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Cable Networks Take Stab At Controlling Web Viewership
Story from the Wall Street Journal

Several major cable networks and subscription-TV providers are readying systems that will let only paying subscribers watch cable shows on the Web, part of an effort to counter the growing amount of free TV shows available online.

Comcast Corp., Time Warner Cable Inc. and DirecTV Group Inc. plan trials of subscriber-only online services this summer, according to people familiar with the matter.

Comcast's test, which it announced Wednesday, will cover 5,000 homes and feature programming from Time Warner Inc.'s TNT and TBS networks, including TNT's "The Closer" and TBS's "My Boys."

Networks such as A&E and the History Channel, which areowned by a venture of Walt Disney Co., Hearst Inc. and General Electric Co.'s NBC Universal, along with networks owned by Scripps Networks Interactive Inc. and Cablevision Systems Corp.'s Rainbow Media are also slated to participate in Comcast's test, according to executives. NBC Universal said it is also in talks to participate in Time Warner Cable's test.

While limited, the new tests represent part of an industry-wide push to preserve and possibly expand the cable-TV business's lucrative subscription model in a digital world. The move also come as media companies are struggling to make money from online video.

A large amount of TV content has already made its way online—particularly from broadcast networks that depend largely on ad revenue. In addition to putting shows on their own Web sites, NBC Universal and News Corp., owner of Fox Broadcasting (as well as The Wall Street Journal) formed Hulu, an ad-supported Web site that aggregates TV programming. Disney's ABC recently signed on, and CBS Corp. has its own video site, TV.com.

Cable operators have chafed as cable networks have posted some of their programming online. The new systems would allow networks to put more programming online without enticing viewers to cancel cable-TV subscriptions.

"The vision is you can watch your favorite network's programming on any screen," said Time Warner Chief Executive Jeff Bewkes, one of the plan's most ardent proponents, at a press conference Wednesday. He added that the plan is "not defensive."

Mr. Bewkes said in interview he is in talks with other providers, including DirecTV, Dish Network Corp., Verizon Communications Inc. and AT&T Inc., and expects to announce more deals in "days or weeks."

A DirecTV spokesman said it will launch a trial this summer. Terry Denson, Verizon's vice president of content and programming, said the company is close to an agreement with Time Warner and other content providers about a similar test. Representatives of AT&T and Dish declined to comment.

There are still significant technical and business hurdles to launching such a system. Some cable-network executives say they believe that cable operators should pay extra for putting more programming online.

Both Time Warner and Comcast said Wednesday that the system they are pursuing will be interoperable with other companies' systems to authenticate subscribers.

There's also a question of whether some media companies will want to sequester their most popular content behind a subscription wall. "People are afraid to go first," said Mr. Bewkes. "We aren't."

FCC Begins Final Review Of Century Tel - Embarq Deal
Story from the Wall Street Journal

WASHINGTON – The Federal Communications Commission is in the final stage of reviewing CenturyTel Inc.'s $11 billion acquisition of Embarq Corp. and could sign off on the deal as soon as this week, clearing the last regulatory hurdle facing the merger of the two midsize phone companies.

The three-member FCC board is waiting to review a final draft of a deal to approve the merger, said people familiar with the review, although negotiations on merger conditions have been substantially completed. The deal received shareholder approval in January and a final nod from state regulators last month.

The companies have agreed to provide faster Internet speeds to their broadband customers at the request of the FCC. The companies committed to providing substantially higher speeds to customers in rural areas within a relatively short time frame to gain the FCC's approval of the deal, which was announced in October.

The FCC's insistence on improved broadband service for rural customers as part of the deal shows how its been focusing more intensely recently on ways of getting more Americans online at faster speeds. The agency is currently working on a national broadband plan designed to offer a roadmap for improving Internet access across the country.

In past years, the FCC has focused more on Internet retail pricing, not speeds, in other recent phone company mergers, including AT&T Inc.'s acquisition of BellSouth Corp. in 2006.

Within three years, the combined company has pledged to offer at least some broadband service to retail customers who are connected via lines that can transmit Internet data.

At least 90% of broadband customers would have download speeds of at least 768 kilobits per second within three years. Within two years, 87% of customers with broadband access would have download speeds of at least 1.5 megabits per second.

Additionally, the companies promised to offer speeds of three megabits per second to 75% of broadband customers within a year of the close of their merger and increase that access to 80% of customers within three years.

On Friday, the two companies signed off on a series of relatively minor conditions, many of which focus on requirements that the newly combined company adopts Embarq's business practices in dealing with wholesale customers.

The combined company, which will be called CenturyLink, will operate in 33 states, with 7.5 million phone lines, 2.1 million broadband subscribers and 440,000 video customers.

A spokeswoman for Embarq declined to comment, citing the FCC's ongoing review of the deal. A spokeswoman for CenturyTel couldn't immediately be reached for comment.

The FCC is on a relatively tight deadline to sign off on the deal, since it will lose one member when the Senate confirms incoming Chairman Julius Genachowski. A Senate vote on Mr. Genachowski's confirmation could come as soon as this week.

Another Democratic FCC commissioner, Jonathan Adelstein, will leave the board when Mr. Genachowski arrives. FCC officials want to complete the deal before the new chairman arrives so that it won't be delayed any further.

Smaller Proves Better For Radio Biz
Story from the Wall Street Journal

For much of the 1990s, the radio industry threw a party for investors, fueled by deregulation and mergers. Then came the hangover.

Acquisitions have burdened numerous broadcasters with heavy debt, including half of the 10 biggest such as Clear Channel's parent CC Media and Citadel Broadcasting.

At the same time, intensifying competition for listeners, from satellite radio and the Internet, helped slow growth in advertising. The recession sent revenues off a cliff. Station ad revenues fell 7.8% in 2008 and are expected to drop a further 15% this year, estimates consultant BIA Financial Network.

That has highlighted an excess of capacity. The number of commercial stations rose 2% to 11,213 from 2004 to 2008, according to the Federal Communications Commission.

One solution is an industry restructuring involving the closure of stations. That could happen if there are some bankruptcy filings.

In the near term, however, the best positioned broadcasters may be those exposed to smaller markets, where competition for ad dollars is less. Average revenue at stations in markets below the top 50 fell 6.6% last year compared with around 9% for bigger stations, BIA estimates. It projects smaller stations will continue outperforming through 2013.

That's not great for No. 2 broadcaster CBS, which has been selling stations in smaller markets. But it could be good for companies like Saga Communications, many of whose 89 stations are in small markets. Saga is trading at a lowly 3.6 times Wachovia Capital's projected 2009 earnings.

Investors tuning into radio now will have to endure a lot of static. But for those willing to leave the big city, the signal may be clearer.

Union Reaches Tentative Agreement With Boston Globe
Story from the Wall Street Journal

The Boston Globe late Tuesday reached a tentative agreement with its largest union on a package of wage and benefits cuts intended to curb deepening losses at New England's biggest daily and streamline it for sale.

Officials from the Globe and the Boston Newspaper Guild said the tentative agreement is similar in scope to the one Guild members rejected two weeks ago, but this one includes a smaller wage reduction of 5.94%, offset by steeper benefits cuts, likely to tilt the scales toward ratification.

Guild members will be briefed on details of the agreement at a general membership meeting scheduled for Wednesday, the Guild said in a statement, and a vote has been set for July 20.

"Our aim throughout our negotiations has been to achieve the necessary savings in a way that causes the least hardship for our employees. We're very pleased to have reached an agreement that accomplishes those goals," Globe publisher Steve Ainsley said in a statement.

The agreement is a breakthrough for the two sides, which have been locked in increasingly contentious talks since early April when Globe parent New York Times Co. threatened to close the paper if it couldn't get $20 million in concessions.

Two weeks ago, the Guild, which is responsible for half of the $20 million in concessions, voted against a proposal that called for an 8.4% wage reduction, furloughs, a pension freeze and the elimination of job guarantees, among other concessions. In response, Times Co. said it would impose a 23% pay cut for all Guild members to achieve the necessary savings.

But a meeting early last week that was to focus on implementing the 23% wage cut turned into a lengthy negotiation that continued throughout the week. The Globe said Tuesday the existing 23% pay cut will remain in effect until the Guild vote. But Guild members will receive a lump sum payment to partially compensate them for wages lost up to the ratification date. The Globe, in turn, will deduct the cost of those payments from payments due to the Guild's health plan.

CBS Finance Chief To Retire
Story from the Wall Street Journal

Fred Reynolds, CBS Corp.'s longtime chief financial officer, is retiring from his post next month, and will be succeeded by his deputy, Joseph Ianniello.

Mr. Ianniello, 41 years old, rises to CBS's top financial post as the media company is reeling from a steep downturn in ad revenue, especially at its local businesses, such as TV stations and billboards.

Mr. Reynolds, 58, recently orchestrated bond issues that have helped ease investors' concerns about some $1.2 billion debt coming due through the end of 2010. But earlier this month, Standard & Poor's downgraded CBS's debt to one notch above junk status.

"Some investors are worried about what their balance sheet will look like going forward," said Marci Ryvicker, a media analyst at Wachovia Capital Markets.

Before becoming deputy finance chief in December, Mr. Ianniello served as CBS's chief development officer and treasurer, making him the point man for deals including last year's $1.8 billion acquisition of CNET networks. But Mr. Ianniello said in an interview Monday he will focus on cutting costs. "I don't see any M&A on the horizon," he said.

Mr. Reynolds steps down after a 15-year run at CBS. He was chief financial officer at Westinghouse Electric Corp. when the company bought CBS in 1995. He stayed on in iterations of that role as the company merged with Viacom Inc. in 2000 and later split again.

Mr. Reynolds said Monday that his reasons for retiring were "99% personal," adding that he had been grooming Mr. Ianniello for the job since 2006, after the company completed its split with Viacom. Mr. Ianniello, whom Mr. Reynolds hired in 1997, will assume the post of finance chief on July 20, although both men plan to participate in a subsequent conference call to report CBS's second-quarter earnings. Mr. Reynolds plans to retire from CBS in August.

Mr. Reynolds said he had almost retired in 2001, eager to move into private equity. But CBS persuaded him to stay on by also putting him in charge of its string of TV stations. This time, Mr. Reynolds said, he isn't interested in taking other jobs, apart from sitting on corporate boards.

Report: Home Construction & Furnishings
Story from the Wall Street Journal

Home builders suffered another year of painful losses in 2008, and the most successful analysts covering the sector were those able to grin and bear it—or at least be bearish on it.

The top analyst in the sector, Kenneth Leon of Standard & Poor’s Corp., a division of McGraw-Hill Cos., employed what he calls the “cockroach theory” in making several prescient calls about builders facing rising leverage and cash-flow issues.

“If there is one, there is likely to be more,’’ says Mr. Leon, 54 years old, in explaining his theory. He says when a few builders had liquidity issues early last year, it meant other builders with weak balance sheets would likely face similar problems. One builder that drew his attention was Hovnanian Enterprises Inc. He rated the stock a sell in early September, capturing a decline of more than 70% through November, when he moved it back to hold.

Mr. Leon also captured big declines with timely sell ratings on builder Meritage Homes Corp. and on Sealy Corp, the bedding maker that was hurt by the deepening recession.

He predicts that the home-building industry and Michigan furniture manufacturer will recover by this year's fourth quarter and that builders’ orders will begin to grow at that time. But he’s staying neutral on the industry because he says home prices will continue falling through 2010 as the supply of foreclosed homes for sale remains high.

“A sustainable recovery for the home builders requires a major reduction in housing inventory,’’ Mr. Leon says. His top picks are Pulte Homes Inc., Toll Brothers Inc. and MDC Holdings Inc., which he sees as well-capitalized builders.

No. 2 analyst Christopher Agnew, formerly of Goldman Sachs Group Inc. in New York, made some good calls on the real-estate-related niche of office-furniture makers by anticipating a big contraction in the financial-services sector and waning demand for new office space, hospital cabinets. Some of the furniture companies, which do a sizable amount of international sales, also were hurt by the declining value of the euro and the British pound, Mr. Agnew says.

Mr. Agnew, 38, had a sell rating on furniture supplier HNI Corp. through much of 2008, capturing declines that totaled more than 60%.

Mr. Agnew, who is now on the job hunt, says that based on historical trends, office-furniture makers will likely continue their move off their lows as the rate of year-over-year revenue declines starts to decelerate, even though the industry is unlikely to experience meaningful revenue growth until at least the end of 2010.

David Goldberg scored the No. 3 spot by navigating the volatility among home builders. For example, he put a sell on Meritage Homes in September, just before its stock fell 65% in about six weeks. Sensing the selling was too extreme, Mr. Goldberg switched to a buy rating in late October through early November and captured a bounce in the stock.

Mr. Goldberg, 31, an analyst in New York for UBS, part of Switzerland’s UBS AG, believes a recent rally in the home-building sector is premature. “We think the trough in the market is coming at end of the year,” he says.

His top picks are Ryland Group Inc. , which owns just enough finished house sites to feed demand, and Toll Brothers, which has ample cash reserves .

Wall Street's Time-Share Bungle-Low
Story from the Wall Street Journal

On Tuesday morning, time-share salesman Albert Mora was waiting to meet potential buyers of a Tahiti Village time-share for a tour of the Las Vegas property when a fellow employee got a cryptic call from headquarters to turn away all buyers.

Staff members scurried down the stairs with bundles of cash to return deposits of those being given tours. Later in the day, Mr. Mora learned that Tahiti Village's owner, Consolidated Resorts Inc., which is owned by a Goldman Sachs Group Inc. real-estate fund, was filing for bankruptcy-court protection.

Managers of the fund, part of Goldman's Whitehall real-estate private-equity franchise, had decided to walk away from the $372 million investment, two years after the deal closed.

The chaotic fall of time-share developer Consolidated is the latest example of how Wall Street's foray into the lodging industry is turning out to be a big bust.

Just a few years ago, investors were paying top dollar to acquire hospitality companies on the assumption that demand for time-shares, room rates and travel budgets would continue to rise for the foreseeable future. After all, they reasoned, the industry rebounded quickly after the terrorist attacks on Sept. 11, 2001.

In a prepared statement Tuesday, Consolidated said it planned to file for bankruptcy protection because of a lending environment that "has made it impossible to continue this company."

The country's biggest time-share developers also have seen their business sputter. At Wyndham Worldwide Corp., the biggest time-share developer in the U.S., "vacation ownership" sales plunged to $280 million in the first quarter of 2009, down 39% from a year earlier. Marriott International Inc. reported a first-quarter operating loss of $17 million in its time-share business.

Now, travel budgets are being slashed and room rates are falling, leaving some hotels without enough cash flow to cover their expenses. In the first five months of this year, U.S. hotel occupancy declined to 53%, the lowest total since Smith Travel Research began tracking the figures in 1987. Revenue per available room, on average, has declined to $52.78 so far this year, the lowest tally since 2004.

While all types of hotels are struggling in this recession -- from luxury to budget, from big to small -- the most imperiled are hotel chains that own lots of real estate and were purchased at the top of the market from 2005 to 2008, with substantial debt.

Twenty of the largest hotel buyouts completed between 2005 and 2008 amounted cumulative debt and equity payments of more than $60 billion. Among them: Blackstone Group LP's $26 billion purchase of Hilton Hotels, Lightstone Group's $8 billion purchase of Extended Stay Hotels and the $2.2 billion purchase of Equity Inns Inc. by Goldman's Whitehall.

While not all of those deals are in danger of collapsing, many are troubled. "If you bought a hotel in 2007 and leveraged it to 80% or greater, you just have a huge challenge on your hands," said Bruce Ford, senior vice president of Lodging Econometrics, a hotel-industry research company.

In turn, defaults on hotel loans have risen sharply. Defaults of securitized mortgages -- mortgages chopped up and sold to investors as bonds -- with hotels pledged as collateral likely will rise from the current 4.7% rate to exceed 8% by year end, according to Morgan Stanley.

Already this year, Extended Stay filed for bankruptcy June 15; Red Roof Inn Inc. defaulted on $367 million of securitized mortgages this month, and Whitehall told investors in March it might need a cash infusion or to sell assets to pare Equity Inns' debt.

Monty Bennett, chief executive of Ashford Hospitality Trust Inc., a real-estate investment trust that owns hotels, waded into the deal frenzy when Ashford bought 51 hotels as part of the break-up of fellow REIT CNL Hotels & Resorts Inc. in 2007. While the $2.4 billion Ashford paid was hefty, it was less on a comparative basis than buyers paid in many other hotel buyouts at the time, Mr. Bennett said.

Ashford protected itself from high interest costs on the debt it used to buy the CNL hotels by replacing it with a floating-rate debt. Ashford also sold new shares to raise money to pay down the debt it incurred in the deal. Still, Ashford's stock is down 54% in the past year, though it has fared better than the stocks of other hotel REITs.

Web Cable Not Ready For Prime Time
Story from the Wall Street Journal

It is called playing defense.

There is no doubt the film and TV industries need to find a way to protect their copyrighted programming on the Web. But the strategy unveiled on Wednesday by Time Warner and Comcast falls short of the ideal solution.

The two companies will test an approach to offering cable shows online without charge but only for viewers who have a video subscription. It is aimed at stopping anyone from turning off their TV subscription and watching video via an Internet connection instead.

Trouble is, as a deterrent to cutting the video subscription, it lacks teeth. Plenty of video programming is available online for free. Not only is there YouTube, but the broadcast networks such as ABC, NBC, Fox and CBS offer many of their shows for free on the Web. There are even a few cable shows available. And consumers also can buy individual episodes of many TV shows on services like Apple's iTunes.

Of course, cable channels have good reason not to throw all of their programs up online for nothing. Unlike the broadcast networks, they get big fees from TV distributors such as cable operators and satellite-TV firms. That has made cable channels hugely profitable and a source of steady growth for Time Warner, Viacom, Walt Disney and News Corp., owner of The Wall Street Journal.

Not only would a free-for-all approach threaten those distribution fees, it would likely undercut advertising revenue. There simply isn't enough ad revenue online to replace dollars lost from television, an issue broadcasters also are wrestling with.

But the Time Warner-Comcast approach could backfire on the cable-network owners. One big reason the sector now draws a majority of TV viewers is that its potential audience has increased. The number of households subscribing to some form of pay-TV service rose to 85% last year from 58.6% in 1990, according to SNL Kagan. That has helped boost cable channels' share of TV advertising.

Putting cable shows behind an Internet wall could start to reverse that trend. Admittedly, the number of consumers switching off their video subscription in the short-term is likely to be tiny. But given the amount of TV programming available and the steadily growing number of technologies making cheap online viewing easier, it will increase.

At the very least, Time Warner and Comcast should offer an online-only option for consumers, so channels won't automatically lose viewers among people cutting off their video subscriptions.

There is little the media companies can do to stop the havoc that the Internet is wreaking on their traditional business. They can slow the drain of profits for a while. But eventually, the companies will have to come up with new business models a little more adventurous than what was unveiled on Wednesday.

Netflix Boss Prepares For Death Of The DVD
Story from the Wall Street Journal

LOS GATOS, Calif. -- Netflix Inc. is a standout in the recession. The DVD-rental company added more subscribers than ever during the first three months of the year. Its stock has more than doubled since October.

But Netflix's chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix's revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix's business -- seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.

His position offers a rare look at how a CEO manages a still-hot business as its time runs out. "Almost no companies succeed at what we're doing," he says.

Companies across the entertainment and technology landscape are struggling with how to profit from Internet video. There's still significant risk that Netflix could falter or lose out to another company that figures out how to do it first. And having picked his battle, the intense former engineer may risk missing other growth opportunities: Mr. Hastings hasn't yet expanded internationally or mounted a direct challenge to kiosks, such as Coinstar Inc.'s Redbox, that let customers pick up $1-a-night DVD rentals.

Mr. Hastings says he is still considering expansion opportunities outside the U.S. and has no plans to open kiosks.

One of Mr. Hastings's biggest hurdles will be persuading Hollywood studios to give Netflix rights to show more and better movies through its Internet service at a time when many studios are protective of their DVD-sales revenues. Late last year, Sony Corp.'s Sony Pictures threw a hitch into Mr. Hastings's plans when it temporarily blocked access to some of its movies from Netflix's Internet video service in a dispute over whether Netflix had rights to them.

Moreover, Mr. Hastings stumbled in an earlier effort to introduce a set-top box that would bring Internet video service into the living room. Netflix developed the hardware but then abandoned it after Mr. Hastings and other executives got cold feet.

Mr. Hastings, 48 years old, says he is a student of companies tripped up by failing to adapt to technology shifts. To fellow Netflix executives, he has long cited the cautionary tale of America Online, the once-mighty online service that didn't successfully adapt to the broadband Internet era from the days of dial-up access, despite trying to fortify itself by acquiring Time Warner Inc. in 2000. "Every day, I wake up with that fear," says Mr. Hastings.

His own big break came as a different industry leader failed to keep step. In the late '90s, the home-video business was shifting to DVDs from VHS tapes, offered by rental giants such as Blockbuster Inc. Netflix emerged with warehouses that stocked larger selections of DVDs than Blockbuster's rental outlets could, mailing them around the country in red envelopes. Mr. Hastings charged consumers a flat monthly rate to rent as many DVDs as they liked, eliminating the late fees charged by rental chains.

Blockbuster eventually started its own DVD rent-by-mail service, but scaled it back in late 2007 after consistently losing money on it. A Blockbuster spokesman declined to comment.

Now, amid gathering signs of the DVD's decline, the industry is poised to shift again.

Home-video sales, mostly from DVDs, last year dropped to $14.5 billion from $15.9 billion the previous year, according to Adams Media Research. Movie rentals remained flat over the period, at about $8.2 billion. The number of DVDs Netflix rents every year -- about a half-billion in 2008 -- is still growing, and Mr. Hastings predicts the company will still be shipping discs to consumers 20 years from now.

But he expects rental figures to begin to dwindle in four to nine years.

Mr. Hastings, a veteran Silicon Valley entrepreneur, says he anticipated the demise of DVDs almost from the time he co-founded the company in 1997. The company's name, coined by Netflix co-founder Marc Randolph, didn't reference discs or mailboxes. From almost the beginning, Netflix invested in software formulas to crunch data about its customers' tastes so it could recommend DVDs to them, a technology Mr. Hastings believed would carry over to an Internet movie service.

In January 2007, Netflix began letting subscribers stream video to their PCs from the company's Web site, allowing users to watch video almost instantly without keeping permanent copies on their hard drives. The service featured only about 1,000 movies and television shows -- about 1% of its DVD selection -- but subscribers could use it for no extra charge.

Now more than 20% of Netflix members regularly use the service. The company says new users attracted by streamed movies have helped push its subscriber total up 25% to 10.3 million at the end of March from a year earlier.

The online model has another benefit for Netflix. The company currently pays about 80 cents to post a DVD to a customer's home and back. Its bandwidth costs for streaming a typical two-hour movie: roughly a nickel.

Mr. Hastings's biggest challenge in reorienting Netflix is getting Hollywood to go along for the ride. Netflix's selection of more than 100,000 DVD rental titles is made possible by the "first-sale doctrine" of U.S. copyright law, which permits buyers of DVDs to lend them out without studios' consent.

In Netflix's early days, its buying team would sometimes purchase DVDs at local Wal-Marts or Best Buys if it couldn't get copies through studios, says Ted Sarandos, Netflix's chief content officer.



In contrast, to deliver movies and television shows over the Internet, Netflix has to license them from studios. So far, it has gotten only about 12,000 titles, a hodgepodge of older films such as "Diehard," episodes of popular TV shows including "30 Rock" and a smattering of new releases.

The main reason: Netflix must compete with television subscription services like Time Warner's HBO, Viacom Inc.'s Showtime and others that gain exclusive rights to show studio movies on cable channels or through on-demand systems. These pay channels have bigger audiences than Netflix and a longer history of hashing out complicated licensing agreements to secure movie rights. Their lucrative deals can prevent Netflix from getting Internet rights for movies until years after they're released on DVD.

If Netflix is to expand the titles on its Internet service, it will have to considerably boost its licensing spending, from roughly $100 million last year, according to a person familiar with the matter.

"Netflix has yet to show that it has the resources and profitability to be in the markets where licensing is the business policy," says Warren Lieberfarb, the former head of Time Warner's Warner Bros. home video division, who helped develop the DVD format.

Mr. Hastings says he expects to spend more for Internet movie rights as the popularity of the Internet service grows, while continuing to mail DVDs to customers when they can't stream the same titles over the Internet. Last year he added several thousand titles to Netflix's online library by cutting a deal with Starz Entertainment, the Liberty Media Corp. premium channel that has rights to movies like Walt Disney Co.'s "Wall-E."

Mr. Sarandos, Netflix's point man with the studios, says Hollywood is "clearly conflicted" about the online service's growth because it could help accelerate the decline of DVDs. "They're supportive of our growth since we license content from every single studio in Hollywood," he says. "At the same time, they would like to preserve these business models as long as they can."

Spokespeople for Time Warner's Warner Bros., General Electric Co.'s Universal Pictures and Sony Pictures declined to comment on how Netflix's streaming service affects them.

Mr. Hastings recently got a taste of the fragility of Netflix's relations with studios. In November, Sony Pictures demanded that Netflix block online access to movies like "Superbad" and "Ghostbusters" that it had obtained through its deal with Starz. The dispute concerned whether Netflix had rights to deliver the Sony movies to TV sets through devices like Microsoft Corp.'s Xbox 360 game console. The titles remained available to Netflix subscribers watching them on PCs.

A Sony Pictures spokesman declined to comment. A Starz spokesman said: "With Sony, as with all the other studios, we want to make sure we always meet obligations we have in contracts with them."

Mr. Hastings tried once before to bring streaming video to living rooms. He has long believed that Netflix could reach a mass audience only by streaming movies to TVs, not PCs. Over the years, the company toyed with designs for a set-top box that would serve as the link.

After Netflix introduced its streaming service, Mr. Hastings assembled a team that came up with a prototype -- a small, square metallic box that would access the Web through a consumer's broadband connection, let viewers navigate a list of Netflix movies by remote from their couches, and sell for under $100.

But the product's early 2008 public unveiling neared, several senior Netflix executives began to express misgivings about straying into the unfamiliar hardware business. The box would never have mass appeal if it was limited to accessing Netflix's movie services, some argued.

Barry McCarthy, Netflix's chief financial officer, was one of the skeptics. "Are we out of our f- minds?" Mr. McCarthy recalls thinking about the hardware plans. "We don't even know what we don't know about this business." He describes Mr. Hastings's infatuation with the project with two words: "Apple lust."

Mr. Hastings concedes that he "fell in love with building boxes" and that part of the inspiration was watching Apple Inc. use its hardware to sell online content. Apple, too, is seeking to bring Internet video to TV sets through its iTunes Store and a box called Apple TV. "Every entrepreneur is a Steve Jobs wannabe," he says. "I was as guilty of that as anybody."

On Dec. 14, 2007, Mr. Hastings and other senior executives huddled inside one of the movie-titled conference rooms at Netflix's Mediterranean-style headquarters -- called "Paheli," after a Bollywood love story -- to discuss the box. By then, Mr. Hastings had also become concerned that getting into the hardware business would "defocus" the company, according to Anthony Wood, a former Netflix executive in charge of the project at the time.

The group's conclusion: Netflix would stay out of the hardware business, handing the project to Roku Inc., a privately owned start-up that Mr. Wood had founded. Netflix invested $6 million for a minority stake in Roku and sent about 20 Netflix employees to work there under Mr. Wood. The decision was disappointing for employees across Netflix who were preparing for the product launch.

"It was a big, sudden left turn," Mr. Hastings says.

Mr. Hastings instead began talking to consumer-electronics companies about including software that would allow consumers to access the Netflix streaming service from their devices. The company reached agreements over the next year to get Netflix into Blu-ray high-definition movie players by LG Electronics Inc. and Samsung Co., TiVo Inc. digital video recorders, Microsoft Xbox 360 and big-screen television sets by Vizio Inc.

People involved in the spinoff say it has turned out well for both parties. Roku says it has sold hundreds of thousands of its Netflix set-top boxes. It has also broadened its partnerships with video suppliers beyond Netflix, letting viewers download movies from Internet retailer Amazon.com Inc. as well. Netflix has also benefited, these people say, because it doesn't have an in-house hardware operation that would be a stumbling block in talks with other hardware makers.

Mr. Hastings says he plans to stick to what he knows, software and online services. On the Internet, he is certain to face more powerful competitors than he has in the DVD-rental business, as Netflix competes for consumers with video services from the likes of Apple, Amazon, Google Inc. and Hulu, a joint venture of media companies including News Corp., owner of Dow Jones & Co., which publishes The Wall Street Journal.

"As a capitalist, I'd rather have Blockbuster as my primary competitor than all those Internet companies," Mr. Hastings says.

Owner Of San Jose Company Arrested In Solar-Energy Scam
There Goes The Sun
Story from Mercury News

The owner of a San Jose solar company that advertised a "free solar program" but allegedly delivered nothing to many homeowners was arrested Tuesday on suspicion of theft and fraud.

Peter Be, 38, of Sunnyvale, is being held without bail at Santa Clara County Jail. He is chief executive and owner of Beohana Solar.

Investigators from the Contractors State License Board found about 30 victims who together had paid $120,000 to $130,000 in deposits for residential solar systems. One victim lost more than $100,000. Many systems were never installed, said Ken Rosenblatt, Santa Clara County supervising deputy district attorney. In addition, Be falsely claimed to be a licensed contractor, Rosenblatt said.

In marketing solar panels over a San Jose ISP, the company claimed, "You lease the solar system from us for 12 years at rates equal to or less than what you are paying your utility company now. At the end of the term, the solar system is yours to keep for FREE."

However, Rosenblatt said, after paying deposits to lease the systems, homeowners were given a written contract that stated that at the end of 12 years they had to pay the "fair market value" of the equipment.

The Contractors State License Board has issued a warning about scams perpetuated by so-called green contractors advertising environmentally friendly services. Consumers may check the status of contractors' licenses by calling an automated telephone number at 1-800-321-CSLB or by viewing the board's Web site, www.cslb.ca.gov, which also carries tips on hiring contractors.

If convicted on all charges, Be faces a maximum of 18 years in state prison.

Those with information on Beohana Solar may contact the District Attorney's Office at 408-792-2572.

Parent Of T.J. Maxx, Marshall's Reaches $9.75M Settlement With States On Massive Data Theft
Story from Mercury News

FRAMINGHAM, Mass. — Discount retailer TJX Cos. said today it has reached a settlement with multiple states related to a massive data theft that occurred at the parent company of retailers T.J. Maxx and Marshall's a few years ago.

The Framingham, Mass.-based company said it will pay $2.5 million to create a data security fund for states as well as a settlement amount of $5.5 million and $1.75 million to cover expenses related to the states' investigations. But TJX stressed that it "firmly believes" that it did not violate any consumer protection or data security laws.

"The decision to enter into this settlement reflects TJX's desire to concentrate on its core business without distraction and to promote cyber security measures that will benefit all consumers," the company stated.

TJX said the settlement's costs are already accounted for in a 2007 reserve it created.

The breach, which was disclosed in January 2007, exposed tens of millions of payment card numbers to hackers. TJX has said that at least 45.7 million credit and debit cards were exposed to possible fraud in the computer systems breach that began in July 2005. The breach wasn't detected until December 2006.

Under the settlement with a multi-state group of 41 Attorneys General, TJX must also certify that its computer system meets detailed data security requirements specified by the states and must encourage the development of new technologies to address weaknesses in the U.S. payment card system.

TJX runs 882 of its namesake stores, 811 Marshalls, 322 HomeGoods and 141 A.J. Wright stores in the U.S. It has 203 Winners, 75 HomeSense and 3 Stylesense stores in Canada and 242 T.K. Maxx and 8 HomeSense stores in Europe.

The company's stock fell 23 cents to $30.55 in afternoon trading.

Shrinking Endowment Forces Job Cuts At Harvard
Story from Mercury News

CAMBRIDGE, Mass. — Harvard University is cutting 275 staff jobs as fallout continues from the school's dropping endowment.

The layoffs amount to less than 2 percent of Harvard's 16,000 staff and faculty. The school also is reducing hours for 40 staffers. The cuts don't apply to faculty.

The cuts were announced in an e-mail Tuesday to faculty and staff from President Drew Faust and human resources Vice President Marilyn Hausammann.

Harvard's endowment fell 22 percent at the end of 2008 to $28.7 billion, and is expected to drop 30 percent in the fiscal year that ends this month.

Harvard has already frozen salaries, cut budgets and slowed construction on a science complex.

Faust said the cuts were hard but tough times require difficult decisions.

Silicon Valley Brides Feeling Economic Pinch
Story from Mercury News

Katherine Kangas and Matt McVay got engaged late last year, and soon after spent all their savings on a new house. So, like many couples getting married in the midst of the worst economy in decades, they decided their wedding would be a simple affair. They plan to have it in their backyard in a few months.

"I had to ask myself, 'How can we do this as economically as possible?' " said Kangas, 26, a Web designer who plans to spend about $5,000 for 100 guests by doing almost everything herself, including the invitations and food. "It's definitely going to be a budget wedding."

This summer and fall marks the first big wedding season since last year's economic meltdown. Whether they're planning big parties or intimate gatherings, couples are sticking to their budgets and downsizing their dreams in this rocky recession, experts say.

"Brides are watching their dollars," said Anja Winikka, editor of TheKnot.com, a popular online wedding planning site, which estimated the average cost of a wedding in 2008 to be $28,000. "Priorities may shift, or, if they keep the same budget, they're making sure they don't go over it."

Brides are opting for Sunday brunch receptions instead of Saturday sit-down dinners. They're tightening guest lists, hiring DJs instead of bands, going for candles instead of floral centerpieces and designing and printing their own invitations.

"I've even had a few brides postpone their weddings because of the economy," said Nicole Ha, whose Berryessa floral business, Nicole Ha Designs, is about 90 percent wedding-related.

On the flip side, bridal boutiques, flower shops, photographers and bakers are changing the way they do business. Some no longer insist on minimum orders and take payments in installments instead of requiring them upfront. Others may offer simpler, less expensive versions of their services. Retailers are keeping inventory tighter and stocking merchandise that's more reflective of the general mood to save instead of spend.

"Customers are much more sensitive to price — even our high-end customers," said Roger Blechman, who has owned Trudy's Brides and Special Occasion in Campbell since 1974.

While brides have customarily ordered their dresses at least six months before the wedding, he's noticed they're buying their gowns much closer to the date of the event, an indication that economic uncertainty is also affecting the way women traditionally buy their bridal gowns. And choices have been less formal and ostentatious.

"Sales are down but we've been in business long enough that when things turn around, we'll be ready," he said of his efforts to control inventory and offer more lower-priced dresses.

Joanne Ho-Young Lee, a former photojournalist who is now a wedding photographer, said her wedding-day package was a firm $6,200 before the downturn. She's now offering a lower-priced option for $4,500.

Jen Kwapinski of Jen's Cakes in Willow Glen said brides are whittling down their guest lists, sometimes by more than half. They're also ordering smaller display cakes for show at the reception, and then adding several sheet cakes to their orders. Her wedding cakes are priced at $6 a serving; the sheet cakes — undecorated versions of the fancy cake — are $1.50 a serving.

"They're also not getting as crazy," she said of a past trend for Mad Hatter cakes and other intricately decorated confections. "Now they want classic and elegant."

September bride Courtney Radonich, 27, is leaning toward a traditional three-tiered cake sprinkled with flowers. She's marrying fiance Gabriel Esposto, 31, at her family's Los Gatos ranch in front of 250 guests.

Food and drink will be provided at cost by Esposto's family, owner of a catering and rental business. Her biggest cost: photography at $5,000.

"My parents have been good about keeping me grounded on the spending," said Radonich, an executive assistant for a private equity firm. She settled on digitally printed invites over letterpress at one-third of the cost, as well as a less-pricey band at the reception. She also gave up a photo booth and string quartet. Still being considered: valet parking service at $2,000.

"Inviting 200 or 300 people used to be more common; now it's more like 100," said wedding planner Liz Guthrie, who estimates Bay Area weddings average $30,000 for a guest list of 100.

"Couples are waiting longer to book vendors because of cash flow issues, and many are having their weddings at home or a friend's house instead of a hotel or rented venue," said Guthrie, the owner of San Jose Wedding Consultants. There's also a trend to cut costs with do-it-yourself projects — invites, cake toppers, reception centerpieces.

Ha, the Berryessa florist, has seen creative use of rose petals and candles as centerpieces. Thankfully, she said, brides still want a professional to do their bouquets and bridal party flowers.

Even couples planning large nuptials have found places to tighten purse strings.

Since they got engaged last summer, there has been no question that Georgia Lampros and Chris Dalikas would have a big wedding.

"We're Greek and my fiance has a very large family," said Lampros, 33, a first-grade teacher at Portola Elementary School in San Bruno. Weeks before their June 27 nuptials, the guest list numbered about 400.

Lampros is about $10,000 over her initial budget of $50,000, but she says she's kept costs in check and compromised as recession worries surfaced, arranging discounts for her bridesmaids' dresses, favors and food. Instead of a four-course dinner reception in San Francisco, she'll have a three-course meal in Foster City.

"It's a once in a lifetime event," she said. "We are fortunate to have families that helped us financially."

Wal-Mart Hopes To Retain The Nouveau Frugal
Story from Mercury News

The recession steered a new type of customer to Wal-Mart — deeper in the pockets and suddenly looking for bargains. Now the world's largest retailer has to figure out how to keep that customer when the economy recovers.

So Wal-Mart is bringing in more brand names, ditching scores of other products and even redesigning hundreds of stores to give them wider aisles, better lighting and better sight lines.

It's more than just a cosmetic upgrade. That new breed of customer also spends about 40 percent more than the traditional Wal-Mart shopper, and the retailer senses an opportunity to accelerate its growth.

Take Aditya Krishnan, a 42-year-old lawyer from San Jose. He used to buy only light bulbs at Wal-Mart but now finds himself spending $150 a month there, including buying workout clothes he used to get at Macy's.

"If I am able to get good stuff at Wal-Mart, and I am able to save money, why would I change?" Krishnan asked. "I am seeing better brands, and the shopping experience is better" than before.

Wal-Mart says that's no accident. It's placing a big bet on the redesign of most of its 3,600 stores, started last fall. This fiscal year, it plans to redo up to 600 at a cost from $1.6 billion to $1.7 billion.

The prototype for the remodeling includes lower shelves to make it easier to see across the store, better lighting and wider aisles. Expanded electronics areas will include interactive displays to test video games and portable gadgets.

The store now carries brands like Danskin and Better Homes and Gardens, and its electronics section now stocks pricier products like Palm Inc.'s well-received new Pre smartphone.

Whether it all works, Wall Street analysts say, depends in part on how quickly the behemoth retailer can remodel and keep shoppers satisfied. Concerns about how Wal-Mart will keep its momentum have sent its stock down 13 percent this year.

The early signs are positive, putting pressure on the rest of the industry. Target Corp., whose sales have been hampered by its emphasis on nonessentials like trendy jeans, is expanding its fresh food offerings. Best Buy Co. is beefing up customer service.

"I believe a lot of what (Wal-Mart) is doing is working," said Joseph Feldman, a retail analyst at Telsey Advisory Group. "They are a threat to everyone."

"If I am able to get good stuff at Wal-Mart, and I am able to save money, why would I change?"

Other discounters, including TJX Cos. Inc., which sells name-brand fashions and home furnishings, Costco Wholesale Corp. and BJ's Wholesale Club Inc., are focusing on how to hold on to new customers lured by low prices during the recession.

But Wal-Mart, which only three years ago struggled with cluttered stores, long lines, stiff towels and unattractive clothing, has a bigger hurdle to climb. And it has to move fast to win over people who still have negative feelings about shopping there.

"The service still needs to be improved, and the stores are a little sloppy," said Daniel Chou, 35, of Warren, N.J., who was at a local Wal-Mart to pick up a bungee cord but who says he rarely shops there.

Stock in Wal-Mart and a few other discounters such as Costco Wholesale Corp. have fallen this year as investors turn to beaten-down shares of more upscale companies like Macy's Inc. and Williams Sonoma Inc., which investors believe don't have much further to fall.

Wal-Mart, which topped $400 billion in sales last year, attracts more than 140 million customers per week. But to get them to buy more than just groceries, which account for about half of annual sales, it's paring its product lineup and making room for better brands.

Consultant Burt P. Flickinger III estimates the remodeled stores are carrying 10 to 15 percent less inventory, particularly getting rid of no-name labels.

The shift risks turning off longtime customers who are looking for only the cheapest products. It's happened before: The company had to dump Metro 7, its in-house clothing line launched in 2005, because it turned out to be too trendy for its general clientele.

Wal-Mart executives say 17 percent of its traffic growth in February from new customers, and they're spending 40 percent more per trip. More than half of those shoppers living in households that take in more than $50,000 a year.

While that may not be considered affluent, it's a big departure from Wal-Mart's core customers, of whom one in five does not have a bank account or has limited access to financial services.

To keep prices low while offering better products, Wal-Mart is slashing its own costs in little ways. The Angus ribeye steak being sold at Sam's Club at 25 percent below competitors' prices is paid for in part by a switch to shorter straws at its cafe, saving $52,000 a year, says spokeswoman Susan Koehler.

A recently converted customer is Judy Safern, a 42-year-old public relations executive from Dallas who used to buy her children's clothing at Galleria mall and groceries at Tom Thumb supermarket.

She now says she hasn't been to the mall in a year and figures she saves several hundred dollars a month by buying most clothing and food at Wal-Mart. "I basically buy everything there," she said.

T-Mobile To Launch Google Phone In July
Story from USA Today

Following huge introductions of the Palm Pre and new iPhone 3G S, T-Mobile on Monday announces July availability of MyTouch 3G, the second phone on Google's Android operating system.

It's the first of 18 new Google-powered phones coming worldwide by the end of the year, Google says, declining to provide specifics. Tech and telecom analysts expect Sprint to have an Android phone by year's end.

T-Mobile has sold 1 million of its first-generation Google phone, the G1. That's tepid compared with the 21.2 million iPhones sold in the last two years, but T-Mobile says it's thrilled with the response. It expects the new phone to sell at a faster clip, and to outpace the competition in mobile SEO.

The MyTouch is smaller, can sync with Microsoft Outlook and has an improved battery, T-Mobile says. "We've addressed some of the concerns from customers," says Andrew Sherrard, T-Mobile vice president.

Current T-Mobile customers can order beginning July 8 for delivery later in the month. General retail availability is planned for early August.
FIND MORE STORIES IN: Microsoft | T-Mobile | Yankee Group | Google | Apple Inc.

The touch-screen phone — made by HTC — sells for $199 with a new two-year contract. Sherrard says T-Mobile will offer a discounted rate for current customers but hasn't finalized pricing.

T-Mobile's selling point is personalization, with customizable menus, wallpapers and icons. A new program called Sherpa learns your favorite locations and preferences and makes recommendations accordingly. The phone also has instant access to Google services.

Even though the Android platform hasn't taken off in public consciousness as the iPhone has, "It's important to remember that globally, this is a market of billions and billions of users," says Andy Castonguay, a Yankee Group analyst. "There's plenty of room for lots of different players."

Google first announced Android in 2007. It gives the operating system to manufacturers for free. Google product manager Erick Tseng says getting phones from idea stage to manufacturer is an 18- to 24-month process. "What you're seeing now is the outcome of the development."

Google has 5,000 applications available for Android from its network of developers, and the list is growing, says Tseng.

Apple has a huge lead, with more than 50,000 applications available from about 20,000 developers, says Forrester Group analyst Charles Golvin. "But in the United States, there are probably more developers working with Google, after Apple, than any other mobile platform."

Obama Announces Agreement With Drug Companies
Story from USA Today

WASHINGTON (AP) — President Obama on Monday welcomed the pharmaceutical industry's agreement to help close a gap in Medicare's drug coverage including Michigan Medicare, calling the pact a step forward in the push for overhaul of the health care system.

Obama said that drug companies have pledged to spend $80 billion over the next decade to help reduce the cost of drugs for seniors and pay for a portion of Obama's health care legislation. The agreement with the pharmaceutical industry would help close a gap in prescription drug coverage under Medicare.

"This is a significant breakthrough on the road to health care reform, one that will make a difference in the lives of many older Americans," Obama said in the White House's Diplomatic Room.

Obama said the move will help correct an anomaly in the program that provides a prescription drug benefit through Medicare. Under the deal, drug companies will pay part of the cost of brand name drugs for lower and middle-income older people in the so-called "doughnut hole." That term refers to a feature of the current drug program that requires beneficiaries to pay the entire cost of prescriptions after initial coverage is exhausted but before catastrophic coverage begins.

"It's a reform that will make prescription drugs more affordable for millions of seniors and restore a measure of fairness," Obama said.

Obama said some Medicare Michigan beneficiaries will find at least a 50% discount on prescription drugs. Obama says drug companies stand to benefit when more Americans can afford prescription drugs.

The drug companies' investment would reduce the cost of drugs for seniors and pay for a portion of Obama's proposed revamping of health care. The deal was struck with Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, as well as the White House.

The president was joined Monday in announcing the deal by Barry Rand, head of the senior citizens' advocacy group AARP, as well as Baucus and Sen. Chris Dodd, D-Conn.

"This is an early win for reform," Rand said.

Jack Welch's Online MBA Program Ready To Launch
Story from Business Week

A corporate icon is diving into the MBA world, and he's bringing his well-documented management and leadership principles with him. Jack Welch, former CEO at General Electric (GE) (and BusinessWeek columnist), has announced plans to start an MBA program based on the business principles he made famous teaching managers and executives in GE's Crotonville classroom.

The Jack Welch Management Institute will officially launch this week, with the first classes starting in the fall. The MBA will be offered almost entirely online. Compared to the $100,000-plus price tag for most brick-and-mortar MBA programs, the $600 per credit hour tuition means students can get an MBA for just over $20,000. "We think it will make the MBA more accessible to those who are hungry to play," Welch says. "And they can keep their job while doing it."

To make the Jack Welch Management Institute a reality, a group led by educational entrepreneur Michael Clifford purchased financially troubled Myers University in Cleveland in 2008, Welch says. Welch got involved with Clifford and his group of investors and made the agreement to launch the Welch Management Institute.

Popularized Six Sigma

For Welch, the new educational endeavor is the latest chapter in a long and storied career. As GE's longtime chief, he developed a management philosophy based on relentless efficiency, productivity, and talent development. He popularized Six Sigma, wasn't shy about firing his worst-performing managers, and advocated exiting any business where GE wasn't the No. 1 or No. 2 player. Under Welch, GE became a factory for producing managerial talent, spawning CEOs that included James McNerney at Boeing (BA), Robert Nardelli at Chrysler, and Jeff Immelt, his successor at GE.

Welch's decision to jump into online education shows impeccable timing. Business schools in general are experiencing a rise in applications as mid-level managers look to expand their business acumen while waiting out the current job slump. The new program's flexible schedule—paired with the low tuition cost—could be doubly attractive to those looking to move up the corporate ladder as the market begins to rebound.

Ted Snyder, dean of the University of Chicago's Booth School of Business, agrees. "I think it's a good time for someone to launch a high-profile online degree," Snyder says. "If you make the investment in contentthat allows for a lot of interaction between faculty and students and also among students, you can get good quality at a much more reasonable tuition level."

Welch's Secret Weapon

That being said, there are challenges that an online MBA program like Welch's will have a difficult time overcoming, even if the technology and faculty are there. "The integrity and quality of engagement between faculty and students is the most precious thing we have," Snyder says. "Assuming it's there, it dominates. These things are hard to replicate online."

But Welch does have one thing that differentiates his MBA from others: himself. "We'll have all of the things the other schools have, only we'll have what Jack Welch believes are things that work in business, in a real-time way," he says. "Every week I will have an online streaming video of business today. For example, if I was teaching this week, I would be putting up the health-care plan. I'd be putting up the financial restructuring plan, talking about it, laying out the literature, what others are saying, and I'd be talking about it. I'll be doing that every week."

Welch and his wife Suzy are also heavily involved in curriculum design, leaning heavily on the principles he used training managers at GE.

"In every course there will be pieces of what I taught at Crotonville," he says. "In the budgeting part there will be a view of conventional budgeting and a view of budgeting my way, and students can debate the two. Same thing in strategy. I have a method of strategy, Michael Porter has a method. We'll use Porter's book and then I'll throw my stuff in."

Lots of Competition

Welch isn't a stranger to the MBA world. For the past three years, Welch has taught an extremely popular leadership course at MIT's Sloan School of Management, based on the leadership principles covered in his best-selling book Winning. Welch also lent his name to the business school at Sacred Heart University in Fairfield, Conn.

The Management Institute marks a more active leap into the business degree landscape, but Welch is far from alone in offering an inexpensive online MBA. Many business schools known for their full-time graduate programs offer online components to their MBAs, including Maryland, Massachusetts, Carnegie Mellon, and Ferris State University MBA. Also, for-profit institutions like the University of Phoenix (APOL) and Cappella University (CPLA)have made names for themselves offering graduate business degrees primarily online at bargain prices.

In the short term, Gary Bisbee, director at Barclay's Capital, doesn't see the Jack Welch Management Institute as much of a threat to the more recognized online education brands. But with the right mix of marketing money and curriculum innovation, it's feasible that in the longer term the Welch Institute could become a serious competitor. "It would make sense that the school could become one of the successful players in the industry, given his reputation for management skill and maybe even more so developing leaders," Bisbee says. "I would clearly think they could become a player over time."

Upside in Online Education

To help him get there, Welch has chosen a dean and is working closely with a select group of prospective faculty members whom he hopes will soon be in place to turn the lights on in September. Ideally, he would have a few hundred students enrolled at that time, gradually increasing the number over time. "We intend to start slow," he says. "Our interest is in developing a quality program and we're not interested in a big ramp-up."

While launching a new MBA program might seem risky, especially with so many seasoned players in the market, Welch isn't concerned. "There's no risk," he says. "So people lose a little money. The reward is that a winning management formula spreads further than it already has. It's already spread widely. Now, we want to add more people to it. Online education is going nowhere but up. It's for real. It took me a long time to get there, being a bit of a traditionalist, but you see the way that kids learn, the way that they are more attentive. I think it had opportunities to be more rigorous. I'm very excited about where we're going."

Overhaul Of Student Loan System Taking Shape
Story from the Chronicle of Higher Education

Washington — Congress may be consumed with health-care reform right now, but behind the scenes, education-committee aides have been quietly crafting legislation to overhaul the student-loan system, with a meeting to review a draft bill possible in the House as early as next week.

College and student-loan lobbyists said they hadn’t seen any draft language yet, and a spokeswoman for the House education committee stressed that a meeting had not been scheduled. Still, lobbyists have been told that such a meeting may occur between June 24 and July 9.

Lenders are holding out hope that Congress will reject President Obama’s proposal to eliminate the bank-based private student loans program, or at least preserve a role for lenders and guarantors in a revamped system. One lobbyist counted as many as 13 counter-proposals circulating in Congress, including a detailed alternative from the lending giant Sallie Mae.

The Congressional Budget Office estimated in March that switching all loans to the government-run direct-loan system would save taxpayers $94-billion over 10 years.

Still, many lenders privately acknowledge that the House is likely to adopt the president’s approach, perhaps with minor modifications, because of the savings it would generate.

The Congressional Budget Office estimated in March that switching all loans to the government-run direct-loan system would save taxpayers $94-billion over 10 years. In a re-estimate issued today, the office adjusted that figure downward slightly, to $87-billion.

Either way, lawmakers are not expected to use the savings to make Pell Grants an entitlement, as Mr. Obama has proposed. Instead, they are likely to provide an infusion of “mandatory” money for the program, while allowing appropriators to continue to set the maximum award, lobbyists say.

The powerful chairmen of the Appropriations Committees in both chambers of Congress have objected to Mr. Obama’s plan on the grounds that it would put a ceiling on the maximum award. Under the president’s proposal, the maximum Pell Grant would increase each year at a rate equal to the Consumer Price Index plus a percentage point.

Green Means Gold In North Carolina
Story from iStockAnalyst.com

Clean energy companies have been creating jobs in North Carolina at more than twice the rate of the rest of the economy, a new report finds.

And the real boom is just about to sound, predicts Rusty Stephens, president of Wilson Community College.

Green jobs are "the one bright spot in an otherwise difficult economic landscape," Stephens said this week.

The report, "The Clean Energy Economy: Repowering Jobs, Businesses and Investments Across America," was released Monday by The Pew Charitable Trusts. It looks at jobs created by environmentally friendly products and services.

Between 1998 and 2007, jobs in North Carolina's clean energy economy grew at a rate of 15.3 percent while overall jobs in the state grew by 6.4 percent, the analysis found.

As of 2007, 1,783 clean energy business in the state employed 17,000 North Carolinians. More than $82 million was invested in those companies between 2006-2008.

"Those investments, along with North Carolina's renewable energy and energy efficiency policies, should help the state's clean energy economy expand even further," said Morgan Jackson, N.C. representative for the Pew Environment Group.

"I've said before, and I will say again: Green is gold for North Carolina," Gov. Bev Perdue said Monday in a statement. "To get green right, we must build on our strengths that attract green companies -- a well-trained, educated workforce; existing relationships between businesses and research institutions; and a strong link between energy policy and economic development."

Stephens, who has championed green energy during his presidency at WCC, said the Pew report bears out what he's seeing at his campus.

"The time has come for large jumps in demand for these jobs," Stephens said Monday. "There's tremendous opportunity."

Nationally, jobs in the clean energy economy grew at a rate of 9.1 percent while total jobs grew by only 3.7 percent, between 1998 and 2007

The college recently hosted a meeting for employers to talk about the need for workers who are trained to retrofit residential and commercial properties for lower energy consumption. WCC is now developing a weatherization certification program for students.

The federal American Recovery and Reinvestment Act includes money for weatherization work, Stephens said. But there is also a need to conserve energy from a resource management angle.

"There's still so much money to be saved on the efficiency side," he said.

Making buildings more efficient would cut the country's energy consumption, lessening the need for new power plants and the use of fuels that create greenhouse gases, Stephens said.

Perdue's energy plan includes the use of $18 million in federal recovery funds to create an Energy Investment Revolving Loan Fund. The fund will provide low- and no-interest loans, up to $1 million, to finance energy-saving projects at businesses, schools, nonprofits, state agencies and local governments.

She also proposes another $10 million to expand the state's Green Business Fund to provide support to new, emerging and expanding green economy businesses.

North Carolina ranked among the top 12 states for green job growth. Nationally, jobs in the clean energy economy grew at a rate of 9.1 percent while total jobs grew by only 3.7 percent, between 1998 and 2007.

The complete study is available online at www.pewtrusts.org/cleanenergyeconomy .

To see more of The Wilson Daily Times or to subscribe to the newspaper, go to http://www.wilsondaily.com/.

For more information regarding Wilson relocation, or Wilson Real Estate, visit the experts at Our Town Properties.

Copyright (c) 2009, The Wilson Daily Times, N.C.

Acer To Load Android - Not Windows
Story from Daily Finance

Taiwan's Acer has been on a tear recently. The company gobbled up Gateway quite a while back and has been a top maker of red-hot netbook PCs so far this year. The PC maker has now said that it will be featuring Google, Inc.'s (NASDAQ: GOOG) 's Android operating system on future netbooks as an alternative to what it ships on most of its netbooks -- Microsoft Corp.'s (NASDAQ: MSFT) aging Windows XP operating system.

The difference here is that while Microsoft XP still may cost a little to Acer and all other PC makers circulating netbooks on the market, Android is a freely-available, open-source product. Acer won't pay a dime for each copy of Android in installs on its netbooks, which -- interestingly enough -- may be the first real head-to-head equitable competition between Google and Microsoft.

Even though the two internet behemoths already compete head-to-head in the mobile space, this is the first time they'll duel each other in the actual PC space with operating systems.

Acer no doubt will be able to offer future netbooks for lower prices with Android installed, and it will be interesting to see if consumers really prefer Windows XP for their Acer netbook or if the operating system really doesn't matter that much.

If email, web, word processing, spreadsheets and the usual suspects are offered through Android, does one really need Windows on an Acer netbook? Possibly -- Windows ships on the lion's share of netbooks from all manufacturers right now. Linux-based netbooks have been slow to catch on as consumers apparently feel more at home with Windows than with anything else. But still, would a "Powered by Google" moniker make more consumers take the plunge and move away from Windows XP? This will be an interesting battle to watch.

Hunch: And Now For Something Completely (Okay, Somewhat) Different
After the failure of several community Q&A sites, Caterina Fake - co-founder of Flickr - has launched Hunch. Will it catch on, or go the way of Jeeves?
Story from Business Week

When Caterina Fake was picking out a new bag for her laptop computer, she didn't turn to friends, browse store aisles, or page through magazines for advice. Instead, she consulted her new Web site, Hunch. In response, the tool asked her a series of questions, including "How much are you planning to spend?" and "Would you prefer leather?", before dishing out three recommendations.

Opened to the public on June 15 after a three-month preview for select users, Hunch is a tool for finding answers to a wide variety of questions—from mundane shopping decisions to dilemmas as serious as "Should I get a divorce?" The questions and answers are created by users, and the site uses feedback from the community to refine the relevance of results.

Hunch is the latest of several decision-making sites that have cropped up in recent years that are designed to shake up a Web-search landscape that has long been dominated by keyword queries. The sites, including Answers.com (ANSW), Mahalo, Aardvark, ChaCha, and Yahoo Answers (YHOO), aim to do what Google and other keyword-based search engines have trouble doing: delivering results tailored to specific human situations and problems without sending users to many different sites on the Internet. "Google can't provide all the answers," says Danny Sullivan, editor-in-chief of Web site Search Engine Land.

Hunch co-founder Fake, who also co-founded image-sharing site Flickr and sold it to Yahoo! in 2005, isn't out to topple Google (GOOG). But she does contend that in an online world where people frequently contribute edits to Wikipedia and thumbs-up stories on Digg, the power of online crowds has yet to be fully harnessed to help people make better everyday decisions. "One little action is actually fairly insignificant in the grand scheme of things, but in the aggregate, these things together create something that's incredibly valuable," she says.
Fake: Flickr, Yahoo Answers, and now Hunch

Fake burnished her search skills while still at Yahoo after the Flickr deal. She helped to create one of the most successful question-and-answer sites, Yahoo Answers. Launched in 2005, each month the site attracts tens of millions of visitors who pose questions and get rewarded with recognition for providing the most popular answers to others' questions. In fact, the site gets many of its visitors from traditional search engines like Google, since Yahoo Answers turns up in results when people search for questions like: "Does chocolate spoil?" Fake left Yahoo last year.

Hunch arrives at a response after asking users about five to 10 questions. Going a step beyond Yahoo's community-voting model, Hunch determines the best response for each individual user based on their past clicks. The site has voluntary survey questions on its front page, in the section "teach Hunch about you," where it asks simple, fun questions and then factors in those preferences when it's advising you on a decision.

Answer engines have a poor track record of late. In May, Microsoft (MSFT) closed its MSN QnA, a service similar to Yahoo Answers. In March, Wikipedia founder Jimmy Wales announced he was closing Wikia Search, a short-lived project intended to create user-influenced results to keyword queries. Google once offered a collaborative search site called Google Answers, where people could offer money rewards for thoroughly researched responses to queries. The company axed the site in 2006, telling users "the Answers community's limited size and other product considerations made it more effective for us to focus our efforts on other ways to help our users find information."

A large base of active users is essential for making these types of sites useful, says Brady Forrest, a technical evangelist at O'Reilly Media who previously worked on the search team at Microsoft and helped develop the prototype of MSN QnA. "You have to constantly be able to pull in a certain crop of answerers who will invest the time to go in and talk about whether you should buy this laptop or that laptop and keep it updated," he says.
"they might get more valuable advertisers"

Profits also hinge on these sites reaching a wide audience. "Many of these services are ad-based, which is problematic, says Greg Sterling, founding principal at technology market researcher Sterling Market Intelligence. '"In order to make that work, you have to have a massive audience.""

Could answer services one day be as lucrative as the search business? Eschewing banner or text ads, Hunch plans to get all of its revenue from fees it receives by sending users to shopping sites like Amazon.com (AMZN). So while it may profit from only a small portion of the questions on its site, search experts say these links could be very profitable since people are already coming to the site with the intention to buy something. "Potentially, they might get more valuable advertisers," says Search Engine Land's Sullivan.

Sullivan says Google and other keyword search engines may lose a small portion of users to decision sites like Hunch, but generally he thinks the category is creating new searches that weren't done before at all. "They enlarge the search pie overall," he says, adding that when video started appearing on the Web, it prompted a similar boom in new types of searches that didn't exist before.

That isn't stopping traditional search engines from trying to compete with these upstarts by trying to offer smarter searches. In May, Microsoft unveiled Bing, a new incarnation of its Web search that's billed as the "decision engine." The site includes information such as average plane ticket prices for a search of "Chicago to London" right on the first page of search results.

Not Amused: Six Flags Files For Bankruptcy
Story from MSN

Six Flags CEO Mark Shapiro says the company won't close parks or layoff employees. But, without a ruling from the court, he can't make any promises.

The ride for Six Flags' (SIXF, news, msgs) shareholders is over. The theme-park operator filed for bankruptcy on Saturday, June 13, after failing to keep up with payments on $2.37 billion in debt.

The Chapter 11 announcement came as little shock to Wall Street, which had long factored the likelihood of bankruptcy into the price of insuring Six Flags' debts. The company, which lost nearly $113 million last year, had visibly struggled to raise money in advance of an Aug. 15 deadline to pay preferred income shareholders $287.5 million, plus another $31.3 million in accrued and unpaid dividends. Failure to meet the deadline would have triggered clauses in other creditor contracts demanding early payments.

"The current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in these challenging financial markets," said Six Flags President and CEO Mark Shapiro, in a statement.

Shapiro has promised that the filing will not impact operations at the companies' 20 theme parks, which include more than 120 roller coasters such as Kingda Ka, the tallest roller coaster in the world. The company owns 18 Six Flags parks in the U.S. and an additional two in Mexico and Canada, according to its bankruptcy affidavit, provided by BankruptcyData.com. It also has plans for a park in Dubai and Qatar, both major tourist destinations in the Middle East.
No layoffs?
Shapiro has also promised Six Flags will not have layoffs. The company employs about 2,040 people as well as another 28,500 seasonal employees during the parks' warm-weather months when the parks are open.

"Our brand and out operations are on solid ground," said Shapiro in a statement. "This process is strictly a financial restructuring of our debt. We are fully committed to ensuring that the experience of our guests this summer is totally unaffected by this restructuring process."

Of course, Shapiro really can't guarantee that. Though the company has pre-negotiated terms with debt holders to erase about $1.8 billion in debt and an additional $300 million in preferred shareholder obligations, the bankruptcy court has not approved the plan.

The company has already sold – and tried to sell – subsidiary parks to other operators. In 2007, the company sold its stake in three water parks and four theme parks. The sale included Houston's SplashTown and the Enchanted Village near Seattle. Six Flags was also reportedly trying to sell the property rights to its New Orleans theme park, which was largely destroyed during Hurricane Katrina in August. 2005. The park is currently closed.

Despite his public statements, Shapiro acknowledged that Six Flags may have to let employees go or shed operations in the affidavit accompanying the bankruptcy filing. "In the event that terminations are necessary," Shapiro wrote, full-time employees will receive "one week of pay per year of service in severance payments" up to $10,950. However, he added that the company does not anticipate that it will need to reduce its work force or, as a result, pay severance.

Former K-Mart Chief Found Liable For Misleading Investors
Story from Bloomberg

Kmart Corp. former Chief Executive Officer Charles Conaway was found liable by a federal jury for misleading investors about the company’s cash crisis in the months before its 2002 bankruptcy.

The U.S. Securities and Exchange Commission, which seeks to bar Conaway from ever serving as an officer of a publicly traded company, sued him in 2005, alleging he duped investors in a third-quarter 2001 securities filing and during a Nov. 27, 2001, conference call.

The case was “a matter of credibility and accountability,” Alan Lieberman, an SEC lawyer, said after today’s verdict. “This jury held Mr. Conaway accountable for his own conduct.”

The jury of five men and five women delivered the verdict near the end of the first full day of deliberations in the trial in federal court in Ann Arbor, Michigan. U.S. Magistrate Judge Steven Pepe will determine what penalty to impose.

Conaway’s attorney, Scott Lassar said he was “very disappointed in the verdict.” Conaway plans to appeal, said Lassar.

‘Dodged Information’

Conaway “dodged inconvenient information,” Lieberman told jurors in closing arguments last week. “He knew when to deny and blame others and say ‘Nobody ever told me.’”

Kmart filed for bankruptcy protection on Jan. 22, 2002, after fourth-quarter sales fell, the surety bonds market evaporated and some suppliers halted shipments. Conaway was fired two months later. Kmart subsequently shed 599 stores and fired about 57,000 workers.

The SEC alleged that Conaway hid the fact the company was short of cash and had a program to delay payments to vendors. Lassar said in his closing argument that the regulator’s case against his client is “ridiculous.”

“There was no liquidity crisis at Kmart” at the time, Lassar argued.

Conaway claimed in testimony last week that he wasn’t involved in preparing the quarterly report. He said he was focused on saving the struggling retailer before the bankruptcy.

“Liquidity was in excellent shape,” Conaway testified. “Better shape than in prior years.” Kmart had caught up by the third quarter, he said. “It wasn’t an issue.”

Bankruptcy Exit

The company exited bankruptcy in May 2003. Kmart Holding Corp. later bought Sears, Roebuck & Co., creating Sears Holdings Corp., based in Hoffman Estates, Illinois.

The government alleged that Kmart began delaying payments to vendors to ease a cash crunch caused by an “extraordinary” $850 million inventory purchase by Kmart’s chief operating officer, without the knowledge of other top Kmart managers, in the summer of 2001.

After delivering the verdict, three jurors who declined to give their names agreed that the videotaped testimony of former Kmart chief financial officer Jeffrey Boyer was particularly important in their verdict against Conaway.

Boyer testified that he was fired after telling Conaway about liquidity problems at the company. The conversation came before Conaway’s November 2001 conference call with analysts, Boyer testified.

The case is Securities and Exchange Commission v. Conaway, 05-cv-40263, U.S. District Court, Eastern District of Michigan (Ann Arbor).

Protect Yourself From Shady Contractors
Story from the Baltimore Sun

You find the new home of your dreams. But what happens when the home builder does not deliver as promised?

The Maryland Attorney General's Office announced Friday that it has charged Columbia-based home builder Altieri Homes with taking deposits and payments from at least 20 homebuyers in Howard and Harford counties but failing to either start or finish the homes. The attorney general's Consumer Protection Division also accuses Altieri of not refunding consumers' deposits or advance payments and failing to pay subcontractors.

As if buying a home is not stressful enough, what are your rights and recourse if you're faced with a similar situation? How do you protect your hard-saved deposit?

Marylanders buy more than 10,000 new homes each year, according to the attorney general's office, and a new home purchase is protected by state law.

Here are other questions to consider:

How do I find a reputable builder?

For starters, make sure your builder is registered. All home builders operating in Maryland must register with the attorney general's Home Builder Registration Unit, except for firms that build exclusively in Montgomery County. (Home builders there must register with the Montgomery County Office of Consumer Protection.)

"It's so important for consumers to check with our office to see if the builder is registered and if they have any complaints, especially on an investment this large," said Raquel Guillory, a spokeswoman for the Attorney General's Office. "Probably for some people this is their life savings, their dream home."

Call (410) 576-6573 in the Baltimore area or (877) 259-4525 in other parts of the state to find out whether your builder is registered with the Home Builder Registration Unit. Or visit www.oag.state.md.us/homebuilder.

A builder's registration can be suspended, revoked or denied for several reasons, including engaging in a pattern of poor workmanship. Another avenue to investigate your home builder is to check lawsuits at the Maryland Judiciary Case Search at http://casesearch.courts.state.md.us/inquiry/inquiry-index.jsp.

A word of caution: The sheer number of lawsuits alone may not be a good indication of a home builder's reputation and quality of work.
How do I protect my deposit?

State law requires the home builder to place your deposit in an escrow account, unless the builder has corporate surety bonds or an irrevocable letter of credit on file with the state.

The builder must disclose whether your deposit is protected by an escrow account, bond or letter of credit.

The attorney general alleges Altieri failed to put customer deposits in an escrow account or secure them through a bond or letter of credit. Verify the builder's escrow account by calling the bank. To verify the builder's bond or letter of credit, call the Home Builder Registration Unit.

What if I encounter problems?

Contact the builder first. Put your problems in writing to the builder. Keep copies of all correspondence and maintain a log of your contact with the builder.

The attorney's general says the best chance of resolving problems is to catch them early and to try to work them out with the builder.
What if a dispute with a builder goes nowhere?

There are several options.

If the builder has provided home warranty coverage, you may be able to file a claim under that plan.

You could also file a complaint with the attorney general's office. The Mediation Unit will attempt to resolve the dispute. But if that fails, the dispute can be submitted to the Arbitration Unit, if both parties agree to it.

For contracts with registered home builders agreed upon after Jan. 1, consumers can file a claim with the Home Builder Guaranty Fund. The fund provides compensation of up to $50,000 for "actual loss" due to incomplete construction, breach of warranty, failure to meet standards or guidelines, or failure to return a deposit.

Before filing a claim with the fund, the attorney general's office says you must file a complaint with the Mediation Unit and have already provided the builder with an opportunity to address your problems.
Should I consider a legal claim against the builder?

"They have the right to sue a general contractor for workmanship that isn't up to standards or somebody who has caused them damage because they didn't do work," said John Prisbe, a partner with Venable's Baltimore office who has represented buyers and builders. (Prisbe has not done any work with Altieri.)

Before taking the legal route, check your contract, which can call for binding arbitration or other forms of alternative resolution as well as prohibit a buyer from suing the builder.

"That could dictate where you're going to bring your claim," Prisbe said.

Another issue to consider: Weighing legal costs against your chances of recovering damages.

"A concern is when you have a builder who's in financial difficulty and whether you have the ability to recover," Prisbe said.

Remember that the plaintiff has the burden of proof. The case's resolution can depend on the complexity of the dispute and how much is at stake, Prisbe said.

For claims $30,000 or less, you can file in District Court or also choose to file in Circuit Court, Prisbe said. For claims over $25,000, you must generally file in Circuit Court.

One Thriving Tech Industry: Home Office Networks
The market for home office networks and data storage is actually booming against the general economic downtrend
Story from Channel Web

Despite a general plummet in storage hardware sales, the SOHO NAS market is actually booming, according to recent Gartner data.

Total revenue from the sales of sub-$5,000 NAS appliances for the SOHO(Small Office/Home Office) market in 2008 were up 64 percent over the revenue booked in 2007, said Pushan Rinnin, research director at Gartner.

And, unlike most of the rest of the storage hardware market, sales of the low-cost appliances are expected to continue to grow in 2009 over 2008, although at a more moderate 6.4 percent, Rinnin said.

Total storage hardware revenue for all of 2008 grew at an anemic 3 percent, according to IDC, with sales falling 5 percent in the fourth quarter.

Overall storage hardware sales plunged in the first quarter of 2009, falling 18.2 percent compared to the same period in 2008, IDC said.

Rinnin said that the growth in the sub-$5,000 SOHO NAS market in 2008 was a lot more than Gartner expected.

However, she did admit there was somewhat of an apples-to-oranges comparison between 2008 and 2007. "Some vendors we didn't capture [data from] in 2007, but we later found out did well, like QNAP in Taiwan, which sells mainly to Europe," she said.

In 2008, Netgear was the largest seller of sub-$5,000 SOHO NAS appliances, with sales of $98.7 million, up 128 percent over 2007. That gave the company a 28 percent share of the market, Gartner said.

It was followed by Buffalo Technology with sales of $44 million, down 47.2 percent; EMC (NYSE:EMC)'s Iomega (NYSE:IOM) with sales of $38 million, up 69 percent; Hewlett-Packard (NYSE:HPQ) with sales of $30 million, up 13 percent; and LaCie with sales of $25 million (percent change unavailable), according to Gartner.

In terms of units, Buffalo Technology led the market despite a 34.4-percent drop in shipments to 62,950 units, giving it a market share of 19 percent.

It was followed by Netgear with 52,255 units, LaCie with 50,000 units, QNAP with 32,900 units and EMC's Iomega with 19,392 units, Gartner said.

Netgear's rise to the top came as a result of its acquisition of Infrant Technologies in 2007, Rinnin said.

Buffalo Tech's drop in sales does not indicate that the company is slipping as a storage vendor, Rinnin said. "Instead, it's more focused on the consumer side of the market," she said. "Its 2007 SOHO NAS numbers might have been overestimated. For some products, there's not such a clear cut between consumer and business use."

The consumer side of the NAS market also did very well in 2008, and that bodes well for growth in the SOHO NAS sector, Rinnin said.

"Growth in the home market comes from consumers getting more digital content," she said. "Putting in network-based storage in the home for use by multiple PCs or as a central backup is a reality now. And vendors are making it easier than ever to use. And as these kind of consumers become familiar with the product, they'll start to use it for their home-based offices as well."

Drew Meyer, director of product marketing for SMB storage at Netgear, said SOHO NAS vendors are some of the biggest storage companies people have never heard of before.

Netgear, for instance, in addition to being the largest sub-$5,000 SOHO NAS vendor in terms of revenue, also is the sixth-largest vendor of unified NAS-iSCSI storage appliances, Meyer said, quoting Gartner numbers. However, once either EMC or NetApp acquires Data Domain, Netgear will rise to No. 5, he said.

Netgear also is the No. 3 vendor of sub-$25,000 NAS in terms of revenue and No. 2 in terms of shipments, Meyer said.

"Nobody thinks of Netgear as a major player in the sub-$25,000 storage space," he said. "Maybe they do in the sub-$5,000 space. So this will give VARs a reason to look at Netgear."

How Do I Protect My Data Center?
Story from Baselinemag.com

Security and business continuity are critical issues to consider

Companies that are either buying or building data center capability should not take business-continuity and risk-assessment planning for granted. In recent discussions with Baseline, four data center experts made the following recommendations and observations:

1. Maintenance procedures should incorporate best practices. Physical security should be a big part of the site management program, says Julian Kudritzki, vice president of development and operations at Uptime Institute Professional Services, a provider of educational and consulting services for IT shops. He recommends checking on the data center’s history of outages, as well as making sure the staff is well-trained and the environment is clean.

2. Locating a data center—or choosing a colocation services provider—that is close to your operations has pluses and minuses. “Though choosing a co-location provider that’s nearby saves time for tasks, such as racking up a server, it prevents you from taking advantage of lower-cost facilities that may exist elsewhere,” Galen Schreck, an analyst at Forrester Research, wrote in a recent report. “Depending on the provider you select, you may be able to use some basic remote services to handle physical configuration tasks, while running your operations remotely.”

There’s another reason for not having your data center and co-location center too close. “Events that are likely to knock out power are often regional,” says Tom Deaderick, director of OnePartner Advanced Technology & Applications Center, a co-location site.

3. Don’t take a cookie-cutter approach to rating a data center. The Uptime Institute’s Tier Classification System, which rates data center availability, doesn’t use a design manual or checklist to reach a specific tier level.

It allows for multiple solutions to reach a given standard, Kudritzki says. Tier III and Tier IV data centers (the institute’s top classifications) must have uninterruptible power supplies, backup power generation, redundant and diverse connections to the power grid, a standalone building, concurrently maintainable infrastructure (redundant systems and distribution paths), and on-site staff to monitor and correct any facility issues, the Forrester report states.

Although many users of data centers realize the need for greater resiliency and are raising their data center requirements, only a small number of private companies pay for certification, says Richard Jones, vice president and service director for data center strategy at the Burton Group. Nearly all hosted companies offering data center services to businesses do get certified, he adds.

4. Test the recovery side of your backup. Determine the resiliency of your data center, how long its uninterruptible power supplies will run and whether staff can reach the data center in the event of disasters, Jones advises. “Even something simple like having a contact list of IT employees is not something companies think about beforehand,” he says. “Companies often fail to look at the whole picture. Having a full business continuity process in place will help them identify these needs.”

28 States Receive Grants To Keep Waterways Clean
Story from Kansas City InfoZine
Department of the Interior Secretary Ken Salazar announced that $14.6 million will be awarded to 28 states under the Clean Vessel Act grant program in 2009.

Washington, D.C. - infoZine - The grants will be used to fund the construction and installation of sewage pump-out facilities and floating restrooms, to purchase pump-out boats and provide educational programs for recreational boaters.

“Clean Vessel Act funds support construction of facilities in communities that depend on recreational boating for their economy, and depend on clean water for their health,” said Salazar. “These grants provide immediate funding for construction of infrastructure that will provide lasting value for recreational boaters, and everyone who relies on clean waters.”

Since the program’s inception in the early 1990s, the program – administered by the U.S. Fish and Wildlife Service – has awarded more than $163 million to states to install thousands of sewage pump-out stations. In addition, many states now rely upon mobile sewage pump-out boats to make the sewage collection process more efficient and convenient. A number of states also have begun installing floating restrooms and pump-out stations in high use areas of lakes and coastal waters.

Funding for the CVA program comes from the Sport Fishing and Boating Trust Fund, formerly known as the Aquatic Resources Trust Fund, which is supported by excise taxes levied on certain fishing and boating equipment and boat fuels.

"These Clean Vessel Act grants will help the states maintain clean and healthy waters for people and wildlife," said U.S. Fish and Wildlife Service Acting Director Rowan Gould. "Sewage pump-outs may not be the most glamorous conservation tool, but their presence can have an immediate and clear impact on the well-being of aquatic resources and recreational waterways that provide drinking water to millions of Americans."

A listing of grant awards made today include:

Alabama: $297,188 – The Alabama Department of Environmental Management plans to install ten sewage pump-out stations throughout the state for its inland and coastal waters. In addition, the agency plans to maintain efforts to inform boaters about the importance of proper sewage disposal and how it benefits the aquatic environment.

Arkansas: $323,335 – The Arkansas Game and Fish Commission plans to purchase five sewage pump-out boats and install fourteen sewage pump-out stations. The grant will also provide funds for the operations, maintenance, repair and rehabilitation of existing sewage pump-out stations as needed to keep these stations functioning.

Arizona: $150,000 – The Arizona Fish and Game Department plans to install at least five sewage pump-out facilities, eight dump stations, and purchase a sewage pump-out boat for use on inland waters.

California: $3,130,000 – The California Department of Boating and Waterways plans to install eight sewage pump-out stations, purchase two sewage pump-out boats, and install up to ten floating restrooms throughout the state for coastal and inland waters. The agency will also continue its aggressive educational program to inform boaters about the importance of proper sewage disposal.

Florida: $1,816,575 – The Florida Department of Environmental Protection plans to install more than 29 dual purpose sewage pump-out-dump station facilities for inland and coastal waters. The agency will continue its education and outreach efforts with boaters to stress the importance of proper sewage disposal.

Georgia: $63,432 – The Georgia Department of Natural Resources will install two sewage pump-out facilities and purchase a sewage pump-out boat for its inland and coastal waters.

Idaho: $95,000 – The Idaho Department of Parks and Recreation plans to replace or renovate approximately four sewage pump-out stations.

Illinois: $112,500 – The Illinois Department of Natural Resources plans install up to five sewage pump-out stations throughout the state, dependent upon the needs of the state’s marina operators.

Indiana: $495,482 – The Indiana Department of Environmental Management plans to install eight sewage pump-out stations and one floating restroom and to continue efforts to inform boaters about the importance of proper sewage disposal.

Kansas: $32,250 – The Kansas Department of Wildlife and Parks plans to fund the installation of a sewage pump-out facility at Perry Lake.

Kentucky: $124,469 – The Kentucky Department of Fish and Wildlife Resources plans to install a sewage pump-out facility, purchase one sewage pump-out boat, and renovate one sewage pump-out facility along the Ohio River, Lake Cumberland, and Dale Hollow Lake.

Louisiana: $90,000 – The Louisiana Department of Wildlife and Fisheries plans to fund the purchase of a sewage pump-out boat and a mobile sewage dump station for use on Lake Pontchartrain and Bayou Castine, as well as continue education efforts throughout the state on proper sewage disposal.

Massachusetts: $1,343,772 – The Division of Marine Fisheries plans to install sewage pump-out facilities, purchase seven pump-out boats, renovate two pump-out boats, and provide operation and maintenance funding for existing sewage pump-out boats and facilities throughout the state’s coastal waters. The agency will also continue its educational efforts on proper sewage disposal.

Michigan: $100,000 – The Michigan Department of Natural Resources plans to fund the installation of four sewage pump-out facilities on coastal waters and boat docks. Michigan DNR officials also plan to continue education and awareness efforts for proper sewage disposal.

Minnesota: $337,500 – The Minnesota Department of Natural Resources plans to install five sewage pump-out stations at floating boat docks and marinas throughout the state and to educate boaters about the importance of proper sewage disposal and its importance to the environment.

Mississippi: $143,500 – The Mississippi Department of Marine Resources plans to install five sewage pump-out facilities throughout the state at coastal and inland sites.

Missouri: $48,000 – The Missouri Department of Conservation plans to install new or replacement sewage pump-out facilities at three or four marinas in the state’s waters as needed.

New Hampshire: $210,370 – The New Hampshire Department plans to install four sewage pump-out facilities at coastal and inland sites.

New Jersey: $588,888 – The New Jersey Department of Environmental Protection plans to install 18 sewage pump-out facilities, purchase one sewage pump-out boat, and educate boaters about proper sewage disposal.

New York: $1,270,007 –The New York Department of Environmental Conservation plans to purchase 31 stationary sewage pump-out units, three sewage pump-out boats, and 31 dump facilities for portable toilets; and to install two floating restrooms throughout the state’s inland and coastal waters. In addition, the state plans to provide operation and maintenance funds for existing facilities to ensure their availability for recreational boaters.

North Carolina: $194,875 – The North Carolina Department of Environment and Natural Resources plans to install four new sewage pump-out facilities and twelve dual purpose sewage pump-out-dump facilities throughout the state’s coastal waters and continue efforts to inform boaters about the importance of proper sewage disposal.

Ohio: $248,625 – The Ohio Department of Natural Resources, Division of Watercraft, plans to install sewage pump-out facilities at five locations throughout the state.

Oregon: $1,111,650 – The Oregon State Marine Board plans to purchase and install 22 sewage pump-out stations and 28 dump stations for coastal and inland waters throughout the state and to provide funding for the operation and maintenance of existing facilities. The agency will also continue its efforts to educate boaters about the importance of proper sewage disposal and its benefits to aquatic ecosystems.

Rhode Island: $448,000 – The Rhode Island Department of Environmental Management plans to install ten sewage pump-out stations, replace or renovate five sewage pump-out stations, and purchase a sewage pump-out boat for the proper disposal of boater sewage on coastal waters throughout the state.

Tennessee: $600,000 – The Tennessee Wildlife Resources Agency plans to install 16 sewage pump-out stations and renovate two sewage pump-out stations throughout the state. The agency will also continue its efforts to educate boaters about the importance of proper sewage disposal.

Texas: $375,000 – The Texas Parks and Wildlife Department plans to install 25 sewage pump-out stations for inland waters and to continue its educational efforts to inform boaters about the importance of proper sewage disposal.

Utah: $350,743 – The Utah Division of Wildlife Resources will construct two sewage pump-out facilities to replace older facilities located at Flaming Gorge Reservoir and Bear Lake.

Washington: $530,000 – The Washington State Parks and Recreation Department plans to install six new sewage pump-out and dump station facilities and to provide operation and maintenance funding for 36 coastal marinas and 25 inland marinas throughout the State.

Economic Woes Sinking Boating Industry
Story from Star-Tribune

LITTLE FALLS, MINN. -- If Minnesota had a symbolic birthplace for the state's boat-making industry, it might be this city of 8,500 that straddles the upper reaches of the Mississippi River and is home to two of the best-known names in boating: Larson and Crestliner. But a rough economy has battered many sectors of the boating industry, creating ripples that are being felt from the lakeshore to the showroom floor.

At Larson, where layoffs over the past few years have slashed that workforce from a peak of 800 to around 200, only a handful of shrink-wrapped boats were being loaded onto trucks one day last week, waiting for shipment to dealers. Employment at competitor Crestliner, owned by Brunswick Corp., is down 26 percent in the past nine months.

Minnesotans' love affair with boats hasn't ended, but soaring unemployment and plunging home values are swamping an industry that epitomizes sunshine and good times.

New boat registrations, down 20 percent between 2004 and 2008, continued to fall through the first four months of this year. Minneapolis-based boatmaker Genmar Holdings Inc., the parent of Larson and several other lines of boats, filed for protection in U.S. Bankruptcy Court in St. Paul while it reorganizes.

Textron Financial Corp. filed a lawsuit in U.S. District Court against Nisswa Marine, alleging the dealer is nearly $4 million in default on financing for inventory.

In Hastings, marina owner Bill King of King's Cove says only 270 of the 411 slips he has for lease are occupied this season. At Wayzata Marine on Lake Minnetonka, owner Dave Briggs has a dealership full of new boats that he's having trouble selling.

Little Falls Mayor Cathy Van Risseghem said: "When you start looking at the necessities of life, boats probably will be one of those things you don't really need. It's a sign of the economic times, and we just have to learn to deal with it."

'It's a Minnesota thing'

With more than 800,000 registered boats, Minnesota has one of the highest boat ownership rates in the country. Judging from the flip flops, swimsuits and berry-brown skin around area boat docks last week, the allure of playing hooky from work on a Friday afternoon for a lazy cruise with a cooler full of beer and pop remains irresistible, especially after a long winter.

"It's a Minnesota thing," said Tamara Duick of Maple Lake. "You don't have to go far to do it. We've got 10,000 lakes."

The owner of Big Dog Fishing Guide said business is holding its own despite the presence of more guides on the lakes.

"We're doing as well as last year, which was a record year," said Gary Klinger, a Howard Lake resident who offers guide services on Lake Minnetonka. On a recent Thursday, Klinger was waiting for two clients -- one from Scotland -- who were in Minneapolis on business and wanted to fish.

But powerboat makers are suffering from a steep drop in demand that began late in 2005 and actually accelerated through the first part of this year.

Brunswick, which makes Bayliner, Mercury and other brands, was forced to close five plants late in 2008, including one in Pipestone. Its sales plunged 64 percent during the first three months of 2009. Recently, the company took a page from automakers and began pledging to cover nine months of payments for any new boat buyers who lose their jobs.

Area boat retailers say they've had to rely heavily on sales of used boats.

"We're selling every used boat we can get," said Briggs of Wayzata Marine. "I don't think folks want their neighbors to see a new boat in the driveway."

Tougher credit policies are one reason Don Mashak, owner of First National Repossession in Albertville, expects the surge in boat repossessions to slow after rising sharply last year.

"People let their boats go before they let their cars go," Mashak said.
'A disposable-income issue'

King, at King's Cove, said boat sales go in cycles but that the current down cycle "is elongated." He said sales of larger boats -- 26 feet or more -- are most affected by the economy and the financing squeeze.

"It's a disposable-income issue," King said. "People are turning to other recreational activities -- motorcycles, RVs, travel, home improvement. It's competition."

Boss Decides The Cubicle Costs Extra

Recently, from the Houston Chronicle:

Q. I work as a financial adviser at a major insurance company. The manager in our office periodically threatens employees with punitive measures as a way to increase their production. This month he made good on one of those threats by withholding $500 from my commission-only compensation for “rent” for the cubicle I occupy. There was no prior agreement for this deduction to be made. Was this legal?

A. Probably not. Under the Texas Payday Law, all deductions (other than payroll taxes, court-ordered garnishments, and other legally authorized deductions) must be both lawful and specifically authorized in writing by the employee. If you did not authorize the rent deduction, your employer may have acted improperly.

Another related issue is whether you are owed overtime for any hours worked over 40 per week. There have been a number of cases against major brokerage firms, particularly where the financial advisers receive no salary — just straight commission.

You should meet with an employment law attorney or overtime lawyer to discuss your situation. You might also consider filing a wage claim with the Texas Workforce Commission to recover the unpaid compensation.

The Nursing Home Abuse Center To Team With Law Firms In All 50 States
Story from PR Web

The Nursing Home Complaint Center Wants To Team Up With Personal Injury Law Firms To Stop Nursing Home Abuse & Medicare Fraud

The Nursing Home Abuse Center intends to go after nursing homes, that abuse their patients, and wants to assist law firms that also have an interest in Medicare-Medicaid fraud, Class actions, and employee wage and hour issues. According to the group, "we want to align ourselves with larger personal injury law firms in specific cities, where we know nursing home abuse, Medicare or Medicaid fraud, and employee wage, and hour issues are wide spread, to stop these types of practices.."

Personal Injury Law Firms, class action law firms, or employment law firms that might have an interest in this are welcome to call the group at 866-714-6466, or visit their web site at Http://NursingHomeComplaintCenter.Com.

(PRWEB) June 8, 2009 -- The Nursing Home Complaint Center has been created to be the premier advocacy group in the nation, for senior citizens suffering wrongful death, abuse and neglect. At the same time the Nursing Home Complaint Center will focus on Medicare-Medicaid fraud, class actions, and wage and hour investigations in most major US cities. The Nursing Home Complaint Center wants to team up with law firms in each US state, that have a personal injury practice, with a focus on elder abuse, class actions, and/or employee wage and hour issues. This is a year-long project, and there will be a modest fee involved, for listing the participating law firms on the site. For more information, interested law firms can call Americas Watchdog's Nursing Home Complaint Center anytime at 866-714-6466, or contact the group via its web site at Http://NursingHomeComplaintCenter.Com.

So what types of issues is the group looking for? Americas Watchdog says, "once our legal team is in place, the Nursing Home Complaint Center will focus weekly press releases on elder abuse, Medicare or Medicaid fraud, Class Actions, or Wage and Hour investigations." As follow:

• Nursing home neglect that involves wrongful death
• Nursing homes not providing patients with minimum time per day.
• Nursing homes over billing Medicare for testing that was never done.
• Nursing homes not changing patients. (the patient then gets septic infections and then they often die)
• Nursing-homes, or elder care firms that, instead of sending an actual nurse, or LPN, send a undocumented worker to spend the day with the patient.
• Nursing homes not paying overtime to their employees, or abiding by FLSA.
• Possible class issues related to standard of care, drug costs, testing schemes, etc.

The group says, "this is all about protecting our elderly, the taxpayer, and the employee, all at the same time."

According to the Nursing Home Complaint Center, "These are but a few of the issues that we intend to go after, and expose. The great thing for the personal injury law firm, class action firm, wage and hour firm, or Medicare fraud lawyer is we have experience doing every aspect of the investigation, we know exactly what we are looking for, and we have a great plan that should produce dramatic results for everyone involved."

According to the Nursing Home Complaint Center, "the ideal medium-to-large law firm would specialize in personal injury, with a practice emphasis on wrongful death, nursing home abuse, class action type issues, and/or wage and hour issues, etc. These types of lawyers will know exactly what we are talking about, they will understand the scope of the problem, and if they are in one of our target markets/states, they will understand exactly why we intend to have an insider campaign as part of this initiative."

These type of law firms are welcome to call Americas Watchdog anytime at 866-714-6466, or contact the group via their web site at Http://NursingHomeComplaintCenter.Com.

Google CEO Eric Schmidt Gives First Impression Of Bing
Video from Fortune Magazine

Seven Essential Tips For Public Speaking
From Forbes

We turn on the television and see people speaking before crowds or handling reporters with confidence and it all looks effortless. In the 15 years I have been training people to become more effective communicators, I have watched for common qualities among great keynote speakers. Are they made, or are they born? Do they have a gift that most of us will never know or is there something more to it? I have seen major political candidates up close and personal, watched prominent chief executives interviewed on national television. I've worked with familiar TV personalities who experienced anxiety whenever they spoke in public.

I have learned from it all that even the people we think are the most natural public speakers often undergo significant training. Sure, a few may be born with a gift, but the overwhelming majority are effective speakers because they trained themselves to be so. Either they've pursued formal public speaking education or coaching or they've taken every opportunity to stand on their feet and deliver speeches.

I have found that being a successful public speaker boils down to following these seven essential principles:

1. Stop trying to be a great speaker.

To truly connect with an audience, first understand that people want to listen to someone who is relaxed and comfortable as well as interesting. In the routine conversations we have every day, we have no problem being relaxed. Yet too often when we stand up to give a speech something changes. We focus on the public at the expense of the speaking. To be an effective public speaker, you must do just the opposite. Focus on the speaking and let go of the public.

If you can carry on a relaxed conversation with one or two people, you can give a great speech. Whether your audience consists of two people or 2,000, and whether you're talking about the latest medical breakthrough or what you did today at work, it's never about turning into someone you're not. It's all about talking directly to people, being your authentic self and making a connection. That's all.

2. Stop trying to be perfect. When you make a mistake, no one cares but you.

Even the most accomplished public speaker will make mistakes. Just remember that the only person who really cares about any one mistake is the person doing the speaking.

People's attention constantly wanders. In fact, most people only really hear about 20% of a speaker's message. The other 80% they internalize visually. This ratio is true in nearly everything: watching a football game or a television show, or even having a heart-to-heart conversation. When you make a mistake, the audience rarely even notices. The most important thing you can do is keep going. Don't stop, and unless the mistake was truly major, don't apologize. Unless your audience is reading along with your speech, they won't know that you left out a word or said the wrong name.

Whether you're the president of the United States or a speaking coach like me, you will make mistakes. It's part of being human, and our humanity is what makes us great speakers, because it's what enables us to connect with our audience. Audiences don't want to hear perfection. They want to hear from someone who is real.
3. Visualize. If you can see it, you can speak it.

Great winners in all walks of life draw on the power of visualizing. Sales people envision themselves closing the deal; executives picture themselves developing new ventures; athletes close their eyes and imagine themselves making the basket or hitting the home run.

In public speaking, the best way to fight anxiety and become more comfortable is by practicing in the one place no one else can see you--your mind. If you visualize on a consistent basis, your mind will become used to the prospect of speaking in public, and pretty soon you'll find that the idea no longer elicits those same feelings of anxiety and fear.

If you have a presentation to give, set aside 30 minutes a day to visualize yourself giving it. Do so in as much detail as possible. See yourself up at the podium. Feel yourself relaxed and comfortable. See yourself delivering the whole thing and connecting with your audience. If you do this every day, by the time the real presentation arrives your mind will be trained to accept the situation as familiar. You will feel much more relaxed and confident in front of the audience.

4. Be disciplined. Practice makes good.

Our goal is not to be a perfect public speaker, since there is no such thing, but to be an effective one. Like anything else in life, that takes practice. It's easy to take communication for granted, since we spend our lives speaking to people. But when our prosperity is directly linked to how good we are in front a group, we need to give the task the same attention as any other serious job. Even world champion athletes practice their craft on a consistent basis.

When I work with clients, I always record their speeches so they can study their presentations. For most of us, however, the best way to practice is simply by giving a speech in the comfort of our home or office. The more you practice it, the more prepared you will be, and that leads to confidence. If you have a speech to give in a week, rehearse it on a daily basis. Deliver it out loud as soon as you get up in the morning, at least once in the middle of the day and twice before you go to bed. Do this every day, and when it's time to deliver the presentation, you will be prepared. You'll know the material inside and out. Along with visualization, this is the most effective way to overcome anxiety and build confidence about performing before an audience.

5. Describe. Make it personal.

Regardless of the topic, audiences respond best when speakers personalize their communication. Take every opportunity to put faces on the facts of your presentation. People like to hear about other people, about the triumphs, tragedies and everyday humorous incidents that make up their lives. Capitalize on this.

Whenever possible, include yourself personally in your public speaking. Not only will it help your listeners warm to you, but it will also do wonders at putting you at ease. After all, where is your expertise greater than on the subject of you?

6. Inspire. Speak to serve.

Yes, talk about yourself, but make the main focus not yourself but your audience. When you think about it, the proper purpose of a speech is not to benefit the speaker but to serve the audience, usually through teaching, motivation or entertainment. So in all of your preparation and presentation, constantly think of how you can help your audience members get what they want from you. When you do this, your role as speaker becomes a role of meeting the needs of the audience. It is sure to take much of the fear out of public speaking, too.
7. Build anticipation: Leave your audience wanting more.

One of the most valuable lessons I've learned in my years in communications is that when it comes to public speaking, less is usually more. Rarely if ever have I left a gathering and heard someone say, "I wish that speaker had talked longer." On the other hand, I imagine you can't count the times you've thought, "I'm glad that speech is over. It went on forever."

Surprise your audience. Always make your presentation just a bit shorter than they expect. If you've followed the first six principles, you've already won their attention and interest, so it's best to leave them wishing you had gone on for just a few minutes more, rather than squirming in their seats waiting for you to finally stop.
Richard Zeoli, author of The 7 Principles of Public Speaking, is the founder and president of RZC Impact, a communications firm specializing in executive-level communication coaching and strategic messaging. He is also a visiting associate at the Eagleton Institute of Politics at Rutgers University in New Jersey.

Calculating The Value Of Social Networking Sites
Story from Business Week

Companies are working fast to figure out how to make money from the wealth of data they're beginning to have about our online friendships

A question: If you have 347 followers on the Twitter microblogging service, what are the chances that they'll click on the same online ad you clicked on last night? Advertisers are dying to know. Or, say you and a colleague exchange e-mails on a Saturday night. Can managers assume that you have a tight working relationship? Researchers at IBM and Massachusetts Institute of Technology are investigating.

Friendships aren't what they used to be. We now have tools, from e-mail to social networks, to keep in touch with people who a decade ago would have drifted into distant memories. Practically every hand we shake and every business card we exchange can lead to an invitation, sometimes within minutes, for a "friendship" on LinkedIn or Facebook. And unless we sever them, these ties could linger for the rest of our lives.

What do these relationships say about us and the people in our networks? Companies armed with rich new data and powerful computers are beginning to explore these questions. They're finding that digital friendships speak volumes about us as consumers and workers, and decoding the data can lead to profitable insights. Calculating the value of these relationships has become a defining challenge for businesses and individuals.

Marketers are leading the way. They're finding that if our friends buy something, there's a better-than-average chance we'll buy it, too. It's a simple insight but one that could lead to targeted messaging in an age of growing media clutter.

The second arena for study is inside companies. Businesses such as Hewlett-Packard and IBM (IBM) are researching employees' relationships with an eye to quickening the flow of knowledge and the generation of ideas within their ranks. One team at IBM Research, studying anonymous data of Big Blue's consultants, concluded that employees who forged tighter e-mail connections with their boss brought in on average $588 more in monthly revenue. This is early-stage research, but the goal is to distill patterns of successful communication and replicate valuable links throughout the company.

For most of us, the business value of networked friends is tied to a third area, personal opportunity. In addition to companionship, friends online represent a turbocharged Rolodex for entrepreneurs and job seekers inside and outside companies. These collections of contacts expand social horizons, keeping us in touch with more people who can provide ideas, answers, business leads, and even legal advice. Those who master these connections stand to win a big edge: the connections and brainpower of a large team.

"A NEW UNDERSTANDING"

An immense new laboratory of human relations is taking shape. Millions of us are playing, working, flirting, and socializing online—and producing oceans of data. Duncan J. Watts, a Columbia University sociologist now on leave and heading a research unit at Yahoo!, marvels at the change. "When I started network research 12 years ago, we had virtually no data," he says. Now he and his team can study the network behavior of 295 million e-mailers and legions of the 200 million Facebook users. For social scientists, Watts says, this flood of data could be as transformative as Galileo's telescope was for the physical sciences: "It gives us a new understanding of our world and ourselves."

But managing hundreds or even thousands of relationships is a thorny challenge. Which friends go where? A couple of months ago, Fred Wilson, a venture capitalist in New York, decided to reduce the 360 people on his Facebook crowd into a circle of intimates. He kept the 56 he could see inviting to a wedding or bar mitzvah. The rest? "I nuked them," he says.

Others find value in a sizable following. Earlier this year, Jason Calacanis, founder of the search engine Mahalo, offered to pay Twitter $250,000 to put his account on a recommended list for the service's users. He says he was "half joking" but believes the investment would have paid off.

He figures the recommendation would have steered 5 million to 15 million new followers his way within two years and that many would have made their way to his company's Web site. "If 10% click on a link [to Mahalo] once a month," he writes in an e-mail, "you have about 1 million visits a year. ... I'd pay 5 cents for a follower." Lots of businesses, he says, could benefit from such followings. An airline such as JetBlue could offer discounts to the first 1,000 people who respond and "never [have] another empty seat."

While Calacanis tries to build crowds, advertisers are more interested in understanding individuals. Decoding friendship, many believe, could be the key to getting consumers' attention. Historically, this wasn't so hard. Information was in short supply, and by comparison, time was cheap. Not long ago millions waited through entire newscasts just to learn who won a game or what tomorrow's weather would be. This was ideal for advertisers: They had a captive audience.

Now we're swimming in information. We can call up nearly every bit of news, music, and entertainment we want on demand. In fact, there's so much of it that we need filters to block the boring or irrelevant stuff and help us find the bits we need or desire. This has created what many call the "Attention Economy." Says Bernardo A. Huberman, director of the Information Dynamics Laboratory at Hewlett-Packard: "The value of most information has collapsed to zero. The only scarce resource is attention." So how do we figure out where to direct it?

The easiest way is to get tips from friends. They're our trusted sources. At least a few of them know us better than any algorithm ever could. Little surprise, then, that the companies most eager to command our attention are studying which friends we listen to. Online friendship is a hot focus for Facebook, Google, and Yahoo. They joust to hire leading sociologists, anthropologists, and microeconomists from MIT, Harvard, and Berkeley. Microsoft just established a research division focused on social sciences in Cambridge, Mass.

Statistically, friends tend to behave alike. A couple of years ago researchers at Yahoo found that if someone clicked on an online ad, the people on his or her instant chat buddy list, when served the same ad, were three to four times more likely than average to click on it. It makes sense. Friends share interests.

But it raised lots of questions. Which types of friends have the most meaningful correlations with each other? People have always confided in a small circle of intimates, often only two or three. They've also had wider circles of experts for specific advice, whether on cars or cooking. Then there's a broader circle of acquaintances whose opinions count far less but who can still generate buzz about a new restaurant or senatorial candidate. By studying patterns of interactions on networks—often scrutinizing us only as anonymous bits of data—researchers are working to predict which friends we trust and which we pay attention to in each area of our lives. The data can be hard to interpret, says danah boyd, a Berkeley PhD who just signed on at Microsoft Research. (She changed her name to lower case). "You may e-mail your mother less frequently than a colleague, but it's not that she's trusted less."

In an office above Palo Alto's University Avenue, a lean 32-year-old PhD from MIT's Media Lab pores over the data connecting millions of dots. Cameron A. Marlow, a research scientist at Facebook, has perhaps the greatest lab in history for studying friendship. He can study social media communications including wall posts, shared photos, pokes, and friend requests among 200 million people.

IGNORING THE ADS

For all its popularity, Facebook has yet to prove itself as an advertising platform. Visitors, it seems, focus on their friends and pay scant attention to ads. Few click on them, and advertisers pay pennies for page views. Consequently, Facebook, with its estimated revenue of $300 million this year, brings in scarcely a dime a month per member.

The hope is that if Marlow and his team manage to track the paths of influence among its communities, the company might be able to offer more effective and lucrative advertisements and promotions.

An early step is to separate each user's friends into clusters. Marlow pulls out a chart illustrating the social network of one of his colleagues, Alex Smith. It shows different groups of dots and their connecting links. One big and busy group represents fellow workers at Facebook. Others are high school friends, family, in-laws, frat brothers. Understanding these types of relationships could provide valuable context.

Marlow's team recently carried out a study to determine how close we are to our friends online. They looked at how often people clicked on their friends' news or photos, how often they communicated, and if the communications traveled in both directions. Studying this data, they determined that an average Facebook user with 500 friends actively follows the news on only 40 of them, communicates with 20, and keeps in close touch with about 10. Those with smaller networks follow even fewer. What can this teach advertisers? People don't pay much attention to most of their online friends. By focusing campaigns on people who interact with each other, they'll likely get better results.

It's an inexact science, to be sure. But that's not stopping a host of startups from hitching friendship analysis to advertising and media campaigns. A New York company, 33Across, has partnerships with social networks, instant chat providers, and makers of online applications known as widgets. Each of these partners tags users with bits of tracking code known as cookies. These let 33Across stitch together friendship profiles of tens of millions of people, says CEO Eric Wheeler. The people remain nameless numbers, but the company knows which ones are connected to which, how strong the connection is, and how many others are in their circles. Working with packaged goods companies, 33Across has focused on thousands of people who have bought a product online, sprinkling ads for the same item along the online pathways of millions of their friends.

FRIENDSHIP DATA

In an industry where the majority of ads go unclicked, even a small boost can make a big difference. One San Francisco advertising company, Rapleaf, carried out a friend-based campaign for a credit-card company that wanted to sell bank products to existing customers. Tailoring offers based on friends' responses helped lift the average click rate from 0.9% to 2.7%. Although 97.3% of the people surfed past the ads, the click rate still tripled.

Rapleaf, which has harvested data from blogs, online forums, and social networks, says it follows the network behavior of 480 million people. It furnishes friendship data to help customers fine-tune their promotions. Its studies indicate borrowers are a better bet if their friends have higher credit ratings. This might mean a home buyer with a middling credit risk score of 550 should be treated as closer to 600 if most of his or her friends are in that range, says Rapleaf CEO Auren Hoffman.

Such intelligence could prove useful for a financial company. While no one would automatically green-light borrowers based on their friends, the friendship data could lead them to assign a human to see if the mathematical model is missing something. "They pay more than $100 in marketing to [attract] customers," Hoffman says. "If they reject you, they lose it."

Friendship data promise insights into not only the marketplace but also the corporation. Researchers can trace the hidden networks, identifying both the people who transmit valuable information and those who appear to block it—and how workers bypass them. By studying these patterns, managers can promote effective networkers and try to bring less communicative colleagues—outliers—into the flow.

To build up communication within the company, IBM Research scours its networks for employees with similar interests and expertise—and suggests them as friends. One key laboratory for IBM is its internal social network called Beehive, in which nearly 60,000 employees discuss patents, critique software code, and even post photos of pets.

Researcher Werner Geyer and his team sift through Beehive for correlations. Working with a control group of 3,000 employees, Geyer's team analyzed the words employees used, friends they had in common, blogs they left comments on, and many other variables. Then they suggested possible friends. Their most successful group added an average of 3.68 new friends to their networks, more than three times the average of the control group. The idea: Each new friend plugs an IBM worker into another sphere of knowledge and human contacts. "These could be valuable mentor connections," says Geyer.

For many, the question is not how to interpret friendship data but how to manage these networks and fit them into careers. Reid Hoffman, LinkedIn's founder, has built his entire company on extending webs of relations. The idea is that while each of us likely will switch jobs seven or eight times in our careers, we continue to build a network of friends that can sustain us.

LinkedIn's Hoffman sees himself as a test case for the value of casual friends. He says he has 1,864 contacts on LinkedIn. While he has met almost all of them personally, he admits that it sometimes takes a moment or two to recall some of them. "I think of them as light alliances," he says. But they have a value. According to studies, the contacts outside of our close friendships are more likely to lead us to new opportunities. Their networks have less overlap and extend into different areas.

Hoffman looks at friendship as a marketplace in which we trade favors. He says he can create an opportunity for someone by taking 30 seconds and whipping off an introduction to a friend. It's a small investment of time with a potentially big payoff. Both of his contacts benefit, and they have Hoffman to thank. His reputation inches up. But consider the risks. If Hoffman has misread one of his weak ties, the person he recommends might end up being a loafer, or worse. In that case, Hoffman's reputation takes a hit.

All of networked humanity mingles in this vast marketplace, trading information, creating alliances, doing favors. We may not think of our connections in such mercantile terms. But for business and individuals alike, the value in online friendship is poised to grow.

Some Buyers Hindered By New Rules For Condominium Loans
Story from Boston.com

Condominiums are becoming more difficult to purchase and refinance as lenders increase fees and tighten regulations to offset what they say is the higher risk of lending to buyers of condos as compared with buyers of single-family homes.

The changes are part of an effort by mortgage giants Fannie Mae and Freddie Mac to limit risky lending in a segment of the housing market particularly hard hit by foreclosures in recent years.

In addition to paying higher fees to get a loan, prospective buyers now must make down payments of up to 20 percent because companies that traditionally insure lenders against borrowers who default are shying away from condos.

Peter Milewski, an official at MassHousing, the state's afford able housing bank, said condos are considered more problematic to lenders because a few foreclosures can affect property values for an entire complex. Also, he said, they carry monthly fees and special assessments that can create massive collective debts if individual unit owners fall behind on payments.

But Milewski and some other housing specialists believe the changes are too restrictive and may discourage qualified buyers from closing deals at a time when the housing market desperately needs to rebound. Even the state housing bank is challenged by the new regulations, he said.

"There has been a dramatic attempt to overcorrect based on what has happened historically," he said. "The pendulum has swung way past center."

Dena Capano of Salem is one of a growing number of qualified condo buyers forced to comply with the tighter borrowing requirements.

Capano, 24, said she was planning to buy a $129,000 loft in Salem in February when her lender demanded she increase the down payment from 18 percent to 20 percent or lose the loan. Capano said she came up with the extra money, but the deal still almost fell through because the condo association didn't meet another new requirement that it keep more money in reserve for repairs and other shared expenses.

"It was definitely more complicated than one would think," said Capano, an administrative assistant for the Lynn Museum and Historical Society.

Amy Tierce, a mortgage lender at Fairway Independent Mortgage in Needham, said the restrictions and fees, which are in force nationwide, unfairly penalize homeowners in the Boston area, where condo foreclosures have not been as prevalent as in other parts of the country. It's particularly unfair to first-time buyers, who often opt for condos, she said.

"In the Greater Boston area, when you've got less money to spend, a condo is your only choice unless you want to commute two hours," said Tierce. "Everybody has gotten nervous about condos."

Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter, said the condo-buying crunch is a nationwide phenomenon. "It's almost as if condos have been blacklisted," he said. "Financing options are much worse on condos, and it is very difficult to refinance now."

The National Association of Realtors is lobbying Fannie Mae and Freddie Mac, which are controlled by the federal government, to have the rules relaxed.

"A person with good credit and qualifying income ratios, why is that person being additionally harmed because that person wishes to buy a condo property?" said Lawrence Yun, chief economist for the trade group.

"If the buyers are hindered from entering the market, it will deter the housing market recovery."

Fannie Mae and Freddie Mac's guidelines, which vary slightly, affect much of the mortgage lending in the United States because the agencies end up buying or guaranteeing nearly 60 percent of all loans, according to federal data. Private lenders do not need to adhere to the new regulations, but those interested in later selling mortgages to the two federal agencies must abide by them.

One of the Fannie Mae and Freddie Mac lending changes is a surcharge equal to three quarters of a percent of the amount being borrowed. The agencies say the surcharge - which took effect April 1 - translates into about an eighth of a percentage point increase in an interest rate, although it could be higher depending on the borrower's credit rating and other financial details. To avoid the extra cost, anyone buying or refinancing a condo must provide a down payment of 25 percent, or demonstrate that they have equity of at least 25 percent in the property.

Brad German, a spokesman for Freddie Mac, said the point fee is meant to address the added risk of financing condos.

"The market has deteriorated, and the condominium market has become much riskier," German said. "We have adjusted our fees accordingly."

Both agencies also now will only loan to people buying into new developments where 70 percent of the units are already sold - or under contract - to owners who will live there, not those buying properties as investments. Until recently, only 51 percent of units had to be owner occupied. The agencies say the intent is to make sure projects are financially sound. But the change has left some otherwise qualified buyers unable to close loans and caused developers to consider turning condos into rental units.

Fannie Mae officials said they will waive the owner occupancy requirement if they determine a project has a strong chance of success - and has done so more than 200 times nationwide since March.

But developers say the occupancy minimum, combined with stricter lending regulations, is driving away business and keeping them from completing projects.

At the Residences at Atlantis Marina, a new luxury condo complex on the waterfront in Winthrop, several buyers poised to close on new homes earlier this year found they could not get financing because of the new requirements.

Developer Alex Steinbergh said his real estate company, Somerville-based RCG, is trying to find ways to help people move in to the 44-unit development. For instance, he is working with a lender who is willing to waive the new requirements by keeping the mortgages in its own portfolio rather than selling them to Fannie Mae or Freddie Mac. RCG also allowed a couple to lease their condo until they can get a loan.

"We have all of these people who are hanging there," said Steinbergh. "It's a big problem for developers."

Adding to headaches, homeowners who can't come up with a 20 percent down payment have traditionally been required to pay for private mortgage insurance, which protects lenders against loan defaults. But many private mortgage insurers now refuse to cover condos or are asking for down payments of 10 or 15 percent before they will issue a policy.

The changes have pushed some prospective buyers to consider single-family houses rather than deal with the complications of condo financing, said Mark O'Hagan, owner of the real estate company MCO and Associates Inc., in Harvard.

"Welcome to a brave new world," O'Hagan said of the tougher lending stipulations. "It makes it that much more difficult for sales of condominiums."

AS SEEN ON TV
Cash for Gold
Should you mail in Grandma's old brooch?
By Candice Lee Jones, Reporter
From Kiplinger's Personal Finance magazine, July 2009

If you have heaps of gold chains stuffed deep into your dresser drawers, those commercials offering to take unused jewelry off your hands in exchange for "cold hard cash" may sound mighty tempting. Cash 4 Gold even ran a Super Bowl ad featuring Ed McMahon.

If you take the risk to sell gold jewelry by mailing it in an envelope, can you actually expect to get anything back?

Yes, but assuming that your bling makes it through the mail intact, even reputable companies will pay you based only on the weight of the gold; they do not pay for gemstones. Jewelry that's still wearable and in good shape can fetch a higher price elsewhere than it would being sold for scrap. You can check the market value of gold at www.goldprice.org. A better option might be to sell gold coins.

If you decide to sell online, go to www.top-10-cash-for-gold.com, which ranks online gold buyers. The site's top pick: ExpressGoldCash.com.

Howard Rubin, of the National Association of Jewelry Appraisers, says local jewelers, protective of their reputations, are likely to give you a square deal and may pay more cash for gold if you trade in the gold toward a new piece.

End Of A Printing Business In Massachusetts
More Jobs That Will Go Overseas
Story from the News Telegram

WEBSTER — Slowly but precisely, the rumbling machines that turn plain fabric into riots of color at Cranston’s textile plant are going quiet.



The 450,000-square-foot facility, which once bustled with about 700 workers and turned out 60 million yards to 70 million yards of printed cloth a year, stopped printing fabric last week and will wind down finishing operations this week. The employees — about 30 will get new jobs in distribution and customer service but about 70 others will be laid off — have already started to scatter.

“That’s it, the end of an era,” said James M. Peloquin, a 32-year employee who worked his way up from running a machine on the third shift to supervisor and will now transfer to a customer service job.

The Webster plant’s fate was determined in January when Cranston, a division of privately held Cranston Print Works Co. of Cranston, R.I., announced it would shift all textile printing to Korea, China, Pakistan and Taiwan. The company cited global manufacturing costs and changes in the marketplace for printed cloth. Cranston reported the Webster plant, which dates to about 1812, would end production but remain a worldwide distribution center.

The company’s employees gathered last week for a farewell lunch, and President Andrew F. Sylvia, who joined Cranston nearly 31 years ago after graduating from college, said he told workers that the forces buffeting the plant were out of their control.

“I wanted them to know to carry their heads high,” he said, calling the workers “craftsmen” who continued to improve the plant and raise productivity even after the closing was announced.

About 18 workers were laid off last week, according to Michael J. Shaw, Cranston human resources manager and a 30-year employee. Other workers will clean the machines in the coming weeks, preparing them for sale. By the end of June, all plant activity should be shut down. Among those leaving will be Mr. Shaw.

“I’ve been half expecting it for a little while,” Mr. Shaw said of the closing announcement. “What none of us wanted to hear were the actual words spoken.”

That might be because Cranston has been a place where generations of families worked and close friendships formed. A good word from a worker could score a hopeful applicant a job. Some employees stayed for decades. During the plant’s busiest years, employees worked overnight shifts and toiled on weekends.

Paul J. Marrier, a 33-year employee, met his wife, a 31-year employee, at Cranston and helped designers develop the “aging” machine that used an acidic vinegar-like substance to treat printed fabric.

“We had so many people you’d bump into people,” said Mr. Marrier, who will now work in distribution and has become president of the plant’s 25-member local of the Unite Here union when the president was laid off. “We had a line of people just to punch out.”

Cranston’s process started with great rolls of cotton fabric, some 2,500 yards to 3,000 yards long. Workers would mix colorings to create the dyes that would then be printed on to fabric. Muted chintz floral patterns, giant Santa prints suitable for wall hangings and Beatrix Potter rabbits all ended up on Cranston products. After the terrorist attacks of Sept. 11, 2001, a red-white-and-blue wavy flag pattern became a best seller.

An acid bath to complete the color process, followed by softening and stretching, finished the fabric, which went to Wal-Mart Stores Inc., craft stores and quilting fabrics shops.

Cranston will seek to sell equipment in the coming months, Mr. Sylvia said. The company has no specific plans for the plant, a sprawling industrial space with wood-beam ceilings and painted brick walls. Cranston fabrics, printed overseas instead of in Webster, will still go out to retailers. The company will have about 60 to 70 workers in Webster, plus another 10 in a New York City office. Departing workers will have severance packages and the opportunity to access federal job retraining benefits.

Mr. Sylvia said he hopes to see Cranston grow into a stronger company.

“Our product’s known throughout the world,” Mr. Sylvia said. “We’re not going to have a lesser-quality product. It’s going to be made in different places.”

Microsoft Bing No Sure Thing
Story from the Wall Street Journal

Microsoft Corp. hasn't had much success competing head-on with Google Inc. in the Internet search market. Now it's staging a flank attack.

Its new Bing Internet search engine, which it showed publicly for the first time Thursday, will still provide search results for any term an online user types into it. But Bing is initially designed to provide a much richer search experience for people looking for information in four categories: shopping, travel, health and local businesses.

The strategy could give Microsoft a shot at peeling away users from rival search engines in some popular search areas that also offer lucrative opportunities for selling related advertising.

But even if Microsoft is successful, it still faces the problem that Google and Yahoo could simply duplicate Bing's features. Search engines have a long history of copying each other's interface changes.

In recent years, for example, all of them have begun suggesting related search terms and blending more photos and videos into their search results.

"If some particular feature becomes particularly popular, it wouldn't be terribly difficult for Google to mimic that feature," says Greg Sterling, an Internet analyst with Sterling Market Intelligence, a research firm.

Bing faces another challenge as well: Microsoft's own research shows that more than 60% of consumers say they are satisfied with existing Internet search engines. That doesn't bode well for the company's efforts to eat into Google's 64% share of the U.S. search market, which far outstrips Yahoo's 20% share and Microsoft's 8%, according to comScore Inc.

Still, there's evidence consumers aren't finding what they want very quickly through existing search engines, says Frederick Savoye, Microsoft's senior director of search.

Microsoft's research shows only one in four searches are satisfactory on the first try. Most others force users to repeatedly refine their queries or to click around on the Web before locating what they need.

Bing's travel-related searches illustrate how Microsoft will try to one-up its competitors.

The top results from a Bing search for the words "flights from Seattle to San Francisco" include a link that shows a low roundtrip fare of $117. The search page also offers an icon predicting, based on historical trends, what will happen to ticket prices over the next seven days.

The links, powered by a travel search engine called Farecast that Microsoft acquired last year, lead to a Bing Travel site from which users can link to airline sites to purchase tickets.

A search for the same terms on Google and Yahoo provides links to airline and booking-agency Web sites, but no ticket prices or predictions about how they will change.

Microsoft's approach of going after the four search categories mirrors attempts others have made to compete with Google by building so-called "vertical" search engines, which specialize in showing results in categories where Google's results are perceived to be weak.

In general, those properties have failed to gain much traction because most consumers prefer a one-stop shop. At the same time, Yahoo and Google have developed and deployed technology unique to specific search areas, like local businesses and shopping.

Google and Yahoo say they welcome the competition from Bing. "The search industry is still in its infancy and there are limitless opportunities for innovation and competition amongst companies including Microsoft," says Prabhakar Raghavan, head of Yahoo Labs and Yahoo Search Strategy.

"Having great competitors is a huge benefit to us and everyone in the search space," adds Google spokesman Nate Tyler. "It makes us all work harder, and at the end of the day our users benefit from that."