Cisco Systems is hoping that taking virtualization to the data center will open up a whole new market for the company, huge cost savings for customers, and impinging on the turf of two tech giants it formerly counted as partners. Well, maybe that last one wasn’t intentional, indeed, Cisco downplayed it on its corporate blog.

But analysts and journalists saw the new product announcement as a clear shot across the bow at former partner Hewlett Packard and IBM in the war to bring virtualization to corporate data centers. Some analysts also called it a “big risk” since Cisco doesn’t know much about the server business. Meanwhile, GigaOm asks the question of whether more and more cloud computing and virtualization is saving customers money at the expense of IT jobs.

Will it be a really small netbook or just a really big iPhone? That’s what everyone wondered last week, as the Apple rumor mill presaged a new device to bridge the divide between a laptop and a phone. Lenovo continues to blur the line this week with teasing images of something called a “Pocket Yoga.” Check out the last picture on this link. Sure, my laptop doesn’t fit in my pocket but this one barely fits. It reminds me of products that try to do too much and please no one. Time will tell if big phone/tiny computer devices fulfill some great consumer desire or just prove to occupy a no-man’s land of consumer spending. Let us know your predictions in the comments...

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From Silicon Alley Insider, Feb. 4, 2009:

Times are tough for Cisco Systems (CSCO), but things could have been worse. In reporting earnings, the company beat analyst expectations despite a 7.5% y/y slump in sales.

Key Stats:

• Q2 Revenue: $9.1 Billion vs $9.00 billion consensus
  
• Q2 EPS: $0.32 vs $0.30 consensus

Cisco's stock was up 1.4% after hours. Stay tuned for LIVE analysis of Cisco's earnings call.

For more coverage, go to SAI.

If there are two Web companies that make Yahoo look like it’s got its act together, they are AOL and IAC. And both had ugly fourth quarters. January doesn’t look much better as IAC head Barry Diller said that display ads could be down as much as 50% this month, that after a 19% drop in advertising revenue in the fourth quarter. The bad news at IAC’s Ask.com prompted Henry Blodget to call for more Google estimate cuts. Google ads may not fall, but growth of 17% is going to be hard to pull off in this ever-worsening ad market, he argued.

We barely had time to absorb all that bad news before TimeWarner came roaring out with its own disastrous earnings, particularly in the AOL unit. Revenue fell 23% from a year ago, and the division wrote down $2.2 billion associated with acquisitions no longer are worth their purchase price. Can anyone say Bebo?

Then there was this odd gem from the earnings call: Google has exercised its right to make Time Warner repurchase Google’s stake in AOL or take AOL public. Might this force the kind of deal among the Microsoft-Yahoo-Google triangle of all talk but no action?...

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From Silicon Alley Insider, Jan. 15, 2009:

Anemic global demand for PCs is taking its toll on chip-maker Intel (INTC): The company reported today net income of $234 million, down 90% from a year earlier.

EPS was 4 cents a share, in line with estimates. Revenue was $8.2 billion, down 23 percent, also in line.

No hard forecasts from Intel: The company said the economy makes it difficult to predict demand, but it's assuming about $7 billion in first-quarter sales. That's below consensus estimates of $7.28 billion.

Tough numbers, but not as bad as feared: The stock is up 1.8% after hours.

See also from SAI:
Dell Loses More Market Share In Q4
Apple's U.S. Mac Shipments Grow In Q4 While PC Market Shrinks

From Silicon Alley Insider, Jan. 7, 2009:

Intel said that the Q4 results it announces on January 15 will be worse than expectations it provided in November. The company says to blame "further weakness in end demand and inventory reductions by its customers in the global PC supply chain" for revenues that will be around $8.2 billion, down 20% quarter over quarter and down 23% y/y.

Full release: ... Click here for the full release.

For more news, go to SAI.

Between MacWorld and the Consumer Electronics Show, investors (and reporters) can usually count on January to start out with a bang. But this year, Steve Jobs isn't attending MacWorld. And CES? Well, how exciting is a show about high priced gadgets, when no one has any money to spend.

But never fear: My guest Paul Kedrosky joined me to tell investors what he thinks the unsexy but potentially lucrative CES trend will be. Also, he weighs in on today's Sony drama.

Plus, click "more" to embed this video.

It's not a day in the markets these days without a 400-point swing up and down, or maybe down then up, or maybe all of the above. We asked TechTicker contributor and noted author and investor Andy Kessler what he thought of tech stocks and the markets in general now. Always colorful, he said tech companies were going to "barf" their fourth quarter earnings. But once the market gets past that, good news: There's still no leveraged balance sheets in tech.

More bullish than some, Kessler thinks tech could recover in 2009 if you pick stocks wisely.

While New York is obsessed with the drama on Wall Street, Main Street America is much more concerned with oil prices and the housing market, says Seagate CEO William Watkins.

Watkins was largely upbeat about Seagate's prospects because of the growth of digitized content, while conceding the credit crunch is hitting IT spending at the enterprise level, as Dell suggested today.

But Watkins reiterated the company's guidance for the current quarter and said the December quarter "will be even better than September and nothing now would [dissuade] us from that viewpoint."

See the accompanying video to see Seagate's newest 500 gigabyte external drive and hear Watkins views on the following issues:

• The reported bidding war over SanDisk, and whether Seagate might enter the fray.
• Competition from solid-state drives and Intel's entry into that field.
• Seagate's move from the NYSE to Nasdaq.
• Why the Street is undervaluing Seagate's stock, which tumbled anew Tuesday.

Throughout 2008, technology stocks have largely failed to live up to their billing as a "safe haven" amid the credit storm. Even after Wednesday's bounce, the Tech Select SPDR (XLK) is down nearly 14% year-to-date, worse than the bank-ridden S&P 500.

But that is no reason to give up on the sector and bargains abound, says James Altucher, managing director of Formula Capital, author and founder of Stockpickr.

In the accompanying video, Altucher makes the case for three tech stocks: ValueClick, QLogic and Harmonic.

None of these three names get a lot of attention from the press, but they also share characteristics that should command investors' attention: solid cash holdings, no debt, and relatively low valuations.

Altucher goes over the particulars for each and also discusses why he believe ValueClick's decision this week to tender for million of deep out-of-the-money employee stock options is a bullish signal.