We move from semiconductors to telecom next week--ultimately a key theme of the class is about the triangular relationship between networks, devices and content. There is an interesting interview with Terry Semel, CEO of Yahoo on video. I encourage you to take a look. It is a good warm-up to understanding the Google phenomenon which we will be covering later in the course. He talks of the importance of search and advertising; their relationship with Google in the early years and how Yahoo tried to buy them.

From yesterday's session, I hope each of you comes away thinking in more cyclical ways. These cycles are important for taking action (or not) in everyday business decisions. Ultimately business is a step by step move where actions should be plotted out (my opinion) in light of various anticipated event scenarios. And the cycles have much to do with this plotting. From Paul Otellini's presentation you should have noted the micro-architecture cycle--the fact that it took four years for them to refresh their microprocessor core; their technology cycle which has been happening with a regular occurrence every two years; the product cycles (all based on the upcoming new micro-architecture, which are all in the process of being refreshed; their working capital/production cycle which got out of synch with their demand, resulting in excess inventory. And the criciticism of the Company continues as this WSJ article below shows:

Intel Shareholders Voice AngerOver Chip Firm's Sagging Stock
By DON CLARKMay 18, 2006; Page B2
Intel Corp. management received some harsh questions from shareholders about the chip maker's sagging stock price.
One questioner at the company's annual meeting went so far as to suggest that Intel take a page from Hewlett-Packard Co., whose results and stock price have improved dramatically since it brought in Mark Hurd to succeed Carly Fiorina as chief executive.
"I suggest that someone ought to be fired in Intel," the stockholder said during the meeting, held near the company's headquarters in Santa Clara, Calif. "My question is who?"
Craig Barrett, Intel's chairman, conceded that the company's recent financial results and stock price have been "unsatisfactory." But he argued that a more reasonable form of "punishment" for management would come in a reduction in bonuses and stock-based compensation for 2006.
Paul Otellini, who became Intel's CEO a year ago, received a bonus of $2.68 million in 2005, nearly double the $1.36 million he received the prior year, according to the company's proxy statement. His base salary rose to $608,300 from $450,000, and was set for this year at $700,000. He also received stock-based compensation awards valued at $5.9 million, up from $3.3 million in 2004, the filing states.
Reed Hundt, an Intel director who is chairman of the compensation committee, told shareholders that Mr. Otellini's pay fairly reflected the company's earnings growth in 2005. But he stressed that compensation will vary with the company's performance.
Intel's stock, which traded at more than $34 in early 2004 and ended 2005 at nearly $25, has been pushed down lately by the company's slowing growth and market-share losses to rival Advanced Micro Devices Inc. Amid a widespread decline on Wall Street yesterday, Intel shares fell 40 cents to $18.66 in 4 p.m. composite trading on the Nasdaq Stock Market.
Mr. Otellini gave a presentation and discussed the company's plans to make its product line more competitive, as well as an internal study to make the company's internal operations more efficient. But he conceded that many analysts are waiting for signs that Intel's actions are having an effect.
"In the aggregate, they all said 'show me,' " Mr. Otellini said. "Talk is cheap."