VMWare Inc. (NYSE: VMW) announed this morning that its co-founder and chief executive, Diane Greene, is leaving the company. Ex-Microsoft executive, Paul Maritz, is set to replace her as the head of one of the most popular technology companies in the market. Predictably, the stock moved down $13 - or 25% - on the news.

VMWare also took the opportunity to lower its financial expectations for the year, since the stock was already going to be down on news of the departure. The company said it expects revenues for the full year of 2008 to come in modestly below the previous guidance of 50% growth over 2007; however, the company did not update its guidance with specific numbers for Q2.

VMWare was one of the hottest IPOs ever one Wall Street before the economy turned south last year. The company is a provider of virtualization solutions from the desktop to the data center. The company's suite of virtualization solutions addresses a range of information technology problems that include infrastructure optimization and desktop management.

Many investors are now wondering whether or not the drawdown today went too far. The departure of Ms. Greene was a long time in coming due to a lot of friction between VMWare and its former parent company EMC. Greene had had a lot of leeway within the company because VMWare was somewhat of a golden egg for the company. However, her failure to perform caused friction.

Some investors are bullish on news of new blood within the executive ranks. Meanwhile, the growth prospects for VMWare remain relatively strong despite the slowdown in technology spending on the part of corporations. The technology itself is used to reduce costs and improve performance, which is why the company used the word "modest" in its statement.

In the end, it will be interesting to see just how much VMWare can fall before investors take into account future growth and realize its relatively low valuation - for a tech company - of 68x earnings. Some are even saying that it could become an eventual takeover target for a larger business technology firm looking to move into the high growth virtualization arena.

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Microsoft Corporation (NDAQ: MSFT) said today that it might revive takeover talks with Yahoo Inc. (NDAQ: YHOO) if billionaire activist Carl Icahn's campaign to takeover the board is successful. Icahn is quickly building momentum ahead of a Yahoo annual meeting scheduled for next month after he promised to oust the board and chief executive Jerry Yang in order to pursue a sale. The billionaire activist has already won support from several hedge funds and is expected to put up a fight.

Icahn insists that Yahoo must combine with Microsoft in order to effectively compete against Google and has already won backing from large holders, including T. Boone Pickens, and John Paulson. The reason, according to many, is that any campaign by Carl Icahn generally draws a great deal of support given his popularity as an activist. Shareholders also clearly appear to be supporting him as shares rose sharply today on the news.

Microsoft originally offered around $44.6 billion for Yahoo, which comes in at $31 per share. That's 62% more than the search company's stock price before the takeover talks. However, the company rejected the offer saying that it was worth more because of its growth prospects and strong presence in Asia. Unfortunately, conditions have worsened since then and many investors are wondering if they can even get that much from Microsoft anymore.

Carl Icahn has nominated nine directors to replace Yahoo's board, including himself, Mark Cuban, and Frand Biondi Jr. The annual meeting is currently scheduled for August 1st, but it would not be uncommon for the meeting to be delayed if the existing board feels that they will lose the vote. It will be interesting to see what becomes of this situation...

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NVIDIA Corporation (NDAQ: NVDA) shares tumbled today after the graphics processor maker warned that its second quarter may suffer. Shares plunged more than 30 percent after the company issued revenue and gross margin warnings and blamed the problems on weak demand, delayed production of new products and price cuts. The news comes ahead of its quarterly earnings along with that of many other companies operating in the sector.

NVIDIA said that it now expects its second quarter revenues to range between $875 million and $950 million with gross margins also expected to be lower than internal expectations. This compares to a prior revenue forecast of $1.01 billion by analysts. The company also said that it would take a charge of $150 million to $200 million in the second quarter to cover anticipated warranty, repair, and return costs associated with a defect on some of its chips.

Shares of NVIDIA rival Advanced Micro Devices, which owns ATI, fell 3.7 percent on the forecast. Others weren't safe either as the Philadelphia semiconductor index fell as much as 2.7 percent in early trading before recovering to trade down just 0.5 percent right now. The industry as a whole has been experiencing problems as consumer spending has weakened - particularly on high-end computers and graphics cards needed for gaming and graphics design purposes.

Shares of NVIDIA Corporation fell $5.52, or 30.12%, to $12.60 per share on the news.

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