Rather than take the money and run or watch it burn a hole in their pockets, a number of Internet companies have put their cash to work to build up their businesses. Investors' first reaction was to sell stock of the acquirers and buy the acquired.
TheStreet.com Internet Sector
index was up 1.03, or 0.1% at 1141.29. The sector -- and our own
James Cramer -- were focused on three deals.
The largest was the $4.2 billion in stock that
agreed to pay for
. Kana, which provides online customer-service software, was down 20 7/8, or 8%, at 238 in early trading, while Silknet, which supplies customer-service software to businesses, was up 38 1/2, or 28%, at 177. Kana will pay 0.83 share for each share of Silknet.
, which provides Web content delivery, was down 15 5/16, or 6.5%, at 219 11/16 after it entered a $2.8 billion stock deal to acquire streaming media company
. The deal calls for Akamai to issue 9.3 million shares for all outstanding shares of InterVU. InterVU was up 4 9/16, or 3.9%, at 121 9/16.
, which makes systems that manage Internet traffic flow, said it would buy privately held
in a deal valued at $415 million. Visual Networks was down 9 7/8, or 16%, at 53 1/2.
Elsewhere, a couple of Net bellwethers were also in the news.
was down 2, or 3%, at 76 9/16 after the company
said that it would sell up to 600 million of euro-denominated convertible subordinated notes that will be due in 2010.
was down 15/16, or 1.6%, at 56 7/8.
, a joint venture between America Online and
, made a pact with
to test and develop Internet-compatible mobile services.
AOL Europe also said it would test its WAP gateway for Web-compatible cell phones and SMS messaging and Mail by Phone services with RTS Wireless.
was up 1 1/8, or 5%, at 22 15/16. The online trading outfit said that it would launch
, a joint venture of E*Trade,
LG Investment & Securities
. E*Trade Korea is the seventh E*Trade-branded site outside the U.S.
In analysts' action,
Banc of America
raised its price target on
to 250 from 225. Ariba, which makes software that lets businesses buy supplies over the Internet, was up 10 13/16, or 6%, at 196 1/4 on the news. Banc of America has not done underwriting for Ariba.