05/18/2012 (12:00 pm)

Facebook IPO trades flat. Buzz kill!

Filed under: online, term |

The biggest tech IPO in history took off like a slightly-delayed rocket this morning, with Facebook shares rising more than $7 to $45 in the first few minutes of trading, before falling back down to its launch price of $38 in the first hour of trading. So will the company be a long-term high flyer or will it just soars briefly before fizzling out?

The company

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05/12/2012 (12:12 am)

Scenarios for Greece are bleak

Filed under: UK, term |

Let Greece go: It’s a possibility that’s being considered more and more publicly in Europe.

There have been two and a half years of bailouts, on top of broken promises by Greece to reform. The result: a fifth year of recession and, this week, political chaos. Voters on Sunday favored parties that either oppose the terms of the country’s international bailout or want to renegotiate them. If it cannot get more rescue loans, Greece will go bankrupt and likely have to leave the eurozone, the currency union of 17 countries.

The question confronting leaders in Athens, Berlin and other eurozone capitals could soon be: What would happen if Greece left the euro? How much damage would that do?

Among the possible scenarios:

• GREEK CHAOS: Economists agree that Greece, where unemployment is 21.7 percent, would suffer even more if it left.

So Greeks would try to pull their euros out of their bank accounts — before they could be converted into a new currency worth far less. Owners of Greek stocks would sell. As markets plunged and deposits fled, banks would collapse.

To try to limit the drain, the government would probably have to close the banks while the new currency is introduced. It might also try to prevent people from moving euros out of the country.

Every Greek company that owes money in euros would see those debts grow much heavier. Many would go bankrupt.

• A BOUNCE-BACK: On the plus side, the weaker drachma would make Greek exports cheaper and more competitive and could help the economy start growing payday loans guaranteed no fax. Companies outside Greece might be attracted by the cheaper labor and real estate, encouraging them to move plants there.

Tourism would also get a boost: booking a room on a Greek island, for example, would become much cheaper for foreigners.

• CONTAGION: The great fear, some say, is that if Greece leaves, other troubled eurozone countries might do the same.

“The big danger is financial contagion,” said Dennis Snower, president of the Kiel Institute for the World Economy. “The question would be, what stops the Portuguese from doing something similar?” People might think “just in case, let me get my money out of the bank,” he said.

• MAYBE NOT: Not everyone agrees that a Greek exit would be a disaster. Greece is tiny, and it wouldn’t be a total surprise. The possibility of a euro exit has been hanging over markets since late 2009. Banks outside Greece have had time to write off their Greek investments — and not make any new ones.

“A year ago, I would have said it’s too risky, but the situation has changed,” said Commerzbank’s chief economist, Joerg Kraemer, citing the eurozone fund and ECB loans. “The combined fiscal and monetary shield is much higher than it was a year ago.”

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05/10/2012 (11:48 am)

Coty boosts buyout bid for Avon to about $10.7B

Filed under: Finance, economics |

Beauty products maker Coty Inc. is raising its buyout offer for direct-seller Avon Products Inc. by about 6.5 percent to almost $10.7 billion.

Avon, whose brands include Skin-So-Soft, Anew and mark, said Thursday that Coty told it in a letter that it was raising its offer to $24.75 per share from $23.25 per share.

The revised bid is a 15 percent premium to Avon’s Wednesday closing price of $21.60. Avon shares rose 1.3 percent to $21.87 in premarket trading Thursday.

Avon had rejected Coty’s $10 billion offer last month, but Coty has remained interested. It said in the letter to Avon that it wants to look at Avon’s books to confirm estimates and learn more about Avon’s ongoing bribery investigation and litigation.

Coty says it will withdraw its latest bid if it doesn’t receive a response by the close of business Monday.

Coty’s letter indicated Avon has said it is not interested in reviewing any proposal until after newly installed CEO Sherilyn McCoy has completed a review of all of Avon’s business operations.

On Thursday, Avon said its board will consider Coty’s letter in due course.

Founded in 1886, Avon became a fixture in households across the country as its legions of “Avon ladies” went door to door selling makeup to family, friends and acquaintances.

Now, Avon is in transition. McCoy, a long-time Johnson & Johnson executive, has been in place less than a month easy payday loans. She replaced CEO Andrea Jung, who had come under fire for failing to stem the company’s declines and wrap up the bribery investigation, which started in China in 2008 and has spread to other countries.

The company’s profit has shrunk over the past three years. It has frequently missed analysts’ earnings expectations and posted weak sales in some of its largest markets, including Brazil and Russia. Avon said last week that its first-quarter net income fell 82 percent, hurt by a bigger restructuring charge and higher commodity and labor costs.

Rumors of other possible bids for the New York company have been swirling. A media report last week said private equity firm Richmont Holdings is structuring an offer for Avon, but so far nothing has materialized.

Coty is controlled by German holding company Joh. A. Benckiser GmbH, which also operates consumer products company Reckitt Benckiser Group PLC. Reckitt’s brands include Air Wick air freshener and Clearasil skin care products. Benckiser is one of Coty’s financing sources, along with BOT Capital Partners and Berkshire Hathaway Inc.

Source

05/05/2012 (12:28 pm)

Buffett says Berkshire may buy more newspapers

Filed under: Mortgage, News |

Billionaire Warren Buffett says his company’s purchase of his hometown newspaper last year may not be the last one even though newspapers face significant challenges.

A Berkshire Hathaway shareholder questioned whether last year’s purchase of the Omaha World-Herald in Buffett’s hometown was a personal indulgence.

Buffett defends the deal and says he believes Berkshire will profit from its ownership of the Omaha World-Herald company and the Buffalo News. It’s just that the profits won’t be as good as they used to be guaranteed payday loan.

Buffett says newspapers are usually still the primary source of local information, and that’s an advantage in places where community is important.

Buffett acknowledges that newspapers face difficult competition from online news sources and have high costs, but says Berkshire’s newspaper deals should work out OK.

Source

04/25/2012 (8:16 am)

China iPhone sales surge, but can Apple protect its apps?

Filed under: Loans, online |

SHANGHAI

04/20/2012 (3:24 pm)

Disney studio chief Rich Ross steps down

Filed under: Business, economics |

Disney movie studio boss Rich Ross is stepping down, a month after the family entertainment giant booked a huge loss on the movie “John Carter.”

Two and a half years ago, Ross took over for then-studio chair Dick Cook.

Ross said in a memo to staff Friday that the role of chairman of Walt Disney Studios was no longer the right professional fit for him.

A month ago, Disney booked a $200 million loss on “John Carter,” the sci-fi epic based on the Edgar Rice Burroughs book series cash advance loan. The loss will pull the entire studio into a loss of $80 million to $120 million in the quarter through March.

The Walt Disney Co. did not name a successor.

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04/18/2012 (9:56 pm)

Stocks head lower in US a day after big gains

Filed under: News, term |

Stocks are opening sharply lower after a mostly strong start to the week, yanked down by concerns about the debt crisis in Europe.

The Dow Jones industrial average is down 75 points to 13,041 in the opening minutes of trading Wednesday, a day after soaring 194 points, its biggest this year.

The Standard & Poor’s 500 is down six at 1,384 and the Nasdaq composite index is down 11 points to 3,032.

Spain, which sent markets higher Tuesday after its successful bond sale, reported that the proportion of bad loans at the country’s banks rose to an 18-year high low fee payday loans.

In the U.S., Halliburton rose 3 percent after the oil services company posted a 23 percent jump in first-quarter profits.

Source

04/15/2012 (5:16 pm)

Philippines Will Assess Rate Cut Impact on Policy, Tetangco Says - Bloomberg

Filed under: News, legal |

The Philippines central bank will gauge the impact of two interest rate cuts this year when it assesses monetary policy at this week

04/07/2012 (10:24 pm)

Apple’s ‘iPad’ is the only tablet people know

Filed under: money, technology |

Apple is on the verge of doing what few others have: change the English language.

When you have a boo-boo, you reach for a Band-Aid not a bandage. When you need to blow your nose, you ask for Kleenex not tissue. If you decide to look up something online, you Google instead of search for it. And if you want to buy a tablet computer, there’s a good chance there’s only one name you’ll remember.

“For the vast majority, the idea of a tablet is really captured by the idea of an iPad,’” says Josh Davis, a manager at Abt Electronics in Chicago. “They gave birth to the whole category and brought it to life.”

Companies trip over themselves to make their brands household names. But only a few brands become so engrained in the lexicon that they’re synonymous with the products themselves. This so-called “genericization” can be both good and bad for companies like Apple, which must balance their desire for brand recognition with their disdain for brand deterioration.

It’s one of the biggest contradictions in business. Companies spend millions to create a brand. Then, they spend millions more on marketing that can have the unintended consequence of making those names so popular that they become shorthand for similar products. It’s like if people start calling station wagons Bentleys. It can diminish a brand’s reputation.

“There’s tension between legal departments concerned about `genericide’ and marketing departments concerned about sales,” says Michael Atkins, a Seattle trademark attorney. “Marketing people want the brand name as widespread as possible and trademark lawyers worry … the brand will lose all trademark significance.”

It doesn’t happen often. In fact, it’s estimated that fewer than 5 percent of U.S. brand names become generic. Those that do typically are inventions or products that improve on what’s already on the market. The brand names then become so popular that they eclipse rivals in sales, market share and in the minds’ of consumers. And then they spread through the English language like the common cold in a small office.

“There’s nothing that can be done to prevent it once it starts happening,” says Michael Weiss, professor of linguistics at Cornell University. “There’s no controlling the growth of language.”

FIGHTING BACK

A company’s biggest fear is that their brand name becomes so commonly used to describe a product that a judge rules that it’s too “generic” to be a trademark. That means that any product _ even inferior ones _ can legally use the name. A brand usually is declared legally generic after a company sues another firm for using its name and the case goes to a federal court.

Drug maker Bayer lost trademarks for the names “aspirin” and “heroin” this way in the 1920s. So did B.F. Goodrich, which sued to protect its trademark of “zipper” in the 1920s after the name joined the world of common nouns. Similar cases deemed “escalator” generic in 1950, “thermos” generic in 1963 and “yo-yo” generic in 1965.

It’s difficult to quantify how much revenue a company loses when its brand is deemed generic. But companies worry that it breeds confusion among consumers.

To prevent their names from becoming generic, some companies use marketing to reinforce their trademarks. For instance, after its Band-Aid brand name started becoming commonly used to refer to adhesive bandages, Johnson & Johnsons changed its jingle in ads from “I’m Stuck on Band-Aid” to “I’m Stuck on Band-Aid brand.”

Kleenex uses “Kleenex brand” instead of just “Kleenex” on its packaging and in marketing and places ads to remind people Kleenex is trademarked. And the company contacts some people who use Kleenex generically to refer to tissue in order to correct them.

“We’ve worked very hard to keep `Kleenex’ from going the route of `escalator’ and `aspirin,’” says Vicki Margolis, vice president and chief counsel, intellectual property and global marketing for Kimberly-Clark, which owns Kleenex. “If we lose the trademark, people can use it with sandpaper and call that a Kleenex.”

Xerox is taking a similar route. The company, which introduced the first automatic copier in the U cash advance.S. in 1959, has been on a public crusade for decades to keep its brand from becoming generic. The machine’s success has led people to start using “Xerox” to refer to any copying machine, copies made from one and the act of copying.

“In the mid- to late-1970s, we ran dangerously close to Xerox becoming `genericized,’” says Barbara Basney, vice president of global advertising. “That prompted a lot of proactive action to protect our trademark.”

Xerox has spent millions taking out ads aimed at educating so-called “influencers” like lawyers, journalists and entertainers about its brand name. A 2003 ad said: “When you use `Xerox’ the way you use `aspirin,’ we get a headache.” More recently, a 2007 ad read: “If you use “Xerox” the way you use “zipper,” our trademark could be left wide open.”

While people still use “Xerox” generically _ the Merriam-Webster dictionary lists the word as both a lower-case verb with the definition “to copy on a xerographic copier” and a trademarked noun _ the brand says its campaign has been a success.

Xerox is still popular: It’s ranked the 57th most valuable global brand, worth $6.4 billion, according to brand consultancy Interbrand. And perhaps most importantly, Xerox hasn’t lost its trademark.

TAKING IT IN STRIDE

Sometimes companies embrace when their brands become common nouns.

Perhaps the best example of this is Google, a company created in 1998 when Alta Vista and Yahoo.com were the top online search engines. Google, which created a formula that returned more accurate results than its competitors, became so popular that people began saying “Google” to refer to a Web search, in general. Experts say Google has benefited from its name becoming a part of the lexicon.

“You don’t say `Why don’t I Google it’ and go to Yahoo or Bing,” says Jessica Litman, professor of copyright law at the University of Michigan Law School, referring to other search engines.

Apple also has gotten a boost from its brand names becoming synonymous with products. The iPod, which was the first digital music player when it came out in 2001, is still the name people use for “digital music player” or “MP3 player.” And it appears Apple’s iPad is headed down the same path.

For consumers like Mary Schmidt, 58, the “iPad” is generic for “tablet.” Schmidt, a Baltimore marketing executive, owns an iPad and doesn’t know the names of any other tablets.

“When I think of tablets, I think of an iPad,” she says. “I think it’s going to be the generic name. They were first.”

It remains to be seen if the iPad will maintain its name domination in the tablet market. Apple declined to comment for this article.

For now, Apple Inc. has a majority of the tablet category, which includes Amazon’s Kindle Fire and Samsung Electronics Co.’s Galaxy Tablet. The iPad accounted for about 73 percent of the estimated 63.6 million tablets sold globally last year, according to research firm Gartner.

Apple’s market share is likely to decline as more rivals roll out tablets. But experts say that won’t necessarily diminish iPad’s name recognition.

“Apple is actually pretty good at this,” says Litman, the law school professor. “It’s able to skate pretty close to the generics line while making it very clear the name is a trademark of the Apple version of this general category.”

When the iPad debuted in 2010, some people offered up “Apple Tablet” or the “iTab” as better names. Others even suggested that the name sounded more like a feminine hygiene product than a tablet: “Get ready for Maxi pad jokes and lots of `em!” wrote tech site Gizmo at the time.

Two years later, those complaints are all but forgotten.

“At the end of the day, the product was so successful that even if it wasn’t the `quote unquote’ best name, it made the name synonymous with the category,” says Allen Adamson, managing director at branding firm Landor.

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04/06/2012 (7:32 am)

Boeing confident bid about to fly with Brazilian Air Force

Filed under: Loans, marketing |

A potential $4.3 billion deal between the Boeing’s defense unit and the Brazilian government that has bounced on and off the table for years is back in play.

And a Boeing Co. official said this week that the company expects to learn by June if it finished atop the process that has pitted aerospace makers from three nations in a bid to supply state-of-the-art fighter jets to the Brazilian Air Force.

Tom DeWald, the regional director for Latin American business development is optimistic that Boeing will prevail.

“There’s no question the Air Force down there loves our product,” he said.

Missouri Gov. Jay Nixon is expected to remind Brazilian officials of that fact when he visits the country on a trade mission later this month.

Should Boeing capture the bid, Brazil would eventually take possession of 36 F/A-18 Super Hornets along with a wealth of spare parts and other materials.

The Super Hornets would be designated “FX-2” fighter jets by the Brazilian Air Force.

The French aircraft manufacturer Dassault Aviation and Sweden’s Saab Defence and Security are the other two bidders.

DeWald said Brazil initially broached the prospect of replacing an already aging fleet of Dassault Mirage fighters in the mid-1990s.

An initial request for bids wasn’t floated until shortly after the turn of the 21st century.

After years of political wrangling, the arms sale competition re-surfaced in 2009 with Boeing, Dassault and Saab as the finalists.

For a country that last engaged in meaningful conflict on its own soil over a century ago, the move to bolster its Air Force has more to do with acquiring technology than adding firepower.

“The end game is for Brazil to develop their own abilities to produce, train, and maintain defensive aircraft systems from what they learn by purchasing these foreign aircraft. In essence, they want to create a South American defense industry base,” Michael Blades, senior aerospace industrial analyst with Frost & Sullivan in San Antonio, wrote in an email response to questions about the Boeing deal.

In a 2010 white paper prepared for the Brookings Institution, foreign policy analyst Kevin Casas-Zamora criticized the uptick in the purchases of military hardware by Brazil and other South American nations.

“The absolute increase in military expenditure, and of acquisitions in particular, hinders the region’s economic and political development. Even the security benefits of such expenditures are debatable at best,” Casas-Zamora wrote.

A deal would, however, bode well for the thousands of local employees of the Boeing Defense, Space and Security unit who build that fighter jet, not to mention countless suppliers here and throughout the U.S.

The company’s 2010 contract to supply 124 fighters to the U.S. Navy is expected to wind down around mid-decade. Likewise, the clock is ticking on a 2011 pact to provide 84 military aircraft to Saudi Arabia. Production on the Saudi contract could run through 2020 if not beyond.

But looming Pentagon budget cuts and the Pentagon’s shift toward unmanned aircraft darken the long-term prospects for continued fighter production in Hazelwood.

For those reasons alone, Blades says much rests on Boeing’s ability to wrest the contract with Brazil.

“If they don’t take advantage of foreign military sales avenues that are open to them they are facing limited growth,” he said. “And if they let other companies like Dassault or Saab (in the case of the Super Hornet) make sales to countries like Brazil not only do they lose growth prospects they strengthen those foreign competitors.”

Source

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