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Keith Olbermann Back On Current TV, But Will It Last?

by The Huffington Post on January 5, 2012

Huffington Post…

Is there trouble brewing between Keith Olbermann and Current TV? Fans of his show, “Countdown With Keith Olbermann” are certainly wondering. When one viewer asked Olbermann if “Countdown” would air during the Iowa caucuses earlier this week, he tweeted that his show was not going to be broadcast. Although he didn’t explain why the program had been preempted, Olbermann did encourage unhappy viewers to contact the network and its co-founders, including former vice president and Current TV chairman, Al Gore. According to a Current TV spokesperson, the brash commentator was offered the opportunity to be the sole anchor and executive producer of the network’s primary and caucus coverage, but “unfortunately, he declined.” On Wednesday, Olbermann addressed his absence during coverage of the Iowa caucuses in a statement to The Hollywood Reporter . “I was not given a legitimate opportunity to host under acceptable conditions,” he stated. Olbermann did not provide details on the exact nature of those conditions. However, in recent weeks, his show has suffered from numerous technical difficulties, including satellite feed disruption and lighting issues, The New York Times reported . The tempestuous host left MSNBC last year, just weeks after the liberal cable news channel suspended him for making donations to political candidates. Since migrating to Current TV, “Countdown” has become the network’s top-rated program. Olbermann returned to the airwaves on Wednesday night, but it’s unclear if the rift with his bosses has been mended. No word yet on whether Olbermann will cover the New Hampshire primary next Tuesday, either.

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Keith Olbermann Back On Current TV, But Will It Last?

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Margaret Chan, WHO Chief, Slams Tobacco Firms That ‘Harass’ Governments

by AP on November 23, 2011

Huffington Post…

GENEVA — The head of the World Health Organization says countries should stand together against tobacco companies who are trying to “harass” governments into softening their anti-smoking stance. Margaret Chan says the tobacco industry is pressuring countries like Uruguay, Australia, Norway and the United States over measures aimed at reducing smoking-related disease. Tobacco giant Philip Morris launched legal action against Australia’s government on Monday after the country’s Parliament passed legislation banning all logos from cigarette packages. Chan told a public health meeting in Geneva on Wednesday that tobacco is “the only industry that produces products to make huge profits and at the same time damage the health and kill their consumers.”

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Margaret Chan, WHO Chief, Slams Tobacco Firms That ‘Harass’ Governments

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Another Day, Another Housing Program

October 24, 2011

The Obama Administration is taking another crack at addressing a core problem hindering the economic recovery: underwater homeowners (that is, borrowers who owe more on their mortgages than their homes are worth) and the ripple-effects of that financial hardship. The Federal Housing Finance Agency announced plans Monday to revamp the three-year-old Home Affordable Refinance Program [HARP] to allow more underwater borrowers to refinance. Ideally, qualified homeowners who have been consistently paying their mortgages would be able to refinance their loans at lower rates thereby staving off the threat of default and freeing up spending money for other purposes. Both outcomes would ostensibly help the economy, if the program works exactly as designed. But given HARP’s lackluster results in its first three years of existence, the new initiative has its share of skeptics. Anthony Sanders, a finance professor at George Mason University, said a “fundamental disconnect” exists between HARP’s goal of lowering monthly mortgage payments and the larger economic issues facing many Americans. “There’s no evidence that lowering a mortgage payment a few hundred dollars a month prevents defaults,” he said. “Giving $200 a month to people who already have a job doesn’t really make any sense.” Homeowners aren’t defaulting on their mortgages over a few hundred dollars, he said. They’re defaulting because they’ve lost their job and can’t find another one, or have suffered some other financial catastrophe. To open HARP up to more financially strapped homeowners, the FHFA has removed an earlier cap that disqualified borrowers whose mortgages were valued at 125% or more than the value of their homes. The program is open only to those borrowers whose loans are backed by Fannie Mae and Freddie Mac , the troubled quasi-government entities that provide financing for an estimated 80% of all U.S. mortgages. (The government seized control of Fannie Mae and Freddie Mac in 2008 as they teetered on the verge of collapse.) “This is an appropriate balancing of risk that’s being borne by Fannie and Freddie, and hence the American taxpayer,” FHFA’s acting director, Edward DeMarco, said Monday during a conference call with reporters. “This will make HARP more available.” The Obama Administration claimed the original HARP program would help 5 million borrowers. But the actual number has been less than 900,000. The FHFA predicted Monday that by easing the restrictions on the old program and reducing some refinancing fees and streamlining the process as many as one million underwater homeowners could get help by 2013. Critics say it still barely makes a dent. In August, Corelogic, a housing research firm, said 11 million mortgages, or nearly 25% of all residential home loans, are underwater. The FHFA also hopes the revamped HARP gives banks with substantial mortgage portfolios additional incentives to participate. To that end, FHFA altered the program so that lenders won’t be forced to buy back HARP loans if underwriting problems are later discovered. Under the previous, tougher restrictions, banks had little incentive to refinance mortgages, said Leif Thomsen, CEO of Mortgage Master, a large Massachusetts home lender. Default rates haven’t reached critical mass for the big commercial banks, Thomsen explained, consequently they saw no reason to renegotiate a loan made at 6% interest down to 4%. Banks are, after all, in the business of making money by lending money, he noted. Besides, given the federal guidelines that capped underwater loans at 125% of the value of the property, many struggling homeowners couldn’t refinance anyway.  But lifting the cap should create strong competition for refinancing underwater loans, Thomsen predicted, a factor that could spark the big banks to renegotiate and refinance on their own or see all that refinancing business move to independent firms like Thomsen’s. “It’s about time that this program came out,” Thomsen said. “I’ve been calling for something like this for three years.” JPMorganChase (NYSE:JPM) is already on board, issuing a statement Monday in praise of the new HARP and saying it could save consumers as much as $2,500 a year. But Sanders said the program – and its creators – are still missing the point. “I think they’re making the assumption that everyone who saves money on a refinanced mortgage will spend it on consumer durables. But they might put it away in their savings account or put it aside for their kid’s college education, like they should have in the first place,” he said. Sanders said the government is essentially wasting its time on housing programs that he described as chronically “too small in scope” and off the mark in terms of targeting what’s really ailing the  U.S. economy. “The government needs to step out of the way and let the housing market heal itself,” he said. “Lack of jobs is what causing the problem right now.”

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Another Day, Another Housing Program

October 24, 2011

The Obama Administration is taking another crack at addressing a core problem hindering the economic recovery: underwater homeowners (that is, borrowers who owe more on their mortgages than their homes are worth) and the ripple-effects of that financial hardship. The Federal Housing Finance Agency announced plans Monday to revamp the three-year-old Home Affordable Refinance Program [HARP] to allow more underwater borrowers to refinance. Ideally, qualified homeowners who have been consistently paying their mortgages would be able to refinance their loans at lower rates thereby staving off the threat of default and freeing up spending money for other purposes. Both outcomes would ostensibly help the economy, if the program works exactly as designed. But given HARP’s lackluster results in its first three years of existence, the new initiative has its share of skeptics. Anthony Sanders, a finance professor at George Mason University, said a “fundamental disconnect” exists between HARP’s goal of lowering monthly mortgage payments and the larger economic issues facing many Americans. “There’s no evidence that lowering a mortgage payment a few hundred dollars a month prevents defaults,” he said. “Giving $200 a month to people who already have a job doesn’t really make any sense.” Homeowners aren’t defaulting on their mortgages over a few hundred dollars, he said. They’re defaulting because they’ve lost their job and can’t find another one, or have suffered some other financial catastrophe. To open HARP up to more financially strapped homeowners, the FHFA has removed an earlier cap that disqualified borrowers whose mortgages were valued at 125% or more than the value of their homes. The program is open only to those borrowers whose loans are backed by Fannie Mae and Freddie Mac , the troubled quasi-government entities that provide financing for an estimated 80% of all U.S. mortgages. (The government seized control of Fannie Mae and Freddie Mac in 2008 as they teetered on the verge of collapse.) “This is an appropriate balancing of risk that’s being borne by Fannie and Freddie, and hence the American taxpayer,” FHFA’s acting director, Edward DeMarco, said Monday during a conference call with reporters. “This will make HARP more available.” The Obama Administration claimed the original HARP program would help 5 million borrowers. But the actual number has been less than 900,000. The FHFA predicted Monday that by easing the restrictions on the old program and reducing some refinancing fees and streamlining the process as many as one million underwater homeowners could get help by 2013. Critics say it still barely makes a dent. In August, Corelogic, a housing research firm, said 11 million mortgages, or nearly 25% of all residential home loans, are underwater. The FHFA also hopes the revamped HARP gives banks with substantial mortgage portfolios additional incentives to participate. To that end, FHFA altered the program so that lenders won’t be forced to buy back HARP loans if underwriting problems are later discovered. Under the previous, tougher restrictions, banks had little incentive to refinance mortgages, said Leif Thomsen, CEO of Mortgage Master, a large Massachusetts home lender. Default rates haven’t reached critical mass for the big commercial banks, Thomsen explained, consequently they saw no reason to renegotiate a loan made at 6% interest down to 4%. Banks are, after all, in the business of making money by lending money, he noted. Besides, given the federal guidelines that capped underwater loans at 125% of the value of the property, many struggling homeowners couldn’t refinance anyway.  But lifting the cap should create strong competition for refinancing underwater loans, Thomsen predicted, a factor that could spark the big banks to renegotiate and refinance on their own or see all that refinancing business move to independent firms like Thomsen’s. “It’s about time that this program came out,” Thomsen said. “I’ve been calling for something like this for three years.” JPMorganChase (NYSE:JPM) is already on board, issuing a statement Monday in praise of the new HARP and saying it could save consumers as much as $2,500 a year. But Sanders said the program – and its creators – are still missing the point. “I think they’re making the assumption that everyone who saves money on a refinanced mortgage will spend it on consumer durables. But they might put it away in their savings account or put it aside for their kid’s college education, like they should have in the first place,” he said. Sanders said the government is essentially wasting its time on housing programs that he described as chronically “too small in scope” and off the mark in terms of targeting what’s really ailing the  U.S. economy. “The government needs to step out of the way and let the housing market heal itself,” he said. “Lack of jobs is what causing the problem right now.”

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Housing Starts Jump, But Overall Data a Mixed Bag

October 19, 2011

Overall housing starts in September beat expectations by a wide margin, the U.S. Commerce Department reported Wednesday, the surge coming primarily from multi-unit structures. Permits for new homes were down, however, which means the gains probably won’t last. With demand for single-family homes still stagnant, many Americans are turning to rental properties, which prompted the increase in multi-unit dwellings. Because of that, as well as the decrease in permit structures, housing experts are skeptical that the September data represent a meaningful shift in direction for the battered sector. “I’d love to see it as something concrete, but I just don’t see that happening,” said Steve Palm, president of Smart Numbers, an Atlanta-based real-estate data firm. The report showed that new housing construction jumped 15% to a seasonally-adjusted annual rate of 658,000 units, the biggest increase in 17 months. Analysts had predicted an increase of 590,000 new units. The lion’s share of the September increase — 51.3% — came from construction of buildings with two or more units.  Meanwhile, construction starts of single-family homes — by far the larger segment of the market — rose just 1.7%, according to the data. Palm described starts on multi-family dwellings as a “moving target” because the data is compiled differently around the country and is often skewed or misleading. Data on single-family homes is more uniform and therefore more telling as an indicator of the health of the housing market. “It’s an anomaly,” he said. Adding to the muted reaction from housing analysts is that permits for new construction, which are viewed as more meaningful than actual groundbreakings, fell 5% to a 594,000 annual rate. It was the lowest reading in five months as an inventory glut of existing homes caused by a rise in foreclosures over the summer appears to have curbed developers’ plans for building new homes. IHS Global Insight economist Patrick Newport explained that permits are more relevant than starts because “they are much better measured, less affected by unusual weather, such as hurricanes, and are forward looking.” “Added up, total permits were down — indicating that housing starts are likely to drop in October or November,” said Newport. “On balance, this was a mixed report.  The increase in starts is good for GDP growth and jobs.  The drop in permits indicates that September’s gains are not sustainable.  The report does not change the current direction of the housing market — a flat single-family market and a slowly improving multi-family market,” Newport concluded. Palm was more blunt. “We’re not going anywhere. We’re just plodding along. The economy definitely has to improve and housing isn’t going to lead us out of this,” he said.

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Ernan Roman: Facebook Coupons: Money in the Bank?

September 13, 2011

Marketing Situation: Could coupons shared via Facebook add a powerful dimension to your marketing programs? This intriguing case study from Social Media Jungle, which profiles an online loyalty program from the specialty ice cream producer and retailer Cold Stone Creamery, suggests that the answer could be “yes” — if . As In: If you listen to your customers, if you create engaging content that motivates people to opt in, and if you can identify a compelling program that will engage online fans. If you can do that, you may be able to pull off what Cold Stone Creamery did: dramatically higher redemption rates (14 percent vs. 0.2 percent) at dramatically lower costs per redemption ($0.39 vs. $3.60). Questions to Consider: Do your best customers have the opportunity to “like” your company, product, service or brand via a Facebook page? Could you leverage that interest with a targeted eGift campaign, enabling a fan of your page to send a discounted present to someone in his or her network? Four recommended actions: The four best practices Cold Stone Creamery followed appear below. Create a strong reciprocal value exchange. By “liking” the company’s Facebook page, customers and prospective customers receive a stream of engaging, regularly updated content. Over 1.6 million people now follow Cold Stone Creamery on Facebook. Listen to your fans. The initial idea for an online coupon campaign came from Cold Stone Creamery fans. Give Facebook users a simple, memorable way to interact with each other. If Jack sees that his friend Maria is having a difficult day, he can send her an online coupon for Cold Stone Creamery ice cream from the company’s fan page. A staggering 14 percent of those encountering the offer redeemed the coupon, as compared with 0.2 percent of previous online coupon campaigns. The low-cost campaign generated $10,000 in incremental sales. Make online friends look good. Jack’s thoughtful gift to Maria shows up in Maria’s News Feed, which means Maria’s whole network of Facebook friends sees it. The coupon campaign generated 66,000 new fans for Cold Stone Creamery in just eight weeks. The Takeaway for Marketers: Consider building a loyalty program on Facebook that is based on a strong reciprocal value exchange, that gives users the opportunity to send a memorable gift, and that makes the sender of that gift look good.

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Facebook’s Zuckerberg, Barefoot With Beer: 2005 Interview Reveals CEO’s Doubts

August 11, 2011

“Should I put the beer down?” Mark Zuckerberg asks. The CEO and co-founder of Facebook , now the world’s largest social networking site, sits on a velour couch in the company’s Palo Alto offices. He is barefoot, dressed in Adidas shorts and a white cotton T-shirt. Movie posters for “Scarface” and “Pulp Fiction” hang on the walls behind him, and an unplugged lava lamp stands to his right. It’s June 2005 and the 15 month-old social networking site is celebrating its three-millionth user with a keg of Heineken. Zuckerberg’s co-founder does a keg stand with help from his co-workers, who prop him up on the keg, legs in the air, so he can drink directly from the tap. Facebook, at this point, has spread to more than 800 schools, is open only to college students and has just twenty employees, including “someone who orders our kegs,” Zuckerberg jokes. This glimpse of Facebook’s early days is afforded by a 40-minute interview with Zuckerberg, never aired in full, filmed by Ray Hafner and Derek Franzese for their documentary about the millennial generation, ” Now Entering ,” released in 2008. Franzese posted a five-minute excerpt of the conversation on YouTube and provided The Huffington Post with access to footage of the entire interview. Facebook spokesman Larry Yu declined to comment on the video. The portrait that emerges from the video is of a young man either still unclear about the possibilities that lie ahead for the explosively-growing company, or playing it coy, hewing to an image as an almost accidental entrepreneur, merely having fun amid college-age antics. He dismisses the suggestion that his business could be poised to become a global behemoth, though that is precisely what is about to happen. In the end, the interview tees up a tantalizing question, while pulling the answer further from view: How much of Facebook’s stratospheric rise was by design, and how much by happenstance? How much randomness helps explain which ventures never transcend the metaphorical garage and which emerge to capture public fascination? Zuckerberg comes off as modest, questioning and openly unsure about what lies ahead for Facebook. There is no hint that he sees himself capable of changing the world or making a fortune through his creation, though he has since done both. He seems slightly clueless as to the potential growth of his company. This changed quickly, however — a year later, Yahoo would offer $1 billion for Facebook, which Zuckerberg refused. “I still don’t know if we have something,” Zuckerberg says of Facebook in the interview. “Whether we have something that will last for a really long time or is just a cool toy for people to play with now, we’ll see. I think it’s actually useful and not necessarily just a fad.” Zuckerberg outlines what now appear to be modest goals for the site, expressing doubt that it would grow beyond college students. In 2011, when Facebook has more than 750 million members, offices in 15 countries and a valuation well over $50 billion, the idea seems nothing short of absurd. Asked what he will do after Facebook expands to campuses it had yet to conquer, Zuckerberg counters, “There doesn’t necessarily have to be more.” “A lot of people are focused on taking over the world or doing the biggest thing and getting the most users,” he continues. “I think part of making a difference and doing something cool is focusing intensely. There’s a level of service that we could provide when we’re just at Harvard that we can’t provide for all of the colleges, and there’s a level of service that we can provide when we’re a college network that we wouldn’t be able to provide if we went to other types of things.” The persona projected by Zuckerberg contrasts sharply with that of two other Silicon Valley legends who built their own Web behemoth: Larry Page and Sergey Brin, the co-founders of Google. The duo, who were only a few years older than Zuckerberg when they founded the search engine, became notorious for their ambitious goals, confidence and audacious visions. While investors predicted the company had a shot at being worth $1 billion some day, Page and Brin promised it would eventually reap $10 billion a year. They made it their mission to build a search engine “as smart as you” that would ” organize the world’s information and make it universally accessible and useful .” Zuckerberg offers measured enthusiasm for his project and downplays its significance without any clear indication of false modesty. Sean Parker, who worked closely with Zuckerberg during Facebook’s first few years, recalls in “The Facebook Effect” that Zuckerberg was, at this point, “very rational about the low probability of building a true empire” and would question whether his project “would last.” “I thought it was really cool for awhile, but I don’t know, I mean, other people are doing interesting things too,” Zuckerberg says in the interview. “I’m happy with what I’m doing but I don’t really think it’s that much cooler than what everyone else is doing. College is really fun and all my friends back at school are having a really good time, too.” The twenty-something even admits to having mixed feelings about his company’s growth, which he says has brought with it unwanted attention, the need to manage larger teams and a slower pace of development. “Working with a lot of people at the same time is a task. I really like making stuff and getting stuff done,” Zuckerberg says. “One of the things I really liked about Facebook was that I could always move so quickly. I wrote the original application in like nine days at the end of January. Now with 20 people we have this whole organization … We’re a little less agile now.” Though he famously printed business cards to read “I’m CEO…bitch,” Zuckerberg suggests in the interview that he is open to alternate roles and concedes he might consider hiring someone to be chief executive so he could “focus more on cool ideas,” which he says is “more fun.” He expresses concern that the CEO of a larger company is “really just managing,” but “not necessarily being the guy with big ideas.” David Kirkpatrick, author of “The Facebook Effect,” notes that in the summer of 2005, Zuckerberg was still feeling out Facebook and transitioning away from another project, the file-sharing service Wirehog, which he said Zuckerberg had found more challenging than the social network and incorporated as a company. “He was still in the process of completely committing to Facebook,” Kirkpatrick told The Huffington Post. “He felt quite strongly that what he would do with his life was come up with lots of cool ideas and inventions and launch them, then get other people to run them for him. He viewed himself more as an inventor than a manager.” So how did Zuckerberg go from “I still don’t know if we have something” to turning down a billion-dollar offer? What clicked — and when — to convince him that Facebook was not a fad but a “utility,” as he would describe it just a few months later? The company’s explosive growth in the fall of 2005, when it added another two million members, helped cement its status in Silicon Valley and among students, clues that Zuckerberg was on to something big. Just a few months after the filmmakers’ interview, the company was earning $1 million each month, could boast 230 million page views per day and was visited daily by 70 percent of its users, according to “The Facebook Effect.” High-level executives from News Corp., Microsoft, Yahoo and Viacom began to court Zuckerberg. “Time goes slower when you’re young, and in a year, Facebook did change dramatically as a business,” Kirkpatrick said. “Zuckerberg was capable of changing his approach to it with great rapidity, which is something he continues to do to this day.” Throughout the interview, there are numerous reminders that Zuckerberg is still barely out of his teens. In addition to chatting about campus parties and the ways his new responsibilities have taken a toll on some friendships, he likens the company’s decision to accept funding to picking up girls. “We actually got that money because we didn’t need it,” he explains. “It’s kind of like where you’re probably more likely to hook up with a girl if you go into a party not wanting to hook up with a girl.” Zuckerberg ultimately comes off as camera-shy and committed to coding, more interested in his work than in questions about it. “I like making things,” he says. “I don’t like getting my picture taken.” Additional reporting by Cooper Smith. WATCH:

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Steve Mariotti: Memories of Flint, Part 2

July 4, 2011

This is part two of a two-part series. Read part one here . GM was founded by a great entrepreneur, William C. (Billy) Durant. Durant had been born in 1861 in Massachusetts. His family moved to Flint in 1871. Billy dropped out of high school to work in his grandfather’s lumber business, and then became a salesman. His lifelong motto was: “Get a self seller, and if you do not have one, get one.” One day in 1884, Durant was walking down the street in Flint and a friend came by in a buggy and offered him a ride. Noticing that the ride was virtually jolt-free, due to a unique spring (suspension) system, he asked where his friend had purchased the buggy. The very next day he took a train down to the town of Coldwater, and bought controlling interest in the Coldwater Road Cart Company from the inventor of the spring system. Moving operations to Flint, changing the company’s name to the Flint Road Cart Company, and taking on Josiah Dort as a partner, Durant was now in business. Within days he drove one of the buggies to a trade show in Wisconsin. Offering rides in his “self-seller,” Durant took orders for 600 carts. He used these to contract with a buggy manufacturer in Flint to make the carts. That transaction was the beginning of Billy’s domination of the buggy industry in the late 19th century, and it put Flint on the map as an industrial center. In 1904, he expanded into the new motor car field and purchased a failing company from David Buick. He acquired many automobile companies, consolidating them into the five lines that became ubiquitous on American roads and highways: Buick, Cadillac, Oldsmobile, Chevrolet, and Pontiac (originally Oakland). Durant incorporated General Motors in 1908. GM was for decades the most successful corporation in the world. Durant lost control of General Motors the first time — through overexpansion — in 1910. He made a comeback in 1917, and then was pushed out for good in 1920. He started Durant Motors the following year, was dealt a crippling blow (like so many others) by the Stock Market Crash of 1929, and had to close the business in 1933 — having lost his personal fortune as well, by single-handedly trying to shore up the company’s stock price (he was especially sensitive to the fact that his fellow citizens in Flint were losing the money they had invested in his company). He died broke in Flint in 1947, after an unsuccessful try with operating a bowling alley, which he rightly saw as a great opportunity in family entertainment. After 1937, Flint became a city that cared about its workers getting a fair shake. I think that the city’s support of the working class was a major reason why the revolutionary group, the Weathermen, held a “war council” in Flint. It was December 1969 and, as president of my junior class and the de facto leader of the anti-war effort in my high school, I knew some of the SDS leaders from Ann Arbor and would often send them letters asking for advise. They arranged for me to meet with several of the Weathermen when they came to Flint, as I wanted to see how I could get involved with their efforts to end the war in Vietnam. I had no idea that their ranks were composed of disturbed and violent people, who saw no difference between Thomas Jefferson and Josef Stalin. During the meeting at a local Howard Johnson’s, I quickly realized I was dealing with psychotics and got out of there as fast as I could. Another memory I have of Flint is the love of cars that we all had. Also, sports were a common interest. All sports were played and appreciated. The local golf courses were outstanding. Even though golf can’t be played in the area until May, it was popular, and two of my friends played on the University of Michigan’s varsity team. I remember Rick Leach, the legendary football player, who grew up half a mile away from where I lived; he was named the Big Ten’s MVP in the mid-70s. I was his elementary school soccer coach. The Mott Foundation sponsored a summer sports program, and at least a dozen sports were offered through the annual Flint Olympian Games; the best athletes in each category competed against Hamilton, Ontario, in the CANUSA Games. Three of the great memories of my life are winning the AAU state wrestling championship at the IMA (now the Perani Arena) — the largest building in Flint — against Arnold Deleon, in 1967, when I was 14; being part of a track team in 1967 that ran a relay carrying a torch 245 miles to Hamilton, to begin the Games; and being on the first Flint team to beat the Canadians in soccer! Growing up in Flint I developed skills in no less than 17 sports and games, including badminton, archery, and bowling. As in all communities, there was a dark side to Flint. The wage rate that the unions and General Motors had agreed to made it almost impossible for the young or minorities to get jobs. Unemployment rose to over 50% for minority youth. Compounded over decades, this led to tragedies — my high school friend Angie turned to prostitution and was murdered, and my favorite English teacher was killed with an arrow! Flint now has one of the highest murder rates in America (45.7 per 100,000 in 2006, as compared with 7.3 in New York City). The population is down to about 102,000, the 1950s level, and the wages in the plants, which were as high at $45 per hour — plus $30-worth of benefits — are in some cases down to $14 dollars, with benefits. Only 8000 people work for GM now, compared with the 80,000 of the late 70s. But things are starting to turn around, as the small-business community is fighting back and the major plants are starting to hire again. As Flint continues its renaissance, the violence should drop significantly. To earn money in the summers, I always worked, and even started my own businesses — seven between the ages of 11 and 21: golf ball recovery in the Flint River, home cleaning services, newspaper delivery, bike repair, selling fire alarms, etc. In the golf-ball-recovery venture, I hired “Golfball Charlie” — a specialist in finding things in dirty river water — to fish for missing balls in the Flint River. I would buy them from him at a quarter apiece and resell them at the clubhouse for fifty cents. No doubt I would sometimes be selling the found ball back to the golfer that had lost it! Being Flint’s first male Avon sales representative was exciting! The lessons I learned included how to sell and the importance of keeping good records. I learned to ask questions and listen to other people’s problems and needs. One summer I designed and had made a key holder that could go on the inside of people’s doors as a place to hang their keys, and offered them to my door-to-door Avon customers. I sold thirty. I wanted to sell fire alarms because I thought every home needed one. I would call people in neighborhoods that had had fires and make appointments to go see them. Invariably, at some point I was always shown politely to the door. However, this endeavor gave me a mental toughness and taught me to keep going no matter what. These early experiences with entrepreneurship and small business became part of the foundation for the Network for Teaching Entrepreneurship (NFTE) that I founded in 1987. Many of the organization’s concepts and lessons were first developed in these entrepreneurial businesses that I created in Flint, and then applied to teaching at-risk children many years later. In Flint, we all learned to play team sports, and to be loyal and honest to one another. The techniques of small business — sales, marketing, and goal setting — were a vital part of our daily culture. Perhaps most important, we learned to make things — like rafts and boats and small electric carts. We understood the value of will, persistence, determination, and pride. “Sometimes life is pure joy,” was our motto. The lessons I learned in Flint have stayed with me all my life.

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$70 Billion?

June 27, 2011

NEW YORK (Reuters) – Investment fund GSV Capital Corp has taken a small stake in Facebook that values the world’s No. 1 social networking site at about $70 billion. The investment fund said on Monday that it had bought 225,000 shares in Facebook at an average price of $29.28 each. Facebook has roughly 2.4 billion outstanding shares, according to the latest data from secondary market company Sharepost. Facebook executives have said it is inevitable that they will take the company public, but have not specified a date. Founded in a Harvard dorm room in 2004 by Mark Zuckerberg, Facebook threatens Internet stalwarts like Google Inc and Yahoo Inc as it becomes one of the most popular destinations on the Web. It is poised to overtake Yahoo for the biggest slice of U.S. online display advertising dollars this year, with more than $2 billion, according to research firm eMarketer. Facebook is one of the most anticipated initial public offerings, with investors to clamoring to get a piece of the social networking site with more than 500 million users. At $70 billion, Facebook would be valued slightly below Amazon.com Inc, Cisco Systems Inc or Hewlett-Packard Co. But concerns about Facebook’s white-hot growth have surfaced in recent months. A group of Facebook shareholders is trying to sell $1 billion of stock on the secondary market in a transaction that also would give the company a value of about $70 billion, Reuters reported in April. Woodside, California-based GSV Capital invests in high-growth, venture capital-backed companies. The $6.6 million investment in Facebook represents about 15 percent of GSV’s total portfolio, the company said in a statement. Representatives of Facebook and GSV Capital were not immediately available for comment. Shares of GSV Capital were up 20.3 percent at $12.35 in morning trading. (Reporting by Jennifer Saba, editing by Gerald E. McCormick and Lisa Von Ahn) Copyright 2011 Thomson Reuters. Click for Restrictions

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What The Citigroup Data Breach Means For Credit Card Users

June 11, 2011

NEW YORK — Citigroup’s disclosure that the names, account numbers and email addresses of 200,000 of its credit card customers were stolen strikes at the core of modern-day financial life – the ways people buy groceries and pay the power bill. It’s only the latest major data breach. In just the past three months, hackers have penetrated 100 million Sony PlayStation accounts, the networks of Lockheed Martin and the customer email databases of a company that does marketing for Best Buy and Target. But half of all Americans, 154 million people, have a credit card. The Citi attack is a reminder that the technology used to protect their information was built by humans, security analyst Jacob Jegher notes – and it can be breached by humans, too. “People rely on the safety net of a bank to take care of their information,” says Jegher, a senior analyst at Celent, a research firm that focuses on information technology in the financial industry. “Unfortunately, that net has a lot of holes.” Citi says all of the customers whose information was stolen will receive a notification letter, and most of them will get a new card, although it has declined to say exactly how many. The bank says its enforcement division and authorities are investigating. The victims will have to endure the hassle of updating the credit card numbers on any number of online accounts, but they probably won’t lose any money. For one thing, federal laws protect credit card customers from fraud beyond $50, and in most cases, the bank that issues the card will cover up to that amount. And the Citi hackers didn’t get to the three-digit numbers that appear on the backs of credit cards, a security feature known as the CVV code. That means the hackers, or whoever they might sell the information to, would have trouble making direct charges. The danger is that someone might use the information that was compromised to mount a sophisticated “phishing” attack, in which criminals send out convincingly designed emails pretending to be from the bank and gain access to account information. The relatively small number of accounts taken from Citi, which has 21 million credit card customers in North America, suggests the hackers used spyware that captured the data of customers who logged in to its website to conduct online banking, one expert says. “The thing in the Citi case which is good is they detected it quickly and shut it down,” says Dave Jevans, chairman of security firm IronKey Inc. and chairman of an anti-phishing nonprofit group made up of 2,000 government agencies and companies, including Citi. “They’ve got systems that are going to look at the data leaving the network and are able to see that somebody’s sending information out,” he adds. Banks are ahead of most other industries in this regard, he explains, and other businesses will have to catch up. CVV codes can’t be stored with a simple magnetic swipe of a credit card, and the businesses that process payments are not allowed to store the codes after a transaction, so they provide another defense against fraud. Deloitte, the audit and consulting firm, said in a report last year that security threats to customer account and other information were on the rise. The good news: Companies are taking notice. The number of companies that said they didn’t spend enough on security fell to 36 percent in 2010 from 56 percent the year before. The survey found that 67 percent of U.S. banks are making encryption, a process to protect digital information, a top initiative. Still, Deloitte also reported that of all nations, the United States had the most financial institutions that were still “catching up” on security, as opposed to being ready or “on plan.” And the number of high-profile attacks in recent weeks is frightening. Tyler Lesthaeghe, a senior at Iowa State University, got a call from Citi on a Saturday morning two weeks ago and was told that his credit card number had been stolen. No fraudulent charges were made, and he received a new card two days later. Lesthaeghe’s case appears unrelated to the attack that Citi disclosed Thursday. Credit card information can be stolen in ways other than a direct attack on the bank, from sophisticated attacks elsewhere in the network that processes card payments to a corrupt waiter who writes down the numbers. He says he expects this sort of thing to happen more often in the Internet age and checks his credit report regularly and his account statements every month. “You have to be diligent about it,” he says. “It seems like large amounts of credit card numbers are getting stolen. It’s kind of scary to hear that.” Security experts say there are several steps you can take to protect yourself: _Check your credit report regularly to make sure stolen information isn’t being used to open new accounts. That scenario is unlikely in the Citi case because the hackers didn’t get enough information, but it’s good to check anyway. “Where consumers have to be very concerned is when information like their date of birth, their Social Security number or their mother’s maiden name is breached,” says Tom Osherwitz, chief privacy officer at ID Analytics. Everyone is entitled to a free annual report from each of the three major credit reporting companies, Experian, Equifax and TransUnion. Those reports can be accessed at annualcreditreport.com, which also explains how to set fraud alerts. Ordering one every few months and rotating the companies essentially allows you to check your credit regularly for free. _Vary the user names and passwords on your online accounts, and make sure to change any user names and passwords that match those in an account that may have been hacked. _Third-party services will monitor accounts established in your name and alert you to something suspicious. If you decide to pay for one, make sure it covers all three credit bureaus and tells you about all activity in a timely manner. Otherwise, it’s not worth the money. _If you are the victim of identify theft, report it to the authorities. Details on how to do that are at onguardonline.gov, a security site developed by several federal agencies. ___ Associated Press Writers Eileen AJ Connelly and Joseph Pisani in New York and Ryan Nakashima in Los Angeles contributed to this report.

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June 9, 2011
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Ryan Mack: Support Small Businesses: Death to the "Hook-Up"

June 2, 2011

Not too long ago, I had a friend who opened a new restaurant in my neighborhood. I was very proud of his accomplishment and was not only willing to dine at his establishment, but would always take a few paper menus to share with my network so they could also experience his wonderful cooking skills and great service. One day, after only two years in business, he told me he was closing. When I asked him why he had to close he gave me a few reasons. One was the lack of business traffic. Not everyone was a regular customer like me and few people took the time to do what I did and assist him in spreading the word to their network. Furthermore, of those close “friends” who did solicit his establishment, he had a serious problem with their unwillingness to pay full price. Sure, they might bring a few friends to eat at his restaurant, enjoy the good music, order multiple drinks from the bar, and get so full from the multiple orders of appetizers they had to put the main course in a take home container. However, when the bill came they went into full “negotiation” mode. Sometimes they would coerce my friend to take as much as half from the final bill’s cost. For the times that he would stand his ground on the bill the evil looks of disgust were enough to make any person cringe, but the ensuing lack of further “support” was even more discouraging. We must recognize that in many of our communities we have a serious problem with this “hook-up” mentality. The “hook-up” is essentially when those so-called friends realize that because of your elevated position/progress they are able to leverage your position for their personal gain. For business owners this is a constant dilemma no matter what your field. Restaurant owners get asked for a hook-up on the final bill, law firm owners are asked for a hook-up on the price for service to get someone out of trouble, financial planning firm owners are asked for a hook-up on a financial plan to “get their house in order,” accountant firm owners are asked for a hook-up on taxes, supply store owners are asked for hook-ups on free goodies, freelance actors/actresses and comedians are asked for hook-ups for free tickets to shows, and the list can go on and on. What is failed to be realized by those who request these “hook-ups” is on the other side of the request you have a service or product provider who has to make a living. Yes, it is nice to get a half price evening on the town … but why do we do it at the risk of someone having to close shop just so we can have a good time or get free materials? If you are truly a “friend,” shouldn’t you be the first person in line to want to pay full price and support the endeavor of your friend? Especially if they are providing good service, why are we so unwilling to pay full price? We all know people who are the first in line to go deep into debt with money they don’t have, to purchase things they don’t need, from people they don’t know. However, for those same people, when it comes to circulating the dollar in their community (thereby making their community stronger) and supporting their close friends they get offended when they have to pay full price! In your community, there are many businesses. These businesses, if supported, will bring respectable traffic to your community. Restaurants, bakeries, law firms, doctor’s offices, schools, libraries, and more are all a reflection of the upkeep and character of your community. Outsiders often get a sense of the community by the quality of service, experience and ambiance within the local community businesses. The physical upkeep of these businesses is often examined by drive-through visitors. Frequent investment is crucial to property value and quality of living. Time and money that flow through these community institutions will always be reflected in the property values and ultimately the quality of life for the community’s residents. So be sure to pay full price when you dine at your friend’s establishment, pay full price for services from your close buddy who is an accountant, and even go so far as to not accept a free book from your good friend who is a struggling author and pay him full price plus a tip for signing it for you. These are the investments that matter most to your network and community, and if we can effectively circulate our dollars for quality services and businesses we will begin to see the makings of a true economic recovery that is beneficial to all. I don’t want to see another business close its doors, so let’s join together to aggressively recommend good services/products and pledge … death to the hook up!

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Jason Alderman: Senior Year Sticker Shock

May 27, 2011

Are American families overspending on proms? A new survey released by my employer, Visa Inc., shows that the average family with a high school student attending the prom will spend $807 this year — a surprisingly large amount. Prom inflation has run amok. Ever-more extravagant proms create a cycle of teenagers continuously trying to outdo each other, making the evening more and more expensive. The survey also found large economic and regional disparities in prom spending: Southerners will spend an average of $542 Northeasterners will spend an average of $667 Midwesterners will spend an average of $943 Westerns will spend an average of $1,073 Parents who make less than $20,000 will spend $713 Parents who make $20,000-$29,999 will spend $812 Parents who make $30,000-$39,999 will spend $1,281 Parents who make $40,000-$49,999 will surprisingly spend even less, $426 Parents who make $50,000-$74,999 will spend $916 Parents who make over $75,000 will spend $864 Defying this trend, however, nearly a quarter of families said they will spend nothing on prom, which likely indicates their kids are not attending. Overall, 22 percent of families who have teenagers will not spend any money on the prom. In the Southern and Midwestern states, that number jumps to 29 percent and 27 percent respectively. Here’s a breakdown of where prom dollars typically are spent: New prom dresses often cost $100 to $500 or more. Plan on spending another couple hundred for shoes, accessories, flowers and professionally styled hair, nails and make-up. New tuxedos cost several hundred dollars, not to mention the formal shirt, tie, studs and shoes you’ll need. Even renting all this will likely run over $150. Figure at least $100 an hour plus tip to rent a limousine for a minimum of four hours. Prom tickets typically cost $50 to $150 per person, depending on venue, entertainment, meals, etc. And don’t forget about commemorative photos. The couple will probably need at least $40 for a nice pre-prom meal. After-parties can run anywhere from a few bucks at the bowling alley to hundreds for group hotel suites. If you’re looking for cost-saving ideas, try these: Shop for formal wear at consignment stores or online. As with tuxedos, many outlets rent formal dresses and accessories for one-time use. Have make-up done at a department store’s cosmetics department or find a talented friend to help out. Split the cost of a limo with other couples, or drive yourselves. Team up with other parents to host a pre-prom dinner buffet or after-party. Take pre-prom photos yourself and have the kids use cell phones or digital cameras for candid shots at various events. Work out a separate prom budget with your child well in advance to determine what you can afford. They may need to take a part-time job to help cover costs, or decide which items they can live without. Prom is only one component of the senior-year experience. If you’ve got a high school junior, you need to start planning and budgeting now for next year. Start by talking to recent graduates and their parents about expenses they faced and their lessons learned. Decide early on which expenses are essential and which ones you can do without. If your child is college bound, entrance exams, study guides and tutoring are important, but can quickly add up: The Scholastic Aptitude Test (SAT) costs $47 each time it’s taken, plus an additional $10 to $21 per individual subject test. Many students take the SATs at least twice. American College Testing (ACT) costs $33, plus another $15 for the writing test. A comprehensive online SAT review course from the Princeton Review will set you back $599. Personalized individual and small group tutoring sessions can cost thousands of dollars. Other common senior year expenses you might anticipate include: College application fees – often $40 to $80 per institution. Site visits. If you’re looking at schools outside the area, costs can vary widely. Don’t forget such variables as airfare, gas, lodging, meals, local transportation, etc. Professionally shot senior portraits and prints often cost hundreds of dollars. Graduation announcements, thank-you notes and postage — depending on your network of family and friends, this could be $100-plus. Senior class dues — check with your school. Yearbooks can run $35 to $85, plus additional fees if you take out a congratulatory ad. Class rings — different styles often run $100 to $500 or more. Cap and gown — usually $25 to $50. Graduation gift and party — it’s up to you to manage expectations. Senior trip – varies from school to school, but it could run hundreds of dollars for a ski weekend, for example. You want to ensure your child has a memorable senior year, but not at the expense of your overall budget. Before the school year begins, create a senior-year budget and get your kid involved in the tough decisions, prioritizing expenses from vital to non-essential. For example, an additional SAT practice session is probably more important than a top-of-the-line class ring. Learning the importance of setting and sticking to a budget is a valuable life lesson for your kids. If you need help making a budget, numerous online tools are available online at sites such as the U.S. Financial Literacy and Education Commission’s MyMoney.gov , the National Foundation for Credit Counseling and Practical Money Skills for Life , a free personal financial management program run by Visa Inc. Readers, I’m curious to know your experiences with senior prom expenses and if you’ve got any cost-cutting tips you’d like to share. This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation. Follow Jason Alderman on Twitter: http://twitter.com/PracticalMoney

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CNBC Anchor Mark Haines Dies

May 25, 2011

NEW YORK — Mark Haines, co-anchor of CNBC’s morning “Squawk on the Street” show, died unexpectedly on Tuesday evening, the network said. He was 65. The network said he died in his home. It did not specify the cause of death. Haines worked at CNBC for 22 years after working as a news anchor at TV stations in Philadelphia, New York and Providence, R.I. He was the founding anchor of CNBC’s “Squawk Box” morning show. In 2005, he started co-anchoring “Squawk On The Street,” a 9 a.m. to 11 a.m. show, with Erin Burnett, while “Squawk Box” was pushed to an earlier slot. Burnett recently left CNBC to host a general news show on CNN. CNBC President Mark Hoffman said Haines was “always the unflappable pro.” “He was an authentic voice in business media,” said Eric Jackson, who runs the hedge fund Ironfire Capital. “He resonated with so many people because he would speak out, and with opinion. Too often the media lets the corporate PR army and highly trained CEOs get their points across without question. He wouldn’t let that happen.” WATCH: Barry Ritholtz, head of the research firm Fusion IQ and frequent guest on CNBC, said Haines was “a no-nonsense straight shooter. He knew what questions to ask and how to ask them.” Ritholtz said that the biggest complaint about CNBC in the 1990s was that its anchors cheered on the stock-market bubble. He said the exception was Haines, who was always skeptical. “He was trained as an attorney,” Ritholtz said. “He brought that keen lawyer’s eye to everything he did. It wasn’t something often seen in the financial media.” Haines had a law degree from the University of Pennsylvania and was a member of the New Jersey State Bar Association, CNBC said. Haines is also remembered for calling a bottom to the stock market decline on March 10, 2009, his first call of the recession. The Dow Jones Industrial Average never closed below its level of March 9. Haines is survived by his wife, Cindy, his son, Matt, and daughter, Meredith. CNBC said funeral arrangements have yet to be made.

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Jonathan Littman: World Bad, Sony Good

May 24, 2011

Sony’s CEO has forwarded a remarkable new rationale for his company’s recent catastrophic network security failures. Howard Stringer warned last week that the April hacker thefts of millions of his customers’ personal records are a prelude to global digital horrors. “It’s not a brave new world,” he told the media. “It’s a bad new world.” Preaching Armageddon as a PR response to a corporation’s own faulty technology and service is an unlikely tactic, especially when continuing attacks this very week show that Sony has clearly not eliminated its vulnerabilities. It’s not our mess, Stringer seems to be implying with his dramatic blame shifting. It’s the world’s mess. What’s strange about this is that it seems to undercut an apology by Kaz Hirai , the head of Sony’s gaming division, delivered ten days after the intrusion. Reuters called Stringer’s comments “a stark departure from the remorseful tone struck just two weeks ago.” Just last week the company offered an apology package , including a 12-month free identity protection program, free games and free content. Though late in coming, those were strong moves. Yet Stringer’s comments suggest Sony does not truly feel sorry for how badly it has treated its customers. What this bizarre narrative demonstrates is that Stringer and Sony are stuck in the first stages of grief: Not over the harm they have inflicted upon their customers, but in the potentially irreparable damage they have done to themselves and their brand. Stage one of grief is shock and denial, stage two is pain and guilt, and stage three is anger and bargaining. Sony has gone through the first two stages and now Stringer is lashing back at critics who have blasted the firm for everything from its substandard security to an indefensible delay in alterting tens of millions of customers — many of them children — that personal and credit records were stolen. “Forty-three percent (of companies) notify victims within a month,” a feisty Stringer told reporters last week in his first public statement since the April break-ins. “You’re telling me my week wasn’t fast enough?” It was a bizarre statistical crutch to rely upon to defend what’s widely considered one of the worst network security gaffes in history. Why compare your firm to average companies? Especially when New York’s Attorney General and Congress are demanding Sony turn over detailed information about its security breakdown. Like how it allowed hackers to steal the names, addresses, email addresses, birthdays, and PlayStation Network login details of over 100 million customers. But Stringer’s most surprising plot twist was to attempt to divert scrutiny of Sony’s problems with a wild claim of impending doom. Stringer told the media that one day hackers may strike at the power grid, air traffic controllers, or the global financial system. Is Stringer Rumpolstillskin? Hackers have been attacking the Internet and high-tech companies for more than two decades. In 1990, I wrote about Rober Morris, the Harvard graduate who launched the first Internet worm, a science experiment gone awry that disabled a large chunk of the budding network. In the mid ’90s I wrote The Fugitive Game and T he Watchman , two books about the hackers, Kevin Mitnick and Kevin Poulsen, that showed the deep vulnerability of the Internet and major corporations to criminal intrusions. Every major firm doing business on the Internet knows that their potential — and Achilles’ heel — is the Internet. Google, Facebook, Microsoft and hundreds more corporations have known this for a very long time. The Internet makes these companies billions in profit. Doing business responsibly on the Internet — and taking extraordinary care for the personal records and privacy of your customers — is nothing short of a sacred duty. Quite simply, Sony abandoned its duty, and Stringer is steaming mad about that internal breakdown because he knows that it threatens Sony’s future. The timing couldn’t be worse. This week Sony posted a $3.2 billion loss, due in part to the March earthquake and tsunami. The CEO has declared that Sony did everything possible to prevent the break-ins. That is denial. We’ve seen this broken narrative before. It is not taking the high road. It does not work. Congress, investigative journalists and hackers will eventually reveal the truth, and it will prove even more costly to the company’s tattered reputation (Experts have already predicted the breach will cost Sony nearly $1 billion). We will learn that Sony engineers and officials knew of inherent internal weaknesses. That it had plans to roll out a new, more secure system. That it could have taken far more steps to prevent or reduce the harm to its customers. Sony’s story won’t play. It won’t play because it is not authentic, and it won’t play because Stringer can’t seem to remember his own narrative. Security — and honest communication — requires consistency. In the same week that Stringer declared the attacks on Sony had ushered in a “bad new world,” he called the crisis “a hiccup in the road to a network future.” Which is it — trivial or cataclysmic? And what a strange, disconnected way to talk about a potential disaster for tens of millions of Sony customers? Would you like threats to your financial and personal security to be seen by Sony as nothing more than hiccup? And what of Stringer’s suggestion that the future does not hold “a brave new world” but a “bad new world?” On top of everything else, Stringer apparently is ignorant of the meaning of a ” brave new world .” In reaching for a sound bite, Sony made another gaffe. Perhaps the embattled CEO or someone on his communications team should have bothered to read the Wikipedia page on Aldous Huxley’s 1932 book, Brave New World . Stringer shot himself in the foot. Huxley himself described Brave New World as a “nightmare.” The Wikipedia page says that the dystopian sci-fi novel explored the “fear of losing individual identity in the fast-paced world of the future.” Indeed. Jonathan Littman is the co-author of the Ten Faces of Innovation and the Art of Innovation. He is the founder of Snowball Narrative.

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Sony Paid Big Money To Mitigate PlayStation Network Hack

May 23, 2011

TOKYO — Sony Corp. is expecting an annual loss of $3.2 billion, reversing its earlier projection of a return to profit, as the electronics giant struggles with production disruptions from Japan’s tsunami and a hacker attack on its online gaming service. The Japanese maker of PlayStation 3 video game machines and Bravia flat-panel TVs said Monday that the projection of a 260 billion yen ($3.2 billion) net loss for the fiscal year ended March 2011 was largely due to writing off 360 billion yen ($4.4 billion) related to a tax credit booked in a previous quarter. Sony announced the loss ahead of its official earnings announcement Thursday under Tokyo Stock Exchange guidelines. The company had earlier projected a 70 billion yen ($860 million) profit. Like many other Japanese manufacturers, Sony has been hampered by the production disruptions set off by the March 11 earthquake and tsunami that killed more than 25,000 people, destroyed many factories and sent the nation’s economic recovery into reverse. The company kept its operating profit forecast unchanged at 200 billion yen ($2.46 billion). It expects to report sales of 7.18 trillion yen ($88.2 billion), slightly down from an earlier projection of 7.2 trillion yen ($88.5 billion). Masaru Kato, Sony’s chief financial officer, said parts shortages in the aftermath of the disaster have eased but a full recovery hasn’t yet been realized. “In the first quarter, we saw quite a major impact on our manufacturing activities,” he said. After the quake, “negative factors have grown bigger” and offset earlier improvement in the previously loss-making games division, dashing hopes for a profit. Tokyo-based Sony also faced a new challenge to its reputation following a massive security breach affecting more than 100 million online accounts. After temporarily closing down its online gaming services last month, Sony began restoring its PalyStation Network services in the U.S. and Europe on May 15 mainly for online gaming, chat and music streaming services. Sony spent 14 billion yen ($170 million) to cover costs that included identity theft insurance for customers, improvements to network security, free access to content, customer support and an investigation into the hacking. Sony has seen plunging sales of flat-panel TVs and other gadgets, and was likely to remain in the red in its TV business for the seventh year straight. Sony has also taken a beating in music players and other portable devices to Apple’s iPod, iPhone and iPad. The company booked a 40.8 billion yen ($439 million) loss for the fiscal year ended March 2010 after a 98.9 billion yen loss the year before_ Sony’s first annual red ink in 14 years. ___ Associated Press writer Tomoko A. Hosaka contributed to this report.

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Sony To Post Huge Loss For The Year

May 23, 2011

TOKYO (By Isabel Reynolds) – Sony Corp said it expected to post a $3.2 billion net loss for the year that ended on March 31 due to a write off on tax credits, the latest in a string of grim headlines for the consumer electronics giant. The maker of PlayStation video games, Vaio computers and Bravia TVs has been battling to recover from the devastating Japan earthquake in March, and more recently, a series of computing hacking attacks that affected more than 100 million user accounts. “I have been skeptical about Sony for a long time. Sony has been overtaken by Apple and other companies,” said Yuuki Sakurai, CEO and president of Fukoku Capital Management in Tokyo. “The management is not able to show shareholders the future of the company.” Sony, once a symbol of Japan’s electronic and manufacturing excellence, has found itself outmaneuvered by Apple in portable music and Samsung Electronics in flat-screen TVs and is facing a tough fight in video games with Nintendo and Microsoft. Sony said it now expected a net loss of 260 billion yen ($3.2 billion) versus a previous forecast for a profit of 70 billion yen due to a “non-cash charge” of around 360 billion yen related to Japanese tax credits. It is due to announce its full-year earnings on Thursday. The net loss would be Sony’s biggest since 1995 and its second-largest ever. The company stuck with its earlier forecast, issued before the March 11 earthquake, for an annual operating profit of 200 billion yen, which is broadly in line with consensus forecasts. CLEAN SLATE Sony said it expected sales to rise this year and forecast a net profit. Some investors saw the revisions as a way for Sony to put the slew of bad news behind it and start with something of a clean slate. “Sony sharply revised down its net forecast to a big loss to show that the impact of the earthquake has been largely factored-in during the previous financial year, while the impact would be limited for the current year,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “Probably the company is expecting the global economy to recover during the second half of the year. Maybe this perception could be a bit optimistic, but we still have to wait and see.” In its first estimate for the year to March 2012, Sony said its operating profit would also be around 200 billion yen. The devastating earthquake and tsunami in March damaged Sony plants in northeastern Japan, snarled the global supply chain in several industries and triggered a plunge in domestic consumption. Sony estimated the impact of the quake in the current year at 150 billion yen at the operating level. Many rival corporations, including Panasonic Corp, have yet to issue forecasts for the current financial year to March 2012, due to uncertainty following the disaster. Sony last month disclosed that it had been a victim of one of the biggest cyber-attacks in history. It shut down its PlayStation Network across the globe in mid-April and has slowly started to restore access, starting in the United States. The company is still working with Japanese government authorities to restore access in that country. Sony said “known costs” were estimated at 14 billion yen. Sony is targeting the end of May for fully restoring the affected networks. Shares in Sony ended down 0.5 percent in a Tokyo market down 1.5 percent. It shares though have fallen 24 percent so far this year, compared with a 7 percent fall in the Nikkei average. ($1=81.71 yen) (Additional reporting by Tim Kelly and Chikafumi Hodo; Writing by Lincoln Feast; Editing by) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Clayton Says Dish Looking at Streaming Blockbuster Films

May 21, 2011

May 20 (Bloomberg) — Joseph Clayton, chief executive officer of Dish Network Corp., talks about the company’s outlook, its Blockbuster Inc. business and competition with Netflix Inc. Dish Network is the second-largest U.S. satellite-television provider. Clayton speaks with Cory Johnson and Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: Bloomberg’s Johnson Discusses Outlook for Dish Network

May 20, 2011

May 20 (Bloomberg) — Bloomberg’s Cory Johnson discusses the outlook for Dish Network Corp., the second-largest U.S. satellite-television provider. Johnson speaks on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Gore Blames Murdoch For Network Getting Dropped

May 19, 2011

NEW YORK – Current TV executives went on the offensive Thursday, claiming that Rupert Murdoch’s News Corporation is pushing Current Italia off the air in Italy because its U.S. counterpart hired Keith Olbermann. Former Vice President Al Gore, who co-founded Current with Joel Hyatt in 2005, told The Guardian that News Corp. wields the “power to shut down voices that disagree with the agenda of Rupert Murdoch.” Gore claimed that Current TV executives were told privately the decision to drop the Italian network from News Corp’s Sky Italia satellite platform was tied to its launching a new show with the liberal cable host and Fox News critic in the U.S. News Corp. however, says the decision to drop Current Italia had to do with business, not politics. “The non-renewal of Current TV’s carriage agreement with Sky Italia is purely commercial,” a News Corp. spokesperson told The Huffington Post. “Current TV asked Sky Italia for double the carriage fee when primetime viewing had fallen by 40 percent in the past year. Sky Italia’s offer was in line with the market and reflected the performance of the channel. It had nothing to do with politics.” Hyatt, who serves as Current’s executive vice chairman, disagrees. In an interview with The Huffington Post, he provided a different account of recent discussions with Sky Italia management about continuing to offer Current Italia to its 4.5 million subscribers. The two companies’ three-year agreement was set to expire on May 7. Hyatt said he met with Sky Italia CEO Tom Mockridge in April in Milan. During a four-hour lunch, Hyatt said Mockridge repeatedly told him that Sky Italia wanted to continue carrying the network. Hyatt said there was no discussion at the lunch about increasing carriage costs, the fees cable and satellite providers pay networks to include them in their programming roster. But about 10 days later, Hyatt said Mockridge told him by phone that Sky Italia decided to no longer carry Current because of financial concerns. Subsequently, Hyatt said he heard on good authority that the order came directly from top management at News Corp., which owns 100 percent of the Italian satellite company. Hyatt said it was only after Mockridge told him about the decision that the two sides ever discussed carriage costs and at no time did Current ask for double its previous fee. Hyatt said he brought up fees at that time to let Sky Italia know that the network was only planning to seek two additional Euro cents per subscriber, per month, in an attempt to see if that would change his mind. Current had been paid six Euro cents per subscriber under the original three-year deal. (Hyatt claimed that Sky Italia pays some lower-rated networks as much as 26 Euro cents per subscriber) The Current co-founder also contradicted News Corp.’s claim of low ratings, arguing that Current’s prime-time ratings increased 550% from 2009 to 2010. “We have been a ratings success,” he said. A Current spokesperson provided numbers from Auditel -– a top Italian ratings agency, similar to Nielsen in the U.S. -– that showed only a slight dip in ratings when comparing the period between May 1 and May 17 in each of the past two years. During that specific time, several networks carried by Sky Italia — including the News Corp.-owned FX — had lower ratings, yet they remain on the service. Sky Italia, in its own statement, claimed that Current asked to double carriage costs and argued that network’s ratings had significantly decreased. While Hyatt touted Current Italia’s rise in prime-time ratings from 2009 to 2010, Sky Italia claimed that, according to its analysis, the network’s ratings dropped by 40 percent when looking at all of 2011 versus the previous year. While both sides offered different breakdowns of ratings, they seem to agree on the quality of Current’s programming. Sky Italia said the initial decision to carry Current in 2008 stemmed from its “belief that the channel would enrich the platform’s news and current affairs” programming already offered. And Hyatt lauded Current Italia as “the only independent news channel in Italy.” He pointed out that Current ran a critical PBS documentary of Italian prime minister (and media mogul) Silvio Berlusconi that other Italian networks wouldn’t air and is now broadcasting a five-part series on The Vatican. The majority of Current Italia’s programming is produced in Italy and the network had no plans to air Olbermann’s new version of “Countdown.” “This is about politics,” Hyatt said. “This about the fact that we hired Keith Olbermann, plain and simple.” Olbermann, never shy to sound off on the Fox News owner, blasted Murdoch’s “Evil Empire” on Twitter for trying to “silence” him. “It’s ON,” he wrote. Then, in a series of tweets, Olbermann continued his criticism, referencing Winston Churchill : “We shall go on to the end; we shall fight in (Italy); we shall fight on the seas and oceans; we shall fight with growing confidence and growing strength (on) the air; we shall defend our (network) whatever the cost may be; we shall fight on the beaches; we shall fight on the landing grounds; we shall fight in the fields and in the streets; we shall fight in the hills; we shall never surrender! – Rupert, you have been warned.” Gore travelled to Rome on Thursday to speak with reporters and make the network’s case on Italian TV in an effort to keep Current Italia on the air. Through a government extension, the network has until July 31 to cut a new deal with Sky Italia before getting pulled. “We’re hoping the public in Italy and our loyal viewers are going to let Sky know that if they cancel Current, our viewers are going to cancel Sky,” Hyatt said.

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Jack Myers: Network Upfront Week: It’s All About Content, Content, Content

May 17, 2011

It’s Network TV Upfront Week, and once again networks will reinforce their focus on traditional series programming and will de-emphasize bells and whistles — such as their digital and value-added offerings. Three seasons ago, networks were focusing more on expanded service offerings including experiential marketing, promotional tie-ins, marketing programs, research capabilities and online extensions. Today, networks, advertisers, and agency middle-men are more focused on the traditional role of network advertising as a vehicle for reaching large audiences with 30-second commercial messages in quality content. While networks offer program sponsorship packages, billboards and a wide spectrum of marketing and research enhancements, these are secondary to the primary role of network television as the lead artillery — spraying brand messages across a wide audience. Jack Myers Media Business Report reports that over the past decade, broadcast network ad revenues increased 8.9% from $17.0 billion to $18.5 billion, tracking well below the rate of inflation. Over the next decade, Media Business Report projects traditional broadcast network commercial ad revenues will increase an average 2.1% annually, while digital revenues will grow almost 30% annually, representing an average annual combined growth rate of 6.0%. By 2020, digital revenues are projected to generate 26% of total broadcast network advertising, compared to only 4.1% of total network ad revenues in 2010. (Myers’ full 2000-2020 forecasts in 55 media and marketing categories are available exclusively to Jack Myers Media Business Report subscribers.) Digital ad revenues are forecast by Myers to grow from a 3.3% share of total cable network TV advertising revenues in 2010 to 18.5% in 2020. For both broadcast and cable TV, while digital is a fast growing segment of their revenues, the engine that drives their business forward will continue to be traditional 30-second commercials. Yes, advertisers are shifting budgets to online, mobile and social marketing. But advertisers continue to rely on network and syndicated television to provide high quality series programming and reliably large audiences for their brand messages. The networks’ future digital ad revenue growth depends on a solid foundation of successful quality programming. That’s why the focus of network Upfront presentations will continue to be all about content, content, content. Jack Myers can be reached at Jack@mediadvisorygroup.com . JackMyersThinkTank is free and underwritten, as part of MediaBizBloggers.com , by subscriptions to Jack Myers Media Business Report ( www.jackmyers.com ). Subscribe free to all MediaBizBloggers reports at www.MediaBizBloggers . For Jack Myers Media Business Report subscription information visit www.myersreport.com or contact Jack Myers at Jack@mediadvisorygroup.com . Jack Myers and Media Advisory Group provide details on all underwriters and companies in which we have an investment at www.jackmyers.com . This commentary was originally posted at www.jackmyers.com

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Sony Begins Restoring PlayStation Network

May 15, 2011

Following a data breach that exposed the personal information of 100 million users and shut down access to the PlayStation Network for weeks, Sony has announced that access to the PlayStation network is being restored. Sony wrote in a blog posted Saturday evening that the process of restoring access to the network would begin in a select number of countries, then expand further, with all locations worldwide back online by the end of May. The Americas, Europe, Australia, New Zealand, and the Middle East will see their access restored first, while users in Japan and other Asian countries will be forced to wait longer. “While we understand the importance of getting our services back online, we did not rush to do so at the expense of extensively and aggressively testing our enhanced security measures. Our consumers’ safety remains our number one priority,” said Sony executive deputy president Kazuo Hirai in a video released by the company (see below). “We want to assure our customers that their personal information is being protected with some of the best security technologies available today, so that everyone can feel comfortable enjoying all that PlayStation Network and Qriocity services have to offer.” Some states in the U.S. are seeing their access to the PlayStation network restored earlier than others, and Sony has posted a map that it will update as additional locations go back online. The company says all U.S. users should be able to get back online within several hours. Sony requires PS3 users to update their firmware prior to going back online, and also recommends that users change their passwords. Technologizer notes that in terms of the potential loss of data and the downtime suffered by users, Sony’s PlayStation outage seems likely to rank among the worst ever. “Okay, it’s close to three weeks later. The PlayStation Network outage continues, it involves the leakage of personal data, and we don’t know when it’ll end. Anyone want to argue that it’s not the single worst fiasco of this type ever?” writes Technologizer. Though the network is — according to Sony — secure, it remains to be seen whether it can recover from the lengthy outage and data breach in order to retain its users and prevent them from defecting to competing services. “It’s hard to say what’s worse for gamers: this lengthy outage – one of the worst on record – or the compromise of their personal data,” notes ReadWriteWeb . “Either way, Sony will have a long road ahead to win back the trust of gamers, who have a wide variety of options for other console or handhelds games.” According to Reuters , “some users have said the prolonged outage has prompted them to switch to rival Microsoft’s Xbox Live games service.” “Please know that we are doing everything we can to fully restore network services around the world and to regain your trust over the days weeks and months to come,” said Hirai. According to Joystiq , the Sony services that will be up and running by May 31 include the following: Sign-in for PlayStation®Network and Qriocity services, including the resetting of passwords Restoration of online game-play across PS3 and PSP Playback rental video content, if within rental period, of PlayStation Network Video Delivery Service on PS3, PSP and MediaGo Music Unlimited powered by Qriocity, for current subscribers, on PS3 and PC Access to 3rd party services such as Netflix, Hulu, Vudu and MLB.tv ‘Friends’ category on PS3, including Friends List, Chat Functionality, Trophy Comparison, etc PlayStation Home WATCH:

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Marty Kaplan: Who’s Afraid of a Countdown Clock?

May 13, 2011

Please don’t run a countdown clock on the debt ceiling. For weeks , that’s what Jack Lew, the Obama Administration’s director of the Office of Management and Budget, has been urging the television networks not to do. You know the kind of clock he means. It’s what we saw on the cable news channels in April as the absence of a deal on the federal budget raised the prospect of a government shutdown. To boost ratings, few things beat whipping up a little Perils of Pauline suspense about whether the Washington Monument will be shuttered and Social Security checks will stop. In 18 hours and 42 minutes, it could be cat food for Granny. Stay tuned! Sometimes the clock starts after the event. “This is the 143d day of the Iranian hostage crisis,” the network anchors said, flipping the pages of the nightly humiliation calendar during the last 444 days of the Carter Administration. Keith Olbermann did something similar with the number of days since “Mission Accomplished” was declared in the Iraq war. Does it matter? In the Carter case, it may well have cemented his 1980 loss to Ronald Reagan. (Double-digit inflation and gas rationing also didn’t help.) In the recent wrangling over the budget, the looming deadline mattered, but it’s hard to believe that the deal the negotiators reached was actually affected by the Nielsens stunt. This time, though, it’s different. That’s Jack Lew’s point, which has also been made by Democrats like Obama economic advisor Gene Sperling and House minority whip Steny Hoyer (D.-Md.), and by liberal columnists like E.J. Dionne . The reason they want the networks to abjure debt ceiling countdown clocks is the fear that they will spook the markets. If the full faith and credit of the United States is in doubt, then no one will trust our bonds, interest rates will spike, unemployment will climb, our fragile recovery will be derailed and the world will be plunged into an even deeper recession. I can see why Republicans aren’t clamoring for the media to can the clocks. They insist that they won’t raise the debt ceiling unless Democrats couple that vote with an agreement to cut spending by at least $2 trillion. Cutting tax expenditures, say the Republicans, won’t count as cutting spending; the top six publicly-traded oil companies made a staggering $38 billion in first-quarter profits, but the GOP has taken the $4 billion-per-year federal subsidy to Big Oil off the table, as well as the $1 trillion in Bush tax cuts for the wealthy that President Obama wants to eliminate. It’s in the Republicans’ interest to portray anything less than total capitulation by the Democrats as an invitation to global collapse. If doomsday clocks incite a little pre-midnight foretaste of economic meltdown, all the better: the Democrats will have no choice but to cave. The clocks would have the perverse virtue of transforming a GOP bluff into an actual game of chicken, with the Republicans taking the steering wheel off and throwing it out the window. What puzzles me is why the markets would be spooked by a TV clock. These are the same markets that are universally said to have already discounted any event that you and I find out about. A wheat fungus in Ukraine, a class-action defeat, a movie that bombs, a CEO ouster, a bad quarter: whenever I think I have a bead on the future, the financial chattering class tells me that the institutional investors, private wealth managers and arbitrageurs have been yawning about that news for months. So you’d think that the wizards of Wall Street, the gnomes of Zurich and the other masters of the universe would by now be totally blasé about some ticking widget that Bloomberg, Fox and MSNBC might use to scare up, and scare, an audience. Is it really conceivable that the people who actually pull the strings of the international economy — not the day-traders and duffers who watch cable to find out what’s going on, but the Davos crowd who truly move markets — is it possible that a cornball countdown clock could cause them to panic? I don’t think so. My bet is that Beijing, Brussels and the rest of the financial capitals decided some time ago that John Boehner (R-Oh.) and Mitch McConnell (R-Ky.) are neither nuts enough nor politically fearful enough to permit the Tea Party to make them accomplices to an economic apocalypse. Sure, there’s a psychological element to the market, but no cable network’s catastrophe-porn chyron is going to be influential enough to jeopardize any media mogul’s fortune. So why are Democrats playing the clock card? My guess: To spook the media about giving the Tea Party a free ride. If cable coverage of the debt ceiling negotiation is framed as a fight over how much spending should be cut, the Republicans win, no matter where the number comes out. But if the question of whether running a clock is civically reckless gains some traction, then the story becomes whether the Tea Party is taking the American economy hostage. Whether cable stations run a countdown or not, the controversy draws viewers, so the networks win either way. I just wish that were also true for the country. This is my column from The Jewish Journal of Greater Los Angeles . You can read more of my columns here , and e-mail me there if you’d like.

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Proximetry Adds Smart Energy Veteran Andres Carvallo to Management Team

May 11, 2011

Former Austin Energy CIO and Smart Grid Pioneer Joins Proximetry to Advance Wireless Network Management Solutions in Smart Energy and More

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Jonathan Littman: Sony’s Slow-Mo Story

May 4, 2011

Sony has been in slow motion the past two weeks, stumbling on how to tell the story of a recent catastrophic intrusion into its on-line gaming network. Indecision doesn’t win in action games, and it’s been devastating to Sony’s reputation. The company has produced a textbook case study on how not to respond to a crisis. Sony first learned its gaming networks had been hacked on April 19 . But instead of making a straightforward, honest announcement, it waited a day and then issued the non-statement, “We’re aware certain functions of PlayStation are down. We will report back here as soon as we can with more information.” The passive corporatespeak revealed Sony had retreated into a reactive mode. By then Sony had already closed down its PlayStation Network and Qriocity networks. That glaring fact and the absence of a believable story fueled the crisis. Sony was painting itself in a distinctly non-heroic light. Like most corporate cover-ups this non-strategy was doomed. Millions of gamers assumed Sony had been hacked, as it had long been defending itself against notorious hackers. So what did Sony do? The company’s leaders went into hiding. Three full days passed before it acknowledged that it had shut down its networks because “an external intrusion on our system has affected our PlayStation Network and Qriocity services.” More Corporatespeak. To put this in perspective, imagine if New York Mayor Rudy Giuliani had announced on September 14th, 2001, “an external intrusion has affected our World Trade Center.” The fact is Sony was blitzed. Denying reality only highlighted Sony’s lack of candor. By then Sony’s official story was that it had shut down the networks to do a thorough investigation and insure that operations would be safe and secure. What was still missing? An authentic concern for Sony’s millions of customers — many of them children. By April 26th , after a full week had passed, Kaz Hirai, head of Sony’s gaming division appeared at a Tokyo press conference to unveil the company’s tablet PCs. He expressed condolences for victims of the March earthquake, and talked at length about the new tablets. Not a word about the hacking attack. He left the stage without taking questions. Twelve hours later, Sony dropped a bomb on its customers, revealing in a formal written statement that the names, addresses and birthdates of millions of customers, many of them children, had been stolen. Why didn’t Hirai apologize for this in the news conference or days before? Did he really believe executive silence would allow Sony to save face? Instead, Hirai hid behind a formal statement: “While there is no evidence at this time that credit card data was taken, we cannot rule out the possibility.” Once again, Sony seemed to be denying reality. Then the company went on to suggest that customers should create credit card fraud alerts and watch for fraudulent charges. By failing to take ownership of its story, Sony handed ammunition to its critics. George Hotz, a hacker who Sony had sued for posting code to enable gamers to play pirated games on PlayStations wrote on his blog: “The fault lies with the executives who declared a war on hackers, laughed at the idea of people penetrating the fortress that once was Sony, whined incessantly about piracy, and kept hiring more lawyers when they really needed to hire good security experts. Alienating the hacker community is not a good idea.” Finally, on April 30th , Hirai and other Sony executives bowed before the press and said they were sorry. Nearly two weeks had passed before they had finally admitted the truth. Ten million credit cards may have been stolen — the entire cache. Along with the records and birthdates of tens of millions of children. What began as a failure of security has become a colossal failure of trust. Worse than the hacks themselves has been the disastrous effect of Sony’s leadership breakdown. Sony’s stock has taken a hit, and a class action suit has already been filed, charging the company with not taking “reasonable care to protect, encrypt and secure the private and sensitive data of its users.” Boycotts are being threatened, and as the Wall Street Journal reported : “Now 77 million people are busy changing their passwords, cancelling their credit cards and worrying about identity theft.” Sony has two very big problems, and it’s difficult to say which one is more serious. Today, how and when a company tells its ongoing story is arguably as important as innovation and customer service. They are all intertwined. Meanwhile, the crisis seems to be snowballing. On Monday, May 2nd, Sony revealed hackers had also penetrated Sony Online Entertainment and stolen credit card records. Veteran Sony watchers are already speculating in the press that the continuing blunders may cost Sony’s CEO Howard Stringer his job. Sony is in desperate need of honest, strategic storytelling. So far, this story has spun out of control like the nuclear crisis in Japan and the early stages of the Toyota safety scandal. Inaction and cover-ups only feed controversy, and the next few weeks will be critical. Sony’s competitors, not the least of them, Microsoft, smell blood. The video game industry is brutally competitive. Sony’s executives are going to have to make some tough moves. They make action video games. But its about time Sony showed what any real gamer knows. In real life or a game, a hero defines himself by his courage under fire. Jonathan Littman is the co-author of The Ten Faces of Innovation and Art of Innovation. He’s the founder of Snowball Narrative.

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Adelaide Lancaster: The Secret Weapon of Successful Entrepreneurs

May 3, 2011

I give the same answer to at least half of the business advice questions that I am asked. “How should I get the word out about my new service?” “What’s the best way to reach my target market?” “What conferences are worth attending?” “How much should I pay my staff?” “How do I find a good manufacturer … sales rep … or cost-effective printer?” “Ask your network,” I reply again and again and again. In my opinion it’s the easiest and fastest way to get the best answers to almost any question. Veteran entrepreneurs usually nod in agreement, mentally scan their network, ask my help in filling any gaps, and then go along their way. Newer entrepreneurs often give me an uneasy look. Maybe their network isn’t that big yet. Or maybe they aren’t yet comfortable asking for help. Or maybe they’re still hesitant to share behind-the-scenes details on their business. But more often than not, it’s the word ‘network’ that turns them off. Believe me, I get it. I too was jaded by “traditional” networking, that is before I was an entrepreneur. The conventional career wisdom when I was growing up was “It’s not what you know but who you know that matters.” It seemed that no one missed an opportunity to remind youngsters that the most important ingredient for success was a thick Rolodex. While some people were probably relieved to hear this, I was a bit resentful. After all I had spent years working hard to cram my brain full of useful information and my resume full of worthwhile experiences. Instead of being able to freely focus on opportunity, promise and ability, success seemed to hinge on a few arbitrary acquaintances. To me, networking was a necessary and unrewarding evil at best. Needless to say when I became my own boss, networking wasn’t at the top of my to-do list. I warmed to the idea when I recognized that word-of-mouth referrals were the best way to get clients. But, since I was still a newbie, I only saw my network as a sales tool. I quickly learned however that, as an entrepreneur, my network was much more than that. Instead of collecting ‘in case I need to know you’ connections, my network became my lifeblood, a never-ending source of experience, knowledge, resources, introductions, ideas, advice, feedback and support. Aside from connecting me to the right clients and opportunities, it is my strong peer relationships that have: prevented me from learning lessons the hard way; shortened my learning curve; given me honest and hard to come by feedback; enabled me to benefit from the first hand experience of others; and provided inspiration and rich ideas. I can’t think of many of my accomplishments where the contributions of my network haven’t been significant. For example, my peers were completely instrumental in the book that my partner and I just finished. Here’s a short list of things that my network provided us with for this gargantuan task: an agent who quickly sold our book, critical advice from recent authors on important contract points with the publisher, feedback on our approach and framework, a rich pool of interviewees, suggestions on equipment and transcription services, an inside look at various publicity proposals, ideas and inspiration about viral campaigns and generation promotional ideas, introductions to other writers and journalists, as well as support and encouragement. I was talking recently to a new entrepreneur who was, unsurprisingly, reluctant to ramp up her networking efforts. Fresh from the corporate world, she was tired of the schmoozing and the ‘what can you do for me’ routine. As I excitedly extolled the importance of peers and colleagues in the journey of entrepreneurship, I caught myself telling her that it’s who you know that really matters. The familiar tone of this phrase almost stopped me short. I was quick to explain the difference between the old quid pro quo style of networking and the kind of support that entrepreneurs engage in, but nonetheless I was firm in my message and underlying meaning: Invest the time and energy in building a strong network of peers. They will improve your business, save you effort and expense, and enrich the journey. A strong network really is the secret weapon of successful entrepreneurs.

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Summer 2011 To Be Worst For Teen Jobs

May 2, 2011

A record-low one in four U.S. teenagers will land a summer job in the coming months as a result of a still-poor job market and lost federal funding, according to a report issued on Monday. As a consequence, urban studies experts said cities like Chicago—where summer unemployment among African-Americans aged 16 to 19 years approaches 90 percent—could experience a rise in street violence. “Both national and local leadership continue to ignore the plight of youth who are most at risk for potential violence as a result of being left on the streets in the summer months when crime is at its most explosive,” Chicago Urban League President Andrea Zopp said in a statement. The summer employment rate among U.S. teen-agers this year was projected at between 25 percent and 27 percent, based on an analysis of four decades of employment trends by Andrew Sum of the Center for Labor Market Studies at Northeastern University in Boston. That would be a post-World War Two low, while as recently as 2006 the teen summer employment rate was 37 percent. U.S. economic growth has been sluggish since the recession ended in June 2009, with job growth lagging the recovery and unemployment still at a lofty 8.8 percent. The long-term impact of higher summer joblessness among young people is a less-experienced work force and increased government spending due to lower lifetime earnings, reduced tax revenues and higher prison costs, experts said. In Chicago alone, nearly 700 children were hit by gunfire last year, with 66 deaths, though the city’s overall murder rate declined, said Jack Wuest, executive director of the Alternative Schools Network which commissioned the report. “We cannot continue to ignore the correlation between youth violence and teen employment,” Wuest said. “We know if our teens are in school or at a job they are not on the streets.” Federal stimulus dollars directed to cities and applied to summer jobs programs have run out and the funding was not renewed by Congress, meaning 18,000 more Illinois teen-agers will be jobless this summer, according to the report. Copyright 2010 Thomson Reuters. Click for Restrictions .

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Bob Martin Joins SeeSaw as Vice President of Business Development

April 28, 2011

SeeSaw Adds industry Veteran to Lead Network Development and Branded Content Strategy

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Mike Green: No Excuses: Galvanizing Black Innovation and Capital

April 20, 2011

I’ve listened with great interest to intellectual minds like Dr. Cornel West , politically savvy leaders like Al Sharpton and Jesse Jackson , and informed media personalities like Tavis Smiley and Tom Joyner . All have uniquely insightful perspectives — and all have outspoken views about the job the president is doing. Yet, Black America — which has remained consistently rutted within a channel of economic depression since Dr. Martin Luther King marched the segregated streets of Selma, Alabama — was quite familiar with the aforementioned names long before it ever pinned all of its hopes on the name Barack Obama. I’m not quite sure if any of the outspoken critics expressing disappointment in this administration have articulated specifically how Black America ought to have already experienced the change hoped for in 2008. The most extraordinary notion I’ve gleaned from some expressions is the implication that President Obama should accomplish — within the span of four years — what Black Americans have failed to accomplish collectively over the past three decades. Allow me to be clear on the point. Black America is currently experiencing double the unemployment rate of the nation’s overall jobless rate. That double-the-overall-jobless-rate statistic is virtually unchanged from the days when little Barack was in diapers. Black America has watched the ever-widening chasm between Black wealth and White wealth quadruple over the past couple of decades. But the real insight is inherent in the fact that Black wealth in the 1960s was 25% of White wealth … quadruple what it is today (6%). So, what has President Obama prescribed for the economic ills of Black America? The exact same prescription he’s written for the nation as a whole: Investment in STEM education Investment in technological innovations Investment in high-growth entrepreneurship The refrain ought to be sung by the whole choir: Investment. Investing in Black America Where is the Black investment in STEM education? Given that STEM literacy is the passport to a bright future in the increasingly competitive and global 21st century innovation economy, there’s a real need to focus on black student preparation and achievement in STEM at the k-12 and post-secondary levels. Recognizing that large numbers of black students are educated in public school districts located in our major urban centers, we need not look any further than Detroit, Milwaukee, Chicago, Atlanta, New York, Baltimore… as examples of failure where high schools have served as drop out factories rather than STEM magnets that prepare black youth for the promise of the innovation economy. In Philadelphia, for example, less than 1 percent of its students graduate and go on to finish college at a 4-year university in any form of a STEM major. Less than 1 percent. Philadelphia serves as a microcosm and is indicative of a widespread problem in all of our urban centers that have failing public school systems … where a majority of African-American students are educated. What future does a system of education hold for our students when it cannot effectively prepare them for an increasingly competitive market? Where is the Black capital investment in high-growth entrepreneurs? There are many exciting business incubators and accelerators, like Plug and Play Tech Center in Silicon Valley, TechStars in Colorado, Jumpstart, Inc. in Ohio and many more across the nation. But where is such training, mentoring and investment within Black communities? Where is the investment in channels of access to capital for entrepreneurs? There are more than 500 angel and venture capital groups within the developed mainstream national infrastructure. But there are very few Black American groups. The Minority Angel Investment Network is such an effort. But where are collaborators to help it grow? A recent rising star, H360 Capital , aims to address this virtually vacant space by raising $100 million in venture capital. How much more effective would its Black principals be in generating the funds they need if they received eager investments from thousands of high net worth Black Americans and collaboration with other like-minded groups? Black Americans MUST be willing to invest in Black America. How embarrassing is it to beg White power brokers in government and corporate America to do exactly what we are not willing to do? Investment Capital Infrastructure Allow me to be clear on the point. The Kauffman Foundation is the nation’s largest nonprofit focused on investment in entrepreneurship. It reports that all net new jobs since 1980 were the result of companies less than five years old. That sort of high-growth entrepreneurship is the direct result of capital investment from private sector angels and venture capitalists. The high-risk private capital investment industry is relatively new. Angel groups that invest in seed stage and early stage companies have just one main trade organization: Angel Capital Association . It’s only six years old. The venture capital industry, which traces its beginning back 65 years, really sprang up as a viable investment industry in the 80s. It, too, has one main trade organization: National Venture Capital Association . In 2008, venture capital-backed companies produced nearly $3 trillion, roughly 21% of GDP. In 2007, all of the nearly two million Black-owned businesses combined produced $137.5 billion, less than 1% of GDP. Since 1970, venture capitalists have rained torrential buckets of cash ($456B) into more than 27,000 companies. Black Investment Required There are three things we know: Private equity capital investments did not rain down upon Black entrepreneurs to any appreciable degree over the past three decades. Black America was, and is, disconnected from the private capital equity investment infrastructure and high-growth entrepreneurial ecosystem. Black America has failed to develop its own investment infrastructure and high-growth entrepreneurial ecosystem. There are three main reasons I believe Black America has remained economically devastated for decades since its Civil Rights Era victory, despite boasting nearly $1 trillion in annual consumer spending last year: Black America does not invest in nor focus on STEM education (to any appreciable degree) as its highest education priority to fill the creative technology funnel with Black innovators. Black America has not developed its own angel and venture capital networks and connected them to the existing private capital infrastructure. Black America does not energetically and enthusiastically invest in high-growth entrepreneurship through development of an entrepreneurial ecosystem. The Black Innovation and Competitiveness Initiative ( BICI ) is the only national voice in Black America specifically focused on connecting 20th century Black America to the 21st century “Innovation Economy,” comprised of three core pillars: STEM Education, Capital Investment and High-Growth Entrepreneurship. No Excuses There is no excuse for Black America to go another decade enduring severe economic depression. Consider the progress Blacks have made in other hostile arenas within a very short time span: Television Industry : In 1988, Bill Cosby was juggling Jello alongside a popular family show that carried his name and re-defined how America viewed Black families. Today, the name Cosby is an iconic name in American entertainment. Pro Football : In 1988, Doug Williams was the first Black quarterback to win a Super Bowl. Matching wits with Hall of Fame quarterback John Elway, Williams out-Elwayed Elway in a masterful comeback from 10-0 at the half to lead the Redskins to a 42-10 victory in Superbowl XXII. Today, the NFL has many talented Black quarterbacks, coaches and front office personnel. Some Blacks in the pro sports world are now team owners. Music Industry : In 1988, Whitney Houston was on top of the music world after her second album release the previous year debuted at No. 1 on the Billboard 200s music chart. Today, she remains the most awarded female artist of all time. We see Black music moguls today who compete on a level that Motown never could in its heyday. Wherever Blacks have concentrated our time, talent, efforts and monetary investments, we have succeeded in transforming the space. Black Angels and Entrepreneurs I commend Rutgers Business School’s Center for Urban Entrepreneurship & Economic Development in producing the first-ever Black Angels and Entrepreneurs Forum in partnership with the Black Innovation and Competitiveness Initiative. This is an opportunity for Black Americans to engage in a collaborative effort to change the economic paradigm. It is time for Black America to invest in developing a private capital equity investment infrastructure and a high-growth entrepreneurial ecosystem. Black America’s experienced academic, political, business and community leaders, as well as its high net worth asset class, must be willing to come to the table of collaboration to leverage their influences in generating the type of exponential economic impact Black America MUST produce to save itself from a potential future as a permanent underclass.

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Infinera Appoints Andrew Bond-Webster Vice President for Asia Pacific

April 13, 2011

SINGAPORE–(Marketwire – Apr 13, 2011) – Infinera ( NASDAQ : INFN ) announced the appointment of Andrew Bond-Webster as Vice President of Sales for Asia Pacific to accelerate Infinera’s focus on marketing Digital Optical Network solutions in the Asia Pacific region.

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Video: Covert Says Dish Network Can Become Netflix Competitor

April 6, 2011

April 6 (Bloomberg) — Kevin Covert, founder and president of Covert & Co., talks about Dish Network Corp.’s proposed acquisition of Blockbuster Inc. Covert also discusses the Wall Street Journal’s report that Google Inc.’s YouTube may be planning to spend as much as $100 million on original content for about 20 premium channels. He speaks with Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Obama Health Care Idea Could Mean Better Treatment, Savings

March 31, 2011

WASHINGTON — The Obama administration on Thursday outlined a new approach to medical care that it said could mean higher quality and less risk for patients, while also saving millions of dollars for taxpayers. The plan involves accountable care organizations, which are networks of hospitals, doctors, rehabilitation centers and other providers. They would work together to cut out duplicative tests and procedures, prevent medical errors, and focus on keeping patients healthier and out of the emergency room. “We need to bring the days of fragmented care to an end,” Health and Human Services Secretary Kathleen Sebelius said as she announced a proposal regulation that defines how the networks would operate within Medicare. If things work out, medical providers would share in the savings. If the experiment fails, they’re likely to get stuck with part of any additional costs. Sebelius said early estimates are that Medicare could save as much as $960 million over three years. That’s not a whole lot for a $550-billion-a-year program, but officials say it’s a start. The estimate was prepared by Medicare’s office of the actuary, known for its independence. Eagerly awaited by the health care industry, the new approach was called for in President Barack Obama’s health care overhaul. If it succeeds in Medicare, it is expected spread quickly to employer-provided health insurance. Already in some parts of the country, such as the Minneapolis area, insurers, hospitals and doctors have set up similar networks for privately insured patients. But there are risks. The networks could end up costing more money because of the intensive work involved in coordinating among different providers. Medicare recipients now may see four or five different doctors, who never talk to each other or compare notes. There’s another potential problem. What if a network of hospitals and doctors acquires monopoly power in its community and starts raising prices? Assistant Attorney General Christine Varney said the administration won’t allow that to happen. “We believe there is no area of the economy that can benefit more from collaboration than health care,” said Varney. “Those who collaborate to fix prices inappropriately will be prosecuted.” Unlike some managed care plans, such as health maintenance organizations, patients will not be locked into the new networks. “The beneficiary has not lost any choice at all,” said Medicare administration Donald Berwick. Instead, it will be doctors, hospitals and other service providers who join the networks. They will have to make a three-year commitment to care for a group of at least 5,000 patients. Medicare administrators will monitor performance on costs and quality. If the network succeeds in saving money over what its patients’ care would have otherwise cost, Medicare will share a portion of the gains. If it loses money, providers could get stuck with a bill. Providers are required to let their patients know that they are part of an accountable care organization and to get permission to share personal health information within the network. The experiment is focused on traditional fee-for-service Medicare. “We are committed to getting the details right,” said Sebelius. “The rules we are proposing today are just the first step in a long process.” ___ Online: Department of Health and Human Services: http://www.hhs.gov

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TBA Global Names Andre Mika Senior Vice President, Digital Creative

March 28, 2011

NEW YORK, NY–(Marketwire – March 28, 2011) – TBA Global , a leading engagement marketing and communications agency, today announced André Mika has joined as Senior Vice President, Digital Creative and will head its digital practice. Mika joins TBA Global from the National Hockey League, where he redesigned and re-launched NHL.com , NHL Network Online and NHL GameCenter LIVE apps, increasing the brand’s online and mobile engagement by nearly 400%.

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Timothy Karr: Five Things Wrong with AT&T’s Mega-Merger

March 24, 2011

AT&T’s $39 billion takeover of T-Mobile USA is yet another in the series of large telecom mergers that over time are slowly reassembling the Ma Bell monopoly of old. It’s now left to federal regulators at the Department of Justice and the Federal Communications Commission to decide what’s really best for Americans. Should they let two national wireless carriers dominate our mobile world? Would giving AT&T and Verizon near complete control benefit smart phone users, create more jobs, make broadband access widespread and affordable, and fuel our sputtering economy? It seems unthinkable to suggest that taking one of the most innovative sectors ” back to the future ” would help us. Consolidation of the scale proposed by AT&T and their boosters in Washington resembles the old railroad and oil trusts of the 19th century. Why go there? Yet AT&T wields unparalleled political power in Washington, and stands a good chance of “convincing” regulators and Congress to discard with common sense , stand aside and let this mega-merger sail through on approval. Here are five reasons that all Americans – and not just T-Mobile and AT&T customers — should be concerned by the return of the new, old Ma Bell: 1. The merger would further erode what little competition exists in the wireless market. The merger hands two companies, AT&T and Verizon, control over nearly 80 percent of the wireless market. That translates to widespread abuses of market power, something AT&T is already known for. In any other industry, allowing this much concentration, especially without any meaningful oversight or regulatory protections, would be unthinkable. By comparison, the top 10 oil producing firms combined control less than 80 percent of the U.S. market, but this merger will give that level of market dominance to just two companies. Imagine if ExxonMobil were to merge with BP, Shell, Chevron-Texaco, and Citgo. That would net ExxonMobil the same level of market control as AT&T will have with this deal. And unlike the gasoline market, where consumers can just drive another block to choose another station, wireless users are locked into long-term contracts. 2. The merger would result in higher prices and fewer choices for wireless consumers. AT&T and Verizon currently control nearly two-thirds of the market and have a long history of raising prices in concert, as they both did early last year by requiring all customers on feature phones to add data plans. Sprint and T-Mobile (the third and fourth largest of the four national carriers) were meant to exert some competitive discipline on the big two. The average fee for AT&T users ($63 per post-paid subscriber) is some 20 percent more than the amount T-Mobile users pay ($52 per T-Mobile &T subscriber). You take T-Mobile’s lower cost structure out of our wireless equation and the remaining providers have even fewer checks against raising prices on every user. And prices have risen steadily, according to J.D. Power and Associates . In December 1998, the monthly Average Revenue Per User (ARPU) for wireless companies was $39.43. By the end of 2010, this has risen to more than $49. This steady price increase comes despite the fact that carriers’ own operating costs have declined substantially, as their profits have risen. This change will be particularly acute for the 34 million people who now subscribe to T-Mobile. Even if AT&T agrees to honor their existing contracts for their remaining length, they will surely see higher prices when those contracts expire or when they need to buy a new handset or make changes to their contracts. 3. This merger will kill tens of thousands of U.S. jobs. When was the last time a merger actually created jobs for Americans and not more pink slips? This merger is no different. And yet that hasn’t stopped AT&T from wrapping itself in the flag by noting that T-Mobile is a subsidiary of a German company. But T-Mobile USA is based in Bellevue, Washington and employs nearly 40,000 U.S. citizens. The plain fact is that AT&T plans to put these American jobs at risk. Their executives say the plan to save $40 billion through merger “synergies.” This means that many of the T-Mobile jobs at retail stores and call centers will be eliminated. The planned shuttering of thousands of wireless towers will result in the firing of an untold number of technicians. And there will be more jobs lost as the cost-cutting effects of this merger ripple through the broader economy. 4. This merger is a raw deal for American innovation. AT&T has a history of making handset manufactures cripple features like WiFi on devices, and of blocking the use of certain applications like Google Voice and Slingbox. The merger would stifle innovation both in devices and on the network. The combined carriers would be able to leverage an unfair amount of market power to prioritize which handsets get used, what technologies work on those handsets and which Apps you’ll be able to upload from the network (Imagine AT&T prioritizing it’s own inferior voice recognition and navigation applications over those offered by Google or a innovating startup). According to the Wall Street Journal , handset manufacturers are remaining mum on the deal, possibly out of a “fear of angering a powerful customer” in AT&T, which can make or break a device by simply deciding to allow it on its network. Would a merged AT&T permit any device innovation that challenges its bottom line? Using history as a guide, the likely answer would be, “no.” 5. The merger is a threat to free speech and openness on the wireless web. AT&T along with Verizon has fiercely opposed any wireless Net Neutrality requirements, with AT&T brokering a deal with the FCC to ensure they have the legal right to block online content and charge application developers additional tolls just to reach AT&T customers. The FCC’s weak Net Neutrality decision was the result — exempting mobile services from openness protections based on Chairman Julius Genachowski’s assumptions that competition existed in wireless. With further consolidation AT&T and Verizon will be in an even stronger position to play gatekeeper on the wireless web, picking winners and losers, limiting our ability to connect and share information and ultimately slowing the pace of the mobile Internet innovation. The fact of this merger shows how the U.S. must have strong Net Neutrality rules, according to Sen. Dick Blumenthal of Connecticut: “Regulatory approval should contain strict conditions to ensure that consumer concerns about cost, access, choice, and competition are adequately addressed. Moreover, such high wireless market concentration raises serious potential net-neutrality concerns that should be addressed. The largest mobile network in the nation must not be allowed to limit access to content in a discriminatory manner.” — Co-authored with S. Derek Turner, Free Press research director.

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Barbara R. Arnwine: Collective Bargaining Rights Are Key for Workplace Equality

March 23, 2011

Women’s History Month is a very special time to reflect upon both the particular challenges that women continue to face in the workplace and upon the new opportunities that will arise for economic equity. It’s also a time is to appreciate the struggles of the Sheroes who came before us who opened the doors of opportunity. It is up to us to recognize the significance of being women and also the importance of being a part of a broader collective that lifts the stature of everyone — male and female. We must ask ourselves, how do we both acknowledge the persistent disparities and concerns of the past while also looking to the future for continued upward mobility for all? Gender-based issues of increasing unemployment, job silos, unequal pay, sexual harassment and the “Old Boys Network” continue to haunt the American workplace and denigrate the economic status of women. And this affects everyone. The fact is, it’s not quite time for “post-gender” thinking. Take the l atest unemployment figures . While we added some 192,000 jobs in February, the overall scenario for women was not rosy. The National Women’s Law Center notes that over the course of the recovery, women’s overall unemployment rate increased from 7.7 percent to 8 percent, while men’s dropped from 9.8 percent to 8.7 percent. Even more disheartening, between July 2009 and February 2011 unemployment rates increased for single mothers (from 12.6 percent to 13 percent) and African-American women (11.8 percent to 13 percent). Recently, we witnessed the crisis facing public workers in Wisconsin. Governor Walker’s actions are of immense importance to women and stand in direct contradiction to our continued progress. According to the Bureau of Labor Statistics , women comprise 52 percent of state-level public sector jobs and 61 percent at the local level. The impact on state and local job cuts in the public sector will be especially devastating to women at a time when the recession has already disproportionately impacted us. Women of color, already facing large pay gaps, are in danger of falling still further behind as bargaining rights disappear. Dr. Steven Pitts of UC Berkeley’s Center for Labor Research and Education notes that black women in the public sector earn a median wage of $15.50 an hour, while the sector’s median wage overall is $18.38 (white men make $21.24). This is not so surprising when you consider that African-American women comprise only 12.2 percent of labor unions. This data exemplifies the compelling need for workers to have the ability to bargain for equal rights in the workforce. The wage gap remains an important civil rights crisis for women. We have made gains in areas of education and employment, yet we know that we have not been fully acknowledged in the workplace when the paycheck arrives. This illustrates the distinction between the evolution of personal achievement and universal women’s emancipation. Barriers still confront women in many professions and prevent us from achieving true equality. While we should appreciate the success stories, such as women’s increased access to law firms, there are still challenges to overcome. The retention rate, for example, tells a bleaker story about how women fare in the legal profession. The attrition rate for white female attorneys within 55 months is 77 percent, while minority female attorneys at law firms have the highest attrition rate, at 41 percent within 28 months and 81 percent within 55 months. A Diversity and the Bar report notes that women of color often feel isolated in an “old boy’s network” environment. It appears that white male attorneys share a greater opportunity for advancement, perhaps because often times those in power (white males) are connected most with people like them. While it is critical that law firms fulfill their responsibility to systemically address these barriers to women’s achievement, women must also assist in advancing each other. This year marked the 100th Anniversary of International Women’s Day. The United Nations highlighted , as I have, that despite the gains made, much remains to be done to eliminate gender discrimination. Until these vast disparities are addressed and systematically dismantled, this country’s economic viability for the future will never be fully realized. The time for a level playing field is long overdue. As women, we must find our voices and be active in advocating for real equality in these times. And we must always look beyond the headlines to find “her” story. This originally appeared on New Deal 2.0 .

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Les Leopold: Is Corruption on Wall Street All in the Eyes of the Beholder?

March 18, 2011

Japan’s Nikkei share average plunged 10.6 percent on Tuesday, posting the worst two-day rout since 1987, as hedge funds bailed out after reports of rising radiation near Tokyo. ~ Reuters, March 15, 2011 While it’s far too early to assess the full impact of the Japanese disaster on markets around the globe — let alone on the Japanese people — we do know that hedge funds are already busy trying to profit from the misery. They make no apologies for operating in an ethics-free zone. Their business is to rapidly move money in and out of distressed markets. That’s just what they do. But as we’re learning from the trial of billionaire Raj Rajaratnam , head of the Galleon hedge fund, an ethics-free zone can easily become a crime scene. The Raj is charged with enough counts of insider trading to spend 20 years in the hoosegow. And he’s not the only one on trial. As the case unfolds, Wall Street as a whole may find itself in the dock, facing the question it dreads most: Just how much of Wall Street’s wealth is built upon criminal activity? Of all the rich and worried people on Wall Street right now, the hedge fund managers are the richest and maybe the most worried. After all, they’ve got a lot to lose. A LOT. Just to name one example, in 2010, the top hedge fund manager, John Paulson, netted — for himself personally — $2.4 million an HOUR. Forbes reports that in 2009, Rajaratnam was the 236th richest American, with an estimated net worth of $1.8 billion. That’s more than 12,000 times the median US family’s net worth (which was $98,997 in 2009). Sebastian Mallaby, the financial author, offers a spirited defense of the hedge fund industry, arguing that, yes, there may be a few truly rotten apples, but insider trading is really no big deal. (See ” Hands Off Hedge Funds ” May 2007) An industry of around 9,000 hedge funds is indeed bound to harbor some criminals….Moreover, some of what politicians and journalists label ‘hedge-fund abuses’ involve leaks of inside information from investment banks rather than from hedge funds, making the hedge-fund managers who receive the leaks accomplices rather than the chief offenders. But federal prosecutors beg to differ: They say the Raj’s hedge fund is the prime mover of the insider conspiracy , not a lowly accomplice to the crime. “Greed and corruption — that’s what this case is all about,” said the the lead prosecutor in his opening statement. Rajaratnam “knew tomorrow’s business news today and traded on it. ….One crucial thing he didn’t know. He didn’t know the FBI was listening.” What goes on when the F.B.I. isn’t listening? The defense team, led by John Dowd, argues that the Raj is just a smart guy who made his fortune through “shoe-leather research, diligence and hard work” and who “conducted the best research in the business.” You see, says Dowd, the Raj used the “mosaic” method of investing: He collected from many sources a compendium of unconnected facts about a company to form a mosaic of its true worth. And that mosaic told him whether to go long, short, both, or stay away. Constructing these gorgeous mosaics turned the Raj into the billionaire he is today. Mosaic method? Okay, let’s give it a try. How about constructing a mosaic of hedge fund illegalities over the past decade or so? There are so many colorful tiles to choose from. Here are a few. Insider Trading : Hedge funds of all kinds rely on ” expert networks ” who link together consultants who gather information about companies. In the process, bits of illegal information find their way into and around the network and then into the bottom lines. The Raj investigation already has upended several hedge funds that benefited from this common phenomenon. Tax Evasion : Swiss banker Rudolf M. Elmer has blown the whistle on an international web of rich investors, banks and hedge funds that evade taxes by illegally shifting money to low-tax jurisdictions. There’s something extra-slimy about tax dodging by hedge funds, given that they already pay less taxes than anyone else. Due to an egregious IRS loophole , hedge fund managers pay a top tax rate of 15 percent instead of the 35 percent normal wealthy people are supposed to pay. That these under-taxed fat cats feel entitled to top it off by engaging in this blatantly illegal form of tax evasion is galling. These guys seem unable to resist piling up more money, even if it means taking the law into their own hands. Ponzi Schemes: When we think Ponzi, we think Bernie. Hedge funds like Madoff’s are ideally suited for this kind of scam since they are designed to evade so many disclosure regulations. But Bernie’s isn’t the only game in town. There’s a whole other kind of Ponzi scheme that has largely escaped media attention. You can find a description of this seriously twisted strategem buried deep in the bowels of the Financial Crisis Inquiry Commission Report . To construct and market exotic and highly profitable CDOs based on toxic subprime assets, investment banks had to be able sell the lower tranches (where a good deal of the junk assets lived). But that got harder towards the end of the housing boom. So to keep the production line going, the banks sold the junk to each other: Entity A sold to Entity B who then sold back to Entity A. This game of hot potato was even played by different departments within one large investment bank. Hedge funds were always there to suck up the lowest level, highest yield “equity” tranches — while often shorting other pieces. The potato toss had to continue or the entire game was lost. According to the Financial Crisis Inquiry Report , “heading into 2007 there was a Streetwide gentleman’s agreement: you buy my BBB tranch and I’ll buy yours.” (p. 278) This scheme would have gone nowhere without hundreds of hedge fund players lapping up the equity tranches and buying the credit default swaps that allowed the deals to be constructed in the first place. How many financial billionaires were minted in this process, I wonder? Front-running trades: With their high-speed trading computers and algorithms that sense market moves, the biggest hedge funds and banks are able to trade just a fraction of a second before the rest of us do. The SEC has been investigating this practice , known as front-running, for several years. The agency is worried that brokers leaked information about large trades by institutional investors to hedge funds so they could pull off the trade just a split second before the large trade took place thereby earning a quick, easy and illegal profit. Timing and Late Trading: When Eliot Spitzer was New York Attorney General (and earned the handle Sheriff of Wall Street), he uncovered how hedge funds were maneuvering around trading rules like a Ferrari speeding around the hapless shmoes stuck in midtown traffic. Hedge funds were allowed to jump in and out of mutual funds many more times than normal investors, enabling them to score high returns at the expense of regular mutual fund customers. They even got away with booking trades hours after the market closed for the day — a real perk, since market-moving announcements often are made right after closing. You don’t need to go to Wharton to make big bucks on this one: All you do is wait a few hours to judge the impact of the after-closing news, then book your trades at the 4 pm price. Spitzer forced the guilty parties to pay several billion dollars in fines. Accounting Irregularities: This is the catch-all biggie: Hedge funds and banks cook the books to avoid showing losses and to artificially inflate profits. Hedge funds are also deeply involved in helping other companies — like Enron and WorldCom — cook their books. According to a study by Bing Liang at the University of Massachusetts, as of 2004, 35 percent of all hedge funds cited no dates for their last audit. Hmmm. Setting up bets that can’t fail: Goldman Sachs had to pay $550 million for not telling its investors about its questionable deal with a hedge fund: The bank allowed the hedge fund to pick the most shaky underlying mortgage securities to be used in creating a synthetic CDO — so that the hedge fund could then turn around and bet against it. It was a winning bet for the hedge fund — it bagged a billion. Unfortunately, the investors lost a billion. Goldman Sachs did pretty well with its deal to pay only the $550 million SEC fine. After all, the company was bailed out by taxpayers to the tune of $12 billion: We paid them 100 cents on the dollar for credit default swap insurance that AIG could not pay. Incredibly, the hedge fund was in the clear. It couldn’t even be charged, since it neither bought nor sold the securities in question. At the moment, there’s no law against encouraging someone else to rig a bet for you — except at the racetrack. These are just a few of the many tiles for our hedge fund mosaic of cheating. As Neil Weinberg and Bernard Condon wrote in Forbes back in 2004 (” The Sleaziest Show On Earth “): Hedge funds exist in a lawless and risky realm, exempt from the rules governing mutual funds, equities and most other investments. Hedge funds aren’t even required to keep audited books — and many don’t. These risky funds often are guilty of inadequate disclosure of costs, overvaluation of holdings to goose reported performance and manager pay, and cozy ties between funds and brokers that often shortchange investors. Of course, none of this proves that any given hedge fund billionaire is a cheat or even ethically challenged. But it does offer an unflattering picture of an industry that is at this very moment trying to milk money from Japan’s roiling markets, once again profiting from the misery of others. There’s got to be a better way. Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009. He is currently working on a new book, How to Earn a Million an HOUR: The Dubious Contribution of Wall Street Billionaires to the American Economy (hopefully to be published in 2011).

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Jason Alderman: Insurance Reality Check

March 3, 2011

When it comes to insurance, many people face the Goldilocks dilemma: Am I buying too much coverage, not enough, or just the right amount? Unfortunately, there’s no easy way to choose; and even when you do settle on coverage levels, your needs will probably change as your living situation evolves — say when you marry, divorce, have a baby or retire. So how do you determine the proper insurance levels while ensuring that you’re not wasting money on unneeded coverage — or worse, leaving yourself and your family exposed? Here are a few considerations for some of the more common insurance types: Health insurance . Everyone needs medical insurance, even the young and healthy. One serious accident or unexpected illness could wipe out your savings and plunge you into debt or even bankruptcy. If you’re covered through your employer, carefully compare all plans offered. The one with the lowest premium may not necessarily be your best option. Consider how other factors add up — things like deductibles, copayments, allowed/disallowed benefits, out-of-network charges (important if your doctor/hospital isn’t in the network) and whether your regular medications are covered under the plans’ drug formularies. Also compare costs to cover you and your children as dependents under your spouse’s plan options, if available. Just make sure the coverage is comparable for the price, and exercise caution if you fear your spouse may be vulnerable to a layoff. If you’re not covered though your employer, you may have other options: If recently laid off, ask about COBRA continuation coverage through your former employer. If under age 26, you may be able to enroll in a parent’s plan, even if married or not living at home, thanks to the Affordable Care Act. (See HealthCare.gov for details.) High-deductible plans provide comprehensive coverage for catastrophic illnesses at much lower premiums than comparable low-deductible plans. An insurance broker can help you find appropriate private coverage — try the National Association of Health Underwriters if you don’t know one. But be aware that even minor preexisting conditions may render you ineligible. Most states provide high-risk insurance for people who don’t qualify for private insurance. It’s costly, but no one can be turned away. Visit the National Association of State Comprehensive Health Insurance Plans ( NASCHIP ) for information. Health Insurance Portability and Accountability Act (HIPAA) insurance may provide coverage if your COBRA has expired and you don’t qualify for private insurance. Eligibility rules are very complicated so consult a knowledgeable insurance broker. Life insurance . This one really depends on your family situation. If you’re single with no dependents, you may get by with minimal or no life insurance — although you may want enough to cover your own funeral expenses. But if your family depends on your income, many experts recommend buying coverage worth at least five to 10 times your annual pay. A few other considerations: If you’re young and healthy you may be able to get a better deal on your own than through your employer’s plan. After your kids are grown you may be able to lower your coverage; although carefully consider your spouse’s retirement needs. Most people don’t need life insurance on their children, since children don’t have earnings to offset; but you might want spousal coverage if you depend on his or her income or would need to pay for child care to keep working full time. If you’re divorced and alimony and/or child support is included in the settlement, buy a life insurance on the person paying it, naming the receiving ex-spouse as beneficiary. SmartMoney.com has an online calculator that can help you determine how much coverage you should have. Automobile insurance . Almost every state requires insurance if you own or drive a car, and for good reason: It protects you financially should you cause an accident or be hit by an uninsured driver. Rates may vary considerably depending on such factors as: coverage and deductible levels for liability, uninsured motorist and collision; work commute; age and driving record; vehicle year and model; number of insured family members; and security features (alarm, airbags, secured parking, etc.). Ruth Stroup, a Farmers Insurance Group agent from Oakland, California sees many of her new clients coming in with ill-fitting policies. She offers a few tips for lowering car insurance costs: Shop around — rates vary widely among carriers. Increasing your deductibles from $250 to $1,000 might lower your premium by 15 to 30 percent. Ask about discounts for safe drivers, age 55+, linked homeowners/renters insurance, etc. With collision and comprehensive coverage, most carriers pay only up to the vehicle’s actual cash value, minus deductibles. Thus, some people with older cars drop this coverage, since repairs often cost more than the car’s worth. But remember: If you drop this coverage and later rent a car, you’ll need to purchase the rental agency’s collision and comprehensive coverage to be fully protected. “My biggest tip on auto insurance is to make sure your liability insurance relates to your net worth and income,” said Stroup. “It only takes one accident to wipe out your savings. Transferring this risk to an insurance company is very inexpensive for good drivers.” Homeowners/Renters insurance . Your home is probably your largest investment, so don’t risk losing it and its contents through an unforeseen disaster, accident or robbery. Renters also need insurance: Your building itself is probably insured by the owner, but your contents are not. You — not your landlord — are responsible for replacing damaged or stolen possessions. A few tips: Review your coverage periodically to adjust for inflation, home improvements, new possessions, change in marital/family status, etc. The market is competitive, so compare your rate with other insurance carriers. Make sure to get “apples to apples” quotes, since policies may have varying provisions. Replacement cost insurance is more expensive than actual cash value insurance but may be worth the difference. For example, the former would replace a stolen 10-year-old TV with a new one, whereas the latter would deduct 10 years’ of depreciation from the settlement. Buy additional coverage on expensive items like jewelry, art and computers, which may have limited coverage. Coverage you may not need . Many people opt to forego these plans: Primary mortgage insurance (PMI). As soon as the outstanding balance on your mortgage drops below 80 percent of your home’s value, federal law allows you to drop this coverage — coverage which protects the lender, not you. Extended warranties. These policies often duplicate coverage already provided in a standard warranty; plus, your credit card may provide its own warranty on purchases. Flight accident insurance. The risk of plane crashes is miniscule, and you may already be covered if you bought the ticket with a credit card — read your policy for rules. Before buying a standalone policy on a boat, RV or other big-ticket item, compare the cost of adding a rider to your homeowner’s insurance policy. Don’t forego critical coverage to save a few bucks: It’s not worth it in the long run. This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation. To participate in a free, online Financial Literacy and Education Summit on April 4, 2011, go to Practical Money Skills .

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Airfare Hikes By Big Airlines Cut In Half

March 1, 2011

DALLAS — The most recent attempt by U.S. airlines to boost fares has been cut in half by pressure from discount carriers. Last week, the big network carriers including United, Continental, Delta and American raised many domestic fares by $20 a round trip. By Monday afternoon, the increase had been cut to $10. Rick Seaney, CEO of website FareCompare.com, said the rollback occurred after low-fare airlines Southwest, JetBlue, AirTran and Frontier began raising fares only half as much as the larger carriers. He said the network airlines then cut their increases in half to avoid charging more than their low-fare competitors. Seaney said U.S. airlines will continue to test price increases in coming weeks to see how much travelers will tolerate. Some analysts believe airlines will drive customers away if they raise prices on leisure fares any higher. The airlines have already attempted five broad-based price increases this year, with most of them sticking. They have also twice imposed bigger increases – up to $60 a round trip – on high-priced tickets favored by business travelers. A third attempt to raise business fares failed.

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Beth Arnold: Letter From Paris: Designing Women

February 28, 2011

“Style is knowing who you are, what you want to say, and not giving a damn.” — Gore Vidal WORDS TO LIVE by–and even more important when one lives in a foreign land. Think of Sofia Coppola’s Lost in Translation . Sooner or later every expatriate feels lost–and must rediscover who she is and express herself in a meaningful way. The women I’m about to present uncovered their entrepreneurial spirits and became designers. They transformed their self-identities–their individual styles–into products that organically fit them as well as their new lives abroad. I’d like to point out that what these designing women did not do was put products on the market just to make a buck, which seems to be the name of the game throughout what has become our throwaway culture. The high road of honesty, beauty, and principles–on every level–which also transcends into true style has been replaced with a mass superhighway of products that manipulate and push people’s buttons. A cheap thrill. Never forget: There is nothing more attractive–nothing more stylish or deeply, spiritually important–than authenticity. I was knocked out by each one of these women for reasons you’ll soon understand. Meet designers … 1) Kasia Dietz Kasia Dietz designs a line of one-of-a-kind, reversible handbags, totes, and clutches that are “made in Paris with love.” Ms. Dietz first began designing the bags a few years ago while she was still working full-time in an advertising career in New York. Mixing her passion for art, design and fashion, she came upon the idea of taking raw canvas and printing it–creating ‘wearable art’–with an added element of reversibility. “I …designed the ‘minimalism’ and ‘nature’ collections,” said Ms. Dietz, “and set up a website with the help of a friend. From there things took off!” Among others, the Japanese loved them, and she did quite well with sales. “During this process,” says Ms. Dietz, “I uncovered my mom’s prints that were collecting dust since the late 1970′s and incorporated them into my designs.” When her mother, Barbara Dietz (originally from Poland), was expecting her, she began to carve wooden blocks with designs of flowers, animals, zodiac signs, and more–and then print T-shirts with them (as well as bedsheets, flared pants, etc.). With the help of Barbara Dietz’s P.R. and marketing skilled husband (and Kasia’s father), the hand-made prints were a big hit with clients like Bloomingdale’s and Bergdorf Goodman. I love the roundness–and familial comfort–in this story, since Ms. Dietz has brought her mother’s art back to life–and uses her family name in memory of her father who passed away almost 20 years ago. Then, in 2007, the tall and slim creator took a break from normal life and traveled the world, always keeping a mindful eye on design, fabrics, colors, and art. “When I moved to Paris in August, 2009, I had the desire (and finally the time) to continue designing, considering I had collected 13 months of inspiration from my travels and was living in what can certainly be considered a fashion capital. But getting started was very tough, not to mention intimidating with my lack of contacts and poor language skills. I spent many afternoons carousing the garment districts of the Sentier and Montmartre looking for fabrics and a manufacturer.” She relaunched her site on December 1st, and sales are steadily growing. “My plans are to continue designing timeless reversible bags and totes, clutches, purses, etc. in fabrics that inspire me as well as printing my own canvas bags as in the latest ‘Paris’ collection. Perhaps a NYC and London collection and more designs incorporating travel.” Me, I’m a bag lady and could have a different one for every occasion. If I had to choose? I’m eyeing the Right Bank bag, since I’m a Right Bank girl. I could also be tempted with one of the number of my arrondissement. Naturally, Ms. Dietz’s love of travel and design are apparent in her bags, which can take a girl anywhere, whether she’s out on the town or planning a weekend away. For Kasia Dietz’s collection, go to www.kasiadietz.com . Select bags will be sold in NYC at Gramercy Project, 240 3rd Avenue, NY 10013. (Montage via Kasia Dietz. Other photos by Beth Arnold.) 2) Michelle Guiliano Necessity is the mother of invention is a phrase that could have been coined for Michelle Guiliano who designs functional gear and technical clothing for babies, so parents–like herself and her husband–who thrive on outdoor activities will feel confident in taking their little ones on outside adventures with them. In fact, Ms. Guiliano’s designs are so on target that her company BolderKidsTM Ltd. was named a Finalist in the 2011 ISPO (International Sports Business Network) BrandNew Awards that were held in Munich last month. Ms. Guiliano and her Danish husband, Jesper Westfall (pictured below), moved to Zurich 10 years ago, and their two boys were born there before they bought a house across the Swiss-French border in Divonne-les-Bains, France. She is an amateur endurance athlete, triathlete, and former rowing coach for Columbia University who became fed up with the inferior outdoor clothing products available to her kids when they were under the age of four. “It was a bit too reminiscent of being an athlete 20 years ago and having to buy a men’s small for any performance fabrics,” said Ms. Guiliano, “which, then, alas didn’t perform for women because without the right fit all is lost. Here we are again with an underserved niche market segment–babies and their outdoor loving parents. Well, I got motivated to build something great to get everyone outdoors with greater safety, comfort, and style.” She founded BolderKids in March, 2009. Hand-sketching the first designs for the Go Farther Performance Infant Carrier Collection, Ms. Guiliano used paper and plastic bags to make the first prototypes. She united the most practical elements of timeless Scandinavian design with Schoeller bluesign approved ecological performance soft shell fabric (made in Switzerland) to create her mittens, boots, and infant carrier. These handy products may have been too late for her own sons, but families with babies and young children can benefit now. Ms. Guiliano was heartened to see the international community recognize that even the youngest outdoor explorers need clever design and quality innovation. And you’ve got to love her brand’s cool slogan: Play Hard. Go Far.© What a great baby present for lovers of the outdoors! By the way, this is a tri-lingual family. Welcome to the new global world! Check out her video that demonstrates the infant carrier system: ISPO BrandNew Awards . For more on BolderKids, go to www.bolderkids.com . Ms. Guiliano’s mountain climbing sons, Peter and Andrew (BolderKids photos via BolderKids) And last though certainly not least… 3) Kirsten Hovenier and Mikée Westerling Crossing the border into Switzerland, one finds a much different style than exists in France. Kirsten Hovenier and Mikée Westerling can tell you all about the Swiss and their clean and fresh design, their wonderful materials and solid craftsmanship. These designing women are using original, up to almost one hundred-year-old Swiss army blankets to create handmade and cozy pillows in different sizes, sturdy footstools, agenda covers, firewood holders, duffle bags, napkin rings, totes, and more to stunning effect. Ms. Hevenier and Ms. Westerling, both from the Netherlands originally, have lived in several countries but moved to Switzerland with their families in August, 2007. They discovered the handsome army blankets, developed a great love for them, and began using them in their own homes. They turned the blankets into cushion covers for the sofa, took the blankets with them for long Swiss summer evenings, and used them for picnics on the banks of Lake Geneva. Everywhere they went, people loved them. Ms. Westerling and Ms. Hevenier have a great story to tell: “In the late 19th century until the early sixties, the Swiss army produced the covers for a war which, fortunately, never happened. The blankets were stored in caves in the Swiss Alps, which served as military depots. The traditional production ceased in the sixties and blankets remained in stock: brand new and unused, but at the same time, pure vintage, a rare combination! And DEKEN discovered this hidden treasure.” I am thinking what lucky girls they were, but it took more than luck to start their company. Ms. Westerling had worked as an interior designer while Ms. Hevenier had been a management consultant. But once their idea for using the Swiss blankets to create casually chic, handsome products for the home was hatched, the whole plan was laid out within two days. Thus DEKEN–Dutch for blanket–was born. These Swiss army blankets are beautifully distinctive: gray-brown with the typical red and white cross and sometimes even a stainless steel coin or seal. Because of reliable Swiss quality, the blankets are indestructible–and marked with the initials of the maker and the year in which the blanket was made. Each blanket is different. I can tell you I’m lusting for some of that gorgeous Deken myself! To see more of the Deken collection, check out www.deken.ch or www.swissarmyblanket.com . Deken is also sold in Camps and Cottages in California. (Photos via DEKEN) In cooperation with KarlenSwiss, Ms. Hevenier and Ms. Westerling have expanded the DEKEN collection with bags, cushions, and footstools made of the Swiss, Antilles and Dutch mailbag. The KarlenSwiss collection will be in stores in the US. * Where there’s a will, there’s a way. And these designing women have found theirs with their own impeccable style. Beth Arnold lives and writes in Paris. To see more of her work, go to www.betharnold.com. She believes in creativity. Crack your world open with it.

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Randall Kempner: Entrepreneurs Are Transforming The Developing World

February 18, 2011

At least once a day at work (and all too often at cocktail parties), I have the opportunity to explain to a newcomer in my field why I think small and growing businesses (SGBs) are key to long-term poverty eradication in developing countries. “If you look at the economic pyramid of a developing country, like the U.S.,” I tell them, “at least 50 percent of jobs and GDP come from small businesses.” Even as I write this, I’m eating Chinese take-out from Mei Wah, the second culinary venture of D.C. restaurateur Larry La. Outside of my office, I hear the vacuum of the nightly cleaning crew, managed by a local company that provides janitorial services to D.C. area businesses. Throughout my day I interact in a variety of ways with small businesses that are the fabric of the U.S. economy. But what does this have to do with poverty in the developing world? It turns out, quite a lot. Because while formal small businesses make up the backbone of “developed” nations, they contribute to only 16 percent of GDP and 18 percent of total employment in the “developing” world. That’s a big difference — and one that we at the Aspen Network of Development Entrepreneurs (ANDE) think can and should be overcome. Small businesses are essential because they create jobs, generate income and take a stake in the communities in which they operate. They also generate goods and services for local communities. When led by the right kind of managers, they grow — and create more jobs, more services and more wealth. And increasingly more often, they tackle social and environmental issues as well. Take, for example, Servals Automation Private Limited in Chennai, India. Servals’ flagship product is a Venus kerosene burner, which reduces kerosene consumption by 30 percent due to an innovative design that uses a single part in place of multiple tubes. Use of the stove reduces harmful emissions and saves the end consumer money. But that’s not all. Servals has also taken the next step to “de-engineer” the production process — breaking it up into a series of small pieces. They then created a manufacturing base in a village 50 miles from Chennai and worked with local self-help groups to train rural women to make the components. The women earn income, without having to leave their families and travel to the city. Servals is a prime example of the many positive impacts that SGBs have in developing countries. However, there are just as many obstacles standing in the way of their success. We believe that entrepreneurs need three key things to succeed: access to talented staff, access to markets and information, and access to capital. The members in our network support SGBs in accessing these resources, and are working together to build up the entrepreneurial ecosystems in over 140 developing countries. In the case of Servals, they received support from Villgro Innovations Foundation which included mentoring and business consulting, as well as help with its R&D, patent processing and fundraising. For the impact investing community, and even the broader investment community — SGBs provide a valuable channel and opportunity. More and more investors are realizing that they can reap financial rewards as well as social and environmental impacts by investing in these types of businesses. Our upcoming Impact Report will share research that demonstrates that in 2010 alone, 31 new funds targeting SGBs were launched. Peter Shrimpton of Heart Capital likens this new interest in SGBs to his experience surfing in his native South Africa. “For a long time it felt to us that we were standing on the beach with our wetsuits on, with our boards waxed up and looking at the ocean and the ocean was flat and people would ask us what we were doing. We would tell them that there was a tidal wave of social transformation coming, but they looked at the ocean and only saw poverty, despair and struggle at the grassroots level. In the past few years we’ve seen this global movement begin to take form, and we are beginning to recognize that we are not all standing on the beach alone with our surfboards, but in fact there is genuinely this global movement of social change and each one of us plays a very key role in terms of bringing about this change.” Which is not to say that we can all sit back and enjoy the ride. There is still much work to be done in this sector to enable us to grow the sector in emerging markets and truly measure the impact of these types of investments. We need to provide more support to entrepreneurs. We need to find more investment dollars. But as both the entrepreneurs behind Mei Wah in D.C. and Servals in India can tell you, a thriving small-business community is key to economic prosperity anywhere.

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Video: Silva Says Banks May Spark `Civil Unrest’ Over Bonuses

February 15, 2011

Feb. 15 (Bloomberg) — Ralph Silva, a strategist at Silva Research Network, comments on bonuses at British banks and Barclays Plc’s annual profit. The U.K.’s third-largest bank reported full-year net income that beat analyst estimates as writedowns shrank and investment-banking profit almost doubled. Silva speaks with Francine Lacqua on Bloomberg Television’s “On The Move.”

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Leading Cloud, Voice and Data Company ABi Hires Top Sales Executive Chris Honigman

February 7, 2011

Honigman Will Manage ABi’s World-Class Sales Teams Across Its Highly Competitive and Rapidly Evolving High Tech Network Specialties

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Diane Dulken: How Long Should Electronics Last? My Calculator, the E-Hero

February 4, 2011

My guest room closet is filled with dead electronics waiting to be recycled, but I marvel at my nearly 30-year-old calculator. It still works, and so do the original batteries. I have yet to find an expert who can explain how this is possible, but every month when I balance my checkbook (do other people still do this?) my calculator gives me the correct answers. My calculator is so old it’s listed on a website called Vintage Calculators. The original AA batteries are so old they are Made in Japan. Yet, they still work. I’ve become emotionally attached to my Sharp EL-505 ELSI Mate. While shiny and new is nice, I hope I’m not alone in appreciating craftsmanship and durability — in electronics too. I bought my first Apple laptop six years ago because a colleague was so happy with his experience, he raved and raved until I jumped from my PC ship. I know this Apple evangelism is not unusual and I’m not holding Apple up as perfect, and neither is Greenpeace’s Guide to Greener Electronics. But it’s worth noting that a company can drive new sales not by planned obsolescence (ensuring that products will have a short life span so customers must buy new ones), but because superior craftsmanship and durability are their own sales tools and have the power to create new customers. “People used to take real pride in longevity,” a man named Jim Puckett told me. “‘Wow, this Rolex is still going strong after 30 years.’ That was a source of pride. Now people are looking for the latest and greatest. The incentive is not there (for products) to last a long time.” This is important to Jim, because as head of the Basel Action Network, he works every day with the dark side of electronics. As B.A.N. and CBS’ 60 Minutes showed in a heartbreaking investigation, our old computers, cell phones and other e-equipment contain many hazardous materials that often end up shipped to countries with weak controls. There, they poison the poor and vulnerable who “recycle” them. There’s a world of reasons for industry and customers to seek new business models and better stewardship over e-production, e-gadgets and e-waste. In the Congo, one of the world’s most brutal wars is financed by the mining of tin, tantalum (coltan), tungsten and gold, some of the rare minerals that power our iPods, cell phones, laptops and other devices. Then there’s the increasing concern over supply. The New York Times recently reported that China is tightening controls on the export of the rare earth minerals that are essential ingredients in everything from smart phones to military applications and new green technology, including electric cars and solar panels. And that control has the potential to disrupt markets. Or as Tech Radar asked: Yes, these ingredients are hazardous to mine and dangerous to manufacture, “But what if they run out?” Puckett told me of the need to develop new business models to improve product durability and stewardship, and of the need for companies to produce products with less hazardous materials as well as to properly recycling them at the end of their life span. Creating newer, faster and cooler electronics is still the focus over creating products that last. But I’ve found small signs in my personal life of the durability of some e-products, and of manufacturers who consider some of the mistakes that I and other consumers make. My cell phone lasted for years, even though I dropped it fairly often. On asphalt sidewalks as well as my living room floor. I appreciated that it was built for my “real world conditions.” The flip phone finally died when I left it in a jacket pocket and did the laundry. Both the wash and dry cycles. My Apple laptop endured years of daily and heavy use for entertainment and work, for music, movies and spreadsheets. I never spilled coffee or anything else on it. But I once got tangled in the power cord and knocked the laptop off the table. It survived. It would have lasted longer than five years if I hadn’t, on one pre-coffee morning, lost my grip walking down the stairs. Then there’s my calculator. I will miss it when the magic eventually fades and the batteries finally fail. After 27 years or so, every time I turn it on, I wonder “How long can this last?” Only recently have I had the flicker of a new idea: Will it outlast me? At midlife, I figure I have a possible 30 or 40 years ahead of me. And my Sharp EL-505 — how many years does it have? How durable can we make our machines?

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SpotXchange Adds Former Walt Disney/ABC Veteran to Board of Directors

February 1, 2011

Bernard Gershon Contributes Decades of Experience to Growing Video Ad Network

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Eboo Patel: Davos: The Global Village and the Local Community

January 26, 2011

The World Economic Forum — like the Clinton Global Initiative, the TED Conference, the Aspen Ideas Festival and other such global confabs — is a carnival of ideas, opportunities, dreams and confessions. It’s less manic than CGI, not quite as laid back as TED, but definitely part of the same family. And it has the added distinction of being, as far as I can tell at least, the Mothership — the event that launched the pattern in which the global meritocratic elite would gather together face-to-face to discuss a wide-ranging, even eclectic agenda. Clinton very definitely shaped his conference to be Davos-like (with the added layer of the attendees making “commitments” to do good works in the world), and while TED began life with a smaller and quirkier dream, it has morphed under Chris Anderson’s leadership to rival (in talent and ideas at least) any other gathering on the planet. Other major conferences tend to gather a narrower range of people to talk about a single subject (the World Health Organization) or have become so unwieldy as to be impossible to navigate (most UN gatherings). The World Economic Forum and its close cousins are different, and professor Klaus Schwab, the founder, knows it. In his introductory session for Davos newbies, he explained the big idea and how it came about. As a Management Professor, he advanced something called “stakeholder theory” – the idea that companies are not just responsible to their shareholders but to a broader range of stakeholders. If such stakeholders gathered to discuss issues, shape a common agenda and find resonances, not only would the company be stronger, but society would be better. Schwab wrote a book about the idea in 1970, and then decided that he wanted to build a platform to try putting it into practice. The first World Economic Forum took place in 1971. The result, 40 years later – a conference that CEOs, presidents and prime ministers feel like they have to come to, and that some happily pay literally hundreds of thousands of dollars to attend – is nothing short of astonishing. The people who come to the World Economic Forum are segmented into different communities – government leaders, media leaders, strategic partners (which are basically Fortune 500 companies, and are the ones who pay the big bucks to attend). Over time, Schwab has added other key communities — technology pioneers, young global leaders, social entrepreneurs, global growth companies (which are going to be the future Fortune 500 and are largely in China). The list of communities shows that he’s a man who is on the cutting edge without being faddish. All in all, it’s a reasonable representation of many of the groups who make things happen at the global level in our world. The more I thought about it, the more I realize that the core idea — and this is not a criticism, simply an observation — is quite old and simple: a healthy social ecology gathers its various segments every so often to bat around ideas, address recurring problems and shape a to-do list for the year or ten ahead. It’s old-school community development really, something that good alderman do in their neighborhoods and good mayors do in their cities: gather the shopkeepers and real estate developers and homeowners and cops and kids and teachers and say, “So what’s this neighborhood going to be about next year?” The fact that Professor Schwab came out of the management world simply means that his scope was global and his network was CEOs. Comparing Davos to a local community development meeting will inevitably bring up local/global issues. The image is so crystal clear it begs to be said out loud. Isn’t it quaint that a slice of the world’s ecology gathers in a Swiss hamlet to engage face-to-face. It makes that global village metaphor feel so, well, real. I wish. In a smart Atlantic piece, Chrystia Freeland explains the rub: “Today’s global super-rich are increasingly a nation unto themselves.” They move their companies where their customers are (increasingly Asia), they can’t find their way around their hometowns because they are so infrequently at home. If lifting people into the middle class in India with jobs and goods means someone has to fall out of the middle class in Indiana, well, that’s globalization. One of the reasons for the increase in the number of World Economic Forum-type events is because the group that gathers here likes to be together. The down-low on Davos is that the really exciting events – the soirees, the nightcaps, the endless-discussion dinners — happen after 10 p.m., like in a college dorm. Leading up to the World Economic Forum, I got dozens of e-mails advertising various late-night social events, and almost nothing touting the formal agenda during the day. These people like to socialize with each other. This is their community. Look, nobody expects the CEO of Citi to walk to work, become president of the PTA and support the neighborhood Little League team. But there was a time that great companies were proud of the cities they were based in. That meant something for jobs, neighborhoods, art museums, local charities. Are those days numbered? Interesting that a stakeholder-driven, community-development-like approach to shaping an agenda for a globalized world could hold such dangerous consequences for local communities. (This piece is re-posted from the Washington Post .)

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Scott Gerber: What’s The Best Way To Increase The Size Of Your Network?

January 24, 2011

Q: What is the best way to increase the size of my network? How can I get myself and my brand in front of people? –Christina Montgomery, FL The following answers are provided by the Young Entrepreneur Council , an advocacy group founded by serial entrepreneur Scott Gerber that works to take action against youth unemployment by teaching young people how to build successful companies. The council’s members include Generation Y entrepreneurs and experts in a variety of fields. A: Attend Events First, figure out what kind of network you want to build: do you want to meet other entrepreneurs? Marketing thought leaders? Fellow kayak enthusiasts? Then, go to your college alumni e-mail list or even Craigslist, and see whether there are any meet ups in your area. If there are none, think about starting your own group and posting to your college list/Craigslist. Get out there and mingle! –Eric Bahn ( @beatthegmat ), founder of beat the gmat A: Go Out There Make sure that you have business cards with your logo on them with you at all times. Wear a t-shirt with the logo on it. It’s easy and when someone glances at the shirt it opens the door for you to tell them about it. Being out and about you may find customers, future contacts, employees and who knows maybe even someone who might want to work with you. People get to see the brand face to face. –Ashley Bodi ( @businessbeware ), co-founder of Business Beware A: Tap Social Media For Personal Branding The best way to meet new cool people is through a personal introduction from someone already in your network. Ask someone you know if they know someone who you should meet. Most likely they do and would be happy to do an e-mail intro. –Elizabeth Saunders ( @RealLifeE ), founder of Real Life E A: Be A Connector Networking is hard work, not because the interactions are actually difficult, but because it must happen on top of all the other daily tasks your business requires. This makes it easy to stay holed up in your office. I am constantly amazed at how quickly and easily those extra meetings pay off, so be sure to time take for the early breakfast meeting or meet someone for coffee in the afternoon. — Anderson Schoenrock ( @ScanDigital ), co-founder of ScanDigital A: Become An Industry Expert The best way to increase the size of your network is to be active both online and offline in the same places your target audience is active. If your audience is on Twitter, you should be on Twitter. If you audience also attends local Meetups, you should attend local Meetups. The first step is to be there and listen. The second step is to engage. –Heather Huhman ( @heatherhuhman ), founder of Come Recommended A: Leave Your Comfort Zone Sometimes meeting new people is as easy as shooting them an email and inviting them to lunch. When you email a prospective lunchtime consultant, be sure to clearly identify who you are, offer concrete reasons why you are worth the person’s time, list the specific topics you would like to discuss, and throw out at least three potential dates, times and locations. –Scott Gerber ( @askgerber ), founder of Sizzle It!

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Brett Alston of Revel Consulting Named Vice President of Northwest Next Board of Directors

January 19, 2011

Alston Helps Lead Network of the Puget Sound Business Journal “40 Under 40″ Honorees

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Brett Alston of Revel Consulting Named Vice President of Northwest Next Board of Directors

January 19, 2011

Alston Helps Lead Network of the Puget Sound Business Journal “40 Under 40″ Honorees

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WATCH: Suze Orman Gives HuffPost Reader Lending Advice

January 16, 2011

In the premiere episode of ” Ask Oprah’s All Stars ,” an OWN: Oprah Winfrey Network original program featuring Suze Orman, Dr. Phil, and Dr. Mehmet Oz on a panel answering viewers’ questions, Orman took an inquiry from one of HuffPost’s very own readers. The reader wrote in asking if she had a right to be angry at her twin sister, who borrowed $4,000 and has yet to pay it back. Despite losing her job and falling upon hard economic times, the reader explained, her sister still managed to get a manicure and take her children on vacation. “You have a right to be angry at her,” Orman responded. “But i have to tell you, you should actually in be, in my opinion, more angry at yourself. Just don’t go telling me this is the first time you’ve seen your sister be irresponsible with money.” Orman continued, “When you give someone money, you’re giving it to them…don’t think you’re lending it to them.” Catch ” Ask Oprah’s All Stars ” Sundays at 8 PM Sundays on OWN. WATCH:

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Network 1 Financial Group Inc., Announces Appointment of New President and CEO

January 11, 2011

RED BANK, NJ–(Marketwire – January 11, 2011) – Network 1 Financial Holdings, Inc. ( OTCBB : NTFL ), today announced that the Board of Directors has elected Damon D. Testaverde, the President and CEO.

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