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Top tech stories of 2013: Big Brother, wearables, and the struggles of aging tech giants

Marc Ferranti | Dec. 10, 2013
Politics collided with the world of technology this year as stories about U.S. government spying stirred angst both among the country's citizens and foreign governments, and the flawed HeathCare.gov site got American health-care reform off to a rocky start.

Dell opens new chapter as private company

When Dell announced in February that the company planned to go private, founder Michael Dell said the move was necessary to turn around the company's flagging fortunes. Fierce competition in the PC market had curbed profit for years, and the idea was that free of the scrutiny of Wall Street, the company would have the breathing room to better execute its strategy to focus on high-margin products and services and refresh its push into the midmarket. But first, so-called "activist investor" Carl Icahn swooped in and scooped up shares, insisting that Dell's offer of $13.65 per share was too low and that Michael Dell should be ousted. What followed was a nasty public battle to win over shareholders. After several shareholder vote postponements, Michael Dell prevailed by sweetening his offer to a total of $13.88 per share, or about $25 billion overall. While competition against the likes of Hewlett-Packard and Lenovo won't get easier, the company that Michael Dell founded three decades ago in his college dorm has a new lease on life.

Yahoo buys Tumblr

Yahoo's $1.1 billion deal to buy social networking and microblogging site Tumblr was not the biggest tech acquisition of the year but it marked the boldest move that Marissa Mayer has yet taken to reinvent the company. Yahoo's success as an Internet portal in the '90s has been overshadowed by competitors, including Facebook and Google. The 38-year-old Mayer, a star at Google, was hired as Yahoo CEO in 2012. Her predecessor, Scott Thompson, had taken the reins from founder Jerry Yang but lasted just four months before resigning amid controversy over a false claim about his college degree in a regulatory filing. The combination of Mayer's youth, programming chops, reportedly imperial management style, and all-American blond looks has fascinated industry watchers, and a jump in the company's share price during her tenure thus far has given her something of a honeymoon period. Mayer herself, though, has acknowledged that the stock has been lifted by investments made years ago, which include a stake in Chinese Web giant Ali Baba. Meanwhile, revenue and profit shrank for Yahoo itself in the quarter ending in September. At some point, the company needs to show that Mayer's strategy of expanding content such as news while boosting the company's tech infrastructure is paying off.

Twitter IPO a sign of the times

Twitter's November initial pubic offering was three bellwethers in one: a coming of age for the microblogging site; another milestone in the rise of social networking as a major force in contemporary culture; and a signal that a hot stock market was igniting the tech IPO market once again. After setting an IPO price of $26, Twitter shares shot up to $50.09 on its IPO day before closing at $44.90. The share price gives Twitter a $24.5 billion market capitalization, not bad for a company with no profit. Investors are banking on the company's ability to use the cash infusion from the IPO to build up its infrastructure and invest in mobile and video technologies. Twitter is just the marquee name on a roster of other tech companies that have gone public lately, riding a stock market that has fueled a 25 percent rise for share prices of Nasdaq tech companies so far this year. But the big question for Twitter is how it will be able to best monetize its millions of users.

 

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