EMC may welcome takeover

EMC may not reject a takeover bid by IBM despite both companies denying rumours of a merger.

Two weeks ago rumours of an imminent takeover bid by IBM were doing the rounds, but were firmly denied by both companies.

However, late last week research house Aberdeen Group published a report titled An IBM/EMC Merger would be a Win-Win for IBM Customers. The report highlighted the advantages of the merger for both companies.

The report stated: "Many IBM server customers turn to EMC for network storage because of EMC's advanced storage management functionality, service and support. IBM's customers look to IBM for help in integrating increasingly complex IT infrastructure components, such as servers, networks, and databases, in addition to storage subsystems. The possible merger would give customers best of both companies from a single source."

But the Aberdeen Group said it cannot confirm negotiations are in progress.

Wall Street analysts believe EMC could post its first quarterly loss in a dozen years as revenues fall as much as $450 million below the breaking even point according to Reuters.

Analysts expect EMC results, due to be released next week, to report revenues of $1.35bn for the third quarter ended 30 September. This is far below the $1.8bn EMC said earlier in the month it needed to break even. EMC then warned that it was highly unlikely to turn a profit, but said it had not estimated how much the revenues would fall for the quarter.

EMC has not posted a net loss since last quarter of 1989.