In the last full trading week of the year, the NetSuite IPO, acquisition news and earnings reports from Oracle, Palm and RIM highlighted technology sector gains, but also concerns for 2008.

Oracle on Wednesday reported net income of $1.3 billion for the quarter ending Nov. 30, up 35 percent from a year earlier. The report validated its acquisition strategy at the end of what is bound to be a record year for M&A in the tech sector. Oracle's results show it is leveraging homegrown as well as acquired products, cross-selling a broad variety of business applications. Company shares closed Thursday at $22.10, up by $1.34.

The U.S. Federal Trade Commission's approval on Thursday of Google's acquisition of online ad-server DoubleClick helped boost Google shares by $12.32, to close at $689.69, even though the deal requires other government body approvals.

Through November 2007, tech M&A amounted to about $449 billion, close to the total for 2006, according to a report released this week by the 451 Group. With a strong December for M&A, 2007 "could be the first year in tech M&A history to top a half-trillion dollars' worth of transactions," according to the report.

There are a variety of reasons for the banner M&A year, but underlying them all were strong vendor earnings. But next year will likely see a slowdown in deals.

The U.S. housing slump and resulting turmoil in financial markets has raised fears of an overall slowdown in the economy. This could affect consumer and business buying plans as well as the financial results of tech vendors.

"There's a sense of muted expectation," according to the 451 Group's Brenan Daly. "Corporate buying activity reflects to some degree consumer activity. If you are flush with cash and expecting good things from the economy, chances are you're more willing to go out buying."

Meanwhile, the IPO of software-as-a-service vendor NetSuite on Thursday reflected a year for public offerings that was ultimately stronger than expected. Company shares closed at $35.50 after opening at $26.00. IPOs this year underscored confidence in sectors such as SaaS and storage, noted the 451 Group report. In the SaaS arena, SuccessFactors and DemandTec had strong IPOs. In the storage sector, Data Domain and 3Par had solid IPOs, 451 noted.

The IDG News Service is a Network World affiliate.