By Sarah Arnott
The British maker of pioneering vacuum cleaners, hand driers, and fans saw profits double in 2009 and attributes its success to investment in innovation
Dyson Ltd. is already an icon of British inventiveness, and the company says its latest soaring financial results vindicate a strategy committed, above everything else, to research and development (R&D).
The vacuum-cleaner pioneer yesterday reported that operating profits doubled to £190m in 2009 and turnover shot up by 23 per cent to £770m. The secret of the success is all about investment, according to Dyson's chief executive, Martin McCourt.
"We have kept investment in research, design and development running very high all the way through both the good economic times and the bad," Mr McCourt said. "The results are a clear recognition that people do want machines that incorporate new ideas and new technologies."
Dyson's latest show-stopper is the Air Multiplier – a futuristic desk fan with no blades and, according to the company, no buffeting. It went on sale in Australia last October and within six weeks accounted for a whopping 60 per cent of the market. It is now available in the US, the UK, Japan, France and Germany, and the company has high hopes it will do similarly well.
Another big seller is the Air Blade – described by Mr McCourt as "the first electric hand-drier that actually dries your hands." After two years, the Air Blade is on sale in 20 markets and turning a healthy profit.
"It has gone down really well – not least because facility managers can see that not only does it dry your hands better, but it is also lower your costs because it doesn't have a heater in it and you don't have reams of paper piling up," Mr McCourt said.
But Dyson's staple product – the vacuum cleaner – is also selling well, albeit in new guises. The financial results saw a major boost from the City, a handheld cleaner launched in Japan early last year that quickly became the country's best-selling vacuum. And there is also the DC25 Ball Vacuum – much like the traditional bag-less model through which the company shot to fame, but with a ball instead of wheels. The Ball already represents more than half of the company's US and UK sales after just one full year on the market.
Dyson is the poster child of British engineering, and a beacon for efforts to rebalance the economy away from an undue reliance on financial services. Although the actual manufacturing was moved to Malaysia in 2002, all the company's R&D is done in the UK, and the group's founder – the high-profile inventor Sir James Dyson – was asked by the Conservative Party last year to lead a taskforce aimed at making Britain a leading hi-tech exporter.
The company bats away critics' claims that the company has betrayed its allegiance to British industry by shifting production to Malaysia. The move made sense for the company, partly because of cost factors, partly because of the strong supply chain for components in the Far East. And, according to the Dyson model, it is the intellectual property that is important, not the production.
"It is not about where you manufacture something, it's about where the ideas are created," Mr McCourt said. "The ideas happen here, at our invention centre in Malmsbury."
Dyson certainly puts its money where its mouth is. The company invested £42m in R&D last year, and will spend more still in 2010. The strong financial results prove it is a strategy that works, says Mr McCourt. And the company is recruiting another 350 engineers this year, doubling its engineering headcount to 700.
The model is at the heart of Sir James's recommendations in his Ingenious Britain report, published with Tory support shortly before the election. With the Conservatives now in government – and an emergency Budget due on 22 June – there is the hope of action, notwithstanding the parlous public finances.
Much needs to be done to make Dyson the norm rather than the exception. Part of the problem is culture. Companies need to be ready to back up their ideas with research, design and development. But there is also much the state can do.
One big ask is on tax credits. The report calls on the Government to refocus the R&D tax credit on hi-tech, small businesses and new start-ups, and says the rate should go up to 200 per cent once the public finances allow. The other major piece is education. Britain churns out a fraction of the science and engineering graduates of a fast-growing economy like China.
"There needs to be a culture change, with higher value placed on science and engineering. And there needs to be more and better teaching available.
"We need people not just dreaming of becoming bankers and advertisers," Mr McCourt said. "We need children wanting to make things."
Dyson's Hits and Misses
Sir James Dyson is one of Britain's best-known inventors, and his highly profitable vacuum cleaner empire has produced a net worth estimated at more than £500m.
His first success was the DC01, the first Dyson machine, bag-less and incorporating patented "Dual Cyclone" technology. The DC01 was launched in 1993 and quickly became a best-seller. Since then, dual cyclone has been superceded by "root cyclone," which has also proved highly successful. But Sir James was not content to stick to vacuum cleaners. The Air Blade hand drier is proving a hit. And the group has high hopes for the futuristic Air Multiplier bladeless fan, launched in Australia last year and quickly the market leader. But there have been some major hiccups along the way. Sir James himself is almost proud of how long the original DC01 design took to perfect. He made some 5,127 prototypes of his original vacuum before he hit on the solution – evidence, he says, that failure helps to hone the creativity.
But there were also some blind alleys once the company had become a worldwide success. In 2000, Dyson launched the world's first "dual drum, counter rotating" washing machine. But consumers' response was lukewarm and after three, unprofitable, models, the lines were discontinued. Meanwhile, Dyson's first robotic vacuum cleaner never made it beyond the trial stage. Billed as "the vacuum cleaning system of the future," the DC06 was too heavy and too expensive for production without further development.
vineri, 28 mai 2010
Shell Buys U.S. Gas Assets From East Resources for $4.7 Billion
By Fred Pals Bloomberg
Royal Dutch Shell Plc, Europe’s largest oil producer, agreed to buy most of the assets of closely-held East Resources Inc. for $4.7 billion in cash, expanding its portfolio of U.S. unconventional gas deposits.
East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming, according to its website. It has been operating in the Marcellus Shale Area for 25 years.
Companies from India’s Reliance Industries Ltd. to Japan’s Mitsui & Co. are spending billions of dollars on drilling to dislodge natural gas from shale -- sedimentary rock composed of mud, quartz and calcite. Shell expects its share of gas in total output to rise to 52 percent in 2012.
“They’ve seen others take material positions in U.S. gas, and this is one way they can also play a part in that business,” said Jason Kenney, head of oil and gas research at ING Commercial Banking in Edinburgh.
The acquisition is the second-biggest oil and gas deal this year, after BP Plc’s acquisition of deepwater assets from Devon Energy Corp. for $7 billion in March, according to Bloomberg data.
“We are enhancing our world-wide upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions,” Chief Executive Officer Peter Voser said in a statement today.
Exxon Mobil Corp., the biggest U.S. oil company, agreed in December to buy XTO Energy Inc., the country’s largest natural gas producer, for $31 billion to gain control of shale-gas assets
Royal Dutch Shell Plc, Europe’s largest oil producer, agreed to buy most of the assets of closely-held East Resources Inc. for $4.7 billion in cash, expanding its portfolio of U.S. unconventional gas deposits.
East Resources owns and operates more than 2,500 producing oil and gas wells in New York, Pennsylvania, West Virginia, and Colorado and is actively exploring drilling programs in Wyoming, according to its website. It has been operating in the Marcellus Shale Area for 25 years.
Companies from India’s Reliance Industries Ltd. to Japan’s Mitsui & Co. are spending billions of dollars on drilling to dislodge natural gas from shale -- sedimentary rock composed of mud, quartz and calcite. Shell expects its share of gas in total output to rise to 52 percent in 2012.
“They’ve seen others take material positions in U.S. gas, and this is one way they can also play a part in that business,” said Jason Kenney, head of oil and gas research at ING Commercial Banking in Edinburgh.
The acquisition is the second-biggest oil and gas deal this year, after BP Plc’s acquisition of deepwater assets from Devon Energy Corp. for $7 billion in March, according to Bloomberg data.
“We are enhancing our world-wide upstream portfolio for profitable growth, through exploration and focused acquisitions, and through divestment of non-core positions,” Chief Executive Officer Peter Voser said in a statement today.
Exxon Mobil Corp., the biggest U.S. oil company, agreed in December to buy XTO Energy Inc., the country’s largest natural gas producer, for $31 billion to gain control of shale-gas assets
Google's Latest Launch: Its Own Trading Floor
By Douglas MacMillan
The search giant is hiring Wall Street vets to manage a $26.5 billion pile of cash
Last fall, some unusual job listings began cropping up on Google's (GOOG) website. Amid the requests for programmers and engineers were postings for bond traders and portfolio analysts. By spring, tech blogs were speculating about what was going on at Google.
The answer was very un-Silicon Valley. Google, it turns out, has launched a trading floor to manage its $26.5 billion in cash and short-term investments. The hoard is the third-biggest cash pile among U.S. tech companies, after Microsoft (MSFT) and Cisco's (CSCO).
One of the company's goals is to improve the returns on its money, which until now has been managed conservatively. Google doesn't disclose its rate of return on investments or the targets it has set, but analyst Aaron Kessler of ThinkEquity estimates the company's 2010 return (including interest income and realized and unrealized gains before tax) at around 2.5 percent. That's a higher return than some other large Internet outfits, such as Yahoo! and Amazon, he says.
Google is using some of its money to buy back shares in the wake of its $750 million acquisition of mobile advertising firm AdMob, which was an all-stock deal. The transaction was cleared by U.S. regulators on May 21. Investors have been wondering what else the company intends to do with its cash. IBM (IBM) recently announced plans to spend $20 billion over five years on acquisitions. Hewlett-Packard (HPQ) just bought Palm (PALM) for $1.2 billion. "Google could do 10 Palm kind of deals," says Michael Yoshikami, president and chief investment strategist of YCMNET Advisors, which owns Google shares. "That would be a pretty decent use of their money." Beyond the AdMob buybacks, Google has said it has no plans to return cash to shareholders.
Google's trading room opened in January. The plan is to keep the war chest growing safely and ready to be deployed should the right mergers-and-acquisitions opportunities arise. The investment team has grown to more than 30 people, up from six three years ago. Many of the new arrivals are former Wall Streeters who left lucrative careers at Goldman Sachs (GS), JPMorgan Chase (JPM), and other banks. The man in charge is Brent Callinicos, Google's 44-year-old treasurer, who joined from Microsoft in 2007, back when Google had $11 billion in cash. "This isn't fast money, this is patient money," he says. His crew works in a recently remodeled finance building on the company's corporate campus in Mountain View, Calif., complete with a rock climbing wall, massage chairs, murals of tropical sunsets, and bamboo wall panels. In a second-floor space accessed by key card—the trading room—the Wall Street vets tap out trades at desks with six computer screens.
Craig A. Jeffery, managing partner of Atlanta-based consultant Strategic Treasurer, says the financial technology at banks and most corporate treasuries tends to be an unwieldy hodgepodge of disparate software applications. If you're crunching numbers in Excel, you probably have to cut and paste the results manually into your foreign- exchange analytics software. Callinicos got around the coordination problem by tapping in-house engineers to meld the various pieces of software into one dashboard for trading and managing cash. "Callinicos built this mosaic of systems and a way of relating them together," says Jeffery.
That woven-together technology gives Google a trading advantage: It shows the value of the company's holdings all over the world in near-real time. This is harder than it sounds. Jeffery says that most treasuries with dozens of bank relationships in multiple countries can see the values of only 60 percent or 70 percent of their positions at any given time. Google's systems can monitor 98 percent of its holdings in real time, says Callinicos. "One of the toughest parts of [managing cash] is extracting the right data for the right decisions at the push of a button," says Wolfgang J. Koester, CEO of FiREapps, a maker of financial software. Callinicos "has been an industry leader on this."
Born in South Africa, Callinicos came to the U.S. at age 16. After receiving an MBA from the University of North Carolina, he landed in Microsoft's finance department in 1992 and became treasurer in 2000. By the time Microsoft's cash neared $60 billion in 2004—the year the company paid out a one-time $32 billion dividend—it was generating returns of more than 7 percent.
After a couple years of cautious cash management at Google, Callinicos says he's beginning to build a higher-risk, higher-return portfolio. Since last year he has pulled away from U.S. government notes and moved into corporate debt securities ($4.9 billion as of Mar. 31, up from $695 million the year before), agency residential mortgage-backed securities ($3.3 billion, up from $60 million), and foreign government bonds ($332 million, up from zero).
Google is still building its team. Its website lists openings for a foreign government bond trader, a risk analyst, and a portfolio analyst of agency mortgage-backed securities. Callinicos says he's looking for different qualities than those that large banks are seeking. "We're not trying to become a Wall Street firm," he says. "This is Google. It's eclectic." He cites Ranidu Lankage, who came to Google after a full-ride at Yale and a two-year stint at Lehman Brothers. When he's not analyzing Google's portfolio, Lankage is a star of Sri Lankan-style rap and R&B. He landed his first record deal with Sony (SNE) at age 19.
Callinicos wouldn't comment on what he pays his staff, though Gustavo G. Dolfino, senior managing director at financial recruiting firm Accretive Solutions, says Google pays finance staffers significantly less than what they would make on Wall Street. (Google has not retained Accretive Solutions.) He adds that what Google jobs lack in pay they make up for in stability. "Everybody knows that Google isn't going anywhere."
The search giant is hiring Wall Street vets to manage a $26.5 billion pile of cash
Last fall, some unusual job listings began cropping up on Google's (GOOG) website. Amid the requests for programmers and engineers were postings for bond traders and portfolio analysts. By spring, tech blogs were speculating about what was going on at Google.
The answer was very un-Silicon Valley. Google, it turns out, has launched a trading floor to manage its $26.5 billion in cash and short-term investments. The hoard is the third-biggest cash pile among U.S. tech companies, after Microsoft (MSFT) and Cisco's (CSCO).
One of the company's goals is to improve the returns on its money, which until now has been managed conservatively. Google doesn't disclose its rate of return on investments or the targets it has set, but analyst Aaron Kessler of ThinkEquity estimates the company's 2010 return (including interest income and realized and unrealized gains before tax) at around 2.5 percent. That's a higher return than some other large Internet outfits, such as Yahoo! and Amazon, he says.
Google is using some of its money to buy back shares in the wake of its $750 million acquisition of mobile advertising firm AdMob, which was an all-stock deal. The transaction was cleared by U.S. regulators on May 21. Investors have been wondering what else the company intends to do with its cash. IBM (IBM) recently announced plans to spend $20 billion over five years on acquisitions. Hewlett-Packard (HPQ) just bought Palm (PALM) for $1.2 billion. "Google could do 10 Palm kind of deals," says Michael Yoshikami, president and chief investment strategist of YCMNET Advisors, which owns Google shares. "That would be a pretty decent use of their money." Beyond the AdMob buybacks, Google has said it has no plans to return cash to shareholders.
Google's trading room opened in January. The plan is to keep the war chest growing safely and ready to be deployed should the right mergers-and-acquisitions opportunities arise. The investment team has grown to more than 30 people, up from six three years ago. Many of the new arrivals are former Wall Streeters who left lucrative careers at Goldman Sachs (GS), JPMorgan Chase (JPM), and other banks. The man in charge is Brent Callinicos, Google's 44-year-old treasurer, who joined from Microsoft in 2007, back when Google had $11 billion in cash. "This isn't fast money, this is patient money," he says. His crew works in a recently remodeled finance building on the company's corporate campus in Mountain View, Calif., complete with a rock climbing wall, massage chairs, murals of tropical sunsets, and bamboo wall panels. In a second-floor space accessed by key card—the trading room—the Wall Street vets tap out trades at desks with six computer screens.
Craig A. Jeffery, managing partner of Atlanta-based consultant Strategic Treasurer, says the financial technology at banks and most corporate treasuries tends to be an unwieldy hodgepodge of disparate software applications. If you're crunching numbers in Excel, you probably have to cut and paste the results manually into your foreign- exchange analytics software. Callinicos got around the coordination problem by tapping in-house engineers to meld the various pieces of software into one dashboard for trading and managing cash. "Callinicos built this mosaic of systems and a way of relating them together," says Jeffery.
That woven-together technology gives Google a trading advantage: It shows the value of the company's holdings all over the world in near-real time. This is harder than it sounds. Jeffery says that most treasuries with dozens of bank relationships in multiple countries can see the values of only 60 percent or 70 percent of their positions at any given time. Google's systems can monitor 98 percent of its holdings in real time, says Callinicos. "One of the toughest parts of [managing cash] is extracting the right data for the right decisions at the push of a button," says Wolfgang J. Koester, CEO of FiREapps, a maker of financial software. Callinicos "has been an industry leader on this."
Born in South Africa, Callinicos came to the U.S. at age 16. After receiving an MBA from the University of North Carolina, he landed in Microsoft's finance department in 1992 and became treasurer in 2000. By the time Microsoft's cash neared $60 billion in 2004—the year the company paid out a one-time $32 billion dividend—it was generating returns of more than 7 percent.
After a couple years of cautious cash management at Google, Callinicos says he's beginning to build a higher-risk, higher-return portfolio. Since last year he has pulled away from U.S. government notes and moved into corporate debt securities ($4.9 billion as of Mar. 31, up from $695 million the year before), agency residential mortgage-backed securities ($3.3 billion, up from $60 million), and foreign government bonds ($332 million, up from zero).
Google is still building its team. Its website lists openings for a foreign government bond trader, a risk analyst, and a portfolio analyst of agency mortgage-backed securities. Callinicos says he's looking for different qualities than those that large banks are seeking. "We're not trying to become a Wall Street firm," he says. "This is Google. It's eclectic." He cites Ranidu Lankage, who came to Google after a full-ride at Yale and a two-year stint at Lehman Brothers. When he's not analyzing Google's portfolio, Lankage is a star of Sri Lankan-style rap and R&B. He landed his first record deal with Sony (SNE) at age 19.
Callinicos wouldn't comment on what he pays his staff, though Gustavo G. Dolfino, senior managing director at financial recruiting firm Accretive Solutions, says Google pays finance staffers significantly less than what they would make on Wall Street. (Google has not retained Accretive Solutions.) He adds that what Google jobs lack in pay they make up for in stability. "Everybody knows that Google isn't going anywhere."
joi, 27 mai 2010
Spanish austerity vote helps reverse euro decline
By Daniel Trotta Daniel Trotta
Spain turned to austerity while China and the United States offered soothing words about Europe on Thursday, providing a respite in the euro-zone debt crisis that allowed markets to recover.
Spain's governing Socialists won parliamentary approval for a 15 billion euro ($18.4 billion) austerity package by a single vote in an effort to cut its budget deficit and regain market confidence.
Fears that soaring Greek budget deficits and violent street protests could infect other euro zone countries sparked a sell-off that had pushed the euro currency to a nearly four-year low versus the U.S. dollar after losing 8 percent this month.
But the euro rebounded 1.6 percent versus the dollar and 1.4 percent versus the yen while the continent's main stock index climbed 2.9 percent.
U.S. stocks rose sharply with the S&P 500 closing 3.3 percent higher, its largest gain on a percentage basis since May 10, although volume was below average. The Dow gained 2.9 percent to close above 10,000 points at 10,259. The Nasdaq rose 3.7 percent for the day.
Global markets received a boost when China reaffirmed its long-term strategy of diversifying currency holdings away from the dollar and denied it was reviewing its holdings of euro sovereign bonds.
The People's Bank of China said in a statement that a Financial Times report that the State Administration of Foreign Exchange (SAFE) was concerned about its exposure to euro-zone debt was groundless.
The central bank said Europe would remain one of China's main investment markets and Beijing would support actions to help the European Union resolve its debt crisis.
The United States also offered comforting comments when Treasury Secretary Timothy Geithner said America and Europe broadly agreed on the need for controls on risk-taking, playing down differences on financial regulation.
"I think we all agree we want more conservative restraints on capital and leverage," Geithner said after talks in Berlin with German Finance Minister Wolfgang Schaeuble.
Washington has grown increasingly concerned that the effects of the Greek fiscal blowout could spread beyond Europe, with banks prone to a similar meltdown that roiled world markets during the 2007-2009 financial crisis.
A day earlier in London, Geithner chided Europeans for their response to the crisis, saying, "What markets want to see is action."
The Kuwait Investment Authority also denied a media report that the Gulf oil producer's sovereign wealth fund was reducing its exposure to the euro zone, saying there was no change to its long-term investment strategy in Europe.
BANKER BONUSES UNDER FIRE
The crisis has hardened attitudes among some European Union lawmakers toward the financial industry, with one EU lawmaker proposing bankers forfeit up to 70 billion euros in bonuses over the next decade to pay for an emergency crisis fund.
The plea by Sharon Bowles, head of the European Parliament's influential Economic and Monetary Affairs Committee, added to the momentum for a bank levy proposed by the 27-country bloc's executive body, the European Commission.
Germany agreed to a 110 billion euro Greek rescue and the $1 trillion emergency scheme only in return for pledges of drastic spending cuts from potential beneficiaries.
Greece, Portugal, Spain and Italy have all agreed to push through multibillion-euro savings despite fierce opposition from trade unions and sometimes violent street protests.
Spanish Prime Minister Jose Luis Rodriguez Zapatero owed his thin victory on the deficit-cutting plan to the abstention of Catalan nationalist lawmakers, underlining his precarious position.
Spanish trade unions were meeting to consider protest action over the planned public-sector wage cuts, pension freeze and civil service hiring restrictions.
French unions were staging a day of action against government proposals, still to be spelled out in detail, to increase the retirement age.
(Reporting by Sonya Sowsett in Madrid; Simon Rabinovitch and Aileen Wang in Beijing; Glenn Sommerville in Berlin; Editing by Paul Taylor, Tomasz Janowski and Jan Paschal)
Spain turned to austerity while China and the United States offered soothing words about Europe on Thursday, providing a respite in the euro-zone debt crisis that allowed markets to recover.
Spain's governing Socialists won parliamentary approval for a 15 billion euro ($18.4 billion) austerity package by a single vote in an effort to cut its budget deficit and regain market confidence.
Fears that soaring Greek budget deficits and violent street protests could infect other euro zone countries sparked a sell-off that had pushed the euro currency to a nearly four-year low versus the U.S. dollar after losing 8 percent this month.
But the euro rebounded 1.6 percent versus the dollar and 1.4 percent versus the yen while the continent's main stock index climbed 2.9 percent.
U.S. stocks rose sharply with the S&P 500 closing 3.3 percent higher, its largest gain on a percentage basis since May 10, although volume was below average. The Dow gained 2.9 percent to close above 10,000 points at 10,259. The Nasdaq rose 3.7 percent for the day.
Global markets received a boost when China reaffirmed its long-term strategy of diversifying currency holdings away from the dollar and denied it was reviewing its holdings of euro sovereign bonds.
The People's Bank of China said in a statement that a Financial Times report that the State Administration of Foreign Exchange (SAFE) was concerned about its exposure to euro-zone debt was groundless.
The central bank said Europe would remain one of China's main investment markets and Beijing would support actions to help the European Union resolve its debt crisis.
The United States also offered comforting comments when Treasury Secretary Timothy Geithner said America and Europe broadly agreed on the need for controls on risk-taking, playing down differences on financial regulation.
"I think we all agree we want more conservative restraints on capital and leverage," Geithner said after talks in Berlin with German Finance Minister Wolfgang Schaeuble.
Washington has grown increasingly concerned that the effects of the Greek fiscal blowout could spread beyond Europe, with banks prone to a similar meltdown that roiled world markets during the 2007-2009 financial crisis.
A day earlier in London, Geithner chided Europeans for their response to the crisis, saying, "What markets want to see is action."
The Kuwait Investment Authority also denied a media report that the Gulf oil producer's sovereign wealth fund was reducing its exposure to the euro zone, saying there was no change to its long-term investment strategy in Europe.
BANKER BONUSES UNDER FIRE
The crisis has hardened attitudes among some European Union lawmakers toward the financial industry, with one EU lawmaker proposing bankers forfeit up to 70 billion euros in bonuses over the next decade to pay for an emergency crisis fund.
The plea by Sharon Bowles, head of the European Parliament's influential Economic and Monetary Affairs Committee, added to the momentum for a bank levy proposed by the 27-country bloc's executive body, the European Commission.
Germany agreed to a 110 billion euro Greek rescue and the $1 trillion emergency scheme only in return for pledges of drastic spending cuts from potential beneficiaries.
Greece, Portugal, Spain and Italy have all agreed to push through multibillion-euro savings despite fierce opposition from trade unions and sometimes violent street protests.
Spanish Prime Minister Jose Luis Rodriguez Zapatero owed his thin victory on the deficit-cutting plan to the abstention of Catalan nationalist lawmakers, underlining his precarious position.
Spanish trade unions were meeting to consider protest action over the planned public-sector wage cuts, pension freeze and civil service hiring restrictions.
French unions were staging a day of action against government proposals, still to be spelled out in detail, to increase the retirement age.
(Reporting by Sonya Sowsett in Madrid; Simon Rabinovitch and Aileen Wang in Beijing; Glenn Sommerville in Berlin; Editing by Paul Taylor, Tomasz Janowski and Jan Paschal)
Bladeless Wind Turbine – Inspired by Nikola Tesla
A research company in New Hampshire recently patented its bladeless wind turbine, which is based on a patent issued to Nikola Tesla in 1913. This wind turbine is christened as the Fuller Wind Turbine. This turbine is developed by Solar Aero. The specialty of Fuller Wind Turbine is it has only one rotating part, known as the turbine-driveshaft. The entire machinery is assembled inside a housing. Wind turbines are often disliked by environmentalists because they kill birds and bats and often generate noise for the residents living nearby.
The wind industry is trying to find a solution to the problem by working with environmental groups, federal regulators, and other interested parties. They are trying to develop methods of measuring and mitigating wind energy’s effect on birds. The Fuller Wind Turbine offers hope to bird lovers and environmentalists.
Fuller Wind Turbine has several advantages over the traditional ones having blades. Fuller Wind Turbine has a screened inlet and outlet. If you try to get a closer look at this wind turbine you can see the only movement visible is as it adjusts to track the wind. This wind turbine can be utilized by the military surveillance and radar installations because there are no moving blades to cause difficulties.
Another plus attached to this wind turbine is that it won’t cost a heaven when you get its power. According to manufacturers this turbine is expected to deliver power at a cost at par with the coal-fired power plants. If you want to probe deeper, its good news that total operating costs over the lifetime of the unit are expected to be about $0.12/kWh.
If we take the maintenance angle it won’t cause much headache because it’s a bladeless turbine. The turbine maintenance requirements are not colossal and it would result in lower lifetime operating costs. The turbine is mainly supported on magnetic bearings. Another advantage is all of the generating equipments are kept at ground level. This will lead towards easy maintenance of equipments. The company comes out with encouraging figures and proclaims “final costs will be about $1.50/watt rated output, or roughly 2/3 the cost of comparable bladed units.”
If we take a look at the Tesla turbine patented in 1913, it operates using the viscous flow of a fluid to move the turbine and as a result generates energy. The Tesla turbine has a set of smooth disks fitted with nozzles that send out a moving gas to the edge of the disk. The gases drag on the disk by following the principle of viscosity and the adhesion of the surface layer of the gas. As the gas slows and adds force to the disks, it twirls in to the center exhaust. Because the rotor has no projections, it is very strong and sturdy. One has to be careful about the disk space because disks in the turbine need to be closely spaced so that they can trap the viscous flow. The Tesla turbine has extremely thin disks to reduce turbulence at the edges and that makes them effective. In 1913, Tesla was unable to find metals of adequate quality to make this work effectively. But now almost a century later, those limitations have been surmounted.
Solar Aero’s current prototype is a modest trailer-mounted unit. But inventor says that their other models “should be capable of 10kW output with no problem.” If this technology takes off smoothly it would remove many hurdles attached with conventional wind turbines and more environment friendly.
Nanosolar: Solar Power at a Lower Cost
In a market-friendly scenario, Nanosolar claims to be able to produce electricity at 5-6 cents/kilowatt hour almost as cheap as power from coal and at about one-third the cost of other solar power. Nanosolar claims: Nanosolar claims mass production of solar power will now become feasible with their differently manufactured solar panels. Conventional silicon-made solar panels have a stiff competitor from CIGS semiconductor printed solar panels – composed of copper, gallium, indium and selenium – which perform as good as conventional solar panels in lab conditions. An inexpensive printing process makes it ideal for mass production by an automated facility with robots and other hi-fi equip
Solar panels re-invented:
The low efficiency which haunted Nanosolar raising the cost of installation of solar-power arrays and which necessitated more solar panels has been addressed successfully by Nanosolar. The larger panels they are now using generate more power; with modifications that cut the cost, the larger panels generate 160 watts as against 70 watts by First Solar.
Power output:
According to Martin Roscheisen, Nanosolar’s CEO, in sunny locations, power plants with these panels could produce electricity at 5-6 cents per kilowatt hour. Mr. Roscheisen claimed even the 16.4 % energy conversion in sunlight as against 20% energy conversion in the lab and only 11% of that energy into electricity by Nanosolar is high enough compared to conventional solar panels.
Raring to go!
Based at Germany and enjoying a huge market thanks to government’s incentives for the solar cells made of CIGS semiconductor, Nanosolar is ready to storm the market with producing solar cells twice as fast as the conventional solar-panel factories. He is ready to give First Solar a run for its money.
Not bankable?
But the claimed low costs are attainable only at close-to-capacity operation level which is at best a distant possibility. Because despite all improvements, under the current economic scenario, Nanosolar is finding it tough to find banks willing to back power plants which may be ready to use their solar panels. Now the panels are not yet “bankable;” but Nanosolar is hoping for a better future.
How a business makes it to $1 million
By Gary Stern CNNMoney
After a year with the Peace Corps in Kenya, husband and wife team Kevin Ward and Renice Jones returned to the U.S. with a business idea: import Kenyan crafts and provide artisans with an affluent new market for their wares.
The idea that launched Global Crafts was simple. Building a profitable business around it wasn't. Less than 50% of new ventures make it to year five, and fewer still grow big enough to cross a key milestone: $1 million in annual sales.
Global Crafts made it -- but it took eight years and a few false starts to get there.
In 2002, the couple launched Global Crafts as a 650-square-foot retail store in New Smyrna Beach, Fla. The sleepy beach town had few buyers interested in gifts and crafts from overseas.
"We didn't sell many items. No one cared about eliminating poverty," Ward says. The store managed only $50,000 in sales, forcing the couple to scrape by on minimal salary.
Instead of carrying on with a flawed business plan, Ward took a step back and started over.
In 2003, Global Crafts shuttered its retail store and started selling wholesale on the Web, targeting the 100 stores in the U.S. that specialized in handmade overseas items. Ward and Jones invested $40,000, opened a 1,100 square-foot-warehouse, and gained Fair Trade Federation accreditation, boosting their credibility with retailers. Following Fair Trade's principles, Global Crafts pays craftspeople 50% upfront and 50% when the item is shipped.
Suddenly, it was a whole new ballgame -- and much more successful. "Wholesale brings volume," Ward says. "Fair trade is a niche market, and it's easier to sell to a limited number of buyers if you know who they are."
Global Crafts targeted retailers through direct marketing and by sending them free samples, attracting 50 accounts. By keeping its wholesale prices low -- $8 to $12 for wire bangles, bracelets, and napkin rings -- the company grew sales to $200,000 in 2004.
Revenue rose 40% a year from 2005 to 2007, as Ward and Jones learned how to boost sales by customizing products and offer incentives. Despite its growing business, Global Crafts continued with a very lean staff of just four people besides the founders: a brand manager plus one employee to process orders and two workers to fulfill them.
But in 2008, the recession hit and business faltered. Ward went back to the drawing board a second time.
Global Crafts launched a second website that year, Gifts with Humanity, to target retail customers. It formed partnerships with Amazon (AMZN, Fortune 500), World of Good, and Overstock.com's Worldstock, which carry its items in return for a cut of the sales.
In 2009 -- with the economic downturn peaking -- Global Crafts had its best year ever and crossed the seven-figure mark. Its annual sales were $1.3 million, with 65% of the revenue coming from the wholesale and the rest from the new retail brand. This year, Global Crafts is on track for sales of $2 million.
Ward says there's two secrets to Global Crafts' success: customer service and search optimization.
"We get orders out the next day. If it's on the website, it's in stock," he says. The company invests $40,000 a year in Google ads, so Global Crafts shows up prominently when potential customers search for "fair trade jewelry."
Carmen Iezzi, executive director of the Fair Trade Federation, attributes Global Craft's success to having "great products, and working directly with its artisan partners to develop products. It eliminates the middlemen who might distort prices."
Now that it's nearing $2 million dollar in sales, Ward is toying again with a once-abandoned strategy.
"We're considering opening several retail stores," he says. With access to a $300,000 credit line, Global Crafts would go after a highly trafficked site this time around. If the first store succeeds, Ward says he would consider franchising.
Which illustrates the real key to building a seven-figure business: Learning from and fixing your inevitable mistakes.
miercuri, 26 mai 2010
Oil falls 2% in global sell-off
By Annalyn Censky CNNMONEY.com
Oil futures slumped 2% Tuesday as political tension between North and South Korea -- and Europe's continued economic woes -- sparked a sell-off in global stock markets.
What prices are doing: Crude for July delivery, fell $1.46, or about 2%, to settle at $68.75 a barrel Tuesday.
Gasoline prices fell for the 19th consecutive day, slipping to $2.780 a gallon from $2.793 the day before, according to a survey by motorist group AAA.
What's moving the market: Asian financial markets posted steep losses, pushing down oil prices, after North Korea threatened military action against South Korea Tuesday, according to reports by South Korean news agency Yonhap.
European financial markets also declined after a Spanish bank bailout turned attention to the financial health of other European banks.
Meanwhile, U.S. stocks fell about 1.6%.
A combination of economic factors have driven oil prices down over the past month, as investors flee to safe-haven buys such as the dollar and Treasurys.
Europe's debt crisis and volatile financial markets have fueled doubts about a global economic recovery, causing concern for oil traders who were expecting demand for fuel to rise this year. Weekly inventory reports from the U.S. government also show oil stockpiles are building up faster than demand.
The dollar has risen about 9.7% against the euro in the last month, adding to the downward pressure on oil. Because oil is priced in the greenback, a stronger dollar makes it more expensive for foreign investors.
What experts are saying: Europe's debt crisis has investors doubting that a global economic recovery will boost demand for oil, and rising tensions between North and South Korea only piled on the negativity, said Phil Flynn, senior market analyst with PFG Best.
"Obviously the European situation has been the ongoing story, but their bank stocks have fallen again today, and that is reducing confidence that this economic crisis is going to go away any time soon. It also increases the likelihood that demand for oil will be aversely affected," Flynn said
Drive My Car (Please?)
By Iain Roberts Bloomerg
The auto industry is in dire need of innovation. Here's a look at some of the more promising ideas for a "car" of the future
The automobile industry is in the midst of a huge transition. Consumers who were once lured into purchase decisions by iconic designs, strong brands, or high performance ratings now want all that and more. As today's drivers spend increasing amounts of time on the road, they crave vehicles that complement their always-on, hypermobile lifestyles and that support the car as a makeshift office, an entertainment center for the kids, and a cargo hold for their inner weekend warrior.
Industry innovators are getting onboard, looking at changing behavior, cultural trends, technological shifts, and analogous industries to figure out how best to meet consumer needs. The automakers that successfully make cars "do" more—in other words, deliver smart, personalized services to drivers on demand—stand the best chance of setting themselves apart from the competition. The most sought-after vehicles will be those that act as just another node in a driver's existing network of devices. The connected car experience is the new reality. Here are a few of the early offerings to hit the market.
Inside the Connected Car
Increasingly, the "connected car" is putting people directly in control of their digital lives while they're behind the wheel. Early this year, Ford (F) announced an integrated "driver experience" for its Ford, Lincoln, and Mercury vehicles. MyFord Touch connects the driver's phone, media, navigation, and vehicle settings via one seamless interface controlled by touch or voice commands. No more missed calls or fumbling for your iPod while you're on the highway.
IDEO participated in the initial development of the MyFord system, and through that I've come to believe that the next generation of connected experiences will likely disrupt this model further by embracing a more "open" approach to innovation: dashboards that are customized by drivers. Imagine, for instance, being able to choose your car's software from a store full of applications developed by automakers, third parties, or even consumers. In other words, the car is becoming a technology platform that evolves with us over time.
Better still, these offerings should allow for safer driving. As connected experiences become more embedded and natural to use, drivers will be able to keep their eyes and attention on the road, rather than on the dashboard or audio-control system. GM recently unveiled a windshield concept in which an interior coating turns the entire piece of glass into a heads-up display. By integrating devices, media, and vehicle sensors into the system, GM can present contextually relevant information, such as road warnings and navigational information in the driver's line of sight with the road. While it may be a few years before any of these developments reach their full potential, it's clear that smart use of technology will ultimately allow drivers to stay connected, on their own terms.
From Connected Car to Connected Ownership
Connected cars have the ability to build histories of vehicle performance, movement patterns, and even the driver's purchase preferences. The data collected from the car and all those connected mobile devices present automakers and third parties with opportunities to develop unique products and services. The possibilities extend well beyond driving into the wider experience of car ownership and, by providing more positive touch points, have the potential to convert consumers into brand loyalists.
BMW's Teleservice collects driver data to improve the experience at the dealer—a moment that's often one of frustration and disappointment for consumers. Teleservice actively monitors each auto's maintenance needs, recording potential problems, and when needed, calling the vehicle's owner to schedule an appointment. The data that have already been collected keep faultfinding, reducing time at the service center to a minimum, something most customers can appreciate.
Alternately, Fiat's Web-based EcoDrive service analyzes driving behavior, rating it on a simple scale and making actionable recommendations about what the driver might do differently to improve fuel economy. EcoDrive also lets car owners rate their performance against other Fiat drivers within their community of users. It's like Nike+ for cars—and the healthy competition provides incentive for participation. Fiat claims that the system could improve efficiency figures up to 15 percent.
Third parties are already getting in on the game. Progressive Insurance's MyRate pilot scheme uses data from a connected vehicle, such as how often and how far it's driven, to calculate a customer's monthly premium.
This is just the beginning. Imagine the possibilities as the auto industry's ability to process data and synthesize patterns improves. Could car companies monitor and promote safer, or more economical, driving behavior through new incentive programs? Or perhaps, one day, your daily latte order may be ready and waiting when you pull into the coffeehouse's parking lot—a perk for which people might pay extra.
The auto industry is in dire need of innovation. Here's a look at some of the more promising ideas for a "car" of the future
The automobile industry is in the midst of a huge transition. Consumers who were once lured into purchase decisions by iconic designs, strong brands, or high performance ratings now want all that and more. As today's drivers spend increasing amounts of time on the road, they crave vehicles that complement their always-on, hypermobile lifestyles and that support the car as a makeshift office, an entertainment center for the kids, and a cargo hold for their inner weekend warrior.
Industry innovators are getting onboard, looking at changing behavior, cultural trends, technological shifts, and analogous industries to figure out how best to meet consumer needs. The automakers that successfully make cars "do" more—in other words, deliver smart, personalized services to drivers on demand—stand the best chance of setting themselves apart from the competition. The most sought-after vehicles will be those that act as just another node in a driver's existing network of devices. The connected car experience is the new reality. Here are a few of the early offerings to hit the market.
Inside the Connected Car
Increasingly, the "connected car" is putting people directly in control of their digital lives while they're behind the wheel. Early this year, Ford (F) announced an integrated "driver experience" for its Ford, Lincoln, and Mercury vehicles. MyFord Touch connects the driver's phone, media, navigation, and vehicle settings via one seamless interface controlled by touch or voice commands. No more missed calls or fumbling for your iPod while you're on the highway.
IDEO participated in the initial development of the MyFord system, and through that I've come to believe that the next generation of connected experiences will likely disrupt this model further by embracing a more "open" approach to innovation: dashboards that are customized by drivers. Imagine, for instance, being able to choose your car's software from a store full of applications developed by automakers, third parties, or even consumers. In other words, the car is becoming a technology platform that evolves with us over time.
Better still, these offerings should allow for safer driving. As connected experiences become more embedded and natural to use, drivers will be able to keep their eyes and attention on the road, rather than on the dashboard or audio-control system. GM recently unveiled a windshield concept in which an interior coating turns the entire piece of glass into a heads-up display. By integrating devices, media, and vehicle sensors into the system, GM can present contextually relevant information, such as road warnings and navigational information in the driver's line of sight with the road. While it may be a few years before any of these developments reach their full potential, it's clear that smart use of technology will ultimately allow drivers to stay connected, on their own terms.
From Connected Car to Connected Ownership
Connected cars have the ability to build histories of vehicle performance, movement patterns, and even the driver's purchase preferences. The data collected from the car and all those connected mobile devices present automakers and third parties with opportunities to develop unique products and services. The possibilities extend well beyond driving into the wider experience of car ownership and, by providing more positive touch points, have the potential to convert consumers into brand loyalists.
BMW's Teleservice collects driver data to improve the experience at the dealer—a moment that's often one of frustration and disappointment for consumers. Teleservice actively monitors each auto's maintenance needs, recording potential problems, and when needed, calling the vehicle's owner to schedule an appointment. The data that have already been collected keep faultfinding, reducing time at the service center to a minimum, something most customers can appreciate.
Alternately, Fiat's Web-based EcoDrive service analyzes driving behavior, rating it on a simple scale and making actionable recommendations about what the driver might do differently to improve fuel economy. EcoDrive also lets car owners rate their performance against other Fiat drivers within their community of users. It's like Nike+ for cars—and the healthy competition provides incentive for participation. Fiat claims that the system could improve efficiency figures up to 15 percent.
Third parties are already getting in on the game. Progressive Insurance's MyRate pilot scheme uses data from a connected vehicle, such as how often and how far it's driven, to calculate a customer's monthly premium.
This is just the beginning. Imagine the possibilities as the auto industry's ability to process data and synthesize patterns improves. Could car companies monitor and promote safer, or more economical, driving behavior through new incentive programs? Or perhaps, one day, your daily latte order may be ready and waiting when you pull into the coffeehouse's parking lot—a perk for which people might pay extra.
Bloomberg BusinessWeek Business Exchange
by: David Welch Bloomberg
Nissan Motor Co. CEO Carlos Ghosn made the rounds in the U.S. the last two days pumping up his electric-car plans. He said the automaker and its global partner, French carmaker Renault SA, will be able to build 500,000 electric cars a year by 2014. To back up his bold plan, he announced a $1.7 billion investment in a lithium-ion battery plant in Smyrna, Tenn. All told, Nissan is dropping $5 billion from 2007 to 2012 for its ambitious play to be the leader in electric cars. The U.S. government loaned Nissan $1.4 billion of the cash for the battery plant. So in essence, we all have a piece of his gamble.
And it’s a big one. The challenges to selling electric cars in big numbers are pretty obvious. The Leaf, Nissan’s five-passenger compact that hits the market later this year, can go 100 miles before needing to recharge. That recharge takes hours. And be careful about that 100 miles. That’s in the city, where stop-and-go driving recharges the battery. Out on the highway, it could get half of that, says Jim Hall, principal of auto consulting firm 2953 Analytics. That will limit its appeal, especially because American city boulevards aren’t exactly electric avenues lined with charging stations. The cars aren’t cheap either. The Leaf will sell for $25,280 after U.S. tax subsidies. That’s at least $5,000 more than most cars its size.
Cue up the ire of green-car fans. They hate hearing that electric cars might not populate every garage from here to Shanghai. Yes, many Americans only drive 20 miles to work and back. For them, the Leaf will be wonderful. Ghosn is also counting on China to snap up a lot of these. He said that his goal of selling half a million EVs would be less than 1 percent of the global car market.
All of that makes sense. But Ghosn will be rolling out cars faster than most big car markets—namely the U.S., Europe and even China—plan to install public charging stations. Renault and Nissan won’t be the only companies selling some kind of high-tech car. Ghosn says he doesn’t see the Chevrolet Volt as a rival to the Leaf since the Chevy has a small gasoline engine to recharge the battery, while the Leaf is electric-only.
I beg to differ. Some buyers want something green and clean. Whether the car runs only on electricity or gets super-high gas mileage makes little difference to some of those customers. To them, the Volt is more practical and has the same high-tech, green appeal. It will be an alternative. Adding more to the fray, Ford plans to sell two electric vehicles by 2012. Toyota is now teaming up with Tesla to build an electric car.
Is Ghosn crazy? Plenty of critics said so when Renault bought a stake in troubled Nissan in 1999. Ghosn made a money maker out of it. He may be overreaching this time. But he remains undeterred. He said the critics will not change the path he is on. He could prove them wrong again by becoming a leader well before others have the derring-do to go electric. He may also lose a lot of money in the process.
Buffett, Moody's CEO to testify to crisis panel
By Karey Wutkowski Reuters
Warren Buffett, the chief executive of Berkshire Hathaway Inc, will testify next week before the U.S. panel examining the causes of the deep financial crisis.
The Financial Crisis Inquiry Commission, a Congressionally appointed panel charged with writing by the end of the year a full account of the crisis, said Buffett will testify with Moody's Corp Chief Executive Raymond McDaniel on June 2 in New York.
The hearing will look at the credibility of credit ratings, and the investment decisions made based on those ratings, the panel said in a release on Wednesday.
Credit rating agencies have been accused of contributing to the global financial crisis by assigning inflated ratings to subprime mortgage-related products.
Buffett earlier this month defended credit rating agencies as an investment, including stakes by Berkshire Hathaway.
He told Berkshire's annual meeting that rating agencies "made the same mistake" that he, politicians, mortgage brokers and others did in overestimating the health of the housing market.
During the first quarter of this year, Buffett further reduced his stake in Moody's, which stood at about 13 percent as of March 31.
Buffett said at the annual meeting on May 1 that the agencies, which also include McGraw-Hill Cos' Standard & Poor's and Fimalac SA's Fitch Ratings, have scant capital needs and have strong pricing power.
Buffett will be one of the biggest names to appear before the 10-member panel, which is modeled after the Pecora Commission that probed the 1929 Wall Street crash.
In the past few months, the commission has also heard from Goldman Sachs CEO Lloyd Blankfein, JPMorgan CEO Jamie Dimon, former Federal Reserve Chairman Alan Greenspan and former Bear Stearns CEO James Cayne.
It must deliver its findings to Congress and President Barack Obama by December 15.
Also scheduled to testify on June 2 are current and former Moody's executives, including Nicolas Weill, the group managing director for Moody's Investors Service, and Brian Clarkson, former chief operating officer for Moody's Investors Service.
The full list of witnesses can be found at: http://www.fcic.gov/hearings/06-02-2010.php
Credit rating agencies are facing tough reforms in the financial regulation legislation moving through Congress.
The Senate version of the bill would have the government set up a clearinghouse to match rating agencies on a semi-random basis with debt issuers.
That could ease pressures the agencies face to assign rosy ratings to securities issued by the firms that hire them, backers said.
Another provision in the Senate's legislation would require federal regulators to develop their own standards of credit-worthiness rather than rely solely on assessments from rating agencies.
Shares of credit rating agencies dropped when the Senate approved the measures on May 13, but it is unclear whether they will make it into the final bill, which must be melded with a version passed by the U.S. House of Representatives.
Hoku Corp. reports $2 million 4Q loss
Hoku Corp. is reporting a net loss of $2 million for its fiscal fourth quarter ended March 31, more than double the $904,000 it lost in the same quarter last year.
The clean energy products and services company said Wednesday that it lost $5.4 million for the fiscal year ended March 31, compared to a $3 million loss in fiscal 2009.
Hoku President and CEO Scott Paul attributed the higher loss in fiscal 2010 primarily to preparations for recently completed pilot production runs and to payments to Idaho Power for reserve power capacity in advance of the company's plant startup.
Hoku is building a $390 million plant in Pocatello, Idaho, to produce polysilicon, a product used for making solar panels.
The clean energy products and services company said Wednesday that it lost $5.4 million for the fiscal year ended March 31, compared to a $3 million loss in fiscal 2009.
Hoku President and CEO Scott Paul attributed the higher loss in fiscal 2010 primarily to preparations for recently completed pilot production runs and to payments to Idaho Power for reserve power capacity in advance of the company's plant startup.
Hoku is building a $390 million plant in Pocatello, Idaho, to produce polysilicon, a product used for making solar panels.
April factory orders rise on demand for aircraft
By MARTIN CRUTSINGER, AP
A rebound in demand for commercial aircraft lifted April orders for big-ticket goods, further evidence that manufacturers are helping to drive the economic recovery.
Requests for durable goods increased 2.9 percent last month, the Commerce Department said Wednesday. It was the best showing in three months and more than double expectations.
Excluding transportation, orders in the highly volatile manufacturing sector fell 1 percent. But that came after the March figures were revised to show a 4.8 percent jump.
A durable good is a product expected to last at least three years, such as a refrigerator.
U.S. companies are benefiting from rising demand both at home and in major export markets.
There are concerns that a debt crisis in Europe could derail the global recovery. Financial markets have been roiled in recent weeks by fears that the problems facing Greece could spread to other heavily indebted European countries, such as Spain and Portugal.
But economists say the U.S. manufacturing industry may be strong enough to weather Europe's troubles.
" April's durable goods orders figures demonstrate that, despite the fiscal meltdown in Europe, the recovery in the American manufacturing sector is still gathering momentum," said Paul Ashworth, senior U.S. economist at Capital Economics.
For April, the 2.9 percent rise in orders was led by a 228 percent surge in demand for commercial aircraft. The increase reflected strong demand for aircraft manufactured by Boeing Co. It also more than offset a 71.2 percent plunge in March in this highly volatile category.
Orders for motor vehicles were up 1.6 percent following an even stronger 4.5 percent gain in March. Automakers continue to dig out of the deep downturn that hit their industry over the past two years. Total manufacturing orders rose 16.1 percent.
The 1 percent drop in orders excluding transportation was a result of declines in a number of areas that had big gains in March.
Orders for primary metals such as steel fell 2 percent. Demand for heavy machinery dropped 5.9 percent after a surge of 10.5 percent in March. Computers fell 3 percent, although orders for communications equipment rose 7.1 percent. Orders for appliances were down 6.9 percent.
Non-defense capital goods excluding aircraft, considered a good proxy for business investment plans, dropped 2.4 percent. But that came after a 6.5 percent increase in March.
The European debt worries have pushed the value of the dollar up 14 percent this year against the euro. That will make American products less competitive in European markets.
There is also concern that the austerity measures that Greece and other European countries are having to implement will dampen demand for American exports and could push Europe back into recession.
At the moment, economists believe the United States will be able to offset weaker exports to Europe with stronger domestic growth, helped by failing oil prices and lower interest rates.
The U.S. economy has been growing since last summer as the country emerges from the worst recession since the 1930s. The overall economy, measured by the gross domestic product, grew at an annual rate of 3.2 percent in the first three months of this year. Economists believe that figure will be revised up to 3.4 percent growth when the new GDP estimate is released Thursday.
A rebound in demand for commercial aircraft lifted April orders for big-ticket goods, further evidence that manufacturers are helping to drive the economic recovery.
Requests for durable goods increased 2.9 percent last month, the Commerce Department said Wednesday. It was the best showing in three months and more than double expectations.
Excluding transportation, orders in the highly volatile manufacturing sector fell 1 percent. But that came after the March figures were revised to show a 4.8 percent jump.
A durable good is a product expected to last at least three years, such as a refrigerator.
U.S. companies are benefiting from rising demand both at home and in major export markets.
There are concerns that a debt crisis in Europe could derail the global recovery. Financial markets have been roiled in recent weeks by fears that the problems facing Greece could spread to other heavily indebted European countries, such as Spain and Portugal.
But economists say the U.S. manufacturing industry may be strong enough to weather Europe's troubles.
" April's durable goods orders figures demonstrate that, despite the fiscal meltdown in Europe, the recovery in the American manufacturing sector is still gathering momentum," said Paul Ashworth, senior U.S. economist at Capital Economics.
For April, the 2.9 percent rise in orders was led by a 228 percent surge in demand for commercial aircraft. The increase reflected strong demand for aircraft manufactured by Boeing Co. It also more than offset a 71.2 percent plunge in March in this highly volatile category.
Orders for motor vehicles were up 1.6 percent following an even stronger 4.5 percent gain in March. Automakers continue to dig out of the deep downturn that hit their industry over the past two years. Total manufacturing orders rose 16.1 percent.
The 1 percent drop in orders excluding transportation was a result of declines in a number of areas that had big gains in March.
Orders for primary metals such as steel fell 2 percent. Demand for heavy machinery dropped 5.9 percent after a surge of 10.5 percent in March. Computers fell 3 percent, although orders for communications equipment rose 7.1 percent. Orders for appliances were down 6.9 percent.
Non-defense capital goods excluding aircraft, considered a good proxy for business investment plans, dropped 2.4 percent. But that came after a 6.5 percent increase in March.
The European debt worries have pushed the value of the dollar up 14 percent this year against the euro. That will make American products less competitive in European markets.
There is also concern that the austerity measures that Greece and other European countries are having to implement will dampen demand for American exports and could push Europe back into recession.
At the moment, economists believe the United States will be able to offset weaker exports to Europe with stronger domestic growth, helped by failing oil prices and lower interest rates.
The U.S. economy has been growing since last summer as the country emerges from the worst recession since the 1930s. The overall economy, measured by the gross domestic product, grew at an annual rate of 3.2 percent in the first three months of this year. Economists believe that figure will be revised up to 3.4 percent growth when the new GDP estimate is released Thursday.
New US homes sales jump
Sales of new US homes rose unexpectedly in April, according to official figures published Wednesday, as Americans rushed to take advantage of expiring tax breaks.
Sales of newly constructed single-family homes increased 14.8 percent in one month, well beyond market expectations.
The rise came in the dwindling days of the government's homebuyer tax credit, which expired at the end of April.
The policy was designed to help the US real estate market recover from a crippling recession that has seen house prices slump and mortgage borrowing become more difficult.
Analysts had expected sales of around 425,000, versus the whopping 504,000 posted.
The rate for March was revised up to 439,000, from 411,000
marți, 25 mai 2010
Ford to hire 220 to make hybrid parts
By Blake Ellis CNNMONEY
Ford Motor Co. said Monday it plans to invest $135 million and hire 220 workers to create parts for its new hybrid and electric vehicles.
Ford (F, Fortune 500) will add a total of 170 jobs at its Rawsonville and Van Dyke Transmission plants in Michigan, as well as more than 50 electric vehicle engineer positions.
The new hires will work to design, engineer and produce battery packs and electric-drive transaxles for the company's hybrids that go into production in North America in 2012.
The initiative will bring work to Michigan that is currently performed by suppliers in Japan and Mexico, Ford said Monday in a prepared statement.
"Electrified vehicles are a key part of our plan to offer a full lineup of green vehicles, and we are building a center of excellence in the U.S., here in Michigan, to keep Ford on the cutting edge," said Mark Fields, Ford president of the Americas. "Today's announcement is another important step in our larger strategy to launch a family of hybrids, plug-in hybrids and full electric vehicles around the world."
The launch of the new hybrid in 2012 is part of Ford's plan to introduce five electrified vehicles in the U.S. by 2012 and in Europe by 2013, the automaker said.
Ford Motor Co. said Monday it plans to invest $135 million and hire 220 workers to create parts for its new hybrid and electric vehicles.
Ford (F, Fortune 500) will add a total of 170 jobs at its Rawsonville and Van Dyke Transmission plants in Michigan, as well as more than 50 electric vehicle engineer positions.
The new hires will work to design, engineer and produce battery packs and electric-drive transaxles for the company's hybrids that go into production in North America in 2012.
The initiative will bring work to Michigan that is currently performed by suppliers in Japan and Mexico, Ford said Monday in a prepared statement.
"Electrified vehicles are a key part of our plan to offer a full lineup of green vehicles, and we are building a center of excellence in the U.S., here in Michigan, to keep Ford on the cutting edge," said Mark Fields, Ford president of the Americas. "Today's announcement is another important step in our larger strategy to launch a family of hybrids, plug-in hybrids and full electric vehicles around the world."
The launch of the new hybrid in 2012 is part of Ford's plan to introduce five electrified vehicles in the U.S. by 2012 and in Europe by 2013, the automaker said.
Wal-Mart slashes iPhone price to $97
By Chavon Sutton Cnn Money
Wal-Mart, the world's largest retailer, plans to slash the price of Apple's 16GB 3GS iPhone to $97 beginning Tuesday.
Apple (AAPL, Fortune 500) is widely expected to unveil a brand-new iPhone next month, and could be working with retailers to clear out its remaining inventory of the about-to-be-outdated model.
At the new price, customers will save $100 on Apple's smart phone, which currently sells for $199. The deal requires that the phone be purchased with a two-year contract from AT&T, the iPhone's exclusive service provider.
"It is our commitment to always lead on price," Mehrdad Akbar, Wal-Mart's (WMT, Fortune 500) senior category director for wireless, in a prepared statement about the price change.
Apple sold 8.3 million iPhones last quarter, more than twice the amount sold during the same period a year ago.
Wal-Mart's pre-Memorial Day price whack comes as technology giants such as Google (GOOG, Fortune 500), Research in Motion (RIM) and Hewlett-Packard (HPQ, Fortune 500), which recently snapped up Palm, vie for top dog status in the smart phone market. Industry analysts say that worldwide smart phone sales topped 54 million units in the first quarter, up nearly 49% from a year ago.
At $97, Wal-Mart's price slightly undercuts the $99 price tag several analysts anticipated for the remaining iPhone 3GS stock. When consumers get sight of a new iPhone model on the horizon, sales of the existing model typically falls off sharply.
In the furor surrounding last month's theft of a new iPhone prototype, Apple filed legal documents claiming that leaked details of the new model would be "immensely damaging" to the company because "people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released."
Wal-Mart, the world's largest retailer, plans to slash the price of Apple's 16GB 3GS iPhone to $97 beginning Tuesday.
Apple (AAPL, Fortune 500) is widely expected to unveil a brand-new iPhone next month, and could be working with retailers to clear out its remaining inventory of the about-to-be-outdated model.
At the new price, customers will save $100 on Apple's smart phone, which currently sells for $199. The deal requires that the phone be purchased with a two-year contract from AT&T, the iPhone's exclusive service provider.
"It is our commitment to always lead on price," Mehrdad Akbar, Wal-Mart's (WMT, Fortune 500) senior category director for wireless, in a prepared statement about the price change.
Apple sold 8.3 million iPhones last quarter, more than twice the amount sold during the same period a year ago.
Wal-Mart's pre-Memorial Day price whack comes as technology giants such as Google (GOOG, Fortune 500), Research in Motion (RIM) and Hewlett-Packard (HPQ, Fortune 500), which recently snapped up Palm, vie for top dog status in the smart phone market. Industry analysts say that worldwide smart phone sales topped 54 million units in the first quarter, up nearly 49% from a year ago.
At $97, Wal-Mart's price slightly undercuts the $99 price tag several analysts anticipated for the remaining iPhone 3GS stock. When consumers get sight of a new iPhone model on the horizon, sales of the existing model typically falls off sharply.
In the furor surrounding last month's theft of a new iPhone prototype, Apple filed legal documents claiming that leaked details of the new model would be "immensely damaging" to the company because "people that would have otherwise purchased a currently existing Apple product would wait for the next item to be released."
Marks & Spencer reports annual profit gain
British retailer Marks & Spencer on Tuesday reported a 3.6-percent gain in annual net earnings but voiced caution on its prospects in light of expected government austerity measures.
The company said profit in the 53 weeks to April 3 came to 536.3 million pounds (610 million euros, 750 million dollars) from sales that rose 5.2 percent to 9.537 billion pounds.
In the 52 weeks to March 27 sales gained 3.2 percent to 9.3 billion pounds.
"We have had a satisfactiory start to the first quarter," said chairman Stuart Rose.
But he added that consumers were "naturally cautious" ahead of the release of the British budget on June 22.
"We therefore remain cautious about the outlook for the year ahead," Rose said in a statement.
Britain's new coaliton government of Conservtives and Liberal Democrats on Monday presented plans to cut 6.2 billion pounds from ministerial budgets, seen as a foretaste of tougher measures to come.
Economists here are talking of possible tax hikes that could discourage consumer spending.
Marks and Spencer said earnings before taxes and exceptional items in the 52 weeks to March 27 rose 4.6 percent to 632.5 billion pounds, eclipsing company expectations of a range of 620-630 million pounds.
Debt in the period was cut back by 422.4 million pounds to 2.1 billion.
The dividend was lowered to 15 pence per share from 15.7 while employees shared bonuses totalling 81 million pounds.
Advertisers Give Google TV a Warm Reception
By Olga Kharif Bloomberg
Google's interactive TV platform might lower costs and improve the targeting of ad spots. Could 'smart' TV redefine advertising?
Say you're watching TV and an ad for Chevy's Silverado pickup catches your eye. Come this fall, viewers using Google's new interactive television technology will be able to type the object of their desire into an onscreen search box and launch a YouTube GOOG video or surf over to Chevy's (FIATY) website.
Advertisers foresee a new medium to get their message to consumers. "Google is going to revolutionize the way we use media," says Shattuck Groome, president of New York ad agency Gotham Direct Interactive, which buys TV ads for brands that include M&M's candy and Zappos.com (AMZN). "It's the future of advertising."
Gotham Direct already buys TV ads for clients through a prior initiative called Google TV Ads, an online marketplace where advertisers can upload video spots and place them on more than a dozen networks, including ABC Family (DIS), through services from the DISH Network (DISH) and TiVo (TIVO). Groome says he's looking forward to being able to measure precisely who is viewing the ads Gotham creates—and to pay only for ads that viewers actually watch.
Google announced its plans for "smart" TVs at its Google I/O developer conference in San Francisco on May 20. Google software will put Web content on televisions and will work with Intel (INTC) chips in TVs from Sony (SNE) and a set-top box from Logitech International (LOGI) that will allow Google TV to run on generic sets. Using Google TV, viewers will be able to search for Web programming through an onscreen search box that presents the results on their TV screens.
Big savings for Advertisers?
Advertisers say Google TV will let them reach TV viewers faster, more cheaply, and more effectively than via traditional TV spots. With Google, advertisers will know exactly who viewed their ad, how many people clicked on it, and how many people chose to use a "click-to-call" feature to contact advertisers immediately.
The platform could make TV advertising more affordable, too. Today advertisers pay thousands or even millions of dollars per spot to push fast food, cars, and beer. But an online video ad costs about only $30 per 1,000 viewings, according to the Diffusion Group, a market researcher. Jeroen Coppelmans, vice-president for the Americas at Spotzer Media, which produces video ads for small businesses, says that "someone with a budget of a couple of dollars a day could do TV advertising
Google hopes Google TV will help it create revenue streams in addition to that from ads linked to searches conducted by computer users on PC Web browsers. Those ads contributed the bulk of the company's $23.7 billion in 2009 revenues. TV advertising in the U.S. accounted for $83 billion in spending last year, according to the Diffusion Group. If Google were able to grab even a small chunk of it, the company would tap a lucrative source of revenue.
smartphone-like remote controls
Google TV brings the company's familiar search box into the living room. The company describes the technology as creating an "entertainment hub" that lets viewers search channels, record shows, and find websites. "Many times, I see an interesting commercial and can't do anything with it," Rishi Chandra, a Google senior product manager, said at Google I/O. He added in an interview: "Now your TV advertising becomes interactive …. Every advertiser has a website."
At first, advertisers won't know whether the ads they buy through Google's advertising network are being viewed on PCs or on TVs. Google plans to let advertisers tailor messages for Google TV viewers, however. "We are looking at ways for advertisers to target specific devices," says Chandra. To facilitate typing, he says, manufacturers are working on remote controls that might resemble smartphone keyboards.
Although TV, cable, and technology companies have been pushing the idea of interactive TV since the early 1990s, the concept hasn't taken off. Among Google competitors pursuing interactive TV are Apple (AAPL), Microsoft (MSFT), Yahoo! (YHOO), and Wal-Mart Stores (WMT), which bought online movie rental service Vudu on Feb. 22. Nearly half of the flat-panel TVs sold in 2013 will be Web-enabled, up from 19 percent this year, according to consultant ABI Research.
Do consumers want full TV Web access?
Yahoo may roll out a TV advertising program in the coming months, says Russ Schafer, a senior director of marketing at the company. Yahoo's Connected TV service, which was launched last year and lets users stream movies online from Amazon.com and Blockbuster (BBI), is available on more than 2.5 million devices from Sony, Vizio, Samsung, and LG Electronics. Yahoo recently demonstrated the ability to show TV viewers a Macy's (M) ad and let them forward a related coupon to a cell phone.
Wal-Mart's Vudu service may offer advertising capabilities in the future as its audience expands, says Executive Vice-President Edward Lichty.
Microsoft's Mediaroom service lets telcos, including AT&T (T) and Deutsche Telekom (DT), offer access to such websites as Facebook on subscribers' TV screens. Ben Huang, Microsoft marketing director, says consumers may not want full Internet access on their TVs, as Google is proposing. "If the point is to allow open Web surfing on a TV, I'm not sure that's what the consumer wants," he says.
from cable companies: Canoe Ventures
Cable companies stand to lose most if Google TV takes off. "There's been enormous frustration among ad agencies about what they can do with the television platform," says Bill Niemeyer, a senior analyst at Diffusion Group. Interactive TV ads "could be a $10 billion to $20 billion industry over the course of the decade," he says. Much of that money may come out of advertisers' TV budgets, he says.
Cable companies and telcos are fighting to defend their turf. Comcast (CMCSA), Cablevision (CVC), and Time Warner Cable (TWC) have been testing interactive TV ads for months.
Comcast and other operators have formed Canoe Ventures, which has developed set-top box software that makes TV ads' effectiveness easier to measure. An overlay on customers' TV screens lets them request direct mail or coupons by pressing a button on their remote. On May 17, Canoe announced that Comcast, Discovery Communications (DISCA), NBC Universal, and Rainbow Media plan to launch the technology in this quarter.
Advertisers face a number of options to combine TV's reach with the Web's precision. Still, interactive TV is seeded with wild cards, including questions about how aggressively TV manufacturers will buy into it and how hard it is to predict consumer tastes. "It's too early to tell," says Darren Herman, chief digital media officer at ad agency Kirshenbaum Bond Senecal + Partners, whose clients include Delta Air Lines (DAL) and Victoria's Secret. "All these folks are currently wearing diapers."
Google's interactive TV platform might lower costs and improve the targeting of ad spots. Could 'smart' TV redefine advertising?
Say you're watching TV and an ad for Chevy's Silverado pickup catches your eye. Come this fall, viewers using Google's new interactive television technology will be able to type the object of their desire into an onscreen search box and launch a YouTube GOOG video or surf over to Chevy's (FIATY) website.
Advertisers foresee a new medium to get their message to consumers. "Google is going to revolutionize the way we use media," says Shattuck Groome, president of New York ad agency Gotham Direct Interactive, which buys TV ads for brands that include M&M's candy and Zappos.com (AMZN). "It's the future of advertising."
Gotham Direct already buys TV ads for clients through a prior initiative called Google TV Ads, an online marketplace where advertisers can upload video spots and place them on more than a dozen networks, including ABC Family (DIS), through services from the DISH Network (DISH) and TiVo (TIVO). Groome says he's looking forward to being able to measure precisely who is viewing the ads Gotham creates—and to pay only for ads that viewers actually watch.
Google announced its plans for "smart" TVs at its Google I/O developer conference in San Francisco on May 20. Google software will put Web content on televisions and will work with Intel (INTC) chips in TVs from Sony (SNE) and a set-top box from Logitech International (LOGI) that will allow Google TV to run on generic sets. Using Google TV, viewers will be able to search for Web programming through an onscreen search box that presents the results on their TV screens.
Big savings for Advertisers?
Advertisers say Google TV will let them reach TV viewers faster, more cheaply, and more effectively than via traditional TV spots. With Google, advertisers will know exactly who viewed their ad, how many people clicked on it, and how many people chose to use a "click-to-call" feature to contact advertisers immediately.
The platform could make TV advertising more affordable, too. Today advertisers pay thousands or even millions of dollars per spot to push fast food, cars, and beer. But an online video ad costs about only $30 per 1,000 viewings, according to the Diffusion Group, a market researcher. Jeroen Coppelmans, vice-president for the Americas at Spotzer Media, which produces video ads for small businesses, says that "someone with a budget of a couple of dollars a day could do TV advertising
Google hopes Google TV will help it create revenue streams in addition to that from ads linked to searches conducted by computer users on PC Web browsers. Those ads contributed the bulk of the company's $23.7 billion in 2009 revenues. TV advertising in the U.S. accounted for $83 billion in spending last year, according to the Diffusion Group. If Google were able to grab even a small chunk of it, the company would tap a lucrative source of revenue.
smartphone-like remote controls
Google TV brings the company's familiar search box into the living room. The company describes the technology as creating an "entertainment hub" that lets viewers search channels, record shows, and find websites. "Many times, I see an interesting commercial and can't do anything with it," Rishi Chandra, a Google senior product manager, said at Google I/O. He added in an interview: "Now your TV advertising becomes interactive …. Every advertiser has a website."
At first, advertisers won't know whether the ads they buy through Google's advertising network are being viewed on PCs or on TVs. Google plans to let advertisers tailor messages for Google TV viewers, however. "We are looking at ways for advertisers to target specific devices," says Chandra. To facilitate typing, he says, manufacturers are working on remote controls that might resemble smartphone keyboards.
Although TV, cable, and technology companies have been pushing the idea of interactive TV since the early 1990s, the concept hasn't taken off. Among Google competitors pursuing interactive TV are Apple (AAPL), Microsoft (MSFT), Yahoo! (YHOO), and Wal-Mart Stores (WMT), which bought online movie rental service Vudu on Feb. 22. Nearly half of the flat-panel TVs sold in 2013 will be Web-enabled, up from 19 percent this year, according to consultant ABI Research.
Do consumers want full TV Web access?
Yahoo may roll out a TV advertising program in the coming months, says Russ Schafer, a senior director of marketing at the company. Yahoo's Connected TV service, which was launched last year and lets users stream movies online from Amazon.com and Blockbuster (BBI), is available on more than 2.5 million devices from Sony, Vizio, Samsung, and LG Electronics. Yahoo recently demonstrated the ability to show TV viewers a Macy's (M) ad and let them forward a related coupon to a cell phone.
Wal-Mart's Vudu service may offer advertising capabilities in the future as its audience expands, says Executive Vice-President Edward Lichty.
Microsoft's Mediaroom service lets telcos, including AT&T (T) and Deutsche Telekom (DT), offer access to such websites as Facebook on subscribers' TV screens. Ben Huang, Microsoft marketing director, says consumers may not want full Internet access on their TVs, as Google is proposing. "If the point is to allow open Web surfing on a TV, I'm not sure that's what the consumer wants," he says.
from cable companies: Canoe Ventures
Cable companies stand to lose most if Google TV takes off. "There's been enormous frustration among ad agencies about what they can do with the television platform," says Bill Niemeyer, a senior analyst at Diffusion Group. Interactive TV ads "could be a $10 billion to $20 billion industry over the course of the decade," he says. Much of that money may come out of advertisers' TV budgets, he says.
Cable companies and telcos are fighting to defend their turf. Comcast (CMCSA), Cablevision (CVC), and Time Warner Cable (TWC) have been testing interactive TV ads for months.
Comcast and other operators have formed Canoe Ventures, which has developed set-top box software that makes TV ads' effectiveness easier to measure. An overlay on customers' TV screens lets them request direct mail or coupons by pressing a button on their remote. On May 17, Canoe announced that Comcast, Discovery Communications (DISCA), NBC Universal, and Rainbow Media plan to launch the technology in this quarter.
Advertisers face a number of options to combine TV's reach with the Web's precision. Still, interactive TV is seeded with wild cards, including questions about how aggressively TV manufacturers will buy into it and how hard it is to predict consumer tastes. "It's too early to tell," says Darren Herman, chief digital media officer at ad agency Kirshenbaum Bond Senecal + Partners, whose clients include Delta Air Lines (DAL) and Victoria's Secret. "All these folks are currently wearing diapers."
luni, 24 mai 2010
Nokia to run Yahoo's maps in global partnership
By BARBARA ORTUTAY
Nokia Corp. will run mapping and navigation services for Yahoo Inc. in an acknowledgement that the slumping Internet company hasn't kept up with rival Google Inc. in the increasingly important area of location services.
Yahoo will, in turn, provide e-mail and instant messaging services on Nokia phones, as part of the worldwide partnership announced Monday.
Yahoo has been working to focus on its core businesses — creating and licensing content, selling online ads and providing messaging services — while turning to partners to run some of its other offerings.
"It just allows us to deliver better experiences than everybody trying to do the same thing," Yahoo CEO Carol Bartz said in an interview.
Partnerships, she said, are increasingly becoming a part of Yahoo's DNA. Last year, the company entered a 10-year Internet search partnership with Microsoft Corp. in an effort to whittle away Google's leadership. On Monday, Yahoo said it will drop its Yahoo Personals brand for its dating service and partner with Match.com, a standalone dating website owned by IAC/InterActiveCorp.
The maps deal with Nokia, the world's No. 1 maker of mobile phones, covers both phones and computers.
Bartz said Yahoo has "chosen to invest in other areas" in recent years. That put the company's navigation services well behind Google, which has continued to innovate.
Google was the first, for example, to offer the now-common feature of letting users move their location on an online map by dragging it with a mouse, rather than repeatedly clicking arrows and waiting for the pages to refresh. More recently, it offered free software that provides spoken-aloud, turn-by-turn directions on phones running its Android system.
Yahoo and Nokia wouldn't disclose financial details of the deal, but they both stand to benefit from the other's reach and expertise.
The services will be co-branded, with Yahoo's navigation services and maps "powered by" Ovi, Nokia's brand of software and services. Nokia's Ovi Mail and Ovi Chat will likewise be "powered by" Yahoo. The services will start to become available later this year and will be offered worldwide in 2011.
Bartz said location is becoming increasingly important as people want to know where they are, where their friends are and what is around.
"It's sort of the anchor for all services," she said.
While advertising was not part of Monday's announcement — both Nokia and Yahoo said their ad strategies haven't changed — by upping the ante on its location services, Yahoo should benefit from advertising based on it.
"On the PC side, any of the mapping services by definition give us, especially in the local arena . a good platform for advertising," Bartz said. "And as mobile increasingly becomes important for advertising, the same thing will happen in the mobile application."
Nokia CEO Olli-Pekka Kallasvuo said the deal brings Yahoo's services to more people around the world, including those whose first Internet experience is through mobile.
And it increases the Finland-based company's visibility in the U.S., where its phones are not as popular as they are in the rest of the word. Although Nokia devices dominate worldwide, it's overshadowed in the U.S. by Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerry.
Standard and Poor's analyst Scott Kessler believes the Nokia and Match.com deals will help Yahoo expand its mail and messenger footprints, enhance its offerings and improve the profitability of its dating services.
"We are a little disappointed there is no pact to sell Personals ... but think these deals will add value," he said in a note to investors.
Shares of Yahoo rose 22 cents to $15.70 in afternoon trading. U.S.-traded shares of Nokia slid a penny to $10.06.
BP Plans Plug Attempt as Gulf Oil Leak Costs Rise
By Eduard Gismatullin Bloomberg
BP Plc will try to plug an underwater oil leak off Louisiana in two days by pumping heavy drilling fluids into the damaged well as the cleanup costs of the monthlong spill accelerate.
BP expects to attempt the “top kill” operation on the morning of May 26, Doug Suttles, chief operating officer for exploration and production, said today in an interview on NBC. It is the second time BP has delayed the measure, and Suttles rated its chances of working at “six or seven” on a scale in which 10 was certain success.
The total cost to BP of the disaster to date has reached about $760 million, or $22 million a day, compared with an initial estimate of $6 million a day last month, the London- based oil company said today in a statement. BP’s net income in 2009 was $16.6 billion, or $45.4 million a day, according to data compiled by Bloomberg.
“The longer it takes, more costs are going to be incurred,” Greg Smith, managing director of research firm Fat Prophets in London, said in a telephone interview today. The final bill, which may not be known for more than six months and depends on litigation, may be as much as $10 billion, he said.
BP fell 16.3 pence, or 3.2 percent, to 490.40 pence as of 12:31 p.m. in London, the lowest level in 10 months. The stock is down 25 percent since an April 20 explosion aboard the Deepwater Horizon drilling rig that killed 11 workers.
Government Officials
U.S. government officials stepped up pressure on BP in the face of criticism that they’ve been too lax in their oversight of the company’s response as oil washed ashore along more than 65 miles (105 kilometers) of coast lining the Gulf of Mexico. Interior Secretary Ken Salazar yesterday threatened to “push them out of the way” if BP doesn’t do enough to halt the leak.
Salazar is scheduled to visit Louisiana and fly over the oil slick today, along with Homeland Security Secretary Janet Napolitano and a group of U.S. senators. Environmental Protection Agency Administrator Lisa Jackson went to the region yesterday.
The “top kill” method requires liquids twice the density of water be pumped into the well using a Helix Energy Solutions Group Inc. rig, Suttles said last week.
“Most of the equipment is on site and preparations continue for this operation, with a view to deployment in a few days,” BP said today. It will be followed by cement to seal the well about 5,000 feet (1,524 meters) underwater.
Growing Frustration
The company said last week it expected to begin the process May 23, and then delayed that to May 25.
“Frustration is growing all around, with Louisiana authorities blaming both BP and the federal government for dragging their feet, while the feds are expressing increasing anger towards BP for missing various deadlines to get the leak plugged,” Edward Meir, a senior analyst at MF Global Inc., wrote in a report.
BP has been diverting some of the spill for about a week, using a pipe to a drillship on the surface. The average recovery rate was 2,010 barrels of oil a day and 10 million cubic feet per day of natural gas from May 17 to May 23, the company said today. Oil recovery ranged from 1,360 barrels a day to 3,000 barrels a day, it said.
“The collection rate continues to vary, primarily due to the flow parameters and physical characteristics within the riser,” BP said.
Leak Rate
A team of government and academic scientists may report this week how much oil is leaking from the well, after independent scientists told Congress the crude was coming out at more than 10 times the 5,000-barrel-a-day estimate BP and the government has given since April 28.
Suttles said in an interview on CNN today that if the top kill doesn’t work they will try another containment device to divert the oil to the ship. The company is preparing a “junk shot” to clog the opening of the leak.
BP is drilling two relief wells to shut the leaking well permanently. The wells will be ready in August.
The cleanup has involved more than 1,100 tugs, barges and other vessels and the use of more than 2.5 million feet of containment boom is in place to protect shoreline and fish nurseries in Louisiana, Mississippi, Alabama and Florida.
In total, more than 22,000 personnel from BP, other companies and government agencies are involved in the response to the incident, BP said. So far 23,000 claims have been filed and 9,000 have already been paid.
Microsoft's Bing Is Gaining Share
By Dina Bass
Users are starting to use "Bing" as a verb, and searches are up. But those will have to translate into more business from advertisers
If Microsoft's (MSFT) goal was to hear Bing used as a verb, there are signs of success. In April about 12 percent of all Web searches were performed using Microsoft's year-old search engine. While that doesn't exactly make Bing a Google (GOOG) killer, it seems to be holding its own. Searches on Bing are up 4 percent since its launch a year ago, according to comScore (SCOR). Meanwhile, Google's share is flat at 64 percent. "I do hear people saying 'I Binged it,' " says Danny Sullivan, who runs the search-analysis Web site Search Engine Land.
Microsoft has been trying to build its presence in search since 2004 (its last pre-Bing effort was called Live Search). Despite huge investments, Microsoft's share of all Net searches fell eight percentage points between 2004 and 2009. Most of the roughly $6 billion in losses racked up by Microsoft's online business division since 2006 are related to search, estimates Matt Rosoff, an analyst with market research firm Directions Marketing Group.
For Bing to be successful, the bump-up in searches will have to translate into more business from advertisers. For years, many companies that wanted their ads to appear alongside search results have sought a strong alternative to Google to get better prices. Range Online Media, a search-marketing firm, says most of its clients spend 5 to 9 percent of their budgets with Bing, up from the 2 to 5 percent they spent on Microsoft's search products two years ago. Curt Hecht, head of Publicis Groupe's digital ad technology unit, says some clients who had been taking a "wait-and-see" approach to Bing are now asking whether they are "underinvested" in Microsoft's search engine.
Bing moved away from Google's minimalist formula of a plain white page with a search box that produces a list of 10 blue links. Instead, Bing's home page showcases a daily high-resolution photo. There's the usual column of results in the middle, and a list of relevant categories on the left. If you Bing Lady Gaga, for example, these categories include "Lyrics" and "Albums." This month, Google unveiled a redesigned search page with a similar layout. "It certainly seems that they've been spurred by something over the past year," says Mike Nichols, Bing's general manager. (Google spokesman Gabriel Stricker: "We have many competitors, and we take them all seriously.")
Bing may never come close to passing Google as the top search engine, but it may not have to. A 2009 deal with Yahoo! (YHOO) makes Bing the search technology that Yahoo will use on its Web sites, though it won't use the Bing name. If Yahoo and Microsoft hold their current shares, Bing will power nearly 30 percent of all searches. "At that size, advertisers can't ignore them," says Rosoff.
The Bing team is pushing for a bigger slice of a market that Google doesn't yet control: mobile devices. While Google is the default search engine on Apple's iPhone (APPL) and other products, Microsoft is cutting deals to entice phone owners to give Bing a try. For example, Microsoft covers the cost of free songs given away by Tapulous every time a fan of its Tap Tap Revenge game agrees to download the Bing app for the iPhone. Says Peter Farago of Web analytics firm Flurry: "Microsoft is being very smart in terms of building market share for Bing in mobile."
The bottom line: Bing may never pass Google as the No. 1 Web search engine. On mobile devices, though, the battle for dominance is not over
Stock futures fall, point to lower opening
By STEPHEN BERNARD, AP Business Writer
NEW YORK – Stocks are set to resume their slide Monday as investors remain jittery about the strength of Europe's financial stability. Futures are sharply lower.
The expected drop at the open comes after a tumultuous week that saw major U.S. indexes post their biggest one-day losses of the year on Thursday only to rebound and rise Friday. Still, major indexes have been hit hard in recent weeks as investors continue to worry about European sovereign debt problems.
Major European indexes all fell Monday following a bailout over the weekend of a regional bank in Spain, one of the countries already dealing with ballooning deficits. The Bank of Spain stepped in to bail out Cajasur after it failed to complete a merger. It was only the second time Spain's central bank stepped in to bail out a regional lender.
The euro fell against the dollar, dropping to $1.2394. In recent weeks as the debt crisis has grown in Europe, the euro has become a proxy for how concerned investors are about the continent's economy. The euro hit a four-year low on Wednesday.
There is uncertainty about whether countries like Greece, Spain and Portugal will be able to contain mounting debt through steep spending cuts. And, investors are also worried that those budget cuts will upend an economic recovery in Europe and slow any rebound worldwide.
Investors brushed off gains in Asia, where China's president said the country will loosen its currency policy and reform the yuan exchange rate. However, no timetable was given for when those measures might occur.
Ahead of the opening bell, Dow Jones industrial average futures fell 79, or 0.8 percent, to 10,081. Standard & Poor's 500 index futures fell 10.80, or 1 percent, to 1,073.80, while Nasdaq 100 index futures fell 17.50, or 1 percent, to 1,801.75.
A report is due out later Monday on existing home sales. Most housing data in recent months has indicated a recovery in the battered market remains slow. Some analysts have worried that sales and home prices will again dip now that the government has withdrawn some stimulus measures like tax credits for first-time home buyers.
Economists polled by Thomson Reuters forecast home sales rose last month to an annual rate of 5.63 million units from 5.35 million a month earlier. April was the final month buyers could quality for the tax credit.
Despite Friday's rally that saw the Dow jump 125 points, major indexes were still sharply lower last week. Stocks are now trading at about the levels seen in early February and are down about 2 percent for the year.
Major indexes are down about 10 percent from their highs of the year, set in late April. That size drop is known as a "correction." This is the first such retreat since markets hit a 12-year low in March 2009.
Meanwhile, bond prices rose Monday as investors again sought the safety of U.S. Treasurys. Investors have been flocking to the perceived safety of government bonds and other investments like gold as they sell off riskier assets like stocks and oil.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.19 percent from 3.24 percent late Friday.
Gold rose $8.8 to $1,184.90 an ounce. Benchmark crude fell 20 cents to $69.84 a barrel in electronic trading on the New York Mercantile Exchange.
Overseas, Britain's FTSE 100 fell 0.4 percent, Germany's DAX index dropped 1.2 percent, and France's CAC-40 fell 0.5 percent. China's Shanghai Composite index jumped 3.5 percent.
Lawyers say no criminal charges in AIG cases
By TOM KRISHER, AP Business Writer
The Justice Department has decided not to file criminal charges against the former head of a division at American International Group Inc. whose dealings in mortgage-related securities nearly bankrupted the company and led to a controversial government bailout, according to lawyers involved in the cases.
The decision appears to bring an end to the criminal investigation of AIG, but a Securities and Exchange Commission probe into AIG and the dealings of its London-based Financial Products subsidiary is continuing and could lead to a civil securities fraud case.
Lawyers representing Joseph Cassano, who formerly ran AIG's Financial Products unit, and Andrew Forster, who worked for Cassano, said they were told by federal prosecutors late Friday that no criminal charges would be filed.
A person familiar with the government's criminal investigation of AIG confirmed that charges wouldn't be brought. The person was not authorized to speak publicly on the matter and spoke on condition of anonymity.
The Justice Department declined comment Saturday.
SEC investigators have been involved in the case from the start, but it is unclear when a decision would be made on a civil fraud case.
Federal prosecutors were investigating AIG's Financial Products unit, which dealt in financial contracts called credit default swaps that helped sink AIG in September 2008, leading to a taxpayer-funded bailout. The credit default swaps AIG sold were insurance-like guarantees on mortgage securities that wound up forcing AIG to pay out billions of dollars after the housing market went bust.
Investigators were looking into whether Financial Products officials tried to deceive investors and AIG's auditors, PricewaterhouseCoopers, by misstating the accounting value of a credit default swap portfolio.
When AIG posted a loss for the fourth quarter of 2007, it pinned the blame on an $11 billion writedown related to the credit default swaps held by its Financial Products group.
If AIG couldn't make good on its promise to pay off the contracts, many of which were held by major banks, regulators feared the consequences would pose a threat to the whole U.S. financial system. That led the government to go ahead with the $180 billion bailout.
Cassano's attorneys, F. Joseph Warin and Jim Walden, said in a statement that the two-year federal investigation was intense and difficult.
"The results are wholly appropriate in light of our client's factual innocence," said the statement, which lauded federal agents and prosecutors for following the facts to end the case. "This result was the product of two things: An innocent client and fair prosecutors and agents. The system worked," the statement said.
Forster's attorneys, David Brodsky and Richard Owens, said in a statement that they knew it would have been easy for federal prosecutors to win a grand jury indictment, but praised them for listening to their client's case.
"We knew the prosecutors were smart, fair and open-minded and that, given a full opportunity to present all the evidence, we could convince them that our client acted at all times in good faith. In the end, the facts were stronger than the emotions surrounding AIG's problems," the statement said.
Cassano left AIG in 2008, shortly after the $11 billion loss was reported. Forster is still employed by the company.
An AIG spokesman did not return a telephone message left Saturday.
The AIG bailout has drawn much public ire, largely because the company paid employees $165 million in retention bonuses after the company nearly failed and had to be bailed out by the government.
Nearly two years after a meltdown in the market for subprime mortgage securities cascaded into the worst financial crisis in the U.S. since the 1930s, prosecutors have had little luck bringing criminal cases against top financial executives. Last November two executives at Bear Stearns who ran hedge funds that collapsed after betting on the subprime mortgage market were acquitted of charges that they lied to investors.
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