networks

Spending At Mobile Companies Grinds Down

by Reuters on January 13, 2012

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By Leila Abboud and Tarmo Virki PARIS/HELSINKI (Reuters) – Telecom operators globally are expected to cut spending on their networks this year, hitting equipment makers that were only just beginning to recover from intense price wars and the last economic downturn. European operators are likely to be more cautious as recession looms and consumers are less willing to splash out on high-end smartphones, while carriers in China and the United States slow their frenetic pace of mobile investments. The shift will pressure long-struggling mid-sized gear makers like Alcatel-Lucent SA and Nokia Siemens Networks, which are more vulnerable than market leader Ericsson or low-cost Chinese player Huawei. Some smaller equipment vendors such as Juniper Networks Inc and Acme Packet Inc have already issued profit warnings in recent weeks, blaming slower spending at big U.S. carriers like Verizon Communications Inc and AT&T. Alcatel-Lucent also had to scale back its margin and cash flow targets for 2011, and Nokia Siemens Networks announced mass layoffs and restructuring. Behind the warnings is a economic slowdown that began in the second half of last year and has already begun weighing on telecom gear makers’ shares. “While it won’t be as bad as 2009 when operators drastically cut their spending, we expect only very weak growth this year and continued pressure on prices,” said Cedric Pointier, a portfolio manager at Natixis Asset Management, which holds Alcatel-Lucent, Nokia and Ericsson shares in its funds. “In tough economic times, telecom operators choose between seeking growth and protecting cash flows, and they usually just adjust their capital expenditures to maintain cash flow.” Telecom network investments tend to follow economic cycles, as operators hold back spending when their customers become more price conscious. HEAVY INVESTMENT In recent years, however, underlying demand for new equipment has grown as networks strain under a rising data load brought on by Internet-connected smartphones and tablets. Operators especially in the United States have invested heavily in mobile networks to keep up, increasing spending BYaround 10 percent last year, but this year analysts expect many to be more prudent. Even optimistic observers see only slight growth of between 3 and 4 percent in the market for telecom network equipment overall, and most expect a steep fall in mobile investments. “Wireless is very weak and will be for the first half,” said Earl Lum, chief of research firm EJL Wireless. Investment bank Nomura predicts that operators’ capital expenditures on mobile networks will shrink 1 percent this year, while fixed drops 5 percent. This is a marked slowdown from last year when operators, led by the United States and Asia, upped their capex on mobile by 7 percent and on fixed by 4 percent, according to Nomura. Credit Suisse expects wireless network investments to grow only 1 percent in 2012, following 10 percent growth in 2011. “Although we retain our view that capacity utilization on mobile networks continues to remain high, which will drive long-term revenue growth, any potential recovery is unlikely before 2013,” wrote Credit Suisse analysts. PRICE BATTLE Some analysts say the slowdown, especially in China, could spark another price battle globally, hurting margins at Alcatel-Lucent, Nokia Siemens and Ericsson. “I expect to see aggressive pricing by the Chinese firms to make up the shortfall in their home market,” said EJL’s Lum. From 2007 to 2009, the industry was gripped by a price war as China’s Huawei and ZTE slashed prices to gain a foothold in overseas markets, just as Alcatel-Lucent and NSN were distracted by complicated mergers and rivals capitalized to take share. Analysts will be watching to see how the Chinese position themselves in bidding for modernization projects at European carriers. In such projects, operators rip out old wireless gear and replace it with new kit. Nokia Siemens could be particularly vulnerable to such projects since its large footprint in European 3G networks could be attacked by Chinese players or even Ericsson. Investors will get a sense of what’s ahead in late January, when major operators and gear makers give 2012 forecasts. Verizon and Ericsson report earnings on January 25, followed by AT&T and Nokia Siemens the next day. Ericsson is expected to report fourth-quarter sales up 7 percent to 67.2 billion crowns ($9.7 billion), while gross margin is seen slipping to 34.1 percent from 34.7 percent a year earlier, according to Thomson Reuters I/B/E/S. Ericsson benefits from its larger scale and geographical reach, strong balance sheet and leadership in the United States, where margins are fatter because of the absence of Chinese vendors. On February 10, Alcatel-Lucent, which is struggling to complete a painful turnaround, is expected to report fourth-quarter sales down 11 percent to 4.3 billion euros ($5.5 billion), the data showed. ($1 = 6.9311 Swedish crowns) ($1 = 0.7814 euros) (Additional reporting by Simon Johnson in Stockholm) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Spending At Mobile Companies Grinds Down

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Huffington Post…

FBI Director Robert Mueller on Wednesday denied the bureau had ever sought information from the mobile-software company Carrier IQ, but said he could not rule out the possibility it obtained data collected by the controversial software through requests from wireless carriers. At a hearing before the Senate Judiciary Committee, Mueller said the FBI had “neither sought nor obtained any information from Carrier IQ in any one of our investigations.” But when pressed by Sen. Al Franken (D-Minn.) about whether the FBI acquired information from wireless carriers that use Carrier IQ to collect customer data, Mueller said it was possible. “I do not know in the information we seek from wireless carriers or what have you – and I’m not talking about Carrier IQ, I’m talking about wireless carriers – we may obtain information that in some way Carrier IQ may have been involved with,” Mueller said. Last month, security researcher Trevor Eckhart sparked controversy over the potential privacy risks of Carrier IQ by posting a video claiming the software logs every text message, Google search and phone number typed on a wide variety of smartphones and reports them to the mobile phone carrier. Carrier IQ is installed on about 150 million smartphones. Mueller’s comments came two days after Michael Morisy, a blogger for MuckRock News, posted an FBI response to his Freedom of Information Act request for “manuals, documents or other written guidance used to access or analyze data gathered by programs developed or deployed by Carrier IQ.” The FBI’s response suggested it had documents on the software, but that they were exempt from disclosure. “What is still unclear is whether the FBI used Carrier IQ’s software in its own investigations, whether it is currently investigating Carrier IQ, or whether it is some combination of both – not unlikely given the recent uproar over the practice coupled with the U.S. intelligence communities reliance on third-party vendors,” Morisy wrote. “The response would seem to indicate at least the former, since the request was specifically for documents related directly to accessing and analyzing Carrier IQ data.” On Wednesday, Mueller told lawmakers there was “some confusion” over the meaning behind the FBI’s FOIA response. In a statement to reporters on Tuesday, Carrier IQ denied having given data to the FBI. “Carrier IQ has never provided any data to the FBI,” the statement said. “If approached by a law enforcement agency, we would refer them to the network operators because the diagnostic data collected belongs to them and not Carrier IQ.” Mueller told lawmakers Wednesday that the FBI seeks customer data from wireless carriers through Title III of the Foreign Intelligence Surveillance Act. This week, Carrier IQ CEO Larry Lenhart and VP of Marketing Andrew Coward met with members of Franken’s staff. Franken sent a letter to the company asking for an explanation of what the software records, whether it transmits data to a third party, and whether the data presents any security or privacy risks. Franken has said the software’s capabilities may violate federal laws. In a 19-page statement released Monday , Carrier IQ acknowledged its software contained “an unintended bug” that “unintentionally” captured and transmitted encoded SMS messages to its carrier customers, including wireless companies — Sprint, T-Mobile and AT&T. The company said the bug occurred only in “unique circumstances,” like when a user receives a text message during a call, though the messages are “not human readable.” The company denied that its software captures or forwards to wireless carriers the content of multi-media messages (MMS), emails, photos, web pages, audio or video.’ To see which mobile carriers and manufacturers have claimed or denied affiliation with Carrier IQ, take a look at our slideshow (below), which includes statements from Apple, Google, Microsoft, Verizon, AT&T, HTC, Nokia, RIM and others. UPDATE: 3:56pm –Carrier IQ officials met this week with federal regulators to discuss the company’s software, according to a company spokeswoman. CEO Larry Lenhart and VP of Marketing Andrew Coward met with members of the Federal Trade Commission and Federal Communications Commission. “We sought the meetings with FCC and FTC in the interest of transparency and full disclosure, and to answer their questions,” Carrier IQ spokeswoman Mira Woods said.

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FBI Director Can’t Rule Out Data Obtained by Carrier IQ

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Some News Guests Are Paid To Promote Products On Air

December 7, 2011

Be wary the next time you turn your TV on: that news segment about the latest gadget might actually be a paid product placement. News shows are studded with guest experts doling out advice on what products to buy. Some of those experts are actually getting paid by companies to promote their products, according to the Washington Post. The paper reported on the practice — also known as “payola” or “plugola” — on Tuesday. One such expert is Alison Rhodes, who has done segments for local news and even “Today.” Rhodes bills herself as the “Safety Mom,” and has made a name for herself as a safety expert for parents. As a result, she has made many media appearances, including on the “Today” show. However, the Post uncovered that Rhodes was paid by several companies to promote their products during her “Today” appearance. ADT then uploaded a video of Rhodes’ “Today” appearance to its own YouTube account (see below), completing the cycle of promotion. NBC said it was unaware that Rhodes was affiliated with the companies she was hawking for. Indeed, the deceptive arrangement generally flies under the radar. It is illegal under federal law, but the Post reports that it rarely attracts the attention of the FCC. There have been other offenders in the past. In 2005, the New York Times reported that government agencies were airing their own reports as television news segments. The segments, created during the Bush administration, promoted federal polices and utilized reporters employed by the government. See Alison Rhodes on “Today” in the clip below. WATCH:

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Americans Favor Protesters Over Wall Street, Washington

November 7, 2011

LOWELL, Mass. — A new national poll released Sunday shows neither Wall Street nor Occupy Wall Street conjuring up strong favorable impressions among the American public. But protesters fared better than their wealthy corporate targets in the poll conducted for the University of Massachusetts at Lowell and the Boston Herald. Among 1,005 adults surveyed, 35 percent had a favorable impression of the protest movement that began in New York City and gained support worldwide. Only 16 percent could say the same for Wall Street and large corporations. Twenty-nine percent had a favorable impression of the tea party movement and 21 percent of government in Washington. Knowledge Networks conducted the survey, asking participants their impressions of the four groups. Wall Street and large corporations tied with Washington government in unpopularity, with 71 percent of those polled saying they had an unfavorable impression of big business and Washington. The tea party got a 50 percent unfavorable response and Occupy Wall Street 40 percent. The group surveyed was selected randomly and the poll conducted online from Oct. 28 through Nov. 1. It had a margin of error of 3.8 percentage points, meaning the results could go up or down by that amount. Last month, an Associated Press-GfK poll showed some 37 percent supported the Wall Street protesters. Fifty-eight percent said they were furious about America’s politics, up from 49 percent in January.

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Regulators Ask Public Companies For First Time To Disclose Cyber Attacks

October 14, 2011

BOSTON/WASHINGTON (Jim Finkle and Sarah N. Lynch) – U.S. securities regulators formally asked public companies for the first time to disclose cyber attacks against them, following a rash of high-profile Internet crimes. The Securities and Exchange Commission issued guidelines on Thursday that laid out the kind of information companies should disclose, such as cyber events that could lead to financial losses. Senator John Rockefeller had asked the SEC to issue guidelines amid concern that it was becoming hard for investors to assess security risks if companies failed to mention data breaches in their public filings. “Intellectual property worth billions of dollars has been stolen by cyber criminals, and investors have been kept completely in the dark. This guidance changes everything,” Rockefeller said in a statement. “It will allow the market to evaluate companies in part based on their ability to keep their networks secure. We want an informed market and informed consumers, and this is how we do it,” Rockefeller said in a statement. There is a growing sense of urgency about cyber security following breaches at Google Inc, Lockheed Martin Corp, the Pentagon’s No. 1 supplier, Citigroup, the International Monetary Fund and others. Tom Kellermann, chief technology officer of security firm AirPatrol Corp, said that the SEC guidance tells companies to report cyber attacks and disclose steps to remediate problems. “They must also incorporate cyber events into their material risk reports,” said Kellermann, who has advised U.S. President Obama on cyber policy. The SEC gets into specifics, telling companies what type of data they might need to provide investors. “Examples of estimates that may be affected by cyber incidents include estimates of warranty liability, allowances for product returns, capitalized software costs, inventory, litigation, and deferred revenue,” it says. (The document can be accessed on the SEC’s website: www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm ) A report out earlier this month found that U.S. banks are losing ground in the battle to combat credit and debit card fraud because they balk at the expense of higher security. Globally, however, security is improving in the payment industry, according to data from The Nilson Report, a California trade publication. There is some hope of U.S. legislation to address the problem, although the House of Representatives appears more interested in tackling it piecemeal while the Senate is opting for a more far-reaching approach. Most of the concern has been focused on critical facilities like nuclear power, electricity, chemical and water treatment plants. (Reporting by Sarah N. Lynch in Washington and Jim Finkle in Boston; Editing by Gary Hill, Bob Burgdorfer and Carol Bishopric) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Fox News, Google To Hold Presidential Debate

September 1, 2011

Fox News and Google are expected to announce plans on Thursday to host a Republican presidential debate in Florida on September 22, The Huffington Post has learned. The forum will be moderated by network anchor Bret Baier. Fox News Sunday host Chris Wallace and anchor Megyn Kelly will be panelists at the event. Fox News has presented two debates already this election season. The first took place in South Carolina in May and the second was held in Iowa last month. The upcoming Fox News-Google debate is expected to incorporate an interactive element. HuffPost has learned that viewers will be able to participate by submitting questions through YouTube and Fox News. They will also have the ability to vote on questions they would like to see the candidates answer. UPDATE (11:33 a.m. ET): Below, full text of the debate announcement released on Thursday. FOX News and Google announced today that they will present a presidential debate on September 22nd from 9:00-11:00 PM/ET in Orlando, Florida, in conjunction with the Republican Party of Florida. In making the joint announcement, Michael Clemente, Senior Vice President of News Editorial, FOX News, said, “For access to news and information, it’s hard to imagine two more powerful brands than FOX News and Google, which is why we are proud to partner with a leader in global technology. The strength and reach of both should ensure a thorough and engaging debate that anyone can participate in.” Moderated by Special Report anchor Bret Baier with panelists Chris Wallace, host of FOX News Sunday and Megyn Kelly, anchor of America Live, the debate will incorporate video and text questions submitted by the public on YouTube.com/FOXNews. Viewers will be able to vote on the questions they want the candidates to answer, and FOX News will use the votes to help choose which questions are posed to the candidates. In addition, FOX News and Google will present public data and Google search trends on air to help provide context to the questions and inform the debate throughout the evening. Steve Grove, Head of News and Politics for YouTube, said, “We’re delighted to give voters across the country this opportunity to ask their questions of the GOP candidates. Through this joint debate with FOX News we hope to bring more voices into the arena to create an informed and lively dialogue about the future of our country.” The FOX News/Google debate will be presented live from the Orange County Convention Center on FOX News Channel (FNC) and live-streamed on YouTube.com/FOXNews, in addition to FOX News Radio, FOX News Mobile, and FOXNews.com. About FOX News FOX News Channel (FNC) is a 24-hour all-encompassing news service dedicated to delivering breaking news as well as political and business news. A top five cable network, FNC has been the most watched news channel in the country for nearly ten years and according to Public Policy Polling, is the most trusted television news source in the country. Owned by News Corp., FNC is available in more than 90 million homes and dominates the cable news landscape, routinely notching the top ten programs in the genre. About Google Inc. Google’s innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google’s targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, visit www.google.com.

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Andy Lopata: Did you Build your Network by Design or Default?

August 1, 2011

When you built your network, how did you decide to whom you should connect and why? That may seem like a strange question to many. After all, how many of us set out deliberately to develop a specific network? For most people they evolve naturally, don’t they? I attended an excellent inaugural meeting of the Like Minds Business Book Club at The Hospital Club in London recently. The speaker was Scott Belsky, author of Making Ideas Happen. During his talk Scott referred to the community as a key ingredient in an effective creative process that sees ideas turned into reality. One of the challenges facing many creative people, he said, is disorganised networks. “Creatives are lazy”, said Scott. “They go with the networks around them.” Is that just a flaw in creative people, or is it something we all do? Indeed, is it really a flaw? The timing of Scott’s comment could not have been more pertinent. On the way to the event I had been reading an article in the latest edition of Harvard Business Review. In the article, A Smarter Way to Network,by Rob Cross and Robert Thomas, the authors argue that the most successful executives have a diverse but select network, rather than having broad or high level networks. Cross and Thomas point to the value of networks that are made up of a cross-section of contacts who each challenge and/or support the executives in different ways. Some will come from within their own company or industry, others from other fields entirely. They point to six areas in which a network should offer support. These are: 1 – Offer new information or expertise 2 – Mentors and influencers 3 – Feedback and challenging – pushing you to be better 4 – Friendship and personal support 5 – Provide a sense of value or worth 6 – Promote work/life balance. If we are building our networks by chance (or default) rather than by design, how can we be sure that we are achieving the right balance of each area of support? Cross and Thomas believe that an effective network contains a small set of core contacts. They state that effective core networks typically range in size from 12 to 18 people. Many of us would call this our ‘inner circle’ but would have built that inner circle based on the depth of relationships rather than by design based on our needs. How well does your inner circle reflect the 6 needs outlined by Cross and Thomas above? During the presentation, one attendee asked Scott Belsky whether, during a career transition, she should seek support from her existing network or look to make new contacts. Cross and Thomas’s article would suggest to me that she should look first to her existing network for where she can draw on the support outlined above, before then expanding her connections to fill in the gaps. In fact, the Harvard Business Review article goes on to suggest the four steps to building a better network. 1 – Analyse – look at your existing network and ask yourself what you get out of interacting with them 2 – De-layer – make some hard decisions to back away from redundant and energy-sapping relationships 3 – Diversify – build your network out with the right kind of people 4 – Capitalise – Make sure you’re using your contacts as effectively as you can. This approach may seem cold and impersonal to many. In fact, when I tweeted the question “If you wanted to build your network, how would you decide to whom you should connect?”, some of the responses focused on finding people you could help, rather than vice versa. It is healthy to take an outward-facing networking approach and seek to help others first. But when looking to your own business or career goals, surely it is imperative that you take a step back and ask whether the network you have built is designed to help you reach them as quickly and effortlessly as possible? Not one of the responses to my tweet mentioned building a network based on achieving goals. Maybe it’s not just creatives. Maybe we all “go with the networks around us”. What do you think? Should we just let networks evolve or should we be more focused on designing the network that best fits our needs? If you do feel that we should design a powerful network, do you agree with the six areas of support recommended by Cross and Thomas, or how would you decide to whom you should connect and why?

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The Most Profitable Ad Space On The Web?

June 20, 2011

By Alexei Oreskovic SAN FRANCISCO (Reuters) – Facebook’s U.S. advertising revenue will total roughly $2.2 billion in 2011, displacing Yahoo Inc to collect the biggest slice of online display advertising dollars, according to a new study. Facebook’s U.S. advertising revenue will give it a 17.7 percent share of the market for graphical display ads that appear on websites, according to a report released on Monday by research firm eMarketer. Last year Facebook had 12.2 percent share of the U.S. market. The figures underscore the growing clout of Facebook, the world’s No.1 Internet social network. It has seen its valuation soar to roughly $80 billion in recent transactions for its shares on the private markets and some investors anticipate it could have an initial public offering next year. While Facebook has grabbed the top ranking, eMarketer analyst David Hallerman said the overall market for display ads, which include banner ads, video ads and Web page sponsorships, is growing robustly enough that it is benefiting numerous companies. “It’s not a zero sum game,” said Hallerman, noting that the display advertising market is experiencing rapid growth as both big international brands and small, local businesses increasingly turn to the Web to reach consumers. Internet companies such as Yahoo, Google Inc and Microsoft Corp are competing for those advertising budgets, while new players such as online coupon company Groupon are offering marketers alternatives to traditional online display ads. Web portal Yahoo will grow its online display business in the U.S. by 13.6 percent this year, eMarketer said. But that will lag the overall U.S. display market’s growth rate of 24.5 percent. Google’s revenue from U.S. display ads will total $1.15 billion in 2011, up 34.4 percent year-over-year. eMarketer’s report looks at companies’ net revenue, which does not include money the companies share with Web publisher partners. Google, which generates the vast majority of its revenue from small, often text-only ads that appear alongside its search results, is stepping up efforts to grow its display advertising business. Last week the company announced the acquisition of AdMeld, which makes it easier for Web publishers to sell display ads on their sites. In 2012, eMarketer projected that Yahoo and Google will be neck-and-neck as the No.2 and No.3 players in the U.S. display market, with the companies having 12.5 percent share and 12.3 percent, respectively. (Reporting by Alexei Oreskovic; Editing by Bernard Orr) Copyright 2011 Thomson Reuters. Click for Restrictions

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Alan L. Kramer: And Sitting at the Next Table… Social Networking in a Global World

June 18, 2011

My wife and I were having dinner in a small Café in Paris, when we met Jean Claude at the next table. He was having dinner with his wife and daughter on her 25th birthday and so began a business/social friendship that continues today. That was 10 years ago, when he owned one of the largest advertising firms in Paris specializing in recruitment advertising. My wife acted as interpreter, as Jean Claude’s English and my French were both weak. On a subsequent visit to Paris, Jean Claude gave me a tour of his operation and could clearly see the differences between NY and Paris, in the depth and breadth of services his organization offered. It was not just posting a help wanted advertisement, but a full-flung advertising firm to market the organization to prospective candidates. And so years have passed, he sold his business, and I am endeavoring to complete another international search for my firm, Kramer Executive Resources. This past year, in New York, we had a search for a CFO for an international auction firm, and the requirements included someone who spoke French fluently. We used all of our traditional methods to identify such a candidate, including French/American business groups on Linkedin. Once joining these groups and letting the members know about this opportunity, doors flung open and we could have served steak frites 24/7. So, now I am in Paris, conducting a search for another CFO, but this time to be located in France. I called Jean Claude and others in our global network to learn about searching in Paris how important Linkedin or similar social networks work, in this regard. It became quite clear to me that to be most effective in this search, I had to partner with a local executive search firm, who had the candidate database, and the knowledge of all of the social networks used. The learning curve, for us, would have been too great for a single search. What truly amazed me in working closely on this search was how quickly word got out about this search through these networks. Yes, of course, we contacted many people directly, but the networks filled in making this search rich with quality people, that really impressed the client. With new Apps, new databases, new social networks being developed, etc., none of these replace the face-to-face meetings where the experienced search professional makes the world seem like “it’s a small world, after all.”

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Does Google Finally Have A Winner?

May 26, 2011

Google’s latest product marks another attempt by the Internet giant to launch a new business that will help it move beyond its highly profitable (and decade-old) search engine. So does Google finally have a winner? Or is it repeating the same mistakes that doomed its other ventures? The new service, Google Wallet , uses near-field communication technology to enable users to pay for purchases, redeem coupons and track loyalty points by swiping their smartphones over readers at registers. Google will not take a cut of transaction fees. Rather, the company aims to leverage the information it collects about what consumers buy, where they purchase and how frequently in order to sell ads, coupons and loyal reward programs to local retailers via its Google Offers service. In essence, Google aims to apply its success with online advertising to offline activity in the physical world. Google Wallet is just the latest in the company’s long line of ambitious product launches, which have spanned everything from social networking to e-commerce. Many of these efforts have been ignominious flops: Google Buzz fizzled and led to a settlement with the FTC over “deceptive” privacy practices; Google Wave, the “email killer,” proved far too complex for most users; Google TV has failed to make inroads into the living room; and Google Music lacks the simplicity and record label deals to compete with Apple’s iTunes. Time and again, Google has unveiled products that seem far better suited to Silicon Valley labs than to the marketplace, announcing half-baked, still-in-beta services that appeal to early adopters but lack the ease-of-use of other devices and products. Google Wallet could prove to be no different, though much will depend on Google’s success in wooing not only industry stakeholders, but also retailers and shoppers, to trade plastic for phones. With Google Wallet , Google seems to have learned some lessons from past missteps and has rallied others in the payment industry to join in its mission to make wallets obsolete. Whereas Google Music launched without the support of music studios, Google Wallet had the blessing of Citibank, MasterCard, First Data, and Sprint, each giants in their field and integral in processing credit card payments via phones. Executives from all four companies joined Google at its press conference in New York Thursday to praise the effort. Citi executive Paul Galant noted that Google Wallet marked an “important milestone in digital and mobile banking.” “This shows some increasing maturity on Google’s part,” said Forrester analyst Charles Golvin of Google’s partnerships. “They did a good job of making sure that they partnered with the key players in the industry and that what they released was aligned with those partners’ interests and business models.” Yet Google seems to have made less progress convincing retailers to get on board, which could be dangerous. Over 100,000 merchants in the United States have terminals that enable them to accept contactless payments via phones and other devices, but Google announced that, so far, just 15 merchants will participate in its Offers program to present coupons, loyalty credit and other perks via the Wallet app. In this sense, Google Wallet looks a lot like Google TV: once again, the company has the infrastructure but lacks the goods. With its television product, Google worked with Logitech and Sony to produce the hardware that was necessary–just as Google has convinced Mastercard, Citi and others to support the payment system Google Wallet depends on. But it failed to win over the networks that control access to must-see TV, just as Google has, to date, been unable to attract more than a handful of retailers to provide discounts and perks. “I think there’s a huge issue about having the sufficient critical mass of merchants–and merchants you want to shop at,” said Alistair Newton, a research vice president with Gartner, a research firm. “The merchants that will sign up for this sort of thing can often be merchants who are desperate for sales, not necessarily merchants I go to make purchases from.” Google, known for innovative but not always intuitive products, also faces the challenge of convincing consumers to toss their wallets for a product the company itself has noted is still in its early stages. Analysts warn that consumers may have little tolerance for a work-in-progress service, especially one that integrates sensitive credit card information and involves something as basic and crucial as paying. Who wants to arrive at a store, try on clothes, wait in line, then discover they’re unable to pay because of technical difficulties with a product still in its beta form? The potential inconvenience Google Wallet could cause far outweighs carrying a three-inch piece of plastic. Google Wallet may also have what proves to be a crippling number of exceptions: It isn’t available for every credit card, on any smartphone, in every city in the nation or at every retailer. In fact, Google Wallet will launch in just two cities and on one phone, the Nexus S 4G. “There are a lot of underlying questions whose answer is ‘not very many,’” said Golvin. “How many phones are there that people can use it with? Not very many. How many card issuers out there let you put existing payment credentials in there? Not very many. How many merchants can you pay with this technology? Not zero, but in the grand scheme of all merchants in the U.S., not very many. You have to ask yourself, what’s the value? Why would a consumer be motivated to not pull out a credit card and use a phone instead?” Yet Google’s greatest advantage may ultimately come from the forward-thinking nature of this product. Analysts note that the company’s past failures have often been services that tried to compete with existing brands, such as PayPal, Twitter and iTunes. Google Wallet is the first service of its kind, and it plays to Google’s strengths collecting and leveraging vast quantities of user data to sell lots and lots of ads. Google’s control over smartphones–its Android operating system powers a lion’s share of smartphones in the U.S.–may also it give the company the leverage it needs to convince additional partners to bring NFC technology to more and more handsets. “Google doesn’t do well when it tries to replicate someone else’s business,” said Nick Holland, a senior analyst at the Yankee Group, a firm specializing in tech industry research. “Whereas the other initiatives were frankly copycats, [Google Wallet] is new… No on else is doing this, there’s no one else out there in the U.S. with a digital wallet that can store credit cards on a mobile device.” No one else for now. Apple is rumored to be developing its own digital wallet solution .

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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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Chinese Tech Giants Fight Over 4G Phones

May 5, 2011

BEIJING — Two of China’s biggest technology companies have launched a court battle in Europe over mobile phone patents in a rare public clash between firms Beijing is promoting as national champions. The fight between Huawei Technologies Ltd. and ZTE Corp. highlights the challenge for communist leaders who need to manage Chinese corporate ambitions as they try to create global competitors in telecoms, energy and other fields. It is the first case of its kind between major Chinese companies, which usually settle disputes in private. “We’re going to see more of this in this industry and others,” said David Wolf, a technology marketing consultant in Beijing. “The government will find, wow, we’ve got these national champions, but now they’re trying to kill each other.” The dispute centers on fourth-generation mobile technology, which companies that are developing it say will deliver more stable connections, wireless broadband and other advances. It is in limited use in the United States and being tested elsewhere. Control of key patents could help decide which equipment suppliers are positioned to reap billions of dollars in sales once it is rolled out in other markets. Huawei and ZTE make network gear, the core of phone systems. They have multibillion-dollar annual sales in China, Africa and Latin America and see themselves as potential global 4G leaders. That fits with Communist Party hopes to transform China from a low-cost factory into a creator of profitable technology. Huawei announced last week it filed patent infringement lawsuits against ZTE in France, Germany and Hungary. ZTE rejected the claims and said it has asked a French court and Chinese regulators to invalidate a Huawei patent. Huawei and ZTE are among China’s first wave of fledgling multinational companies. They compete with Nokia-Siemens Networks, Ericsson and Alcatel-Lucent and have a small but growing U.S. and European presence. Their dispute comes amid mounting complaints by foreign business groups about Beijing’s industrial policy. They say China is improperly supporting favored companies by limiting market access and providing low-cost loans and other support. Huawei’s lawsuits accuse ZTE of infringing patents for data cards and improperly using a Huawei-registered trademark on some of its products. “We will do whatever is required to ensure that the use of Huawei’s intellectual property by any company is based on internationally accepted protocols and practices,” said Huawei’s chief legal officer, Song Liuping, in a statement. ZTE said its lawsuit accused Huawei of infringing its 4G patents. The company said it also has asked a French court and China’s State Intellectual Property Office to invalidate Huawei’s patents for a rotary USB connector used to exchange data between devices. “ZTE respects the intellectual property rights of other companies, but it will not stop protecting its own intellectual property rights,” said a company statement. Huawei, founded in 1987 by a former Chinese military engineer, has 110,000 employees and reported 2010 revenues of 182 billion yuan ($28 billion). ZTE, founded in 1985, has 70,000 workers and reported 2010 revenues of 70 billion yuan ($10.8 billion). Their status as industry leaders gives both high-level political influence. But Chinese leaders want both to succeed – a possible reason for a stalemate and the decision to go to court. An impartial ruling by a European court also might add to the winner’s appeal for potential customers by reinforcing its status as a technology creator, rather than a Chinese policy tool. “They are making an interesting statement by filing those lawsuits not in Chinese courts but overseas, because Chinese courts are perceived to be very political, and they want this matter obviously adjudicated on the legal merits,” said Wolf, CEO of Wolf Group Asia. Huawei and ZTE are unusual among major Chinese companies because they compete directly with each other, offering similar products in the same markets. Authorities who want China’s potential global companies to focus their competitive energies on foreign rivals have tried to head off clashes in other industries by assigning different markets or products to individual enterprises. In aerospace, a plan to create a homegrown jetliner to compete with Boeing Co. and Airbus Industrie was assigned to one state-owned company while a potential rival was told to develop a smaller regional jet instead. Huawei has suffered setbacks as it tries to expand in the United States. It was forced in February to unwind its acquisition of 3Leaf Systems, a maker of cloud computing technology, after it failed to win approval from a U.S. security panel. In a separate case, Huawei won a court order that temporarily blocked the sale of Motorola Solutions Inc.’s network business to rival Nokia-Siemens Networks. Huawei said the deal might reveal business secrets because Motorola sold Huawei equipment. Motorola settled with Huawei for an undisclosed fee. Also this month, Ericsson said it has filed lawsuits against ZTE in Britain, Germany and Italy accusing the company of infringing patents for handset and network technology. The Swedish company asked the courts to block ZTE from selling mobile phones that contain the disputed technology and some network products. ___ Array Array

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Richard (RJ) Eskow: Green Alert: Banks Use Bush Terror Team, Threat Tactics to Push Debit Card Fees

May 5, 2011

Big banks and credit card companies have made a PR misstep in the fight over debit card charges. They’re trying to use the Bush Administration’s anti-terror team to convince Americans that exorbitant debit card fees are needed for our nation’s security. The timing couldn’t be worse. Just as Bin Laden was being hunted down they decided to rely on the credibility of Michael Chertoff and Gen. Michael Hayden, two of the senior officials who failed to find him. It’s hard to imagine that somebody made a proposal for this campaign and somebody else gave it the green light. Attackers could strike the U.S. banking system, of course, either for criminal purposes or as a terrorist act. (I wrote a memo on the topic myself, in 1998.) But this campaign never suggests that any significant portion of U.S. debit card fees is being used to prevent cyber-attacks. Instead they use vague threats and insinuations to suggest that an attack could happen, and that we could be very, very sorry, if we don’t do as we’re told. Sounds familiar, doesn’t it? Just think: For a few bucks more they could’ve hired Tom Ridge to issue an “orange alert.” Their strategy centered around a meeting called the “Visa Global Security Summit – Evolutions in Payment Security.” It should be noted that Visa has more than 60% of the entire U.S. debit card market and Mastercard had the lion’s share of the rest. This duopoly crushes all competition in this marketplace, which is the main reason credit unions and other normally trustworthy groups have been arm-twisted into supporting them on this issue. After, all, if you don’t play along with Visa and MasterCard, you don’t have anywhere else to go. (Free market, anyone?) Publicity around the “summit” centered on a “Live Data Breach Simulation” moderated by Gen. Michael V. Hayden of the Chertoff Group. Here’s what you need to know about Gen. Hayden: His greatest foray into information technology came when, as director of the NSA, he initiated what may be the largest software development failure in history. As the Baltimore Sun reported in 2006, “A program that was supposed to help the National Security Agency pluck out electronic data crucial to the nation’s safety is not up and running more than six years and $1.2 billion after it was launched … After an estimated $1.2 billion in development costs, only a few isolated analytical and technical tools have been produced, said an intelligence expert.” Gen. Hayden didn’t just waste a billion dollars of taxpayer money. His project’s delays and failures also endangered our national security, leaving our defenses weakened at a critical time. One can only hope that the Summit’s “live simulation” came in on time and on budget. An executive in private industry would have been fired for a debacle like Trailblazer. Instead Hayden eventually became CIA Director, after pushing hard throughout the Bush years to dismantle civil liberties and expand the warrantless wiretapping program. These two events aren’t unrelated, of course. Compliance can be more useful than competence, when a boss wants the right political answer and a subordinate can be depended on to give it. Hayden chose a time-honored, if cynical, road to career advancement. Mr. Chertoff’s path to becoming Secretary of Homeland Security is equally instructive. As Special Counsel for the “Senate Whitewater Committee,” Chertoff worked tirelessly (if fruitlessly) to prove that Bill and Hillary Clinton did something illegal, in the now-discredited “Whitewater Scandal,” then did some fundraising for the Bush campaign in 2000. He was rewarded for his service with a judgeship on the Third Court of Appeals. When Rudy Giuliani sidekick (and now convicted felon) Bernie Kerik was forced to step aside, Chertoff was further rewarded with an appointment to Homeland Security. These two gentlemen appear to share a certain – how shall we say it? – responsiveness to the needs and wishes of their superiors. Their shared history hardly lends credibility to the claim that high debit card fees are the only thing standing between our bank accounts and the bad guys. The crux of this PR campaign came with stories like this one from the Washington Post : “The Federal Reserve has proposed capping … interchange or “swipe fees,” depending on which side you’re on — at 7 to 12 cents per transaction. That would reduce banks’ revenue from the fees by about 75 percent … On Wednesday, the card industry said a massive cybersecurity data breach could … be the result.” The Post added: “Debit card fees help pay for banks and the networks that process the transactions, namely Visa and Mastercard, to combat fraud and identity theft.” True, but excessive debit card fees don’t. The Fed didn’t just decide to cut fees by 75 percent on a whim. The recommended rate for similar fees in Western Europe is 75 percent lower, and they’re presumably as concerned about cybersecurity as we are. On the other hand, it could be true that cybersecurity four times as much here as it does in Europe – that is, if Hayden is managing it. Just it case you didn’t get the point of the Summit, a panel was held on what was called “the Durbin Effect,” named after the Durbin Amendment restricting debit card fees. The panel was described this way: “Panelists will explore long-term issues stemming from this new law, specifically the potential to impact payment security. Will a reduction in financial institution debit card revenue reduce future innovations and investments in new technology or force them to create more efficiency through tighter transaction screening?” We’re willing to place bets on which conclusion the panel reached. There was another unfortunate coincidence of timing As the Summit was being held last week, the Pew Foundation released a report which slammed the banking industry for taking advantage of debit cards to hit its customers with excessive and deceptive overcharge fees. (There have been no panels suggesting that deceptive overdraft fees are also needed to protect us from cyberattacks … at least none yet.) With this cynical move, the banking and card industries have only reinforced the impression that they have no legitimate argument for these extraordinarily high fees. Americans have reasonably good memories, and they remember when some of the same high-profile individuals who appeared at the Summit used security threates to promote everything from the invasion of Iraq to the re-election of political partisans. For more background on the debit card charge issue, the work of Zach Carter & Ryan Grim and that of Mike Konczal , is extremely helpful. (We did an overview of the debit card debate ourselves in March and concluded that it has become Wall Street’s ” invisible tax .”) More perspective can be found in this Grim/Arthur Delaney piece on how banks exert their influence over Congress. And as Carter reported today , Republicans made headway today in their efforts to prevent the government from protecting consumers from a wide range of bank ripoffs. None of this should reflect negatively on the other participants in the Visa Security Summit, by the way. There are a lot of good professionals working in this field, and presumably they provided valuable technical perspective to the discussion. That presumably includes Visa’s senior executive for risk management, who provided the first keynote address for the event. Risk management is a complex field, and most people who have leadership roles have earned them. But Chertoff’s speech and Hayden’s staged event only served to remind us of those desperate days when cynics used our greatest threats, and our greatest fears, to advance their own self interest. In trying to scare us into submission, the banks and card companies may have just lost their case. Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light . He can be reached at “rjeskow@ourfuture.org.” Website: Eskow and Associates

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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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Superclick Networks to Open Middle East Office, Initiative Managed by Regional Industry Leader

April 28, 2011

MONTREAL–(Marketwire – Apr 28, 2011) – Superclick, Inc. ( OTCBB : SPCK ), a technology leader in IP infrastructure solutions to the hospitality industry, has announced plans to open a regional office in Dubai, UAE as part of its growth strategy to scale its presence worldwide. Superclick Networks currently has offices in Canada and the US with this new location to provide the strategic hub for commercial, deployment and support initiatives within the Middle Eastern region.

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PARTNERS: Nokia, Microsoft Ink Major Deal

April 21, 2011

By Tarmo Virki, European Technology Correspondent (HELSINKI) – Nokia Oyj’s earnings fell less than expected in the first quarter and the company signed a final agreement to start using Microsoft Corp software, sending its shares 3 percent higher. But gains were capped by the company’s forecast for profits to fall in coming quarters, due in part to Japan’s earthquake which hit component supplies across the technology sector. Underlying earnings per share fell to 0.13 euros in the three months through March from 0.14 a year earlier, beating analysts’ average forecast for 0.10. Nokia’s market share fell to 29 percent from 33 percent as nimbler Asian rivals ate into its dominant position in cheaper phones and it continued to lose out in more expensive smartphones to Apple Inc and others. To turn around its smartphone fortunes, Nokia’s new Chief Executive Stephen Elop in February unveiled a deal to start using Microsoft software instead of its own Symbian platform. Nokia said the deal enables it to cut annual costs by around 1 billion euros ($1.5 billion). Labour union officials said they expect Nokia to start lay-off talks next week. “Finalization of the agreement with Microsoft means Nokia can now focus on execution, but margin guidance underlines that difficult times lie ahead as it transitions the portfolio,” said analyst Geoff Blaber at CCS Insight. Nokia’s key phone unit reported an operating profit margin of 9.8 percent for January-March, well ahead of analysts forecast of 8.6 percent, but said for the full year the margin would fall to within a 6 to 9 percent range. Analysts on average expected the margin to drop to 8.5 percent. NIL-NIL Shares in Nokia were 3 percent higher at 6.11 euro by 6:57 a.m. EDT, outperforming 1.3 percent gain in the STOXX Europe 600 Technology Index. The stock remains well down on a record 65 euros seen in 2000. “It’s a bit of a no-score draw really. You’ve got a solid set of numbers but guidance is bad,” said Richard Windsor, global technology specialist at Nomura. “You’ve got a little bit of relief going on today but it probably doesn’t have legs in it.” Nokia forecast second-quarter sales at its phone unit would fall to between 6.1 and 6.6 billion euros, well below analysts’ average forecast of 6.9 billion, partly due to component shortages stemming from the March earthquake in Japan. “We expect these factors and their negative impact on our mobile devices volumes to continue not only during the second quarter 2011 but also through the third quarter 2011 at least,” Nokia said in a statement. Despite its bargaining power analysts say Nokia is likely to be among the phone makers worst hit by the disruption to supplies from last month’s devastating Japanese earthquake. It makes 450 million phones a year, which means quick and big changes in component supply are difficult. Nokia’s smaller rival Sony Ericsson said this week there were shortages of displays, batteries, camera modules and some printed circuit boards. Nokia’s telecom network gear arm Nokia Siemens Networks reported a surprise profit for the quarter and said Chinese regulators had approved its $975 million acquisition of Motorola Solutions’ gear business, clearing the last major hurdle for the deal to go through. The deal, which Nokia Siemens expects to close on April 29, will make the venture the second-largest globally and give it better access to the North American market. (Additional reporting by Terhi Kinnunen in Helsinki, with Georgina Prodhan in London and Mia Shanley and Simon Johnson in Stockholm; Editing by David Holmes) ($1=.6850 Euro) Copyright 2011 Thomson Reuters. Click for Restrictions

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Motorola Settles Trade Secret Dispute With Chinese Telecom

April 13, 2011

By Paul Thomasch (NEW YORK) – Motorola Solutions Inc and China’s Huawei Technologies Co have settled a legal dispute over trade secrets, clearing the way for Motorola to complete the sale of one of its business units to Nokia Siemens Networks. The settlement puts to rest charges by Huawei that Motorola, one of its long-standing partners, could disclose a variety of its trade secrets in selling a networks business to rival Nokia Siemens Networks. Motorola agreed to pay an unspecified transfer fee to Huawei as part of the settlement, it said on Wednesday. Motorola, in a separate announcement, also said it had lowered the sale price of the networks business to Nokia Siemens to $975 million from $1.2 billion. That should help ensure the deal goes through by April 29, Motorola said. While Motorola and Nokia Siemens can now press ahead with their deal, Huawei will likely use the legal settlement to help improve relations with the U.S. business community and government. Huawei is one of the world’s largest makers of telecommunications equipment but has said its ability to do business in the United States has been hurt by a series of unproven allegations and misperceptions. Legal disputes have not helped its reputation, particularly when they involve a long-term partner such as Motorola. Last summer, Motorola filed suit against Huawei alleging theft of trade secrets via former Motorola employees who gave information to Huawei’s founder. “Huawei hopes the recognition of the value of its intellectual property and withdrawal of claims about it would help put behind rumors of its association with the Chinese government,” said Robert Haslam, an attorney at Covington & Burling, who is representing Huawei. Concerned about its reputation, Huawei recently challenged the United States to launch a formal investigation into its business, It was a highly unusual moved and followed a recent U.S. government foreign investment review that is forcing Huawei to sell assets it bought from 3Leaf, a small U.S. company. Three years ago, Huawei had to pull back from a bigger proposed investment in 3Com, in similar circumstances. Huawei says it has been the victim of misperceptions about its relationship with the Chinese military because its founder, Ren Zhengfei, served in the People’s Liberation Army until 1983. In its case again Motorola, Huawei demanded that the deal with Nokia Siemens be altered to avoid infringing intellectual property rights. It said that Motorola, its partner since 2000, had information including its plans for future products and technical specifications related to product performance and testing. Huawei wanted assurances that none of that would be transferred to Nokia Siemens, a venture of Finland’s Nokia Oyj and Germany’s Siemens AG. Nokia Siemens, or NSN, had grown impatient to close the deal, originally due to occur by the end of last year. For Nokia Siemens, the delayed Motorola deal was intended to strengthen it against Chinese rivals and make it the second-largest mobile telecom gear maker ahead of Huawei. The delay, according to analysts, may also have been holding up plans by the parent companies of Nokia Siemens to sell a minority stake in the venture. Nokia and Siemens said last August they had been approached by private equity firms interested in buying a stake. “This is a good thing for Nokia as they have been able to cut a new deal, which will be closed in the second quarter,” said Swedbank analyst Jari Honko. “This means they can proceed with selling of minority stake in NSN.” Shares of Motorola were up 31 cents at $44.14. (Additional reporting by Tarmo Virki in Helsinki and Kenneth Li in New York; editing by Dave Zimmerman)

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One In Four Working Baby Boomers Say They’ll Never Retire, Survey Finds

April 5, 2011

WASHINGTON — Baby boomers are starting to retire, but many are agonizing about their finances and believe they’ll need to work longer than they had planned, a new poll finds. The 77 million-strong generation born between 1946 and 1964 has clung tenaciously to its youth. Now, boomers are getting nervous about retirement. Only 11 percent say they are strongly convinced they will be able to live in comfort. A total of 55 percent said they were either somewhat or very certain they could retire with financial security. But another 44 percent express little or no faith they’ll have enough money when their careers end. Further underscoring the financial squeeze, 1 in 4 boomers still working say they’ll never retire. That’s about the same number as those who say they have no retirement savings. The Associated Press-LifeGoesStrong.com poll comes as politicians face growing pressure to curb record federal deficits, and budget hawks of both parties have expressed a willingness to scale back Social Security, the government’s biggest program. The survey suggests how politically risky that would be: 64 percent of boomers see Social Security as the keystone of their retirement earnings, far outpacing pensions, investments and other income. The survey also highlights the particular retirement challenge facing boomers, who are contemplating exiting the work force just as the worst economy in seven decades left them coping with high jobless rates, tattered home values and painfully low interest rates that stunt the growth of savings. “I have six kids,” said Gary Marshalek, 62, of South Abington Township, Pa., who services drilling equipment and says he has repeatedly refinanced his home and dipped into his pension to pay for his children’s college. His inability to afford retirement “sounds like America at the moment,” Marshalek said. “Sounds like the normal instead of the abnormal.” Marshalek was among the 25 percent in the poll who say they plan to never retire. People who are unmarried, earn under $50,000 a year, or say they did a poor job of financial planning are disproportionately represented among that group. Overall, nearly 6 in 10 baby boomers say their workplace retirement plans, personal investments or real estate lost value during the economic crisis of the past three years. Of this group, 42 percent say they’ll have to delay retirement because their nest eggs shrank. Though the first boomers are turning 65 this year, the poll finds that 28 percent already consider themselves retired. Of those still working, nearly half want to retire by age 65 and about another quarter envision retiring between 66 and 70. Two-thirds of those still on the job say they will keep working after they retire, a plan shared about evenly across sex, marital status and education lines, the survey finds. That contrasts with the latest Social Security Administration data on what older people are actually doing: Among those age 65-74, less than half earned income from a job in 2008. “I’m going to keep working after I retire, if nothing else for the health care,” said Nadine Krieger, 58, a food plant worker from East Berlin, Pa. Citing $50,000 in retirement savings that she says won’t go far, she added, “We probably could have saved more, but you can’t when you have a couple of kids in the house.” About 6 in 10 married boomers expect a comfortable retirement, compared with just under half of the unmarried. Midwesterners are most likely to express confidence in their finances. “I’m a good planner,” said Robert Rivers, 63, a retired New York State employee in Ravena, N.Y. He still works seasonally for the federal government and collects a modest military pension. A recreational pilot, he says he has scaled back his lifestyle by flying and driving less. “I’m spending money I have, not spending it and trying to repay it,” he said. Among boomers like Rivers who plan to continue working in retirement, 35 percent say they’ll do so to make ends meet. Slightly fewer cite a desire to earn money for extras or to simply stay busy. Excluding their homes, 24 percent of boomers say they have no retirement savings. Those with nothing include about 4 in 10 who are non-white, are unmarried or didn’t finish college. At the other end, about 1 in 10 say they have banked at least $500,000. Those who have saved at least something typically have squirreled away $100,000, with about half putting away more than that and half less. Despite the worries and dearth of savings cited by many, only about a third of boomers say it’s likely that they’ll have to make do with a more modest lifestyle once they retire. Only about 1 in 4 expect to struggle just to pay their expenses. Financial experts say such expectations are often not realistic. “Most families have to make a significant adjustment from their working lives to their retirement years,” said financial planner Sheryl Garrett, who runs the Garrett Planning Network. Ads that show silver-haired couples strolling off into the sunset do not represent the typical retirement, she added. The AP-LifeGoesStrong.com poll was conducted from March 4-13 by Knowledge Networks of Menlo Park, Calif., and involved online interviews with 1,160 baby boomers born between 1946 and 1964. The margin of sampling error is plus or minus 3.5 percentage points. Knowledge Networks used traditional telephone and mail sampling methods to randomly recruit respondents. People selected who had no Internet access were given it for free. ___ AP Polling Director Trevor Tompson, Deputy Director of Polling Jennifer Agiesta and AP News Survey Specialist Dennis Junius contributed to this report. ___ Online: Array

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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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Jack Myers: Television Network Upfront 2011/2012: ‘Them That Has, Gets!’

March 29, 2011

As the national TV Upfront season moves toward the May/June negotiating period, one thing television networks, media agency executives and marketers all agree upon is that broadcast and cable network TV remains the engine that pulls the media and marketing train. As the digital rocket ship climbs through the atmosphere, marketers’ remain committed to shoveling more and more coal to fuel the TV train and keep it running smoothly. In this week’s Jack Myers Media Business Report , I shared historical network TV Upfront cost-per-thousand data from 2002 to 2004, the two seasons following the 2001 recession. The 2002-2004 Myers data arguably serves as a forecast for the 2011/2012 national television Upfront season, which should be one of the most interesting and robust in recent history. As a child, I played Monopoly with my dad. When I landed on his hotel on Boardwalk or Park Place, his favorite comment was “Them that has, gets!” In this year’s Upfront, the broadcast and major cable networks have the best real estate and have built out their houses and hotels. As advertisers move their pieces around the Media Monopoly board, they can still buy less desirable real estate, but the best properties are controlled by the TV networks. Once the agency buyers pass “GO” and move into the May/June negotiating season, there will be no Get Out of Jail Free card and it’s pretty clear that “Them That Has, Will Get!” With broadcast network TV rating erosion taking its toll again this year, the leading networks will be under pressure to generate cost-per-thousand increases that not only compensate for lost rating points, but that assure meaningful revenue increases. Strikes threatening the NFL and NBA seasons add increased demand for primetime network and high appeal, male targeted programming. It’s unlikely that broadcast and leading cable networks will increase year-to-year sell out. Marketers’ options are limited as digital video CPMs remain greater than broadcast and cable costs. Cinema, video place-based and point-of-influence media, and local TV and radio will all benefit with increased revenues but will not significantly reduce advertiser demand for network TV. The most appealing national broadcast syndicators will experience strong CPM increases, especially as supply erodes with the shift of Oprah to cable. Smaller cable networks will experience some gains but agency buyers point to their clients’ current reach over-exposure on cable and are reluctant to increase their current cable ratings levels. The top ten cable networks led by Turner, A&E Networks, FX and NBCU are likely to generate costs-per-thousand increases at or above broadcast network levels. Bottom line, the national TV marketplace is healthy. Marketers continue to depend on broadcast and cable network TV as the foundation of their advertising plans. And this year’s Upfront will be fascinating to follow as it continues to unfold. Share your comments here . These issues and more will be discussed this Thursday at the annual IRTS Foundation Media Buyers Newsmaker Breakfast, featuring Gibbs Haljun of MEC Global, Greg Kahn of Optimedia, Mike Rosen of Starcom, Maribeth Papuga of Mediavest and Dani Benowitz of UM. I am moderating the panel discussion, which will be at the Pierre Hotel. Advance purchase is required and tickets are available by calling the IRTS at (212) 867-6650 x 11. 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 published at www.jackmyers.com

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Rajiv Khemani Appointed Chief Operating Officer of Cavium Networks

January 31, 2011

MOUNTAIN VIEW, CA–(Marketwire – January 31, 2011) –   Cavium Networks ( NASDAQ : CAVM ), a leading provider of semiconductor products that enable intelligent processing for networking, communications, and the digital home, announced today the appointment of Rajiv Khemani as Chief Operating Officer of Cavium Networks effective immediately. Mr. Khemani previously served as Vice President and General Manager of Cavium’s Networking and Communications Division. In the expanded role of COO, he will oversee both the Networking and Communications Division and the Broadband & Consumer Division as well as manufacturing operations. He will continue to report to Syed Ali, Chairman, President and CEO.

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Motorola To Officially Split Into Two Companies

January 3, 2011

NEW YORK — Motorola Inc.’s formal split into two companies on Tuesday will mark the final step in the years-long breakup of a consumer electronics industry pioneer. Motorola began selling car radios in the 1930s and expanded into TVs in the ’40s and cell phones in the ’80s. The company has become increasingly diverse, and the breakup that began in 2008 is motivated by a desire to present two simple businesses to investors rather than one complicated one. Motorola is splitting its consumer-oriented side, which makes cell phone and cable set-top boxes, from the professional business of selling police radios and barcode scanners to government agencies and large companies. The new companies will be called Motorola Mobility and Motorola Solutions. The two companies will begin trading on the New York Stock Exchange Tuesday, allowing new investors to buy shares. Motorola shareholders of record on Dec. 21 will receive one share of Mobility for every eight shares of Motorola Inc. they already held. Motorola Inc. shares will then go through a 1-for-7 reverse split and become Motorola Solutions shares. Existing investors have already been trading stock in the newly formed companies on a “when issued” basis for almost a month. Although “when issued” trades will not be settled until Tuesday when the split became official, these preliminary moves help decide how Motorola’s roughly $21 billion market cap would be divided between the two companies. In trading Monday, shares of Mobility jumped $1.14, or nearly 4 percent, to close at $30.24, putting the value of the company at about $8.9 billion. Mobility shares gained 21 percent since they started trading on a “when issued” basis in December. Solutions’ shares fell 57 cents, or 1.5 percent, to $37.48, for a total market cap of about $12.6 billion. Shares have lost 8 percent in the last month. As part of the breakup, Motorola is also selling off a division that makes network equipment for cell phone companies to Nokia Siemens Networks, a Finnish-German joint venture. Regulators in China are still reviewing the deal, which is expected to close in the next three months. Motorola’s professional business has become the crown jewel of Motorola’s portfolio, while its cell phone business is just emerging from a long slump. The divisions that will become Motorola Mobility had $2.9 billion in sales in the most recent quarter, compared with $1.9 billion for the Motorola Solutions segments. However, the $321 million in operating earnings at Solutions was much stronger than the $3 million that Mobility made. The company’s cell phone division once enjoyed strong sales thanks to the Razr, a slim, clamshell-style feature phone that debuted in 2004 and became a best-seller. As recently as 2007, cell phones accounted for two-thirds of the company’s revenue. But Motorola couldn’t repeat the Razr’s success as consumers began flocking toward smartphones such as Apple Inc.’s iPhone. Motorola’s manufacturing process also yielded smaller profits than competitors’, and so when cell phones sales began dwindling, its losses loomed that much larger. In 2008, under pressure from activist investor Carl Icahn, Motorola set the breakup in motion, hiring Sanjay Jha, the chief operating officer of mobile chipmaker Qualcomm Inc., to strengthen its declining cell phone business. The breakup was originally slated for 2009, but Motorola postponed it due to the economic downturn. In November, the company announced a definitive date for the long-planned split. The company’s cell phone business has since rebounded. In October Motorola said the division was profitable for the first time in three years, due in large part to its focus on smart phones such as the Droid that run Google Inc.’s Android software, which competes with the iPhone. Solutions will continue to be based in Schaumburg, Ill., while Mobility will take up a temporary home in nearby Libertyville, Ill. Motorola officials have said that it may later move its headquarters team to San Diego, the San Francisco area or Austin, Texas.

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China Delays NSN Motorola Deal

January 1, 2011

The antitrust arm of Chinas Ministry of Commerce has delayed the acquisition of Motorolas network equipment business by Nokia Siemens Networks

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Net Neutrality Rules Poised To Pass FCC Tomorrow

December 20, 2010

WASHINGTON — New rules aimed at prohibiting broadband providers from becoming gatekeepers of Internet traffic now have just enough votes to pass the Federal Communications Commission on Tuesday. The rules would prohibit phone and cable companies from abusing their control over broadband connections to discriminate against rival content or services, such as Internet phone calls or online video, or play favorites with Web traffic. FCC Chairman Julius Genachowski now has the three votes needed for approval, despite firm opposition from the two Republicans on the five-member commission. Genachowski’s two fellow Democrats said Monday they will vote for the rules, even though they consider them too weak. The outcome caps a nearly-16-month push by Genachowski to pass “network neutrality” rules and marks a key turning point in a policy dispute that began more than five years ago. “The open Internet is a crucial American marketplace, and I believe that it is appropriate for the FCC to safeguard it by adopting an order that will establish clear rules to protect consumers’ access,” Commissioner Mignon Clyburn, a Democrat, said in a statement. Yet many supporters of network neutrality are disappointed. Clyburn and the other Democrat, Michael Copps, both said the rules are not as strong as they would like, even after Genachowski made some changes to address their concerns. That sentiment was echoed by some public interest groups on Tuesday. “The actions by the Federal Communications Commission fall far short of what they could have been,” said Gigi Sohn, president of Public Knowledge. “Instead of strong, firm rules providing clear protections, the commission, created a vague and shifting landscape open to interpretation.” A number of big Internet companies, including Netflix Inc., Skype and Amazon.com Inc., have previously expressed reservations about the proposal as well. Meanwhile, even the weakened rules are likely to face intense scrutiny as soon as the Republicans take over the House next year. The chairman’s proposal builds on an attempt at compromise crafted by outgoing House Commerce Committee Chairman Henry Waxman, D-Calif., as well as a set of broad net neutrality principles first established by the FCC under the previous administration in 2005. The rules would require broadband providers to let subscribers access all legal online content, applications and services over their wired networks – including online calling services, Internet video and other Web applications that compete with their core businesses. But the plan would give broadband providers flexibility to manage data on their systems to deal with problems such as network congestion and unwanted traffic like spam as long as they publicly disclose their network management practices. Senior FCC officials stressed that unreasonable network discrimination would be prohibited. They also noted that this category would most likely include services that favor traffic from the broadband providers themselves or traffic from business partners that can pay for priority. That language was added to help ease the concerns of Genachowski’s two fellow Deomcrats. The proposal would, however, leave the door open for broadband providers to experiment with routing traffic from specialized services such as smart grids and home security systems over dedicated networks as long as these services are separate from the public Internet. Public interest groups fear that exception could lead to a two-tiered Internet with a fast lane for companies that can pay for priority and a slow lane for everyone else. They are also worried that the proposal lacks strong protections for wireless networks as more Americans go online using mobile devices. The plan would prohibit wireless carriers from blocking access to any websites or competing applications such as Internet calling services on mobile devices. It would require them to disclose their network management practices too. But wireless companies would get more flexibility to manage data traffic as wireless systems have more bandwidth constraints than wired networks. “Individuals who depend on wireless connections to the Internet can take no comfort in this half-measure,” said Joel Kelsey, political advisor for the public interest group Free Press. Republicans, meanwhile, warn that the new rules would impose unnecessary regulations on an industry that is one of the few bright spots in the current economy, with phone and cable companies spending billions to upgrade their networks for broadband. Burdensome net neutrality rules, they warn, would discourage broadband providers from continuing those upgrades by making it difficult for them to earn a healthy return on their investments. Still, Genachowski’s proposal is likely to win the support of the big phone and cable companies because it leaves in place the FCC’s current regulatory framework for broadband, which treats broadband as a lightly regulated “information service.” The agency had tried to come up with a new framework after a federal appeals court in April ruled that the FCC had overstepped its existing authority in sanctioning Comcast Corp. for discriminating against online file-sharing traffic on its network – violating the very net neutrality principles that underpin the new rules. Comcast argued that the service, which was used to trade movies and other big files over the Internet, was clogging its network. To ensure that the commission would be on solid legal ground in adopting net neutrality rules and other broadband regulations following that decision, Genachowski had proposed redefining broadband as a telecommunications service subject to “common carrier” obligations to treat all traffic equally. But Genachowski backed down after strong opposition from the phone and cable companies, as well as many Republicans in Congress.

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Merchant Debit Fees: Fed Proposes 12-Cent Cap, Visa, MasterCard Could Take Big Hits

December 16, 2010

NEW YORK — The Federal Reserve on Thursday proposed a 12-cent cap on the fees banks would be allowed to charge merchants for debit card transactions, a limit that some estimate could cut up to 90 percent of the revenue collected through such fees. Shares of Visa Inc. and MasterCard Inc. slid more than 10 percent after the proposals were made public. Capping debit interchange fees, sometimes called swipe fees, would help merchants. Under the existing system, the Fed said the average fee in 2009 was 44 cents per transaction, or 1.14 percent of the transaction. When the customer signed for the purchase in the same way they would for a credit card purchase, known as signature debit, the average fee was 56 cents, or 1.53 percent of the transaction amount. The proposal also would require that merchants have a choice of unrelated networks to process transactions, like Visa and MasterCard. That could cut into revenue for those companies by allowing other networks to process transactions now handled by the two biggest players in the industry. The network giants could see further revenue hits from banks that try to extract concessions based on the sharp fee cuts, said Thomas McCrohan, an analyst for Janney Capital Markets. The networks set the interchange rates but the fees are paid to the banks that issue debit cards bearing the Visa or MasterCard logos. The revenue hit could be between 70 and 90 percent of the fees currently paid, said Jeff Tassey, executive director of the Electronic Payments Coalition, a group that represents banks, credit unions, payment networks and card processors. “It’s a massive reduction,” he said. Wall Street was expecting a 60 percent cut, said McCrohan. Bank stocks were largely unaffected by the news, but shares of Visa slid $9.75, or 12.7 percent, to close at $67.19. MasterCard shares plunged $25.73, or 10.3 percent, to close at $223.49. Fed staff members said a swipe-fee cap probably wouldn’t translate into lower prices for consumers, except in some highly competitive markets. It may, however, result in banks cutting back on debit card reward programs or searching for other ways to offset the impact of lower fees. The proposal was made to enact a provision known as the Durbin Amendment that was part of the financial regulatory overhaul bill that became law in July. The provision requires that interchange fees be “reasonable and proportional” to banks’ costs for processing transactions. Critics noted that the Fed did not allow for the costs of fraud prevention and detection in setting the cap. “For a smaller institution, fraud prevention costs and fraud costs, for the most part are the costs,” said Bill Cheney, CEO of the Credit Union National Association. The law exempts banks and credit unions with market capitalizations under $10 billion. But industry representatives questioned how the exemption would be enforced, and said it could result in merchants refusing to accept debit cards issued by smaller institutions because those transactions would cost more. The limit would not apply to interchange fees for credit cards, which were not addressed in the financial overhaul. The National Retail Federation was among merchant groups that praised the proposal, saying fee limits “would result in lower costs for merchants and could lead to discounts for their customers.” The American Bankers Association had a vastly different take, charging that the cap would “essentially relieve retailers of paying their fair share” for debit card transactions. Visa said that the Fed’s proposal of “artificial” caps on fees doesn’t take into consideration the value of merchants being able to accept debt cards and the costs of running a debit network. It added in a statement that “the proposed routing and exclusivity alternatives put retailer profits ahead of consumer protection, choice and convenience.” McCrohan, the analyst at Janney, said the portion of the proposal that could require two networks for each type of transaction would create a hugely complicated system. “That just makes people’s heads hurt,” he said. “How is that going to work exactly?” MasterCard issued a statement saying that the Fed’s proposal fails to consider the full range of costs incurred by issuers to operate their debit card programs, and that it plans to file formal comments in the coming weeks as part of the public comment period. “Experience demonstrates that consumers, not banks, or payment networks are the biggest losers as a result of this regulation,” Noah Hunt, MasterCard’s general counsel said in a statement. “This type of price control is misguided and anti-competitive, and in the end is harmful to consumers.” The Federal Reserve will accept comments on the proposed rule through Feb. 22. The proposal must be finalized by April 21, and would take effect three months later. In the meantime, the fight over interchange fees may return to Congress. “We’re deeply troubled by the approach taken and essentially the direction Congress went in,” said Kenneth Clayton, general counsel for the American Bankers Association, a lobby group. “We clearly think the issue needs to be revisited.”

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Steve Rosenbaum: AOL’s New Video Chief Charts a Course

December 3, 2010

Content Aggregation, Curation, and Syndication are core to the vision Ran Harveno smiles when he tells you he isn’t the “new” head of AOL Video, he’s the first person to have that job. As he sees it — it’s a sign of the times that big web players see video as core to their future. “The news is that there is an AOL video department” said Harveno, speaking to a packed house of the New York Video Meetup at the Samsung Experience in the Time Warner Center. The fact that one of the biggest companies out there believes in video. AOL is becoming a way more innovative company.” “There is no real video company right now on the web that is making more than half a billion dollars. YouTube is at five hundred million. I think that AOL has a great chance to scale and become a really powerful video company. They have a lot of traffic on their own, but it’s billions of page views with a very limited video experience so far.” Looking at the web, he sees lots of folks chasing the “sexy” world of entertainment video, while the web’s audience is looking for information. He sees a huge opportunity in premium ad dollars and premium content — but in the nitchified web world, premium audiences are in nitches, not in mass audiences. “The web is about niches. Its’ about information”, said Harveno. “Health is not that sexy — neither is food or home and garden. There’s no unified experience, there’s no curated library of premium content that people can consume. On the other hand, most of the sites out there are text.” And in taking on the new world of web video, AOL found a guy who had been diligently and steadily winning the key target verticals, one category at a time. “The goal is to start shifting real dollars from TV to the web. Which we don’t see enough. The biggest problem of the online video industry is supply. There are not enough views. People are looking at this as the next revolution and huge adoption — if you compare the video views on the web to inventory that exists on TV, we’re still a fraction.” Today his company, 5min Media, founded just 4 years ago in Tel Aviv, is number one in health, food, home, fashion, autos and travel the six biggest verticals for advertisers. 5min gathers professional quality content, and then provides syndication revenue to content creators. Harveno says his goal is to be the “supply” side of supply and demand. “We basically aggregate a lot of content. 200,000 pieces of content. And it’s all curated. It’s Scripps, Hachette, Hearst, TBS, NBC, and a lot of web originals like Next New Networks and Revision 3.” By aggregating and curating niches, Harveno says he can create quality audiences that will drive CPM’s up, rather than commoditizing mass audiences that drive CPM’s down. “What we’re trying right now at AOL is to create a market where you have the premium layer of good content on the home page and on the site and a huge audience extension with 5min, which is growing all the time. and through ad.com and really create a good marketplace for advertisers. We are going to take the 5min library and our content partners live on every AOL page. We’re live right now 18 sites. We have 50 to go. We’re taking our videos and our semantic technology all across the web. 5min has the brand and the syndication play. Ad.com is a video network. We unified the AOL video unit.” 5min began its relationship with AOL as a provider of syndicated video, but once AOL exec’s saw the impact of 5min’s library on traffic and conversions, an acquisition conversation moved along quickly. AOL bought 5min for a reported 65 million dollars, a meaningful return for the venture firms who’d put 13 million dollars in the company over the past four years. Now that Harveno is SVP of video — he says job one is getting more content into the network. “We want content. One of the things that is critical for every big company is to have a have self-produced content, and aggregated content. We can’t produce it all.” And he sees 5min’s brand and publisher services as remaining core to what they do. He says sites need his brand of quality content. “If you go to most of the travel sites, most of the food sites, there’s a very poor video experience with these sites. So we basicaly understood all the good content producers that don’t find a good ROI on the web and aggregate them in a curated way.” Getting quality content to publishers is core to Harveno’s vision. And he says that companies that try to manufacture video at a low cost have the model wrong. You can’t create all your own content with good economics. Harveno: “There is only one company that is trying to produce all of its own content — Demand Media. I think that the content quality that they produce is questionable. If you want to produce real good content, and not content for one hundred bucks, you need to aggregate.” Says Harveno: “What we’re trying to do is to create an ROI for content producers though distribution, and extend it through AOL so it’s an opportunity to be on the home page. To be on the home pages of all their sites and to be in the 5min network.” So, given that this is largest video company sale in New York, how does Harveno, from his spot at AOL, see the next chapter for video? “The big old companies didn’t take video seriously so far. So I think there will be more acquisitions.”

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Marian Salzman: Net Gain

December 1, 2010

This is the third in a series of 12 posts expounding on the 2011 forecasts in the annual trends report from Salzman, president of Euro RSCG Worldwide PR and an internationally respected trendspotter. There’s a loss-of-faith crisis, and it’s as movement-ready as the one that led Jerry Rubin to pen the Yippie manifesto in 1968. That was the genesis of the famous “Don’t trust anyone over 30″ message that went viral in the election that ushered in President Richard Nixon (aka Tricky Dick). Today, our trust deficit feels just as hairy. In the United States, people say they don’t trust politicians, institutions, the media, the schools or the direction of the country. In ceremonial Japan, which has one of the world’s fastest-growing divorce rates, divorcing couples gather for a ritual smash (with a hammer) of their wedding rings, while toasting to never seeing each other again. Even trust by institutions is lacking: Trust icon Standard & Poor’s assigned the U.K. and its skinny austerity budget just a one-in-three chance of working this summer. To compensate for this trust shutout, citizens of the world (who haven’t lost trust in self-reliance or technology) are increasingly looking to their networks. They’re building on the cascades of bonds that connectivity promises to keep flowing. They’ve already learned to trust in e-commerce for what it offers (timeliness, convenience, price), as demonstrated by the ongoing popularity of eBay, Amazon and even the “crazy business idea” that was FreshDirect’s appeal to shoppers for urban groceries. (The strategy extended to FreshDirect’s developing an iPhone app–in New York, some 66 percent of its users have smart phones–for mobile ordering .) Now, increasingly, global citizens are turning to the Internet to find the people they want in their lives. It’s a needs shift from consumption to communication with other real beings, and it’s proving that online, thanks to the Network Effect, there’s a virtually unlimited supply not only of stuff but also of the people you need in your life. Spin this web from macro to micro. Web-in-use numbers are staggering and on the rise; there are almost 2 billion Internet users worldwide (239 million in the U.S.), 51 million in the U.K., 45 million in France, 81 million in India and a whopping 420 million in China (which is adding 600,000 broadband users per month). But of the top four places where Internet users are spending their time–Google, Yahoo, Microsoft and Facebook, respectively–it’s Facebook that wins the lion’s share, at more than seven hours per month. That exceeds the time people are spending on the other three combined. But it’s not distraction that people are seeking in their online match-ups; it’s real human connections. Can it be any accident that one of the hottest dance songs in Europe this month (by Duck Sauce ) has just one lyric–”Barbra Streisand”–in homage to the chanteuse who brought us “People Who Need People” back in 1964? We can’t forget to thank social media for nurturing the where-to-find-your-new-BFF quests. Twitter has held the dialogue to 140 characters or less, but players on this field of dreams have us communicating on non-space-restrained sites, from LinkedIn (“Relationships Matter”) and Google’s networking platform Orkut to Foursquare (microcosm’d to the level of finding others in your city) and Chinese IM site QQ, French school-reunion site Copains d’avant, and Gowalla, which lets you “stamp your passport” on your phone. On all these new force fields–not to mention Match.com, eHarmony or Chemistry.com–are scads of humans wishing and hoping and dreaming of meeting their fellow enthusiasts, sufferers, travelers, worshipers or partners, and using their networks to make that entirely real. That plugging-in now affords us unlimited possible partners for everything from hobbies to work to networking to marrying–or just finding people to hang out with–and might manifest the single biggest social change we’ve experienced since the Summer of Love. Really what’s at work is a lot more than the old saw that loneliness is the most entrenched of human emotions. Keyboards and mobile devices have become touch extensions for many Americans, a phenomenon that might have helped Thumb Man , a Facebook public figure ( “the bloke that looks like a thumb” ), amass more than 12,000 “likes” between March and April last year. Given that the interactivity value is no longer just human-to-product but human-to-human, I predict that one new and huge ideal applied to time spent online will be reciprocity (which goes hand in hand with people calculating just how precisely they’re expressing their values to their networks). This should all come as no surprise to brands that found out with YouTube that group amusements would reliably generate a following , at least for a short while–as Mentos saw in 2006 when its YouTube video of a mint exploding in a glass of Diet Coke upsurged its fan base on Facebook (temporarily). Next year, the do-as-your-friends-do phenomenon will find people abandoning false personas on social media and moving into a calculated but real projection of their values–people showing each other online what they’re really about. What they’ll share with others–whether a passion for guitar picking or the game of Go , recovery from addiction or an addiction to dog training –will show that you are your networks and your networks are you. The more niche the passion, the more social the match experience will be. As time goes by, expect these rich connections to increase an ambient awareness about the environment of networks, where it feels good to be (virtually) and to be connected (actually). And expect innovative individuals to increase their net worth as they use their own power of influence to generate revenue–their personal CPMs, a phenomenon I have been predicting and waiting for for nearly three years–by recognizing the power of their social cachet, then leveraging it and charging for access to it. Previously: “Mad as Hell–and Only Getting Madder” “Talk to the Hands” Tomorrow: “Public Mycasting System”

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Juniper To Pay 152M For Trapeze Networks

November 17, 2010

Juniper Networks will acquire Beldens wireless local area network business Trapeze Networks

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Jeff Sweat: Why Your Social Media Campaign Is Not the Next Old Spice Guy

October 27, 2010

Just watching Grover say “I’m on a horse. Cow.” in the pitch-perfect “Smell Like a Monster,” took me back to this summer’s Old Spice Guy social media campaign, and all the advice that followed to help marketers crack the Old Spice secret formula. No doubt there are people using that advice right now to recreate that famous monocle smile. But it takes more than a checklist to create a viral hit. Reverse-engineering the Old Spice Guy is just going to make a lot of things that smell like the Old Spice Guy — but aren’t. The advertising world obsesses about what makes things go viral, so when a true viral hit like Old Spice Guy happens, everyone’s going to try to deconstruct it. So from this campaign we got lessons for brands, lessons for public speakers, and just plain lessons . Luckily for us at Yahoo!, we have scientists to do the obsessing for us. A Yahoo! Labs research team analyzed millions of Tweets to find out what makes something a success. This study only looked at Twitter, but most of its findings translate to other channels, too. Their conclusion? The tweets that were retweeted endlessly looked an awful lot like those that weren’t. And 99.9% of tweets went absolutely nowhere. The only two factors that predicted success were the number of followers, and whether or not the person tweeted it had had a viral hit before. Nothing else — whether it was funny or not, subject matter, timeliness, media format — matters. Well, scratch that. It’s tough to imagine something going viral if it’s not clever. Old Spice Guy wouldn’t have been a hit if he just sat around telling people how to smell like a man. You have to have all the basics of “virality” down. But as Yahoo! research scientist Duncan Watts says, “That’s not a recipe for success — it’s a recipe for probability for success.” If no one actually decides to pass your content along, it’s not viral. It’s just a really nice portfolio piece. Three rules for viral success What? Didn’t I basically just say the rules don’t matter? Well, Watts does offer up some rules. They just don’t work the way you’d think they work. You can’t make viral happen: The first thing you need to do, Watts says, is accept the fact that you can’t control whether or not something goes viral. If that sounds like the Serenity Prayer from a 12-step program, you’re not too far off. Consider this a 3-step program for social media 12-steppers. You can create a great campaign, but you can’t make it a hit. This, by the way, is a great point to make to your boss. Get the recipe right: You have to create the kind of content that people want to pass along, so it needs to combine things like humor, interactivity and buttons that let you share. Usually, it can’t talk about the brand head on. (Which is a rule Old Spice Guy seems to have broken. Or did he? Discuss!) One of the things that Old Spice Guy did right is tap into the networks with large followings. Since that’s one of the few factors that Watts’ team found does work, doing that for your content should help it spread. The bigger your soapbox, the more likely people will be able to hear you. Try lots of stuff: You don’t know which of your ideas is going to take off, so you have to try a lot of them. Remember Elf Yourself, the viral hit from OfficeMax? It’s easy to look back at it now and see why it’s a hit. Because… everyone loves tiny little feet, right? But as AdWeek’s Brian Morrissey said in a recent presentation, that wasn’t the case when it was built. OfficeMax and its advertising agency partners made 24 different sites, many of them duds. Morrissey emailed Daniel Stein of EVB, one of the agencies that created it, who said that he was surprised that something like “Reindeer Arm Wrestling” wasn’t the one that made it big. “What it shows is that brands need a portfolio approach when looking to embed in digital culture,” Morrissey said. “There will be duds, without a doubt, and it’s time brands get OK with that.” By making a lot of good campaigns, OfficeMax increased the odds that one of them would break through. “You want to create a strategy where you don’t have to be right,” Watts says. He compares this to card-counting in Vegas. When you’re counting cards, you’re not trying to win every hand. You’re just trying to increase the odds of winning more hands. I should be clear — I think you should listen to lessons from the Old Spice Guy. Not because they’re going to give you a hit, but because they’re good things for your brand. And possibly because the man has one helluva silverfish hand catch . For more from Jeff, visit the Yahoo! Advertising Blog or follow @YahooAdBuzz .

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Video: Horizon’s Adgate Expects More Content-Cable TV Disputes: Video

October 25, 2010

Oct. 25 (Bloomberg) — Brad Adgate, director of research at Horizon Media Inc., discusses Cablevision Systems Corp.’s fee dispute with News Corp. over how much the cable company should pay for programming. Broadcasters have recently pressed demands for fees from pay-TV distributors for content that has long been available for free over the air waves and the Web. While Cablevision and other pay-TV companies have resisted paying, the networks have succeeded in several markets. (Source: Bloomberg)

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Video: Lingerie League Strikes Broadcast Deal With MTV Networks: Video

October 18, 2010

Oct. 18 (Bloomberg) — Bloomberg’s Michele Steele reports on the Lingerie Football League and it’s partnership with Viacom Inc.’s MTV Networks for broadcast rights. (Source: Bloomberg)

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FriendFinder Plans 296M Bond Sale

October 18, 2010

FriendFinder Networks is planning to raise 296 million in debt issue

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O3b Networks signs deal with Netcom, Nigeria

October 11, 2010

O3b Networks signs deal with Netcom, Nigeria

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AireSurf: Creditors Approve Bankruptcy Proposal

October 8, 2010

TORONTO, ONTARIO–(Marketwire – Oct. 8, 2010) – AireSurf Networks Holdings Inc. (CSNX:ANH) (the ” Company “) announces that further to its press release of September 22, 2010, secured and unsecured creditors unanimously approved the Company’s bankruptcy proposal at the meeting of creditors held today. The Company will seek court approval of the proposal at the first available court date.

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Calix To Acquire Occam For 171M

September 20, 2010

Calix Networks is planning to buy competitor Occam Networks for 171 million in cash and stock

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World-Class Industry Leaders Join Polycom’s Executive Team

September 20, 2010

Former Cisco Unified Communications Chief Technology Officer Appointed Polycom Chief Strategy and Technology Officer; Motorola GM of Home and Networks Mobility Software Appointed Polycom Chief Development Officer

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Renata Sellitti: Unemployment Blues

September 5, 2010

My name is Renata, and I have a confession to make: I’m unemployed. I lost my job early last year, becoming part of the country’s 9.6 percent unemployment rate, and I’ve been a statistic ever since. This past year, I’ve learned when you lose your job you may very well lose your mind too. While millions of jobless Americans get resume tips, what we really need is awareness of the struggle we are about to stare down. I experienced something that I’ve come to identify as “the five stages of unemployment,” a playful-yet-serious incarnation of psychiatrist Elizabeth Kubler-Ross’ famed explanation of the five stages of grief. The jobless blues can be crippling and embody a similar loss of control at first. Then they eventually — and hopefully — lead to acceptance. Denial. Apart from carrying the contents of our desks out of the office, a job loss often doesn’t feel like a bonafide job loss. The initial week or two may even have been fun. We get to sleep late and watch all of the daytime television that we want, not realizing what total poison it may be. We don’t admit to ourselves that our foreheads have been branded unwittingly with a capital “U” that won’t wash off. Last summer, Gretchen Sodergren, 32, a corporate retail planner, got a call from her boss telling her, “This is the last paycheck this Friday.” Having worked from home, she was confused for weeks, asking herself, “What just happened here?” Sodergren became what she called, “The Coupon Lady,” clipping coupons to save money. As her bills accumulated, she learned to make macaroni dinners last for days and downgraded to drinking Miller Lite out of cans. Financial anxiety is the surest way to snap out of the denial. The length of this stage varies for everyone, but is always followed by its ugly stepsister, the second stage of unemployment: repetition. Repetition. I call this stage “one long Groundhog Day of rejection.” I spent endless days in blue Calvin Klein pajama pants and a pink shirt emblazoned with a picture of an angry chocolate chip cookie character and the moniker, “One Tough Cookie.” The slogan was ironic because, even though I sent my resume to everyone I knew, only to learn that most of them were also looking for work, I was falling apart. While worker bees buzzed outside my window on their daily commute, I turned to “Ellen” and “Oprah” to drown them out. I felt paralyzed by my inability to contribute to the world around me. By day, I hung out with Raymond and John, the doormen at my Murray Hill apartment building in midtown Manhattan, and bonded with the Hispanic housekeepers, while I did laundry in the basement. By night I begged my friends to go get drinks so I could actually leave my apartment. I cursed necessary tasks like calling the unemployment office. I wallowed my way right into stage three: Self-Improvement . The need for self-improvement sets in when even you become so disgusted with yourself and your appearance that you channel your frustration into exercise or grooming and wardrobe upgrades. Some months after losing her job, Sodergren, the corporate retail planner who suffered from denial threw away her stained white “Miami Beach” sweatshirt and the ill-fitting, light blue Old Navy pajama pants that she wore just about every day last year. “I actually convinced myself that because they matched it was somehow an outfit,” she says. Rob Nagel, an Indianapolis college admissions director who was unemployed for most of last year, walked his dogs Boss and Chick at Wadsworth, a local dog park, and rode his Gary Fisher mountain bike regularly because, he says, “Let’s face it. Mountain biking is free.” He lost 20 pounds. “People say that it’s a great opportunity to change career paths and all that stuff, but the only thing that really gave me sanity was exercise,” says Nagel. Rachel Stein, 28, a public relations manager in San Francisco, dealt with her unemployment last year by waking up early and packing her days with job searches and long walks. “I gave myself a routine,” she says. “I knew how important that was.” This past January, Stein launched a website, ” Tales from the Recently Laid Off .” But even discipline and all the exercise in the world can’t stave off the cruelest of the stages: Desperation. This is when all of the things that you previously shunned – like your mother’s well-intentioned-but-reaching job advice – suddenly don’t seem so ridiculous. You start actually entertaining them. Yikes. This is accompanied by a complete swallowing of your pride. Last spring, Michael Gargiulo, an unemployed freelance television producer in New York, got a call from his mother telling him that there was a news anchor with the same name on NBC4. She urged him to reach out to the “other Gargiulo” for a job. Initially, he resisted but after several months unemployed he sent “the other Gargiulo” an email explaining their many similarities – both work in broadcasting and both are from Brooklyn – and punctuated the email with a subtle plea, “In these tough economic times, us Michael Gargiulos have to stick together.” To Gargiulo’s surprise, the newscaster emailed him back the next day offering his home phone number and words of encouragement. Later, Gargiulo launched a Facebook fan page, “Michael Gargiulo Unemployed Genius,” to help navigate the job search because he says, “You have to have a little humor or you will go insane.” The final stage of unemployment is actually a road that forks into two possible choices, Surliness or Self-Help. Surliness happens when your frustration bubbles to the surface and you lash out. After getting a flurry of emails from Career Builder, an employment website, Nagel, the Indianapolis college admissions director who took up mountain biking, sent the website an email, “STOP F*CKING SENDING ME EMAILS.” He received a response threatening to ban him from the site and scolding, “I feel sorry for you however, because your temper & attitude is most likely why you can’t hold down a job! We suggest a good therapist to find out why your [sic] so angry at the world! We wouldn’t want a foul mouth like you working for us anyway!” Despite his desperation, Nagel was more amused than upset. Seeking help involves relying on support services or just deciding to be productive and determined rather than symbolically flipping unemployment the bird. Last November, Jayan Kalathil, an unemployed public affairs manager at MTV Networks published the book, “Generation Change,” taking on the task of self-branding and promotion to try and break back into the job market. “I think the biggest lesson I’ve learned,” he says, “is to say yes to different opportunities, invitations and everything that comes my way, something that I wasn’t as open to before I lost my job.” Early last year, Terry Drula began a support group in Westford, Mass., the St. Catherine of Alexandria Faith Works Unemployment Support Group, with ten members attending monthly meetings. About 25 members now attend. Drula says the group, comprised of a revolving door of chemical engineers, designers, software and marketing professionals, encourages members to identify career strengths and lets them network over coffee and cookies. It also organizes job search presentations to provide tools for reemployment. “There is a heck of a lot of quality people out there without jobs,” says Drula. As if losing your job isn’t bad enough, it seems as if unemployment may now actually kill you. Robert Leahy, director of the American Institute for Cognitive Therapy in New York and the author of the forthcoming book, Beat the Blues Before They Beat You , says that according to recent scientific studies, there is a strong link between unemployment and increased mortality rates, because of issues like increased stress, depression-related substance abuse and suicide. “Unemployment feeds into our worry, our pessimism, and is a major health problem,” he says. Leahy says after returning to work, the psychological effects that his patients suffer — like shame and isolation — don’t readily go away. Leahy encourages people to volunteer, exercise and restructure their daily routine and to avoid over-identifying themselves with their jobs. “What you do is part of who you are,” he says, but job seekers, “need to identify themselves as spouses, friends, fathers, mothers,” and other roles. In truth, many jobseekers say that they wouldn’t attend a support group meeting unless they were forced to attend, but there can be some merit to those measures. “Support systems can be very helpful if they go beyond complaining,” Leahy says. However jobseekers stay afloat despite the tidal wave of injured self-worth that threatens to crest over their heads daily, it is acceptance that most helps. This comes only after hitting bottom, though no one tells you that, either. And it looks different for everyone. For Sodergren, the “Coupon Lady,” bottom came when she tearfully realized she couldn’t even afford a $24.99 pair of shoes. For Stein, author of the blog, “Tales from the Recently Laid Off,” it came when she looked hard at the other folks vying for the same food service job she was considering. “It went from ‘I can’t believe I’m applying for this’ to ‘I can’t believe I’m competing for this,’” she admits. For me, hitting bottom came as I changed diapers and cleaned up Juicy Juice drink box spills while babysitting some of New York City’s privileged tots. I escaped the blues only after a total life overhaul. I went back to school and changed cities. Be warned: This method isn’t for everyone. Jobseekers can’t always convince their friends and family to understand their situation, but they can let go of their frustration while holding onto hope. Finding that peace will make things better. “I stopped blaming myself,” says Kalathil, author of “Generation Change,” “and understood that this is the nature of how things are right now. You never know what’s going to happen from day to day, so I just stay networking and stay optimistic because that sense of optimism is what gets you through it.” Still looking for work, I don’t wear my “One Tough Cookie” T-shirt anymore. I live it.

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Juniper Networks Appoints David Schlotterbeck to Its Board of Directors

September 2, 2010

SUNNYVALE, CA–(Marketwire – September 2, 2010) –  Juniper Networks® ( NYSE : JNPR ) today announced the appointment of David Schlotterbeck, chairman and chief executive officer of CareFusion, a leading global medical technology company, to the Juniper Networks board of directors.

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James Rucker: Google, Verizon, and You

August 19, 2010

There was a time not long ago when it was easy to believe that Google was a different kind of company — one that considered the public good as well as the bottom line in making decisions. My, how a week changes things. Google had once distinguished itself as one of the strongest corporate proponents of openness and freedom on the Internet. These characteristics are guarded by a principle called network neutrality , which basically means that Internet service providers can’t slow down or speed up data that flows over their networks. But last week, the company turned its back on net neutrality — and the American public. In practical terms, net neutrality prevents AT&T, which provides high-speed Internet service to millions, from making a deal with Hulu.com to make its videos load five times faster than Youtube’s. It means that FoxNews.com couldn’t make a deal with Comcast, another major Internet provider, to block progressive blogs critical of Fox such as JackandJillPolitics.com or Daily Kos. And Myspace couldn’t cut a deal with Verizon to slow down Facebook’s traffic so that consumers would choose Myspace instead. In that way, net neutrality guarantees that the Internet remains an open platform for ideas and innovation, where anyone with a good idea and technical know-how can find success — just like Sergey Brin and Larry Page, Google’s founders. Last Monday Google reversed its historic support for net neutrality, joining Verizon — an Internet provider that has been working to weaken or eliminate net neutrality — in announcing a policy proposal which, if adopted as law, would spell the end of the Internet as we know it. There are tons of problems with this proposal for everyone.  But as is often the case, poor people and people of color will get the worst of it. It would divide the Internet into a network-neutral “public Internet” and a much faster “private Internet,” where broadband carriers could write the rules. But the devil is in the details — the public Internet’s net neutrality protections are so weak that most Internet providers would be able to go around the rules frequently. The other major problem here is that the private Internet would come to choke the life out of the public Internet. As more of the companies and organizations that wanted to take advantage of cutting edge speed and services merely stopped producing content for the public Internet, the Internet would become a pay-to-play enterprise. As io9′s Annalee Newitz put it : “The public internet? Yeah, that’s just for poor people. But guess what’s going to remain on the public net, the place where you go when you don’t have money? Certainly there will be educational resources like Wikipedia. But mostly it’s going to be advertisement-saturated free content from major entertainment companies…. Put in brick-and-mortar terms: There won’t be any produce markets on the public internet, but there will be plenty of liquor stores. Another disturbing aspect of the Google-Verizon proposal is its so-called “wireless carveout” — essentially saying that mobile Internet would not be subject to network neutrality rules. All the same reasons that net neutrality is important on regular wired networks apply to wireless networks, and it’s important for all Americans. Wireless broadband is the future of the Internet, and the telecom companies want to kill neutrality there to lay the groundwork for a profit bonanza. But it’s also true that changing trends in Internet usage indicate that many of the harms of a non-neutral wireless Internet would disproportionately fall on communities of color. According to The New York Times ,the percentage of African-Americans using mobile phones or other connected devices to share e-mail, exchange instant messages and access the Internet for information on an average day has more than doubled since late 2007, jumping to 29 percent, from 12 percent. By comparison, only 19 percent of Americans over all log on to the Internet on a mobile device on a typical day. And nearly half of all African-Americans and English-speaking Hispanics were using mobile devices to surf the Web and send e-mail messages, compared to just 28 percent of white Americans. Perhaps worst of all, the Google-Verizon proposal would leave the web without meaningful protection from corporate abuses. If, under this framework, an Internet provider were caught violating one of the few rules left in place, their maximum fine would be $2 million. But as law professor Marvin Ammori notes , Verizon makes that much money in revenue every 10 minutes, and $10 million in profit every three hours. They would have little incentive to ever do the right thing so long as the benefits of their actions outweighed the cost, and in fact, their shareholders would come to demand it. As Ammori later says: “If the punishment for bank robbery was $10, we’d have more bank robberies…. Verizon and Google have a duty to their shareholders to maximize profit. Their proposal essentially says that cheating on your taxes lets you keep the taxes, if you pay 5 bucks. Of course their shareholders will expect cheating; the law makes it profitable.” This is what happens when corporations write the rules they are supposed to play by — they win, and the public loses. The good news is that this scheme isn’t law yet, and the Federal Communications Commission still has the power to act for the public’s best interest. But it first must revisit a Bush-era decision to deregulate broadband. By revisiting this decision and reclassifying broadband as a communication service, the FCC can do everything it needs to do to protect American consumers. And in fact, the Chair of the FCC, Julius Genachowski, announced his intentions to do this. But he has backed away from this plan under intense pressure from the telecommunications industry, choosing to try negotiating a deal with them instead. That’s why it’s so important to speak out and demand immediate action to protect the Internet, and our future in this new digital century. When the banks wrote and enforced the rules on Wall Street, our financial system melted down. When BP and other oil giants wrote and enforced the rules for deep-sea drilling, the Gulf Coast suffered the worst oil spill in world history. It would be foolish to now entrust the Internet’s future to the profiteers in the broadband industry and their new ally, Google. The FCC has all the tools it needs to protect our interests and ensure the Internet remains a vital engine of information exchange and innovation. Genachowski must act now, before Google and Verizon’s bad idea becomes an even worse reality.

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Michele Colucci: The Language of Venture Capital

August 9, 2010

The first time I attended a conference to learn about venture, I was greeted at the door by a man who said, simply, “VC or Entrepreneur?” I knew I wasn’t a “VC” or Venture Capitalist, but had never realized that I was an Entrepreneur — or that the word “Entrepreneur” could actually be a job title. So, shortly thereafter, I joined the ASTIA program for female entrepreneurs (now firm in my conviction that I was an Entrepreneur). This is an incubator for female CEO’s with start-ups. I distinctly remember sitting in one of the first seminars struggling to follow the language one of the instructor/CEO’s was using to demonstrate how to assemble my company financials. It was then that I realized that almost every other woman in the room was struggling to keep up as well. Yes, there were a few MBA’s who had the lingo down, but not the rest of us. And what I also realized was, it wasn’t because we weren’t able to articulate what was being asked of us — in fact, most of us could rattle off the answers if asked in layman’s terms. But not so in venture speak. Since that time, I’ve started to familiarize myself with the terminology necessary to operate in this world of start-ups, fundraising and building a business. It was not something that, as a woman, I had ever been exposed to, though I had started businesses before. And I realized that women in particular are very disadvantaged by not knowing this language. So, for my first blog, I am sharing with my fellow female entrepreneurs what and how I learned the “language of venture.” Here are a few suggestions that worked for me: 1. Attend pitch sessions. Most angel groups have showcases. (you can Google angel showcase in your area; or if you don’t find any, check out www.vator.com , the www.pitch.com or other online pitching opportunities. (Note: a “pitch” is exactly what it sounds like — you explain your idea in concise, clear language designed to let your potential investor see what you see in the idea with an end goal of getting them to give you money to do it.) I’d also suggest seeking the advice of others in the audience. If you’re lucky enough as I was to sit next to someone who will take the time to critique the pitches for you (my chance meeting was with Ted Driscoll, angel, VC and now friend extraordinaire…), then take advantage of the fact that most have probably seen hundreds of these pitch’s and can focus you on the most effective way to clearly and concisely present your business and connect with potential investors. 2. Earnings Calls: I got a great bit of advice from a friend at Goldman I met on a plane years ago. He said: Listen to earnings calls. Anyone can call in. So give it a try. Write down all the words you hear that you are not familiar with. Then look them up. Google them. See how they’re used. Then try to apply them to your business. If you pick up languages easily, great. If not, listen more. You’ll pick it up and soon start talking about your relationships in terms of scaling! ( Or not… yikes… time to bail. ) 3. Power Point: Do a tutorial for using the Power Point program. This is the common form of presentation when you pitch your idea to potential investors or venture folks. I have always liked Bill Reichert’s pitch guidelines. Aside from being a smart man (evidenced by the fact that he’s married to a very lovely and smart woman who’s also a lawyer and also a Michelle), his advice is solid. You can find his slideshow presentation here , which contains the ten things that should be in your presentation. And don’t be deterred when they ask you to make it “pretty.” I was so worried about insulting my audience that I had all very serious words and statistics on each page. I was told venture loves statistics that support your proposition that the market is huge and that they will make tons of money if they invest — so they don’t have to take your word for it. Wrong on the words. Right on the statistics. Venture folks don’t like to work too hard to get your point. If they do, you lose their interest. Think of it like dating: If you take one look at him and yell “check!” — it’s probably not going to be a match made in heaven. 4. Connect to Women Run Networks: There are several networks promoting women such as ASTIA , Girls in Tech , Catalyst . I started with ASTIA, which is an incubator. Sharon Vosmek, ASTIA CEO, throws out some pretty interesting statistics (i.e. only 4.3% of venture investments in 2006 had female CEO’s). Translation = opportunity! So find one in your area and connect. Aside from providing access to funding, these places teach you “investor speak.” This language includes crafting your pitch, assembling a team, identifying market statistics that prove people need/want what you’re offering, assembling credible financials to make profit projections (another blog on this another day… ), and possible exits (how will investors realize their profit). They also provide relationships with other CEO’s or with “coaches” who have experience in your field. Bottom line, it’s all about being able to effectively communicate in their language the need for what you’re selling in the market, that your particular solution is the answer, and explaining just how your opportunity will make your investors rich (… now that’s a language we can all understand ). Hopefully I’ve been able to shed a little light on the language barrier preventing many women from obtaining venture investment for their business. If you have more suggestions or funny venture speak stories, I’d love to hear them! Inspire, Innovate, Illuminate, Michele

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Inder Sidhu: Profiles in Doing Both: The View That Changed Television

July 19, 2010

Later this year, two TV legends, Oprah Winfrey and Larry King, will sign off for the final time. Given their recent ratings, it’s probably for the best. So far this year, King’s ratings have fallen by more than 40 percent . The Queen of Daytime Talk has also seen better days. In June, Winfrey’s ratings dipped to their lowest level ever. While superstars continue to attract viewers on other networks, the struggles of these megawatt personalities underscore how difficult it is for an individual to command the attention of millions of fans year after year, in good times and bad. But the news isn’t all bad in talk shows. The ensemble cast of ABC’s The View is changing daytime TV . Unlike other programs that showcase the talents of one or two mega-stars, The View ushered in a new era where critical issues are discussed and dissected by a panel of contributors. Though rarely seamless, their combined delivery is almost always entertaining. “We’re political, funny and still very smart and extremely relevant,” says co-host and co-executive producer Barbara Walters . If you don’t know The View, it boasts superstars in TV news legend Walters and Oscar, Tony, Emmy and Grammy award-winning actress Whoopi Goldberg . Rounding out the cast are comedian Joy Behar, actress Sherri Shepherd and conservative commentator Elisabeth Hasselbeck . Together, they were honored in 2009 with an Emmy for Best Daytime Talk Show Hosts. For 60 minutes each morning, these women debate everything from major world events to the latest celebrity gossip. When they speak–often over one another or in roundtable interviews–they pull no punches. No topic is too sacred or too sensitive. Instead of cooking tips or fashion makeovers, the hosts of The View tackle everything from the iPhone 4 to torture . And critics and viewers alike love what they do. In 2009 and 2010, ratings climbed to their highest point since the show went on the air in 1997. So how do five people from different backgrounds, political persuasions and generations collaborate so successfully? They do what a lot of successful sports teams and corporations do: They nurture both individual superstars and the collective team, generating results that neither could achieve on their own. Take Walters, for example. The first female TV news anchor in U.S. history, Walters has interviewed presidents, kings and sheiks ranging from Richard Nixon to Fidel Castro. Her hard-news background lends credibility to The View. And the others lend it broad relevance. Hasselbeck, for example, is an outspoken critic of left-leaning politics and socially progressive lifestyles. Her presence on the show attracts guests that might otherwise avoid the show. But thanks to her input, The View provides balanced programming, attracting a wider audience. Each member of the team brings her respective strengths to bear. Behar, for example, conducts most of the guest interviews, while Shepherd provides comic relief in tense moments. By leveraging the output of its superstar performers and maximizing the contributions of its collective team, The View has bucked the downward trend in daytime viewership. But the work has not been easy. It took years for the show to find the right combination of stars and role players–and a lot of pain, too. Former co-host Rosie O’Donnell quit The View in 2007 after repeatedly sparring with her peers, especially Hasselbeck. A star in her own right, O’Donnell didn’t mesh well with the ensemble cast and the show suffered as a result. Since the O’Donnell debacle, the show’s producers have worked to find the right combination of stars to build a truly unique team. The team is now so strong that it now relies less on daily guests, turning instead to the popular–and intense–roundtable discussions. By nurturing both individuals and the team, The View has reached more people than ever before. Doing both has not only lifted the fortunes of ABC, but changed the way we see TV. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

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Video: Bloomberg’s Adewuya on Nokia Siemens’s Motorola Unit Buy: Video

July 19, 2010

July 19 (Bloomberg) — Bloomberg’s Iyan Adewuya discusses Nokia Siemens Networks’ agreement to pay $1.2 billion for wireless network assets from Motorola Inc. to expand in North America and Japan. Adewuya also discusses Carlyle Group and TPG Capital’s agreement to buy Australia’s Healthscope Ltd. for A$2 billion ($1.7 billion) and Kinder Morgan Inc.’s possible initial public offering. He talks with Scarlet Fu on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Video: Minyanville’s Harrison Says Hefner Wants Playboy Mansion: Video

July 12, 2010

July 12 (Bloomberg) — Todd Harrison, chief executive officer of Minyanville Media Inc., speaks about the proposal to take Playboy Enterprises Inc. private by founder Hugh Hefner. FriendFinder Networks Inc., owner of Penthouse adult magazine, plans to submit a bid for Playboy following the $123 million offer from Hefner. Harrison talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: Minyanville’s Harrison Says Hefner Wants Playboy Mansion: Video

July 12, 2010

July 12 (Bloomberg) — Todd Harrison, chief executive officer of Minyanville Media Inc., speaks about the proposal to take Playboy Enterprises Inc. private by founder Hugh Hefner. FriendFinder Networks Inc., owner of Penthouse adult magazine, plans to submit a bid for Playboy following the $123 million offer from Hefner. Harrison talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Alex Nogales: Comcast’s Contract With Latinos: A Step in the Right Direction, Not a Solution to Media Consolidation

July 9, 2010

When Comcast announced last fall that it planned to merge with NBC Universal, few were more skeptical of the deal than I was. As I stated in my testimony before the House Judiciary Committee on June 7th, if this deal is approved, it will be the first time in history that a major cable company will control both the dissemination of content and the content of major film, cable, and television networks. Moreover, this merger could cause more consolidation by Comcast’s competitors, an unsettling idea for those of us who care about receiving diverse viewpoints from competing media sources. However, most troubling to me, as the leader of an organization focused on diversifying the media, was Comcast’s record with Latinos. In December of 2009, the Hispanic Association on Corporate Responsibility released a report on the diversity performance of thirty four Fortune 100 companies, including Comcast. The rankings were based on the diversity of Comcast’s employment, procurement, philanthropy, and governance. Comcast received only 50 out of 100 points. Only three companies scored worse, one of which was General Electric — NBC Universal’s parent company, which scored a pitiful 30 out of 100 points. For these reasons, I welcomed the invitation to discuss Comcast’s diversity efforts with its CEO and other executives. At that meeting I entered into a six member negotiating team of leaders from the Hispanic community, that included top representatives from the National Hispanic Leadership Agenda (NHLA), the League of United Latin American Citizens (LULAC), National Council of La Raza (NCLR), Hispanic Association on Corporate Responsibility (HACR), and the Cuban American National Council (CNC). And over the past few months we set forth in good faith to draft a Memorandum of Understanding (MOU) to help Comcast improve its diversity efforts. On June 25th we came to an agreement with Comcast. I believe that this MOU is a positive first step towards diversification at Comcast and I look forward to working with Comcast to execute its many specific and general initiatives. This MOU is similar in some ways to the ones that the National Latino Media Council (NLMC), of which NHMC is secretariat, has with the broadcast networks, ABC, CBS, NBC, and FOX. Through those MOUs we have seen incremental improvement at the networks, but of course, change does not happen overnight, and after ten years we continue to work with the networks to improve their employment and procurement efforts. I do not purport that this Comcast MOU is a silver bullet that will repair all of the ills that media consolidation brings to society. That is not the focus of the MOU, though there are several provisions in the agreement that will bring more independent programming and networks to Comcast’s cable systems, and will stifle some of the adverse effects of media consolidation. For instance, Comcast has agreed to add ten new independently-owned and operated programming services to its cable systems over the next eight years following the closing of the transaction. Four of these networks will go to Latinos. At least two of those will be American-Latino-operated, English-language channels and will be on the digital tier (D-1). One of those two will be added within 18 months, and the other within 36 months of the closing of the transaction. Comcast will add two additional networks in which American Latinos have a majority and/or substantial ownership interest within six years of closing of the transaction. In addition, Comcast has agreed to extend carriage of at least three of its existing programming services from independent entities that are American Latino owned or controlled or that target the Latino community with English or Spanish language programming. Comcast will fulfill this commitment within six months of closing of the joint venture. These services will be carried on the digital tier (D1) or better, and will reach at least 10 million new subscribers. NHMC insisted and Comcast agreed that it will increase investment for local newscasts and local public affairs programs at Telemundo stations. Comcast explicitly agreed not to cut any local Telemundo newscasts, and agreed to set about expanding those newscasts. NHMC will tirelessly monitor Comcast from here on out to ensure that it is keeping these, and all of the many other promises it made in the MOU, and not just those that relate to programming, but also those dealing with its employment, procurement, philanthropy and governance. Indeed, the MOU itself contains specific language about the monitoring process. Annually, Comcast will give NHMC its programming details and statistics. In turn, NHMC will issue a public report on Comcast’s progress, or lack thereof. NHMC and our sister organizations have fought hard for these and other provisions in the MOU. Could they have been stronger? Perhaps. Do they solve the problem of media consolidation? No. But it is my hope that this is the first in a great number of steps towards improving diversity at Comcast. And now I can rest easy at night knowing that even if this mega-merger gets approved by the FCC, that we have a mechanism in place to ensure that Comcast serves the Latino community even in the face of its recently-gained market power.

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Brett King: BANK 2.0: Branch Networks under threat!

June 28, 2010

I’ve spent the better part of the last three months meeting and talking to some of the best and brightest bankers in Australia, Asia, UK and the USA and what I’ve learned is fairly predictable, and just a little disappointing. Direct banking (mostly Internet and Mobile) is going off everywhere I go, but most banks are still saddled with an unhealthy attachment to their branch networks. I decided to try and figure out where Branch banking is really going and surmise the strategic options for Retail banks. Branch Networks under pressure In the US last year branch growth was non-existent, well to be technically correct branch growth was 0.39% , but that is the lowest it has been in 14 years and the trends are clear – there will be no more branch growth in the USA. In the UK branch growth has declined on average 24% in the last 5 years. In Australia, after fits and starts, branch decline has definitely set in, with 2010 being the 4 th year running that branches have declined in numbers. In Sweden last year, 88% of Swedes didn’t even visit a branch . In the annual American Banker’s Association survey on channel preferences, the branch continues to suffer (41% decline in just 3 years) as Internet Banking has become the dominant day-to-day channel of choice. So does this spell doom and gloom for banking? No. There is some good news, in fact some may say excellent news on the horizon. What UBank and ING Direct tell us In Australia, UBank , an exercise in direct banking for NAB has rapidly paid dividends. Within just 3 years UBank has become the 8 th largest bank by deposits in Australia. But where can UBank go from here after such a strong start? While UBank has faced some leadership challenges in recent times , I spoke to Sam Plowman , Executive GM of Direct Banking at NAB, last week and I was delighted to hear that UBank is a big part of their forward-looking strategy, with a host of new products planned over the next few months. This must be the only sensible move for NAB given their current market share and the unbridled success of UBank. In fact, UBank would probably have to be considered the single most successful initiative NAB has launched in the last 5 years, wouldn’t it? Sam’s colleague Simon Terry is currently working on the launch of the Oracle-powered NextGen platform that will power future innovation in customer experience. Between Sam and Simon, they hold the future of the bank in their hands. If UBank continues to perform so well though, what happens to NAB itself? The key lesson from UBank’s success must be that direct banking is at the very core of NAB’s business moving forward – if NAB falls into the trap of thinking it’s a one-hit deposit taking wonder, they would be missing the point; Customer Behaviour has already shifted. How do you deal with the runaway success of a new direct banking brand when you run a $100m branch network? Tough question… Is UBank an isolated case? ING Direct recorded profits of US $101m profit (EUR 75m) last year up 70.5% year-on-year, this in the tail of the global financial crisis. Rabo Bank, Jibun, Shinshei and PayPal have all had similar results as either Internet-only or mobile-based models of banking and payments. But it’s not just profitability. Branch networks are contracting as customer behavior shifts In their annual customer satisfaction survey, UK-based consumer sentiment research group Which? polled over 15,000 UK members to see what they thought about the relative performance of the various high street and direct banks. First Direct and Smile were top of the ranking this year, with scores of 89% and 87% respectively. Mobile increases the threat to Branch Mobile is now a huge area of investment. Bank of America has more than 4 million customers actively using their mobile banking platform currently, making it the most successful mobile bank in the USA. BofA say they’ve added more than 150,000 new customers just because of their mobile platform. But mobile is more than a transactional channel for BofA as this excerpt from a recent Bloomberg article shows: Bank of America Corp. went from buying an occasional mobile campaign to paying Phonevalley , the agency run by Publicis’ Mars, a $1 million annual retainer, said Kathryn Condon, a vice president of digital marketing at the bank. Google’s AdMob is among the ad-placement companies used by Bank of America, the largest U.S. bank by assets. With Direct and Internet banking at all time highs in terms of adoption rates, with the breakout success of mobile Internet banking in recent times, and customer channel preferences clearly shifting for the bulk of retail segments, where can we go from here? Where to from here? There are three scenarios for Branch Networks: All the trending data is wrong and the branch is about to face a resurgence in popularity because people seek a return to high quality, face-to-face engagement Nothing will happen – branch population will neither grow nor decline in the next few years All the trending data is right and we are seeing a shift in customer behaviour that will increasingly see branch-based banking at risk When retail distribution specialists are looking at the positioning of branch real-estate there are a number of considerations, but the foremost consideration is where physically to put a branch to enable the most visits – essentially, how convenient it is to get to a branch. But these days, the branch simply isn’t the most convenient channel to use – Internet, Mobile and ATMs are far more ‘convenient’. Key segments like Mass Affluent, and key product areas like mortgages, wealth management and loans are just too easy to position and service through direct channels. Branches better start figuring out how they’re going to make money over the next 5 years, and they better do it fast. The first thing banks need to do is reorganize their organization structure to be channel agnostic. The days of ‘alternative’ channels are gone – Internet, mobile, direct are mainstream. Thus, the organization structure should reflect the same – Head of Branches, Head of Internet, Head of Mobile, Head of Social Media should be equals in the retail team- why? Because that’s how customers think. The second thing is banks need to get better at measuring where the money comes from. A customer might end up at the branch, but how does he get there? Does he get there because of a compliance procedure (“Can you come into the branch to sign this?”) or does he end up there because he wants a face to face discussion? By better understand the behavioral drivers, we can determine those branches which will remain profitable and those that no longer cut the mustard, as they say.

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Trading Floor TVs, Atrium Stadiums Help Firms Avoid Soccer Sick-Note Surge

June 18, 2010

By Paul Jarvis and Armorel Kenna June 18 (Bloomberg) — Kellogg Co. doesn’t have to worry about staff at its U.K. headquarters staying away from work or sneaking out of the office when England plays its potentially decisive World Cup game against Slovenia next week. When the match kicks off at 3 p.m. local time on June 23, the 660 employees at Kellogg’s base in Manchester, northwest England, will be allowed into the building atrium to watch the team’s attempt to qualify for the tournament’s latter stages. “It’s fantastic that we are being able to watch it from work,” said Louise Davies, assistant communications manager for the cereal maker. “It’s hard to imagine that with a big crowd, employees won’t want to join in to watch the match.” With many World Cup games taking place during working hours, European companies must decide whether to make provisions for staff wanting to follow their team. Those that don’t risk absenteeism or clogged Internet networks as workers log on to live streams of the games. The cost to U.K. businesses in terms of lost working hours may reach 1 billion pounds ($1.48 billion), according to the Chartered Management Institute. Fiat SpA , Italy’s biggest carmaker, can get as many as 500 medical notes from employees on the day of an important soccer match, according to two people familiar with the matter. Credit Suisse Group AG ’s office in London has a small auditorium available to allow its employees to watch certain games of the World Cup and has screens in the background across dealing rooms. It’s raising money for the Alzheimers Society by selling flags to employees supporting their individual teams. Accommodating Requests “There is huge goodwill, both in terms of employee engagement and in productivity, to be gained from accommodating flexible working requests or allowing staff to take a couple of hours out to watch the games,” said Michael Rendell, leader of human resource services at PricewaterhouseCoopers LLP. Nomura Holdings Inc. , Japan’s biggest brokerage, has made arrangements for employees throughout Europe to watch the World Cup matches either via the Internet at their desks or on large screens in separate rooms. “Our employees work hard and manage their time effectively so the management are happy to make provisions for people to watch the games over the coming weeks,” the firm said. According to a survey conducted in April by YouGov and Telegent Systems, 38 percent of employees in England would be prepared to skip work to watch the soccer. Of 2,463 people interviewed online, 48 percent said allowing staff to watch games at work would have the most positive impact on morale. Flexible Shifts J Sainsbury Plc, the U.K.’s third-largest supermarket chain, is allowing workers to book time off, swap shifts, start or finish earlier and time their breaks to coincide with kick- offs. QAS Ltd., a unit of credit-checking company Experian Plc, sent an e-mail to staff before the start of the World Cup asking them to nominate a team which they would be allowed to watch at local pubs. “We obviously have to make sure we haven’t got an important meeting when out of the office, and need to make up the time later, so it works well for us and the company,” said Nick Moodie, who works at QAS and watched New Zealand play Slovakia this week at the Frog pub in Clapham, south London. A study of 1,000 British workers commissioned by PricewaterhouseCoopers LLP showed that 53 percent of male employees and 21 percent of females aimed to watch World Cup matches during office hours. About 5 percent planned to watch without their employers’ permission or call in sick. Clogging Networks Businesses that fail to make adequate provisions for their staff to watch games may find that the performance of their Internet network slows as employees log on to live streams, said Scott Morrison , an Antibes-based vice president at Gartner Inc. “Organizations have to maintain the threat that if network performance is affected too much they will block streaming traffic and that’s certainly the approach many organizations we are speaking to are taking,” Morrison said. In Germany, employees of sports goods makers Adidas AG and Puma AG will get to see the matches. At Adidas’s Herzogenaurach headquarters, televisions have been installed in the stadium- like exhibition center and the “Stripes” canteen, spokeswoman Katja Schreiber said. Puma has set up projector screens in its canteens, according to spokeswoman Kerstin Neuber . Infineon Technologies AG , Europe’s second-largest chipmaker, is arranging public viewing of today’s lunchtime game between Germany and Serbia in the staff canteen, spokesman Christian Hoenicke said. SAP AG, the world’s biggest maker of business-management software, is showing all matches on a big screen at its Walldorf, Germany, headquarters and two nearby locations, according to spokeswoman Angelika Pfahler . Business as Usual Not all are so sympathetic. Daimler AG, the world’s second- biggest luxury carmaker, doesn’t allow staff to watch World Cup matches at work, spokeswoman Dominique Albrecht said, citing job-safety directives. Beiersdorf AG, the German maker of the Nivea skin cream, isn’t providing public viewing facilities in its Hamburg headquarters, spokesman Ralph Esper said. At ING Groep NV, the Netherlands’ biggest financial- services firm and a sponsor of the Dutch team, employees at some locations have to pay an entrance fee to see games that goes to ING’s and Unicef’s charity program “Chances for Children.” “Every business around the world has to make its own arrangements,” said ING spokesman Frans Middendorff . “Several ING offices in the Netherlands facilitate watching games by the Dutch team, work permitting and after management approval.” Royal Bank of Scotland Group Plc will convert an atrium at its London office into a soccer field with giant screens to entertain bankers and clients during the World Cup. RBS will invite as many as 3,000 investment banking clients to watch the matches, according to an e-mail to employees earlier this month. “With a canopy covering the space, an indoor pitch and giant screens it promises to be a great venue to watch the games,” the bank said. To contact the reporters on this story: Paul Jarvis at pjarvis@bloomberg.net ; Armorel Kenna in Milan at akenna@bloomberg.net .

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Viacom to Start Paying Its First Dividend, Buy Back Stock Amid Ad Rebound

June 9, 2010

By Sarah Rabil June 9 (Bloomberg) — Viacom Inc. , the owner of MTV Networks and the Paramount Pictures film studio, will start paying a dividend for the first time and buy back as much as $4 billion in stock as the advertising market recovers. The quarterly dividend of 15 cents a share will be payable on July 1 to shareholders of record on June 21, Viacom said today in a statement. It’s the first time the company will pay a dividend to investors since Chairman Sumner Redstone split Viacom and CBS Corp. at the beginning of 2006. Viacom Chief Executive Officer Philippe Dauman said on an April 29 conference call that Viacom would consider buying back stock or starting a dividend after profit beat analysts’ estimates and the ad market started to bounce back. Viacom, which also owns Comedy Central and VH1, hasn’t repurchased stock since suspending buybacks early last year amid the recession. “With the cash flow Viacom is generating, they had to figure out a good way to spend it,” said Chris Marangi , an analyst at Gabelli & Co. in Rye, New York, who recommends buying Viacom shares . “The timing is right for this.” Media companies are increasingly weighing dividend increases or buybacks as ad demand recovers, after cutting payouts last year by 33 percent from 2008, according to data compiled by Bloomberg. CBS, owner of the most-watched U.S. broadcast network, has said it will address returning cash to shareholders over the next few quarters. New York-based News Corp. is also evaluating uses of cash, Chairman Rupert Murdoch said May 4. Rising Earnings Viacom ended the first quarter with $358 million of cash and equivalents, up from $298 million at the end of the fourth quarter. The company’s first-quarter profit rose 38 percent, topping analysts’ estimates. The dividend will cost about $270 million this year and $365 million per year after that, Dave Novosel , an analyst at Gimme Credit LLC in Chicago, said in a report today. Viacom may generate $1.5 billion in free cash flow in 2010, enabling it to “easily afford” the payout, he said. Viacom won’t spend more than its free cash flow on dividends and buybacks, Novosel said. Viacom said it will begin repurchasing shares in the fourth quarter. JPMorgan Chase & Co. analyst Imran Khan said the media company may beat his 2011 earnings estimate of $3.02 a share by 5 percent if it spends $400 million in stock buybacks in the fourth quarter and $2 billion in 2011. Viacom rose $1.08, or 3.3 percent, to $33.63 at 1:49 p.m. in New York Stock Exchange composite trading . The shares had gained 9.5 percent this year before today. CBS gained 78 cents, or 5.9 percent, to $14.09. CBS, also controlled by Redstone, chopped its dividend by 81 percent in February 2009. Prior to that, CBS had raised the payout five times to 27 cents after the separation from Viacom. To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

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Manoj Gujral Joins Cavium Networks as Vice President & General Manager of the Broadband and Consumer Division

May 17, 2010

MOUNTAIN VIEW, CA–(Marketwire – May 17, 2010) –   Cavium Networks ( NASDAQ : CAVM ), a leading provider of semiconductor products that enable intelligent processing for networking, communications, and the digital home, today announced that Manoj Gujral has joined the company as Vice President and General Manager of the Broadband and Consumer Division (BCD).

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Dan Solin: Worst Advice in the World for Volatile Markets

May 11, 2010

Volatile markets bring out the worst in the financial media. They are so excited about all the attention they are getting, they feel compelled to provide endless, nonsensical advice to their beleaguered readers and viewers. Let me ask you this question: Why do you pay any attention to them? I can’t recall hearing the financial pundits predict the dramatic drop we experienced in the Dow this week. And few of them advised us to short the markets, or that the run-up (which they also did not predict) was a “selling opportunity.” Oddly, when the markets go bonkers, the networks turn to the same “experts” to explain what’s going on to viewers who were blindsided by their previous advice. It’s not surprising that the new insights are just as defective as the old advice. Here are the most common categories of flawed advice inundating investors: 1. The bull market is ending . I see. You have the ability to time the markets. You know when it is going to up or down. You are very unique. Every study I have seen of the track record of market timing gurus is dismal. If someone had this expertise, wouldn’t you think they would publish their track record so we could all marvel at it? Instead, legendary investors like Benjamin Graham have observed the opposite: “If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what’s going to happen to the stock market.” 2. Flee to safety . Why are you “fleeing” to anything? Unless you are gambling, you have no exposure to stock market risk if your time horizon is less than five years. You don’t care what is happening today or tomorrow in the markets. If you have a longer time horizon, you have an appropriate asset allocation, which permits you to ride out the lows and wait for the markets to recover. 3. Focus on stocks that will not be affected by the global financial crises . Why would you “focus” on any individual stocks? You know the expected return of an individual stock is about the same as the index to which it belongs, but with significantly greater risk because of “idiosyncratic” or company-specific risk. You are better off sticking to a globally diversified portfolio of low cost index funds. 4. This is a “buying opportunity” for a specific stock. Really. Why are you so lucky? Do you believe the stock is priced too low by the market? What information about the stock do you know that is not public and taken instantly into account in pricing the stock? Down markets may or may not be a “buying opportunity” for any particular stock. However, you have no way of knowing, which means the risk is high that you might be wrong. Taking big risks is gambling, not investing. 5. Buy gold . So you believe that gold is mispriced? It is hardly a secret that the world is beset with a financial crises. Don’t you think that has been factored into the current price of gold? Don’t get me wrong, I don’t have a clue about the future price of gold. Every portfolio should have a percentage allocated to commodities, including gold, as well as all other asset classes. This issue is not “should you own gold?” It is, “should you overweight your portfolio in gold?” If you decide to do so, you should be aware of the risk you are taking. All of the advice has one theme in common: You must do something now! Intelligently constructed portfolios don’t take the temperature of the markets daily and act accordingly. They change when the investment objectives and tolerance for risk of the investor change. Investors control their portfolios. The media turns this basic principle on its head and encourages investors to let the markets control them. Don’t fall into this trap. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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