intel to sell the assets of its media and signaling business to Eicon.

The acquisition is expected to allow Eicon to become a leading player in the media processing and signaling market segment. The sale will enable Intel to focus its investments on its core communications and embedded businesses, including Intel® Architecture and network processors, modular communications platforms and optical modules. The transaction is expected to close in approximately four to six weeks and is subject to regulatory review and normal closing conditions. Financial terms are not being disclosed.

The end of this story came last night, eight weeks later, when I read the following press release:

MONTREAL, Quebec. Oct 4th, 2006 – Eicon Networks Corporation (“Eicon”) announced today that its acquisition of Intel Corporation’s Media and Signaling business has been completed. Eicon also announced that it would be proceeding to change its name to Dialogic Corporation.

"We got screwed," I emailed my friends last night: "Several things are evident:"

1. Intel was negotiating to sell the business in a private deal precisely at the time I contacted them.

2. They did not handle the sale of Dialogic as a controlled auction. Had they, they would gotten more bidders, the bidding would have been frenetic and Intel would have sold Dialogic for a higher price. By not doing this, by doing a private non-auction deal, they shortchanged their own shareholders.

3. Intel's management, I'm guessing, dumped the whole Dialogic division at a bargain price – just to get it off their books and to cover their embarrassment at the mess they had made of Dialogic since 1999. Otherwise why not reveal the price?

Am I annoyed that I didn't get a shot at this? You betcha.

Am I surprised that Intel shareholders got screwed? No. They've been screwed for years. Nothing is new.

Am I praying for all the useless, rude, incompetent people I dealt with at Intel? Yes. I'm praying they'll be among the 10,500 jobs that Intel announced in early September they were eliminating. As I said, Intel is among the more bureaucratic, make-no-decisions large companies existig today.

Life does go on. Yesterday the financial press was speculating that Intel is about to buy the graphics chip maker Nvidia. The reasoning? Intel's talented, gutsy competitor in PC and server chips, AMD recently bought the other graphics chip maker ATI. If Intel does buy Nvidia, it will be a great boost to AMD. Intel will screw up Nvidia just like they screwed up Dialogic and all the other companies they bought in the past 20-30 years in their lame (but failed) attempts at diversification from that wonderful PC chip, recently called Pentium.

I thought long and hard about publishing this Intel story, since it probably reads like sour grapes. Frankly, I thought it was interesting. It's another reason not to buy Intel stock.

Your home wiring can seriously mess up your DSL. A 10-foot phone wire extension unterminated in one home reduced DSL speeds by 25%. Experts are warning that “numerous runs to wall jacks, as is customary in U.S. homes, the data rate can suffer even more significantly.” To make your DSL line run the fastest, you need a dedicated, twisted pair from your home's demarcation point -- where the phone company brings its DSL phone line to -- directly to your DSL modem. No breaks. No splices. No joins. Ditto for cable modems.

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The first dumb blonde joke
Jack, a handsome man, walked into a sports bar around 9:58 pm. He sat down next to this blonde at the bar and stared up at the TV. The 10:00 news was on. The news crew was covering a story of a man on a ledge of a large building preparing to jump.

The blonde looked at Jack and said, "Do you think he'll jump?"

Jack says, "You know, I bet he will."

The blonde replied, "Well, I bet he won't."

Jack placed $30 on the bar and said, "You're on!"

Just as the blonde placed her money on the bar, the guy did a swan dive off of the building, falling to his death.

The blonde was very upset and handed her $30 to Jack, saying, "Fair's fair. Here's your money."

Jack replied, "I can't take your money, I saw this earlier on the 5 o'clock news and I knew he would jump."

The blonde replies, "I did too; but I didn't think he'd do it again."

Jack took the money.....

The second dumb blonde joke
A blonde was trying to sell her old car but wasn't having any luck because the car had 250,000 miles on it.

One day, she mentioned this to a friend. Her friend told her, "There is a way to make the car easier to sell, but it's not legal."

"That doesn't matter," replied the blonde, "I've just gotta sell it."

"Okay," said the friend. "Here is the address of a friend of mine. He owns a car repair shop. Tell him I sent you and he will turn the odometer in your car back to 50,000 miles. Then it should not be a problem to sell it."

The following weekend, the blonde made the trip to the mechanic. About one month after that, her friend asked her, "Well, did you sell your car?"

"No," replied the blonde, "why should I? It only has 50,000 miles on it!"

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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