Google Inc. (NASDAQ: GOOG) is a true Goliath in the online world, exerting its dominance in search, Web-based e-mail, maps, software, and more. Despite this fact -- or perhaps because of it -- it seems that tech companies can't wait to do battle with Google. IBM (NYSE: IBM) is the latest rival to throw down the gauntlet, with the company launching its own internet-based e-mail service for businesses.
The new service, known as LotusLive iNotes, is geared toward employees who might not be able to access their company e-mail remotely. The no-frills program features basic applications such as messaging, calendar, and contact management. LotusLive iNotes is being offered at prices as low as $3 per user per month. (Google's Google Apps service, with e-mail and Web-based applications including word processing, is priced at $50 per user annually.)
IBM has high hopes for its new product. "It's going to be very competitive both functionally and from an economic point of view," enthused Sean Poulley, IBM's vice president of online collaboration services. Citing the general business trend toward moving data online rather than storing it locally, Poulley added, "There's plenty of market data that says this will expand, and we're certainly seeing it in our pipeline of opportunities."
IBM shares ticked fractionally higher Friday morning, defying a widespread downside bias among the broader Dow Jones Industrial Average (DJIA). The shares have added more than 40% this year, easily outperforming their blue-chip brethren, and the stock is currently enjoying support from its 10-week and 20-week moving averages. These two trendlines haven't been breached on a weekly closing basis since early March.
However, a glut of out-of-the-money calls could stall the security's progress during the near term. IBM is trading a few points below peak call open interest in the October series, which consists of 27,116 contracts at the 120 strike. As expiration draws closer, this accumulation of overhead calls could exert options-related resistance.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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