Original URL: http://www.theregister.co.uk/1999/05/14/software_spinoff_put_on_hold/

Software spin-off put on hold by Acer

Uncertainties plague yet another business venture by Taiwanese giant

By Linda Harrison

Posted in Business, 14th May 1999 16:11 GMT

Acer has put plans for a software spin off on the back burner due to worries over the new arm’s profitability. The Taiwanese PC manufacturer has delayed plans to expand the division as a separate software company due to no guarantee over earnings for the venture. An Acer representative said: "We want the software division to be more mature and able to stand on its own," according to today’s Wall Street Journal. In February, Acer announced plans to form an independent software firm before the end of April. Today it was reported there was no longer "any fixed schedule" for the venture, and "not a lot of guarantee" about future profitability. The vendor had previously held high hopes for the software enterprise, hoping it would shift business towards this more lucrative area away from the lower margin PC hardware business. Acer had aimed to target business outside the group and create a separate culture from the hardware side. Acer chairman Stan Shih wants 30 per cent of net profit to stem from software sales by 2010. But last year saw a dismal $76.4 million from that business – a fraction of the company’s net income. ®