Economy check

February 26, 2009

It’s the question of the moment in the technology world: have we hit bottom?

Tech execs appeared at a bunch of investor events this week and gave their best guess on what’s going on in this murky economy of ours. Some said things seemed a bit better, while others said visibility is as bad as ever. Here’s a collection of their comments:

Yahoo Chief Financial Officer Blake Jorgensen, who is leaving the company, said advertisers are “in shock” at the moment because of the economy, but cited the superior return on investments that they get online compared with traditional marketing mediums.

Cisco Chief Executive John Chambers said most people seem to expect the economic downturn to last “well into 2010″ but he is more optimistic and sees business conditions beginning to recover around the end of 2009.

Intel Chief Executive Paul Otellini said, “You’re starting to see a pattern of purchases emerge again that’s more predictable. I’m not saying we know where the bottom is or that we’ve hit the bottom (but) the predictability is starting to come back into the system.” He added, “I think you have seen the global shock and now people are starting to figure out how to work out of it.”

Applied Materials CFO George Miller Davis was asked whether things might be stabilizing at a low level in the chip equipment side of the business. “It’s hard to make that call yet because the falloff that everybody was reacting to happened so quickly and not only did it roll through the broader customer base far more quickly than we’d ever seen … I think everybody had to completely redo their sense of what their near-term forecast was. I think it’s premature to try and call a bottom.”

On a more positive note, Miller Davis was hopeful about the solar business and the new stimulus package, which provides a 30 percent investment tax credit for renewable energy and conservation. “I think the stimulus package and the investment tax credit actions are very important… for the U.S. to be relevant you’ve got to get the utilities bringing scale to investment in this area,” he said. “I think with the Obama administration coming in you have a real change and a real shift in the tone … we at least now have the investment tax setup … I think things are going to really shake loose over the next 2 to 3 years. You’re going to see some very big things happen. “

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