Xerox to cash in on Palo Alto Research Center

Doug Way dway at riskmetrics.com
Wed Dec 12 18:06:21 UTC 2001


A somewhat interesting article...


http://biz.yahoo.com/rf/011211/n11136591_3.html



Tuesday December 11, 7:59 pm Eastern Time

Xerox to cash in on Palo Alto Research Center

(UPDATE: Adds details and comments)

By Andrea Orr

PALO ALTO, Calif., Dec 11 (Reuters) - Xerox Corp. (NYSE:XRX - news), the troubled office equipment maker, on Tuesday said it is in talks to sell part of the Palo Alto Research Center (PARC), its legendary innovation lab often viewed as the birthplace of the personal computer.

The decision to sell a piece of the famed innovation lab comes at one of the most trying times in the history of Xerox, where slumping sales and five straight quarters of losses are forcing the company to look at any asset that could bring in some badly needed cash.

A spokeswoman for Stamford, Connecticut-based Xerox declined to name any of the investors who were looking at PARC, nor would she speculate on how much money a partial sale might generate.

She stressed that Xerox would retain a ``significant'' stake in Xerox PARC, where it says the laser printer, the first commercial mouse, and the point-and-click graphical user interface which made computers far more user-friendly, were all invented.

Today, the 270 people employed at Xerox PARC are focusing their efforts on advanced wireless and mobile technologies, but its recent innovations, like a product it calls ``electronic paper,'' have been more marginal than some of its early breakthroughs.

The high-tech world is also a much different place today. Most major technology companies have now their own labs in-house, and Xerox PARC is not one of the biggest, and is often not considered particularly influential.

Curtis Carlson, president of the research group SRI International in nearby Menlo Park, Calif., said SRI, with a staff of 2,000, is many times the size of Xerox PARC, and still not particularly influential, in the scheme of things.

``How many places are out there doing the kind of research we do? One thousand? Ten thousand? We are both tiny,'' he said.

If Xerox PARC's illustrious history has won it a place in the heart of Silicon Valley, it has remained much further from its financial center, and many critics are wondering if Xerox will have much luck cashing in on the property.

FUMBLING THE FUTURE

The research lab has a long history of putting in all the hard work behind some critical inventions, only to drop the ball when it came time to sell them -- most famously in the early 1980s when a visitor named Steve Jobs observed an early version of the graphical user interface.

As the story goes, it was that visit to Xerox PARC that inspired Jobs to write easy-to-use software that helped his Macintosh computer become a smashing success and ushered in the PC age.

Rob Enderle, an analyst with Giga Information Group, said Xerox PARC has some valuable intellectual property, but is trying to attract investors at a time when most people are wary of putting money into technology.

``Investors are incredibly risk-adverse right now and Xerox PARC has a reputation of being an organization that came out with a lot of great ideas that other people made money on,'' said Enderle.

``If you are asking people to pony up the money, they will have to believe that Xerox PARC is different than it was then.''

Xerox's missteps with PARC became so infamous that they were chronicled in a 1988 book, ``Fumbling The Future: How Xerox Invented, then Ignored, the First Personal Computer.''

On Tuesday, the author of another book about Xerox PARC suggested that the lab had lost its mystique and questioned why anyone would want to by the lab itself when they might be able to hire its best engineers for a lot less money.

``It used to be unique. It's not unique anymore because a lot of people looked at it and said, 'We can do something like this,''' said Michael Hiltzik, author of ``Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age.''

``Why would you invest in a place like this if you can just hire these people yourself? It's not like there is a lot of capital equipment or lab equipment that you can't reproduce. It's brainpower.''




More information about the Squeak-dev mailing list