HowToWeb Finance

Business and Financial News Highlights 7-25-07

Wed, 25 Jul 2007 15:00:00 EST

Here are some business news highlights from around the web.

Dow closes above 14,000 for first time thanks to some strong earnings reports.

S&P 500 closes at new record high of 1,552.50.

Weak Dollar -> Dollar falls to 26-year low against pound sterling.

High iPhone expectations. Some bullish analysts expect sales of 5 million units in iPhone's first year.

Largest Canadian deal ever: Canadian telecom BCE Inc. sells for nearly $49 billion.

Slow Growth: Economy grew only 0.7 percent in the first quarter.

Sales of existing homes fell in May to the lowest level in four years.

Financial Times says Rupert Murdoch is searching for more internet acquisitions.

Study finds 70% of Americans believe economy is getting worse.

Yahoo Inc. Chairman Terry Semel has stepped down as CEO of Yahoo. Yahoo co-founder Jerry Yang named CEO.

Mortgage foreclosures soar to new record. California, Florida, Nevada and Arizona hardest hit states.

Dow sale a possibility now that Bancroft family has agreed to "meet Mr. Murdoch to discuss his bid."

Has U.S. economy dodged a recession? No. Not with unresolved housing, energy price threats remaining.

New home prices surged in April. Biggest gain in 14 years.

The Motley Fool has an article called Dow 5000 but it doesn't argue that the Dow will fall that much.

Economic growth in the 1st Quarter slowed to a crawl. Just 1.3% GDP growth.

Existing home sales plunge 8.4%. Biggest one month drop in home sales in 18 years. NAR blames weather.

Bush administration makes laughable claim that economy has been stronger under Bush administration than the Clinton administration.

New Century Financial, a subprime lender, has filed for Chapter 11 protection. They also fired 3,200 employees. See here, here and here.

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Whole Foods CEO John Mackey's Rahodeb Mess

Sun, 22 Jul 2007 21:00:00 EST

You have probably heard of the recent fiasco where Whole Foods CEO John Mackey was busted making comments about rival company Wild Oats on Yahoo's stock market message boards under the pseudonym Rahodeb. If you haven't heard the story Mediapost has a nice recap.

The latest example: John Mackey, co-founder and chief executive of Whole Foods, posted anonymously about his company and the acquisition target Wild Oats Markets on the Yahoo stock market boards beginning in 1999 until last year. Using the pseudonym "Rahodeb" -- an anagram of his wife's name, Deborah -- he routinely bashed Wild Oats, posting nuggets such as "OATS has no value and no future," The Wall Street Journal reports. That particular post was made in February 2005; this year, Whole Foods agreed to purchase Wild Oats for $670 million in February.

The information about Mackey's posts came to light this week, thanks to the Federal Trade Commission, which is seeking to block Whole Foods' buyout of Wild Oats, saying the deal would squash competition.

But, while criticizing a rival anonymously doesn't seem like an especially noble way to run a business, it's also hard to see how, in these circumstances, it proves an antitrust violation.

A Wall Street Journal article (via The Food Section) goes into detail about Mackey's comments on the Yahoo forum.

"Would Whole Foods buy OATS?" Rahodeb asked, using Wild Oats' stock symbol. "Almost surely not at current prices. What would they gain? OATS locations are too small." Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock fell below $5. A month later, Rahodeb wrote that Wild Oats management "clearly doesn't know what it is doing .... OATS has no value and no future."

Obviously, this was a huge mistake by Mackey. CEOs and insiders should stay far away from Internet forums and blog comment sections. The same post from Mediapost.com mentioned above also compares the John Mackey "Rahodep" incident to Wal-Mart's Travel Flog. The flog was pretty bad but Mackey's postings are worse. It has been a much bigger news story and more damaging to Whole Foods than the flog was to Wal-Mart.

John Mackey's blog has been put on hold. For more coverage of John Mackey's mistake try a Technorati search for Rahodeb. That will give you a number of blogs that are discussing the story.

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Writers Write Inc. Launches Singers Sing

Fri, 13 Jul 2007 15:00:00 EST

Writers Write, Inc., the parent company of ShoppingBlog.com, Watchers Watch and Writers Write, has announced the launch of SingersSing.com. SingersSing.com is a daily music blog featuring music news and music video clips. Recent posts include:

Nunatak's Live Earth performance from Antarctica.

Katharine McPhee's hot new single Love Story.

Merriam-Webster's addition of crunk to its dictionary.

Avril Lavigne and Lil' Mama's hot remix of "Girlfriend."

The Spice Girls' World Reunion.

The top ten most irritating songs.

Hillary Clinton's campaign song selection.

The Obama Girl's music video.

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Apple Boosted by Strong iPhone Sales

Thu, 5 Jul 2007 15:50:00 EST

Reuters reports that Apple shares climbed over 3% on Thursday as investors were excited by the possibility of extremely strong iPhone sales.

"The stock is obviously anticipating very very strong sales for the iPhone and very good follow-through sales," said Andy Hargreaves of Pacific Crest Securities. "The stock isn't going to be a one-month wonder."

Apple has said it will start selling iPhones in Europe this year and in Asia in 2008, but gave no further details.

European media reports this week have said Apple may be close to deals with carriers in France, Germany and Britain, a three-country strategy that would mimic the launch of its popular iTunes online music store in Europe in 2004.

Apple shares have increased more than 50 percent since the company unveiled in January the cell phone that combines Web browsing with the music and video playing capabilities of its best-selling iPod device.

500,000 iPhones had already been sold on the launch weekend after geeks waited in long lines to own the gadget. Apple also seems to be keeping up with demand. One sign of this is the fact that eBay sellers have been somewhat frustrated and have been unable to sell iPhones for much more than the retail price. That should be good news for Apple. You want a hot gadget that everyone wants but you also want to keep the supply strong enough that everyone who wants one can buy it.

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Zambelli Fireworks: An Explosive Business

Mon, 25 Jun 2007 14:33:00 EST

The July 4th holiday is an explosive one for Zambelli Fireworks, a fireworks and pyrotechnics company. According to a CNN/Money article the company produces 1,600 fireworks displays nationwide for Independence Day celebrations.

The self-titled "first family of fireworks," based in New Castle, Pennsylvania, has been in business since the turn of the century, when Antonio Zambelli brought his pyrotechnic ability to the U.S. from Naples, Italy.

The company was then passed on to Antonio's son George "Boom-Boom" Zambelli in the 1950s, and is currently run by George's children.

"My dad took the business to another level," said George Zambelli Jr. "He created a designer brand of fireworks, and choreographed the displays to musical scores or live music."

"That's when the business exploded, you could say," Zambelli added.

Now Zambelli, who started working with fireworks at the tender age of 12, serves as chairman of the company. He works alongside his four sisters and his own children, including Jared and George Zambelli III, who will likely take over the business one day.

The article says the biggest displays require as much as "45,000 fireworks and 770,000 pounds of mortars." The company also provides for smaller celebrations like weddings. They also provide indoor pyrotechnics for sporting events and conventions. But this time of the year is likely the company's biggest -- you might hear one of their productions this upcoming holiday weekend.

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Yahoo CEO Terry Semel Resigns. Co-Founder Jerry Yang Named New CEO

Wed, 20 Jun 2007 18:40:00 EST

Yahoo CEO Terry Semel has resigned. Taking his place will be Jerry Yang, one of the co-founders of Yahoo, Inc. The announcement was made in a press release.

Terry Semel said, "The Board and I have long talked about the importance of ensuring a smooth succession in Yahoo!'s senior leadership - and more recently, about the need for a leadership team committed to carrying Yahoo! through its multi-year transformation. As we discussed my future goals and plans, I was clear in telling the Board of my desire to take a step back sooner rather than later. I believe Jerry and Sue, with their superb talents and intense dedication to Yahoo! and its people, are the perfect combination to carry us forward. This is the time for new executive leadership, with different skills and strengths, to step in and drive the company to realize its full potential - it is the right thing to do, and the right time is now."

Semel continued, "Jerry and Sue will make an unbeatable team. Jerry has long been recognized as an Internet visionary. His incredible experience and close involvement since founding the company 12 years ago have given him tremendous strategic, technical and industry insight as well as unparalleled knowledge and understanding of Yahoo! and its great potential. We are equally fortunate to have Sue Decker, one of the most talented executives in the industry, as our new President. Sue has played a broad and important role in driving our strategy over the years, and has shown even greater skills and leadership with the success she's had in taking on more operating responsibilities. Both Jerry and Sue have been great partners to me and I am looking forward to collaborating with and supporting them both, as well as the Board, in any way that I can as Chairman. I'm proud of all that we've accomplished over the past six years during this exciting, still early stage of the Internet's development, and my single goal is to ensure that Yahoo! achieves its full potential."

Shares of Yahoo jumped on the news that Semel is stepping down as CEO. The WSJ's Deal Journal blog said (hat tip Epicenter) Yahoo will remain independent. They quote now acting CEO Yang who said, "We believe Yahoo can be a vibrant independent company."

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Starbucks to Open 10,000 More Stores

Wed, 6 Jun 2007 12:44:00 EST

Bloomberg reports that the popular coffee chain Starbucks Corp. plans to add 10,000 new stores over the next four years. The company already serves a staggering 45 million customers each week.

Starbucks Corp., the world's largest coffee shop chain, will open at least 10,000 new stores over the next four years and double its size within five years, chairman Howard Schultz said yesterday. Starbucks is serving 45 million customers a week, Mr. Schultz said at the company's annual meeting in Seattle, where it is based. Starbucks' long-term goal is to have 40,000 locations worldwide, compared with 13,168 stores at the end of 2006. In another development, Paul McCartney was introduced as the first artist signed to Starbucks' new record label. The former Beatle made an appearance via a video feed from London at the annual meeting.

Wallstrip offers some insight on Starbucks Corp. in this entertaining video below. They talk about how Starbucks is turning into a retail outlet selling books, cds, etc. They mention a couple Starbucks related blogs: StarbucksGossip.com and I Hate Starbucks. If all this coverage encourages you to run out to Starbucks for a caffeine fix just don't try to carry quite as many drinks as Wallstrip's host Lindsay did.

Direct video link

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Internet Tax Freedom Act Expires in November

Sun, 27 May 2007 16:30:00 EST

The Internet Tax Freedom Act, which bans texas on web access, is set to expire on November, 2007. The act was signed into law on October 21, 1998 by President Bill Clinton. Reuters reports that groups like Don't Tax Our Web want the ban on web access taxes made permanent. There is concern that taxes could slow down the web's continued growth and development. Reuter's reporter Manoush Zomorodi discusses the implications of the approaching expiration of the Internet Tax Freedom Act in the video below. The most likely result is that the Internet Tax Freedom Act will simply be extended for several more years but there are lawmakers like Senator Ron Wyden who are fighting for a permmanent ban.

Direct video link

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The Twenty Most Admired Companies

Tue, 15 May 2007 21:00:00 EST

Fortune has an article listing the most 20 most admired companies. It probably isn't a big suprise to most people that General Electric tops the list. this page shows GE with an industry rank of #1 in nearly every category. To come up with the list Fortune and survey firm Hay Group asked 3,322 executives, directors, and securities analysts to select the 10 companies they admire most. Here's the list:

Fortune also offers a full list that goes way beyond the top twenty.

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Summer Turbulence Ahead for Airlines?

Sat, 5 May 2007 21:40:00 EST

The airports seem as crowded as ever but there is some concern that domestic air travel demand is waning despite the approach of the busy travel season. This Reuters video discusses Delta Air Lines which just emerged from bankruptcy protection. Did they emerge from bankruptcy at just the wrong time? The Reuters video also says some airlines are complaining about "sluggish booking."

Direct video link

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Financial Services Webby Awards

Wed, 2 May 2007 20:12:00 EST

This year's Webby Award winners have been announced. You can find the full winners list here. Here are the winners and nominees in the Financial Services category.

Webby: The Wall Street Journal Online

People Choice: CNN/Money

Other nominees included American Express RED, MoveOutMoveUp and Vanguard Library Campaign.

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One Day Blog Silence

Mon, 30 Apr 2007 15:00:00 EST

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Business and Financial News on Twitter

Mon, 16 Apr 2007 18:00:00 EST

We have launched a twitter profile which provides business and financial news. Twitter is a microblogging service and communication tool that allows you to post short 140 character updates. To get our updates on Twitter you need to join Twitter and then follow our Twitter profile.

You can keep up with news about Twitter by reading BloggersBlog.com's Twitter news section or by following the BloggersBlog.com Twitter. Examples of some of the other news Twitters available include celebrity gossip, sports news, tech gadgets, jobs, green news, video game news, health news, tech news, fashion news, politics and virtual worlds.

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CompUSA Closing 100 Stores

Tue, 3 Apr 2007 21:00:00 EST

CompUSA is closing 100 of its 229 stores following a comprehensive reconstructuring. Consumerist says that competition from retailers like Best Buy, Wal-Mart, Circuit City as well as online retailers has made life difficult for CompUSA.

News of the shuttering comes after recent corporate restructuring, and a swirl of rumors in recent weeks about the ailing retailer. One was that CompUSA might get a $400 million-plus infusion from Mr. Carlos Slim, Mexican billionaire chain owner. Another one posited that the retailer might buy, or be bought by, Tiger Direct.

Hammered by competition from Best Buy, Wal-Mart, Circuit City, and internet retailers, and burdened by over $100 million in unsalesable store inventory, Mr. Slim evidently thinks CompUSA's chances at recovery too narrow.

You can see a list of the closed stores here on the CompUSA website. More coverage of the store closings can be found at Ars Technica. Gizmodo says 128 stores are closing not 100.

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Dow Ends First Quarter Down 0.9%

Fri, 30 Mar 2007 11:30:00 EST

Those expecting the bullish Dow market to keep climbing may have been surprised a little by the first quarter of 2007. The Dow ended the first quarter down 0.9%. Marketwatch notes that this was the Dow's first quarterly decline since the second quarter of 2005.

For the quarter, the blue-chip average sits on a loss of 0.9%, its first quarterly decline since the second quarter of 2005.

The Dow first rose by over 65 points in morning trade Friday, before falling by over 100 points and then recovering some ground in the afternoon.

"Near-term, there are too many uncertainties," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank. "There are a lot of issues that aren't resolved about the housing market, subprime mortgages and geopolitical tensions."

Stocks have been rocked since late February amid mounting concerns that a meltdown in the subprime mortgage market will spread, restricting lending, cramping consumption and further weakening a slowing U.S. economy.

"The market is going to be in choppy waters, at least for the next couple of months," said Fitzpatrick. Next week, the market will be on the lookout for negative announcements from companies forced to ratchet down earnings outlooks, "given the weakness that we've already seen in the economy," he said.

The Nasdaq faired much better and had a 0.3% increase during the first quarter.

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SEC Launches Operation Spamalot

Fri, 9 Mar 2007 18:00:00 EST

The Securities and Exchange Commission has suspended trading in the securities of 35 companies that have been the subject of recent and repeated spam email campaigns. The trading suspensions are part of a stepped-up SEC effort that is code named Operation Spamalot. The goal of Operation Spamalot is to protect investors from potentially fraudulent spam emails that hype small company stocks with phrases like, "Ready to Explode," "Ride the Bull," and "Fast Money." The SEC estimates that 100 million of these spam messages are sent every week. These spam emails can trigger spikes in trading volume and share price that causes investors to lose money.

"When spam clogs our mailboxes, it's annoying. When it rips off investors, it's illegal and destructive," said SEC Chairman Christopher Cox. "Today's trading suspensions, and actions that will follow, should send a clear message to spammers: the SEC will hold you accountable."

The SEC provided these three examples of how the spam emails can increase volume and alter share prices.

On Friday, Dec. 15, 2006, shares in Apparel Manufacturing Associates, Inc. (APPM) closed at $.06, with a trading volume of 3,500 shares. After a weekend spam campaign distributed emails proclaiming, "Huge news expected out on APPM, get in before the wire, We're taking it all the way to $1.00," trading volume on Monday, Dec. 18, 2006, hit 484,568 shares with the price spiking to over 19 cents a share. Two days later the price climbed to $.45. By Dec. 27, 2006, the price was back down to $.10 on trading volume of 65,350 shares.
On Dec. 19, 2006, trading in Goldmark Industries, Inc. (GDKI), closed at $.17 on trading volume of 126,286 shares. On Dec. 20, 2006, the spam campaign started, with e-mail proclaiming "GDKI IS MAKING EVERYONE BANK!," and setting a 5-day price target of $2. By Dec. 28, 2006, spam emails boasted of the price spike that had already been achieved -- "$.28 (Up 152% in 2 days!!!)" -- and promised a 5-day price target of $1. That same day, GDKI closed at $.35 on a volume of more than 5 million shares. By January 9, 2007, the closing share price was back down to $.15.
A spam campaign in Healtheuniverse, Inc. (HLUN) stock began on Sept. 4, 2006, with emails incorporating a Healtheuniverse press release proclaiming that HLUN was "focused on being the first to commercialize stem cell applications in the $15 billion worldwide plastic surgery and cosmetic surgery market." On Sept. 7, 2006, HLUN closed at $.12 per share on trading volume of 3,000 shares. The spam campaign accelerated, and HLUN shares spiked to $.22 per share on Sept. 11, 2006, with over 2.2 million shares trading hands. By Sept. 22, 2006, the closing price had dropped back down to $.11.

Symantec, a provider of anti-virus software, has some more information about Operation Spamalot here. You can also read the SEC's news release about Operation Spamalot.

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Stock Market FInally Rebounds

Tue, 6 Mar 2007 18:00:00 EST

The DOW climbed 157.18 points today after being down six of the seven past sessions. The NASDAQ also moved upwards by over 44 points. The U.S. stock climb followed a rebound in Asian markets. MSNBC.com reports that computer screens were finally showing more green again.

The advance Tuesday treated Wall Street traders to what had become a rare sight - the color green splashed across their computer screens that show stock prices, instead of last week's red. But, after being knocked about by erratic market shifts in recent sessions, there was still a sense this might not be the recovery everyone is waiting for.

"I don't think we should get too used to seeing all this green," said Jay Suskind, head trader at Ryan Beck & Co. "This market feels to me like it doesn?t have legs, there just doesn?t seem to be that euphoria out there. There is still trepidation."

The Dow rose 157.18, or 1.30 percent, to 12,207.59, after dropping 581 points over the past week. The Standard & Poor?s 500 index was up 21.29, or 1.55 percent, at 1,395.41 in its biggest advance since July.

Marketwatch also has an article about today's spike. Even with today's good day there are still nagging concerns about the subprime mortgage market and the future of the economy.

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Computer Glitch Triggered DOW Plunge

Fri, 2 Mar 2007 20:10:00 EST

Part of Tuesday's stock plunge was due to a very brief computer glitch that occured when the Dow moved to backup computers and the market plunged nearly 200 points instantaneously.

A computer glitch triggered a sudden plunge in the Dow Jones industrial average at mid-afternoon Tuesday, turning an already bad day in stocks into a head-turning spectacle.

Dow Jones & Co., the media company that manages the well-known index of 30 blue chip stocks, said it discovered shortly before 2 p.m. that its computers weren't properly handling the day's huge volume in trades at the New York Stock Exchange.

It switched to a backup computer, and the result was a massive swoon in the index as the secondary system took over processing shortly before 3 p.m.

The Dow plunged about 200 points almost instantly, and was down as much as 546 points - its worst single-session decline in more than five years, and one that sent the blue chips into negative territory for the year.

"I've never seen a collapse like that, and I've only been doing this for 47 years," said Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc.

CyberNet News reveals another recent glitch on the Nasdaq that showed stocks selling at $100,000 per share. The Wall Street Journal has an interesting map of Tuesday's stock drop that shows how the stock market has become a global market.

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Rats Inside a KFC/Taco Bell

Mon, 26 Feb 2007 21:00:00 EST

A KFC/Taco Bell in Manhattan faced a disturbing rat problem. Blogging Stocks explains what the rat invasion looked like. You could also watch the video.

It seems that after local news stations heard about the rat sightings they flocked to the store to catch the rodents having their way around the restaurant. The rats were taped running between counters and tables and climbing on children's high chairs. Yikes, definitely not a good scene.

While today's rat race is definitely a disturbing event, it really shouldn't come as much of a surprise to the restaurant owners. Back in December when the store had a health inspection they were giving a passing grade but the inspectors noted at that time that there was evidence of rat droppings in the store.

The store has been closed until the store is completely re-sanitized and given a clean bill of health. According to a statement from KFC/Taco Bell construction in the basement on Thursday "temporarily escalated the situation."

Blogging Stocks also reports that shares of Yum Brands, the parent company of Taco Bell and KFC, traded down 0.7% for the day.

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Whole Foods and Wild Oats Merge

Thu, 22 Feb 2007 21:00:00 EST

Bloomberg reports that the larger organic food retailer Whole Foods is buying smaller organic food retailer Wild Oats.

Whole Foods Market Inc., the largest U.S. natural-foods grocer, said it agreed to buy rival Wild Oats Markets Inc. for $565 million after reporting its first profit decline in five quarters.

Whole Foods will pay $18.50 in cash for each share of Boulder, Colorado-based Wild Oats, 18 percent higher than its closing price today. First-quarter net income fell 7.8 percent to $53.8 million, or 38 cents a share, Austin, Texas-based Whole Foods said today. Earnings missed analysts' estimates.

Buying Wild Oats will help counter slowing growth at Whole Foods, which faced competition from Safeway Inc., Trader Joe's and other grocery stores selling organic and prepared food. First-quarter sales at Whole Foods stores open at least a year rose 7 percent, down from 13 percent a year earlier.

"Whole Foods had won the size game and was able to call the shots," said Matt Patsky, portfolio manager at Boston-based Winslow Management Co. which overseas $350 million, including Whole Foods shares.

Wild Oats posted a loss in two of the past five years and its sales climbed 26 percent over the period to $1.12 billion, while Whole Foods doubled profit and sales.

Here are a few other details:

Whole Foods will add 110 stores in 24 states and Canada and close a few Wild Oats stores that overlap with Whole Foods stores.

Whole Foods says the integration will take them two years.

The deal could help Whole Foods cut costs as they face rising competition from regular grocery stores adding organic food aisles and sections.

Another article on the merger can be found here in the Denver Post. Wild Oats is based in Denver.

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Another Round of Tech IPO Mania?

Wed, 21 Feb 2007 22:00:00 EST

Could the tech bubble be ready for a big spike with waves of new tech IPOs and hysteria? A new Business 2.0 article (via BloggersBlog.com) is ready for champagne corks to be popped again by tech company executives and venture capitalists.

Business 2.0 even has an image gallery featuring six IPOs on deck. They include Art.com, MetroPCS, NetSuite, Postini, Tellme Networks and Zappos. Before you get too excited about the prospect of numerous tech IPOs a ZDNet blog post warns that Business 2.0's math may be incorrect.

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XM and Sirius to Merge

Mon, 19 Feb 2007 18:00:00 EST

The two companies that helped revolution radio and launch the ad free satellite radio industry are merging. The merger between Sirius Sattelite Radio and XM Satellite Radio is a $13 billion deal. There is one big possible wrench in the XM-Sirius merger plan and according to the Hollywood Reporter that wrench is regulator approval.

Experts have been saying for months that approval of a combined XM-Sirius depends on how the FCC and anti-trust regulators view the industry. If considered broadly, with digital music players and the Internet thought of as competition, then approval ought to be granted. However, if the government sees competition for XM and Sirius stemming only from each other and from free radio, then approval isn't likely.

Sirius and XM said Monday that they're confident they will be a single company by the end of the year. What they haven't yet decided is what their new company will be called and where it will be headquartered. Sirius is based in New York and XM in Washington, D.C.

Sirius CEO Mel Karmazin and XM chairman Gary Parsons will have those titles at the combined company, while a role for XM CEO Hugh Panero -- if there is to be one -- is unclear, except that he will remain CEO of XM until the merger is consummated.

We don't know what the name of the new company will be if they get regulator approval but we do know the company will have a huge subscriber base of 14 million listeners.

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U.S. Home Construction Falls 14.3% in January

Sat, 17 Feb 2007 18:00:00 EST

After two straight months of increases home construction dropped a steep 14.3% in January. Reuters says the drop was worse than what most economists were expecting.

The pace of U.S. home construction fell 14.3% in January, sharpest drop since October and much worse than economists had expected, a government report on Friday showed.

The drop followed two months of increases.

The Commerce Department said housing starts clocked an annual pace of 1.408 million units in January compared with a 1.643 million pace in December. January's pace was the lowest in nearly 10 years.

Economists had forecast January housing starts to fall to a 1.60 million pace from December's originally reported 1.642 million units annual rate.

The housing market was considered last year's top business story by some. It is attracting a lot of early attention already this year.

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Motorola Announces Major Layoffs

Thu, 1 Feb 2007 11:22:00 EST

USA Today reports that Motorola has announced that it will lay off 3,500 employees. The news follows a fourth quarter that showed profits down 48%. Stocks jumped after the announcement.

Zander, speaking to analysts at a meeting in New York, said the move will save the company about $400 million over two years. The cuts from Motorola's workforce of about 70,000 are to be spread across the company globally and completed in the first half of 2007.

The world's No. 2 handset manufacturer also said it will beat Wall Street estimates for 2007 sales by as much as $3 billion, forecasting a full-year total of $46 billion to $49 billion. Analysts had predicted sales of $45.9 billion.

The announcements sent Motorola's stock surging despite a fourth-quarter earnings report that showed profits down 48% from a year earlier on a stumble in operating results from its handset business.

The announcement came after the world's No. 2 handset manufacturer reported that fourth-quarter profit fell 48% despite record sales as operating results stumbled during the key holiday selling season.

The article also says that Motorola's CEO Ed Zander believes there is still strong demand for the company's Razr brand. Motorola has sold 75 million Razrs so far worldwide.

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The Story of Gizmondo

Wed, 17 Jan 2007 18:00:00 EST

Have you ever heard of the Gizmondo, the handheld do-it-all device from Tiger Telematics that had a big buzz behind it in 2005? If you haven't heard of it that is because the Gizmondo handheld hype turned into a disaster. GameSetWatch has written a detailed 10,000 word article on the Gizmondo disaster story that peaked with the infamous Ferrari Enzo car crash.

So, here's the first of the GameSetWatch 'holiday special' articles, and it's a kinda interesting one. The first thing to note is that it's out of date - it was originally written in January 2005, and never published. And, well, it's an investigative article written by me about Gizmondo, the now-famed Ferrari-crashing, money-squandering handheld company.

But because it goes into unprecedented detail about the financial history of the company, I think it's worth publishing. In fact, it goes into somewhat ridiculous, almost 10,000-word long detail, which is one of the reasons that it was never published. But let's give you some context here - when in Gizmondo's history was this published, and why didn't it make it out at the time?

Even if you are not into gaming this is still a classic business meltdown story

Cooling Housing Market Top 2006 Story?

Fri, 5 Jan 2007 15:00:00 EST

Broderick Perkins at the Reality Times argues that the housing market was last year's top business story.

The market was so hot for a while, condo speculation (along with a concentration of high-end condos in some markets), drove up the national median condo price beyond that of single-family detached homes, according to the National Association of Realtors.

Last year, however, accelerated home price appreciation proved unsustainable, sales slipped, speculators split, renters stayed put, builders bolted, foreclosures reached historic proportions in some demographic segments and the inflated bubble of a housing market began to reenter the atmosphere.

It was the sudden reversal of fortunes that led Associated Press' newspaper and broadcast editors to put the housing market at the top of the heap of business stories for 2006, according to the news service.

"At the housing market's peak, buyers rushed to open houses, blank checks in hand. Lenders gave big-money mortgages to people who could barely afford their monthly payments. That ended in 2006, when home builders scuttled projects, walked away from land they'd hoped to develop and would-be buyers canceled orders," reported AP's Ellen Simon.

Everyone had been expected the housing bubble to burst and housing did indeed retract. The big question is how much more are housing prices going to drop in 2007 and will all home prices be affected or just those markets that have had the biggest bubbles.

MSNBC: Top Business Stories of 2006

Thu, 28 Dec 2006 21:00:00 EST

MSNBC.com says these stories were the top business news stories for 2006.

Technology issues Google Buys YouTube and the new PS3 and Wii gaming systems didn't make MSNBC.com's list.