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INX Reports Second Quarter Results and Restatement of Certain Prior Periods. ...................... 1
Radio Frequency Systems Exhibiting at IBC2009 ...................................................................... 2
Tracing metal.(WORKSHOP) ..................................................................................................... 3
HIGHLIGHTS - Gen. Skrzypczak to Be Dismissed? ................................................................... 3
Triads in services outsourcing: bridge, bridge decay and bridge transfer *.(Report) ................... 4
Air Canada launches application for iPhones and iPod touches. ...............................................18
WTN CALENDAR .....................................................................................................................18
Business Wire Recap ................................................................................................................18
Notice to Investors of MCK, HBOC, HS, CPQ, CURE, SFSK, SEGU, PCTY and FIBR
Concerning Shareholder Lawsuits by Berman, DeValerio & Pease LLP ...................................19
Upstream Biosciences Seeks Licensors or Acquirers for Drug Discovery Portfolio and Cancer
Diagnostic Platform ...................................................................................................................20
A resolution to amend the Standing Rules of the House of Representatives. ............................21
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INX Reports Second Quarter Results and Restatement of Certain Prior Periods.
Wireless News, August 19, 2009
INX Inc. announced financial results for its second quarter ended June 30.
In an August 13 release, INX reported that for the quarter ended June 30, compared to the same period
in the prior year:
- Total revenue decreased 8.8 percent to $58.3 million from $64.0 million.
- Product revenue decreased 9.7 percent to $46.5 million from $51.4 million, with gross profit margin on
product revenue increasing to 20.6 percent compared to 19.0 percent.
- Service revenue decreased 5.3 percent to $11.9 million from $12.6 million, with gross profit margin on
service revenue decreasing to 26.5 percent compared to 31.7 percent. Gross profit on total revenue
decreased 7.5 percent to $12.7 million compared to $13.8 million, with gross profit margin on total
revenue of 21.8 percent, compared to 21.5 percent.
- Operating income was $400,000 compared to operating income of $1.9 million.
- Net income was $319,000 compared to net income of $1.1 million.
- Diluted net income per share was $0.03 compared to diluted net income per share of $0.13.
- Non-GAAP (see attached schedule which reconciles non-GAAP to GAAP) net income was $969,000
compared to $2.1 million; and non-GAAP diluted earnings per share was $0.10 compared to $0.25.
For the six months ended June 30, compared to the same period in the prior year:
- Total revenue decreased 6.4 percent to $115.7 million from $123.6 million.
- Product revenue decreased 10.7 percent to $91.0 million from $101.9 million, with gross profit margin on
product revenue increasing to 19.8 percent compared to 18.6 percent.
- Service revenue increased 13.6 percent to $24.7 million from $21.7 million, with gross profit margin on
service revenue decreasing to 28.4 percent compared to 31.9 percent.
- Gross profit on total revenue decreased 3.4 percent to $25.0 million compared to $25.9 million, with
gross profit margin on total revenue of 21.6 percent, compared to 20.9 percent.
- Operating loss was $25,000 compared to operating income of $3.6 million.
- Net loss was $183,000 compared to net income of $2.1 million.
- Net loss per share was $0.02 compared to diluted net income per share of $0.26.
- Non-GAAP (see attached schedule which reconciles non-GAAP to GAAP) net income was $1.1 million
compared to $4.0 million; and non-GAAP diluted earnings per share was $0.12 compared to $0.49.
James Long, INX's Chairman and CEO, said, "Customer demand during the second quarter improved
compared to the first quarter, but some of the improvement in demand was offset by customers delaying
data center projects due to the lack of availability of Cisco's new Unified Computing System. This was
what we had expected, and revenue for the quarter came in above the mid-point of our range of
guidance. We executed well in a number of key areas during the quarter in spite of continued difficult
market conditions. We continued to position the company to take advantage of the change in data center
technology that is occurring, and the increasing trend towards cloud computing and data center
virtualization, which we believe represents a substantial opportunity for INX. Cisco's recent
announcement of their Unified Computing System and VMware's recent announcement of their new
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vSphere 4 virtualization software offer evidence of the technology transformation that INX has been
positioning for over the past year. During the second quarter we continued to take steps to control costs,
while balancing cost-cutting with positioning the company to take advantage of opportunities. We
continued to invest in our data center practice, investments that we believe will pay off in the future as
these recently announced new products begin to create demand."
Subsequent to the issuance of the unaudited interim condensed consolidated financial statements as of
and for the three-month periods ended March 31, and 2008, the Company determined that those
condensed consolidated financial statements contained (1) a computational error related to the services
revenue accrual for the three months ended March 31, and (2) a classification error related to the
company's floor plan financing. The computational error resulted in the overstatement of services revenue
by $208, overstatement of selling, general and administrative expenses by $21 for the impact on sales
commission expense, and an overstatement of income tax expense by $1 for the impact on the Texas
Margin Tax accrual.
Overall the computational error understated net loss from continuing operations and net loss as originally
reported by $186 or $0.02 per share. The classification error related to amounts payable under the
Company's floor plan financing arrangements with a third party financing company that is not a supplier.
The floor plan financing balances were previously classified as trade accounts payable, and the related
cash flows were reported as operating cash flows. The presentation of these non-interest bearing
balances has been corrected and separately classified as "Floor Plan Financing," on the Balance Sheet
and the related cash flows have been reclassified as financing cash flows. The classification error had no
effect on the previously reported Statements of Operations.
The December 31, 2008 balance sheet presented herein reflects the reclassification of floor plan
financing described above. These restatements are more fully described in a Form 8-K filing that the
company filed with the Securities and Exchange Commission.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
DIALOG(R)File 9:Business & Industry(R)
(c) 2009 Gale/Cengage. All rights reserved.
Radio Frequency Systems Exhibiting at IBC2009
Wireless News, Aug 19, 2009
Anonymous
Radio Frequency Systems (RFS) is ready to support the ramp up of next generation digital broadcast
services in Europe with additions to its comprehensive portfolio and a dedicated assembly facility in the
UK.
On the occasion of IBC2009 in Amsterdam, September 11-15, RFS will unveil two products: A new line of
filters and combiners plus a range of connectors. These "built-for-broadcast" additions round out RFS'
portfolio of premium solutions.
The centerpiece of RFS' exhibit is a new coaxial combiner bandpass filter line. It has been specially
designed to sustain high peak power levels in DTV transmitters. By removing the power peak handling
limitation, broadcast operators can look forward to reduced tripping of systems.
The new, easy-to-install connector range is available for RFS' proven HELIFLEX Cables.
Also to be highlighted at IBC is RFS' suite of mobile TV antennas, designed for co-location at mobile base
stations; including the fully broadband, lightweight MTV-4, and the CTV series of compact multi-channel
antennas.
In 2009 RFS was honored with an Emmy Award, the US television industry accolade, for its work on
"adjacent channel combiners" for TV broadcasting. According to RFS, this technology has saved the
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industry millions of euros by making it unnecessary to deploy new systems in order to run digital and
analog signals concurrently during TV's digital switchover.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
DIALOG(R)File 15:ABI/Inform(R)
(c) 2009 ProQuest Info&Learning. All rights reserved.
Tracing metal.(WORKSHOP)
Finishing, July-August, 2009
The 797 VA Computrace can carry out trace metal analyses with the same or better sensitivity for a
fraction of the cost of an AAS or ICP instrument. With low operational costs, small amounts of reagents
and a small footprint, the 797 VA Computrace makes trace analysis easy and fast using the standard
addition method typically used in these analyses with detection limits down to ppt.
In addition, total metal concentration and speciation can be determined with the computer-controlled
software system. Curve evaluation and automated dispensing options make the 797 VA Computrace
system a valuable tool to distinguish the different oxidation stages of metal ions or to differentiate
between free and bound metal ions as well as to specify the biological availability of heavy metals in
environmental analysis.
The 797 VA Computrace makes voltammetry an essential tool for environmental analysis. Comparable
insights can only be gained by spectroscopy after complicated separation of the metal species. Its
compact size means that the 797 VA Computrace system can also be used in mobile laboratories.
Samples with high ionic concentration are no problem for voltammetry.
The 797 VA Computrace can be used to determine trace quantities of various organic compounds by
voltammetry in organic chemistry and pharmaceuticals. Some special anions, such as sulfide, nitrite and
nitrate, can also be determined by voltammetry.
DIALOG(R)File 16:Gale Group PROMT(R)
(c) 2009 Gale/Cengage. All rights reserved.
HIGHLIGHTS - Gen. Skrzypczak to Be Dismissed?
POLISH NEWS BULLETIN, August 20, 2009
The President and the Defence Minister will be discussing the matter of Gen. Waldemar Skrzypczak, who
criticised the Defence Ministry for its policy concerning equipment purchases. Skrzypczak is expected to
be dismissed, but politicians are reluctant to confirm it due to the officer's popularity, - Industrial Output
Fell By 4.6%
According to the Central Statistical Office (GUS) report, industrial output in July rose by 2.8 percent in
relation to the June results and fell by 4.6 percent in comparison to last year. The figures are a
disappointment for analysts. Nevertheless, it is expected that the results should improve by 1 percent in
August and in the last quarter of the year the overall dynamic should already be positive. - NBP Issuing
Data on Investment
Foreign direct investment totalled EUR962m in the H1 of 2009. The NBP has not officially published any
data as yet. In June the market noted a drain of EUR192m from foreign funds, while a year earlier
EUR65m had been invested.
DIALOG(R)File 20:Dialog Global Reporter
(c) 2009 Dialog. All rights reserved.
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Triads in services outsourcing: bridge, bridge decay and bridge transfer
*.(Report)
Journal of Supply Chain Management, July, 2009
INTRODUCTION Services outsourcing is more ubiquitous than ever (Grossman and Helpman 2002; Roth
and Menor 2003; Amiti and Wei 2005). A recent CAPS Research study on services outsourcing (Tate and
Ellram 2006) showed that more organizations outsource services than those that outsource direct or
indirect materials. Services outsourcing is expected to expand in the future--in the same CAPS study,
companies expected the outsourcing of services to become even more pervasive.
Yet, popularity does not guarantee good results. The outcome of services outsourcing is mixed at best
(Bait-heiemy 2003; Aubert and Croteau 2006). According to a DiamondCluster report in June 2005, the
number of buyers prematurely terminating an outsourcing relationship has doubled to 51 percent while
the number of buyers satisfied with their providers has "plummeted from 79 percent to 62 percent"
(Weakland 2005, p. 2). One such example is Deli Inc., which outsourced its technical support for business
customers to a supplier in Bangalore, India, in 2001, and not long after, in 2003, moved it back to the
United States (InfoTech 2003; Aubert and Croteau 2005). Other companies such as AT & T, Capita! One,
and J. P. Morgan Chase have also taken their outsourced services functions back in house (Overby
2003, 2005; McLaughlin and Peppard 2006; Pfeffer 2006). A 2005 Gartner study predicted that 60
percent of organizations that have outsourced services functions would see significant numbers of
frustrated customers switching to competitors (Chon 2005). As CNN.com columnist Jeffrey Pfeffer (2006)
puts it, "a penny saved, a customer spurned" (p. 1).
Why have there been so many failed attempts in services outsourcing? In general, the existing literature
in services outsourcing has focused on two key questions--"should we outsource" and "what to
outsource." The former has generally been addressed by economists interested in the impact of services
outsourcing on the national economy (Fixler and Siegel 1999; Amiti and Wei 2004, 2005; Gorg and
Hanley 2004). The latter was studied by scholars looking for the key drivers of outsourcing decisions
building on transaction cost economics (TCE) (Williamson 1975; Jensen and Meckling 1976; Milgrom and
Roberts 1992; Lacity and Willcocks 1995; Ang and Straub 1998; Williamson 2008), core competence
theory (CCT) (Venkatesan 1992; Quinn and Hilmer 1995; Jennings 2002) or the resource-based view
(RBV) (Wernerfelt 1984; Harrigan 1986; Barney 1991, 2001; Jennings 2002).
Although these scholars have addressed their questions well, a careful examination reveals a serious
omission. The question of how to manage the process of services outsourcing is missing. An implicit
assumption is if we followed the theoretical guidelines of "what should we outsource," we would be fine
after the outsourcing. However, in the business world, this simplistic view has not been matched by the
reality. In this study, we intend to examine the process of the relational structures involved in services
outsourcing--"What was the relationship structure prior to, during, and post the services outsourcing?"
and "What are their performance implications?" We will endeavor to understand better, using a social
network lens, the shifting of relationship structures among the services supplier, the buyer, and the
buyer's customer, and suggest better strategies for managing the relationships from the buyer's
perspective.
This study has profound theoretical and managerial implications. First, it breaks away from the "once and
for all" static view of the services outsourcing approach and delves deeper into the dynamics of the
underlying relationship structures at different stages of the services outsourcing process. Second, it
extends social network theory into the services outsourcing context. As such, it offers insights not
available in other outsourcing theories such as TCE, CCT and the RBV. The explanatory power of the
social network theory and the insights it offers also lends itself to the very prevalent and pragmatic
managerial problems we are facing today.
In the following sections, we will first explore the nature of services and then discuss relational structures
in terms of how services outsourcing is different from manufacturing outsourcing. Next, we will present
social network theory as a new lens to examine the process and consequences of structural shifting. We
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will then synthesize the literature on services operations and the structural hole concept and present our
conceptual model linking each stage of the services outsourcing process with a set of unique relationship
structures among the services buyer, its supplier and its customers. We will close with a discussion of
managerial implications, limitations of the present study, and directions for future research.
SERVICES AND SERVICES OUTSOURCING
Services have one enduring characteristic--the customer interacts with the service provider during the
process of delivery (Gaither and Frazier 1999; Sampson 2001; Sampson and Froehle 2006). For
instance, Sampson and Froehle (2006) reviewed the services literature and highlighted this interaction
and the role of customer inputs in this interaction. Chase and Aquilano (1977, p. 17) state, "the main
feature that sets a service system apart from a manufacturing system is the extent to which the customer
must be in direct contact." In this regard, the services we are referring to in this study are in fact "pure
services" based on the terminology of CCT (Chase and Aquilano 1977; Kellogg and Chase 1995). It
refers to the operations where "major production is carried out in the presence of the customers" (Chase
1981, p. 701). Compared with other types of services such as "mixed services" and "quasi-manufacturing
services," pure services emphasize the importance of the real-time interaction that occurs between the
service providers and the customers. Mixed services "commonly involve a mix of face-to-face contact and
loosely coupled back office work" (Chase 1981, p. 701), while quasi-manufacturing "entails virtually no
face-to-face contact" (Chase 1981, p. 702). The outsourcing of these other types of services shares
characteristics common to manufacturing outsourcing and is not the focus of this study.
Services outsourcing is typically defined as the conscious choice of replacing internal service functions
with the use of external agents to perform one or more service activities. It seems then services
outsourcing should be similar to manufacturing outsourcing: in services outsourcing we just outsource
intangible goods, such as customer service; while in manufacturing outsourcing we outsource tangible
goods such as parts and raw materials. Contrary to our initial intuition, there are fundamental differences
underlying the two types of outsourcing arrangements and it is important to understand these differences.
Hewlett-Packard (HP), one of the world's top manufacturers of notebook PCs, was outsourcing its
manufacturing in the 1990s. When a retail shop ordered Pavilion zd8000 laptops, this shop interacted
with HP but had no contact with the suppliers. It was HP that interfaced with the suppliers--an assembly
supplier in Taiwan, a graphic chip supplier in Markham, Ontario, liquid crystal display screens and
memory chips suppliers in South Korea and Taiwan, and a hard-disk drives supplier in Japan (Dean and
Tarn 2005). In this type of manufacturing outsourcing arrangement, the customer is not in direct contact
with any of HP's suppliers. HP, acting as a go-between or bridge, controls the direct information and
product flows between its suppliers and its customers prior to, during, and after the outsourcing.
Such relational dynamics change when it comes to a services setting. Besides outsourcing its
manufacturing operation, HP also outsourced some service work--a portion of its software support
activity. In this case, the customer service representatives from the supplier company were in direct
contact with the customers of HP when offering their services. HP had no ready measure to control this
interaction while its suppliers delivered their services to HP's customers.
Figure 1 depicts these two different structural arrangements. The linear diagram on the top represents a
manufacturing setting wherein manufacturing buyers can effectively control the interaction between its
suppliers and its customers. The triangular diagram on the bottom of Figure 1 depicts the services setting
where the services supplier and the buyer's customer contact each other directly. The triadic relationship
structure among the services buyer, services supplier and buyer's customer in Figure 1 serves as the
foundation of our study. Specifically, we will frame services outsourcing from the lens of social network
theory and examine the shifting of the triadic relationship structures in a services supplier network.
(FIGURE 1 OMITTED)
THE SOCIAL NETWORK PERSPECTIVE
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A network is made of elements and the links that connect these elements (Borgatti and Li 2009). When
these elements represent "agents" that are able to make volitional choices, such as individuals or
organizations, the network is called a social network (Wellman and Berkowitz 1988; Burt 1992; Watkins
2003; Borgatti and Li 2009). Our model builds on two key perspectives from the social network literature:
social capital {Coleman 1988a, b, 1990) and the structural hole concept (Burt 1992, 1997).
Social Capital and Social Networks
Social capital derives from an agent's relationship with other agents in the same network through which
the agent gains access to resources (Coleman 1990). One particular type of relational arrangement is
called a structural hole, wherein an agent works as a bridge between two other agents or networks with
no links between them (Burt 1992, 1997; Gargiulo and Benassi 2000).
The most prominent growth area in social network research has been the study of social capital (Borgatti
and Foster 2003). Bourdieu (1985) first noted the positive effects for an individual who is tied to a group of
other individuals. Other scholars (Coleman 1988a, b; Baker 1990; Schiff 1992; Portes 1998) continued
this research stream by considering power and influence associated with being in social networks. Later,
Burt (1992, 1997) elevated the ideas of social capital in a novel direction. Instead of emphasizing the
benefits of being closely associated to a social group, he studied the leverage gained when individuals
span across structural holes among social networks. His concepts stressed the advantage of bridging two
disconnected networks.
Structural Hole Concept
A structural hole is defined as the lack of connections between agents or groups that are not directly
linked together (Burt 1992, 2000a). The structural hole concept is closely related to the concept of a
bridge. A bridge is the agent that is positioned on a structural hole. In the absence of a connection
between two isolated agents, a bridge acts as a go-between and the gatekeeper of information.
The underlying premise of the structural hole theory is that the structure of the network is what offers an
agent the social capital. In other words, the structural position within a network is what determines the
dynamics among actors because social actors in some positions in the networks are better off than those
in other positions (Burt 1992). Specifically, social actors that occupy the bridge position enjoy brokerage
opportunities. Figure 2 offers a pictorial rendition of the structural hole and bridge concepts.
Figure 2 shows three agents. Agent B and Agent C are linked to Agent A but they are not directly linked
to each other. This lack of connection forms a structural hole. A structural hole "creates a competitive
advantage for an individual whose relationships span the holes" (Burt 2000a, p. 6). Agent A spans the
structural hole between Agent B and Agent C and is in the bridge position and reaps benefits that come
with this position.
(FIGURE 2 OMITTED)
Benefits of Bridge Position
Burt (2000a, b, 2002) explains the advantages that come with being a bridge. First, there is the
information benefit (Burt 1992, 2000a, 2002). Because a structural hole can be viewed as the gap
between two nonredundant agents or networks, agents who occupy the bridge position can benefit from
additional information from nonredundant sources. Second, there is the control benefit. Simmel (1955)
and Merton (1968) introduced the ideal type of people who derive control benefits from the structural
hole--the tertius gaudens or a third who benefits from brokering the connection between others (Burt
1992, 2000a). The bridge can negotiate and exploit information to its advantage (Burt 2000a; Zaheer and
Bell 2005).
Zaheer and Bell (2005) explicated further the advantages of the bridge. By accessing information from
unique parts of the network, the bridge can hear about the impending threats or opportunities before other
actors who are not in the bridge position. The bridge can also enjoy privileged information about the
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quality of possible exchange partners and potential allies (Powell and Smith-Doerr 1994; Uzzi 1996;
Zaheer and Bell 2005).
Bridge Decay and Bridge Transfer
Being a bridge may be a good thing, but it does not last forever. A firm's bridge position is not a
permanent state and is subject to change (Burt 2000b, 2002; Soda, Usai and Zaheer 2004). First, the two
agents that are otherwise isolated by the bridge can begin making connections and reduce the leverage
of a bridge, creating the state we call "bridge decay." This happens once the agents on each side of the
structural hole are able to link directly and the connection to the agent that used to be the bridge becomes
redundant and loses its value (Johnson 2004). In fact, such bridge decay may be more prevalent than
one may realize. Burt (2001) observed that compared with other kinds of relationships, the bridge position
shows a faster rate of decay over time. Second, a bridge can willingly or unwillingly relinquish its position
to one of the other two agents and create a state we call "bridge transfer." Structurally, bridge transfer
happens if the existing structural hole is filled and one of the other two links is disconnected.
Bridge decay has implications for the stability of social capital. With the loss of bridge position, a social
agent also loses the advantage of social capital it once enjoyed. Therefore, it is seldom to the benefit of
agents who hold the bridge position to encourage others to join them in linking groups, because then they
become redundant and lose their value (Johnson 2004). This puts the burden on the social agent to make
extra effort to maintain the bridge position (Burt 2001). Even after the decaying of the bridge, the shifting
of the relationship structure is by no means over. This structural shifting is bridge transfer. Compared with
bridge decay, bridge transfer is rarely studied.
Figure 3 depicts the concepts of bridge decay and bridge transfer. During the initial stage for both bridge
decay and bridge transfer, Agent A is in the bridge position across the structural hole created between
two nonredundant agents, B and C. During the transformed stage, differences begin to emerge. In the
bridge decay scenario, Agents B and C establish a direct link with each other, effectively eliminating the
structural hole and nullifying Agent A's bridge position. In the bridge transfer scenario, Agent A loses its
connection with C while Agent B establishes its connection with C. Agent B is the new bridge now and
assumes the benefits of social capital brought by its position and power and influence in the network of
agents.
(FIGURE 3 OMITTED)
Triads in Services Supply Networks
Services outsourcing offers a unique context for studying how service supply networks evolve through
different stages of outsourcing. As mentioned before, in manufacturing, the buyer typically retains its
bridge position before and after the outsourcing. It often consciously creates barriers between the
suppliers and its customers, thereby continuing to act as an intermediary. When its bridge position is lost,
it is called "supply chain disintermediation" (Rossetti and Choi 2005). In a services context, however, the
buyer has no choice but to permit a supplier to directly interface with its customer. Building on Figure 3,
Figure 4 depicts these changes of network positions among supply chain partners. The network states of
bridge, bridge decay and bridge transfer describe the triadic structures before, during and post services
outsourcing.
(FIGURE 4 OMITTED)
Triad before Outsourcing: Buyer as Bridge
During the negotiation stage before outsourcing, two dyadic relationships exist, one between the buyer
and its potential supplier and another between the buyer and its customer. The buyer is positioned as the
bridge between the supplier and its customer, and thus the supplier and its customer lack a direct link to
each other.
Consider the case where a major computer company outsourced to a services supplier in India a call
center for its business customers. The service work entailed supporting a series of software tools used in
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supply chain operations. Before outsourcing, the internal IT team of this company was in direct contact
with its customers and provided the call center support. The same team also was involved in the selection
of the services supplier and thus was in contact with the prospective suppliers. At this stage, the
customers were not in direct contact with the potential services suppliers in India. Positioned as the
bridge, this buying company had full control of what information to share and how to share it with its
potential suppliers and customers. For example, this company could strategically deemphasize the
complexity involved in the application support tasks to the potential suppliers in order to negotiate a lower
price or higher service. It could also strategically emphasize the complexity involved in the application
support tasks to its customer in order to negotiate a better contract.
As shown in the top line of Figure 4, one might say the buyer is "central" in this triad (Bavelas 1950; Burt
1980; Borgatti and Li 2009). The buyer has access to information about the supplier's capability and
capacity and also maintains information on the customer's service performance requirements. As long as
there is a structural hole between the supplier and buyer's customer, the buyer can strategically control
the flow of this type of critical information. This leads us to the first proposition:
Proposition 1: Prior to services outsourcing, the services buyer acts as a bridge between the services
supplier and the buyer's customer and therefore enjoys information and control benefits associated with
the bridge position.
Triad during Outsourcing: Bridge Decay
The structure of our triad changes after the negotiation is done and when the supplier and the buyer's
customer are brought together. As we stated earlier, the key characteristics that separate services
operations from manufacturing operations is the direct contact between the services provider and the
customer (Chase and Aquilano 1977; Kellogg and Chase 1995). In a services outsourcing context, the
buyer has no effective measures to block this interaction and at the same time expect the supplier to
deliver services to its customers. While outsourcing agreements are implemented, the services supplier
comes in direct contact with the buyer's customer. As these two endues begin to interact with each other,
the bridge position of the buyer is gradually eroded. As the bridge position becomes diminished, the
leverages that the buyer used to have are weakened (Burt 2002). The buyer would not be able to control
how information flows between the supplier and its customers. Eventually, the buyer's bridge position is
no longer there and the triad would decay, as shown in Figure 4.
Proposition 2: Services outsourcing causes the buyer to lose its bridge position, leading to the erosion of
the information and control benefits it used to enjoy.
Once the services supplier and the buyer's customer begin to interact directly, a new relationship between
them would start to form. A critical question that emerges is how strong this new tie might be. We posit
that the strength of the new tie is influenced by the past relationship or experience between the buyer and
its services supplier. For instance, the buyer may have had prior experience with the supplier in another
functional area. Or, the supplier could have been subject to certain treatment from the buyer during the
supplier selection and negotiation process.
There are two major types of buyer-supplier relationships--adversarial and collaborative (Auster 1994;
Gulati 1998; Humphreys, Shiu and Chan 2001). An adversarial relationship is characterized by a
competitive price-driven arrangement (Lamming 1993), which is a common approach practiced in the
commodity market. On the opposite spectrum is the collaborative type of relationship, which has received
considerable academic attention (Monczka, Petersen, Handfield and Ragatz 1998). A collaborative
relationship is characterized by the close cooperation between a buyer and a selected group of suppliers
typically based on a long-term agreement. Trust and open communications are two characteristics
associated with the collaborative buyer-supplier relationship (Chen, Paulraj and Lado 2004). In a
collaborative relationship, the buyer and supplier would engage in frequent communication as part of their
daily routines.
When the buyer engages in services outsourcing and the supplier is entrusted to offer a consistent level
of services to its customers, it is reasonable to expect that the supplier will replicate the existing
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communication patterns with its new customers. Also, trust in a collaborative relationship tempers the
buyer's opportunism or the possibility of intentionally abusing its power of being the bridge. The result is a
more transparent information flow between the supplier and the buyer, and subsequently this type of
practice would spill over into the new relationship between the supplier and the buyer's customer
(Balakrishnan, Mohan and Seshadri 2008). Fewer "surprises" would occur in the resulting contractual
relationship among the supplier, the buyer, and the buyer's customer. A cooperative relationship between
the buyer and supplier before the outsourcing is expected to continue fostering trust and open
communication between the supplier and the buyer's customer. Similarly, an adversarial relationship
between the services supplier and the services buyer before the outsourcing arrangements would tend to
extend an adversarial relationship between the services supplier and the buyer's customers.
Proposition 3: How the new relationship is formed between the services supplier and the buyer's
customer depends largely on the type of relationship the buyer has established with the supplier prior to
bridge decay. A collaborative relationship between the services buyer and services supplier tends to
foster a collaborative relationship between the services supplier and the buyer's customer. An adversarial
relationship between the services buyer and services supplier tends to foster an adversarial relationship
between the services supplier and the buyer's customer.
The following example illustrates such a path dependent nature of a newly formed relationship. Aviva, a
British insurance firm, outsourced its software development and claims administrative services to three
supplying companies in India (Bhalla, Sodhi and Son 2008). To secure services, Aviva formed a strategic
alliance with these three services supplying firms, and in 2003, it deepened its commitment to them as it
opted for the build-operate-transfer model. As a result, the services outsourcing effort became a total
success and Aviva claimed how outsourcing enabled it to improve the service levels to its customers and
attain higher customer satisfaction (Aviva 2004). Aviva's outsourcing success has been attributed to the
collaborative relationship it had with its suppliers, which in turn worked as a foundation for the resulting
relationship between the services supplier and its customers.
Triad after Outsourcing: Bridge Transfer
Once the services supplier is in direct contact with its customers, the buyer will gradually cease to be
involved in the creation of services, per its outsourcing intention. When outsourcing a service, the goal of
the buyer is to relinquish the outsourced services operation to the supplier and for this supplier to deliver
services to its customers without its direct involvement. Otherwise, it will continue to incur administrative
costs. Therefore, it is only natural for the buyer to withdraw its involvement and let the supplier take over.
In fact, Sanders, Locke, Moore and Autry (2007) documented the existence of "total outsourcing," where
the buyer lets suppliers manage everything. This kind of disconnection between the buyer and its
customers is in line with the argument of TCE (Williamson 1975, 2008; Jensen and Meckling 1976;
Milgrom and Roberts 1992; Lacity and Willcocks 1995; Ang and Straub 1998). Unless the buyer lets the
supplier take care of its customers, it would continue to incur the transaction cost or the "frictional cost"
that occurs at the interface with another firm. Therefore, by design, the buyer wants its supplier to
interface with its customer and handle the relationship; after all, the supplier is being compensated for
taking care of the buyer's customer. The supplier understands this arrangement and will interact with
customers directly. Besides setting up the direct contact with customers, the supplier also maintains its
contact with the buyer, who is obligated to pay the supplier's invoice. The supplier now spans over two
disconnected agents and enjoys the bridge position, as shown in the last network diagram in Figure 4.
Once this bridge transfer occurs, the supplier who used to be in a subservient position to the buyer now
takes on a more powerful position. Some scholars (i.e., Startman 2008) have cautioned services buyers
of the power shift between buyers and suppliers. It is true that the buyer still writes the check to the
supplier; however, as long as the bridge transfer holds wherein the buyer stays disconnected from the
end customer, the supplier enjoys its position of the tertius gaudens. In other words, the supplier now
accesses information from disconnected entities, the buyer and its customer, and these two now depend
on the services supplier to control information. By accessing information as the new bridge, the services
supplier also emerges as the gatekeeper of the information and this role grants it more power in dealing
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with the buyer. For instance, because the supplier is now in the position of having to provide services, the
buyer may be forced to hand off proprietary knowledge to the supplier. Lenox and King (2004) caution
how key knowledge resources could be handed off to a services supplier and the buyer would then
become beholden to the supplier to transfer the knowledge back when needed. Similarly, Ray Perry, vice
president at Avon Products, cautioned similar power shift after the information services outsourcing
arrangements. He pointed out the difficulty a services buyer faced during the contract renewal stage
when the services supplier became dominant in power (O'Leary 1990). We offer the following proposition
as an explanation for such power shift.
Proposition 4: In services outsourcing, the triad structure of bridge decay would evolve into the triad
structure of bridge transfer, where the leverage position would be assumed by the supplier.
The new network arrangement increases dependency of the buyer on the services supplier and this shifts
the power position (Emerson 1962; Brass and Burkhardt 1993). The question at this point becomes how
the supplier would react to this new-found power as the bridge. After all, the supplier is a rational actor
that seeks to maximize its utility. As discussed earlier, the extent to which the supplier might abuse its
bridge position by acting opportunistically would again largely depend on its past relationship with the
buyer. A collaborative past relationship would tend to minimize opportunistic behaviors, but an adversarial
relationship would amplify such behaviors. From the supplier's perspective, a collaborative relationship
would offer long-term gains while an adversarial relationship would not. The prospective for long-term
gains can act as a containment mechanism for suppliers' opportunistic behaviors. When suppliers under a
collaborative relationship with its buyers are in the newly found bridge position, they would tend to act
less opportunistically. Conversely, suppliers aimed solely at making "quick money" would show more
tendencies to take advantage of their bridge position and act opportunistically.
Kodak outsourced its data center operations to IBM in the 1980s and it was viewed as a landmark
success (La-city and Hirschheim 1993). Kodak's director of data center services, Vaughn Hovey, pointed
out that the secret to outsourcing success was in the way Kodak saw its suppliers as partners. By
entering into strategic alliances with IBM, Kodak effectively contained the opportunistic behavior of IBM.
Although the outsourcing contract was only a few pages long and the majority was under gentlemen's
agreement (Lacity and Hirschheim 1993), which might be considered a perfect setting for opportunistic
behavior, IBM did not behave opportunistically and instead provided superior services to Kodak's
customers. However, the reverse can also be true. Unless care is taken, a supplier can act
opportunistically and the outsourcing arrangement can fail. For instance, Hirschheim and Lacity (2000)
studied a company called Chem2 and its failed outsourcing attempt. Chem2 selected its supplier based
on price without paying attention to relationship building. Once the knowledge was transferred, the
supplier started to exhibit opportunistic behaviors such as providing low quality service, charging high
costs, and reassigning talented employees to work on other company projects. Eventually, Chem2 had to
reverse its outsourcing decision.
The underlying reason behind Kodak's services outsourcing success and Chem2's outsourcing failure lies
in the nature of the past buyer-supplier relationship or lack thereof. The buyer and supplier in a strategic
partnership typically align their goals closer compared with the buyer and supplier in an adversarial
relationship, leading to less goal incongruence between them. Additionally, research has shown that a
prior history of cooperation between firms has been found to reduce the opportunistic behavior (Parkhe
1993) and decrease perceptions of exchange hazards {Deeds and Hill 1999). Further, in order to build a
deeper supplier relationship, the buying company would typically invest in knowing the supplier firm's
background, including past performance. Thus we state Proposition 5 below. Note that this proposition
differs from Proposition 3. Proposition 5 is concerned with the ties between the buyer and its supplier,
whereas Proposition 3 is concerned with the ties between the supplier and the buyer's customers.
Proposition 5: Once the bridge transfer is complete, a collaborative relationship between the buyer and its
supplier would mitigate the potential opportunistic behavior by the supplier, while an adversarial
relationship would increase it.
Desirable Strategy: Acceptance of Bridge Decay
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We have discussed how the services buyer loses its bridge position after the outsourcing occurs.
However, if the buyer must give up the bridge position, the last thing it wants to do is to set up its supplier
in a new bridge position, because the supplier will act opportunistically. After all, opportunism is a
fundamental assumption about firm behavior (e.g., Williamson 1975). We propose that a better alternative
would be to fill in the structural hole completely, creating a permanent state of bridge decay. This
outcome requires the buyer to maintain close communication with its customer and obtain feedback
regarding the performance of the supplier.
Simply because services have been outsourced, this does not mean the buyer should leave everything
up to the supplier (Sanders et al. 2007). The buyer should still maintain contact with its customer and
monitor how well the supplier is doing its job. This is the hallmark of Honda and Toyota--they keep a close
watch on their suppliers, work very closely with them, and ensure a superior level of customer satisfaction
(Liker and Choi 2004). Given the real-time delivery of services requiring close interaction, the buyer
should monitor the process of the service delivery by the supplier. The buyer should focus on three loci of
control: the supplier, its customers, and the relationship between the supplier and the customers. This
arrangement is shown in Figure 5.
(FIGURE 5 OMITTED)
To address the issues of bridge transfer and the associated transfer of power to a services supplier, the
buyer should maintain its information exchange with its customers as well as information exchange with
its suppliers. In this scenario, all three players shown in Figure 5 will be connected with one another and
thus effectively eliminate structural holes or advantages enjoyed by a bridge. It may appear to the buyer
that continued monitoring and involvement seems like a poor option, but the alternative of bridge transfer
is worse, because it would mean that the services supplier becomes the full-fledged bridge in the new
relationship structure. To maintain control, or more precisely, to guard against the increasing leverage of
its supplier, the services buyer must constantly monitor its customers, suppliers and the relationship
between its trading partners.
Proposition 6: In a steady state, bridge decay is a much more strategically desirable outcome for the
buyer compared to the bridge transfer.
Here the steady state occurs after the implementation of services outsourcing and after the relationship
structures for postoutsourcing take place as shown in Figure 4. The concept behind this proposition is
exemplified in the creation of the "solution integrator" role at HP (Parker and Anderson 2002). HP created
a solution integrator role after the decision to outsource its internal IT support function to an external
software support center located in low-cost regions. Employed by HP, these solution integrators served
as go-betweens for the external support center and the end customers of HP. Their roles included
coordination, monitoring, issue escalation, and issue resolution to ensure a high level of service quality. In
this case, the services buyer would know what the supplier knew and engaged in constant information
exchange with its customers as well.
DISCUSSION AND IMPLICATIONS FOR FUTURE RESEARCH
Services outsourcing has been laden with stories of failed attempts. We posit that an important root cause
of these failures is the lack of understanding of the dynamic nature of the triadic relationships among the
services buyer, services supplier, and the buyer's customer. By extending the social network theory into
the services outsourcing context, we were able to reveal the shifting relationship structures within the triad
of services supply network at different stages of the services outsourcing.
During the contract negotiation stage and before outsourcing arrangements, the services buyer acts as a
bridge between the supplier and the buyer's customer and enjoys information and control benefits
associated with that bridge position. Once the service outsourcing arrangements are in place and a
services supplier begins to interface with the customer, a situation unique to services outsourcing
emerges. The services buyer invariably loses its bridge position to the supplier. Loss of the bridge
position means loss of leverage. Unless intervened, the services supplier would end up gaining the
advantage that comes with being a tertius gaudens. To mitigate this risk, we propose the use of a bridge
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decay arrangement as the permanent state. This means that the services buyer should continue to
monitor the supplier, the buyer's customers, and the relationships between the services supplier and the
buyer's customers after the outsourcing arrangements.
This approach may appear to be counter-intuitive. One of the major incentives behind outsourcing in a
business setting is cost reduction, and extra monitoring costs extra money. What a buyer typically would
prefer to do is only monitor its relationship with the services supplier after outsourcing because the buyer
lets its supplier handle the relationship with its customers. After all, the supplier is being compensated for
taking care of the buyer's customer. However, the buyer must realize the consequences of such bridge
transfer. The field is littered with failed services outsourcing with the supplier as the new bridge, as
illustrated earlier, and this outcome can have long-term, negative consequence to the buyer. A common
negative outcome is the reduction in customer service quality (Anderson, Fornell and Lehmann 1994;
Ittner and Larcker 1998). In this regard, the state of the bridge decay as a permanent state should be
considered as a viable option.
Our study integrates social network theory and services outsourcing by focusing on triads and the role of
tertius gaudins in the triad. There are ample additional opportunities to extend our research. Future
research can expand beyond the triadic structures and examine how the embeddedness of a service firm
impacts its structural choices. For example, if a services buyer is embedded in a sparse network or a
services supplier relies on the buyer's extended network for future business opportunities, the services
buyer may have more enduring leverage over the supplier beyond a single services outsourcing contract.
Under this type of scenario, bridge transfer may be a plausible strategy for the buyer. The buyer could
potentially rely on its extended network as a containment mechanism for the supplier's opportunistic
behaviors.
When the services buyer is the bridge to extended networks that are valuable to the supplier, the buyer
can also exert its role as the tertius iungens, the third who joins (Obstfeld 2005). Similar to the tertius
gaudens, the tertius iungens also derives benefits from the bridge position. However, in contrast to the
role of the teritus gaudens who derives benefits from playing off the nodes on each side of the structural
hole, the tertius iungens derives benefits via mediating between two disconnected nodes. An intriguing
question then arises as to how the buying firm should play the role of the tertius iungens as well as the
tertius gaudens.
Besides social embeddedness, other areas of social network theory deserve further exploration. For
example, Tsai and Ghoshal (1998) distinguish three dimensions of social capital--the cognitive dimension,
the relational dimension, and the structural dimension. How could these dimensions compete or
complement each other in a services outsourcing context? How could they influence the formation and
strength of different types of ties among the triad in the service supply network? These are all important
questions that have significant managerial relevance.
Our structural relationship-shifting model is geared toward high-contact, pure services outsourcing
arrangements where the services provider is in direct and intensive contact with the end customers, such
as the outsourcing of a call center, banks, health care services, training and beauty salons. Besides pure
services, as we noted earlier, other types of services entail lesser degrees of customer contact. It would
be worthwhile to examine the patterns of structural shifting that exist in mixed services and quasi-
manufacturing settings.
One interesting scenario that can also be considered in future studies entails complete supply chain
disintermediation. Here, the services supplier completely bypasses the services buyer and works directly
with the end customers. One common example of such disintermediation happens in tax preparation
firms. Once the outsourced services suppliers (accountants) work with its customers, they are then able
to obtain the contact information of these customers. They would have the option of contacting those
customers directly for future tax returns, completely bypassing the tax preparation firm. Another
interesting example happens in Internet portals such as the travel site hosted by Yahoo.com. In this case,
the travelers (customers) use the portal (buyer) to locate an airline (services supplier) that sells the least
expensive ticket. Once they have found the ticket, they can go directly to the airline's website to make the
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purchase and take advantage of a small savings by purchasing directly from the airline's website. In the
above two scenarios, no triadic relationships remain among the services supplier, services buyer and
buyer's customer. At the end of the transaction, the services buyer is completely dropped out of the
supply network. We believe this loss of intermediary entity deserves further investigation.
Our model is limited largely to the substitution type of outsourcing, as opposed to the abstention type
(Gilley and Rasheed 2000). As such, we are able to focus on the conscious choice of replacing internal
production with external purchases (i.e., substitution), which contrasts the regular "sourcing" decisions
that occur because of the lack of internal production capabilities (i.e., abstention). In other words, our
model does not apply to some of the Internet sellers who purchase logistics services from carriers such
as UPS to deliver their products to their customers. In this example, these Internet sellers simply do not
have the capability to deliver their products on their own and have to purchase services from UPS. It is a
regular sourcing decision, not an outsourcing decision. Therefore, the network dynamics involved in
abstention types of services sourcing is left to future studies.
Services outsourcing practices are indeed very complex. Social network theory offers a wide array of
opportunities to tackle this complex task. Our study is only the first step toward analyzing this challenging
issue. Nevertheless, we have been able to reveal insights omitted by other theories used in services
outsourcing studies. The insights gained from integrating services outsourcing and social networks
concepts are of great theoretical and managerial relevance that can help us move the field forward.
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Uzzi, B. 'The Sources and Consequences of Embed-dedness for the Economic Performance of
Organizations: The Network Effect," American Sociological Review, (61:4), 1996, pp. 674-698.
Venkatesan, R. "Strategic Sourcing: To Make or Not to Make," Harvard Business Review, (70:6), 1992,
pp. 98-107.
Watkins, S.C. "Social Networks." In P. Demeny and G. McNicoll (Eds.), Encyclopedia of Population,
Macmillan Reference, New York, 2003, pp. 909-910.
Weakland, T. 2005. "Global IT Outsourcing Study." Available at
http://www.diamondconsultants.com/PublicSite/ (Accessed April 6, 2009).
Wellman, B. and S.D. Berkowitz. Social Structures: A Network Approach, Cambridge University Press,
Cambridge, 1988.
Wernerfelt, B. "A Resource-Based View of the Firm," Strategic Management Journal, (5:2), 1984, pp. 171-
180.
Williamson, O.E. Markets And Hierarchies: Analysis and Antitrust Implications, Free Press, New York,
1975.
Williamson, O.E. "Outsourcing: Transaction Cost Economics and Supply Chain Management," Journal of
Supply Chain Management, (44:2), 2008, pp. 5-16.
Zaheer, A. and G.G. Bell. "Benefiting from Network Position: Firm Capabilities, Structural Holes, and
Performance," Strategic Management journal, (26:9), 2005, pp. 809-825.
Mei Li (Ph.D. Candidate) is a Ph.D. student at Arizona State University in Tempe, AZ. She previously
served as a global program manager in supply chain information technologies at the headquarters of the
Hewlett-Packard Company and had a wealth of industry experience in supplier selection, integration,
evaluation and management. Mei Li's research interests include services operations, services
outsourcing, self-services, innovation and sustainability. Her latest project empirically tests the
implications of the shifting of the triadic relationship structure in the services supply network. Her earlier
work on the evolution of inductive case studies with Dr. Barratt and Dr. Choi has been recognized as the
finalist for the Chan Hahn Best Paper Award by the Operations Management Division of the Academy of
Management Conference 2007.
Thomas Y. Choi (Ph.D., University of Michigan) is a professor of supply chain management and John G.
and Barbara A. Bebbling Professor in Business at Arizona State University in Tempe, AZ. He also holds
the title of Outstanding Operations Management Professor at Yonsei University. He received his A.B.
degree from the University of California at Berkeley. His research interests are: dyads and triads in supply
networks, supply base rationalization, second--and third-tier suppliers, supplier-supplier relationships, and
supply chain disintermediation. His articles have been published in the Academy of Management
Executive, Decision Sciences, Harvard Business Review, Journal of Operations Management, Journal of
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Supply Chain Management, Production and Operations Management, Supply Chain Management
Review, and others.
MEI LI AND THOMAS Y. CHOI
Arizona State University
* Like all invited papers and invited notes, the original version of this manuscript underwent a double-blind
review process.
DIALOG(R)File 148:Gale Group Trade & Industry DB
(c) 2009 Gale/Cengage. All rights reserved.
Air Canada launches application for iPhones and iPod touches.
Telecomworldwire, August 20, 2009
TELECOMWORLDWIRE-20 August 2009-Air Canada launches application for iPhones and iPod
touches(C)1994-2009 M2 COMMUNICATIONS http://www.m2.com
THIS IS THE FULL TEXT: COPYRIGHT 2009 Normans Media Ltd. Subscription: 300.00 British pounds
per year. Published daily (7 times a week). 1 Solsbury View, The Normans, Bathhampton, Bath BA2 6TF.,
United Kingdom
DIALOG(R)File 636:Gale Group Newsletter DB(TM)
(c) 2009 Gale/Cengage. All rights reserved.
WTN CALENDAR
WASHINGTON TELECOM NEWSWIRE, August 14, 2009
Aug. 25 Region 8 Public Safety Regional Planning Committee 700 MHz and 800 MHz meetings, Life
Safety Complex, Paramus, N.J. 973-395-2567
Aug. 27 Region 35 Public Safety Planning Committee 700 MHz meeting, Washington County
Communications Agency, Beaverton, Ore. 503-466-3782
Aug. 27 FCC monthly meeting, 10 a.m., 445 12th St. SW, Washington -- www.fcc.gov/fccmeetings.html
0628-09
DIALOG(R)File 696:DIALOG Telecom. Newsletters
(c) 2009 Dialog. All rights reserved.
Business Wire Recap
Business Wire February 28, 1999 15:44 PT
Sports Editors
SATURDAY, FEB. 27
(SC-WAL-MART-FLW/OPR-BASS)(OPBAS) LEXINGTON, S.C.--Arkansans
Sweep Top Three Spots In Wal-Mart FLW Event; Wurm Wins $100,000 At
Lake Murray (BW1432 17:30)
(FL-MLB/989-SPORTS/VIDEO)(BBM) ADVISORY/989 Sports' Goes To
Spring Training To Show Players The Realism Of MLB 2000 VIDEOGAME --
Available This March on PlayStation (BW0009 21:55)
FRIDAY, FEB. 26
(TX-TEAM-MOUSE) DALLAS--Team Mouse and NHL Introduce
"State-of-the-Art," Interactive Screen Saver to Hockey Fans (BW0072
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9:02)
(MA-PGA/SCHOLARSHIP-WIN)(GLF) FAIRHAVEN, Mass.--Titleist and
FootJoy Worldwide Announces PGA Apprentice Scholarship Winners (BW1351
16:51)
(NY-BOXING/HOLYFIELD-LEWIS)(BOX) NEW YORK--Viewer's Choice &
TVKO Announce Heavyweight Online Sweepstakes; "The Road to the Garden"
(BW1381 17:36)
(SC-WAL-MART-FLW/OPR-BASS)(OPBAS) LEXINGTON, S.C.--Five Pro
Anglers Move To Final Round In $471,500 Wal-Mart FLW Tour Bass
Competition (BW1402 19:22)
CONTACT: BW SportsWire, New York
Mike Maguire, 212/752-9600, ext. 255
800/221-2462
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: http://www.businesswire.com
DIALOG(R)File 810:Business Wire
(c) 1999 Business Wire . All rights reserved.
Notice to Investors of MCK, HBOC, HS, CPQ, CURE, SFSK, SEGU, PCTY and FIBR
Concerning Shareholder Lawsuits by Berman, DeValerio & Pease LLP
PR Newswire April 30, 1999 22:59 EDT
, April 20 /PRNewswire/ -- Berman, DeValerio & Pease LLP, a law firm specializing in representing
shareholders in class action lawsuits, issues the following press release:
If you purchased the securities of any of the companies listed below, you may be a member of the class
and should consider contacting Berman, DeValerio & Pease, LLP to learn about your rights and interests
in the case. You can contact the firm at 800-516-9926 or visit their website at
http://www.bermanesq.com/:
CHS ELECTRONICS This lawsuit is brought on behalf of investors who purchased the common stock of
CHS Electronics during the period June 19, 1998 to March 19, 1999. The lawsuit charges that CHS
Electronics issued materially false financial statements during the class period by overstating its vendor
rebates. CHS Electronic's common stock price plummeted more than 34% in reaction to this news.
COMPAQ COMPUTER CORP. Beginning on January 27, 1999, Compaq's two top officers, Eckhard
Pfeiffer and Earl Mason, assured stock market analysts and investors that the company was on target to
meet first quarter 1999 earnings projections. However, these officers were receiving internal information
that Compaq's sales were slowing and that the company would not meet first quarter 1999 projections.
Compaq eventually disclosed that it would earn approximately one-half of its 1999 projected first quarter
earnings. The stock price plunged 22% on the news. Investors who purchased the stock from January 27,
1999 through April 9, 1999 are included in the Class.
CURATIVE HEALTH SERVICES, INC. This action charges Curative Health Services, Inc. with overstating
its publicly reported revenues and earnings through improper fee charges for patient referrals and
charging excessive fees to Columbia/HCA which were ultimately reimbursed by Medicare. Upon
disclosure of the Department of Justice's joining in a fraud action against Curative Health Services, its
stock price plummeted approximately 60%. The action is brought on behalf of purchasers of Curative
Health common stock from June 28, 1996 through April 9, 1999.
MCKESSON HBOC, INC. Prior to its acquisition by McKesson, HBO & Co. had been artificially inflating
its revenues and earnings and issuing false financial statements. After McKesson merged with HBO &
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Co., the new company, McKesson HBOC also issued false financials. If you bought HBOC stock from
April 14, 1998 to January 12, 1999, or McKesson HBOC stock from January 12, 1999 to April 27, 1999,
you may be included in the action.
SEGUE SOFTWARE, INC. Segue Software improperly recorded revenue in its 1998 fiscal third and
fourth quarters and has been forced to restate and "revise" its previously issued financial statements.
Investors who purchased during the period October 13, 1998 to April 9, 1999 are eligible for inclusion in
this action.
OSICOM TECHNOLOGIES, INC. On July 1, 1998, the start of the class period, Osicom announced it had
a contract valued at $90 million. On April 20, 1999, the close of the class period, it was revealed that the
contract was only valued at about $175,000. Osicom's stock price plunged on the revelation.
PARTY CITY CORP. Party City is charged with issuing materially false and misleading financial
statements for its 1998 fiscal year. It is also alleged that certain company officers sold approximately $1.5
million of their stock while the stock price was inflated. Party City's stock price plummeted when it was
announced that the filing of the company's 1998 financial statements would be delayed. The action
covers investors who purchased during the period February 26, 1998 to March 18, 1999.
SAFESKIN CORP. Safeskin recently announced that it would be restating its 1998 fiscal third quarter
results. The lawsuit charges that Safeskin improperly recorded revenue from sales of product in violation
of GAAP. Safeskin's stock price has crashed in response to the revelation of its improper accounting
practices. The stock, which traded as high as $34 per share, is presently trading at slightly over $8 per
share. Investors who purchased during the period October 28, 1998 to March 11, 1999 are included in
this lawsuit.
Berman, DeValerio & Pease is one of the nation's leading firms in representing investors in securities
class action lawsuits and has substantial experience in prosecuting class actions. The firm has been
appointed lead counsel in many major shareholder lawsuits pending throughout the country. The firm
prides itself on its responsiveness to shareholders and their needs in particular cases.
If you are an investor in any of the actions listed above, or have any questions about any securities class
action, please contact the firm at 800-516-9926. Ask to speak to one of the attorneys handling the case
you are seeking information about, or you may speak to Norman Berman, Esq. or Jeffrey C. Block, Esq.,
or you can also write to the firm at One Liberty Square, Boston, MA 02109, send the firm a facsimile at
617-542-1194 or send the firm an e-mail at bdplaw bermanesq.com
SOURCE Berman, DeValerio & Pease LLP
DIALOG(R)File 813:PR Newswire
(c) 1999 PR Newswire Association Inc. All rights reserved.
Upstream Biosciences Seeks Licensors or Acquirers for Drug Discovery Portfolio
and Cancer Diagnostic Platform
Source: Blood Weekly p. 549 Thursday August 27, 2009
Section: Expanded Reporting
Upstream Biosciences Inc. (OTCBB: UPBS) announced that the company is actively seeking licensors or
acquirers for its novel anti-parasitic drug discovery portfolio and cancer diagnostic platform (see also ).
Mr. Joel Bellenson Co-founder, Chairman, CEO stated, "On July 27 2009, Upstream announced the
formation of an independent committee of the board to evaluate and assess the strategic direction of the
company. The independent committee has recommended that the company undertake an aggressive
strategy to seek licensors or acquirers. Management and the board are in full support of these actions."
Upstream's drug discovery portfolio is based around a unique, small molecule scaffold that was
discovered using an artificial intelligence/combinatorial chemistry diversity strategy by leveraging
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historical anti-leishmaniasis screening data from the literature. The Company has filed provisional patent
applications claiming the composition of matter, synthesis and use of its compounds.
A pipeline of more than 100 anti-protozoan compounds has been synthesized to date. Several Upstream
compounds have demonstrated in vitro efficacy at M concentrations against leishmaniasis,
trypanosomiasis, and/or malaria in vitro. In vitro safety testing of Upstream lead compounds human THP-
1 cells has been demonstrated at 10M concentration. In vivo LD50 data in mice demonstrated tolerance
of several of Upstream's anti-protozoan compounds at 5mg/kg and some were tolerated at even higher
concentrations. In vivo efficacy studies have been limited to date as current compounds are not easily
water soluble and Upstream lacks the necessary financial resources to develop an appropriate
formulation.
Upstream's cancer diagnostic platform is based on unique genetic markers that may be linked to a
patient's susceptibility to developing certain cancers including liver, prostate, ovarian and thyroid cancer.
The Company has filed provisional patent applications claiming the genetic variations and their use in
determining susceptibility and potential therapeutic outcomes.
Further information on this opportunity is available on the Company's website at www.upstreambio.com.
Upstream Biosciences has also prepared a technical package, which will be made available for review by
interested parties under a nondisclosure agreement.
Copyright (c) 2009 Blood Weekly via NewsRx.com
DIALOG(R)File 989:NewsRoom Alert
(c) 2009 Dialog. All rights reserved.
A resolution to amend the Standing Rules of the House of Representatives.
Source: LegAlert (Summaries) p. Wednesday August 26, 2009
Most Recent Action Date: August 26, 2009
Bill ID: MI HR 143
Session: 2009-2010
Sponsor: Kathy Angerer
Summary: A resolution to amend the Standing Rules of the House of Representatives.
Actions:
20090826 - (H) INTRODUCED BY REPRESENTATIVE KATHY ANGERER
Intro Date: 20090826
Copyright (c) 2009 NETSCAN iPublishing Inc. All rights reserved.
DIALOG(R)File 990:Newsroom Current
(c) 2009 Dialog. All rights reserved.
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