IBM ready for new Internet boom, says new chief

A new Internet boom is just around the corner and this time IBM stands ready

to be among the first to cash in, said IBM new CEO Samuel Palmisano. ''This is

IBM's franchise. The opportunity that results from this industry shift is ours

to lose."

Palmisano, who is talking over from the retiring Louis Gerstner, spoke for

the first time as CEO at IBM's annual shareholder meeting. Gerstner will remain

IBM chairman through the end of 2002, after which he will leave the company for

good.

Palmisano said IBM's insistence on security technology, and its expertise in

networking and computer services are the right combination of tools to handle a

new wave of emerging Internet devices that is expected to be used by millions of

business users and consumers.

IBM, of course was very later getting into the Internet business in the late

1990s. But the firm's conservative stance paid big dividends when the first

Internet boom turned into a bust Palmisano said IBM is in good shape. It has

sufficient cash flow last year to invest $5.8 billion in research and

development resulting in more than 3,000 new patents. It also spent $5.7 billion

in capital expenditures.