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Tuesday, May 9, 2006 - Page updated at 12:00 AM

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Business Digest

Airbus may make design changes

Speculation is mounting that Airbus, bending to customer pressure, will announce in July a complete revamp of its plan to compete against Boeing's highly successful 787, killing off the previously touted A350 and replacing it with an A370.

According to a Flight International report Monday, the new twin-engine design will create a family spanning both the 787 and the 777 Boeing models. It will have a wider fuselage cross section, with a row of nine seats rather than the A350's eight, plus all-composite wings and more powerful engines designed for higher cruise speed.

Such a design could leapfrog Boeing technically and provide steep competition long term. The price for Airbus: Its new jet will be expensive to develop and would not enter service until 2012, almost four years behind the 787.

An Airbus spokeswoman said only that the European jet maker is listening to its customers, "now as always."

Microsoft

New messenger software put to test

Microsoft rolled out the latest test version of its instant-messenger software today, touting features including Internet voice calls and video conversations.

Windows Live Messenger updates MSN Messenger, a service used by 230 million people, Microsoft said. The new messenger is part of a suite of Internet services meant to integrate communications, Web search and personal information management. Live Messenger automatically updates contact information and lets users send messages to offline contacts, and easily share files and photos.

Microsoft also plans to introduce a beta version of its revamped Windows CE to software developers at a conference today in Las Vegas. The software is used in small electronic devices.

Microsoft

Acquisition made to aid AdCenter

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Microsoft bought DeepMetrix, a maker of tools for tracking Internet traffic, to match Google and bolster its ability to win over advertisers.

DeepMetrix, a closely held Canadian company, lets Internet marketers and publishers track visits to Web sites. Microsoft will use the software to put analytics tools in future versions of its AdCenter Internet advertising software, which was released last week, the company said in a statement Monday.

Microsoft has bought nine other companies in the past year to add online and advertising capabilities as it tries to catch Google in the market for Internet search and advertising.

Insitu Group

$23 million more for robotic aircraft

The Insitu Group, based in Bingen, Klickitat County, has raised $23 million in venture-capital funding to further develop its miniature robotic aircraft for military and commercial use.

Major investors included Battery Ventures of Menlo Park, Calif., Second Avenue Partners of Seattle and Pteranodon Ventures of Las Vegas.

Insitu developed its ScanEagle unmanned aerial vehicle (UAV) in collaboration with Boeing.

Micron Technology

Photronics to help with photomasks

Micron Technology, the largest U.S. maker of computer-memory chips, and Photronics will form a joint venture to produce photomasks used in the production of semiconductors.

Micron will contribute a photomask facility at its Boise, Idaho, headquarters, and Photronics will invest $135 million over three years for a 49.99 percent stake in the venture, the companies said in a statement.

Dell

1st-quarter results fall short of targets

Amid stiffening competition, computer maker Dell said Monday its fiscal first-quarter results will miss earnings targets, blaming the shortfall on "pricing decisions."

The news sent Dell shares falling nearly 6 percent to a 52-week low.

The company said it expects to earn 33 cents per share on revenue of about $14.2 billion, compared with analysts' average estimate of 38 cents per share on revenue of $14.52 billion.

The news, released after the close of trading, sent shares of the tech bellwether tumbling nearly 6 percent.

Dell, which sells computers directly to consumers and is the world's largest PC maker, previously forecast a profit ranging from 36 cents to 38 cents per share, including stock-option costs of 3 cents, on revenue of $14.2 billion to $14.6 billion.

United Airlines

More cuts pledged after 1st-quarter loss

United Airlines reported a wider first-quarter loss Monday despite the completion of its 38-month bankruptcy overhaul, blaming the shortfall on record fuel prices, stock-based compensation expense and a change in accounting methods.

Company executives, while "encouraged" by strong revenue improvements, said United's costs remain too high. They pledged to cut $400 million by next year by streamlining functions.

The parent of the nation's No. 2 carrier officially reported a $22.9 billion on-paper profit for the quarter, but that total was misleading. The figure reflected the reversal of on-paper losses recorded for all of last year, when unsecured claims that would ultimately be settled for a fraction of the charges resulted in a $21 billion loss for 2005.

The more representative figure, the company said, was a loss of $306 million before reorganization items versus a loss of $302 million during the first quarter a year ago.

Vonage

Some customers get IPO offering

Vonage set aside as much as 15 percent of its planned initial public offering (IPO) for customers who helped propel the growth of the company's Internet phone service.

Anyone who opened an account on or before Dec. 15, 2005, is eligible to buy shares at the IPO price, Vonage said Monday. The company plans to raise up to $563.4 million by selling 31.3 million shares for $16 to $18 each. The offer will be sold May 23, according to UBS.

"If a customer owns stock in the company, he's not likely to churn as quickly," said Sanford C. Bernstein analyst Jeffrey Halpern. Vonage's churn rate, a key measure of customer retention, worsened to 2.11 percent in the period ending March 31 from 1.7 percent a year earlier.

Eligible Vonage customers may offer to purchase as few as 100 and as many as 5,000 shares through a limited-purpose brokerage account, the company said in a separate SEC filing Monday.

Compiled from Seattle Times staff, Bloomberg News and The Associated Press

Copyright © 2006 The Seattle Times Company

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