ZapMe!, Dell ink alliance

ZapMe! Corp. and Dell Computer Corp. on Aug. 23 announced an alliance to bring Dell’s OptiPlex PCs and PowerEdge servers to ZapMe!-installed schools.

Under the agreement, Dell becomes the principal supplier of PCs and servers for the ZapMe! network. Through Dell’s custom factory integration service, DellPlus, the systems will be pre-configured with software for both internet connectivity and classroom instruction.

In addition, Dell has made an equity investment in ZapMe!, and the two companies will collaborate in both product development and joint marketing programs.

ZapMe! also appointed a new chief executive officer, Rick Inatome, on Sept. 20. Inatome was founder and served as CEO of Inacomp Computer Centers and is chairman of its successor company, Inacom Corp., a global Fortune 500 technology services provider. In addition, he co-founded Computer City, one of the country’s leading computer superstore chains, and is co-chairman of American Speedy Printing Centers Inc., the nation’s fourth largest quick-printing chain.

ZapMe! founder Lance Mortensen will remain actively involved as chairman and devote his efforts to business development and creative strategies, the company said.

Lightspan acquires Global Schoolhouse

The Lightspan Partnership Inc., developers of comprehensive educational software and web-based tools and activities for classroom learning, on Sept. 8 announced the acquisition of Global Schoolhouse, a leading web site for classroom-to-classroom communication.

With this acquisition, Lightspan is well positioned to bring the best in collaborative learning activities to more teachers and to extend its mission of improving student achievement, the company said in a press release.

“Global Schoolhouse and Lightspan are a natural fit,” said Winnie Wechsler, senior vice president and general manager of Lightspan’s internet services. “Our mission is to use technology to help kids learn, and Global Schoolhouse, a true pioneer in using the internet for exchanging ideas and information, will enhance Lightspan’s growing online community for teachers, kids, and parents.”

Proceeds from the purchase of Global Schoolhouse will serve as an endowment for the non-profit Global SchoolNet Foundation. “As a result of this endowment, the foundation will be able to provide grants to teachers for expanding classroom use of the internet,” said Yvonne Marie Andres, co-founder of Global Schoolhouse and a new vice president at Lightspan.

“The goal is to reward those forward-thinking teachers and organizations—and help them put in place great online curriculum projects for their students,” Andres continued. The first grants will be awarded early next year, she said.

College Board to create for-profit web site

Pressure from the rapidly expanding online industry that helps students prepare for and select colleges has motivated the College Board, the non-profit organization that administers the SAT, to create its first for-profit subsidiary in a move to establish a full-service web site of its own.

The decision marks a radical shift for the century-old organization best known as the objective overseer of college entrance exams. The move follows a host of other advertisement-driven online ventures, including an upgrade of the Princeton Review’s web site, that focus on the lucrative high school and college market—a trend that has raised concerns among many about the commercialization of education.

The College Board’s plan for a web site to cater to a college applicant’s every need, from financial aid forms to SAT tutoring, marks the convergence of two major trends in education in the 1990s: the expansion of for-profit enterprises and the large number of electronic endeavors.

“We’re living in a world of piranha economics in regard to education,” Arthur Levine, president of the Teacher’s College at Columbia University, told the New York Times. “Every Wall Street firm, seemingly, has an education department. Venture capitalists are moving into this very quickly. Any nonprofit that fails to recognize both the opportunities and the challenges that come from the digital world is destined for extinction.”

Cisco gets into fiber optics with $7.4 billion acquisitions

Shoring up an iron grip on the market for internet equipment, Cisco Systems Inc. of San Jose, Calif., is paying $7.4 billion for two companies with expertise in the fiber-optic technology needed to carry telephone calls and TV over data networks.

The acquisitions of Cerent and Monterey Networks, announced Aug. 26, put Cisco in direct competition with Lucent Technologies, Nortel Networks, and Alcatel in a market that analysts expect to grow to $10 billion during the next three years.

The Cerent purchase is the biggest ever for Cisco, which today controls roughly 85 percent of the world’s market for the routers and switches that direct data around computer networks.

“The size of this deal really surprised me, but Cisco had a clear hole in their product portfolio, and they simply had to fill it,” said Chandan Sarkar, an analyst at Soundview Financial. “I think these guys had Cisco over a barrel.”

Cerent, based in Petaluma, Calif., makes a microwave-sized device that can be used by providers of cable, phone, and internet service to ease bottlenecks between the speedy fiber-optic “backbones” that make up the internet and older, slower telephone networks made with copper.

Monterey, based in Richardson, Texas, makes technology used to increase capacity at the core of an optical network.

“The internet is going optical fiber, no doubt, and Cisco just wasn’t in on it yet,” said Gina Socklow, an analyst at Brean Murray & Co. “Now they’re back in the race.”

Mike Volpi, Cisco’s vice president of business development, said the deals will enable it to help customers such as internet service providers make the transition from “old world networks—voice networks” to multimedia networks carrying data, voice, and video together.

Analysts say CEO departure will hurt Iomega

Stock analysts say the departure of Iomega’s chief executive officer, Jodie Glore, will hurt the struggle to right greater stability to the company.

Glore was the second CEO to leave the company in 10 months. He was temporarily replaced by David J. Dunn, who said he plans to return the company to “profitable growth.”

“The fact that Jodie is leaving is a significant impediment to the return to profitability of Iomega,” said analyst Stan Corker of Pennsylvania-based Emerald Research, during a round-table discussion of analysts carried over the internet.

Officials at the Roy, Utah-based company, which makes disk drives for computer data storage, said they don’t understand the pessimism.

“We’re puzzled here at some of the reaction,” said spokeswoman Janet Kacskos. “Some of the comments have got the employees scratching their heads.” She said the company has new hardware and software hitting the market and “we’re full steam ahead.”

Reasons for Glore’s Aug. 19 resignation are unclear. He joined the company last October, and said he was leaving to spend time with his family. But there was speculation that Glore may have been asked to leave the company.

When Glore was hired, his job was to right a company whose stock price had fallen from $40 per share in 1995 and had fallen to $9 when he took over. But analysts were critical of Glore’s performance, including layoffs and plant closures in California, billed as cost-cutting moves.

In all, seven top executives, not including the CEOs, have left in the past two years, which Corker said made it tough to turn the company around. That’s bad news for a company pinning its future on a strong fourth quarter, Corker said.

Western Digital recalls 400,000 computer hard drives

A defective computer chip has forced Western Digital Corp., of Orange County, Calif., to recall 400,000 hard disk drives.

Western Digital officials said it was unclear how many of the affected hard drives actually were in consumer hands or how much the recall would cost.

The company, which supplies equipment to Gateway Inc. and Compaq Computer Corp., said many of the disk drives were still in the hands of manufacturers and sellers.

The defect can cause the hard drives to fail to power up after six to 12 months of use, company officials said Sept. 27.

“No data has been lost, and none is in danger of being lost,” said Charles Haggerty, Western Digital’s chief executive.

The recall is the latest in a string of problems for the company, including recent layoffs and a plunging stock price.

The hard drives being recalled are part of the WD Cavair series. They were made between Aug. 27 and Sept. 24 and have drive capacities between 6.4 gigabytes and 20.5 gigabytes, the company said.

Consumers who purchased computers in the past month can check specification sheets on their machines to see if they include a Western Digital drive, officials said. The company’s web site,, offers a software program that can be downloaded to identify affected products.