Latest glitch hits United a week before holiday crush

A massive computer outage at United Airlines early Thursday stranded passengers across the country.A spokesperson for United tells WGN-TV that the airline is up and running again.

United Airlines, just a week before the year's busiest travel period, experienced yet another major computer problem Thursday morning that delayed hundreds of flights across the country, mostly on the East Coast. Some airline industry observers called for "heads to roll" at the world's largest airline.

The latest glitch involved the dispatch system software that enables Chicago-based United to communicate with airplanes before departure, delivering information on the plane's weight and balance, number of passengers and baggage, said United spokesman Charlie Hobart.

Flights of United's regional jet service United Express were not affected.

The outage occurred from about 7:30 a.m. to 9:30 a.m. Thursday and resulted in 257 delays directly attributable to the outage and more through the day, along with about 10 cancellations. The airline said it had a total of 636 delays on Thursday, far more than its usual number of about 300. The delays affected a relatively small number of the airline's 5,500 daily flights — fewer than 5 percent, Hobart said.

The computer problems, especially with the reservation system, have had Jeff Smisek, CEO of United's parent company United Continental Holdings, making public apologies since March. He conceded to Wall Street analysts that operational problems hurt the airline's third-quarter profits as many customers fled to competitors. However, he said during an earnings call with analysts in late October that those problems were behind the airline and that he was confident United would perform well during the heavy holiday travel season.

Aside from weather-related delays, such as Hurricane Sandy and a snowstorm on the East Coast, that seemed true until Thursday. Even on Thursday, United's on-time performance for all of its operations was about 80 percent, meeting its target, a spokesman said.

"It was a software issue that we found and fixed in that two hour period," United spokesman Rahsaan Johnson said. "It will not happen again."

But some industry observers said United is out of excuses.

"It is flat-out unacceptable," said Henry Harteveldt, co-founder of Atmosphere Research Group. "This makes United a laughingstock among airlines."

He said airline computer systems are complex and Thursday's problem might be a one-time issue, but the repeated failures are not only embarrassing for United, they also "undermine trust in the airline" and "demoralize employees."

"There are clearly failures in the airline's strategy and the airline's execution, and heads need to roll," he said. "United's [chief information officer] should resign or be dismissed."

Hobart, the United spokesman, pointed out that the airline has improved recently. "Since this summer, we've significantly improved our operational performance, with nearly 85 percent of our flights  on-time so far this month and nearly 80 percent of flights arriving on-time in October, despite operational challenges like Hurricane Sandy," he said. "We understand this outage was frustrating for our customers, and we are enabling them to rebook without penalty and receive a full refund of their flights were delayed by at least two hours."

Hobart said he did not have details about what went wrong with the dispatch system Thursday.

Joe Brancatelli, a business-travel writer at JoeSentMe.com, said the failures point to a larger problem.

"Mostly what it says is that [airlines] have got to stop looking at mergers as two route maps you can smash together," he said. He contends the United-Continental merger was not planned properly. "There are too many things going wrong," he said. Blame rests with "the guys running the show," he said of United's top executives. "The fish stinks from the head."

gkarp@tribune.com

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'Jihad' ads on CTA buses cause controversy

The controversial ads unveiled on the back of 10 CTA buses Wednesday read, “In any war between the civilized man and the savage, support the civilized man.” They conclude with the words, “Support Copts. Defeat Jihad.”

Within hours of the buses' first runs, messages appeared on Facebook and Twitter denouncing the campaign. Many said degrading a spiritual tenet of Islam -- one that refers to a Muslim's personal quest to become a better person -- amounts to hate speech.

“This whole campaign insinuates Muslims are violent,” said Asaf Bar-Tura, programs director for the Jewish Council on Urban Affairs, which protested the ads on social media Wednesday. “If it's within their legal powers, (CTA) should either not put it up because they incite hate and stereotypical thinking or put a label next to each sign saying `The CTA disagrees with this ad.’ ”

So far, federal judges have sided with the advertisement's sponsor, the American Freedom Defense Initiative, which sued transit authorities in New York City and Washington, D.C., when they initially rejected the ads. Those judges ruled that public forums such as buses and trains can't bar advertising entitled to First Amendment protection.

Pamela Geller, executive director of the initiative, said she believes the Jewish Council has good intentions, but denies that her ad qualifies as hate speech.

"There’s nothing hateful about it," she said in an e-mail. "9/11 was hate. 3/11 in Madrid was hate. ... The Christmas underwear bomber was hate. ... Pushing back against such hate is not hate."

"Perhaps this is the strangest thing of all: their utter lack of awareness, or denial, of the barrel pointed straight between their eyes," Geller said. "It is an odd combination of naivete, brainwashing and self-loathing that I will never comprehend."

Although Geller posted on her blog "Atlas Shrugs" a letter from her lawyer threatening legal action against CTA if they didn’t place the ads, Brian Steele, a spokesman for the CTA, denied that the CTA was threatened with a lawsuit. But the precedents did deter the CTA from rejecting the ads, which are expected to run on different routes each day for the next four weeks.

“While those courts agreed that the AFDI ads violate anti-disparagement or anti-demeaning standards similar to CTA's, that violation in and of itself did not remove AFDI's First Amendment protection to place the ads,” Steele said in a statement.

“CTA understands that this ad may be offensive to our customers,” he added. “While the courts have ruled this ad is a form of protected speech under the First Amendment, we object to its divisive message.”

The estimated ad revenue is about $4,500, a spokesman said.

Meanwhile, Ahmed Rehab, the executive director of the Chicago chapter of the Council on American Islamic Relations, said the group expects to launch its own nationwide ad campaign next week. As part of the campaign called “My Jihad,” individual Muslims define what the spiritual concept means for them.

“I don't feel the urge to fight … I'd rather put out the alternative,” Rehab said. “People can decide what racism is.”

mbrachear@tribune.com
Twitter: @TribSeeker

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Texas Instruments cuts 1,700 jobs, winds down tablet chips

NEW YORK/SAN FRANCISCO (Reuters) - Texas Instruments is eliminating 1,700 jobs, as it winds down its mobile processor business to focus on chips for more profitable markets like cars and home appliances.

Texas Instruments said in September it would halt costly investments in the increasingly competitive smartphone and tablet chip business, leading Wall Street to speculate that part of the company's processor unit, called OMAP, could be sold.

The layoffs are equivalent to nearly 5 percent of the Austin, Texas-based company's global workforce.

"A sale would have been better than a restructuring but a restructuring is certainly better than nothing," Sanford Bernstein analyst Stacy Rasgon said.

TI has been under pressure in mobile processors, where it has lost ground to rival Qualcomm Inc. Leading smartphone makers Apple Inc and Samsung Electronics Co Ltd have been developing their own chips instead of buying them from suppliers like TI.

Instead of competing in phones and tablets, TI wants to sell its OMAP processors in markets that require less investment, like industrial clients like carmakers.

TI is expected to continue selling existing tablet and phone processors for products like Amazon.Com Inc's Kindle tablets for as long as demand remains, but stop developing new chips.

"This year, the Kindle runs on the OMAP 4 and next year's Kindle is slated, we believe, for OMAP 5. We believe that program is well along to completion and do not expect that the termination of OMAP will disrupt those plans," said Longbow Research analyst JoAnne Feeney.

Amazon had reportedly been in talks to buy the mobile part of OMAP.

TI said it expects to take charges of about $325 million related to the job cuts and other cost reduction measures, most of which will be accounted for in the current quarter. Its previously announced financial targets for the fourth quarter do not include these costs, TI said.

The company, which has 35,000 employees around the world, expects annualized savings of about $450 million by the end of 2013 from the action.

TI shares rose to $29 in after-hours trading after closing at $28.76, down 2 percent on Nasdaq.

(Reporting By Sinead Carew in New York and Noel Randewich in San Francisco; editing by Carol Bishopric)

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Jets' Ryan angered by anonymous rips of Tebow

FLORHAM PARK, N.J. (AP) — Rex Ryan doesn't mind his New York Jets players saying what's on their minds. Just as long as they put their names to their comments.

An angry Ryan addressed his team Wednesday for some anonymous quotes by players and members of the organization ripping backup quarterback Tim Tebow in a newspaper report.

"If you're not going to put your name to it, I think that's about as cowardly of a thing there is," Ryan said. "I don't want to get into specifics of what I said, but I did address it with our football team. If you're searching for things to try to drive a wedge through the team, my thing is, I believe in this team.

"I believe this team is (together), will continue to be and maybe even become tighter. I'm confident that will be the case."

A report in the Daily News on Wednesday said that more than a dozen players and members of the Jets organization believe there's no chance Tebow could overtake Mark Sanchez for the starting quarterback job — with one saying of the backup: "He's terrible."

"We never say that it always has to be a bed of roses," said Ryan, who encourages his players and coaches to "be yourself" in interviews. "But again, put your name to it. I think people would respect you a lot more for it."

Tebow was acquired from Denver in a stunning trade in March, with the Jets envisioning using the popular player in key spots on offense. Instead, he has had little impact through nine games, rushing 27 times for 92 yards and completing five of his six passes for 40 yards. Tebow also has not scored with the Jets, and the wildcat package he was supposed to be such a large part of has been inconsistent and mostly ineffective.

Ryan and the Jets insist he has made a difference on special teams, though, as New York's personal punt protector because opponents have been forced to account for him since he has pulled off a handful of fakes.

"We asked him, a former Heisman Trophy winner, first-round pick, a quarterback who led his team to a playoffs that, 'You know what? We want you to be our personal protector,'" Ryan said. "Everything we've asked him to do, he's done."

But with Sanchez mired in a dreadful slump in which he has thrown two touchdowns and three interceptions, lost three fumbles and been sacked 11 times in the Jets' last three games, Ryan remains committed to him as the starting quarterback. Many fans and media have been calling for Tebow to take over for Sanchez to, more than anything, provide a spark for the offense.

For now, though, this remains Sanchez's team. And Tebow will remain on the sideline for most games, aside from the seven or eight plays he averages.

"He's a football player and I said that from Day 1," Ryan said of Tebow. "We never brought him in to be the starting quarterback. We already had a starting quarterback in Mark Sanchez. I thought I was clear on that from the day we brought Tim in here."

Ryan did, in fact, insist since the offseason that Sanchez was his guy, and he has stuck to that. But the latest locker room chatter presents an issue that the Jets are all too familiar with. In-fighting helped sink New York's season a year ago, with Sanchez and Santonio Holmes at odds nearly throughout.

After the season ended, several anonymous players were quoted in a media report saying they were uncertain of Sanchez's leadership abilities and called for the Jets to make a hard push for Peyton Manning. Ryan insists keeping his locker room together, something he thinks was a bit exaggerated last year, won't be a problem this time around.

"This team, in my opinion, is not going to be pulled apart by outside people," Ryan said. "Inside the walls, we're going to be (together), and that's what's going to give us an opportunity. If I'm wrong on that, obviously, that's going to be a different issue. I don't believe that."

Some have speculated that the team's infrequent use of Tebow is a reflection of Ryan's true feelings about him, that perhaps he was never on board with bringing him to the Jets in the first place — and it's owner Woody Johnson who pushed for the popular backup to be here and drum up ticket sales.

General manager Mike Tannenbaum told The Associated Press during training camp that he and Ryan kicked around the idea while waiting for a flight, and the two — along with Johnson and offensive coordinator Tony Sparano — were excited about the prospect about bringing in Tebow.

"I absolutely wanted Tim here," Ryan said. "The reason I say that is for the things that we've talked about. I was very honest from Day 1, and I've never gotten off that."

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Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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BAFTA Shifts Corporate Sponsors for Film Awards

LOS ANGELES (TheWrap.com) – You can’t buy awards, but when it comes to the BAFTAs you can certainly sponsor them.

The British Academy of Film and Television is switching up its corporate partners for its annual film awards ceremony. That means it’s out with telecom company Orange, and in with broadband network EE.

The overhaul will require some rechristening of BAFTA‘s hardware. After 15 years with Orange in the title, the ceremony will now be known as the EE British Academy Film Awards. Moreover, its award for best newcomer will now be named the EE Rising Star Award.

The BAFTAs are the U.K. equivalent of the Oscars. EE is a sister company of Orange, so the shakeup is not seismic.

The EE British Academy Film Awards will be broadcast on the BBC on February 10, 2013 and will be hosted by satirist Stephen Fry.

TV News Headlines – Yahoo! News

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New gene triples risk for Alzheimer's disease

Scientists have identified a new gene variant that seems to strongly raise the risk for Alzheimer's disease, giving a fresh target for research into treatments for the mind-robbing disorder.

The problem gene is not common — less than 1 percent of people are thought to have it — but it roughly triples the chances of developing Alzheimer's compared to people with the normal version of the gene. It also seems to harm memory and thinking in older people without dementia.

The main reason scientists are excited by the discovery is what this gene does, and how that might reveal what causes Alzheimer's and ways to prevent it. The gene helps the immune system control inflammation in the brain and clear junk such as the sticky deposits that are the hallmark of the disease. Mutations in the gene may impair these tasks, so treatments to restore the gene's function and quell inflammation may help.

"It points us to potential therapeutics in a more precise way than we've seen in the past," said Dr. William Thies, chief medical and scientific officer of the Alzheimer's Association, which had no role in the research. Years down the road, this discovery will likely be seen as very important, he predicted.

It is described in a study by an international group published online Wednesday by the New England Journal of Medicine.

About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million have Alzheimer's. Medicines such as Aricept and Namenda just temporarily ease symptoms. There is no known cure.

Until now, only one gene — ApoE — has been found to have a big impact on Alzheimer's risk. About 17 percent of the population has at least one copy of the problem version of this gene but nearly half of all people with Alzheimer's do. Other genes that have been tied to the disease raise risk only a little, or cause the less common type of Alzheimer's that develops earlier in life, before age 60.

The new gene, TREM2, already has been tied to a couple other forms of dementia. Researchers led by deCODE Genetics Inc. of Iceland honed in on a version of it they identified through mapping the entire genetic code of more than 2,200 Icelanders.

Further tests on 3,550 Alzheimer's patients and more than 110,000 people without dementia in several countries, including the United States, found that the gene variant was more common in Alzheimer's patients.

"It's a very strong effect," raising the risk of Alzheimer's by three to four times — about the same amount as the problem version of the ApoE gene does, said Dr. Allan Levey, director of an Alzheimer's program at Emory University, one of the academic centers participating in the research.

Researchers also tested more than 1,200 people over age 85 who did not have Alzheimer's disease and found that those with the variant TREM2 gene had lower mental function scores than those without it. This adds evidence the gene variant is important in cognition, even short of causing Alzheimer's.

"It's another piece in the puzzle. It suggests the immune system is important in Alzheimer's disease," said Andrew Singleton, a geneticist with the National Institute on Aging, which helped pay for the study.

One prominent scientist not involved in the study — Dr. Rudolph Tanzi, a Harvard Medical School geneticist and director of an Alzheimer's research program at Massachusetts General Hospital — called the work exciting, but added a caveat.

"I would like to see more evidence that this is Alzheimer's" rather than one of the other dementias already tied to the gene, Tanzi said. Autopsy or brain imaging tests can show whether the cases attributed to the gene variant are truly Alzheimer's or misdiagnosed, he said.

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Online:

Medical journal: http://www.nejm.org

Alzheimer's info: http://www.alzheimers.gov

Alzheimer's Association: http://www.alz.org

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

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Erdrich wins National Book Award for fiction

NEW YORK (AP) — Louise Erdrich's "The Round House" has won the National Book Award for fiction.

Katherine Boo's "Behind the Beautiful Forevers" won the nonfiction award Wednesday night at a New York ceremony. David Ferry's "Bewilderment" won for poetry, and William Alexander's "Goblin Secrets" won for young people's literature.

Winners each received $10,000.

Honorary prizes were given to novelist Elmore Leonard and New York Times publisher and chairman Arthur O. Sulzberger Jr.

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FCC recommends cross-ownership waivers for Tribune Co.

The staff of the Federal Communications Commission has recommended that the agency grant Tribune Co. waivers of so-called media ownership rules, paving the way for the company to emerge from its long-running bankruptcy.

The waivers -- the last major hurdle in the four-year case -- would take effect Friday as long as none of the five commissioners raise serious objections, according to a person at the FCC who wasn't authorized to speak and therefore did not want to be identified.

No vote is required for the waivers to take effect.

The waivers would set the wheels in motion to emerge from bankruptcy, something that can happen as soon as new ownership, a group led by senior creditors Oaktree Capital Management, Angelo Gordon & Co and JPMorgan Chase & Co., can complete the necessary paperwork.

The FCC staff is recommending that the agency grant a permanent waiver to Tribune's ownership of the Chicago Tribune and WGN radio and television stations and that it give  one-year waivers for the Los Angeles Times ownership of KTLA-TV Channel 5 and for similar arrangements in three other markets.

The FCC also is circulating among commissioners a proposal for new media ownership rules that would ease restrictions on consolidations among newspapers and TV and ratio stations, according to FCC Chairman Julius Genachowski. That proposal is expected to come up for an agency vote at the next regular meeting.

Once the new rules are in effect, Tribune's new owners could seek permanent waivers in the Los Angeles, New York, Hartford, Conn., and South Florida markets.

Tribune Vice President Shaun Sheehan declined to comment.

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Fla. socialite at center of scandal

If you were to diagram the increasingly tangled sex scandal involving former CIA Director David Petraeus, nearly all lines would lead back to one person: Jill Kelley, a 37-year-old Tampa socialite who hosted parties for the nation's top military brass.

Kelley's complaint about anonymous, threatening email triggered the FBI investigation that led to Petraeus' downfall. And now she is at the center of an investigation of the top U.S. commander in Afghanistan over alleged "inappropriate communications" between the two.

Kelley is a close friend of the Petraeus family, and photographs circulating in the media show the dark-haired woman at parties with Petraeus, his wife, and Kelley's husband, Scott, a cancer surgeon. She served as a sort of unofficial social ambassador for U.S. Central Command in Tampa, holding gatherings for the general when he was commander there from 2008 to 2010.

She also met Gen. John Allen while he was at Central Command, and now investigators are looking at 20,000-plus pages of documents and emails between Kelley and Allen, some of which have been described as "flirtatious." The general has denied any wrongdoing.

For her part, Kelley has taken a low profile since Petraeus' affair with his biographer, Paula Broadwell, became public. The Kelleys have retained high-powered Washington lawyer Abbe Lowell, who did not immediately return a call.

On Tuesday, Kelley could be seen through the large windows of her South Tampa home, a stately, two-story brick house with a half-dozen white columns. In the driveway was a silver Mercedes with a license plate marked "Honorary Counsel." Kelley's identical twin sister, Natalie Khawam, also lives there.

In the afternoon, Kelley, wearing dark sunglasses, left through the front door and ignored reporters' questions as she drove off in the Mercedes.

South Tampa is a conservative Southern community of big houses, big bank accounts, garden clubs and wives who pride themselves on volunteer work. A lot of the brass from MacDill Air Force Base, where Central Command is headquartered, lives or socializes in South Tampa, and helping members of the military is a major volunteer activity.

Former Mayor Pam Iorio said that she went to several parties to benefit the military at the Kelleys' home, and they drew MacDill's top brass, including Petraeus. But they were by far not the only parties held around the city for MacDill's officers.

"Our community's relationship with MacDill is just multi-faceted," said Iorio, who later invited the Petraeuses over to her own home for dinner. "It's something that is generational. People sincerely care about the military."

Petraeus aides said Kelley took it to another level, winning the title of "honorary ambassador" for her extensive entertaining. Petraeus even honored Kelley and her husband with an award in a special ceremony at the Pentagon.

The Kelleys invited then-Florida Gov. Charlie Crist to their home, but he never accepted. Instead, he had dinner with the Kelleys at a steakhouse in Tampa with Petraeus.

"Lovely people. I remember I had a nice dinner with she and her husband and the general and his wife," Crist said.

Ken Walters, a neighbor, said he went to a party the couple had to celebrate their first son's baptism. The Kelleys have two other children.

"Natalie and her sister, they're certainly not shrinking violets," Walters said. He recalled that when the sisters first entered the South Tampa social scene, they "rubbed people the wrong way. I think they probably stepped on a couple of toes."

Petraeus' affair with Broadwell was discovered after Kelley told an FBI agent friend that she had received email warning her to stay away from Petraeus. The email turned out to be from Broadwell, who apparently regarded Kelley as a rival for Petraeus' affections. Kelley's family and Petraeus aides have said Petraeus and Kelley were just friends.

In another strange footnote to the scandal, long before the case involving Petraeus got under way, the FBI agent sent Kelley shirtless photos of himself, according to a federal law enforcement official.

Kelley's brother, David Khawam, told WPVI-TV in Philadelphia on Monday night that the allegations have spilled out quickly.

"It's a shock. We're trying to figure out where the pieces are falling right now," he said in an interview at his law office in Westmont, N.J.

He said that his family left Lebanon for suburban Philadelphia's Huntingdon Valley in the 1970s to escape the turmoil in their homeland. His parents opened a Middle Eastern restaurant in Voorhees, N.J., called Sahara.

"My family is very patriotic; we came from Lebanon at a young age," he said.

Kelley later married and moved to Florida with her husband, who works at a cancer clinic.

Jill and Scott Kelley have been involved in at least nine legal actions since arriving in Tampa, according to court records. Most involve real estate transactions, including one foreclosure and an $11,000 judgment against the couple in a Pennsylvania case.

In another twist in the scandal, court records indicate that Petraeus and Allen intervened two months ago in a messy custody dispute on behalf of Jill Kelley's sister. Both four-star generals wrote letters supporting Natalie Khawam.

The judge in the case awarded Khawam's ex-husband custody last year of their son. He also called Khawam dishonest and lacking in integrity.

Khawam is a lawyer who works on health care fraud and whistleblower cases, according to her LinkedIn profile, which has been removed from the professional networking site. The sisters also competed in a cook-off filmed for a Food Network show called "Food Fight" in 2003.

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Associated Press writers Kimberly Dozier and Pauline Jelinek in Washington, and Brendan Farrington in Tallahassee, Fla., contributed to this report.

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Exclusive: AMD hires bank to explore options - sources

NEW YORK/SAN FRANCISCO (Reuters) - Advanced Micro Devices has hired JPMorgan Chase & Co to explore options, which could include a sale, as the chipmaker struggles to find a role in an industry increasingly focused on mobile devices and away from traditional PCs, according to three sources familiar with the situation.

Sources told Reuters on Tuesday that an outright sale of the company is not the main option, and other choices could include a sale of its portfolio of patents.

The company's stock surged 18 percent on the news before ending up 5 percent at $2.09 on the New York Stock Exchange. The shares slipped further to $2.07 in extended trade after AMD said it was "not actively pursuing a sale of the company or significant assets at this time."

"AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD's highly-differentiated technology assets is the right approach to enhance shareholder value," spokesman Drew Prairie said in an email to Reuters.

When asked why AMD had hired JPMorgan, Prairie declined to confirm the engagement, saying the company does not comment on its relationship with investment banks.

A JPMorgan spokeswoman declined to comment.

One of Silicon Valley's oldest chipmakers, AMD is laying off engineers and some analysts are concerned it may not find new markets for its chips in time to reverse a declining cash reserve.

AMD's shares have fallen more than 60 percent this year, giving it a market value of about $1.4 billion. It also has long-term debt and capital lease obligations of about $2 billion.

Since the 1980s, AMD has competed with much larger Intel and at times has made inroads with its PC and server chips. But setbacks at AMD limited those gains and AMD now faces new competition from companies designing low-cost and power-efficient chips based on ARM Holdings' technology.

Like Intel, Sunnyvale, California-based AMD was caught flat-footed in recent years with the emergence and fast growth of mobile devices.

But while Intel has deep pockets to fund research on new products to catch up, AMD faces declining cash flows and a more modest balance sheet.

EMULATE APPLE

Some investors believe part or all of AMD could be bought by a technology company that might want to emulate Apple Inc's tight control of software and components, a strategy credited in part for the success of the iPad and iPhone.

One source described AMD as a "legacy company" and said it might prove difficult to sell because of its dependence on the PC industry and lack of strong mobile offerings.

Another source said AMD's game console chip and embedded chips businesses were growing and attractive.

Microsoft Corp, Google Inc, Samsung Electronics, Intel Corp and even Facebook Inc have been suggested by Wall Street analysts as potential suitors that could benefit from some of AMD's chip business, including its graphics division, PC processors and server chips.

Others say AMD's most valuable asset may be its deep bench of engineers or its patents.

Goldman Sachs analyst James Covello estimated in a recent note to clients the chances of AMD's PC processor business being sold are between 15 percent and 30 percent.

Rather than selling AMD, bankers could help the chipmaker strengthen its finances in order to acquire technology it believes it needs to tackle new markets, said Williams Financial analyst Cody Acree.

"Right now they don't have the currency on their balance sheet or their share price to make an acquisition (of another company) viable," Acree said.

UNDERESTIMATED CHANGE

Rory Read took over as AMD's CEO in 2011 promising to fix long-standing execution problems that have plagued the chipmaker. But AMD has continued to lose money as well as market share to Intel and graphic chip rival Nvidia.

AMD said last month it would slash 15 percent of its workforce, while devoting more resources to areas outside of its traditional PC business, including communications, industrial and gaming applications.

Last week, AMD said it added a second board member from its leading shareholder, Mubadala Development Co, which owns 15 percent of the chipmaker.

In October, Read told analysts on a conference call he had underestimated the speed of change in the PC industry and said AMD would move quickly to focus on selling chips for communications, industrial and gaming applications.

AMD recently announced it has licensed technology from ARM and will use it to build low-power chips for servers. But those products aren't expected to launch until 2014 and AMD is one of several companies vying for a microserver market that will be small compared to traditional servers that power most data centers.

With the company burning through cash, analysts have recently become concerned about future liquidity and say AMD needs to turn its business around sooner than later.

AMD's cash declined $279 million in the third quarter to $1.48 billion. AMD said it was reducing its "optimal" cash target to $1.1 billion from $1.5 billion due to the business' now smaller size.

(Reporting by Nadia Damouni and Noel Randewich; Editing by Paritosh Bansal, Gary Hill and Bernard Orr)

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