Wall Street Wonderland

The good, the bad and the unspeakably ugly and everything in between, so help us!

Thursday, November 30, 2006

Can a $150 Laptop Save the World? Are you shitting us?

Of course it’s such a totally lame idea; it’s enough to make you wonder if these guys have been hitting ye olde bong. Natch, when computer industry execs heard about a plan to build a $100 laptop for the developing world’s children, they laughed. How could you build such a computer, they asked, when screens alone cost about $100, completely forgetting, as Silicon Valley slobs will, that the real problemo is tech’s persistent Messiah complex.

Is a cheap laptop the best approach to educate the developing world's children or would the money be better spent on issues like teacher training and curriculum? An equally good question is has it done much for western educational systems? If anyone has noted much improvement in test scores, or any objective measurement, we haven't heard about it.

But back to our story; Mary Lou Jepsen, the chief technologist for the project, likes to refer to the insight that transformed the machine from utopian dream to working prototype as “a really wacky idea.” Ms. Jepsen, a former Intel chip designer, found a way to modify conventional laptop displays, cutting the screen’s manufacturing cost to $40 while reducing its power consumption by more than 80 percent. As a bonus, the display is clearly visible in sunlight.

That advance and others have allowed the nonprofit project, One Laptop Per Child, to win over many skeptics over the last two and a half years. Five countries — Argentina, Brazil, Libya, Nigeria and Thailand — have made tentative commitments to put the computers into the hands of millions of students, with production in Taiwan expected to begin by mid-2007.

The laptop does not come with a Microsoft Windows operating system or even a hard drive, and the screen is small. And the cost is now closer to $150 than $100. But the price tag, even compared with low-end $500 laptops now widely available, transforms the economic equation for developing countries.

None of which has prevented the effort, conceived by Nicholas Negroponte, a prominent computer researcher, from becoming the focal point of a debate over the value of computers to both learning and economic development.

The detractors include two computer industry giants, Intel and Microsoft, pushing alternative approaches. Intel has developed a $400 laptop aimed at schools as well as an education program that focuses on teachers instead of students. And Bill Gates, Microsoft’s chairman and a leading philanthropist for the third world, has questioned whether the concept is “just taking what we do in the rich world” and assuming that that is something good for the developing world, too.

We are loath to admit it, but for once in his life, Bill is absolutely on the right track. When will these guys get it, technology won't deliver a utopia. As a matter of fact, it has its hands full trying to cope with the problems it has already created.

http://www.nytimes.com/2006/11/30/technology/30laptop.html?ei=5088&en=010d8905efd64342&ex=1322542800&adxnnl=1&partner=rssnyt&emc=rss&adxnnlx=1164889639-4flOmVRSWwFoyJrLgGr3sg

Wednesday, November 29, 2006

Who ever said greed was good? Universal Music looking to extract royalties on every iPod sold?

We aren't exactly sure who's getting the shorter end of the stick in Universal Music's "deal" with Microsoft to extract a set fee from every Zune sold, but now its oh-so-mettlesome CEO is thinking of putting the same pressure on ole Steve, better known to this writer as Jerk-off Jobs.

While Jerk-off has certainly had a rather sour relationship with the labels over the years, and has flat our refused to boost music prices (twice) at the iTMS, this predicament could be a fair bit stickier. Doug Morris is reportedly considering asking demanding a royalty fee from every iPod sold now that he's already won the war over at Microsoft, touting Universal's massive music collection on iTMS as something fairly essential to the program's continued success.

But things aren't as clear cut as the previous deal, as the Zune Marketplace was (and still is) in a position trying to grab any sliver of market share it possibly can, while Apple's rendition basically owns the digital download realm already. While it's easy to assume that both companies will agree on a ridiculously small fee just to save face, it begs the question of other labels trying to cash in at Jobs' expense if this deal goes down -- but hey, what goes around, comes around, right?

http://www.engadget.com/2006/11/29/universal-music-looking-to-extract-royalties-on-every-ipod-sold/

Tuesday, November 28, 2006

“I’ve never heard of the Zune”

How is Msoft's latest addition doing? If you've been following this blog, you will be shocked, Casablanca-shocked to read the following news item from Businessweek - it should be noted, a huge fan of product innovation.

"I have never heard of the Zune," one retail clerk was quoted as saying in an analyst's note comparing Microsoft Corp.'s new music player to its much more popular rival, Apple Computer Inc.'s iPod.

Piper Jaffray analyst Gene Munster said in a note to investors Tuesday that a survey of clerks at 40 big box retailers found that only 8 percent recommend buying the Zune, while 75 percent recommend the iPod.

"In fact, some MP3 player salespeople had not even heard of the Zune, despite the fact that they sold it in their store," the analyst wrote.

Due to what he called a less than favorable reception, Munster doesn't expect the Zune to materially affect iPod sales in the current quarter.

Microsoft released the Zune less than two weeks ago. Munster noted the Zune held the 7th spot on Amazon's best-selling MP3 players list on Nov. 16, the Thursday of the week it launched. By the following Monday, it has already fallen down the list.

As of midday Tuesday, the black 30-gigabyte Zune held the No. 22 spot on the list, while Apple's black 30-gigabyte iPod took the top spot followed by four other iPod versions -- including the pink 4-gigabyte Nano at No. 5 and the tiny 1-gig Shuffle at No. 3. Both Apple's and Microsoft's 30-gig music players retail for about $249. Unlike the iPod, the Zune features a built-in FM tuner.

The Zune is not generally seen as a threat to the iPod, which dominates the portable music player market. Shaw Wu, an analyst for American Technology Research, has predicted that Zune's success may instead come at the expense of other makers of portable music players, such as Sony, Samsung and Creative Technology Ltd.

As for reviews, Munster noted that they have been neutral to negative. When the Zune made its debut, "the player drew many comparisons to the iPod, but failed to match up in the eyes of most reviewers," the analyst wrote.

When it comes to marketing, "our checks show that Zune ads are being placed more selectively than iPod ads," Munster said, adding that the Zune "is off to a slow start; from sales perspective as well as the marketing perspective."

Apple's shares were up $2.12, or 2.4 percent, to $91.66 on the Nasdaq, not far from their 52-week high of $93.16. Microsoft's shares were down 18 cents at $29.30 in midday trading on the Nasdaq. Which just about says it all.

http://www.businessweek.com/ap/financialnews/D8LM782O0.htm

Monday, November 27, 2006

It walks….it talks…it’s the Apple Mac Tablet PC

Sleepless, you’ve tossed and turned for years because you didn’t have one. Well, at least you can finally take care of your sleep debt. Apple researchers have built a full working prototype of a Mac tablet PC and three Companies in Taiwan are now costing a product for a potential launch in mid 2007.

Sources in Taiwan have said that the focus has been more on the home and the education environment than the enterprise marketplace. Several months ago I was told that Apple was exploring a neat new device that is basically a touch screen that links to various source devices including a brand new media centre that Apple is planning to launch next year.

The Mac tablet has been designed to handle third party applications such as home automation software that will allow users to control lighting, audio, entertainment devices and security feeds. It also acts as a full blown PC has wireless linking for a new generation of Wireless Hi Fi speakers that are currently being tested by Apple.

One set of speakers which are similar in size to the small Bose speakers have been developed by an Australian Company. Also taken into consideration was the use of the device in educational environments where presenters often want to walk around while having access to source material being presented to a screen or auditorium speakers.

The new MAC tablet has Intel processors as well as a docking station that allows the device to link to screens with HDMI input. The docking station also has additional memo0ry capability so that users can stream content to either the tablet PC or the docking station or directly to a media centre if one is being used.

During the past year Apple has lodged several touch screen patents. They have also lodged patents for wireless devices. However three patents according to sources have been lodged by third part Companies who are licensing technology to Apple.

During the last two weeks, Apple's stock price has soared to record highs, as investors bet on the success of the new iPhone which will be launched early in 2007.

On November 16, the US Patent & Trademark Office published Apple's patent application titled ‘mechanical overlay' which was originally filed in May 2005. Apple's patent relates generally to overlays for touch sensing devices. More particularly, the present invention relates to mechanical overlays that include one or more mechanical actuators that provide touch inputs to the touch sensing devices. This powerful patent provides several great examples of mechanical touch screen overlays which could be used with a future iPod, cell phone, PDA, remote control or gaming device. Furthermore, the patent provides us with a unique glimpse into how touch screens will eventually replace traditional MacBook keyboards in addition to providing users with the ability to transform the new keyboard-GUI into being a piano keyboard amongst other applications.

If we sound a little underwhelmed, well, we’ve been through this tablet thing before. It is not the answer to our fervent prayers. Some good, simple computer software design is – but we know better than to hold our breath waiting for it.

http://www.smarthouse.com.au/Automation/Display_Panels?Article=/Automation/Display%20Panels/H9R6N2M2

Friday, November 24, 2006

Microsoft Surrenders!

Is this the same company founded by a guy whose mother had to take him to a child psychlogist because litte Gates wouldn't do anything anybody said? Well, much water has flowed under the bridge since then, but it seems that history has been made. Microsoft has handed in revised interoperability information to the European Commission (EC). However, knowing M'Soft the way we do, there's gotta be a catch somewhere. There's just gotta be.

Under the 2004 anti-trust ruling Microsoft was required to hand in documents detailing the technical information required to create products which interoperate with Microsoft work group servers. Microsoft appealed the decision but lost in December 2004.

Microsoft has missed several deadlines to submit the information since then, and in July 2006 was fined €280m for doing so. In July it submitted some documents and it is these which have now been improved. Some 8,500 pages of documents have been lodged with the EC.

The documents will be reviewed by monitoring trustee Neil Barrett. They can also be inspected by potential licensees.

The EC said: "The commission will decide in due course whether or not Microsoft is in compliance with the obligation to provide complete and accurate technical documentation taking into account comments from the potential licensees and advice from the trustee."

For its part, Microsoft said in a statement: "This is an important milestone. The trustee and Microsoft have now completed the technical review and edits to the more than 100 documents, totalling 8,500 pages, that we submitted in July of this year, in accordance with the deadline established by the commission."

The software giant said it will continue to work closely with the Commission to ensure full compliance. It said the submission and revision of documents involved over 300 engineers and technical writers.

The statement ends: "the documentation is now available for review by any potential licensee, and we look forward to receiving feedback from the industry."

http://www.theregister.co.uk/2006/11/23/ms_revises_interop/

Tuesday, November 21, 2006

In Web World, Rich Now Envy the Superrich

You have to keep yourself from breaking down and weeping openly for this guy. That is if you have a heart, and readers of this blog know that we wear ours on our sleeve. Almost anywhere else, Reid Hoffman would be considered a major success. As an early executive of PayPal, he was in the money when the company was sold to eBay in 2002 for $1.5 billion. These days, he runs a new start-up company of his own while investing in others.

But when greater fortunes are made — as happened recently to three former PayPal colleagues when YouTube was sold to Google for $1.65 billion — Mr. Hoffman said he could not avoid a twinge of envy.

“It’s kind of embarrassing,” said Mr. Hoffman, 39, whose start-up, a business-oriented social-networking site called LinkedIn, is almost four years old. “You started a year or two earlier, and they start after you and then this thing zips right past you and gets the golden results.”

Envy may be a sin in some books, but it is a powerful driving force in Silicon Valley, where technical achievements are admired but financial payoffs are the ultimate form of recognition. And now that the YouTube purchase has amplified talk of a second dot-com boom, many high-tech entrepreneurs — successful and not so successful — are examining their lives as measured against upstarts who have made it bigger.

Mr. Hoffman, who made enough from PayPal to “retire to a comfortable upper-middle-class lifestyle,” said he felt no spite toward peers who later hit bigger jackpots. Still, he said, “there’s always components of, ‘Wow, you happened to pick the right time,’ and that will always lead to some kind of implicit envy.”

The envy is magnified by the fickleness of this latest wave of sudden wealth, creating some huge paydays but a small circle of winners. Partly that reflects more judicious investment of venture capital in new companies; the amount invested has risen slightly over the last year but is down 70 percent from the peak of $40 billion in 2000.

Seven or eight years ago, when it seemed that anyone with a business plan could get rich, the finger of fortune was generous — and democratic. By the time it occurred to people to be envious, it seemed, they were rich, too — at least on paper. It was in Silicon Valley, after all, that the term “sudden wealth syndrome” entered the clinical vocabulary.

In the end, of course, much of the paper wealth turned worthless. But now, in the wake of successes like YouTube and MySpace, which was sold last year to the News Corporation for $580 million, some people believe that the foundations for more solid success are now in place. For one thing, the viability of online advertising is no longer in doubt, as Google and others have proved.

And the success of a YouTube can produce not only envy but also serious motivation — in Silicon Valley and beyond.

http://www.nytimes.com/2006/11/21/technology/21envy.html?ref=business

Monday, November 20, 2006

Yahoo and the Peanut Butter Memo

Terry Semel, chairman of Yahoo, is set to come under heightened pressure this week following the leak over the weekend of an internal memo that amounts to a stinging indictment of his leadership of the flagging internet company.

The memo, written by Brad Garlinghouse, a senior vice-president, paints a picture of a company that lacks a cohesive vision, has become beset by bureaucracy and has lost the edge to compete with faster-moving internet companies.

"Heads must roll," Mr Garlinghouse concludes, with the sacking of senior executives who have failed to stop the rot and a 15 to 20 per cent cut in the company's overall headcount. "The direction needs to come decisively from the top." The outspoken attack on Yahoo's supposedly dysfunctional culture, first reported in the Wall Street Journal, follows a series of setbacks that have cast doubt on the turnround that Mr Semel oversaw when he arrived at the company in 2001.

In spite of mounting a series of acquisitions, Mr Semel has not been able to match the growth of a new breed of internet companies built around services such as search and social networking.

While Mr Semel arrived at Yahoo with a plan to narrow its focus to a smaller number of services, Mr Garlinghouse's memo accuses the company of spreading itself too widely.

I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world," he says. "The result: a thin layer of investment spread across everything we do and thus we focus on nothing in particular."

The criticisms levelled against Yahoo include a lack of "a focused, cohesive vision"; the separation of its operations "into silos that far too frequently don't talk to each other"; a "massive redundancy that exists throughout the organisation"; and an organisational structure "that has become overly bureaucratic".

Yahoo did not comment on the criticisms but said the e-mail was a sign of the "open, collaborative culture" inside the company. Yeah, yeah, sure. And our name is Little Mary Sunshine.

http://www.msnbc.msn.com/id/15803091/

Sunday, November 19, 2006

MSoft to EU: So Sue Me, Already.

Surprise. Surprise. EU regulators said last week that Microsoft Corp. has still not supplied "complete and accurate interface documentation" to comply with a March 2004 antitrust order and risks further fines unless it takes action by Nov. 23.

The European Commission fined Microsoft $357 million in July for not supplying technical information that aims to help rivals make server software that works smoothly with Microsoft's desktop operating system Windows.

"Progress has been made towards turning the information supplied by Microsoft to date into specifications to be made available to potential licensees for testing," the Commission said.

"The Commission expects the remaining omissions and deficiencies in the technical documentation to be remedied by Nov. 23 so that by the end of November the entire set of technical documentation will be available for potential licensees to review."

Regulators must then decide if Microsoft has finally obeyed its 2004 ruling that found the company had abused its monopoly by deliberately withholding technical data from rivals. That decision would be based on comments from potential licensees and advice from an independent monitor, computer scientist professor Neil Barrett, on whether that information is "operational."

"Should Microsoft continue to fail to comply, the amount of the daily penalty payment to which Microsoft could be subject would be increased from up to $2.56 million to up to $3.85 million per day with effect from July 31, 2006," the Commission warned.

In 2004, the EU fined Microsoft a record $613 million and told it to share interoperability information with rivals and put on sale a copy of Windows without Media Player software.

Regulators said Microsoft had committed to and missed a number of deadlines for supplying "complete and accurate specifications," the last on July 19.

Unless the EU seriously ups the penalties, MSoft will probably think it's a better investment to give the dough to their lawyers.

http://www.msnbc.msn.com/id/15727285/

Friday, November 17, 2006

Gates, the Ghost of Christmas Past, the Future, and Google

We don’t know if it’s keeping up with Melissa’s demands in the sack, or if Bill Gates’ meds need adjustment, but every time the man opens his mouth it’s like Cringe City. He sounds more and more like the lame ghost of Christmas past. OK, the ghost wasn’t lame, but Gates is. And he certainly is stuck in the past. Like the early 90’s. But hey, don’t listen to us, read what eweek has to say and see for yourself.

Philanthropist Bill Gates is able to take things a little slower these days, since he doesn't have to worry anymore about the day-to-day irritations of running a major multinational corporation. He mostly thinks about how to give his -- and colleague-in-cash Warren Buffett's -- money away for the betterment of mankind through the Bill and Melinda Gates Foundation.

Do not misunderstand: Gates is still chairman of the Microsoft board, and he still sees progress reports, goes to the occasional company strategy meeting, speaks at keynotes and intervenes in big customer deals as needed. But he also has more time for events like TechNet, held Nov. 15 at Stanford University's venerable Memorial Auditorium.

Gates was interviewed by PBS's talk-show host Charlie Rose in a wide-ranging, hourlong conversation before an audience of about 1,000 Stanford students, media members and various guests -- including Gov. Arnold Schwartzenegger of California.

TechNet describes itself as the "bipartisan political network of CEOs that promotes the growth of the innovation economy."

The 200-member organization held its third annual TechNet Innovation Summit at Stanford to discuss the state of innovation and the public policies needed to sustain the United States' competitiveness in the global economy.

Here are some observations from Gates in response to questions from Rose:

# On whether there's another idea today that is as powerful as the idea of the personal computer in the 1970s: "If I knew medicine like I do computers, I would like to be able to control the [human] immune system, to fight against the onset of disease on a world level ... but I think the idea of the PC still would have topped that."

# On Microsoft's increasing competition with Google: "I've been told that Google is the company most like ours. That may be true. Well, we overlap in a lot of areas. We're both software companies, so we're competing on a lot of levels. They hire a lot of smart people, we hire a lot of smart people. Google Earth is fantastic; what they do is free and a huge benefit to all. They're very good at knowing how to use high traffic at their sites and turning it into profit.

"We're going to compete in search. We think our Live.com will be a better search in a lot of ways. Competition between our two companies will be good for the whole industry."

# On Microsoft's often-contentious relationship with the European Union: "We feel very good about our relationship with the EU." There was loud laughter from the audience.

"No, really," Gates said. "They were mainly concerned about security and open-document formats -- those were the big issues. We have worked out our differences. If they wanted us to leave out some of our components for some reason, we could have delivered a European version of Vista for them. But it turned out that wasn't necessary."

# On what changes IT will make in society over the next 10 years: "Changes are now coming faster than ever. We'll be seeing more and more students using tablets instead of stacks of books in schools and in online learning. We'll have computers that can see and learn like people ... we'll continue to see major breakthroughs in software development, in things like voice recognition, gaming [and] video. We're on to new and important advances in IT, just as we were at the advent of the PC.

http://www.eweek.com/article2/0,1895,2060022,00.asp

Wednesday, November 15, 2006

Microsoft “Play Well With Others”? Can a Leopard change its spots?

Get a grip sportsfans. Microsoft plans to unveil a technology industry alliance on Tuesday to make software from competing companies and partners work better together, company executives said. Of course, Msoft's concept of an alliance is Gates' guys striding through the world like kings and everybody else ground down like the dirt beneath their feet

Bob Muglia, the Microsoft SVP who has led the company’s so-called interoperability efforts for the last year, will announce details of the alliance in Barcelona, Spain, at an event for European software developers. The move is Microsoft’s latest effort to move from being a company that insists on the advantages of its own products to one that can adapt when customers use other companies’ goods.

Eleven days ago, for instance, Microsoft struck a deal with Novell, a longtime rival, to ensure that Novell’s version of the Linux operating system operates with Windows in corporate data centers. Analysts saw the partnership as a concession by Microsoft that open-source software like Linux was a rival it could not defeat. Others say Microsoft is trying to take the lead in interoperability so it can manage the relationships, rather than cede management to others.

The new Interop Vendor Alliance, which is being financed by Microsoft and is starting with 22 corporate members, will work publicly and privately to share information to solve common problems faced by customers and test real-world situations.

One example, company officials said, would be the not-so-simple task of letting a company’s employees sign on to multiple programs with a single user name and password, rather than using separate log-ons for each application.

In Europe, interoperability is a bit of a loaded word when it comes to Microsoft. The inability of Microsoft’s crucial operating system, Windows, to work well with its rivals’ products was at the heart of a European Commission antitrust case that resulted in a record fine against the company in 2004.

The commission found that by withholding vital information about Windows, the company deliberately restricted interoperability between personal computers using Windows and computer servers running software from Microsoft’s rivals.

Muglia, in an interview, said the alliance was “much, much broader than what has been mandated by the European Commission.” He continued, “This is about the long term.”

Yeah, yeah sure it is.


Tuesday, November 14, 2006

Swimming with sharks: Apple Steals I.B.M.’s Top Lawyer

Apple Computer on Monday said it had hired I.B.M.’s head lawyer Donald Rosenberg to take over as its new senior vice president and general counsel. Apple’s general counsel post has been vacant since May, when Nancy Heinen abruptly stepped down without explanation. After her departure, Ms. Heinen reportedly hired a high-profile legal team to represent her in an investigation into the Mac maker’s stock options practices.

http://dealbook.blogs.nytimes.com/2006/11/14/apple-poaches-ibms-top-lawyer/

The digital revolution is over. Next?

A factory of one's own. No, no one has been hitting the bong again. The next big change will be about manufacturing. Anyone with a PC will be able to build anything just by hitting 'print.'

Sound a little too utopian to believe? Well, imagine a machine with the ability to manufacture anything. Now imagine that machine in your living room. What would you build first? Would you start a business? Would you ever buy anything retail again? According to MIT physicist Neil Gershenfeld, it's not too early to think about these questions, because that machine, which he calls a personal fabricator, is not so far off - or so far-fetched - as you might think.

Five years ago the National Science Foundation awarded the CBA $14 million to build a manufacturing lab full of futuristic hardware. That includes a nanobeam writer that can etch microscopic patterns on metal, and a supersonic waterjet cutter that generates 60,000 pounds of water pressure, enough to shear through almost any material. The CBA factory can churn out anything, from the tiniest semiconductor to an entire building.

Tomorrow's hot tech gear today

Gershenfeld formed the class to introduce his students to the machinery and give them an opportunity he had always craved himself. "In high school I desperately wanted to go to trade school, where we could weld and fix cars," says Gershenfeld, whose fast-talking manner and bobbing head of unruly curls give him the classic aura of a frazzled professor. "People said, 'Because you're smart, you'll have to go to the other school.' I could never figure out why. Now, every semester, students are begging to get in."

His students have invented both serious and whimsical creations, from a $10 computer to an alarm clock you have to wrestle to prove you're awake. Like computing before it, Gershenfeld says, this kind of personal manufacturing is coming into the home. He doesn't mean designing a product on a PC and sending the plans off to a plant in China. He means you'll have a setup right in your house.

The all-in-one of the future

Today your all-in-one device prints, scans, faxes and copies. Tomorrow it will cut, score, etch and sew. Want a new dining room chair? You'll design it on a PC and press PRINT, and your personal fabricator will create it for you right before your eyes. Just make sure tray No. 2 has enough wood.

http://money.cnn.com/magazines/fortune/fortune_archive/2006/11/13/8393124/index.htm?postversion=2006110706

Monday, November 13, 2006

Youza! Youza! Here’s comes MSoft’s Zune, a dollar short and years late….

In case you’ve been hiding under a rock, Microsoft is preparing to launch its 30 gigabyte Zune, a digital music player to compete with Apple's iconic iPod.

The device plays songs and videos which owners can download to their PCs via the Zune Marketplace site.

It also has wireless technology which allows owners to send each other songs and pictures. The Zune has a three-inch colour screen and comes in black, brown and white.

Users can either buy tracks individually from the site or get a Zune Pass subscription to download as many songs as they want for a flat fee. The gadgets have been pre-loaded with some initial content from a number of record labels prior to sale.

Zune's global marketing general manager Chris Stephenson said: "On November 14 we're delivering not only a device, but a shared, social experience that will be shaped by the collective imagination of consumers."

The Zune will go on sale in the US on Tuesday priced at $249.99 (£130). No date or price has been set for its UK launch. After five years of great Apple merchandising, is the handheld music market saturated? Stay tuned, sportfans.

http://www.channel4.com/news/content/news-storypage.jsp?id=31703135

Saturday, November 11, 2006

Oh, the humility, the humility! Successor tells of tough job following Bill Gates

File this under “No shit, Sherlock”. Ray Ozzie, the man who is taking over Bill Gates' day-to-day role at Microsoft admitted that it was taking him a long time to build authority inside the company.

Ozzie, who assumed the title of chief software architect this summer, said that the deference shown to Mr Gates had both helped and hindered him.

"There's a certain mythology around any leader, particularly Bill, who's a really talented guy," said Ozzie. "He will always have an amazing level of soft power, and people want to follow him. The organization reveres him and wants to do what he wants."

"I've got to earn that followership and that takes some time." But Mr Ozzie said that his mission to reinvigorate the gigantic computer firm, which is being attacked by many competitors in different markets, was beginning to take hold.

Last year a leaked memo from Mr Ozzie pointed out many of the company's failings, and he underlined the need to embrace the next generation of online services to successfully take Microsoft into the future. The memo caused uproar inside the software giant, but Mr Ozzie said the dust was beginning to settle.

"I could see that some people really got it with respect to the shift that the industry is in right now, and some people were heads down working on whatever they had," he told the Web 2.0 Summit in San Francisco. "I really felt the need to get a broader message across."

He also talked of the reaction inside Microsoft to this summer's news that Bill Gates would step down in two years and hand over many strategic responsibilities.

"It more or less caused a bunch of people to go back and re-read the memo," he said. "I'm fortunate that Bill's given two years for this transition because people can see us together."

http://business.guardian.co.uk/story/0,,1944649,00.html

Friday, November 10, 2006

Internet Health Alert: BlackBerry Thumb Epidemic Spreads

Attention CrackBerry addicts. This is worse than the bird flu. Seriously. Not only are those goobers addictive, but as probably many of you know from first hand experience (we sure do), you can wind up with major hand problems, known as "Blackberry Thumb". Employment lawyers are warning companies that they could be liable for physical injuries in using company pdas:

The American Physical Therapy Association in Alexandria, Va., and other occupational organizations warn that improper use and overuse of personal digital assistants (PDAs) can lead to hand throbbing, tendonitis and swelling, a condition known as BlackBerry Thumb, named after the popular PDA.

"If you develop full-blown symptoms, it's pretty severe," says Alan Hedge, an ergonomics professor at Cornell University in Ithaca, N.Y. "Some suffers are unable to jerk off for weeks at a time. Employers can train people how to correctly hold and use the handheld device and encourage employees to write brief e-mails."

Frank Morris, a lawyer in Washington, D.C., says employers need to develop policies on PDA use. They also face a liability risk because some employees could argue they're entitled to overtime if a staffer is expected to use a company-provided PDA after work hours.

Some hotels like the Hyatt Regency Scottsdale and Sofitel Los Angeles are even cashing in on the painful phenomenon by offering special hand and other massages.


USA Today has tips to help save your thumbs – you secret sinners go check it out. You know who you are.

http://www.wallstreetfolly.com/

Welcome to Web 2.0, The Wall Street Version

Sure, sure, the FourSquare conference has become the East Coast incarnation of Allen & Company’s annual summer gathering in Sun Valley, Idaho, the incubator for all kinds of major and minor deals. But as Yogi Berra said, it was déjà vu all over again.

And if Chad Hurley, the chief executive of YouTube, was the belle of the ball at Sun Valley this summer, then Mr. Zuckerberg was the “it” boy of FourSquare. Hurley was also in attendance yesterday, still basking in the glow of his company’s sale to Google for $1.65 billion — and also wearing a blazer and jeans, though he had shoes on.

YouTube’s sale may be only a month old, but Wall Street had already appeared to move on to the next big deal with all eyes on Mr. Zuckerberg, who has been in on-and-off negotiations with Yahoo. At the conference yesterday, Zuckerberg could be seen standing amid a throng of high-powered would-be suitors. Analysts have estimated that Facebook could have a value of as much as $1 billion.

Many speakers and attendees at the conference, including Barry Diller of IAC/InterActiveCorp, Shari E. Redstone of National Amusements, David J. Stern of the National Basketball Association, Martin Sorell of WPP and Harvey Weinstein of the Weinstein Company, among others, attended a dinner the night before, where much of the conversation was about the YouTube deal and its astronomical price tag. Several people questioned whether Internet valuations had once again gotten out of control.

“We’ve seen how this movie ends,” said one executive at a traditional media company who nonetheless was still looking at a bevy of new media acquisitions. “But we all believe we can change the ending.”

Among the companies being whispered about as takeover targets were sites with user-generated content like Digg and other video sites like Brightcove.

Much of the conference also focused on how user-generated content was upsetting the traditional media model and whether it was a fad or here to stay.

Jerry Seinfeld, the comedian, lamented the quality of the comedy on user-generated YouTube clips. “It’s terrible,” he said. Mr. Stringer retorted, “It’s funny to them.”

“I think of the entertainment industry and Detroit similarly,” Seinfeld said as he dressed down the television executives in the room for not being bolder in their programming. “They don’t have confidence in their instincts. Maybe they don’t have instincts to be confident in?”

Who cares? And why is TV programming being discussed at an internet-related conference, you ask? Precisely what we wanted to know.

http://dealbook.blogs.nytimes.com/2006/11/10/media-executives-find-their-new-it-boy/

A little irony, anyone? Ex-Enron Exec Starts Energy Hedge Fund

Investor memories must be shorter than short. Jeff Shankman, the former chief operating officer of global markets at Enron Corp., (home of the second largest bankruptcy in U.S. history) plans to raise as much as $250 million in the next six months for an energy hedge fund, according to two investors who received marketing documents on the proposal.

Trident Asset Management LLC, based in Houston, was founded this year by Shankman and Andy Weathers, a former trader at CenterPoint Energy Inc., and will start trading this month, said the investors, who declined to be identified because details are still confidential. Shankman didn't return messages left requesting comment. Weathers declined to comment.

A four-year rally in prices for raw materials has spurred investment in commodity-trading hedge funds. They oversee $22.5 billion globally, up from $12 billion a year ago, according to London-based NewFinance Capital LLP, which invests in such funds. Trident's Cayman Islands-registered fund will trade U.S. natural gas, crude and refined oil, according to the investors.

Shankman, 39, headed trading in markets from commodities to foreign exchange and equities at Enron, the world's largest energy-trading company before it went bankrupt (doh!) in 2001. He then started Monotech International Inc., a Texas-based building- construction company

Viper Charged With Slippery Moves

Sometimes we wonder what would cause a person to name a hedge fund after a poisonous snake. Of course, now investors are discovering why. He spoke with a forked tongue. The SEC has charged Edward Ehee, an Oakland, Calif., hedge fund manager, with defrauding 18 investors in his Viper Investments, Viper Founders Fund, and Compass West Fund out of some $5 million.

According to the complaint filed in U.S. District Court for the Northern District of California, Ehee gave thousands of dollars to family members from money he raised from investors, which included the children?s trust fund of a neighbor and the life savings of the neighbor?s mother-in-law. In its complaint, the SEC alleges that Ehee continued to raise money for the Viper Founders Fund as recently as last May, even though the partnership for the fund incorporated in Illinois basically ceased operations about four years ago.

Says the SEC, Ehee covered his tracks by using bogus account statements and phony financial reports showing millions of dollars in non-existent fund assets to lure new investments. Ehee provided one investor earlier this year with supposedly audited financial statements showing the fund had more than $18 million AUM with annual returns of 10%.

He is also charged with fabricating an audit opinion letter from an accounting form that never actually audited the funds. The court has granted the SEC’s request to freeze Ehee’s funds and those of his wife, brother, and father, who received thousands of dollars of investor money from Ehee.

And the duped investors? Rots of ruck!

http://www.dailyii.com/article.asp?ArticleID=1084278&LS=EMS111127

Thursday, November 09, 2006

Monkey See – Money Do Microsoft Strikes Deal for Music

In the usual Microsoft to enter a field and attempt to play catch up, the company said yesterday that it had agreed to pay a percentage of the sales of its new portable media player to the Universal Music Group.

Universal Music, a unit of Vivendi, will receive a royalty on the Zune player in exchange for licensing its recordings for Microsoft’s new digital music service, the companies said.

Universal, which releases recordings from acts like U2 and Jay-Z, said it would pay half of what it receives on the device to its artists. The company is expected to receive more than $1 for each $250 device, according to executives who were briefed on the pact.

The deal represents a big departure from the standard set by Apple Computer, which pays record companies for songs sold through its iTunes service but does not give them a cut of the sales of its hugely successful iPod.

Under the deal, Universal, the world’s largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week.

The pact comes after weeks of tense talks and averts a standoff that might have crippled Microsoft’s attempt to compete against the iPod.

We give it just a few years before Microsoft loses interest and essentially leaves it treading in the water, like Hotmail.

http://www.nytimes.com/2006/11/09/technology/09music.html?_r=1&oref=slogin

Wednesday, November 08, 2006

Profiting from the economy's dirty little secret

First, you have to have faith. You have to believe Business 2.0’s Wall Street snapshot: largely a men’s club, a place packed with hypercompetitive tough guys proud to wear their machismo on their sleeves. Yet there's still one investment the Street is generally wary of: adult entertainment.

That's why Francis Koenig, a onetime Wall Street hedge fund executive now based in Los Angeles, believes there are riches to be made by matching investors with "adult entertainment" companies. He believes that plenty of people would back the industry if there were vehicles commonly available to do so.

Francis Koenig's funds provide myriad ways for investors to cash in on the lucrative adult entertainment business. His reasoning? Simple: adult entertainment is a lucrative part of the American economy, hovering around $12 billion a year. And there are hundreds of porn outfits hungry for financing to become more than bedroom operations.

"There just hasn't been a good way to invest in this market," says Koenig, 31.

He launched AdultVest late last year to change that. He's been courting investors and combing the country for small and medium-size adult businesses, some of which boast profit margins upwards of 60 percent. The response has been strong: Koenig says he's signed up well over 1,000 potential investors since January.

For now, he's catering to investors with big money, although he says his approach will eventually evolve to serve the investing masses. He's raising money for two funds: a $100 million fund that requires a minimum investment of $1 million, and a $10 million fund with a $100,000 minimum.

Koenig has a good track record: The New World Partners hedge fund, where he was a managing director, posted double- and triple-digit returns through the late '90s - and he thinks similar returns are possible with porn. His funds are set up like any venture capital fund and will invest in a range of businesses, with a portion of each earmarked for buying and running strip clubs.

The overarching strategy is to take majority stakes in businesses that AdultVest will then help manage and consolidate. Koenig won't say how close he is to raising the total $110 million, but to help the sell, he and his team won't charge any performance fee until the funds return 100 percent.

http://money.cnn.com/magazines/business2/business2_archive/2006/11/01/8392016/index.htm

Hedge Fund sues for Twinkies

We’d heard of the Twinky Defense – a San Francisco sicko politico shot another politico in cold blood and blamed it on his Twinky-rich diet – but this is our first Twinky suit. Brencourt, a $1.8 billion hedge fund holding some 8.4 percent, or 3.8 million shares of Interstate, said it is concerned with the company's "declining operating performance" as it restructures under Chapter 11 bankruptcy protection, according to a letter accompanying the suit.

The suit, filed in the Chancery Court of Delaware, seeks to compel the Kansas City, Missouri-based company to hold a shareholders' meeting to elect new directors.

Brencourt said the company hasn't held an annual meeting since September, 2003, in violation of Delaware law, where the company is incorporated.

"IBC's current situation is the culmination of years of bad management and board neglect," said Brencourt Chief Executive William Collins in a letter to Interstate. "IBC needs a new, capable board with the skills to properly oversee the company's reorganization and operational turnaround."

Interstate filed for Chapter 11 in the Western District of Missouri in September, 2004.

The maker of Wonder bread, Hostess Twinkies and Drake's cakes this month disclosed that it offered to settle a previously disclosed U.S. Securities and Exchange Commission investigation into how it accounts for workers compensation and other reserves.

It also said the SEC's Division of Enforcement had recommended canceling Interstate's common stock if the company continues to be delinquent in filing required financial reports. It said it is currently late in filing its fiscal 2006 reports.

Brencourt, which joined the court-mandated Committee on Equity Holders for the Interstate bankruptcy case in September, said competing companies have "managed to thrive through the low-carb craze" that Interstate has blamed for its travails. It also said that it is "particularly egregious" that Interstate has operated without a chief financial officer for a decade.

Egregious isn't exactly the word we'd pick for a totally screwed up company like this one.

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2006-11-07T215515Z_01_N07433906_RTRIDST_0_FINANCIAL-INTERSTATE-HEDGE.XML

Tuesday, November 07, 2006

Donnez moi une fucking break! Burger King sued over marijuana in police officers' Whoppers

Oh puh-leze! Two US police officers have sued Burger King Corp., alleging personal injury, negligence, battery and violation of fair practices after they were served hamburgers that had been sprinkled with marijuana.

"It gives a whole new meaning to the word Whopper," said the officers' attorney Sam Bregman. "The idea that these hoodlums would put marijuana into a hamburger and therefore attempt to impair law enforcement officers trying to do their jobs is outrageous."

The civil lawsuit was filed in state District Court in Bernalillo County by Mark Landavazo and Henry Gabaldon, officers for the Isleta Pueblo tribal police.

Officials at Miami-based Burger King declined to comment, citing a company policy against discussing pending litigation.

The lawsuit says the officers were in uniform and riding in a marked patrol car when they purchased meals through the drive-through lane on 8 October at a Burger King restaurant in Los Lunas, New Mexico

The officers ate about half of their burgers before discovering marijuana on the meat. They used a field test kit to confirm the substance was pot, then went to a hospital for medical evaluations.

Three Burger King employees — Justin Armijo, 19; Robert Nuckols, 21; and manager Joseph Ledesma, 33 — were arrested and charged with possession of marijuana and aggravated battery on an officer, a felony. They subsequently were indicted.

The lawsuit seeks punitive and compensatory damages to be determined at trial, along with legal costs.

The incident has been publicized in late-night television jokes by comedian Jay Leno and others, and Bregman acknowledged the situation "seems somewhat humorous" at first glance. But he also called it "deadly serious."

"God forbid these officers didn't realize their burgers were laced with pot and then were called to a violent situation where they'd have to draw their firearms," Bregman said. "Their lives were placed in danger because of these idiots and Burger King."

Two US police officers have sued Burger King Corp., alleging personal injury, negligence, battery and violation of fair practices after they were served hamburgers that had been sprinkled with marijuana.

"It gives a whole new meaning to the word Whopper," said the officers' attorney Sam Bregman. "The idea that these hoodlums would put marijuana into a hamburger and therefore attempt to impair law enforcement officers trying to do their jobs is outrageous."

The civil lawsuit was filed in state District Court in Bernalillo County by Mark Landavazo and Henry Gabaldon, officers for the Isleta Pueblo tribal police.

Officials at Miami-based Burger King declined to comment, citing a company policy against discussing pending litigation.

The lawsuit says the officers were in uniform and riding in a marked patrol car when they purchased meals through the drive-through lane on 8 October at a Burger King restaurant in Los Lunas, New Mexico. The officers ate about half of their burgers before discovering marijuana on the meat. They used a field test kit to confirm the substance was pot, then went to a hospital for medical evaluations.

Three Burger King employees — Justin Armijo, 19; Robert Nuckols, 21; and manager Joseph Ledesma, 33 — were arrested and charged with possession of marijuana and aggravated battery on an officer, a felony. They subsequently were indicted.

http://news.independent.co.uk/world/middle_east/article1962010.ece

Monday, November 06, 2006

Wall Street Bonus Pay Skyrockets to Record $36 Billion

Whoa! Never in the history of Wall Street have so many earned so much so quickly.

Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. are about to reward their 173,000 employees with $36 billion of bonuses. That's a 30 percent increase from last year's record, and it doesn't include the billions more that will be paid by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, as well as the hundreds of hedge funds and private-equity firms that constitute the financial industry.

Enriched by the unprecedented value of takeovers, equity trading and credit derivatives, ``this year will be the best ever for the major brokerage firms,'' said Brad Hintz, an analyst at New York-based Sanford C. Bernstein & Co.

The average windfall for each individual at the five largest U.S. securities firms will be enough to buy a $165,000 Bentley Continental GT, the two-door coupe favored by Paris Hilton and Cher. They'll have plenty of change for a box of Romeo y Julieta cigars and a case of Pol Roger champagne -- the stuff enjoyed by Winston Churchill, Britain's prime minister in the 1940s and 1950s.

New York City was able to cut the estimate for its budget deficit by 87 percent last week, in part because of the investment banks' better-than- expected earnings. The state comptroller's office said Oct. 17 that tax receipts from the financial industry's wages will rise 14 percent to $2.4 billion in fiscal 2006.

Attention Ferrari and Porsche dealers: brace yourselves. Wall Streeters will want delivery now, not later!

http://www.bloomberg.com/apps/news?pid=20601087&sid=atEk12XYMerk&refer=home

Wednesday, November 01, 2006

Tower R.I.P.

We’re in deep, deep mourning over the demise of Tower Records. We know it’s a classic story of late capitalist hubris: big store comes in and prices all the small Mom and Pop stores out of business. And then goes bankrupt, leaving nothing in its wake, but a giant sucking sound. But we happen to be hard- bitten classical music fans, and Tower has been our manna in the midwestern wilderness. In addition to the well worn symphonic chestnuts, it stocked the odd, the unusual, treasures we’d never thought of buying until we came across it while looking for something else.

Where will we go, what will we do? We could download our collection and new stuff onto an iPod, but it would take forever, not to mention the fact that that they sound like bad AM radios.

We’re at a total loss. We’ve got to take some time off to sort it all through. But in the meantime, no one could have put it our situation better than Tommasini, music critic of the New York Times did last week


Requiem for a Store’s Dying Classical Department

By ANTHONY TOMMASINI

The classical music department at the Tower Records store near Lincoln Center is a funereal place these days. Longtime shoppers are making final pilgrimages and having weepy farewells with sales clerks, some of whom have worked there for years and been helpful guides to music lovers. No one can believe that Tower Records, the retail chain that has dominated the market for decades, is going out of business. The bankrupt operation’s assets were sold to a liquidation company early this month for more than $130 million. All 89 of its United States stores are closing, probably by the end of the year.

Without Tower, the city has few options for classical CD shoppers.

The loss of Tower Records will have a severe impact on niche markets like classical music. According to one industry insider’s estimate, Tower Records alone accounted for up to 50 percent of sales in the specialty genres.

Older record collectors have memories of wonderful, quirky independent stores run by managers who were passionate, if opinionated, about the music they sold. I remember when Pamela Dellal, a good mezzo-soprano based in Boston, worked as a saleswoman at the Harvard Coop in Cambridge in the early 1980’s. I used to call her the czarina of classical music at the Coop because she was so informed, efficient and forceful in her recommendations.

For many years Tower Records at Lincoln Center has been the closest New Yorkers have had to those small shops of earlier times. This is a paradox, I know, since the company, which opened its first store in 1960 in Sacramento, grew into a bullying retail chain that pushed out independents. Still, because of its location, Tower Records at Lincoln Center was a mingling place for classical aficionados. There, music students, opera buffs, contemporary-music devotees, everyday concertgoers and, now and then, well-known artists would bump into one another and talk shop.

Just last week, while checking out the scene, I watched as two older couples asked the classical department manager for help finding specific items. One wanted William Bolcom’s opera “A View From the Bridge.” The other wanted Philip Glass’s “Mechanical Ballet.” How’s that for sophisticated New York tastes?

The shelves in the classical department are woefully bare right now, since Tower has been holding a liquidation sale, with prices slashed by up to 40 percent. The room devoted to opera and aria recordings is especially barren. Opera buffs are scavengers. You can imagine the scene, like something out of “Lord of the Flies,” when the doors opened on the first day of the sale.

As of last week, if you wanted a recording of “Tosca,” you were too late to find the classic versions with Callas or Tebaldi. But there were ample copies of “Tosca” with Fiorenza Cedolins in the title role and that paragon of Puccini tenors, Andrea Bocelli, as Cavaradossi.

You could argue that Tower Records courted its own demise in 1995, when the company became one of the first marketers to introduce an online shopping site. Those who embrace the Web as the ideal way to purchase CD’s argue that Tower Records became obsolete. Anything can be bought online these days.

Maybe. But for many people, tracking down a CD online, with only various critiques by unknown purchasers to guide them, is not the same as mingling with other opera buffs in front of the Verdi shelves. I am convinced that there is money to be made for someone willing to set up a classical music CD shop in New York, a place that does not promise to stock everything, but provides an in-depth catalog, including a smart selection of historic recordings and essential reissues. Besides, how many times have you bought something that you simply chanced upon by flipping through stacks of CD’s at an actual store?

Where will classical music lovers in New York shop now? The Virgin Megastore in Times Square? From what I can tell, its classical stock is weirdly spotty, though maybe I’m wrong, since that gargantuan, noisy place, with pop music blasting from overhead speakers, intimidates me.

There is the gift shop at the Metropolitan Opera. If the managers got rid of all the tacky souvenirs and overpriced jewelry, expanded the shelves for opera CD’s and offered decent prices, it could become the go-to place for opera recordings. The Juilliard Bookshop, with its small but interesting stock of CD’s, could also help fill the void, especially if the school enticed students to work there part time. If you are looking for a recording of Bach’s solo cello suites or music by Berio, wouldn’t you trust the recommendation of young Juilliard musicians?

Meanwhile, the Tower Records at Lincoln Center should be getting more stock over the next couple of months as warehouses are cleared out. So there may be potential bargains for intrepid collectors. Last week one older couple searching through the Wagner recordings looked so forlorn that I asked if I could help them. They wanted a “Ring,” but there were no complete sets available, just a confusing array of live historic recordings mostly of interest to “Ring” fanatics.

I suggested that if they wanted to have a complete, top-notch “Ring,” they should probably get one of the classic sets conducted by Georg Solti, Herbert von Karajan or maybe James Levine. The Solti set with Birgit Nilsson as Brünnhilde sounded exciting to them.

“Where can we get it?” they asked.

What could I say? I told them to try amazon.com.