Dell Eyes Takeovers But Says Inside Growth Is Key

"It's a pretty simple issue," said Dell, at the Business Council forum of CEOs in Florida. "If you look at the new areas of Dell's business, whether it's in data networking, or storage or services, we're looking at alliances and partnerships and certainly acquisitions would be a potential. [But we certainly don't have any acquisitions to announce. [Organic growth will continue to be the majority of our growth."

Dell's comments come at a time of consolidation in the industry. Compaq Computer and Hewlett-Packard plan to merge. Shareholders are expected to vote on the merger plan in March, but analysts say it is still a toss-up whether the contentious deal will go through.

Dell Computer has led a price war that has helped it win market share and capture the top spot from rival Compaq, now the No. 2 PC maker. But PC demand has slacked off as the economic downturn has dampened buying by consumers and corporations, and the computer company is looking to find new areas for growth.

Speaking at a news conference on Wednesday announcing the results of a Business Council survey of CEOs, Michael Dell reiterated comments of other corporate leaders who said they are braced for more short-term weakness but most predict a recovery from recession later this year.

Dell said he is encouraged about the prospects for the PC industry because he expects more people will need to replace aging computers.

"A replacement cycle will open up," he said.

Michael Dell and about 100 other CEOs from major corporations including Citigroup, CSX Corp. and Johnson and Johnson are attending the Business Council meetings in Boca Raton, Fla.

Dell shares edged up 3 cents, to $25.30, in early-afternoon Nasdaq trading.

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