Shares rose at Cineworld this morning after the cinema chain announced an increase in first quarter sales despite a dearth of box office blockbusters in the period. Source: Telegraph Business | 29 Apr 2008 | 11:10 am
Record oil prices help Royal Dutch Shell and BP to report strong profits for the first three months of 2008. Source: BBC News | Business | World Edition | 29 Apr 2008 | 11:06 am
A regulatory hold-up means HSBC's controlling purchase of a South Korean bank must be delayed. Source: BBC News | Business | World Edition | 29 Apr 2008 | 11:03 am
LONDON (Reuters) - Oil fell on Tuesday, retreating further from a record high hit a day before, as the dollar firmed and a strike ended at Britain's Grangemouth refinery.
The company which builds a large portion of the world's PCs is raising its estimates for the number of units it will build this year. Taiwan-based Quanta Computer, has raised its shipping targets for this year by a whopping 25 per cent, according to The Inquirer. Most of the firm's output is laptops, the hot part of the market. The news is very good for Dell (DELL) and Hewlett-Packard (HPQ), and not half bad for Microsoft (MSFT). Wall St. has assumed that a global recession could sharply cut sales of PCs. That would also hurt sales of Redmond's Vista operating...
News of a fresh rights issue in the banking sector and stubborn dealing room rumour of more to follow weighed on banks at the open on Tuesday but better-than-expected results from BP and Shell helped lift... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 10:53 am
Bank results formed the backdrop to trade in European equity markets on Tuesday, with disappointing numbers from Deutsche Bank, Danske Bank and DnB NOR contributing to the overall losses.Germany's biggest... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 10:52 am
HBOS's decision to go for a rights issue was not exactly a surprise - but their request for £4bn (at the top end of expectations) will have analysts sharpening their pencils. As with RBS, the final number appears to be double the original forecasts and it is this fact which will be weighing on investors' minds. Source: Telegraph Business | 29 Apr 2008 | 10:45 am
Abbey, the mortgage bank now owned by Spanish bank Santander, boosted its share of the UK's mortgage market by 10pc in the first quarter, taking advantage of smaller lenders that have fallen victim to the credit crunch. Source: Telegraph Business | 29 Apr 2008 | 10:45 am
NEW YORK (Reuters) - Blockbuster Inc is in talks about taking a stake in the new premium TV channel to be launched by Viacom Inc with Lions Gate Entertainment and Metro-Goldwyn-Mayer, the Wall Street Journal said on Tuesday, citing people familiar with the situation.
Industrial and Commercial Bank of China posts a 77% rise in first-quarter net income from a year earlier, helped by a lower tax rate, fee and commission income growth across its businesses.
BP (BP) and Shell produced out-sized profits for the first quarter. BP earnings rose to $7.62 billion from $4.66 billion. Over at Shell the numbers were up to $9.08 billion from $7.28 billion. According to MarketWatch "BP sold its oil and gas for 52% more than it did in the year-earlier period, while Shell received 66% more." Fair enough. The companies took advantage of the market and the rising price of crude. Now Wall St. can prepare for numbers from the US companies, especially Exxon (XOM) and Conoco (COP). Exxon's shares are above $92, very near their 52-week high. The...
LONDON (MarketWatch) -- The special liquidity plan unveiled by the Bank of England last week isn't designed to "kickstart" sluggish mortgage lending, but instead aims to ensure banks are confident they'll be repaid when lending to each other, Bank of England Gov. Mervyn King said Tuesday.
A £50bn loan plan for UK banks was not designed to "kick-start" the mortgage market, the Bank of England head says. Source: BBC News | Business | World Edition | 29 Apr 2008 | 10:34 am
LONDON (MarketWatch) -- HBOS, the U.K.'s biggest mortgage lender, said Tuesday that it plans to raise 4 billion pounds ($7.95 billion) through the sale of stock to existing shareholders as it battles against rising write-downs and tighter lending margins.
Disney launches a Russian website to introduce Mickey Mouse, Winnie the Pooh and Jack Sparrow. Source: BBC News | Business | World Edition | 29 Apr 2008 | 10:29 am
Reuters - Industrial and Commercial Bank of
China (1398.HK)(601398.SS), the world's biggest bank by market
value, posted a 77 percent jump in first-quarter profit on
Tuesday and booked a further $58 million worth of provisions
for its exposure to the U.S. subprime mess.
HONG KONG (Reuters) - Industrial and Commercial Bank of China , the world's biggest bank by market value, posted a 77 percent jump in first-quarter profit on Tuesday and booked a further $58 million worth of provisions for its exposure to the U.S. subprime mess.
LONDON/FRANKFURT (Reuters) - Britain's biggest mortgage lender begged for new funding on Tuesday and Germany's top bank suffered its first quarterly loss in years as the credit crunch sapped financial industry strength.
A United Nations task force is to be set up to tackle the crisis triggered by rising global food prices. Source: BBC News | Business | World Edition | 29 Apr 2008 | 10:22 am
Oil prices fell by $1 on Tuesday after reaching a record near $120 a barrel in the previous session while base metals weakened and gold prices softened. Nymex June West Texas Intermediate traded $1 lower... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 10:22 am
AP - Paying for gasoline easily tops the list of economic woes facing families in the United States, according to a survey on how changes in the economy have affected people's lives.
BMW's first-quarter profit sinks 17%, hit in part by the weak dollar and soaring prices for raw materials, as the luxury-car maker sounds a note of caution that further market deterioration could endanger its 2008 outlook.
The number of mortgages granted to home buyers fell to a record low last month
as prohibitive rates and demands for large deposits put off borrowers. Source: Latest Business News from Times Online | 29 Apr 2008 | 10:16 am
Citigroup (C) started two hedge funds last year and sold interests in them to well-off retail investors. What those people were not told is that the investments were risky. Now, Citi is giving some of that money back. Cit brokers, from the Smith Barney division, misled some of the poor souls who put up their cash. The retail brokerage operations "drummed up hundreds of millions of dollars from retail clients, including some who were told the fixed-income funds were a safe place to stash money," according to The Wall Street Journal. Never give a sucker an even break, never wise...
Reuters - Britain's biggest mortgage
lender begged for new funding on Tuesday and Germany's top bank
suffered its first quarterly loss in years as the credit crunch
sapped financial industry strength.
The Bank of England has today said that seasonally-adjusted mortgage approvals for house purchases fell to the lowest level since comparable records began in 1993. Approvals fell to 64,000 in March, down... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 10:12 am
The Bank of England has today said that seasonally-adjusted mortgage approvals for house purchases fell to the lowest level since comparable records began in 1993. Approvals fell to 64,000 in March, down from 72,000 in February and below a 2007 peak of 115,000 seen in both May and March. Source: Telegraph Business | 29 Apr 2008 | 10:12 am
Deutsche Bank AG said Tuesday that it wrote down $4.2 billion during the first quarter, pushing Germany's biggest bank to its first quarterly loss since 2003 amid trading losses, lower... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 10:10 am
Take-Two Interactive (TTWO), M&A prey of Electronic Arts (ERTS) will launch is wildly anticipated game "Grand Theft Auto IV" today. The paeon of bad taste, violence, and sexual lust may set records for video game sales volumes. The current champion of the genre is Microsoft's (MSFT) "Halo 3". According to The New York Times, which rarely writes about such things "During the next two weeks, some five million couch jockeys are expected to plunk down $60 to buy Grand Theft Auto IV." It is only fair to ask how five million people came by that money. Before the end of...
International organisations on Tuesday urged countries not to use food export bans to deal with the global food crisis, saying that restrictions would only fuel inflation. ... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 10:03 am
Microsoft has been radio silent since Yahoo's doomsday clock struck midnight last weekend. No chariots-cum-pumpkins, no big bombs. Just dead air.
Even employees say they're in the dark as to the company's next move. So as its stock slowly loses air, C.F.O. Chris Liddell offered the only clue available in an conference call with Microsoft employees late last week.
"If you go back to what you mentioned, which is the 52-week high, we're down from 36 bucks [actually, it peaked at $37.50 on Nov. 2]. So no one can feel happy about that... And I think until the Yahoo situation clarifies itself one way or another, it's going to be an overhang on our price."
Liddell wouldn't clarify "the Yahoo situation." In the face of such uncertainty, the wheels of analysis spin furiously. One of the better insights came from Citigroup analyst Mark Mahaney, who handicapped the outcomes of the Microsoft-Yahoo war.
Mahaney reckons there's a 45 percent chance Yahoo sells out at a higher offer; a 40 percent chance Microsoft goes hostile; a 10 percent chance Microsoft walks away; and a 5 percent chance they both agree to the current price.
Taking each of those options in turn, it's possible to at least handicap some winners and losers as this particular battle in the war for the Web plays out.
Scenario: The higher offer.
What happens next: The classic prisoner's dilemma: If Yahoo said early on it would take a higher bid, Microsoft would have paid it. If Microsoft had upped the bid early on, Yahoo would have taken it. Yet neither did so, because of two decades of Silicon Valley history when Microsoft sucked the life blood of many startups.
Today's Microsoft may be less vampiric, but the memories linger. It's like other reparations: Silicon Valley demands it be compensated via a Yahoo premium, but Microsoft's current shareholders don't understand why they must pay from their pockets for others' sins in the past.
Winner: Steve ("Give It Up to Me!") Ballmer. Yahoo, across the board.
Loser: Microsoft shareholders.
Wildcard: Microsoft deliberately offered mediocre earnings knowing its stock would drift down and, with it, its bid for Yahoo. (Microsoft initially offered half cash and half stock for Yahoo, worth $44.5 billion in February but worth only $40.9 billion today.) If Microsoft offers all cash, it effectively pays a 10 percent premium to the current value without raising its initial bid.
Scenario: The hostile takeover.
What happens next: With Saturday's deadline past, Microsoft has to be talking with key Yahoo shareholders behind the scenes. Last week's threats by C.E.O. Steve Ballmer that Microsoft may simply walk away were a bluff intended to weaken their resolve.
One shareholder, Capital Group, doubled its stake in Yahoo in the first quarter. If Capital bought those new shares after Microsoft made its offer, it may be in its financial interest to talk with Microsoft.
The catch here is the poison pill Yahoo created seven years ago. Once an aggressor owns more than 15 percent of Yahoo, the board can "make it more difficult for a third party to acquire us (or a significant percentage of our outstanding capital stock) without first negotiating with our board of directors." That means the board can issue 10 million new shares overnight, and existing investors can also buy new shares.
So Microsoft's ultimate tactic is a proxy fight—it can push an alternate board; all of Yahoo's directors are up for re-election this year.
Yahoo deserves a board that can help it find a way out of its slump. Some current board members, hailing from Skyrider and Northwest Airlines, seem irrelevant. But those pitched by Microsoft, with experience at Grey Global and Adelphia, are arguably worse.
So while hostile in name, this effort will remain tame. Microsoft remains as incapable of a knockout punch as it has been all along. And that means a long and costly proxy battle, with at best a Pyrrhic victory for Microsoft. And the slump in Microsoft and Yahoo's stocks will likely continue.
Winners: No one, really.
Losers: Everyone else.
Wildcard: Big Yahoo investors like Capital Group decide they're tired, and take Microsoft's offer.
Scenario: Microsoft walks away.
What happens next: Yahoo's stock drops back below $20, and Microsoft's rallies above $30.
Then Yahoo turns its spin machine away from Microsoft and toward future growth. Yahoo has launched a few initiatives—improving its algorithms, opening its search to developers—that could potentially have a real impact. Its stock, usually volatile, could rise above $31 if it does everything right.
Microsoft has its own options. It could buy the AOL business that Time Warner is eager to sell. It could buy or exchange stakes with News Corp., taking an interest in MySpace and Fox Interactive. It could buy Ask.com if Barry Diller finally spins it off, or a neglected online-ad player like ValueClick.
Winners: Microsoft shareholders.
Losers: Yahoo shareholders, at least for several months.
Wildcard: Microsoft bolts just so Yahoo's stock can plunge, then it walks back in a few months with a lower offer. An intriguing bet, but if Yahoo does turn around this year, Microsoft would regret taking such a risk.
Scenario: Microsoft sticks to its half-stock, half-cash bid.
What happens next: Assuming Microsoft doesn't pay all cash, this isn't likely unless Yahoo's stock falls further.
Winners: Microsoft workers hoping for the cash Microsoft would need to pay for Yahoo.
Losers: Anyone who bought Yahoo on Microsoft's initial offer.
U.S. stock futures slipped on Tuesday, with pharmaceutical Merck reeling from a surprise regulatory rejection of a key drug and caution still prevailing ahead of a key interest-rate decision.
The fourth installment of the controversial video game "Grand Theft Auto" goes on sale worldwide Tuesday with expectations that it will break sales records.
The euro fell to four-week lows against the dollar and the pound on Tuesday as weak European banking results and deteriorating economic sentiment weighed on the single currency.Deutsche Bank, Germany's... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 9:52 am
Ford's stock has gone through a series of spasms the last few days. First the company said it has made $100 million. Almost no one expected that and the stock rose sharply. The next day an auto analyst said the stock was overvalued. The shares gave most of their gains back. The following day, billionaire and octogenarian extraordinaire, Kirk Kerkorian made a tender offer at above the market price to pick up 20 million shares of Ford. Up went the stock again. Those not watching the main event might have noticed the side-show where GM was cutting a huge portion...
India's central bank on Tuesday hiked the amount of cash banks must hold in reserve for the second time in two weeks, as it struggles to tame inflation in Asia's third-largest economy. Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:50 am
LONDON (Reuters) - Oil giants Royal Dutch Shell and BP beat forecasts to post big rises in first quarter profits on Tuesday, lifting shares across the sector, as investors bet oil prices above $100/barrel would be an even bigger bonanza than expected.
If the stock markets' wild swings have been making you nervous, it might be time to consider an asset-allocation fund. These hybrids mix stocks, bonds, and cash in parachute portfolios designed to catch wind in boom times and to cushion against sharp drops.
Lewis Ranieri, one of the people who started the financial systems for the current mortgage market, believes that they system is worse off than most people know. According to Reuters, "I think the actual price declines are bigger than the indexes are showing, since so little is being sold." Douglas A. McIntyre
Tuesday, April 29, 2008: Fed poised to cut rates; may take a break after that WASHINGTON (AP) _ The Federal Reserve is poised to deliver another interest rate cut to millions of... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:40 am
Reuters - Oil giants Royal Dutch Shell (RDSa.L)
and BP beat forecasts to post big rises in first quarter
profits on Tuesday, lifting shares across the sector, as
investors bet oil prices above $100/barrel would be an even
bigger bonanza than expected.
LONDON (Reuters) - Oil giants Royal Dutch Shell and BP beat forecasts to post big rises in first quarter profits on Tuesday, lifting shares across the sector, as investors bet oil prices... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:39 am
Blockbuster (BBI) continues to put its nose where it does not belong. First it tried to buy Circuit City (CC), a firm which is weaker than Blockbuster is, and Blockbuster is plenty weak. It shares are under $3, down from over $20 less than five years ago. The issue of where Blockbuster would get the capital to close the deal came up quickly. The movie rental company's management looked like buffoons. Now Blockbuster wants to own a piece of Viacom's (VIA) new pay-TV channel which is going into business to compete with HBO and Showtime. Viacom has lined up content...
Sacyr Vallehermoso on Monday night dramatically pulled the planned public offering of its toll road business, in the latest setback for the debt-laden Spanish construction and services group.Itnere, which... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 9:33 am
HONG KONG (Reuters) - Industrial and Commercial Bank of China , the world's biggest bank by market value, posted a 77 percent jump in first-quarter profit on Tuesday, boosted by widening... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:31 am
Oil prices fell Tuesday amid expectations that a supply disruption in the U.K. would soon be resolved and as the U.S. dollar strengthened further against the euro. Crude futures the... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:25 am
Former World Bank chief James Wolfensohn thinks the credit crisis will take $1 trillion in losses out of the market. That is a number much higher than most estimates. It also means that the trouble is not over for financial firms like Citigroup (C), Merrill Lynch (MER), and Morgan Stanley (MS). According to Bloomberg ``It does seem to be a major adjustment on any level,'' Wolfensohn said. ``There may be a $1,000 billion worth of losses in it somewhere.'' He said he ``cannot recall anything similar, certainly in the last 30 to 40 years that I've worked.'' Douglas A. McIntyre
Oil prices ease from a record as Scottish refinery workers end a strike that disrupted North Sea crude production. Source: BBC News | Business | World Edition | 29 Apr 2008 | 9:23 am
Global banking giant HSBC said Tuesday it has extended by three months the deadline for completion of a six-billion-dollar deal to buy a South Korean bank from US fund Lone Star. Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:22 am
Abbey trebles its share of the new mortgage market in the UK, thanks to the position of its Spanish parent firm. Source: BBC News | Business | World Edition | 29 Apr 2008 | 9:17 am
Asian shares were mixed on Tuesday, with Hong Kong and Shanghai lifted by good results from some big Chinese banks and Mumbai rising in relief after India's central bank kept interest rates unchanged.In... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 9:17 am
Reuters - U.S. stock futures eased in Europe on
Tuesday, suggesting Wall Street may fall later on a busy day
for earnings, following a pessimistic economic outlook from
investor Warren Buffett.
LONDON (Reuters) - U.S. stock futures eased in Europe on Tuesday, suggesting Wall Street may fall later on a busy day for earnings, following a pessimistic economic outlook from investor Warren Buffett.
LONDON (Reuters) - U.S. stock futures eased in Europe on Tuesday, suggesting Wall Street may fall later on a busy day for earnings, following a pessimistic economic outlook from investor... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:15 am
N Brown, the British home shopping company which caters for fuller-figured
women, has defied difficult market conditions to deliver a higher than
expected 19.4 per cent rise in pre-tax profits. Source: Latest Business News from Times Online | 29 Apr 2008 | 9:09 am
NEW YORK (Reuters) - U.S. home foreclosure filings jumped 23 percent in the first quarter from the prior quarter, and more than doubled from a year earlier, as more overextended borrowers failed to make timely payments, real estate data firm RealtyTrac said on Tuesday.
One out of every 194 U.S. households received a foreclosure filing in the first three months of 2008, according to the latest figures released Tuesday by RealtyTrac.
The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners... Source: Infocious RSS raw feed - channel BNewsBusiness | 29 Apr 2008 | 9:01 am
Royal Dutch Shell and BP, Europe's two biggest oil companies, have delivered better than expected results as the price of oil soared. While BP's profit growth was much faster than Shell's, both companies... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 8:58 am
Shell and BP, Europe's largest oil groups, both delivered first quarter results that exceeded forecasts on the back of the surging price of oil which has risen to over $100 a barrel this year Source: FT.com - US homepage | 29 Apr 2008 | 8:58 am
Just as the Boeing 737 started its initial approach into Washington's Reagan National Airport, Gerard Arpey asked for my pen and pad. Arpey, the polished chief executive of American Airlines, was on his way from Dallas to brief FAA administrators about the maintenance issues that had recently grounded nearly half his fleet. But as the seatbelt sign went on, his mind turned to the industry's recent merger mania.
Deutsche Bank and two other German financial institutions reveal fresh hits from the sub-prime crisis. Source: BBC News | Business | World Edition | 29 Apr 2008 | 8:53 am
Strong results from oil companies Royal Dutch Shell and BP lifted the London oil and gas sector and helped the broader market to trade in the green on Tuesday.
UK bank HBOS unveils plans to raise £4bn of extra funding from its shareholders through a rights issue. Source: BBC News | Business | World Edition | 29 Apr 2008 | 8:42 am
Deutsche Bank and Allianz, Germany’s two biggest financial groups, both announce further write-downs after the credit crisis worsened towards the end of the first quarter.
This week, a few days ahead of schedule, tax rebates from the Treasury Department will start arriving in Americans' bank accounts. About 130 million U.S. households -- including anybody and everybody who earned more than $3,000 in 2007 and filed a tax return by April 15 -- will get something back from Uncle Sam.
Alliance & Leicester, the UK lender to companies and home owners, said Chairman Sir Derek Higgs has died suddenly at the age of 64 Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 8:30 am
Alliance & Leicester, the UK lender to companies and home owners, said Chairman Sir Derek Higgs has died suddenly at the age of 64 Source: Telegraph Business | 29 Apr 2008 | 8:30 am
Eurotunnel is asking its shareholders for extra cash to help the indebted firm pay off creditors. Source: BBC News | Business | World Edition | 29 Apr 2008 | 8:27 am
Reuters - A former top Federal Reserve official
has said that the Fed's bailout of Bear Stearns Cos
will come to be viewed as the "worst policy mistake in a
generation," the Wall Street Journal reported on Tuesday.
NEW YORK (Reuters) - A former top Federal Reserve official has said that the Fed's bailout of Bear Stearns Cos will come to be viewed as the "worst policy mistake in a generation," the Wall Street Journal reported on Tuesday.
BP and Royal Dutch Shell on Tuesday both reported big first-quarter-profit rises, as a nearly 70% rise in crude-oil prices helped offset virtually flat production and skyrocketing costs at the European oil giants.
HBOS, Britain's biggest mortgage lender, launched its 4bn rights issue on Tuesday as it announced write-downs totalling 2.84bn against impaired securities in its first quarter, and plans to bolster its... Source: Infocious RSS raw feed - channel BNPaperBusiness | 29 Apr 2008 | 8:06 am
HBOS has unveiled plans to tap shareholders for £4bn as Britain's mortgage lender becomes the latest UK bank to bolster its balance sheet in the face of the credit crunch. Source: Telegraph Business | 29 Apr 2008 | 8:00 am
European shares snapped a four-session winning streak on Tuesday, pressured by losses from French tire maker Michelin and German insurance giant Allianz, although strong results from BP and Royal Dutch Shell cushioned losses.
BANGKOK (Reuters) - Thailand said on Tuesday it will sell some of its government rice stockpiles into the domestic market for the first time in nearly 1-½ years as the world's top exporter seeks to cool prices that have nearly trebled this year.
According to Reuters, Cadbury is looking at buying Hershey. Reuters writes that banks being sued by Clear Channel (CCU) have asked for a delay of a Texas trial. Reuters reports that share of Visa (V) fell on quarterly results Reuters reports that Lewis Ranieri who helped create the current mortgage market says that house prices are off more than most analysts think. Reuters writes that the Fed is thinking about paying interest on bank reserves. Reuters reports that big US media companies are expected to have good first quarters because of their cable properties. The Wall Street Journal writes that...
Former Iraqi Deputy Prime Minister Tareq Aziz, the public face of Saddam Hussein's regime, is set to face court on Tuesday over the execution of dozens of merchants in 1992. Source: FT.com - US homepage | 29 Apr 2008 | 7:38 am
Deutsche Bank, Germany’s biggest bank, today disclosed its first quarterly
loss in five years as Allianz said that the problems at its Dresdner Bank
operation could threaten medium-term profits goals. Source: Latest Business News from Times Online | 29 Apr 2008 | 7:36 am
Britain could not conceivably suffer a major economic slowdown without facing a similarly-proportioned rise in unemployment. Source: Telegraph Business | 29 Apr 2008 | 7:20 am
Germany's biggest lender reported a €141m net loss in its first quarter amid markets that chief executive Josef Ackermann said were 'the most difficult in recent memory' Source: FT.com - US homepage | 29 Apr 2008 | 7:20 am
Markets in Asia were mostly higher. Tokyo was closed for a holiday The Hang Seng rose 1% to 25,925. China Netcom (CN) rose 3.9% to 24.05. China Petroleum (SNP) rose 2% to 8.22. The Shanghai Composite rose 1.4% to 3,523. Data from Reuters Douglas A. McIntyre
The $3-billion effort has had difficulty obtaining construction financing amid the real estate downturn. The projected finish date for its first phase is now 2012.
The developer of the Grand Avenue project in downtown Los Angeles said Monday that completion of the $3-billion redevelopment effort will be delayed until 2012 because of difficulty in obtaining construction loans amid the real estate downturn.
Small companies such as pet sitters and housecleaners are finding it necessary to pass on some of the rising expense to customers as well as to cut back on driving.
You know fuel prices have gotten out of control when even your dog walker is adding a surcharge to the bill.¶ In the week ended Monday, self-serve regular gasoline rose nearly a nickel a gallon in California to an average of $3.892 -- a record -- while nationwide the average jumped nearly a dime to a record $3.603, according to the Energy Department's weekly survey of service stations.¶ For Melissa Roth, owner of Pet Concierge, filling the tank of her 2003 Ford Explorer costs nearly $90 instead of the $74 tab when she opened her company in July 2006. ¶ "It's just scary," said Roth, who logs as many as 300 miles a week to walk and care for her clients' four-legged family members. "One of my biggest expenses now is gasoline." ¶ To keep her company operating, Roth is planning to increase her prices and add an extra fee for clients who live more than 10 miles from her Atwater Village base.
Robert Maguire offers to buy the real estate trust and sell off many of its signature buildings, but directors say the deal has too many uncertainties.
Downtown Los Angeles skyline boss Robert Maguire, fighting to keep control of the real estate investment trust he founded, on Monday made a complicated offer to buy the company and sell off many of its signature holdings, perhaps including the tallest building in the West.
The central bank needs to atone for failing to rein in loose credit policies, Rep. Maxine Waters and others say.
The Federal Reserve held an unusual hearing Monday in Los Angeles on Bank of America Corp.'s proposed $4-billion takeover of troubled Calabasas mortgage lender Countrywide Financial Corp. But it was the Fed itself that came in for some of the harshest criticism.
The former executive has been notified that the agency plans to recommend civil proceedings against her.
The former chief financial officer of Pixar Animation Studios may face charges that she mishandled stock options, the latest fallout in the legal troubles that have plagued high-tech companies.
Sir Derek Higgs, the Alliance & Leicester chairman and a leading corporate
governance reformer, died suddenly yesterday aged 64. Source: Latest Business News from Times Online | 29 Apr 2008 | 6:59 am
HBOS has unveiled plans to tap shareholders for $xxbn as Britain's mortgage lender becomes the latest UK bank to bolster its balance sheet in the face of the credit crunch. Source: Telegraph Business | 29 Apr 2008 | 6:45 am
HBOS has unveiled plans for a heavily-trailed £4 billion rights isssue as part
of a refinancing under which Britain’s biggest mortgage lender will pay its
interim dividend in shares and take an additional £2.8 billion writedown
against the credit crunch. Source: Latest Business News from Times Online | 29 Apr 2008 | 6:26 am
BP and Royal Dutch Shell have reported massive increases in profits for the
first three months of this year on the back of rocketing petrol prices,
which are expected to hit £5 a gallon today. Source: Latest Business News from Times Online | 29 Apr 2008 | 6:03 am
New Zealand's March trade performance was surprisingly weak, with dairy export values lower than forecast while high volumes of oil kept imports up.
A $50 million deficit in the March trade balance contrasted with the median forecast... Source: New Zealand Herald - Business | 29 Apr 2008 | 5:33 am
Fred Buenrostro said he was resigning to to pursue private sector opportunities, days after the largest US pension fund's chief investment officer said he would step down Source: FT.com - US homepage | 29 Apr 2008 | 5:08 am
In a melodramatic scene from the 1985 movie Rocky IV, the elite Soviet boxer Ivan Drago coldly assessed the wan and beaten body of his American opponent, Apollo Creed: "If he dies, he dies."
Antitrust regulators must worry they'll come across like a bureaucratic version of Drago if they were to stand in the way of the airline industry as it rushes to consolidate. Surely no one could be so cruel, so uncaring, as to let the injured die without offering a little help, a little hand up, a little love?
Airlines today look so sad, so shriveled up. Where did the profits go? First the 2001 terrorist attacks, now $120 barrels of oil? United Airlines just lost how much in the first quarter? Half a billion? Oh, it's just too painful. We can't let the airlines die. If they want to combine into three jumbo airlines, so be it. If they merge, they merge.
It may seem that the idea of headlong airline consolidation is a slam dunk. But not everyone is going along with the idea.
Severin Borenstein
Severin Borenstein, who was an adviser to the Clinton-era Justice Department as it considered, and eventually turned down, United Airlines' first pass at buying US Airways, in 2000, says the government doesn't have to feel like a killer if it decides to block another United-US Airways deal.
"The only thing that changed is the airlines are broke because the price of oil is high and they'd like to make more money," said Borenstein, who is now a professor at the Haas School of Business at the University of California at Berkeley.
"That's not a particularly tough-love view," Borenstein added. "That's pretty much a standard view among economists. You don't let firms merge just because they're losing money."
Others echo the notion that competition isn't the issue. Elizabeth Bailey, a professor at the University of Pennsylvania's Wharton School of Business said the airline industry's problem isn't having six or seven major carriers, it's high fuel prices.
"In normal times, this number of carriers is able to make money," Bailey said. "Things were looking pretty good for the last two or three years."
With the Bush administration's deal-friendly Justice Department in charge until January 20, 2009, hardly an antitrust concern has been raised in the past month of merger mania in the airline industry.
Delta's agreement to buy Northwest has set the airlines scrambling like desperate singles at a square dance. Money-losing United is especially in the grip of merger fever. "Consolidation is underway -- ensuring you have the right partner is everything," United Airlines chief executive Glenn Tilton said over the weekend.
Borenstein said airline C.E.O.'s have a window of opportunity to get a deal done, and are desperate to act before it closes.
"They see the end of the Bush administration coming and an almost certain increase in antitrust scrutiny of airline mergers after January 20," he said. "So they feel real time pressure to do something if they're ever going to."
Mergers, say the airlines, could save the industry from mounting losses, bankruptcies and global humiliation. "The U.S. airline industry is in serious decline!" writes James May, the president of the airline industry's lobbying body, the Air Transport Association, in an open letter entitled, "Final Approach."
Below a chart comparing the paltry market capitalization of the six incumbent carriers with German carrier Lufthansa, May goes on to quote pro-consolidation views of Morgan Stanley and J.P. Morgan analysts.
The July 27, 2001, announcement that rejected the US Airways—United Airlines takeover nevertheless looks controversial in hindsight. The Sept. 11, 2001, terror attacks flung the airline industry into its deepest hole ever, and in many ways it has never fully recovered.
Borenstein says the Supreme Court has long stood by the idea that rules about the concentration of market power don't go out the window when an industry is suffering.
"So what?" he said. "The airlines are losing hundreds of millions of dollars because they happen to own aircraft when the price of oil went up."
Ausra, which develops solar energy for sale to utility companies, is emblematic of the current generation of “clean tech” energy firms that seek to find newer, cost-efficient ways to generate and store energy via renewable sources and advances in fuel cells and related technologies.
The company’s core technology, which uses sunlight to drive steam turbines to generate energy, was originally commercialized on a small scale in 2004 in Australia. Last September, Ausra, which was formed in late 2006 to take the technology to a larger scale in the U.S. and worldwide, raised more than $40 million in a first round of funding from blue-chip Silicon Valley venture capital firms Kleiner Perkins Caufield & Byers and Khosla Ventures.
This isn’t the 1970s, when spiking oil costs and heightened concern over energy security caused the spotlight to shine on alternative energy sources and then fade. Nor is this a niche market in which only those with HAVE YOU HUGGED A TREE TODAY? bumper stickers are investing. Many of today’s companies are well-funded, large-scale operations, raising record amounts of capital with an eye toward massive initial public offerings—even as the economy as a whole heads down a shaky path and funding for other risky startups dries up.
Khosla Ventures’ Vinod Khosla, a founder of Sun Microsystems, has invested in 45 clean energy ventures since 2004, putting $205 million into nine companies in the first quarter of 2008 alone. And he’s far from alone. Venture capital firms sunk $2.2 billion into 166 clean tech firms in 2007, most of which are energy related, according to the National Venture Capital Association. That’s up from $1.5 billion invested in 2006, and the pace is only quickening. In the first quarter of 2008, clean tech companies received $625 million in V.C. funding, according to the N.V.C.A.
With global energy demand and alarm about the environment and global warming reaching unprecedented heights, those backing clean energy companies say there’s a timely market opportunity in the sector. Global energy needs are projected to be more than 50 percent higher in 2030 than they are today, with China and India accounting for 45 percent of that increase.
“You start to see this rise in enormous appetite for energy, and someone’s got to feed that mouth,” says Erik Straser, general partner at Mohr Davidow Ventures, a V.C. firm that has invested more than $400 million in clean energy ventures.
Clean energy backers point in particular to the significantly declining costs of developing and producing alternative energy as evidence of the economic viability of these ventures. For example, in the 1970s, large-scale solar energy solutions cost about 30 times more to implement than they do today. And new, larger wind turbines now generate 120 times as much electricity as 1980s’ models at a quarter of the cost. Some of the newer technologies promise to bring costs down even further.
“The primary difference between what is happening now and what has happened in prior market cycles is it’s now economically feasible and desirable to pursue these types of solutions,” says John Balbach, managing partner at Cleantech Group, a network of clean technology investors and companies. “If the outcome is less pollution or reduced carbon or some impact on climate change, that can benefit in a positive way, but the primary [concern] is return on investment.”
“At the end of the day, there has to be financial incentive for people to make an investment in the sector, and there is,” says Patrick McCloskey, managing director of Evolution Markets Financial Services, which provides banking services to clean energy companies and their investors. “John Doerr [of Kleiner Perkins] and Vinod Khosla wouldn’t be spending the time in the energy sector unless there was financial gain to be made.”
Investors seeking a measure of how these companies might fare can look at the significant returns from the generation of alternative energy companies started in the 1990s.
Last year, Goldman Sachs made $900 million from its two-year investment in Horizon Wind Energy after it sold the wind farm to a Portuguese power company for $2.2 billion. And First Solar, a Phoenix-based manufacturer of “thin-film” equipment for collecting solar energy, went public in November 2007, raising $400 million and handsomely rewarding its backers like True North, an investment firm founded by now-deceased Wal-Mart heir John Walton. (First Solar now sports a market cap of almost $23 billion.)
At Ausra, things are moving ahead at full, uh, steam. Its U.S. steam facility is expected to go online this summer, and the production of its solar mirrors is starting this month. “It’s just a matter of time before we begin to deploy on a large scale,” says Robert Fishman, the company’s C.E.O. Some studies suggest that the market for the type of energy generated by Ausra could reach $200 billion a year by 2030.
To be sure, the path to success for most alternative energy companies will not likely be as smooth. For one thing, clean energy firms are often heavily dependent on the support of the government, which can be inconsistent.
“The problem is, all this investment is being poured into these firms, based upon the idea the government is going to regulate the heck out of the energy business,” says William Yeatman, an energy policy analyst at the free market-oriented Competitive Enterprise Institute. “That’s not the best basis on which to guide one’s investment.”
In addition, wind and solar energy, which so far have been the energy sources most supported by the government, still face challenges related to energy storage and generation for times when the sun is not out or the wind is not blowing.
Despite these challenges, though, V.C.’s firmly believe that the companies that can eventually roll out their products and technologies on a mass scale will bring huge rates of return. Khosla, for one, says he is “very bullish” on the long-term prospects for clean energy, although he thinks the investment cycle may take as long as 10 to 20 years to play itself out.
“One has to keep perspective in mind,” Khosla says. “There are few winners and lots of losers. In 1995, what could you predict about the internet? Almost nothing.”
Other V.C.’s, like Mohr Davidow’s Straser, believe that we’re only one or two years away from seeing blockbuster I.P.O.’s and billion-dollar acquisitions, particularly as large, established businesses like General Electric and Siemens look to startups for ways to reduce the energy consumption of their products and technologies. In the short term, Straser expects that the solar industry will see a handful of investments in the $100 million to $150 million range to fund the new technologies and expand production facilities.
Just as with the development of the internet, though, there’s bound to be plenty of ups and downs in the clean energy business.
“Venture capitalists have a belief that there will be some very large wins here—[but] there’s also going to be an awful lot of blood on the floor at the end of the day,” says Emily Mendell, vice president of strategic affairs at the N.V.C.A. “The ones that are going to win are going to win very big.”Related Links A Google in the Sun G.M.'s Alternative Alternatives Chevron Responds
Allowing Foodstuffs or Woolworths to take over The Warehouse would destroy an opportunity that could result in cheaper groceries, the Court of Appeal was told today.
The Commerce Commission today opened its case to strike out a... Source: New Zealand Herald - Business | 29 Apr 2008 | 2:56 am
Telecom New Zealand is expected to report quarterly net profit fell sharply as increased regulation and competition erode its market dominance.
The government has forced Telecom to split into three arms and open its networks to... Source: New Zealand Herald - Business | 29 Apr 2008 | 2:46 am
New Zealand turned in a worse than expected trade performance in March, with a deficit of $50 million in the trade balance, Statistics New Zealand (SNZ) figures show.
It was only the second March deficit recorded in the past decade,... Source: New Zealand Herald - Business | 29 Apr 2008 | 2:43 am
Federal Reserve policymakers are set to discuss paying interest on bank reserves in a closed door meeting. Such a move could in theory allow the Fed to expand its liquidity support operations without limit Source: FT.com - US homepage | 29 Apr 2008 | 12:13 am
The Daily Telegraph's Most Powerful UK Business People list ranks the most influential figures in British business by sector. Here are the top 20 figures from industry. Source: Telegraph Business | 29 Apr 2008 | 12:01 am
Ford Motors' shares rose to their highest level since November after billionaire investor Kirk Kerkorian said he had amassed a 5 per cent stake and was seeking another 1 per cent of Detroit's second-largest carmaker Source: FT.com - US homepage | 28 Apr 2008 | 11:15 pm
Jeremiah Wright, Barack Obama's former pastor, gave a defiant address in Washington that looks likely to add to Mr Obama's growing vulnerability ahead of a critical primary in Indiana next week against Hillary Clinton Source: FT.com - US homepage | 28 Apr 2008 | 11:02 pm
Archie Norman, the former Conservative MP and Asda chief executive, has
attacked the Office of Fair Trading (OFT) for its series of price-fixing
raids and investigations into Britain’s biggest supermarkets. Source: Latest Business News from Times Online | 28 Apr 2008 | 11:00 pm
Northern Rock breached capital rules six months before its collapse, yet
failed to tell shareholders and continued to be given favourable “light
touch” treatment by financial regulators, it emerged yesterday. Source: Latest Business News from Times Online | 28 Apr 2008 | 11:00 pm
Warren Buffett took advantage of the credit crunch yesterday as Mars announced
an agreed $23 billion ($£11.5 billion) takeover of Wrigley in a deal that the
world’s richest man helped to finance in return for a cut-price stake in the
chewing gum group. Source: Latest Business News from Times Online | 28 Apr 2008 | 11:00 pm
If stress relief is one reason people like to chew gum, Todd Stitzer could
have been forgiven for reaching for a pack of Trident yesterday morning. Source: Latest Business News from Times Online | 28 Apr 2008 | 11:00 pm
CHICAGO (Reuters) - M&M's candy maker Mars Inc has teamed up with billionaire Warren Buffett to buy the No. 1 chewing gum manufacturer Wm Wrigley Jr Co for $23 billion, creating the world's largest confectionery company.
Dairy giant Fonterra says it has bought the final 42 per cent of Chilean dairy company Soprole for US$201.9 million.
It already owns 58.85 per cent of the company, which it says has "the second-most recognised corporate brand... Source: New Zealand Herald - Business | 28 Apr 2008 | 9:18 pm
In big cities in China, single women may still be looking for men with charm, wit, intelligence and good looks. But what really makes them swoon is a man who owns a home. Lisa Chow reports. Source: Marketplace | 28 Apr 2008 | 9:15 pm
Hundreds of millions of the world's poorest consumers are suffering greatly as the global cost of food has soared. Washington Post reporter Anthony Faioloa met some of them recently in western Africa. He talks with Kai Ryssdal about what he saw. Source: Marketplace | 28 Apr 2008 | 9:15 pm
IBM employees on Tuesday plan to protest the company's practice of "reclassification," or changing salaried workers to hourly ones. It's a word that's getting a lot of play in corporate America these days. Lisa Napoli reports. Source: Marketplace | 28 Apr 2008 | 9:15 pm
Almost a year ago the United States Postal Service stopped sending letters and packages by sea. It's airmail only now for most international postage. Commentator Robert Lyle wonders whether the change has been worth it. Source: Marketplace | 28 Apr 2008 | 9:15 pm
Two weeks from today the cost of mailing a first-class letter goes up a penny, from 41 to 42 cents. Unless you've bought some of theose "forever" stamps, which are being bought at a rate of 30 million a day. Jeremy Hobson reports. Source: Marketplace | 28 Apr 2008 | 9:15 pm
The Federal Reserve is holding hearings in L.A. on Bank of America's planned acquisition of troubled mortgage company Countrywide. Fair-lending advocates say the acquisition should include an obligation to help clients avoid foreclosure. Jeff Tyler reports. Source: Marketplace | 28 Apr 2008 | 9:15 pm
Oil nudged closer to $120 a barrel today. Two theoretically unrelated labor disputes -- in Nigeria and Britain -- were largely to blame. Stephen Beard reports. Source: Marketplace | 28 Apr 2008 | 9:14 pm
The Mars candy company is teaming up with Warren Buffet to buy Wrigleys for $23 billion. Meanwhile, Kirk Kerkorian is buying more shares in Ford Motor Co. If you've got billions, is now the time for bargains? Jill Barshay reports. Source: Marketplace | 28 Apr 2008 | 9:14 pm
Saudi Arabia's Public Investment Fund is in the "final stages" of launching the kingdom's first sovereign wealth fund. But its early financial commitment will disappoint those hoping for another megafund Source: FT.com - US homepage | 28 Apr 2008 | 9:02 pm
The New Zealand dollar got some lift last night from a generally weaker greenback, with markets relatively quiet ahead of a decision on US interest rates on Thursday morning (NZT).
By 8am today the kiwi was buying US78.51c from... Source: New Zealand Herald - Business | 28 Apr 2008 | 8:55 pm
US stocks ended little changed on Monday after the biggest US takeover deal proposed this year helped offset the comments by influential investor Warren Buffett, one of the deal's backers, that the country could face a long and deep... Source: New Zealand Herald - Business | 28 Apr 2008 | 8:46 pm
Oil has hit a fresh peak near $120 a barrel as supply outages in Nigeria and Britain shut down nearly 2 million barrels per day (bpd) of output in the Atlantic Basin.
US crude CLc1 settled up 23 cents at $118.75 a barrel after... Source: New Zealand Herald - Business | 28 Apr 2008 | 8:12 pm
The uproar over a Vanity Fair photo of 15-year-old Miley Cyrus raises a question: Was it simply the outcome of a pushy photographer and naïve star or is part of an effort to position the ‘tween sensation toward a more mature image?
Parents and fans were outraged when the racy photos of the pop star, beloved by young audiences for her role as Hannah Montana, came to light. Cyrus issued an immediate apology. Disney blamed Vanity Fair. The magazine said that Miley, her parents, and handlers had seen and signed off on the photos.
Still, Vanity Fair is notorious for boundary pushing when it comes to its starlet subjects. Rachel McAdams, for example, once walked off the cover shoot for Vanity Fair's 2006 Hollywood Issue when Tom Ford asked her to pose nude.
Lindsay Lohan was the subject of a January 2006 cover story (which featured its fair share of risqué snaps), and ended up denying admissions of bulimia and drug abuse the author claimed she had made.
"It's very hard for anyone to dictate what's going to happen at a shoot, especially with photographers like Annie Leibovitz," says Michael Pagnotta, president of Reach Media and the former media advisor to Mary Kate and Ashley Olsen. "The situation probably wasn't managed as proactively as it should have been before or during by her handlers."
But Howard Bragman, founder of media and public relations agency 15 Minutes, says the photo shoot was likely part of a more calculated strategy to evolve Cyrus's image.
"The bigger question is, why is she doing Vanity Fair in the first place?" Bragman says. "What is the career plan? If she's there, it's got to be for a reason."
Miley Cyrus wouldn't be the first example of a young Disney star chomping at the bit to move away from young audiences and family fare.
Tired of her role in 7th Heaven, a 17-year-old Jessica Biel posed for Gear magazine apparently to distance herself from the family-oriented television show.
Lindsay Lohan got her start in Disney movies such as Parent Trap and Freaky Friday. After breaking into older roles she too posed for suggestive photos in the June 2004 Vanity Fair, just before her 18 birthday.
And in August Hillary Duff, former star of hit Disney show "Lizzie Maguire," appeared in her first risqué photo spread for Maxim at the age of 19.
Bob Guccione, who was the publisher of Gear magazine when Biel posed topless, believes that Cyrus's handlers are eager to advance her toward mainstream Hollywood before her 15 minutes are up.
"Children's market phenomena are like magnesium flares: they are brilliant for a short period of time then go away," says Guccione. "Smart marketers are planning for the eventual end."
Regardless of the intent of the controversial shots, it is widely believed that at 15, Cyrus is far to young to start moving past her Disney days.
"Slow is fast enough," Pagnotta says. "Higher profile media opportunities like these are very tempting, but she's not 18, she's 15, and that's a big three years for herself and her fan base. The gap between what the Vanity Fair audience and the Hannah Montana audience expect is still much too wide."
Bragman believes that Cyrus has only scratched the surface of the Hannah Montana brand, and that breaking away from her young audiences would destroy substantial revenue potential from a very lucrative franchise.
For Disney, the controversy over the Vanity Fair photo points to the difficulties of having an enormous profit center in the volatile form of a 15-year-old girl.
Cyrus has already had issues with photos in the past, most recently one circulating on the internet of her pulling down a tank top to reveal a green lace bra.
"Disney and her brand will certainly survive this," Bragman says. "But I think Disney's going to exercise a little more control from now on."
Opec's president warned oil prices could hit $200 a barrel and there would be little the cartel could do to help Source: FT.com - US homepage | 28 Apr 2008 | 7:03 pm
Finance Minister Michael Cullen says Vector's Wellington electricity network is not on sensitive land and doesn't come under the same sale criteria as Auckland International Airport.
Vector is seeking approval for a $785 million... Source: New Zealand Herald - Business | 28 Apr 2008 | 7:00 pm
Mars is reshaping the confectionery industry with an agreed $23bn takeover of Wrigley, the world's biggest chewing gum maker, financed in part by Warren Buffett's Berkshire Hathaway Source: FT.com - US homepage | 28 Apr 2008 | 6:07 pm
Since its debut five years ago Monday, Apple's iTunes Store has sold more than 4 billion songs and accounts for approximately 70 percent of digital music sold worldwide. In the next five years, it may well account for a staggering 28 percent of all music sold worldwide.
By 2012, digital music is projected to account for 40 percent of music sold, according to InStat. If Apple holds onto its current market share, it will account for more than one-quarter of all music sales by its ninth birthday. Not bad for freeware.
"I'm very skeptical about whether iTunes can be unseated, because there's not a lot of consumer pain there," said Paul Resnikoff, editor of Digital Music News.
Digital Music News recently found that iTunes is installed on nearly 30 percent of all computers worldwide, making it the most widely installed music store application in the world.
When Apple snapped up a little music program called SoundJam MP back in 2000, no one predicted that the iTunes application it became would lead to a complete restructuring of the music industry.
Like all journeys, iTunes' reinvention of the music business began with a single inauspicious step. The major labels agreed to license their music only to Apple because the iTunes Store ran exclusively on Macs, representing a "sandbox" in which the labels could test the fledgling online music market.
Of course, once the labels saw Mac users snapping up their songs, the Windows version followed soon after, setting the stage for iTunes' dominion over the fledgling digital music market, which it has held onto ever since.
The key to iTunes' continued success has clearly been the iPod, but as iPod sales plateau, Apple may need to rethink its iTunes strategy, especially because its partners in the music business are looking for ways to give its competition an unnatural advantage.
"Apple is under pressure from the four major labels to change its pricing model to a tiered pricing structure," said Susan Kevorkian, an IDC audio analyst. "The way the labels are pressuring Apple is by withholding DRM-free downloads from the service … [while] cultivating other online music services, most notably Amazon's MP3 downloads store."
"They're playing on the periphery of this dominant iTunes application," Resnikoff said. "Why would I want to go outside of that?"
Despite the apparent toothlessness of the current Amazon threat, pundits agree that Apple needs to make significant changes to maintain its lead.
Kevorkian thinks Apple should cede to label demands for tiered pricing to stave off a possible migration to stores that lack DRM and offer lower prices. Besides, she says, Apple's 99-cents-per-song strategy has served its purpose: to put digital music "on the radar" of the music-buying public.
Apple has other ways to grow iTunes without relying on the iPod -- even ideas Jobs has pooh-poohed in the past, such as music subscriptions. The most obvious (and least likely) scenario is a PlaysforSure-style subscription service, which would require a new, stronger version of FairPlay DRM and rule out compatibility with older iPods.
A more likely option would be an eMusic-style subscription in which customers get a fixed number of songs per month, receiving a better deal than if they'd purchased the songs individually.
Then there's the so-called "unlimited music" iPod, which could be on the horizon. "We think the issue holding things up is how much money per iPod the labels get," Kevorkian said.
If Apple tires of butting heads with the labels, it could eventually cut them out of at least part of the equation by forming its own record label to keep a portion of the estimated 65 cents it currently pays out to the labels for each song sold.
"Digital distribution makes the economics of the industry so different," Kevorkian said. "That, coupled with Apple's tremendous brand name and reputation as an online music distributor, could make it a very important point of departure."
All it would take, she said, is the addition of an A&R department for scouting bands.
Dan Frakes, senior editor of MacWorld, agrees: "I think Apple will eventually work directly with the creators of content, allowing iTunes to sell original content without having to go through the entertainment industry."
Only Steve Jobs knows which of these paths Apple will take, but in general, iTunes' prospects for the next five years looks about as bright as they have been for the last five.
"If Apple keeps doing what it's doing," Resnikoff said, "I don't think you'll see any factors really eroding iTunes' installation percentage. It's an application that works so well."
The world's 11th richest man may have succeeded in his second attempt at buying into New Zealand, with the purchase of Vector's Wellington electricity network for $785 million.
Vector announced yesterday it had agreed to sell its... Source: New Zealand Herald - Business | 28 Apr 2008 | 5:00 pm
AFP - Swiss banking giant UBS on Monday declined comment on a report which claimed that the group, currently the worst-hit financial institution by the subprime home loan crisis, would cut 8,000 jobs.
To: Jerry Yang From: Jack Flack Subject: After Microsoft Walks
Congratulations. You're about to "win."
Some people speculate that Microsoft's threat to pull its bid is simply a negotiator's bluff. More likely, it's actually trying to pre-establish the logic for their retreat, hoping the coverage will cast them as shrewd, not weak.
When they do pull back, the Yahoo story will shift dramatically. Thus far, most of the coverage assumed that Yahoo is a business that cannot regain its past glory, and that your company has no future on its own. While many predicted a pyrrhic victory for Microsoft, suddenly you're going to be the one who stands to lose by winning.
Much of the scrutiny will focus on you personally, given that many people suspect that your emotional resistance, not cold valuation analytics, drove you to reject the deal. To avoid going down in history as the peculiar, stubborn founder who preferred to manage his once-great company into the ground instead of selling it to the Evil Empire, you must act boldly against four pieces of advice.
1. Play the "Choice" card
Minutes after Microsoft announces the withdrawal of its offer, issue your own statement declaring the retreat a victory for freedom of choice and independent thinking. Proudly explain that the tech industry is becoming a duopoly of Google and Microsoft, and that Yahoo is one of the few competitors large enough to provide a genuine alternative.
Your lawyers were right to make you quite sensitive to the need to minimize your exposure to shareholder lawsuits by staking your rejection of the bid to a valuation argument. But now, you must make additional arguments that appeal to the interests of all your other constituencies.
Repeatedly explain to your employees that they not only have the opportunity to save Yahoo, but also the chance to prevent the industry itself from falling into a Dark Age of Dominance.
Within the tech world, harp on the importance of not selling out, ensuring the small players understand that the only way to keep a couple of 800-pound gorillas honest is to make sure there are also a few healthy 400-pound gorillas still hanging around the jungle.
Most important, consistently remind advertisers that they need you to succeed so that they can have legitimate alternatives on-line. They already worry about how much power Google has, and so it shouldn't be a tough sell.
2. Get ready for the heat—and a return visit
Ballmer has emotions of his own, and you should anticipate Microsoft will immediately seek to damage your business as much as possible. Assume it's already moving to block the expansion of the outsourcing arrangement you're testing with Google.
Google will keep telling you it wants to make that deal happen. But don't be surprised when things suddenly start moving a lot more slowly, as your new "friends" in Mountain View begin demonstrating a heightened sensitivity to their own antitrust vulnerabilities.
The moderates hope your stock price drops only to $20 when Microsoft walks. Even if they're right, tepid earnings over the next few quarters will drag your stock into the mid-teens. When that happens, Microsoft will come right back after you.
Assume that this has become completely personal with them, and that they will not even bother to ring the doorbell this time. Instead, they'll go straight to a hostile offer that carries a premium of 20 percent or less.
That's why you must…
3. Deliver
You laid out a bullish plan to justify holding out, and now you've got to make much of it happen very quickly to maintain credibility. Most important, you need to quickly demonstrate that your "must buy" concept can actually work, and so you should not wait until the third quarter to launch your new AMP! program. Without that kind of urgency, you'll never get the revenue growth required to fulfill your promise of restoring cash operating margins to 42 percent.
All of that will be essential to buying time. But it will not sustain you for the longer haul, and you'll need to think "transformational." I know you want to stay involved, and so selling out-right is not an option. Thus, there's only one sensible deal of substance out there for you.
4. Absorb AOL
Try to do the same deal that was on the table last month, and use the transaction to build additional structural impediments to another Microsoft bid. As you negotiate, don't get too precious about the numbers, as Ballmer will be sitting outside Jeff Bewkes' office, holding on his knees a much bigger briefcase than yours.
Insist the name of the new company will be "Yahoo Online." Not only will that allow you to euthanize that annoying exclamation point at the end of your name, but it will also make you hero to many by finally killing the name "AOL."
Take a role like "executive chairman," and limit your engagement to high-level strategy and special projects. Make Randy Falco the C.E.O., sending a clear signal that the business will be run with a clinical view of the future, not a moistened eye on the past.
And oh, speaking of Ballmer, if you wake with him doing that monkey dance on your lawn tomorrow morning, then that probably means that I'm wrong about them retreating. If so, that's going to require an entirely different Rescue Memo.
Reuters - Consumer electronics retailer
RadioShack Corp posted a lower first-quarter profit on
Monday as sales fell and an increase in promotions hurt gross
margin, sending its shares plunging about 11 percent.
It's not unusual for Miley Cyrus to grace headlines, but, for once, attention on the tween sensation has taken a negative turn: A revealing photo of the 15-year-old media darling has become the center of a media storm.
This morning the controversial photo was featured prominently on the homepage of the Drudge Report and was the front page of the New York Post with an outsized headline: Miley's Shame.
The photograph, taken by Annie Liebovitz for Vanity Fair's June issue, depicts Cyrus—teen role model and star of Walt Disney's mammoth Hannah Montana franchise—baring her back and clutching a satin blanket to her chest.
For Cyrus's part, she's been as contrite as can be since fans (and their parents) began leveling criticism over the racy shots.
"I took part in a photo shoot that was supposed to be 'artistic,' and now, seeing the photographs and reading the story, I feel so embarrassed," Cyrus said in a statement. "I never intended for any of this to happen, and I apologize to my fans who I care so deeply about."
But Disney has been less willing to admit wrongdoing, instead passing off the blame to Vanity Fair.
"Unfortunately, as the article suggests, a situation was created to deliberately manipulate a 15-year-old in order to sell magazines," Disney said in a statement.
A Vanity Fair spokeswoman countered, "Miley's parents and/or minders were on the set all day. Since the photo was taken digitally, they saw it [at] the shoot, and everyone thought it was a beautiful and natural portrait of Miley."
The Hannah Montana franchise is expected to be worth $1 billion by the time Cyrus hits 18, including not just the flagship TV show, but concerts, a movie, merchandising, CD sales, and a book deal.
Brooks Barnes in the New York Timesdoubts that in today's world, a single photograph such as the one shot by Vanity Fair could do much (if anything) to harm such a powerful franchise.
But this is the second time in the past week that Disney's No. 1 good girl has had to deal with contentious images. Last week, snaps of teen star with her bra visible under a tank top hit the internet, even prompting Bill O'Reilly to call for a "conference" to discuss the photos.
"Somebody needs to pull in the reins of this talented little gal before her career stampedes off into the sunset," says Elizabeth Snead in the Los Angeles Times' Dish Rag blog.
Jilted by Chrysler, disappointed by General Motors, investor Kirk Kerkorian has now turned his loving gaze toward Ford Motor.
Kerkorian's investment vehicle Tracinda Corp. has built a 4.7 percent stake in Ford and has announced its intention to buy as many as 20 million more shares, or nearly another 1 percent, at a premium of 13.3 percent over Ford's closing stock price on Friday.
The announcement comes just days after Ford showed signs that it was turning a corner by announcing an unexpected profit for the first quarter. (For an interactive look at Ford's bumpy road to profitability, click here.)
And indeed, unlike some past auto investments, the stake being taken by Kerkorian is an endorsement of the changes that Ford is making.
"Tracinda believes that Ford management under the leadership of chief executive officer Alan Mulally will continue to show significant improvements in its results going forward," the company said in a statement.
At a time when few believe that Detroit can save itself, Kerkorian's faith in the industry, at the age of 90, is remarkable.
In 1995, he made an unsuccessful takeover bid for Chrysler. After Chrysler agreed to be acquired by Daimler-Benz in 1998, Kerkorian sued but lost in a Delaware court. When Daimler later put Chrylser up for sale last year, Kerkorian tried to present a bid.
Between Chrysler engagements, Kerkorian became the biggest individual shareholder in General Motors in 2005. He successfully pressed G.M. for a seat on the board, but he was less successful in trying to persuade the automaker to enter into an allianace with Renault of France and Nissan Motor of Japan.
Even in hard times, life, for a moment anyway, can still taste sweet with a mint. The desire to capture a global market in cheap impulse purchases is helping drive a huge deal in the candy business.
Mars has reached a deal acquire the Wm. Wrigley Jr. Co. for $23 billion. Warren Buffett's Berkshire Hathaway would provide financing for Mars and get a stake. Mars will pay $80 cash for each share of common stock and Class B stock of Wrigley. Mars will provide $11 billion of the funding for the buyout. Goldman Sachs is providing $5.7 billion in a debt facility, and Berkshire Hathaway is providing $4.4 billion in subordinated debt.
Berkshire has also agreed to buy a minority stake in the Wrigley business for $2.1 billion.
"Those of you who know me, know that I have been a big fan of Wrigley's business model for many years, and I love their products," Buffett said. "When you think of a business that's easy to understand—with favorable long-term economics, and able and trustworthy management—you think of Wrigley. "
The deal would end the independence of Wrigley, which has been controlled by the Wrigley family for four generations. (For a history, see a slidehow here.}
The buyout team matches the world's most famous, most media-savvy investor with perhaps the world's most secretive consumer company. Mars, maker of M&M's and Snickers, is a tightly controlled family-owned company. Or as Fortune put it more than a decade ago: "Mars is an enigma inside a mystery tied up in a bright candy wrapper."
The deal could spark other mergers. Wrigley had sought a merger with Hershey, but that fell apart. More recently, Hershey and Cadbury Schweppes, which has spun off its soda and beverage business, have held discussions over a possible combination, according to various reports.
Douglas McIntyre of the blog 24/7 Wall St. says a deal for Wrigley looks expensive: "On a per-share basis, Wrigley would be going for almost $80. The company's stock has not been that high, ever."
A combination of the two candy kings could certainly find cost savings in raw materials, especially at a time when commodity prices are rising, and it would have greater global marketing and distribution heft.
Candy is an attractive market because while there are only a few global brands, it is relatively fragmented with no one having much more than a 10 percent global share.
Reuters - Industrial and Commercial Bank of
China (1398.HK)(601398.SS), the world's biggest bank by market
value, posted a 77 percent jump in first-quarter profit on
Tuesday and booked a further $58 million worth of provisions
for its exposure to the U.S. subprime mess.
AP - Paying for gasoline easily tops the list of economic woes facing families in the United States, according to a survey on how changes in the economy have affected people's lives.
Reuters - Britain's biggest mortgage
lender begged for new funding on Tuesday and Germany's top bank
suffered its first quarterly loss in years as the credit crunch
sapped financial industry strength.
Reuters - Oil giants Royal Dutch Shell (RDSa.L)
and BP beat forecasts to post big rises in first quarter
profits on Tuesday, lifting shares across the sector, as
investors bet oil prices above $100/barrel would be an even
bigger bonanza than expected.
Reuters - U.S. stock futures eased in Europe on
Tuesday, suggesting Wall Street may fall later on a busy day
for earnings, following a pessimistic economic outlook from
investor Warren Buffett.
Reuters - A former top Federal Reserve official
has said that the Fed's bailout of Bear Stearns Cos
will come to be viewed as the "worst policy mistake in a
generation," the Wall Street Journal reported on Tuesday.
AFP - Swiss banking giant UBS on Monday declined comment on a report which claimed that the group, currently the worst-hit financial institution by the subprime home loan crisis, would cut 8,000 jobs.
Reuters - Consumer electronics retailer
RadioShack Corp posted a lower first-quarter profit on
Monday as sales fell and an increase in promotions hurt gross
margin, sending its shares plunging about 11 percent.