Accounting Issues Trip Up FindWhat Deal

Accounting issues aren’t just a U.S. problem, investors found out on Friday.

FindWhat plunged 25% on news that a European company it plans on acquiring wasn’t everything it had hoped.

FindWhat announced that it had found problems with paid search firm Espotting’s profitability and projections, and said it may walk away from the deal if it can’t negotiate a better price.

Paid search providers Looksmart and Overture (being acquired by Yahoo ) slipped on the news, perhaps in a guilt-by-association response by investors. But Espotting’s problems could also serve to brighten their prospects, particularly Looksmart, which has been a rumored acquisition target in the past.

The broader market slipped Friday as traders locked in profits as options and futures expired.

The Nasdaq slipped 3 to 1905, the S&P 500 gave back 3 to 1036, and the Dow declined 14 to 9644. Volume declined to 1.46 billion shares on the NYSE, and 1.88 billion on the Nasdaq. Advancers led 17-14 on the NYSE, and 16-15 on the Nasdaq. Downside volume was 54% on the NYSE, and 53% on the Nasdaq. New highs-new lows were 286-7 on the NYSE, and 382-4 on the Nasdaq.

HP edged higher on reports that CEO Carly Fiorina will leave Cisco’s board, prompting speculation of a closer alliance between the companies that would preclude Fiorina from serving as an independent director.

Red Hat soared 17% on news that SCO Group’s Linux battle isn’t having much effect.

Jabil and 3Com surged after beating estimates, while Palm declined after missing revenue estimates. Solectron edged higher after reaffirming guidance.

Micron rose 2.5% on news of rising DRAM prices.

Qwest fell 3% on news that it could be barred from federal contracts.

IBM climbed on a building security deal with GE .

VeriSign , off 3%, is under fire for redirecting mistyped Web and email addresses to its own search site.

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