World Business

Dell CEO says considered taking company private

(Agencies)
Updated: 2010-06-04 11:45

From college to wall street

Michael Dell famously founded the company in 1984 while a student at the University of Texas. Dell, which went public in 1988, pioneered a unique business model by selling PCs directly to customers.

But after a period of huge growth that culminated in the company's claiming the title of world's biggest PC maker, Dell has struggled over the past few years. It has fallen to No 3 in the global rankings on a unit basis and lost market share to HP and Acer Inc.

Dell stepped down as CEO in 2004, but returned to the post in 2007, raising hope among some investors.

The company has been shedding jobs and cutting costs as it focuses on profitability over growth, and Dell has been trying to diversify its business away from its core of low-margin PCs.

But PCs still account for roughly half of the company's revenue.

"I think this is a company that can grow its operating income in dollars pretty substantially and that's our intent," Michael Dell said at the investors' conference.

"If people look at the progress around services...and the server business, there's a whole lot there to like," he said.

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Last month, Dell reported quarterly sales and profit that beat expectations, but its gross margin fell short of analysts' forecasts.

In 2009, Dell made its largest acquisition, buying technology services provider Perot Systems for $3.9 billion.

When asked about the company's future merger and acquisition deals, Dell said there is "not necessarily" a high probability that the company would make an acquisition of more than $2 billion, instead focusing on smaller deals.

Shares of Round Rock, Texas-based Dell closed up 4.9 percent at $13.76 on the Nasdaq.