October 2007 Archives

October 2, 2007

eBay gets buyer’s remorse over Skype

That’s according the the “Good Morning Silicon Valley” newsletter:

In what will undoubtedly be a blow to the Skype founders’ seller rating, eBay finally acknowledged that its bid for the VoIP firm may have been a tad overenthusiastic and that whatever expectations it had were not being met. EBay announced that in the quarter just ended, it will take $1.4 billion in write-offs and charges related to the Skype acquisition. About $530 million will go to former Skype shareholders to help them forget about those additional performance-based payouts. And eBay will write off about $900 million in Skype-related “goodwill” to more accurately reflect the acquisition’s value. And just in case the message wasn’t clear, Skype co-founder Niklas Zennstrom was eased out of the CEO’s office and given the non-executive chairman’s seat at the Skype board table.

Filed under Mergers and Acquisitions, Telecommunications by

California economy weak, but no recession, according to Anderson report

Mortgage defaults and a “sustained lull” in home building will weigh on California’s economy for at least another year but will not tip the state into a recession, according to UCLA Anderson Forecast. “Overall, our forecast is that California is in for at least another year of these economic doldrums, with rising unemployment, weak job growth and a slowdown in all broad indicators,” the report said and “Barring a substantial worsening in housing or another source of weakness suddenly appearing, California’s sluggish economy will not spiral into a full-blown recession”. Economist Ryan Ratcliff of the forecasting unit wrote in the report that rising mortgage defaults in California have begun to slow payroll job growth and lift the state’s unemployment rate. Mortgage-related job losses have “swamped” financial service payrolls while construction payrolls are being trimmed, Ratcliff wrote. However, other sectors are adding employees so California will maintain very weak payroll growth through late 2008.

Filed under California Economy by

Falling dollar pushing up India outsourcing costs

Interesting article in the San Francisco Chronicle:

Around the globe, the falling dollar is touching everyone in the business world, from Saudi oil princes to U.S. computer-makers, making American goods and services cheaper while raising the cost of foreign products.

One effect that hasn’t received much attention is how the dollar’s relentless drop is throwing a bit of sand into the gears of India’s vaunted technology machine. That movement of technology operations to India is a trend that has emerged as a prime symbol of globalization in recent years.

The reason U.S. companies went to India for technology in the first place was to save money. Workers there in the outsourcing sector earn roughly one-eighth as much as their American counterparts, according to experts on India business. And software development services that might cost $200 to $275 per person per hour in the United States can be purchased from an Indian company for $25 an hour or less, those experts note.

The past year, the dollar has fallen from about 45 rupees to about 39. That 13 percent drop, on top of significant pay increases there, has shaved part of the Indian cost advantage, forcing both buyers and sellers of technology services to adapt. And economists expect the rupee to strengthen over the long term as India’s economy matures.

“We are facing some tough questions. It’s not an easy process,” said GK Murthy, senior vice president with Sierra Atlantic, a Fremont business software services company that does most of its programming in India.

One ironic bit of fallout from the falling dollar: Big Indian software companies are stepping up their hiring of American tech workers, who have suddenly become a lot cheaper to employ. For example, Bangalore technology giant Wipro Technologies recently unveiled a plan for a software development center in the Atlanta area that ultimately could hire 500 programmers.

Full article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/01/BU6USGDH9.DTL&feed=rss.business

Filed under India, Information Technology by

October 3, 2007

Sempra Wins $172M in dispute with Argentine gas companies

The International Centre for Settlement of Investment Disputes in Washington, D.C., has awarded Sempra Energy $172 million according to a report in the San Diego Business Journal. The award was to settle a 2002 dispute involving the company’s 43 percent ownership in two Argentine natural gas holding companies. “We hope that the government of Argentina will honor its legal obligations as we seek immediate enforcement of the award,” said Javade Chaudhri, executive vice president and general counsel for Sempra. Sempra had the interest in Sodigas Pampeana and Sodigas Sur. In a statement, Sempra says the dispute involved its efforts to recover the utilities’ diminution in value that occurred as a result of measures taken by the Argentine government in 2002.

Filed under Argentina, Energy Industry, Legal and Criminal Issues by

October 4, 2007

U.S. “deletes” California government domains

The U.S. General Services Administration accidentally “deleted” government website addresses for entire State of California yesterday. As a result, state government websites were unavailable to the public for most of the day until the system was restored late Tuesday. As explained in Network World:

Even the government shudders when someone says they’re from the government and they’re here to help. Case in point: A hacker’s diversion of traffic from a California county government Web site to a porn purveyor spiraled into IT chaos yesterday after a countermeasure applied from Washington essentially “deleted the ca.gov domain.”

Order was restored only after seven hours of frenzied coast-to-coast communications and a “forced propagation” of ca.gov network systems, according to Jim Hanacek, public information officer for the California Department of Technology Services.

“We don’t for sure have the whole picture, but as we understand it, there was some event at the Transportation Authority of Marin Country where their site got hacked,” Hanacek told me this afternoon. Traffic was being redirected from that site to one featuring pornography.

A department within the U.S. General Services Administration in Washington oversees and polices the .gov domain. “The federal government saw this incorrect use of ca.gov and they made a change at a much more global level than probably was necessary and it started taking down all of our ca.gov domain,” says Hanacek. “That impacted Web access and e-mail services.”

A Network World reader whose brother works for a California state agency forwarded me an e-mail alert that his brother received: “The Department of Technology Services (DTS) has notified us that the Federal Government inadvertently deleted the CA.GOV domain. As the evening progresses you may experience an impact in your ability to access some Web sites and exchange e-mail. DTS is working with their federal counterparts to restore service as quickly as possible but service may not be restored until tomorrow morning.”

The change from Washington was made around noontime yesterday on the West Coast … and things quickly got worse. “Unfortunately there was no prior notification, they just made the change and sent us an e-mail to one of our administrators who wouldn’t be a normal contact,” Hanacek says. “Once that person saw the e-mail and started looking we determined how serious this could be and we opened our emergency operations center. Unfortunately that was about 3 in the afternoon and folks back East were already going home, so it took us some time to get hold of the right people in the General Service Administration to get this address reinstated.”

Those corrections began between 4 and 5 p.m. PT but didn’t restore full normalcy until about 7:30 p.m. Hanacek indicated that California’s IT people will be having a chat with their Washington counterparts: “We’ll certainly be discussing how we should be notified of a change of this magnitude.”

Filed under Information Technology, U.S. Government by

October 5, 2007

Paramount steps into a mine field

Paramount Vantage, the Los Angeles distributor of Kite Runner, has decided to delay the release of the film because of concerns over the safety of it’s child actors, and the possibility that it could set off ethnic violence in Afghanistan. As reported in the New York Times:

The boys (actors) and their relatives are now accusing the filmmakers of mistreatment, and warnings have been relayed to the studio from Afghan and American officials and aid workers that the movie could aggravate simmering enmities between the politically dominant Pashtun and the long-oppressed Hazara.

In an effort to prevent not only a public-relations disaster but also possible violence, studio lawyers and marketing bosses have employed a stranger-than-fiction team of consultants. In August they sent a retired Central Intelligence Agency counterterrorism operative in the region to Kabul to assess the dangers facing the child actors. And on Sunday a Washington-based political adviser flew to the United Arab Emirates to arrange a safe haven for the boys and their relatives.

“If we’re being overly cautious, that’s O.K.,” Karen Magid, a lawyer for Paramount, said. “We’re in uncharted territory.” In interviews, more than a dozen people involved in the studio’s response described grappling with vexing questions: testing the limits of corporate responsibility, wondering who was exploiting whom and pondering the price of on-screen authenticity.

The Kite Runner is based on the best-selling novel by Khaled Hosseini that spans three decades of war in Afghanistan. It is about a friendship between two Afghan boys- one a Pashtun and one a Hazara, but the storyline includes a rape of the Hazara boy by a Pashtun. The film’s director, Marc Forster made the film in Dari, an Afghan language. He has said that casting the two young Afghan actors did not seem risky at the time, but the situation there has since deteriorated and ethnic tensions are on the rise. In late July, violence worsened in Kabul, so Paramount executives turned to lobbyists for Viacom- their Parent Company, for help. They recommended that John Kiriakou, a retired C.I.A. operative with experience in the region, be sent to assess the situation. As the New York Times reported, Mr. Kiriakou’s briefing “could make a pretty good movie by itself”:

A specialist on Islam at the State Department nearly wept envisioning a “Danish-cartoons situation,” Mr. Kiriakou said. An Afghan literature professor, he added, said Paramount was “willing to burn an already scorched nation for a fistful of dollars.” The head of an Afghan political party said the movie would energize the Taliban. Nearly everyone Mr. Kiriakou met said that the boys had to be removed from Afghanistan for their safety. And a Hazara member of Parliament warned that Pashtun and Hazara “would be killing each other every night” in response to the film’s depiction of them. None of the interviewees had seen the movie.

While the Taliban destroyed all movie theaters in Afghanistan, bootleg DVDs often appear on the streets of Kabul shortly after a major film is released. It is likely that Kite Runner will be released after some time has passed and the safety of the child actors can be assured.

Filed under Afghanistan, Media and Entertainment, z9-Uncategorized by

October 7, 2007

Shades of ping-pong diplomacy?

That’s what is being reported as North Korean Karate team visits L.A.

In a visit already drawing comparisons to the “ping pong diplomacy” between the U.S. and China in the 1970s, a team of North Korean masters of the martial art tae kwon do is expected to arrive in Los Angeles on Thursday for an unprecedented 13-day American tour. In Los Angeles, the 18 North Koreans are expected to be joined by American and South Korean practitioners of the ancient Korean combat art in a three-hour performance. They also will spend the day hobnobbing at the quintessentially American institution, Warner Brothers Studios, before traveling to San Francisco; Cedar Rapids, Iowa; Louisville, Ky.; and Atlanta.

Full story at this link: : http://www.msnbc.msn.com/id/21000352/

Filed under Foreign Relations, North Korea, z9-Uncategorized by

Hollywood steps in it again, or did they?

ABC Studios is taking heat for a comment made by one of the characters in it’s popular “Desperate Housewives” series. The controversial scene occurred when character “Susan” – played by actress Teri Hatcher, tells her doctor: “OK, before we go any further, can I check those diplomas? Because I would just like to make sure they are not from some med school in the Philippines.” Filipinos take pride in the quality of their medical professional, so this caused quite a stir. As reported in Global Nation and the Philippine Daily Inquirer:

Many Filipino-Americans found the apology issued by ABC Studios and the show’s producers insufficient. A broad alliance of Filipino-American groups said it wanted the TV network to take concrete steps to correct its mistake, such as holding cultural sensitivity and diversity awareness training for its management and staff. Rico Foz, executive vice president of the National Alliance for Filipino Concerns, said the group was demanding that the ABC television network immediately edit out the controversial scene… The remarks sparked protests from the Philippine Congress and presidential palace and prompted a letter to the show’s producers from the Philippine consulate in Los Angeles.

State Senator Leland Yee (D-San Francisco/San Mateo) also jumped on the opportunity to make some political hay out of the situation and posted this statement on his website:

As a senator who represents the largest Filipino community outside of the Philippines, I am appalled that the producers and writers at ABC found this type of humor acceptable, This desperate attempt at humor is offensive and has no place in our community. Filipinos, including those trained outside of the United States, have made invaluable impacts on the medical field, and should be valued, not disparaged.

According to Global Nation, Senator Yee has urged the television network that produced the show to issue a public apology its next broadcast in addition to the apology it has already issued.

Not so fast Senator, let’s think this one through. What if the studio was purposely showing the shallowness of this character- which was almost certainly their intent. What if the sentiment that “Susan” expressed also sometimes expressed in the real world- however ill informed and uneducated that might be? Do we really want our entertainment in the future to be the most neutral, politically correct material that writers can create?

This incident came to light just days after Paramount was forced to delay the release of Kite Runner- but that was involving a rape scene that could have exploded ethnic violence. This is just a scene about a mildly bigoted airhead in a nighttime soap opera. It doesn’t rise to the level of where any kind of self censorship should be considered. It could even be argued that ABC Studio’s gave the Philippines medical industry and professionals a chance to assert themselves.

Filed under Hollywood, Media and Entertainment, Opinion, Philippines by

CalChamber merges with CCIT to form free trade lobbying group

The California Chamber of Commerce has announced that it will join the California Council for International Trade (CCIT) and form a new lobbying organization it plans to call “California Chamber of Commerce Council for International Trade”. According to a press release issued by the Chamber: “The CalChamber Council for International Trade will boost the ability of California businesses and organizations to advocate sound international business policies by bringing together the two leading trade policy organizations in the state to form a single unified group of business leaders on international issues”.

The California Chamber, a business association with close ties to the Schwarzenegger administration, has taken a position that “enthusiastically supports free trade worldwide”. Allan Zaremberg, CalChamber president and chief executive officer said in a statement: “We are at a historic time to take action on several free trade agreements pending before Congress, the merged CalChamber Council for International Trade will enhance our ongoing work with state and federal administrations and lawmakers to influence international business policies that support California’s global success, job creation and sustainability.”

The California Council for International Trade is a trade policy lobbying group that has been around for decades but in recent years has been less active and far less dynamic. Its primary activity has been organizing a yearly resort meeting with Federal and State elected officials to discuss trade policy, and has been held together by Wells Fargo and a few other large corporations. A search of the Internet to find more information about CCIT for this story found that it may no longer exist. Their old web address “ccit.net” now redirects to the CalChamber website and it is not clear if any part of that association is still active, or if it has been completely absorbed by the California Chamber of Commerce.

Filed under Business Associations by

October 8, 2007

L.A. Times expose on Nuñez junkets

The Los Angeles Times has written an expose about the luxury junkets being taken by Speaker of the California Assembly, Fabian Nuñez. Entitled “Nuñez travels the world like a high roller” the article describes how the Speaker has “traveled the world in luxury, paying with campaign funds for visits to some of the finest hotels and restaurants and for purchases at high-end retailers such as Louis Vuitton in Paris.”

In a sad and familiar refrain, the Times also reports that “it is not clear how these activities have related to legislative business, as state law requires, because the Los Angeles Democrat refuses to provide details on tens of thousands of dollars in such expenditures.”

Haven’t we been here before? California’s politicians seem to be far better at taking these junkets then they are at making quality policies- especially as it relates to international business and trade. We have harshly criticized Governor Schwarzenegger for the “undisclosed donors” he uses fund his international trips, and it is disconcerting to learn that this kind of corruption has apparently also spread to the Legislature. Read the whole sorry story at this link: http://www.latimes.com/news/local/la-me-nunez5oct05,1,1069266.story?page=1&cset=true&ctrack=1&coll=la-headlines-california

Filed under California Legislature, California Politics, Opinion by

October 9, 2007

China Bank buys stake in United Commercial Bank

UCBH Holdings Inc., the parent company of United Commercial Bank, agreed to let China Minsheng Banking Corp. acquire a 9.9 percent stake in UCBH and have an option to buy 20 percent of the bank. According to report in San Francisco Business Times, this is “the first Mainland Chinese bank to successfully make a strategic investment in a U.S. bankment in a U.S. bank.” UCBH, based in San Francisco, with $10.7 billion in assets, several reasons for pursuing the investment: “the move increases UCBH’s access to capital, enhances the bank’s platform to conduct cross-border business and better positions UCBH for growth in China while becoming more competitive in the United States”. Minsheng, founded in 1996, has a market cap of $30 billion. The bank operates almost 300 branches and 1,370 ATMs in the wealthy coastal areas of China. UCBH itself announced plans to buy a bank in China earlier this year- Shanghai’s Business Development Bank Ltd. The Times reports that proceeds from this transaction will be used to fund that acquisition.

Filed under Banking and Financial Services, China, Mergers and Acquisitions by

SAP to acquire Business Objects for $6.8 billion

SAP AG announced that it will buy Business Objects SA for an eye-popping $6.8 billion. SAP is an enterprise software firm based in Germany with it U.S. headquarters in Palo Alto. Business Objects is based in Paris and San Jose. Acquiring Business Objects is seen helping SAP compete with Oracle in the area of business Intelligence software that is used for risk management and corporate management.

Filed under Germany, Information Technology, Mergers and Acquisitions by

Google Sputnik logo sets off conservative critics

That cute little logo that Google dresses up for special occasions is just a harmless bit of frivolity right? Like last week when they drew a little sputnik satellite in their logo to honor this Russian scientific achievement. Well not if you are a neoconservative. As the L.A. Times reported:

The Mountain View, Calif., company bathes its logo in stars and stripes every Independence Day, but last week’s decision to honor the 50th anniversary of the Sputnik launch — the second “g” in Google was replaced with a drawing of the Soviet satellite — is being blasted by some conservatives. Not only did Google honor an achievement by a totalitarian regime that was our Cold War enemy, they griped, but it did so without having ever altered its logo to commemorate U.S. military personnel on Memorial Day or Veterans Day.

A Google spokeswoman said that Google’s special logos tend to be lighthearted and often scientific in nature “We do not believe we can convey the appropriate somber tone through this medium to mark holidays like Memorial Day.” More on this silly controversy can be found in the L.A. Times report.

Filed under Aerospace and Aviation, Media and Entertainment, Russia by

October 15, 2007

Whole Foods Sells Henry’s Markets to Smart & Final

Whole Foods Market Inc. has completed the sale of its 35 Henry’s Farmers Market and Sun Harvest Market stores to a subsidiary of Los Angeles grocer Smart & Final Inc., according to a report in San Diego Business Journal. The Austin, Texas-based company sold its two operations to Smart & Final for $166 million, including a distribution facility in Riverside. Sun Harvest stores are located in Texas, and Henry’s are located in California, with 15 stores in San Diego County. “Our plans are to continue under the existing names and formats,” a spokesman told the Journal. “Overall what you’ve seen is the model that you’re going to get going forward, including the focus on natural and organic and lots of produce.” The sale of Henry’s was the result of Whole Foods’ bid to acquire Henry’s parent Wild Oats for about $565 million. Wild Oats was Whole Foods’ main rival in the natural grocery business.

Filed under Agriculture and Food, Mergers and Acquisitions by

Wikimedia is moving to San Francisco

The Wikimedia Foundation, the force behind the popular online encyclopedia Wikipedia, is moving from Florida to a new headquarters in San Francisco. According to a report in the San Francisco Chronicle, Founder Jimmy Wales said that the small operation is packing up its office in St. Petersburg, Fla., and moving to San Francisco in an attempt to create a larger brand, attract more talent and make better inroads in developing countries, particularly in Asia. Wikipedia, which is edited largely by volunteers, is among the 10-most-visited Internet sites in the world. “San Francisco won out for all the obvious reasons; the Internet culture, the great developers and potential partners. It’s really the place to be,” said Wales. “We’re a major Internet brand and this is where a lot of the major brands are located.” San Francisco Mayor Gavin Newsom welcomed the nonprofit to town in a statement. “Wikimedia will be an illustrious addition to our thriving information technology hub,” he said. “They represent the cutting edge of Internet-based innovation and will contribute greatly to the atmosphere of creativity that flourishes in San Francisco.”

Filed under Information Technology, Internet by

Apple and AT&T sued over iPhone restrictions

Tech.co.uk reports:

Apple and AT&T are being sued for $1.2 billion (£590 million) over the Apple iPhone. The complaint was filed in a Californian district court by law firms Folkenflik & McGerity and Hoffman & Lazear on behalf of Apple iPhone owners. The lawsuit claims that Apple’s decision to offer the Apple iPhone on just one mobile network is illegal under US antitrust laws and California’s unfair trade practice laws. The lawsuit claims that Apple iPhone users are being restricted to using only AT&T’s mobile network and Apple applications on their devices.

Filed under Legal and Criminal Issues, Telecommunications by

Nuñez tries to explain his junkets

Assembly Speaker Fabian Núñez is trying to defend his practice of using campaign funds to pay for international travel and expensive purchases. A Los Angeles Times investigation showed he spent nearly $50,000 on airline travel this year and more than $8,000 for high-end hotels in Europe, and thousands of dollars in extravagant purchases by tapping his $5.3 million “Friends of Fabian” campaign fund. He then really stepped in it when he said, “”There’s not too big a difference between how I live and how most middle-class people live” which contrasted greatly with his long cultivated image as a champion of the working poor. In trying to explain himself at a news conference, Núñez said, “The fact that I’ve been successful, that I’m the speaker of the Assembly, and I’ve represented California around the world is something I’m very proud of,” and that this travel would help “broaden his horizons”, he went on “I think the fundamental question here is, should I use campaign funds for trade missions and educational missions, or should I be using government money, or should I be using non-profit entities that sponsor trips like these?”

Mr. Speaker, a small suggestion. when you are in a hole, stop digging. First of all, campaign funds- or public funds, should not be used to “broaden your horizons” – that is what your own money is for. Second, as we have said here at least a dozen times, people will forgive an occasional international junket if you you also come up with some meaningful and international policies or programs- but the Legislature and the Schwarzenegger administration have done neither. You might, like the Governor, be able to fool some people into thinking that using these shadowy “non profits” with “undisclosed donors” to fund your junkets is good public policy, but those of us who follow this issue closely know better- and eventually everyone else will too.

Filed under California Legislature, Opinion by

October 16, 2007

Porn spammers get jail term

The Business Journal of Phoenix reports that a federal judge in Arizona sentenced two men to more than five years in prison for an international pornographic spamming business that grossed more than $1 million. Jeffrey A. Kilbride, 41, of Venice, Calif., was sentenced to 72 months and James R. Schaffer, 41, of Paradise Valley, was sentenced to 63. Kilbride received a longer sentence based on the court’s finding that he had obstructed justice by attempting to prevent a government witness from testifying at the trial. The trial in was the first to include charges under the CAN-SPAM Act of 2003, a law designed to crack down on the transmission of pornography in commercial bulk unsolicited electronic mail messages.

Filed under Internet, Legal and Criminal Issues by

Mercedes introduces clean diesel to California

Mercedes-Benz USA has unveiled a version of its E320 BLUETEC, a diesel sedan that will immediately be available in limited numbers to California customers through a special two- year/24,000-mile lease. California’s stringent emissions requirements have kept new diesel automobiles models off the California market for the better part of a decade. “In order to be able to provide the power and economy of diesel technology throughout the world, we had to make the diesel version as clean as the gasoline model,” said Dr. Leopold Mikulic, head of powertrain development at Mercedes-Benz Cars. According to Tom Cackette, executive director for the California Air Resources Board (CARB), “This vehicle has shed the reputation of diesel as a dirty technology. And we hope California has shed its anti-diesel reputation by certifying this vehicle as the first diesel passenger car to meet the most stringent smog emission standards in the world.”

Filed under Environment and Climate, Germany, Transportation by

Peace Activist jailed in Iran back in California

Ali Shakeri, an Iranian-American peace activist who spent four months in a Tehran prison has returned home after posting bond with Iranian authorities. Shakeri was arrested in May and charged with endangering national security, along with three other Iranian-Americans. He was released in late September, at the same time that Iranian President Mahmoud Ahmadinejad was in New York to attend the U.N. General Assembly. Shakeri is a founding board member of the University of California, Irvine’s Center for Citizen Peacebuilding. He was detained after traveling to Iran to visit his ailing mother. Shakeri has given speeches and radio interviews advocating democracy in Iran and has written occasionally for Payam-E-Ashena, a pro-democracy Persian magazine based in Laguna Hills. His son told reporters that he was allowed to leave the country after posting a property deed for about $110,000 and may have to return to Iran to answer the charges against him, but that the family has little information about the legal process there, or even the exact charges he faces.

Filed under Foreign Relations, Iran, Legal and Criminal Issues by

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