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Advanced Micro Devices will sell its digital TV chip business to Broadcom for $192.8 million.

The move is part of chip company AMD’s attempt to raise some cash and regain its footing in its core microprocessor business where Intel has been eating AMD’s lunch.

AMD needs the cash since it has been losing money for seven quarters and is in the process of switching to an “asset light” strategy where it will likely lease its factories rather than own them outright. The digital TV chips will broaden Broadcom’s focus on entertainment chips and allow it to enter the market for low-end TV screens. This is one of those things that is akin to tossing out baggage when a plane is approaching mountains and it’s still too heavy.

The deal is expected to close in the fourth quarter of this year and could cut Broadcom’s full-year earnings by four cents to five cents a share. The boards of both companies have approved the deal, which still requires regulatory approval.

Sunnyvale, Calif.-based AMD is selling off the digital TV division which it acquired the business along with its acquisition of a graphics chip business of ATI Technologies. At the time, AMD executives touted how the digital TV chips would allow the company to diversify beyond the PC chip business into consumer electronics. Intel, meanwhile, refocused on microprocessors and is now forcing AMD to do the same.

Irvine, Calif.-based Broadcom will ask 530 AMD employees, mostly engineers, to join the company. This is really only the first step of creating a leaner AMD. The company will have to do more to improve its balance sheet as it comes up new ways to finance its capital-intensive chip factories. AMD has to be ready for whatever a newly competitive Intel will toss its way.

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IPhone glitches may be fixed in September — A chip in the iPhone is being blamed for dropped calls and choppy web reception, according to BusinessWeek. The problems will hopefully be fixed next month with a software upgrade.

Netflix suffers shipping and distribution outage — The outage affects one-third of the movie rental service’s 8.4 million customers. Executives say they’re trying to figure out an appropriate refund or credit.

Open source movement scores court victory — A federal appeals court ruled that even if a software programmer gives away their code, they can still dictate how that code is distributed. The decision bolsters one of the key principles behind open source software and overturns a ruling that many open source licenses are too broad to carry legal weight.

Icahn allies appointed to Yahoo’s board of directors — The appointment of Frank Biondi, Jr. and John H. Chapple is part of the deal struck between Yahoo and investor Carl Icahn, who tried to swing the board his way after acquisition talks with Microsoft fell apart.

Analyst: The strengthening dollar will hurt tech companies — That’s because a weak dollar boosts the earnings of companies that sell their goods overseas in foreign currencies, but report their profits in U.S. dollars, says Bernstein Research analyst Toni Sacconaghi.

Confirmed: Lulu has acquired book search engine uGenie — The rumor started earlier this month after self-publishing company Lulu announced a partnership with uGenie, which is backed by Sierra Ventures and BlueRun Ventures. Now we have confirmation that the deal is real, although the price was not disclosed. UGenie’s founders have reportedly joined the Lulu team.

Judge keeps gag order intact in subway hacking case — A federal judge upheld the order that prevented MIT students from giving a presentation at DefCon on their research into security vulnerabilities in the Boston subway system.

AMD launches four new processors for the business server market — The processors are triple-core and quad-core.

Apparently tired of using the same basic architecture in its computers that its other Windows-based rivals do, Apple is thinking about not adopting Intel’s so-called Montevina chipset, the key component of Intel’s Centrino 2 platform, according to AppleInsider.

This does not mean that Apple would stop using Intel CPUs, just its chipsets which usually controls everything else in a computer. AppleInsider even throws out there that Apple may have its eye on a new set by Intel-rival AMD which includes faster integrated video, Hyperflash I/O and support for Hybrid Hard Drives (regular hard drives with flash components means to load faster). Imagine that, Intel chips and an AMD chipset.

Apple could also possibly design its own custom chipset. The company used to have customized chipsets before its transition to Intel processors in 2006.

Any new architectural changes would supposedly take place in Apple’s upcoming notebook overhauls due this fall. These new notebooks could be radically different with elements such as glass trackpads, according to Computerworld. But that report also says Apple may use Centrino 2.

Apple seems to be in the mindset that it has a winning product with its Mac line, now it just wants to speed things up. Its upcoming new operating system, OS X 10.6 Snow Leopard, is apparently not going to be that different from OS X 10.5 Leopard, it is mainly designed to run quicker and more smoothly with lighter-weight apps.

We have an email into Intel about this possibility. I’ll update if I hear back.

Update: As expected, Intel responded that it wasn’t sure what Apple’s plan were.

Update 2: Dean McCarron, analyst with Mercury Research thinks such a move is unlikely.

As he tells us:

Montevina uses the P4 bus and everyone but Nvidia is exiting that market (VIA is all but done and doesn’t have a P4 license anymore, it expired in April. AMD is, well, AMD, and has been seriously ramping down their chip set production.)

If anyone would do it, it’d be Nvidia, which is ramping up its Intel-capable chip sets. So it’s possible, but a bit of a long shot; I’d be more certain if we knew what Apple’s motives would be.

[photo: flickr/k0a1a.net]

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Hewlett-Packard confirmed today that it is in advanced talks to buy EDS — It wants to acquire the data center outsourcing service company for $12 billion to $13 billion, well above the company’s current value of $9.5 billion, according to the Wall Street Journal, which first reported the story. If the deal is consummated, HP would have a lot more legs to compete with IBM’s global services division. HP’s services division brought in $16. 6 billion of the company’s $104 billion in revenue last year. EDS had revenue of $22 billion last year, so don’t expect the new company to be call HPEDS. The big fish can swallow this one whole.

Google extends its lead in online video in March, according to new figures from comScore — People watched about 11.5 billion videos in March, with Google accounting for 38 percent of the entire tally. YouTube, in turn, accounted for 98 percent of Google’s results.

Jeff Raikes has been named CEO of the Bill & Melinda Gates Foundation, which is committed to improving health in the developing world –Raikes is retiring as the president of Microsoft’s business division and will work as a full-time philanthropist along side Bill Gates, who is also joining the foundation full-time in June. Raikes will start in September. Reporters asked on a phone call if the foundation will take on the same culture as Microsoft as a result. Will we see the Gates Foundation, which has an endowment of $37.3 billion, make a hostile takeover bid for the Ford Foundation — and then give up?

XM Satellite Radio posted a wider loss than Wall Street estimated, as Silicon Alley Insider reports. But the CEO Nate Davis said he expected that the merger with Sirius Satellite Radio will be approved in the second quarter. Clearly, running a business on its own isn’t going so well, with a loss of $129.3 million and rising costs for acquiring new subscribers.

Apple is reportedly in talks with Time Warner’s HBO division to sell popular HBO programs — Update: The deal’s just been announced. Programs will include “Entourage,” for Apple’s iTunes service. Apple may charge a higher price of $1.99 for HBO videos. This may be the first time that Apple has created a separate price structure with a content provider, signaling the importance of the HBO content. I guess it shows there is life after the Bada bing.

Knowledge Adventure, the maker of kids’ educational-game software JumpStart, will begin selling virtual-world software aimed at three-year-olds to five-year-olds. The JumpStart Advanced Preschool World will encourage kids to learn their ABCs by playing games in a 3-D version of a beach or a jungle.

Hackers managed to steal the identities of six million Chileans — This included the daughter of the country’s president. The data included identity cards numbers, addressses, phone numbers, e-mails and academic backgrounds. The data was taken early Friday from servers at the Education Ministry, as first reported by the daily newspaper El Mercurio. You can read more about it CNN.com.

Picitup launches a test version of its search engine for finding matching images — It can be used for celebrity face matching and a variety of other image related functions. It reminds me of the combination image-text search engine under research at the Palo Alto Research Center.

Advanced Micro Devices shuffles management — Randy Allen, former head of the company’s server chip business, will be the senior vice president of the computing solutions group. He replaces Mario Rivas, an apparent victim of Intel’s spectacular success against AMD. AMD has had a tough time competing because of delays in launching its Barcelona products. AMD has more details on the reshuffle on its web site.

Here’s the latest action:

Advanced Micro Devices is in a world of hurt — The Sunnyvale, Calif. chip company lost $358 million on revenues of $1.5 billion in the quarter. It cited a tough outlook for the computer market, but it is clearly hurting from Intel’s newfound competitiveness. AMD’s core business is microprocessors and graphics chips for personal computers. It has other businesses related to getting those chips into other devices, from consumer electronics to mobile phones. CEO Hector Ruiz said the company is looking at its “non-core businesses” to evaluate them as part of a new cost-cutting program. That’s in addition to its previously announced restructuring in which it will cut 10 percent of its staff. Hence, it may sell off some of its non-core businesses.

Sequoia wants to be Blackstone, Carlyle going through shift — Sequoia Capital, Silicon Valley’s top dog venture capital firm, is trying to broaden its franchise, looking to do asset management and advisory work, according to Dan Primack, who says it is looking to become the venture community’s Blackstone Group. Among other things, PE Wire says Sequoia is raising a $750M hedge fund and has hired Eric Upin, former chief investment officer for the Stanford University endowment, and Michael Beckwith, former principal with Maverick Capital. We’ll look into this (let us know if you know more). Meanwhile, Primack also mentions that Bob Grady, who has led venture capital activities for The Carlyle Group, an investment firm with close ties to the Bush Administration, is moving into a lesser role. It’s part of a larger transition happening at the firm. The firm has lost two partners, and it replaced them with Nick Sturiale (formerly of Sevin Rosen Funds) and Greg Rossman (formerly of Pequot Capital). According to Primack, it also has hired Jeb Miller as a principal. Miller was previously ousted from ComVentures when that firm merged with Velocity Interactive Group.

Technorati and b5media to merge? — Seems like an odd idea to merge a company like Technorati, which searches and ranks blogs all across the web, with b5media’s network of 340 topic-oriented blogs. Wouldn’t the result be b5-biased Technorati rankings? Anyway, the merger is off because of personality differences and accounting issues, apparently.

The future of social networking: Watch this space — Social networking executives, investors and pundits sounded optimistic at a panel held on Microsoft’s Silicon Valley campus yesterday afternoon. There are still issues with making networks profitable, but that will come with time, panelists said. The discussion was part of ReMix, a follow-up to Microsoft’s big Mix conference earlier this year. The award for best quote goes to Dalton Caldwell of imeem (pictured), who said about Facebook founder Mark Zuckerberg, “I think Zuckerberg is calling the shots for our industry, and when they launched a platform, our heads exploded.”

Electronic Arts and Take-Two Interactive continue to trade barbs as EA extends takeover offer — More here. Our previous coverage here.

Quality-video site Hulu coming to mobile? — It’s been talked about before, and chief executive Jason Kilar implied as much again during a recent talk. Of course, there are already mobile competitors. YouTube has its own mobile site, while startup MyWaves has a deal with media conglomerate Viacom to be the sole provider of mobile Viacom videos.

“‘Crazy guy’” thinks CNN’s web site is about to be attacked by Chinese computers — more here.