Devoted to hardware, software, IT issues, and information technology management

Yahoo's profits may be dwindling but IBM's having a good time with increased profits and revenue. They had a strong quarter with revenue up 5.1% at $22.62 billion compared to last year’s 3rd quarter and earnings up 46% with a net income of $2.22 billion or $1.45 per share. Earnings at Big Blue increased 15%, excluding the favorable tax rates, which is still strong, especially with their size.

The revenue and earnings results illustrate the strategic shift underway at IBM. Prior to the 1990s IBM was a hardware company. Lou Gerstner transformed IBM in the 1990s into a services juggernaut culminating with its purchase of PwC’s Consulting Unit. IBM rode the IT spending boom of the 90s that extended though the Internet boom and the NASDAQ 5000.

IBM is in another major transformation shifting to software as its growth engine. IBM announced four major acquisitions of software companies last quarter totaling $3.6 billion. Since the start of 2003, IBM has acquired approximately fifty companies at the cost of $11.4 billion, of which 31 have been software companies.