The 5 Dumbest Things on Wall Street: Sept. 3

5. Tech Sector Catches Case of Innovator's Block

What we have here is a failure to innovate.

It seems the tech sector's leading companies feel that blazing the trail of innovation -- the very thing that got them to the top of the game in the first place -- just ain't the way to go anymore. No, let's forget all that. It's just so much trouble! And so much work!

Instead, apparently they've decided it's time to kick back and let all that money they've built up do the working for them.

Recent takeover activity from the likes of HP ( HPQ), Intel ( INTC), IBM ( IBM) and many others reveals an inexcusable lack of innovation that's working itself through the sector with the alacrity of the swine flu virus.

With so much money to toss around, it's embarrassing that these companies are unable to fund their own research & development. Waiting for another company to create something worth buying is among the most expensive and inefficient ways to grow a business.

Just look at the price tags: Intel is spending $7.7 billion for McAfee ( MFE) and $1.4 billion for Infineon's ( IFX) wireless-chip business. HP is now offering $2.06 billion for 3Par ( PAR) (double the original deal with Dell ( DELL), which wisely dropped out of the auction), and Cisco ( CSCO) is reportedly looking to grab Skype before an IPO that is expected to value eBay's ( EBAY) Internet calling unit at $5 billion.

There also are plenty of smaller deals in the making, such as IBM's $480 million purchase of marketing software company Unica ( UNCA) and VMWare's ( VMW) $100 million takeover of Integrien, which makes systems monitoring software.

These companies are sending a pretty clear message that they can't -- or won't, or perhaps don't remember how to -- do it on their own. Investors might consider sending their own message, accordingly.

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