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Thu, May 02, 2002 - Page 21 News List

IBM hopeful for a return in Web capital spending

AP , LOUISVILLE, KENTUCKY

IBM Corp's chief executive told shareholders Tuesday that Big Blue stands ready to reap the benefits of the coming boom in business Internet spending, provided it happens.

"This is IBM's franchise. The opportunity that results from this industry shift is ours to lose," an upbeat Samuel J. Palmisano said to about 400 investors gathered for the company's annual meeting.

IBM was widely chided for having missed the Internet boom in the late 1990s, an assertion that the company later turned around and used to its advantage, when the dot-com bubble burst.

Palmisano said IBM's deft use of security technology, networking and its giant services arm were the right tools for the new wave of emerging Internet devices.

IBM also increased its quarterly dividend by a penny to US$0.15 a share and boosted its stock repurchase authorization by US$3.5 billion.

The shareholders meeting signaled the leadership transition at Big Blue. IBM chairman Louis V. Gerstner presided, but it was Palmisano, his successor as chief executive, who outlined business strategy.

The retiring Gerstner, who will remain IBM chairman through the end of 2002, said he did not intend to remain on the company's board after his retirement.

Shareholders overwhelmingly defeated four proposals opposed by IBM. One attempted to alter accounting practices to prevent IBM executives from reaping extra pay for earnings made by pension funds.

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