5 Companies That Had A Rough Week

The Week Ending April 25

This week's roundup of companies that had a rough week include Samsung's mobile network outage following a data center fire; Google's loss of the key executive overseeing its Google+ social media efforts; Birch Communications coming under scrutiny for its planned acquisition of Cbeyond; Amazon stock hitting a six-month low; and four major tech giants settling an employee lawsuit.

Fire Knocks Out Samsung's Mobile Network

A fire at a Samsung data center in Gwacheon, South Korea, over the Easter weekend knocked out the company's mobile network. The incident rendered Samsung smartphones and tablet computers unusable for several hours and caused problems with Samsung's Smart TV with SmartHub, credit card services, and other Samsung devices and services connected to Samsung servers.

While service was restored within a few hours, Samsung channel partners expressed concern that so many services were concentrated in one data center and that the company apparently did not have procedures in place for automatic fail-over to another site in the event of such a disaster.

Google Loses Key Social Media Executive

Vic Gundotra (pictured), one of Google's most visible executives and the manager of the company's Google+ social networking service, announced his departure from the company this week with no word on where he was going. Gundotra joined Google in 2007 from Microsoft and was well known for hosting the annual Google I/O developer conference, in addition to his Google+ work.

Google+, launched in 2011, has managed to recruit more than 500 million users. But it has struggled to gain serious traction against competitors like Facebook and Twitter in the social networking arena. A Wall Street Journal story said the Google+ unit was recently reorganized and that Gundotra's departure was the latest sign of upheaval for Google+.

Cbeyond-Birch Communications Deal Faces Investigations

Telecom service provider Birch Communications this week said it planned to acquire national managed services provider Cbeyond for $323 million. But the deal immediately came under fire from a shareholder rights firm, Johnson & Weaver, which began an investigation into whether the acquisition was undervalued and whether alternatives were properly considered.

Three other law firms also said they planned to closely scrutinize the deal. Cbeyond shareholders would receive between $9.97 and $10.00 per share under the acquisition agreement.

Amazon Stock Slumps As Spending Increases

Amazon saw its stock price hit a six-month low Friday morning as increased spending limited its profit growth last quarter, according to Bloomberg.

Amazon's share price fell 9.4 percent to $305.46 early in trading Friday. The online retail giant's expenses rose 23 percent in the quarter, according to a company statement. That spending included investments into a TV set-top box that is Amazon's push to compete with Netflix and Apple.

A study released this week might also be concerning to Amazon. Researchers at Ohio State University say consumers in states that charge sales tax reduced their spending at Amazon by about 10 percent.

Tech Giants Settle Major Employee Lawsuit

Four tech heavyweights settled a class-action lawsuit Thursday that alleged they conspired to prevent engineers from getting better job offers from competitors.

According to the The Seattle Times, Google, Apple, Intel and Adobe averted a May 27 trial in San Jose, Calif., by reaching a settlement. The lawsuit claimed these companies followed a "gentleman's agreement" where they wouldn't recruit each other's employees. Plaintiffs were seeking $3 billion in damages on behalf of 64,600 workers.

Kelly Dermody, an attorney representing the workers, called the settlement "an excellent resolution" in a prepared statement.