Tech Ticker: HP-Microsoft; EA; eBay

Mercury News wire services from Bloomberg News

HP

2nd Microsoft deal

Hewlett-Packard and Microsoft will spend as much as $180 million over the next four years to jointly develop and sell hardware and software for messaging, video and voice in a challenge to Cisco Systems. HP plans to create new desk phones and expand its ProCurve networking products for use with Microsoft software, the companies said Tuesday in a statement. The effort is one of the largest undertaken by the Frontline Partnership they formed two decades ago, the companies said. The deal is the second in the past month between HP, the world's largest personal-computer maker, and Microsoft, the biggest software company.

— Bloomberg News

EA

Looking for a spark

Electronic Arts CEO John Riccitiello said the company's release of a new fitness game Tuesday may help spur demand for Nintendo's top-selling Wii console after two months of declines. "What we've been lacking so far this year is any reason to buy hardware," Riccitiello said. —‰'EA Sports Active' may be the first software catalyst that can move hardware." Electronic Arts is adding Wii games including "EA Sports Active" as part of a turnaround plan that includes the release of "The Sims 3" on June 2.

— Bloomberg News

EBay

PayPal's Potential

EBay CFO Robert Swan said the company's PayPal online payment system will account for 73 percent to 78 percent of checkout sales on its e-commerce Web site by 2011. EBay aims to double its PayPal revenue to $5 billion within three years, Swan said at an investor conference in Boston. He also said customers' creditworthiness has improved since the recession began. EBay expects PayPal to become the company's biggest moneymaker, as the payment system outpaces sales from e-commerce commissions. PayPal accounted for less than a third of sales last year. The marketplace unit, which makes money from auctions and other transactions, accounted for more than half of revenue. EBay, which generated free cash flow of $578 million last quarter, is holding most of its cash outside the U.S. The company plans to use it for acquisitions, he said.

— From Bloomberg News