Merger and acquisition news this week from Hewlett-Packard, EDS, Comcast, Plaxo, CBS and CNET -- along with Carl Icahn's battle to get a Yahoo-Microsoft deal back on track -- stoked IT investor excitement and vendor share values.

Now that first-quarter earnings season is over, investors -- especially in IT -- may be tempted to breathe a sigh of relief, but dark clouds still hang over the horizon. At various points over the past few weeks, market observers have talked about a "trendless" market, as trader uncertainty continues to spark share-price volatility.

The Internet market has been especially tumultuous. U.S. online ad spending is increasing and stirring many companies to M&A as a way to pick up market share and new technology. The Interactive Advertising Bureau reported on Thursday that online ad spending increased 26 percent in 2007 over 2006, as Google's dominance continues.

Billionaire investor Icahn thinks a Microsoft-Google combination would be well-placed to take on Google. On Thursday he made public a letter he sent to Yahoo's board, announcing he is nominating a slate of candidates to replace all board directors in the wake of the breakdown in negotiations over Microsoft's takeover bid two weeks ago.

"It is quite obvious that Microsoft’s bid of [US]$33 per share is a superior alternative to Yahoo's prospects on a stand-alone basis," Icahn wrote.

Though Microsoft has said it is no longer interested in Yahoo, clearly Icahn thinks otherwise, or possibly believes that another suitor -- perhaps his friend Barry Diller, CEO of IAC/Interactive -- may want to do a deal. Yahoo shares closed at $27.75, up by $0.61, on the news.

Just before news of Icahn's letter broke, CBS announced it will pay $1.8 billion for online media company CNET Networks in order to broaden its Web offerings. Since CNET is losing money, the price tag is a testament to confidence in the overall Internet market. Though CBS called CNET "profitable," the online company lost $6.1 million on revenue of $91.4 million in the first quarter, and made a profit in its last fiscal year thanks mainly to a tax benefit. CNET shares rose by $3.46 Thursday to close at $11.44, close to CBS' offer price of $11.50.

Also Thursday, Comcast announced it will acquire social-networking company Plaxo in a bid to enhance its community services. Comcast shares closed at $22.54, up by $0.17.

The IDG News Service is a Network World affiliate.

Whitepapers

• The Trend from UNIX to Linux in SAP(r) Data Centers
• Secure Wireless Printing Options
• Improve Virtual Storage TCO by Comparing Vendors
• Making IT Invisible
• Best Practices for VMware ESX Server
• Virtualizing Storage for VMware Success

View more DATA CENTER whitepapers

Webcasts

• Branch Office Trends and Best Practices
• Data Protection and Application Availability for Your VMware Environment with Veritas NetBackup and Cluster Server for VMware ESX
• Making NetBackup Highly Available with Storage Foundation HA
• Best Practices for Deploying WAN Optimization for Disaster Recovery
• Tips and Techniques for Remote Data Backup and Delivery
• WAN Optimization Landscape

View more DATA CENTER webcasts

Special Reports

• Executive Guide: Storage Heats Up
• Symantec State of the Data Center Report
• Data Centers: At the center of the action
• Executive Guide: Virtualization Reality Check
• Executive Guide: Data Center Decisions
• Get More From Your WAN

View more DATA CENTER special reports