The price of $25 a share would represent a 32.5 percent premium to Electronic Data Systems’ closing price of $18.86 on Friday.

Both sides were in the final stages of negotiations, these people said, with Hewlett-Packard’s board planning to meet Tuesday morning to approve the transaction. Still, these people cautioned, the agreement could be postponed or collapse.

Hewlett-Packard confirmed Monday that it was “engaged in advanced discussions” with E.D.S. for a possible business combination, but said “there can be no assurances that an agreement will be reached or that a transaction will be consummated.”

A deal would make H.P. the second-largest player to I.B.M. Such a merger would be Hewlett-Packard’s largest since it acquired Compaq for $20 billion six years ago.

Hewlett-Packard, based in Palo Alto, Calif., has not been averse to making acquisitions in recent years. Mark V. Hurd, the company’s chief executive, has been vigorously adding software and services companies to take on I.B.M. in a ruthlessly competitive business of managing data centers and the data processing of large corporations.

The business has long been rough — with competitors eking out low profit margins — but it has become particularly challenging in recent years as companies award contracts to outsource work to overseas companies, notably in India, that pay lower wages.

The services businesses is attractive to I.B.M. and H.P. because it is a fast-growing global business valued at about $748 billion by Gartner, a market information firm. Hewlett-Packard has lagged behind I.B.M., the industry’s leader with around $54 billion in annual revenue. It is followed by E.D.S., which has around $22 billion in revenue.

Hewlett-Packard, meanwhile, had around $16.6 billion in revenue from services in 2007. Size matters in this business, because a larger company can have people in place across the globe to provide the services.

The question is whether an acquisition of E.D.S. would give Hewlett-Packard the inside track it is looking for in competing against I.B.M. and other rivals. And the answer on Monday from Wall Street analysts was a decidedly mixed one. Hewlett-Packard’s stock price seemed to reflect the uncertainty, falling after news of a potential deal began to circulate. The stock closed at $46.83, down nearly 5 percent.

Shares of E.D.S. closed at $24.13, up 28 percent from Friday’s close.

“It’s a very significant combination,” said Ben Pring, a research vice president in the IT Practices Group at Gartner. But “people who are skeptical of big integrations will have a field day around this,” he said. “It’s putting together two large businesses with two different heritages. It’s going to be a big culture clash.”

E.D.S. has a storied past. Founded in 1962 by H. Ross Perot, it pioneered the outsourcing of data management as well as the management of entire data centers. In 1984, he sold the company to General Motors, but it was a rocky relationship and he left the company two years later. G.M. spun off E.D.S. in 1996.

E.D.S., based in Plano, Tex., is comfortable with acquiring and integrating new operations because that is its business. Hewlett-Packard successfully integrated Compaq and has reorganized its core businesses to cut costs and provide cash for growing businesses. Business services had been a laggard division for H.P., but Ann M. Livermore, the executive vice president responsible for what the company calls its Technology Solutions Group, has made it profitable and made its growth rate match the rest of the company.

H.P. has acquired a string of enterprise software companies in recent years, including Mercury Interactive, Opsware and Neoware. (Several years ago, H.P. considered purchasing P.W.C., a major consulting firm, only to lose it to I.B.M.)

But the size of the proposed merger with E.D.S. would pose more daunting challenges. E.D.S. has 140,000 employees to H.P.’s 172,000. About two-thirds of the E.D.S. employees are located in the United States, which means Hewlett-Packard would be buying a relatively expensive work force compared to the fast-growing lower-cost competition based overseas, said A. M. Sacconaghi Jr., an industry analyst with Sanford C. Bernstein & Company.

Mr. Sacconaghi said that while he shared some of the skepticism of the deal, he thought H.P. might try to justify the acquisition on the basis that E.D.S. had fallen out of favor, and that this was the right time to make a deal.

In the last year, the stock has fallen steadily from around $28.

“This is bargain-hunting,” Mr. Sacconaghi said. “This is H.P. saying, ‘We see a cheap asset.’ ”

Chris Whitmore, an analyst with Deutsche Bank, noted that E.D.S. had grown marginally, to around $22 billion in annual revenue, from $19.8 billion in 2003. And E.D.S.’s operating margins have been around 6 percent, about half of that of Hewlett-Packard; neither of those figures is particularly impressive, though the operating profits in the services businesses tend to be modest. I.B.M.’s service’s margins are a little higher than 10 percent, analysts said.

Mr. Whitmore said that he was surprised by the prospect of a deal because such a major integration can be so distracting, particularly because, he said, H.P. has done such a fine job of re-organizing its business in the last few years.

Friend Connect is a new data portability initiative for spreading social connections around the web. It’s the third of such announcements to be made in less than a week; MySpace Data Availability and Facebook Connect are the other two.

More information will be available from Google at this URL following the event : http://www.google.com/friendconnect

The deal marks the first time that Apple has agreed to a separate price structure for a content provider, one of the employees said.

The HBO insiders said that the new service would be launched and announced simultaneously, most likely in a week or two.

Details of the agreement are not yet known, but it is clear that HBO was able to secure better terms from Apple than other content providers, they said.

One possibility is that HBO programming will have a higher retail price than the flat $1.99 fee Apple currently charges for video content; another is that HBO will receive a larger cut of the same flat rate than other iTunes content providers receive.

Apple and HBO spokespeople did not return calls for comment on the deal.

NBC pulled its programming from iTunes last summer after Apple refused to charge more than $1.99 for that network’s shows. In May, NBC struck a deal with Microsoft to sell its shows on the Zune website.

The HBO-Apple agreement is a strategic coup for both companies. Apple is trying to increase sales and awareness of its new Apple TV, a device that allows viewers to rent movies and buy content from your television. HBO wants to profit from its archive by letting fans buy old episodes of shows like Deadwood and The Larry Sanders Show.

The terms of this new deal could open a Pandora’s box for iTunes. With the advent of pricing variation, movie studios and musicians will want to charge more for their big hits. Apple could be pressured to accept variable pricing for other content, a change it has resisted in the past.

HBO started an online download service earlier this year. It lets HBO subscribers watch 400 hours of programming a month and stream HBO’s main channel. The service, called HBO on Broadband, is currently being tested in Wisconsin and will soon spread to other markets.

The deal with Apple is a more dramatic move for HBO, since the broadband service only allows current HBO subscribers to access the content. Selling through iTunes would let HBO tap everyone else.

In the past, HBO has been notoriously slow to offer content through new media, and the deal with Apple is a result of pressure from HBO’s parent company, Time Warner, according to HBO employees.

“We should have done this a long time ago,” said an HBO insider. Jeff Bewkes took over as Time Warner C.E.O. from Dick Parsons late last year.

The small business ideas we list on our site are 100% legitimate. We’re not here to take your money – in fact, we don’t even sell anything on our site.

Our fundamental goal at nicetrends.com is to help you get your entrepreneurial juices flowing.

(more…)

1. Santa Claus Mail

Ok, how’s that for a brilliant idea. Get a postal address at North Pole, Alaska, pretend you are Santa Claus and charge parents 10 bucks for every letter you send to their kids? Well, Byron Reese sent over 200000 letters since the start of the business in 2001, which makes him a couple million dollars richer. (more…)

The airlines have been threatening to do this for years. American Airlines has tested technology developed by Qualcomm, and Air France and bmi have also experimented with the in-flight calls.

Depending on your point of view, this is either a great step forward, or just another reason to dread boarding an airplane.

1. Marketing Activity (How much marketing did we do?)
The best place to start is with an account of what you’re doing (output) to remind yourself how hard you’re working (or not working). (more…)

The Academy’s green initiative, which includes several energy-saving strategies, is being carried out in collaboration with the Natural Resources Defense Council, a non-partisan environmental and advocacy organization. (more…)

The way we think of web development — as HTML pages on a server being accessed by desktop browsers — is about to change. The way we’ll access the Web, the way we replicate and accept data, even the formats in which the data is passed, are all changing. (more…)

The 2008 Index of Silicon Valley, which this year was sponsored by Joint Venture : Silicon Valley Network, a public-private partnership, and the Silicon Valley Community Foundation, a nonprofit, found that from 2002 to 2006, middle-wage jobs fell to 46 percent of the work force, from 52 percent.

At the same time, while the percentage of higher-end jobs rose slightly — to 27 percent from 26 — lower-wage jobs expanded to 27 percent, from 22 percent of the work force. In all, more than 50,000 middle-income jobs have disappeared over the four years measured by the study.

The vanishing jobs — defined as those paying $30,000 to $80,000 — represent workers who had been in the lower part of the white-collar pyramid, including secretaries, clerks and customer support representatives. The picture was blurred, however, by growth in some blue-collar, middle-income professions like electricians and plumbers, and several white-collar areas like computer support technicians.

The consequence of the shift may undercut some of the basic mechanisms of the Valley economy, according to the authors of the report, by making upward mobility more difficult.

“If you lose the middle, it’s harder to support the top,” Doug Henton, an economist at Collaborative Economics, a research and consulting firm in Mountain View, Calif., that helps prepare the annual report, told The New York Times.

The short-range outlook for the region appears to be more positive, with the overall pace of job gains outpacing the nation’s.

For example, for the first time since 2001, when the dot-com sector was imploding, median household income rose. Silicon Valley added 28,000 jobs, for an increase of 1.7 percent in 2007. Over all, the region is far more wealthy than the rest of the country, with per capita income 57 percent higher than the national average.

Reflecting the changing boundaries of what is defined as Silicon Valley, this year the authors of the report added all of San Mateo County’s work force. It was the first change to the definition of the region by the study, which was first published in 1995. By moving the northern border of the Valley past the San Francisco airport, the area now reflects more of the biotechnology orientation of companies like Genentech. The region does not include San Francisco.

Venture capital investment continued to climb at a healthy clip during 2007, rising by 11 percent. Sixty-two percent of the so-called clean tech venture investment for California was invested in Silicon Valley during the year.

The Valley continues to stand apart because it is a center of technical innovation, said Russell Hancock, president of Joint Venture. But he also said it was unlikely that the region would be unaffected by a recession or the subprime mortgage crisis.

Still, the researchers behind the study said the Valley was distinguished by the flexibility of its economy and its ability to adapt to changing conditions.

“What we’re talking about is a Valley that continues to reinvent itself, and it’s not in any one sector,” Mr. Henton told The Times.

One notable category in which the region lags behind its international competitors is home broadband networks. Only 51 percent of the region has access to broadband Internet — defined as more than 200 kilobits per second. In contrast, 65 percent of the households in Japan and 94 percent in South Korea are wired to at least that speed.

Good luck to the valley !