The original article is from http://www.businessweek.com
Written By Jesse Drucker on April 17, 2012
If you want to read more, please refer to the link above.
The ‘No Sale’ Sale
Cashing in on stocks without triggering capital-gains taxes
An executive has $200 million of company shares. He wants cash but
doesn’t want to trigger $30 million or so in capital-gains taxes.
1. The executive borrows about $200 million from an investment bank, with the shares as collateral. Now he has cash.
2. To freeze the value of the collateral shares, he buys and sells
“puts” and “calls.” These are options granting him the right to buy and
sell them later at a fixed price, insuring against a crash.
3. He eventually can return the cash, or he can keep it. If he keeps
it, he has to hand over the shares. The tax bill comes years after the
initial borrowing. His money has been working for him all the while.
Seller beware: The IRS challenged versions of these deals used by billionaire Philip Anschutz and Clear Channel Communications (CCMO)
co-founder Red McCombs. A U.S. Tax Court judge in 2010 ruled that
Anschutz owed $94 million in taxes on transactions entered into in 2000
and 2001. He lost an appeal last December. McCombs settled his case in
2011. Despite the court cases, such strategies “are alive and well,”
says Robert Willens, who runs an independent firm that advises investors
on tax issues.
There are plenty of other ways. please check the original article.
Sunday, April 29, 2012
Tuesday, April 24, 2012
$1,000 and a Click: Buying Stock the Crowdfunding Way
The original article is from http://www.businessweek.com
Written By Karen Weise on April 18, 2012
If you want to read more, please refer to the link above.
It’s been just two weeks since President Obama signed the JOBS Act into law, loosening requirements for companies looking to raise capital. The rules aren’t even written yet, and already one new fundraising outfit is jumping into the fray. On Wednesday, CircleUp was launched as a crowdfunding site that lets small businesses recruit investors to buy shares in their companies. It’s building off the success of such sites as Kickstarter and Indiegogo that let business and other projects solicit donations, though CircleUp takes it a step further by letting companies find actual equity investors. For investors, it’s a chance to profit from the growth of small, private companies. But it can also be risky, since only half of all small businesses survive longer than five years, and their disclosures to investors aren’t nearly as robust as those of publicly traded companies.
CircleUp focuses on consumer product companies with revenue between $1 million and $5 million a year. It’s being launched with the sale of securities in a company that makes pet food, another that sells healthy snacks, and a third that produces baby-care products. CircleUp’s website lets potential shareholders read a company’s investor presentation and standardized stock-offering and shareholder agreements. Investors can post comments and concerns about the business on a forum and post questions for the entrepreneurs. Video conferences are in the works. “There are no longer closed-door conversations,” says co-founder and Chief Operating Officer Rory Eakin.
For now, to participate on CircleUp you must be a so-called accredited investor, which means you make at least $200,000 a year or have at a minimum of $1 million in net worth, excluding your primary residence. That’s because regulators deem accredited investors savvy enough to understand the investment risks on their own. Proving that status is an on-your-honor system, which CircleUp says has long been sanctioned by the SEC.
Written By Karen Weise on April 18, 2012
If you want to read more, please refer to the link above.
It’s been just two weeks since President Obama signed the JOBS Act into law, loosening requirements for companies looking to raise capital. The rules aren’t even written yet, and already one new fundraising outfit is jumping into the fray. On Wednesday, CircleUp was launched as a crowdfunding site that lets small businesses recruit investors to buy shares in their companies. It’s building off the success of such sites as Kickstarter and Indiegogo that let business and other projects solicit donations, though CircleUp takes it a step further by letting companies find actual equity investors. For investors, it’s a chance to profit from the growth of small, private companies. But it can also be risky, since only half of all small businesses survive longer than five years, and their disclosures to investors aren’t nearly as robust as those of publicly traded companies.
CircleUp focuses on consumer product companies with revenue between $1 million and $5 million a year. It’s being launched with the sale of securities in a company that makes pet food, another that sells healthy snacks, and a third that produces baby-care products. CircleUp’s website lets potential shareholders read a company’s investor presentation and standardized stock-offering and shareholder agreements. Investors can post comments and concerns about the business on a forum and post questions for the entrepreneurs. Video conferences are in the works. “There are no longer closed-door conversations,” says co-founder and Chief Operating Officer Rory Eakin.
For now, to participate on CircleUp you must be a so-called accredited investor, which means you make at least $200,000 a year or have at a minimum of $1 million in net worth, excluding your primary residence. That’s because regulators deem accredited investors savvy enough to understand the investment risks on their own. Proving that status is an on-your-honor system, which CircleUp says has long been sanctioned by the SEC.
Opening Remarks - The Future Retail Wasteland
The original article is from http://www.businessweek.com
Written By Brad Stone and David Welch on April 12, 2012
If you want to read more, please refer to the link above.
Best Buy cited an unspecified “personal conduct” issue as the reason for Dunn’s abrupt departure, though the larger troubles plaguing the company haven’t changed. Founded in 1966 in St. Paul, Minn., Best Buy has watched its business stagnate because of a mix of macroeconomic forces and shifts in consumer behavior that essentially boil down to that one word Dunn bragged about as an advantage: choice. Shoppers are finding more choices online—primarily at Amazon.com (AMZN)—where they can often find a better deal. At the same time choice has narrowed in product categories such as HDTVs and PCs. There’s hardly a reason anymore to line up various models in a showroom.
Best Buy’s decline reflects a cultural shift that’s reshaping the retail world. All big-box stores, and Best Buy in particular, thrived in an era when comparison shopping meant physically going from store to store. The effort required of consumers was a kind of transactional friction. With the advent of mobile technology, friction has all but disappeared. Rather than ruminate with a salesperson before making a selection, tech-savvy consumers are more likely to walk into stores, eyeball products, scan barcodes with their smartphones, note cheaper prices online, and head for the exit. Shoppers can purchase virtually any product under the sun on Amazon or EBay (EBAY) while sipping a latte at Starbucks (SBUX). For traditional retailers, that spells trouble, if not death. “So far nothing Best Buy is doing is fast enough or significant enough to get in front of these waves,” says Scot Wingo, CEO of e-commerce consulting firm ChannelAdvisor.
Even giants such as Wal-Mart (WMT) and Target (TGT) are striving to adapt and are beefing up their online operations while lowering their profile in the physical world. Target’s operating margin has slipped from 8.3 percent in fiscal 2008 to 7.6 percent for fiscal 2012, which ended in January. The company is opening five smaller CityTarget locations to seek growth in municipal areas. Wal-Mart, which also seemed invincible until recently, has offset years of declining sales of general merchandise with increased sales of groceries. Last year it added 21 small-format stores and plans to increase that number by as many as 100 this year. Most of those are Neighborhood Markets, which sell a higher percentage of groceries than the SuperCenters.
The question is whether it’s too late for companies like Best Buy to put themselves on the path to recovery. The retailer’s business hasn’t collapsed; annual sales have been stable at around $50 billion for the past few years. But it needs to adapt in a hurry. An excursion to the Apple Store in New York’s Grand Central Terminal illustrates how much the ground beneath traditional retailers has shifted. Despite the throng in the store, buying an iPhone charging cable lasts about three minutes: the time it takes to grab the box off a wall, scan it, tap a couple of security codes into the iPhone app that popped up, and walk out. No need to wait in a checkout line—or even speak to a salesperson—and if security personnel were watching, they were invisible. It’s a process designed to remove any lingering barriers between shoppers and their money. You might call it frictionless.
Written By Brad Stone and David Welch on April 12, 2012
If you want to read more, please refer to the link above.
Brian Dunn was practically ebullient. “The one critical thing we offer the world is choice,” the Best Buy (BBY) chief executive officer said in a March phone interview with Bloomberg Businessweek.
He was trumpeting in particular his company’s role in guiding customers
through the expanding smartphone universe. “We provide the latest and
greatest choice of all technology gear, from Apple (AAPL) products to Google (GOOG)
products, and that brings more opportunity to help people put
technology to use. That is a great place for us to be.” A week later,
reality intruded. The consumer electronics retailer posted a $1.7
billion quarterly loss and announced it would close 50 stores
nationwide. On April 10, Dunn resigned.
Best Buy cited an unspecified “personal conduct” issue as the reason for Dunn’s abrupt departure, though the larger troubles plaguing the company haven’t changed. Founded in 1966 in St. Paul, Minn., Best Buy has watched its business stagnate because of a mix of macroeconomic forces and shifts in consumer behavior that essentially boil down to that one word Dunn bragged about as an advantage: choice. Shoppers are finding more choices online—primarily at Amazon.com (AMZN)—where they can often find a better deal. At the same time choice has narrowed in product categories such as HDTVs and PCs. There’s hardly a reason anymore to line up various models in a showroom.
Best Buy’s decline reflects a cultural shift that’s reshaping the retail world. All big-box stores, and Best Buy in particular, thrived in an era when comparison shopping meant physically going from store to store. The effort required of consumers was a kind of transactional friction. With the advent of mobile technology, friction has all but disappeared. Rather than ruminate with a salesperson before making a selection, tech-savvy consumers are more likely to walk into stores, eyeball products, scan barcodes with their smartphones, note cheaper prices online, and head for the exit. Shoppers can purchase virtually any product under the sun on Amazon or EBay (EBAY) while sipping a latte at Starbucks (SBUX). For traditional retailers, that spells trouble, if not death. “So far nothing Best Buy is doing is fast enough or significant enough to get in front of these waves,” says Scot Wingo, CEO of e-commerce consulting firm ChannelAdvisor.
Even giants such as Wal-Mart (WMT) and Target (TGT) are striving to adapt and are beefing up their online operations while lowering their profile in the physical world. Target’s operating margin has slipped from 8.3 percent in fiscal 2008 to 7.6 percent for fiscal 2012, which ended in January. The company is opening five smaller CityTarget locations to seek growth in municipal areas. Wal-Mart, which also seemed invincible until recently, has offset years of declining sales of general merchandise with increased sales of groceries. Last year it added 21 small-format stores and plans to increase that number by as many as 100 this year. Most of those are Neighborhood Markets, which sell a higher percentage of groceries than the SuperCenters.
The question is whether it’s too late for companies like Best Buy to put themselves on the path to recovery. The retailer’s business hasn’t collapsed; annual sales have been stable at around $50 billion for the past few years. But it needs to adapt in a hurry. An excursion to the Apple Store in New York’s Grand Central Terminal illustrates how much the ground beneath traditional retailers has shifted. Despite the throng in the store, buying an iPhone charging cable lasts about three minutes: the time it takes to grab the box off a wall, scan it, tap a couple of security codes into the iPhone app that popped up, and walk out. No need to wait in a checkout line—or even speak to a salesperson—and if security personnel were watching, they were invisible. It’s a process designed to remove any lingering barriers between shoppers and their money. You might call it frictionless.
Friday, April 13, 2012
What Wall Street Sees in the Yellow Pages
The original article is from http://www.businessweek.com
Written By Karen Weise on April 09, 2012
If you want to read more, please refer to the link above.
AT&T is following other telcos, including Sprint (S), Verizon (VZ), and Qwest Communications (now part of CenturyLink (CTL)), which have all spun off or sold their directory operations, some as long as a decade ago. They’ve been fleeing the industry as it declines; since 2007, print revenue has decreased by $7.3 billion as such websites as Yelp, Google, and Groupon have taken over the market for small business ads. Directories have been able to offset only about $2 billion of that loss by building up a digital presence through websites and mobile apps, according to data from BIA/Kelsey.
So why would a private equity firm want a dead-tree product with little future? In a simple word: cash. As Bloomberg Businessweek reportedin March, the industry still prints 422 million directories a year, and businesses still pay almost $7 billion to advertise in them. AT&T’s Yellow Pages publishes 1,200 directories in 22 states. Rita McGrath, an associate professor at Columbia Business School, explained last month that while private equity investors often look for companies they can turn around, that probably isn’t what drew them to the Yellow Pages. Instead, they may be hoping to earn a decent return on their investment as the business shrinks. “This one is like a cash register—it just dribbles out on an ongoing basis,” she said. McGrath likened it to individual investors having a CD in their portfolio.
Written By Karen Weise on April 09, 2012
If you want to read more, please refer to the link above.
AT&T is following other telcos, including Sprint (S), Verizon (VZ), and Qwest Communications (now part of CenturyLink (CTL)), which have all spun off or sold their directory operations, some as long as a decade ago. They’ve been fleeing the industry as it declines; since 2007, print revenue has decreased by $7.3 billion as such websites as Yelp, Google, and Groupon have taken over the market for small business ads. Directories have been able to offset only about $2 billion of that loss by building up a digital presence through websites and mobile apps, according to data from BIA/Kelsey.
So why would a private equity firm want a dead-tree product with little future? In a simple word: cash. As Bloomberg Businessweek reportedin March, the industry still prints 422 million directories a year, and businesses still pay almost $7 billion to advertise in them. AT&T’s Yellow Pages publishes 1,200 directories in 22 states. Rita McGrath, an associate professor at Columbia Business School, explained last month that while private equity investors often look for companies they can turn around, that probably isn’t what drew them to the Yellow Pages. Instead, they may be hoping to earn a decent return on their investment as the business shrinks. “This one is like a cash register—it just dribbles out on an ongoing basis,” she said. McGrath likened it to individual investors having a CD in their portfolio.
The Education of Google's Larry Page
The original article is from http://www.businessweek.com
Written By Brad Stone on April 04, 2012
If you want to read more, please refer to the link above.
Page also wanted to speed up decision-making at
the company, whose ranks had swelled to almost 30,000 employees. He
plucked one management idea from New York City Mayor Mike Bloomberg, who
requires that the city’s department heads spend time sitting together
in City Hall (Bloomberg is founder of Bloomberg LP, which owns this
magazine). Page fashioned an open bullpen of desks on the fourth floor
of Building 1900 in the Googleplex and required top managers, called the
L-Team, to spend part of each day there. “The insight I got from Mayor
Bloomberg was that it’s maybe more efficient to tell people, ‘For these
hours of the day we’re going to be all together, and at these hours of
the day, you’re going to be with your team,’” he says. “I’m just trying
to get people together for a fixed set of hours in one place.”
Page also started cutting back on products that weren’t working. Services such as Knol, the Wikipedia knockoff, and the complicated productivity tool Google Wave were sent to the Google graveyard. The company reorganized into seven divisions: search, ads, YouTube, Android, Chrome, commerce, and social networking. Page worked on defining clear short- and long-term goals for the leaders of each group. “In some ways we have run the company as to let 1,000 flowers bloom, but once they do bloom you want to put together a coherent bouquet,” Brin said at a technology conference last fall.
In June, Google unveiled the work of the seventh product group—Google+. Page demanded that every employee embrace the new focus on social networking, and linked yearend bonuses to the overall success of the effort. He says he’s pleased with the service’s progress. “We’re not even a year into that, and that’s going very well; much better than I expected in many, many ways, and I think than most people would have expected,” he says. “It doesn’t mean tomorrow it’s going to be bigger than any other social network out there. That’s not realistic. But it’s growing faster, I think, than other services have.”
Many Google watchers, and more than a few shareholders and analysts, question the extent of that success. Google+ has attracted 100 million members, who spent an average of 3.3 minutes on the service in January, according to ComScore (SCOR). Facebook’s 850 million users spend an average of 7.5 hours a month on that site. Page cites his own Google+ follower count of 2 million users as evidence that people are engaging with the service. And he promises the social network is just getting started with new features.
Page also judges Google+ success in another way, arguing that it has added a necessary dimension to Google search results. He cites the dilemma of a friend, a Google engineer named Ben Smith. It’s such a common name that a Google search returns millions of results. Now that the company knows that Page and a particular Ben Smith are connected, the results are more specific. A common name “is good if you want to have privacy, and it’s bad if you want to have other friends find you,” Page says. “For the first time, we can put Ben Smith into the search box, and it can be the Ben Smith that you know.”
Page
sounds more than a little exasperated by the doubters. He says he’d be
happy to include social data from Facebook and Twitter inside Google
results but can’t because those companies will not agree to make it
available. “We would love to have better access to data that’s out
there. We find it frustrating that we don’t,” he says. As an example, he
points to ongoing friction over the one-way transferability of users’
address books between Gmail and Facebook. New members of Facebook can
quickly and easily find their Gmail contacts, but it doesn’t work the
other way: New Gmail users cannot similarly find their Facebook friends.
“Our friends at Facebook have imported many, many, many Gmail addresses
and exported zero addresses out,” he says. “They claim that users don’t
own that data, which is a total specious claim. It’s completely
unreasonable.”
As for the parts of their sites that rivals do make available to Google’s search engine, such as individual tweets or profile pages on Facebook—Page dismisses the idea that Google should do a better job of getting those to show up in its search results. “We don’t force anyone to index,” he says. “That’s not the way we operate. … That’s always somebody else’s choice, whether their data is indexed or not.”
Last July, Google lost an important battle that was mostly invisible to the public. It bid for the patent portfolio of bankrupt Canadian telecom pioneer Nortel and was outspent by a consortium of rivals that included Microsoft (MSFT), Sony (SNE), Research In Motion (RIMM), and Apple. Suddenly, Android, the open-source mobile operating system that powers about 50 percent of the world’s smartphones, seemed vulnerable to the wave of licensing shakedowns and patent lawsuits breaking out in the high-tech industry. The next month, Google paid an astonishing $12.5 billion for Motorola Mobility (MMI), the American technology company with its own trove of mobile patents dating back to the invention of the cell phone. “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Page wrote in a blog post announcing the deal.
Page laments the tendency among technology companies to sue each other over intellectual property. “The general trend of the industry towards being a lot more litigious somehow has been a sad thing,” he says. “There is a lot of money going to lawyers and things, instead of building great products.” Google, he insists, has never aggressively enforced its own patents in search, and he blasts the aggressors engaging in warfare in the mobile arena. “I think that companies usually get into that when they’re towards the end of their life cycle or they don’t have good confidence in their abilities to really compete naturally.”
Although Google’s acquisition of Motorola was approved by regulators in the U.S. and Europe, it remains under review by Chinese antitrust officials and the deal has yet to close. Dennis Woodside, a longtime Google executive, will head the new Motorola division inside Google, Bloomberg News has reported. Page won’t elaborate on his plans for Motorola Mobility, though it’s hard to imagine he wouldn’t introduce Google-branded phones and tablets to help the company compete with the runaway success of Apple’s elegant hardware. Existing Android tablets “are great experiences,” Page insists, “but they are going to get a lot better. I think we’re at the pretty early stages of this.”
At the end of the conversation, Page addresses one anecdote relayed in Walter Isaacson’s best-selling biography of Steve Jobs. According to a story in that book, Page called Jobs before his death, seeking advice on how to run Google. Jobs had threatened “thermonuclear war” on Google for copying elements of the iPhone, Isaacson wrote, but put aside his animosity over Android to counsel the young CEO.
That
could be a classic Silicon Valley-style distortion of reality. The man
who pioneered the practice and would know for sure is gone. It’s now
Larry Page’s world, and he’ll have to work even harder than he already
does to keep it that way.
Written By Brad Stone on April 04, 2012
If you want to read more, please refer to the link above.
Sitting for an April 3 interview at the Googleplex in Mountain View,
Calif., Page bridles at any suggestion that Google isn’t the
destiny-defining innovator it once was. He’s wearing geek business
casual—fleece jacket, logo shirt, jeans, black Converse sneakers.
“Producing the best [products] we possibly can for users is our
paramount thing,” he says. “I think we have demonstrated that over a
very long period of time, with a whole variety of different issues we’ve
faced around the world.”
Page isn’t the first founder to reassert himself as leader of the
company he helped to create. There was Howard Schultz’s return to run Starbucks (SBUX),
which has worked out well, and Michael Dell’s reclaiming the reins of
his eponymous PC maker, which has not. For a still-young tech
entrepreneur such as Page, Steve Jobs’s triumphant homecoming at Apple
in 1997 is the most obvious benchmark of success. Their situations
aren’t totally analogous—unlike Jobs, Page never left the company he
founded. Though the comparison is apt in one important way: In the
1990s, Apple needed a more sophisticated operating system to navigate
changes in the computing landscape, and so bought Jobs’s company, NeXT.
Today, Google also needs to figure out a new world, in which its users
increasingly see the Web through the lens of their friends, instead of a
cold, calculating algorithm. Although Google started social networks
such as Orkut in the last decade, Page acknowledges that the company
underestimated the power of friending. “Our mission was organizing the
world’s information and making it universally accessible and useful,” he
says. “I think we probably missed more of the people part of that than
we should have.”
Google’s tardy embrace of social networking and its other moves, such as
the strict terms it dictates to licensees of its Android operating
system, have opened the company up to the kind of criticism it rarely
encountered during its days as a mere colossus-in-the-making. Antitrust
authorities in the U.S. and Europe are investigating whether Google
gives preference to its own content in Internet search results instead
of being a neutral arbiter. Privacy watchdog groups are calling Google
out on changes to its privacy policies, charging that it has abused its
users’ trust. Bloggers now routinely wonder if the company is doing
evil, a caustic play on Google’s famous dictum in its 2004 initial
public offering prospectus. A recent headline on the technology site
Gizmodo hyperbolically summed up the stew of distrust: “Google’s Broken
Promise: The End of ‘Don’t Be Evil.’”
Page smiles at the charge. Google, he insists, has not really changed at
all. “Our soul is the same,” he says. “What we’re about is using
large-scale technology advancements to help people, to make people’s
lives better, to make community better. If you look at the river of
things we’re doing, like automated cars and things like that, those
things are fundamentally about [using technology] to help people. And I
think there is still a huge amount of that to be done.”
With Sergey Brin, Page founded Google in 1998 at the
age of 25. By any measure, the company is among the most remarkable in
the history of Silicon Valley, growing from a research project at
Stanford to a multibillion-dollar global behemoth in a little more than a
decade. Yet by the time Page took command last April, Google had grown
unfocused and unwieldy. A freewheeling atmosphere of invention and
curiosity spawned countless unpolished, unsuccessful products. (Take
Google Buzz. No, really, take it!) The previous CEO, Eric Schmidt, was
spending much of his time on the road, focusing on the company’s
mounting problems with antitrust and privacy regulators and dousing
controversies such as the interception of home networking data by
Google’s roving, camera-equipped Street View cars.
An ongoing discussion among Google’s leaders about refocusing the
company around key product lines precipitated Schmidt’s decision to step
aside. Now Google’s executive chairman, Schmidt is still the public
face of the company at industry conferences and government hearings.
Brin, Page’s co-founder, works on futuristic technology products, such
as augmented-reality glasses. As CEO, Page handles the day-to-day
decisions—and takes the blame when things go wrong. “He’s probably
working harder than anyone at Google right now,” says Sundar Pichai,
senior vice president of the group that makes the Chrome browser.
Page spent the months before his formal appointment as CEO
reshaping the leadership team. “He had a very clear sense of the
organization he wanted to have and handpicked people to run large areas
of the company and set their objectives,” says Ram Shriram, a longtime
Google board member. Newly elevated deputies included Pichai, Vic
Gundotra of Google+, Salar Kamangar of YouTube, and Susan Wojcicki, who
runs the ad unit.
Page also started cutting back on products that weren’t working. Services such as Knol, the Wikipedia knockoff, and the complicated productivity tool Google Wave were sent to the Google graveyard. The company reorganized into seven divisions: search, ads, YouTube, Android, Chrome, commerce, and social networking. Page worked on defining clear short- and long-term goals for the leaders of each group. “In some ways we have run the company as to let 1,000 flowers bloom, but once they do bloom you want to put together a coherent bouquet,” Brin said at a technology conference last fall.
In June, Google unveiled the work of the seventh product group—Google+. Page demanded that every employee embrace the new focus on social networking, and linked yearend bonuses to the overall success of the effort. He says he’s pleased with the service’s progress. “We’re not even a year into that, and that’s going very well; much better than I expected in many, many ways, and I think than most people would have expected,” he says. “It doesn’t mean tomorrow it’s going to be bigger than any other social network out there. That’s not realistic. But it’s growing faster, I think, than other services have.”
Many Google watchers, and more than a few shareholders and analysts, question the extent of that success. Google+ has attracted 100 million members, who spent an average of 3.3 minutes on the service in January, according to ComScore (SCOR). Facebook’s 850 million users spend an average of 7.5 hours a month on that site. Page cites his own Google+ follower count of 2 million users as evidence that people are engaging with the service. And he promises the social network is just getting started with new features.
Page also judges Google+ success in another way, arguing that it has added a necessary dimension to Google search results. He cites the dilemma of a friend, a Google engineer named Ben Smith. It’s such a common name that a Google search returns millions of results. Now that the company knows that Page and a particular Ben Smith are connected, the results are more specific. A common name “is good if you want to have privacy, and it’s bad if you want to have other friends find you,” Page says. “For the first time, we can put Ben Smith into the search box, and it can be the Ben Smith that you know.”
Linking data from Google+ into its search engine, however,
has also invited scrutiny. The integration, named “Search, Plus Your
World,” was rolled out in January to a chorus of protest from bloggers,
privacy groups, and competitors who charged that Google was giving
special treatment to its own content. Bloomberg News has reported that
the Federal Trade Commission is reviewing Google+ as part of a larger
antitrust investigation into whether Google is unfairly abusing its
monopoly in search. Regulators in Europe and the U.S. are also looking
into accompanying changes in Google’s privacy policy that allow the
company to track consumers’ use of various Google services.
As for the parts of their sites that rivals do make available to Google’s search engine, such as individual tweets or profile pages on Facebook—Page dismisses the idea that Google should do a better job of getting those to show up in its search results. “We don’t force anyone to index,” he says. “That’s not the way we operate. … That’s always somebody else’s choice, whether their data is indexed or not.”
Last July, Google lost an important battle that was mostly invisible to the public. It bid for the patent portfolio of bankrupt Canadian telecom pioneer Nortel and was outspent by a consortium of rivals that included Microsoft (MSFT), Sony (SNE), Research In Motion (RIMM), and Apple. Suddenly, Android, the open-source mobile operating system that powers about 50 percent of the world’s smartphones, seemed vulnerable to the wave of licensing shakedowns and patent lawsuits breaking out in the high-tech industry. The next month, Google paid an astonishing $12.5 billion for Motorola Mobility (MMI), the American technology company with its own trove of mobile patents dating back to the invention of the cell phone. “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies,” Page wrote in a blog post announcing the deal.
Page laments the tendency among technology companies to sue each other over intellectual property. “The general trend of the industry towards being a lot more litigious somehow has been a sad thing,” he says. “There is a lot of money going to lawyers and things, instead of building great products.” Google, he insists, has never aggressively enforced its own patents in search, and he blasts the aggressors engaging in warfare in the mobile arena. “I think that companies usually get into that when they’re towards the end of their life cycle or they don’t have good confidence in their abilities to really compete naturally.”
Although Google’s acquisition of Motorola was approved by regulators in the U.S. and Europe, it remains under review by Chinese antitrust officials and the deal has yet to close. Dennis Woodside, a longtime Google executive, will head the new Motorola division inside Google, Bloomberg News has reported. Page won’t elaborate on his plans for Motorola Mobility, though it’s hard to imagine he wouldn’t introduce Google-branded phones and tablets to help the company compete with the runaway success of Apple’s elegant hardware. Existing Android tablets “are great experiences,” Page insists, “but they are going to get a lot better. I think we’re at the pretty early stages of this.”
At the end of the conversation, Page addresses one anecdote relayed in Walter Isaacson’s best-selling biography of Steve Jobs. According to a story in that book, Page called Jobs before his death, seeking advice on how to run Google. Jobs had threatened “thermonuclear war” on Google for copying elements of the iPhone, Isaacson wrote, but put aside his animosity over Android to counsel the young CEO.
Page offers a different version of those events. He says
that Jobs reached out to him, not the other way around, and that when
they met, in the last months of Jobs’s life, the Apple founder offered
useful insights into how to run a company. Page believes that Jobs’s
fury toward Google was not entirely genuine and was “actually for show.”
Asked to explain, he suggests that Jobs’s apparent rage about Android
was merely meant to motivate Apple employees. “For a lot of companies,
it’s useful for them to really feel like they have an obvious competitor
and to rally around that. I personally believe it’s better to shoot
higher. You don’t want to be looking at your competitors.”
Joel Stein Has Four Accountants - Tax story
The original article is from http://www.businessweek.com
Written By Joel Stein on April 05, 2012
If you want to read more, please refer to the link above.
I don’t resent taxes for the usual
reason—that government wastes my hard-earned money. No, I resent paying
taxes because if the government wants my money, it should have to do the
work of figuring out how much it wants. I don’t click on a book on Amazon.com (AMZN)
and then fill out 20 pages of forms to figure out how much it will cost
me, and then keep every receipt and form in case Amazon wants to make
sure I got the number right five years from now. If I had to do all of
that for Amazon, I’d have an even lower chance of reading Finnegans Wake.
So I’m grateful for my accountant. He’s the accountant my dad has used for three decades, and he’s been doing my taxes since I was in college. And I’ve never met him. I think we’ve talked, in total, three times on the phone. I mail him some forms, he asks me for some more forms, I write some checks, and he e-files for me. I wish all of my relationships were like this.
There were four years after I moved from New York to Los Angeles, however, when I switched to a high-end accountant because I created a loan-out corporation. To this day, I don’t really understand what a loan-out corporation is, but that accountant cost me well over $10,000 a year. I have no idea if he was better. But he had nice offices and paid for my parking.
This year I really wanted to find out: What level accountant do I need? Can I do my returns myself using websites that promise to guide me through the process? Can H&R Block (HRB) handle it? Is my current accountant great? Or would a high-end accountant know all the loopholes and get me so much money back that his fee would be worth it? Would any of them slip me the results of the Academy Awards?
Mark W. Everson, who ran the IRS from 2003 to 2007, predicted that all four of my returns would come out the same, since, unless you lie, the numbers all plug into one formula. The accountant one needs, Everson said, isn’t based on wealth, but complexity: If, for instance, you have a business partnership, you need a high-end accountant to value the shares of that privately held company. As an analogy, he explained that people with very small lawns can use a push mower, the equivalent of doing their taxes themselves; some need a regular lawn mower like H&R Block; some need a riding mower like an expensive accountant. “Some people need riding mowers because they have big lawns, other people have a riding mower just because they want a riding mower,” he said.
Everson, a CPA who is vice chairman of alliantgroup, a tax advisory firm, doesn’t do his own taxes. “It’s easier, and I have a part ownership in this partnership. It’s complex, and you want to make sure it’s right. I started that when I was in the service. One thing I couldn’t afford to do was make a mistake,” he says. Treasury Secretary Timothy Geithner, who filed his own returns with TurboTax (INTU), got audited for failing to pay $35,000 in self-employment taxes for years 2001-04.
Since I’m unlikely to ever be treasury secretary, I tried TaxSlayer.com, an online service so powerful that it not only sponsors bowl games (including the TaxSlayer.com Gator Bowl) it’s also used by Dale Earnhardt Jr., who races the TaxSlayer.com Chevrolet.
TaxSlayer asked me to choose an accountant, either Bobby, a white guy with dark hair and a suit, or Kelly, a white woman with dark hair and a suit. I picked Kelly. I could click on videos to have Kelly explain things to me, like that my W2s are also sent directly to the IRS (Kelly’s subtext: Do not lie about your earnings). Kelly also said comforting things such as, “Your W2 can often look daunting, but it’s much simpler than the complex groups of numbers may suggest.” This website understood the level I was operating at. When it asked for my Social Security number, it showed a picture of a Social Security card, in case this was the first time someone had brought up the whole Social Security number thing. TaxSlayer.com was making me feel like an accounting genius.
The fun part of the site is that as you enter data, it keeps a running tab of how much you owe or are getting as a refund. So every time you punch in a number, you cheer or boo at your screen. When I finished, TaxSlayer.com said that I’d be receiving a refund of $92,309 from the IRS and $27,245 back from California. The entire process had cost me only $30. I was going to use the $119,554 to buy a summer home. And I was going to name that home TaxSlayer.com.
I was slightly suspicious of TaxSlayer.com’s returns, however. I made $399,101 in income plus $19,073 in dividends, $1,312 in capital gains, and $11,902 in refunds from last year—that’s a total of $431,388—and paid $127,826 in taxes, almost 30 percent. With my refund, I’d be paying only $8,272 in taxes for the year, a little less than 2 percent. That didn’t seem possible, since I do not run a hedge fund.
So I went to an H&R Block near my house in Los Angeles. I always figured that H&Rs were cheesy, full of sad sacks who show up with a jumble of paperwork in a supermarket plastic bag. But much like my first LensCrafters experience, I found H&R to be professional, cheery, competent, and not particularly cheap. There were huge signs proclaiming, “I am here to turn your shoebox into a treasure chest.” My returns would cost $300 to $400, exactly what my longtime accountant charges me. But unlike H&R, my accountant doesn’t throw in free tickets to the Laugh Factory as a promotion. I got the feeling my returns were going to turn out differently than they did with TaxSlayer.com. I didn’t need the Laugh Factory after my TaxSlayer.com returns. I could have bought the Laugh Factory after my TaxSlayer.com returns.
After being offered macaroons and coffee, I was led to tax associate Michael Goldblatt, who wore a suit and a name tag and looked exactly like an accountant. He was nice, knowledgeable, and happy to deal with the jumble of paperwork I had brought in a supermarket plastic bag. I also showed Goldblatt my TaxSlayer.com returns, which were 48 pages long. “Whoa. That’s a book,” he said. Then he looked at my windfall. “The refund is definitely interesting. Somehow the government might give you a call on that one. They might send a car for you.” According to Goldblatt, if I had filed that, the IRS would be the one doing the slaying. I’m going to let him use that one at the Laugh Factory.
Because of my loan-out corporation, Goldblatt said my personal taxes were easy. I had very little to deduct since my corporation deducts expenses before paying me. Compared to the actors he helps with tons of W2s or the prostitute who doesn’t have any W2s at all, I was a simple case. The H&R returns were just 22 pages long and had me owing the IRS $1,227 and owing California $1,160—$2,387 out of my pocket. Not bad. But my summer house was definitely gone.
Determined to see what I’d done wrong, I went back to TaxSlayer.com and started over. This time, I got just $16,695 from the IRS and owed California $21,992. It was clear that I am not smart enough to use TaxSlayer.com. Dale Earnhardt Jr. must be a genius.
I FedExed my forms to my regular accountant, Halbreich Accounting & Tax Services in Staten Island, N.Y. Howie Halbreich started the business 40 years ago and now has more than 3,000 clients. He works with his son, Alan, and has a part-time CPA who is also a full-time firefighter. The only thing I don’t like about these guys is that their e-mails are in ALL CAPS and they never have gotten me a $119,554 refund. Still, I’ve never been audited. And if I were, I know they’d have my back and show up with me to explain all the things I couldn’t. I picture it like a cop procedural, where I start to talk to the IRS and the Halbreichs storm in and tell me to shut the hell up.
Finally, I took an elevator to the plush offices of RBZ in
Los Angeles, which has more than 100 employees and views of the entire
city. It was the firm’s Spirit Week, and everyone was wearing pajamas. I
was deeply suspicious.
Mark Baumohl, who handles the Family Wealth Group and has a business card that lists his job as “Co-Partner In-Charge,” wasn’t wearing pajamas. Even though he was in a suit—a very nice suit with purple lining—he wasn’t at all what I expected in a high-end accountant. He had a beard, a guitar in his office, and a framed diploma from Humboldt State University. He took all my notes on a yellow legal pad and punched my numbers into an old typewriter with a paper roll printout. He’s had some clients for five generations. He makes house calls to some of his widowed clients. He played me a song. He was so thoughtful and empathetic that my only anxiety was he was going to file my returns to Marlo Thomas.
He did also have a computer with three monitors. And the questions Baumohl asked were less about how much I made than about my parents, my wife, and my son. He was trying to figure out what kinds of things I should be planning for, like whether it was worth putting money in a 529 College Savings Plan for my son and risking the 10 percent penalty if my parents wind up fully funding it. He suggested opening a medical reimbursement plan through my loan-out corporation. His main advice was to never make a life decision based on tax implications. “Don’t let the taxes wag the dog,” he said.
My returns, for which he would charge $1,200, were 25 pages long and had me paying the feds and California $2,592 and $1,952, respectively. He was less aggressive than the Halbreichs—my donation of four boxes of books to the local library was worth $250 to him compared with $400 to H&R Block and $1,250 to the Halbreichs. Small decisions like that added up to me paying $5,013 more than I will with the Halbreichs’ returns. Even though he thought the Halbreichs were a little aggressive, Baumohl said there was nothing fishy. “Based on the income, it’s not unheard of,” he said.
Like former IRS Commissioner Everson told me, paying more for an expensive accountant doesn’t mean he’ll find lots of loopholes that will get me more back—in fact Baumohl sent more money to the government than anyone else. What a higher-end accountant does is look at my financial situation holistically and think long-term. Sure, Goldblatt at H&R Block also had some ideas for changes I could make in my savings, but it isn’t the thrust of his business as it is for Baumohl.
I’m going to stick with Howie. He’s affordable, a little aggressive with the deductions, and knows me. He makes the process painless, which—more than a fat return or even a long-term plan of how to beat the government—is what I’m really looking for. Even if one day he thinks we should meet over something, he’s in Staten Island. Everyone knows there’s no way anyone is going out there.
Written By Joel Stein on April 05, 2012
If you want to read more, please refer to the link above.
Though I’ve tried many times, I have never read James Joyce’s Finnegans Wake
or my own tax returns. If the U.S. Internal Revenue Service ever asks
me to defend anything I declared or exempted or deducted or itemized,
I’ll just sigh, take out my wallet, and start handing them twenties
until they stop talking.
So I’m grateful for my accountant. He’s the accountant my dad has used for three decades, and he’s been doing my taxes since I was in college. And I’ve never met him. I think we’ve talked, in total, three times on the phone. I mail him some forms, he asks me for some more forms, I write some checks, and he e-files for me. I wish all of my relationships were like this.
There were four years after I moved from New York to Los Angeles, however, when I switched to a high-end accountant because I created a loan-out corporation. To this day, I don’t really understand what a loan-out corporation is, but that accountant cost me well over $10,000 a year. I have no idea if he was better. But he had nice offices and paid for my parking.
This year I really wanted to find out: What level accountant do I need? Can I do my returns myself using websites that promise to guide me through the process? Can H&R Block (HRB) handle it? Is my current accountant great? Or would a high-end accountant know all the loopholes and get me so much money back that his fee would be worth it? Would any of them slip me the results of the Academy Awards?
Mark W. Everson, who ran the IRS from 2003 to 2007, predicted that all four of my returns would come out the same, since, unless you lie, the numbers all plug into one formula. The accountant one needs, Everson said, isn’t based on wealth, but complexity: If, for instance, you have a business partnership, you need a high-end accountant to value the shares of that privately held company. As an analogy, he explained that people with very small lawns can use a push mower, the equivalent of doing their taxes themselves; some need a regular lawn mower like H&R Block; some need a riding mower like an expensive accountant. “Some people need riding mowers because they have big lawns, other people have a riding mower just because they want a riding mower,” he said.
Everson, a CPA who is vice chairman of alliantgroup, a tax advisory firm, doesn’t do his own taxes. “It’s easier, and I have a part ownership in this partnership. It’s complex, and you want to make sure it’s right. I started that when I was in the service. One thing I couldn’t afford to do was make a mistake,” he says. Treasury Secretary Timothy Geithner, who filed his own returns with TurboTax (INTU), got audited for failing to pay $35,000 in self-employment taxes for years 2001-04.
Since I’m unlikely to ever be treasury secretary, I tried TaxSlayer.com, an online service so powerful that it not only sponsors bowl games (including the TaxSlayer.com Gator Bowl) it’s also used by Dale Earnhardt Jr., who races the TaxSlayer.com Chevrolet.
TaxSlayer asked me to choose an accountant, either Bobby, a white guy with dark hair and a suit, or Kelly, a white woman with dark hair and a suit. I picked Kelly. I could click on videos to have Kelly explain things to me, like that my W2s are also sent directly to the IRS (Kelly’s subtext: Do not lie about your earnings). Kelly also said comforting things such as, “Your W2 can often look daunting, but it’s much simpler than the complex groups of numbers may suggest.” This website understood the level I was operating at. When it asked for my Social Security number, it showed a picture of a Social Security card, in case this was the first time someone had brought up the whole Social Security number thing. TaxSlayer.com was making me feel like an accounting genius.
TaxSlayer.com even
told me which way to file (married filing jointly) and informed me of
recent tax law changes (mileage reimbursement rates are up!). Then I
input data for three hours, during which I learned a lot about the tax
code. From what I gathered, based on the deductions offered, the
following people control our tax laws: farmers, clergy, homeowners,
people who live in Washington, D.C., parents, and, not surprisingly,
accountants.
The fun part of the site is that as you enter data, it keeps a running tab of how much you owe or are getting as a refund. So every time you punch in a number, you cheer or boo at your screen. When I finished, TaxSlayer.com said that I’d be receiving a refund of $92,309 from the IRS and $27,245 back from California. The entire process had cost me only $30. I was going to use the $119,554 to buy a summer home. And I was going to name that home TaxSlayer.com.
I was slightly suspicious of TaxSlayer.com’s returns, however. I made $399,101 in income plus $19,073 in dividends, $1,312 in capital gains, and $11,902 in refunds from last year—that’s a total of $431,388—and paid $127,826 in taxes, almost 30 percent. With my refund, I’d be paying only $8,272 in taxes for the year, a little less than 2 percent. That didn’t seem possible, since I do not run a hedge fund.
So I went to an H&R Block near my house in Los Angeles. I always figured that H&Rs were cheesy, full of sad sacks who show up with a jumble of paperwork in a supermarket plastic bag. But much like my first LensCrafters experience, I found H&R to be professional, cheery, competent, and not particularly cheap. There were huge signs proclaiming, “I am here to turn your shoebox into a treasure chest.” My returns would cost $300 to $400, exactly what my longtime accountant charges me. But unlike H&R, my accountant doesn’t throw in free tickets to the Laugh Factory as a promotion. I got the feeling my returns were going to turn out differently than they did with TaxSlayer.com. I didn’t need the Laugh Factory after my TaxSlayer.com returns. I could have bought the Laugh Factory after my TaxSlayer.com returns.
After being offered macaroons and coffee, I was led to tax associate Michael Goldblatt, who wore a suit and a name tag and looked exactly like an accountant. He was nice, knowledgeable, and happy to deal with the jumble of paperwork I had brought in a supermarket plastic bag. I also showed Goldblatt my TaxSlayer.com returns, which were 48 pages long. “Whoa. That’s a book,” he said. Then he looked at my windfall. “The refund is definitely interesting. Somehow the government might give you a call on that one. They might send a car for you.” According to Goldblatt, if I had filed that, the IRS would be the one doing the slaying. I’m going to let him use that one at the Laugh Factory.
Because of my loan-out corporation, Goldblatt said my personal taxes were easy. I had very little to deduct since my corporation deducts expenses before paying me. Compared to the actors he helps with tons of W2s or the prostitute who doesn’t have any W2s at all, I was a simple case. The H&R returns were just 22 pages long and had me owing the IRS $1,227 and owing California $1,160—$2,387 out of my pocket. Not bad. But my summer house was definitely gone.
Determined to see what I’d done wrong, I went back to TaxSlayer.com and started over. This time, I got just $16,695 from the IRS and owed California $21,992. It was clear that I am not smart enough to use TaxSlayer.com. Dale Earnhardt Jr. must be a genius.
I FedExed my forms to my regular accountant, Halbreich Accounting & Tax Services in Staten Island, N.Y. Howie Halbreich started the business 40 years ago and now has more than 3,000 clients. He works with his son, Alan, and has a part-time CPA who is also a full-time firefighter. The only thing I don’t like about these guys is that their e-mails are in ALL CAPS and they never have gotten me a $119,554 refund. Still, I’ve never been audited. And if I were, I know they’d have my back and show up with me to explain all the things I couldn’t. I picture it like a cop procedural, where I start to talk to the IRS and the Halbreichs storm in and tell me to shut the hell up.
Howie told me that
refunds are overrated, and I was smarter to owe a little money this
year. “You don’t need a refund. It’s an interest-free loan to the
government,” he said. I did not see that on a sign at H&R Block.
Unlike Goldblatt, he advised against declaring my home office as an
expense, since—due to the Alternative Minimum Tax—they use the office
expense on my corporation, which also means I won’t depreciate my home
thereby causing more capital gains when I sell it. Their 22-page returns
had me getting a $1,488 refund from the IRS and then giving most of
that to California—$1,019. Still, I was $469 ahead. Better than H&R
Block.
Mark Baumohl, who handles the Family Wealth Group and has a business card that lists his job as “Co-Partner In-Charge,” wasn’t wearing pajamas. Even though he was in a suit—a very nice suit with purple lining—he wasn’t at all what I expected in a high-end accountant. He had a beard, a guitar in his office, and a framed diploma from Humboldt State University. He took all my notes on a yellow legal pad and punched my numbers into an old typewriter with a paper roll printout. He’s had some clients for five generations. He makes house calls to some of his widowed clients. He played me a song. He was so thoughtful and empathetic that my only anxiety was he was going to file my returns to Marlo Thomas.
He did also have a computer with three monitors. And the questions Baumohl asked were less about how much I made than about my parents, my wife, and my son. He was trying to figure out what kinds of things I should be planning for, like whether it was worth putting money in a 529 College Savings Plan for my son and risking the 10 percent penalty if my parents wind up fully funding it. He suggested opening a medical reimbursement plan through my loan-out corporation. His main advice was to never make a life decision based on tax implications. “Don’t let the taxes wag the dog,” he said.
My returns, for which he would charge $1,200, were 25 pages long and had me paying the feds and California $2,592 and $1,952, respectively. He was less aggressive than the Halbreichs—my donation of four boxes of books to the local library was worth $250 to him compared with $400 to H&R Block and $1,250 to the Halbreichs. Small decisions like that added up to me paying $5,013 more than I will with the Halbreichs’ returns. Even though he thought the Halbreichs were a little aggressive, Baumohl said there was nothing fishy. “Based on the income, it’s not unheard of,” he said.
Like former IRS Commissioner Everson told me, paying more for an expensive accountant doesn’t mean he’ll find lots of loopholes that will get me more back—in fact Baumohl sent more money to the government than anyone else. What a higher-end accountant does is look at my financial situation holistically and think long-term. Sure, Goldblatt at H&R Block also had some ideas for changes I could make in my savings, but it isn’t the thrust of his business as it is for Baumohl.
I’m going to stick with Howie. He’s affordable, a little aggressive with the deductions, and knows me. He makes the process painless, which—more than a fat return or even a long-term plan of how to beat the government—is what I’m really looking for. Even if one day he thinks we should meet over something, he’s in Staten Island. Everyone knows there’s no way anyone is going out there.
Google's Page Interview with Bloomberg Businessweek
The original article is from http://www.businessweek.com
Written By Brad Stone on April 04, 2012
If you want to read more, please refer to the link above.
I think we have done really well. There are bets that we made many, many years ago—on Android, on Chrome, on YouTube. Those were long-term bets that we made and they’ve been very successful. All of those things have continued to grow like crazy. We made a more recent one, obviously, which is Google Plus, and that’s a long-term bet as well. We’re not even a year into that and that’s going very well, much better than I expected. There are various worries people have, and we’ll address those, but we have a really good start.
I have over 2 million followers now on Google Plus. A number of other people are even ahead of me. And that’s with real engagement. So I’m very happy with the growth of the core Google Plus network. It doesn’t mean tomorrow it’s going to be bigger than any other social network out there. That’s not realistic. But it’s growing faster, I think, than other services have and I’m very happy with that.
We are in an interesting place in tech where almost none of the big companies—Apple (AAPL), Facebook, Amazon.com (AMZN)—are working together. Why is that?
Big companies have always needed and cooperated in areas where it made sense. I don’t know that I believe there is some huge, strange change in that.
We were real interested in getting instant messaging to work across networks back in the day, and we worked really hard with AOL (AOL) to do that. You know, integration between Google Talk and AOL Instant Messaging. It ended up being a tremendous amount of technical effort. There were some user benefits generated by it, but I’m not sure it was ultimately worth the effort. I would say that my experience with these things is that they have been somewhat difficult.
Google was once incontrovertibly a search company. But what is Google today?
I think you have—I mean, what does it really mean to be a search company? I mean, even at that time, I think at that time and now, basically our soul is the same. I think what we’re about is we’re about using large-scale kind of technology: technology advancements to help people, to make people’s lives better, to make community better. Obviously, our mission was organizing the world’s information and making it universally accessible and useful, and I think we probably missed more of the people part of that than we should have.
In your heart of hearts, do you really feel that getting into social networking has been worth it?
Oh, definitely. One of the things I’m just really excited that we launched is: For the first time you can actually search for a person. You never were able to do that. What I mean by that is, I have this friend, Ben Smith, who works here. That’s not a great name. You know, it’s—
I have some problems with Brad Stone, actually.
Yes, that’s a little bit of a challenged name. But Ben Smith is particularly bad. I guess it’s good if you want to have privacy and it’s bad if you want to have other friends find you. For the first time, we can actually deal with that very well. We can put that Ben Smith with a picture and a search box. Obviously, the search for that will get better over time, but having that ability to put an entity of a person in the search box is really a powerful thing. We have been able to get to there by having Google Plus, by having the social infrastructure we have. That’s super-important.
The Motorola deal hasn’t closed yet, but can you tell more about your plans with that company?
We actually hold a fair number of patents now ourselves, just as Google. We have never really asserted those against anybody. Obviously, we held a lot of search patents, for example. We have somehow been successful without suing other people over intellectual property.
So for us, the general trend of the industry toward being a lot more litigious somehow has just been—it has been a sad thing. There is a lot of money going to lawyers and things, instead of building great products for users. I think that companies usually get into that when they’re toward the end of their life cycle or they don’t have confidence in their abilities to compete naturally.
Is there an Android tablet you’re happy with?
I really like using my Samsung (005930:KS) tablet. I previously used the Motorola Xoom for a while and liked that. I think that those are great experiences, but they’re going to get a lot better. I think that we’re at the pretty early stages of this.
There was a report that Google might brand its own tablets and sell them directly to consumers online. True?
I can’t really comment on rumors.
Do you worry at all that Google has lost a little bit of the trend-setting and innovative positioning it had in its first decade?
No. No. I don’t worry about that at all. And you know, we’re a much bigger company than we were 10 years ago, so we have more resources to do things.
Pretty much everything we’ve done that’s been successful has been sort of a many, many year kind of effort. Even before we started the company, we worked on it for years when we were at Stanford. These things don’t just kind of snap into being, as much as I would like them to. It takes time.
Obviously we don’t talk fully about our plans because we like to keep what we’re doing pretty close to the vest. But I’m not worried that we’re not being ambitious enough in terms of doing things that are really important for people and different for the world. That’s not a worry I have. I think we’re very focused.
Who are you looking for for guidance these days? I mean, obviously still Eric Schmidt and Sergey Brin, but do you have other mentors outside the company? I heard my boss, Mike Bloomberg, is someone you talk to periodically.
Yes. Actually, I was inspired by the bullpens that he’s been running at City Hall, so I have been trying to do some things similar here.
With your seven primary deputies sitting around you?
As companies get big or as any organization gets big, you need the management or the high level of the company talking to each other and you need them to be running their big respective teams or buildings.
The insight I got from Mayor Bloomberg was that it’s maybe more efficient to tell people: “For these hours of the day we’re going to be all together. At these hours of the day, you’re going to be with your team.” You just grab the people you need. It’s much more fluid. It doesn’t have to be scheduled. I’m just trying to get people together for a fixed set of hours in one place.
Apple announced a dividend recently. Did it change your thinking about giving cash back to shareholders as a dividend or a stock buyback?
I think Apple has more cash than we do—
Than everybody, including some governments.
We have nothing to announce at this time.
People have been critical of your values of late. As in: As Google tries to compete with Facebook or Apple, is it sacrificing the contract they established with users 15 years ago?
One day you can import all of your Gmail contacts into Facebook and the next day try to export those out and they would not let you do that. It’s clearly for competitive reasons that they do that.
According to the Steve Jobs biography by Walter Isaacson, when you became CEO you went to Jobs for advice. I know you had your differences at the end around Android, but what did you take from him as a mentor and a friend?
I think the Android differences were actually for show. I had a relationship with Steve. I wouldn’t say I spent a lot of time with him over the years, but I saw him periodically. Curiously enough, actually, he requested that meeting. He sent me an e-mail and said: “Hey, you want to get together and chat?” I said, “Sure, I’ll come over.” And we had a very nice talk. We always did when we had a discussion generally.
He was quite sick. I took it as an honor that he wanted to spend some time with me. I figured he wanted to spend time with his family at that point. He had a lot of interesting insights about how to run a company and that was pretty much what we discussed.
Wait, the fury around Android was for show?
I think that served their interests. For a lot of companies, it’s useful for them to feel like they have an obvious competitor and to rally around that. I personally believe that it’s better to shoot higher. You don’t want to be looking at your competitors. You want to be looking at what’s possible and how to make the world better.
Written By Brad Stone on April 04, 2012
If you want to read more, please refer to the link above.
On April 3, Google (GOOG) co-founder and Chief Executive Officer Larry Page sat down with Bloomberg Businessweek
to discuss his first year at the helm of the technology giant, his
plans for the future, and the company’s relationships with its
competitors. Excerpts from our forthcoming magazine story:
When
you took over as CEO, one of your goals was to take the clear
accountability and decision-making of a division like Android and move
that out to the rest of the company. How have you done?I think we have done really well. There are bets that we made many, many years ago—on Android, on Chrome, on YouTube. Those were long-term bets that we made and they’ve been very successful. All of those things have continued to grow like crazy. We made a more recent one, obviously, which is Google Plus, and that’s a long-term bet as well. We’re not even a year into that and that’s going very well, much better than I expected. There are various worries people have, and we’ll address those, but we have a really good start.
I have over 2 million followers now on Google Plus. A number of other people are even ahead of me. And that’s with real engagement. So I’m very happy with the growth of the core Google Plus network. It doesn’t mean tomorrow it’s going to be bigger than any other social network out there. That’s not realistic. But it’s growing faster, I think, than other services have and I’m very happy with that.
We are in an interesting place in tech where almost none of the big companies—Apple (AAPL), Facebook, Amazon.com (AMZN)—are working together. Why is that?
Big companies have always needed and cooperated in areas where it made sense. I don’t know that I believe there is some huge, strange change in that.
We were real interested in getting instant messaging to work across networks back in the day, and we worked really hard with AOL (AOL) to do that. You know, integration between Google Talk and AOL Instant Messaging. It ended up being a tremendous amount of technical effort. There were some user benefits generated by it, but I’m not sure it was ultimately worth the effort. I would say that my experience with these things is that they have been somewhat difficult.
Google was once incontrovertibly a search company. But what is Google today?
I think you have—I mean, what does it really mean to be a search company? I mean, even at that time, I think at that time and now, basically our soul is the same. I think what we’re about is we’re about using large-scale kind of technology: technology advancements to help people, to make people’s lives better, to make community better. Obviously, our mission was organizing the world’s information and making it universally accessible and useful, and I think we probably missed more of the people part of that than we should have.
In your heart of hearts, do you really feel that getting into social networking has been worth it?
Oh, definitely. One of the things I’m just really excited that we launched is: For the first time you can actually search for a person. You never were able to do that. What I mean by that is, I have this friend, Ben Smith, who works here. That’s not a great name. You know, it’s—
I have some problems with Brad Stone, actually.
Yes, that’s a little bit of a challenged name. But Ben Smith is particularly bad. I guess it’s good if you want to have privacy and it’s bad if you want to have other friends find you. For the first time, we can actually deal with that very well. We can put that Ben Smith with a picture and a search box. Obviously, the search for that will get better over time, but having that ability to put an entity of a person in the search box is really a powerful thing. We have been able to get to there by having Google Plus, by having the social infrastructure we have. That’s super-important.
The Motorola deal hasn’t closed yet, but can you tell more about your plans with that company?
It’s pretty hard for
me to say much more about that than I have previously, which is just
we’re really excited for the opportunity to arrive. What we see, having
these amazing devices in your pocket. Every time I get a new one, it’s
like a kid on Christmas. I mean, it’s just totally—my life has changed.
It’s kind of like the experience of first using the Internet or using a
computer as you get these new phones.
How did patents figure into the Motorola deal?We actually hold a fair number of patents now ourselves, just as Google. We have never really asserted those against anybody. Obviously, we held a lot of search patents, for example. We have somehow been successful without suing other people over intellectual property.
So for us, the general trend of the industry toward being a lot more litigious somehow has just been—it has been a sad thing. There is a lot of money going to lawyers and things, instead of building great products for users. I think that companies usually get into that when they’re toward the end of their life cycle or they don’t have confidence in their abilities to compete naturally.
Is there an Android tablet you’re happy with?
I really like using my Samsung (005930:KS) tablet. I previously used the Motorola Xoom for a while and liked that. I think that those are great experiences, but they’re going to get a lot better. I think that we’re at the pretty early stages of this.
There was a report that Google might brand its own tablets and sell them directly to consumers online. True?
I can’t really comment on rumors.
Do you worry at all that Google has lost a little bit of the trend-setting and innovative positioning it had in its first decade?
No. No. I don’t worry about that at all. And you know, we’re a much bigger company than we were 10 years ago, so we have more resources to do things.
Pretty much everything we’ve done that’s been successful has been sort of a many, many year kind of effort. Even before we started the company, we worked on it for years when we were at Stanford. These things don’t just kind of snap into being, as much as I would like them to. It takes time.
Obviously we don’t talk fully about our plans because we like to keep what we’re doing pretty close to the vest. But I’m not worried that we’re not being ambitious enough in terms of doing things that are really important for people and different for the world. That’s not a worry I have. I think we’re very focused.
Who are you looking for for guidance these days? I mean, obviously still Eric Schmidt and Sergey Brin, but do you have other mentors outside the company? I heard my boss, Mike Bloomberg, is someone you talk to periodically.
Yes. Actually, I was inspired by the bullpens that he’s been running at City Hall, so I have been trying to do some things similar here.
With your seven primary deputies sitting around you?
As companies get big or as any organization gets big, you need the management or the high level of the company talking to each other and you need them to be running their big respective teams or buildings.
The insight I got from Mayor Bloomberg was that it’s maybe more efficient to tell people: “For these hours of the day we’re going to be all together. At these hours of the day, you’re going to be with your team.” You just grab the people you need. It’s much more fluid. It doesn’t have to be scheduled. I’m just trying to get people together for a fixed set of hours in one place.
Apple announced a dividend recently. Did it change your thinking about giving cash back to shareholders as a dividend or a stock buyback?
I think Apple has more cash than we do—
Than everybody, including some governments.
We have nothing to announce at this time.
People have been critical of your values of late. As in: As Google tries to compete with Facebook or Apple, is it sacrificing the contract they established with users 15 years ago?
I would—obviously—say
no. Producing the best thing we possibly can for users is our paramount
thing. I think we have demonstrated that over a very long period of time
with a whole variety of different issues we’ve faced around the world.
We
would love to have better access to data that’s out there. We find it
frustrating that we don’t. It’s the tendency of the Internet to move
into a well-guarded state. We’ve pushed pretty hard, for example, around
just having contact reciprocity. I mean, our friends at Facebook have
imported many, many, many Gmail addresses and exported zero addresses.
And they claim that users don’t own that data, which is a totally
specious claim. It’s completely unreasonable.One day you can import all of your Gmail contacts into Facebook and the next day try to export those out and they would not let you do that. It’s clearly for competitive reasons that they do that.
According to the Steve Jobs biography by Walter Isaacson, when you became CEO you went to Jobs for advice. I know you had your differences at the end around Android, but what did you take from him as a mentor and a friend?
I think the Android differences were actually for show. I had a relationship with Steve. I wouldn’t say I spent a lot of time with him over the years, but I saw him periodically. Curiously enough, actually, he requested that meeting. He sent me an e-mail and said: “Hey, you want to get together and chat?” I said, “Sure, I’ll come over.” And we had a very nice talk. We always did when we had a discussion generally.
He was quite sick. I took it as an honor that he wanted to spend some time with me. I figured he wanted to spend time with his family at that point. He had a lot of interesting insights about how to run a company and that was pretty much what we discussed.
Wait, the fury around Android was for show?
I think that served their interests. For a lot of companies, it’s useful for them to feel like they have an obvious competitor and to rally around that. I personally believe that it’s better to shoot higher. You don’t want to be looking at your competitors. You want to be looking at what’s possible and how to make the world better.
Thursday, April 12, 2012
'People Problems' Sink Most Startups
The original article is from http://www.businessweek.com
Written By Karen E. Klein on April 02, 2012
If you want to read more, please refer to the link above.
It’s not undercapitalization, lack of planning, or failure to test the market that most often cause startup business failures, says Noam Wasserman, a 42-year-old associate professor at Harvard Business School. Instead, nearly two-thirds of early stage failures stem from people problems—who does what and how they’re compensated, says Wasserman, who has written a new book, The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (Princeton University Press, 2012). I spoke to Wasserman recently about his conclusions on startup failure and how he recommends would-be entrepreneurs increase their odds of success. Edited excerpts of our conversation follow.
You found research showing that bad personnel decisions—about co-founders, equity splits, hires, and investors—drive most early failures. Let’s talk about partners and co-founders and what goes on there.
The most common source of finding co-founders is people you have social but not professional relationships with—friends and relatives. It’s understandable, but my quantitative analysis shows that these are the least stable of all the startup teams. There are two Achilles’ heels: You already trust each other in the social realm and you assume that will map to trust in the professional realm, which it does not necessarily do. And you’re not going to have the in-depth conversations about competence and skills that you would have with a business acquaintance or a stranger. That’s because you assume you don’t need to talk and you are hesitant to raise doubts because you fear they could blow up the social relationship that is so valuable to you.
You studied both small startups that are bootstrapped and higher-potential startups that often attract outside capital. What are the big differences in decision-making?
The smaller businesses are often not as aware of some of the nuances in decision-making and they are playing with fire more often. For instance, half of tech startups co-found with social-relationship partners—that’s even more common in smaller startups. About one-third of tech companies split the equity equally up front; that goes to 70 percent for smaller bootstrapped startups.
Written By Karen E. Klein on April 02, 2012
If you want to read more, please refer to the link above.
It’s not undercapitalization, lack of planning, or failure to test the market that most often cause startup business failures, says Noam Wasserman, a 42-year-old associate professor at Harvard Business School. Instead, nearly two-thirds of early stage failures stem from people problems—who does what and how they’re compensated, says Wasserman, who has written a new book, The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup (Princeton University Press, 2012). I spoke to Wasserman recently about his conclusions on startup failure and how he recommends would-be entrepreneurs increase their odds of success. Edited excerpts of our conversation follow.
You found research showing that bad personnel decisions—about co-founders, equity splits, hires, and investors—drive most early failures. Let’s talk about partners and co-founders and what goes on there.
The most common source of finding co-founders is people you have social but not professional relationships with—friends and relatives. It’s understandable, but my quantitative analysis shows that these are the least stable of all the startup teams. There are two Achilles’ heels: You already trust each other in the social realm and you assume that will map to trust in the professional realm, which it does not necessarily do. And you’re not going to have the in-depth conversations about competence and skills that you would have with a business acquaintance or a stranger. That’s because you assume you don’t need to talk and you are hesitant to raise doubts because you fear they could blow up the social relationship that is so valuable to you.
You studied both small startups that are bootstrapped and higher-potential startups that often attract outside capital. What are the big differences in decision-making?
The smaller businesses are often not as aware of some of the nuances in decision-making and they are playing with fire more often. For instance, half of tech startups co-found with social-relationship partners—that’s even more common in smaller startups. About one-third of tech companies split the equity equally up front; that goes to 70 percent for smaller bootstrapped startups.
Wednesday, April 11, 2012
The Secret to Mitt's Success: Harvard
The original article is from http://www.businessweek.com
Written By David J. Lynch on March 29, 2012
If you want to read more, please refer to the link above.
Romney reached Harvard in 1971 after graduating from Brigham Young University and completing a Mormon mission overseas. He enrolled in a joint law and business school program, earning two graduate degrees in four years. Studious and ambitious, he thrived, reveling in the intellectual challenge and impressing classmates with his drive and discipline. “He had a gravitas,” says Howard Brownstein, a law school classmate. “You thought: This guy could be president. And I remember thinking that in 1971.”
Brains and determination were taken for granted at the nation’s premier university. Romney stood out more for the intensity of his work ethic and his commitment to his Mormon faith. “He was very serious about his religion and his relationship with God,” says Mark Mazo, a member of Romney’s law school study group. “That was highly unusual at the time.” At 24, Romney was older than many of his classmates. Married and a father, he lived with his wife, Ann, in an off-campus rental in suburban Belmont. One night, while the Romneys and Brownsteins were strolling through town, some local toughs began verbally harassing them. Romney immediately positioned himself between his wife and the townies in a way Brownstein recalls as “chivalrous.”
Romney didn’t indulge in that part of campus life. His habitat was the business school, across the Charles River in Allston. Romney’s bottom-line way of thinking was especially suited to the MBA program’s emphasis on isolating key questions and finding answers by vacuuming up all available data. “Mitt is the ultimate pragmatist. He’s only interested in what will work,” says Brownstein, who later worked alongside Romney at Boston Consulting Group and now runs a crisis-management firm in Pennsylvania.
At rival Yale University, law students often went on to work in government. Harvard sent more graduates to legal careers on Wall Street or in the corporate world. The law school was a cerebral institution, populated with aspiring politicians and devoted to understanding the norms that govern society. The business school was defined by empiricism—what worked and what made money. Harvard faculty and students tended to regard the business school with a mix of disdain and condescension; its students were seen as academically suspect. Overwhelmingly white and male—just 11 percent of Romney’s HBS classmates were women—the business school was insulated from the forces buffeting society. For clean-cut business students, venturing onto the main university campus meant running a gantlet of hostile looks. “You felt like they didn’t want you to be there,” says Mitch Kurz, who was a year behind Romney and later became chief executive officer of Wunderman, an advertising agency.
The MBA program traditionally had trained managers to run large corporations. A course that dealt with retail franchises, Management of Service Operations, became one of the most popular. As economic growth slowed and inflation soared, employers such as General Motors (GM) and Ford Motor (F) took the extraordinary step of rescinding job offers to graduating students. “It was the last part of an era at HBS,” says Kurz.
Romney often touts his great success in private equity as evidence of his ability to solve tough problems and turn around troubled institutions. The data-driven approach he learned at Harvard had a lot to do with that. Romney’s former classmates say the imprint of his Harvard years is still very apparent in his presidential campaign. Howard Serkin, a business school study group partner who is now chairman of Heritage Capital Group, an investment banking firm in Jacksonville, Fla., says Romney’s 59-point economic plan is classic Harvard Business School: impressive, if numbing, in its detail. Even the candidate’s history of shifting positions on issues to adapt to new conditions derives from the unsentimental brand of analysis he learned at HBS, says Kurz. Romney “seems to be doing what they teach you in business school.”
The bottom line: At Harvard in the ’70s, Romney learned the data-driven method of problem solving that made him rich—and defines his campaign.
Written By David J. Lynch on March 29, 2012
If you want to read more, please refer to the link above.
Romney reached Harvard in 1971 after graduating from Brigham Young University and completing a Mormon mission overseas. He enrolled in a joint law and business school program, earning two graduate degrees in four years. Studious and ambitious, he thrived, reveling in the intellectual challenge and impressing classmates with his drive and discipline. “He had a gravitas,” says Howard Brownstein, a law school classmate. “You thought: This guy could be president. And I remember thinking that in 1971.”
Brains and determination were taken for granted at the nation’s premier university. Romney stood out more for the intensity of his work ethic and his commitment to his Mormon faith. “He was very serious about his religion and his relationship with God,” says Mark Mazo, a member of Romney’s law school study group. “That was highly unusual at the time.” At 24, Romney was older than many of his classmates. Married and a father, he lived with his wife, Ann, in an off-campus rental in suburban Belmont. One night, while the Romneys and Brownsteins were strolling through town, some local toughs began verbally harassing them. Romney immediately positioned himself between his wife and the townies in a way Brownstein recalls as “chivalrous.”
Romney didn’t indulge in that part of campus life. His habitat was the business school, across the Charles River in Allston. Romney’s bottom-line way of thinking was especially suited to the MBA program’s emphasis on isolating key questions and finding answers by vacuuming up all available data. “Mitt is the ultimate pragmatist. He’s only interested in what will work,” says Brownstein, who later worked alongside Romney at Boston Consulting Group and now runs a crisis-management firm in Pennsylvania.
At rival Yale University, law students often went on to work in government. Harvard sent more graduates to legal careers on Wall Street or in the corporate world. The law school was a cerebral institution, populated with aspiring politicians and devoted to understanding the norms that govern society. The business school was defined by empiricism—what worked and what made money. Harvard faculty and students tended to regard the business school with a mix of disdain and condescension; its students were seen as academically suspect. Overwhelmingly white and male—just 11 percent of Romney’s HBS classmates were women—the business school was insulated from the forces buffeting society. For clean-cut business students, venturing onto the main university campus meant running a gantlet of hostile looks. “You felt like they didn’t want you to be there,” says Mitch Kurz, who was a year behind Romney and later became chief executive officer of Wunderman, an advertising agency.
The MBA program traditionally had trained managers to run large corporations. A course that dealt with retail franchises, Management of Service Operations, became one of the most popular. As economic growth slowed and inflation soared, employers such as General Motors (GM) and Ford Motor (F) took the extraordinary step of rescinding job offers to graduating students. “It was the last part of an era at HBS,” says Kurz.
Romney often touts his great success in private equity as evidence of his ability to solve tough problems and turn around troubled institutions. The data-driven approach he learned at Harvard had a lot to do with that. Romney’s former classmates say the imprint of his Harvard years is still very apparent in his presidential campaign. Howard Serkin, a business school study group partner who is now chairman of Heritage Capital Group, an investment banking firm in Jacksonville, Fla., says Romney’s 59-point economic plan is classic Harvard Business School: impressive, if numbing, in its detail. Even the candidate’s history of shifting positions on issues to adapt to new conditions derives from the unsentimental brand of analysis he learned at HBS, says Kurz. Romney “seems to be doing what they teach you in business school.”
The bottom line: At Harvard in the ’70s, Romney learned the data-driven method of problem solving that made him rich—and defines his campaign.
Sunday, April 8, 2012
Best Buy's Amazonian Nightmare
The original article is from http://www.businessweek.com
Written By Roben Farzad and Kenton Powell on March 29, 2012
If you want to read more, please refer to the link above.
Best Buy’s moves show how even those traditional merchants that have managed to trump their brick-and-mortar rivals can’t automatically count on picking up their former customers. Channeling Johnny Cochran, Gimme Credit analyst Carol Levenson explains: “If you don’t perform, you must transform. … No amount of adjustments or restatements can obscure the fact that the company returned to negative comparable-store sales in the fourth quarter … and posted a second straight year of comparable-store sales declines.” All this, she says, despite the fact that ”Best Buy was handed a gift when Circuit City left the building.”
One retailing shift that’s likely at work here is a phenomenon known as “showrooming,” in which window shoppers go to one of Best Buy’s well-appointed stores to avail themselves of quality face time with gadgets and salespeople (think inventory and salary costs) before consummating the transaction elsewhere—online. Most often, they do that through Amazon.com, where shipping is frequently free and, depending on your state, sales tax does not apply. Fueling that growing practice are price-comparison apps such as Amazon’s Price Check, which lets those obnoxiously savvy smartphone users scan a particular item’s barcode at a store and immediately know who has the best deal on the Web. Consumers can then just buy it right on their phone. It’s like a scene from the vintage cartoon comedy The Jetsons, but traditional retailers with hundreds of costly stores, such as Best Buy, Sears Holdings, and even Wal-Mart, aren’t laughing.
Written By Roben Farzad and Kenton Powell on March 29, 2012
If you want to read more, please refer to the link above.
Best Buy’s moves show how even those traditional merchants that have managed to trump their brick-and-mortar rivals can’t automatically count on picking up their former customers. Channeling Johnny Cochran, Gimme Credit analyst Carol Levenson explains: “If you don’t perform, you must transform. … No amount of adjustments or restatements can obscure the fact that the company returned to negative comparable-store sales in the fourth quarter … and posted a second straight year of comparable-store sales declines.” All this, she says, despite the fact that ”Best Buy was handed a gift when Circuit City left the building.”
One retailing shift that’s likely at work here is a phenomenon known as “showrooming,” in which window shoppers go to one of Best Buy’s well-appointed stores to avail themselves of quality face time with gadgets and salespeople (think inventory and salary costs) before consummating the transaction elsewhere—online. Most often, they do that through Amazon.com, where shipping is frequently free and, depending on your state, sales tax does not apply. Fueling that growing practice are price-comparison apps such as Amazon’s Price Check, which lets those obnoxiously savvy smartphone users scan a particular item’s barcode at a store and immediately know who has the best deal on the Web. Consumers can then just buy it right on their phone. It’s like a scene from the vintage cartoon comedy The Jetsons, but traditional retailers with hundreds of costly stores, such as Best Buy, Sears Holdings, and even Wal-Mart, aren’t laughing.
Professor Bernanke Explains the Trouble With Gold
The original article is from http://www.businessweek.com
Written By Peter Coy on March 26, 2012
If you want to read more, please refer to the link above.
Bernanke warmed up slowly in his March 20 lecture (the first of four to the same class at GWU), reviewing the basic notion that “to stimulate an economy, you lower interest rates.” But soon he was on to the perils of the “liquidationist” theory of Andrew Mellon, the Treasury secretary who is notorious for advising President Herbert Hoover to “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate … it will purge the rottenness out of the system.” Bernanke told the students: “Sounds pretty heartless and I think it was.”
From there, Bernanke went on to explain how the Fed helped cause the Great Depression by keeping interest rates high to defend the gold standard, and by letting banks fail. Bernanke conceded that a gold standard might keep inflation lower over the long haul, but at the cost of severe fluctuations in economic output. What’s more, he questioned whether a commitment to a gold standard would even be credible. The Bank of England stuck to a gold standard for decades because “everybody knew that their first, second, third, and fourth priority was staying on gold,” Bernanke told the students. In a modern democracy like the U.S., in contrast, the pressure to devalue the dollar to stimulate growth would be irresistible—and speculators, realizing that, would undermine the gold standard by demanding gold instead of currency.
Written By Peter Coy on March 26, 2012
If you want to read more, please refer to the link above.
Bernanke warmed up slowly in his March 20 lecture (the first of four to the same class at GWU), reviewing the basic notion that “to stimulate an economy, you lower interest rates.” But soon he was on to the perils of the “liquidationist” theory of Andrew Mellon, the Treasury secretary who is notorious for advising President Herbert Hoover to “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate … it will purge the rottenness out of the system.” Bernanke told the students: “Sounds pretty heartless and I think it was.”
From there, Bernanke went on to explain how the Fed helped cause the Great Depression by keeping interest rates high to defend the gold standard, and by letting banks fail. Bernanke conceded that a gold standard might keep inflation lower over the long haul, but at the cost of severe fluctuations in economic output. What’s more, he questioned whether a commitment to a gold standard would even be credible. The Bank of England stuck to a gold standard for decades because “everybody knew that their first, second, third, and fourth priority was staying on gold,” Bernanke told the students. In a modern democracy like the U.S., in contrast, the pressure to devalue the dollar to stimulate growth would be irresistible—and speculators, realizing that, would undermine the gold standard by demanding gold instead of currency.
Sunday, April 1, 2012
Corporate America to Small Biz: Sell to Us
The original article is from http://www.businessweek.com
Written By John Tozzi on March, 2012
If you want to read more, please refer to the link above.
Corporate America has been under fire for decades for shipping work overseas to lower-cost suppliers. Now a group of multinationals led by IBM (IBM) say they want to send more business to Main Street U.S.A. companies. More than a dozen companies that spend a combined $300 billion on outside suppliers have created Supplier Connection, a website where small businesses can register for the chance to do business with the big guys. The idea is that small companies can complete a single application to be considered for contracts by all the corporations in the group.
Here’s how it works: Companies with less than $50 million in revenue or 500 employees sign up on the site and enter detailed information about what services or products they sell, their company finances, and their certifications. While small businesses can’t browse contract opportunities on the site, large companies can draw on the database when scouting potential vendors.
The challenge for large companies is, “How do I find you, and how do I accredit you?” Beyond such altruism, larger companies may find more nimble or competitive suppliers who may work harder to please a big client, says Kevin Lyons, a professor of supply chain management at Rutgers Business School. “With a small business, the hunger to do more business, to actually interact with such a large firm allows them to adapt and change,” Lyons said.
Still, the advantage for buyers is questionable, says Joel Sutherland, managing director of the Supply Chain Management Institute at the University of San Diego. “It’s building complexity in, not simplifying it,” he says. ”I don’t think there’s a strong business case” for turning to small business suppliers. Sutherland, a former vice president of operations at Japanese auto supplier Denso, adds: “I think it’s more of a halo effect.”
Written By John Tozzi on March, 2012
If you want to read more, please refer to the link above.
Corporate America has been under fire for decades for shipping work overseas to lower-cost suppliers. Now a group of multinationals led by IBM (IBM) say they want to send more business to Main Street U.S.A. companies. More than a dozen companies that spend a combined $300 billion on outside suppliers have created Supplier Connection, a website where small businesses can register for the chance to do business with the big guys. The idea is that small companies can complete a single application to be considered for contracts by all the corporations in the group.
Here’s how it works: Companies with less than $50 million in revenue or 500 employees sign up on the site and enter detailed information about what services or products they sell, their company finances, and their certifications. While small businesses can’t browse contract opportunities on the site, large companies can draw on the database when scouting potential vendors.
The challenge for large companies is, “How do I find you, and how do I accredit you?” Beyond such altruism, larger companies may find more nimble or competitive suppliers who may work harder to please a big client, says Kevin Lyons, a professor of supply chain management at Rutgers Business School. “With a small business, the hunger to do more business, to actually interact with such a large firm allows them to adapt and change,” Lyons said.
Still, the advantage for buyers is questionable, says Joel Sutherland, managing director of the Supply Chain Management Institute at the University of San Diego. “It’s building complexity in, not simplifying it,” he says. ”I don’t think there’s a strong business case” for turning to small business suppliers. Sutherland, a former vice president of operations at Japanese auto supplier Denso, adds: “I think it’s more of a halo effect.”
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