WILMINGTON, Del. – U.S. and Canadian judges on Monday approved a $4.5 billion cash bid from a consortium that includes smartphone makers Apple and Research In Motion for thousands of patents held by bankrupt telecom-equipment maker Nortel Networks Corp.

The judges approved the results of Nortel's patent auction at a joint hearing Monday, just over a week after the consortium offered five times more than Google Inc.'s initial bid of $900 million for some 6,000 patents and patent applications.

The purchase _and its approval_ represent a significant win for a consortium of companies that includes Apple Inc., EMC Corp., LM Ericsson AB, Microsoft Corp., Research in Motion Ltd., and Sony Corp. Phones running Google's Android system compete with software and devices made by the new holders of the Nortel patents. The patents cover many technologies, including data networking, semiconductors and wireless systems known as fourth generation, or 4G.

Nortel has said the portfolio "touches nearly every aspect of telecommunications and additional markets ... including Internet search and social networking." They are among the last major assets of Toronto-based Nortel, which filed for bankruptcy protection in 2009. The company has been selling off its operations bit by bit since then.

The sale of the Nortel patents comes as smartphone manufacturers square off in legal battles over such common features as swiping gestures on touch screens. Such lawsuits could allow patent holders to capitalize on their rivals' success in the market through royalty settlements.

Google had said it wanted the patents to defend itself against lawsuits from other companies until Congress enacts broader changes to the patent system to help reduce such litigation. Google gives away its Android software for free, counting on its popularity to drive usage of other Google services, such as search and maps.

Attorneys for Nortel and its official committee of unsecured creditors praised the results of the patent auction. Nortel attorney Lisa Schweitzer said the final price, which came after 19 rounds of bidding, is more than the combined total received from Nortel's previous bankruptcy asset sales. Including the patent sale, Nortel has realized roughly $7.7 billion from its asset sales.

"This truly is a `wow' transaction," said David Botter, an attorney representing Nortel's official creditors committee.

Derrick Tay, an attorney representing Nortel in Canada, said the auction is a "shining example" of what can be achieved in a bankruptcy case.

"I don't believe a dollar was left on the table," Tay told Ontario Superior Court of Justice Judge Geoffrey Morawetz, who conducted the joint hearing with U.S. Bankruptcy Judge Kevin Gross in Delaware via videoconference.

Gross described the result of the auction as "quite extraordinary" and said it would be a mistake for the court not to give its approval.

"It's not every day that a judge has an opportunity to make a $4.5 billion mistake," he quipped.

The sale, which includes a good faith deposit of $54 million already delivered to Nortel, is expected to close within 30 days.

By Jim Finkle

BOSTON |
Thu Jun 23, 2011 6:59pm EDT

SAN FRANCISCO – Investors are clamoring to connect with the online networking service LinkedIn Corp. in the latest sign of the fervor for Internet companies that specialize in bringing together people with common interests.

The demand to buy a piece of LinkedIn is so intense that the 8-year-old company is expected to make its stock market debut Thursday with a value of at least $4 billion. That would make LinkedIn's initial public offering of stock the biggest by a U.S. Internet company since Google Inc. went public in 2004, according to the research firm Renaissance Capital.

The appetite for LinkedIn's IPO encouraged the company's bankers to raise the asking price by about 30 percent Tuesday to $42 to $45 per share. It won't be surprising if the IPO is priced even higher Wednesday evening and then sells for more than that Thursday morning when they are expected to begin trading on the New York Stock Exchange under the symbol "LNKD."

The IPO is expected to raise about $200 million for LinkedIn and produce $125 million to $135 million for existing stockholders, who plan to sell some of their shares. The biggest winner will be LinkedIn's co-founder and chairman, Reid Hoffman, whose 20 percent stake in the company will be worth more than $800 million.

The coming-out party on Wall Street for LinkedIn, which focuses on connecting professionals online, could be the prelude to even more excitement if several popular Internet companies decide to go public during the next year. The list of candidates includes the online messaging service Twitter, online game maker Zynga, online coupon service Groupon and the biggest social network of all, Facebook.

"LinkedIn will be used very heavily as a modeling tool for other companies in this space," predicted David Menlow, founder of research firm IPO Financial. "The pricing is going to have a dramatic effect. This is just the starting point for valuation adjustments."

Facebook is the most prized among the Internet companies still awaiting an IPO. It was valued at $50 billion as part of an investment organized in January by Goldman Sachs Group Inc., a major shareholder in LinkedIn. If Goldman Sachs follows through on its plan to sell its entire LinkedIn stake in the upcoming IPO, the bank would receive about $38 million at the mid-point of the targeted price range.

LinkedIn, based just down the street from Google's Mountain View, Calif. headquarters, has become profitable by building a website that acts both as a Rolodex and a hiring center.

People set up LinkedIn accounts to post the resume on a page and connect with current and past colleagues. LinkedIn members can then ask the people they know to introduce them to other connections that might help further their careers.

Although not nearly as popular as hanging out on Facebook, LinkedIn has emerged as a widely used directory. Through March, it had 102 million members and is adding another million each week.

The company gets about two-thirds of its revenue from fees that it charges for greater access to the website and more data about the expertise listed on each member's page. Businesses and job headhunters use LinkedIn to recruit people who might not even be looking for a job at the time. LinkedIn also has made money from business surveys of its members and a service that offer career advice to college graduates.

The rest of LinkedIn's revenue comes from Internet ads, which serve as the financial backbone for Google, Facebook and many other Internet companies.

The lofty appraisals being given LinkedIn and other online networking companies have raised worries of an investment meltdown if the businesses don't turn out to be as successful as enthusiastic investors anticipated.

That is what happened in the late 1990s when hundreds of unprofitable Internet companies attracted billions in venture capital and then went public to much fanfare. That led to a devastating collapse that still haunts Internet investors.

The big difference this time is that the current Internet darlings haven't rushed to the public markets. Instead, they are waiting until they have developed ways to make money while amassing massive audiences.

"These are serious businesses with huge global market opportunities ahead of them," said John O'Farrell, a partner with Andreessen Horowitz, a venture capital firm that owns stakes in Facebook, Twitter, Zynga and Groupon. "To an uninformed person, the valuations may look like a bubble, but we believe they will in fact prove to be very low valuations."

Last year, LinkedIn earned $3.4 million on revenue of $243 million. Its growth accelerated during the first three months of 2011, putting it on a pace to generate $500 million in revenue this year. Management, though, has warned that the company might lose money this year as it invests in more products and more computers to run its website as it tries to ward off competitive threats overseas.

If LinkedIn's IPO is priced at the mid-range target of $43.50 per share, the company would have a market value of $4.1 billion — about 17 times its 2010 revenue. By comparison, Google's current market value of $170 billion is less than six times its revenue last year. When Google went public, though, its market value of $24 billion was 16 times higher than its revenue from the previous year.

___

AP Business Writer Tali Arbel in New York contributed to this story.

SAN FRANCISCO – In the race to build a faster computer chip, there is literally nowhere to go but up. Today's chip surfaces are packed with the tiniest electronic switches the laws of physics allow, but Intel Corp. says it is blowing past those limits with a breakthrough, three-dimensional transistor design it revealed Wednesday.

Analysts call it one of the most significant developments in silicon transistor design since the integrated circuit was invented in the 1950s. It opens the way for faster smartphones, lighter laptops and a new generation of supercomputers — and possibly for powerful new products engineers have yet to dream up.

Minuscule fins jutting from the surface of the typically flat transistors improve performance without adding size, just as skyscrapers make the most of a small square of land.

"When I looked at it, I did a big, `Wow,'" said Dan Hutcheson, a longtime semiconductor industry watcher and CEO of VLSI Research Inc. "What we've seen for decades now have been evolutionary changes to the technology. This is definitely a revolutionary change."

Intel CEO Paul Otellini said that "amazing, world-shaping devices" will be created using the new technology.

Computers are already doing things that were almost unimaginable when Intel co-founder Gordon Moore made his famous prediction in 1965 that computers should double in power every two years. The axiom, known as Moore's Law, has held true ever since as computers have gotten cheaper, smaller and more powerful.

Engineers believe Intel's new transistors will keep the axiom going for years to come. Chips with the 3-D transistors will be in full production this year and appear in computers in 2012.

When Moore's Law was first coined, the most advanced computers were large, mainframe-type machines that took up entire rooms and were best suited for narrow tasks done one at a time.

Today we have smartphones that let us carry around the Internet in our pocket, supercomputers that have beaten Jeopardy! and chess champions, and even experimental cars that drive themselves. Technologists entertain visions of even deeper integration of artificial intelligence into our lives as computer technology advances, such as robots performing surgery.

Transistors, tiny on/off switches that regulate electric current, are the workhorses of modern electronics. They're to computers what synapses are to the human nervous system. They have become faster over the years thanks to new materials and manufacturing techniques, but Intel's latest advance is a redesign of the transistor itself.

A chip can have a billion transistors, all laid out side by side in a single layer, as if they were the streets of a city. Chips have had no "depth" — until now. On Intel's chips, the fins will jut up from that streetscape, sort of like bridges or overpasses.

The fins give the transistor three "gates" to control the flow of electric current, instead of just one. That helps prevent current from escaping. There's a limit to how much current a chip can take, and the new design allows more of that power to be spent on computing rather than being wasted.

Intel has been talking about 3-D, or "tri-gate," transistors for nearly a decade, and other companies are experimenting with similar technology. Wednesday's announcement is noteworthy because Intel has figured out how to manufacture the transistors cheaply in mass quantities.

Other semiconductor companies argue that there's still life to be squeezed from the current design of transistors, but Intel's approach still allows it to advance at least a generation ahead of rivals such as IBM Corp. and Advanced Micro Devices Inc.

Intel's approach carries some risks because the technology is untested on the mass market. But Doug Freedman, an analyst with Gleacher & Co., said Intel's approach might actually reduce chip defects if the multiple gates make the transistors more reliable.

"Intel takes big gambles when it knows what it's doing," Freedman said.

The reduced power consumption also addresses a key need for Intel, which is the dominant maker of chips for personal computers but has been weak in the growing markets for chips used in smartphones and tablet computers. Intel's current chips use too much power for it to be competitive in those markets, and the 3-D chips could help it become more of a player.

Transistors are microscopic, but their performance is felt with every click of a mouse, tap on a smartphone or download from a website. The faster they twitch, the faster a computer "thinks" — and sucks up power.

They need to get smaller without leaking too much power, a worrisome issue as the materials reach the atomic scale and get worse at blocking current from escaping.

Intel's advance does not add a complete third dimension to chip-making — that is, the company can't add an entire second layer of transistors to a chip, or start stacking layers into a cube. That remains a distant but hotly pursued goal of the industry, as cubic chips could be much faster that flat ones while consuming less power.

And the technological advance Intel has achieved won't guarantee success, as Intel has learned in repeated attempts at cracking the mobile market. The performance expectations and power requirements for phones and tablet computers are not as high as those for PCs.

Other chip makers such as Qualcomm Inc. and Texas Instruments Inc. have entrenched partnerships with cellphone makers that Hutcheson, the industry watcher with VLSI Research, said will be tough to overcome.

"When it comes to the mobile market, they have their work cut out for them," he said. But "this gives you the transistors to build the next great system."

By Alastair Sharp

ORLANDO, Florida |
Mon May 2, 2011 10:33am EDT