2007seattletripv4 - Carnegie Mellon University

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					3rd   Annual Seattle Trip

  2007 Information

 March 14 – 16, 2007
                                         Business & Technology Club Seattle Trip

                     Table Of Contents

Important Details! ..................................................... 3
What to Bring ........................................................... 3
Trip Itinerary ............................................................. 5
Companies ............................................................. 10
Directions ............................................................... 11

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Important Details!

Please keep in mind that missteps by a few can make all of us look bad.

Be respectful of your classmates by being on time, attentive at presentations, turning
your cell phones and pagers off during visits, and all the other normal stuff. Let’s watch
out for each other, hit the Seattle as a team and make the most of it for everyone.

Remember that this trip is about finding a job for the near future, and about networking
for jobs in the future. Some of the companies we will talk with do not offer internships or
will not offer internships this year. Next year, however, they may have just the job you
want, so follow the COC’s advice about networking and keeping in touch with your

What to Bring
   Business Casual clothing - for company visits
   Suit – just in case
   Business Cards – more than you think you need
   Printed Resumes – although we will have everyone’s resumes on the CD, which we
    will leave with each company, it never hurts to have a few copies of your resume
    with you.
   Map of the Seattle area
   Your Tepper Faux Leather Folder
   Breath Mints – you never know
   Umbrella – you’re in Seattle!

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                                             Business & Technology Club Seattle Trip

Alumni Events
We highly encourage you to attend the alumni events that will occur during this trip.
Both events are great networking opportunities and give us an opportunity to learn
about what Carnegie Mellon University alumni are doing. John Sengenberger, Director
of Alumni Relations at Tepper, will attend along with Stephen M. Rakas, Associative
Director, Career Opportunities Center.
For up-to-date info on all events go to

Tepper Alumni Networking Dinner
Event Date: 3/14/2007 7:00 p.m.
Location: Bainbridge Thai Cuisine
The Seattle Alumni Chapter of the Tepper School of Business at Carnegie Mellon will
be holding an informal dinner reception for visiting Tepper MBA students on Wednesday,
March 14, 2007 at Bainbridge Thai Cuisine at 330 Madison Avenue South on
Bainbridge Island.
Directions: Bainbridge Thai Cuisine 330 Madison Avenue South Bainbridge Island,
WA 98110 206-780-2403 INSTRUCTIONS: The plan will be to take the 5:30 ferry from
Seattle (Colman Dock - at the waterfront at the end of Marion Street) and then walk
down the Main Street (Winslow Way) of Bainbridge to Madison (restaurant is at the
water at the bottom of Madison).

Reception and Panel on Best Marketing Practices for Today's Leading
Brands in Seattle
Event Date: 3/15/2007 6:00-9:00 p.m.
Location: Bell Harbor International Conference Center
Join us on Thursday, March 15, 2007 for a special alumni reception and presentation on
Best Marketing Practices for Today's Leading Brands in Seattle at the Bell Harbor
International Conference Center on Pier 66 in Seattle. The networking reception will
begin at 6:00 p.m. and the panel presentation will begin at 7:00 p.m.
Directions: Bell Harbor International Conference Center, 2211 Alaskan Way, Pier 66,
Seattle, WA 98121; Tel: 206.441.6666; See:

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Trip Itinerary
These 3 days are going to go by fast. We do have a break in the schedule, so you may
want to contact alums out there and try to set up a time to meet.

PLEASE ALLOW FOR EXTRA TRAVEL TIME (Seattle’s traffic can be pretty bad) AND

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                                                  Business & Technology Club Seattle Trip

        3/12/2007   3/13/2007        3/14/2007             3/15/2007           3/16/2007
         Monday     Tuesday        Wednesday               Thursday              Friday
8:00                                 Starbucks           Real Networks          Boeing
                                8:15 AM - 10:15 AM    8:30 AM - 10:30 AM     8 AM - 12 PM

9:00                                 Starbucks           Real Networks          Boeing
                                8:15 AM - 10:15 AM    8:30 AM - 10:30 AM     8 AM - 12 PM

10:00                                Starbucks                                  Boeing
                                8:15 AM - 10:15 AM                           8 AM - 12 PM

11:00                                                      Boeing
                                11 AM - 12:30 PM                             8 AM - 12 PM

12:00                                                      Nintendo
                                11 AM - 12:30 PM                           12:45 PM - 2:30 PM

13:00                               Microsoft                                   Nintendo
                                 1 PM - 3:30 PM                            12:45 PM - 2:30 PM

14:00                               Microsoft              Amazon               Nintendo
                                 1 PM - 3:30 PM          2 PM - 5 PM       12:45 PM - 2:30 PM

15:00                               Microsoft              Amazon           Weyerhaeuser
                                 1 PM - 3:30 PM          2 PM - 5 PM        3:30 PM - 5 PM

16:00                                                      Amazon           Weyerhaeuser
                                                         2 PM - 5 PM        3:30 PM - 5 PM


18:00                                                  Marketing Panel
                                                        6 PM - 9 PM

19:00                           Networking Dinner      Marketing Panel
                                  7 PM - 9 PM           6 PM - 9 PM

20:00                           Networking Dinner      Marketing Panel
                                  7 PM - 9 PM           6 PM - 9 PM

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                                   Business & Technology Club Seattle Trip

Hotel Information
La Quinta Inn & Suites
2224 8th Avenue
Seattle, WA 98121
Phone: (206)624-6820
Fax: (206)467-6926

Directions from Seattle Airport to La Quinta Seattle Downtown
Start:                              End:
17801 International Blvd             2224 8th Ave
Seatac, WA 98188, US         Seattle, WA 98121-1906, US

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Seattle Restaurants___________________
94 Stewart
94 Stewart St. Seattle, WA 98101                            Chez Shea
94 Stewart is a Chef owned Northwest style bistro           94 Pike St. Suite 34, Seattle, WA 98101
featuring world class cuisine based on fresh seafood,       French.
as well as locally grown meats and produce.
                                                            Coldwater Bar and Grill Downtown
Andiamo Bellevue                                            1900 Fifth Avenue, Seattle, WA 98101
938 110th Ave NE Bellevue, WA 98004                         Coldwater Bar and Grill is a contemporary seafood
Italian Restaurant. Andiamo features an exhibition          restaurant that caters to the savvy business traveler
kitchen, soft lighting and crisp linens in a cool hip       and local corporate clientele by featuring regional
contemporary setting.                                       cuisine focused on the freshest local seafood.

Assaggio                                                    Cutter's Bayhouse
2010 4th Ave., Seattle WA 98121                             2001 Western Ave., Seattle WA 98121
Italian. As warm, colorful and personal as any trattoria    Cutters is directly influenced by the unique nature of
in Coppola's Godfather, Assaggio specializes in             the Pike place market. Because of their ongoing
traditional Italian-American cooking.                       commitment to incorporate only the finest seasonal
                                                            Northwest ingredients in all menu offerings.
703 N34th Street, Seattle, WA 98103                         Dahlia Lounge
Bandoleone is a fine Latin cuisine restaurant offering      2001 4th Ave., Seattle WA 98121
dishes that echo the flavors of the island nations of       Northwest. Dahlia Lounge is the latest flower in
the Caribbean with a good amount of Brazilian and           restaurateur Tom Douglas' cap. And semi-lebrity chef
African influence thrown in for fun: Cuba, Trinidad,        Matt Costello is no pansy in the kitchen, either.
Tobago, and so on.
                                                            Daniel's Broiler
Brasa                                                       10500 NE 8th, Bellevue, WA 98004
2107 3rd Ave. Seattle, WA 98121                             Daniels' Broiler in Bellevue is located on the 21st floor
Brasa has been voted one of the best restaurants in         of the Bank of America Building. Daniel's Broiler is the
Seattle. The menu features sun-drenched Seattle             only major Seattle steakhouse serving USDA Prime
flavors and the restaurant has a beautiful dining room,     Beef exclusively.
popular bar and lounge.
                                                            Dulces Latin Bistro
Cafe Campagne                                               1430 34th Avenue Seattle, WA 98122
1600 Post Alley Seattle, WA 98101                           Dulces Latin Bistro (pronounced dool-says) has been
A Parisian cafe tucked beneath Campagne                     sharing their European fare with Latin, Mediterranean,
Restaurant on Post Alley, Cafe Campagne serves              and Spanish influences to a loyal clientele since 1992.
traditional French fare in a cozy, unpretentious setting.   Their 1,300 bottle international wine list is noted as
                                                            one of Seattle's best.
Cafe Juanita
9702 NE 120th Place, Kirkland WA 98034                      Etta's Seafood
Cafe Juanita features Mediterranean dishes prepared         2020 Western Ave. Seattle, WA 98121
with Northwest ingredients and an Italian flair             Etta's Seafood showcases the culinary flair of Chef
complimented by an award-winning wine list.                 Tom Douglas for every kind of seafood imaginable
                                                            Situated near Seattle's famous Pike Place Market,
Cascadia Restaurant                                         Etta's Seafood offers both tourists and locals a rich
2328 1st Avenue, Seattle, WA 98121                          experience of the best seafood in Seattle.
Forget about rules and trends, and come to Cascadia
for fine dining focused on great food, smooth service,      Fish Club
an award-winning wine list and tableside chats with         2100 Alaskan Way Seattle, WA 98121
Chef Kerry Sear.                                            Todd English's International coastal cuisine served on
                                                            Seattle's Waterfront.
Chandler's Crabhouse
901 Fairview Avenue North, Seattle, WA 98109

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Icon Grill                                                 to Elliot Bay with robust sausages, pan-fries and other
1933 5th Ave. Seattle, WA 98101                            Cajun classics.
Icon Grill's "aroused Americana" menu showcases the
higher quality ingredients in a sophisticated yet simple   Six Seven
manner.                                                    2411 Alaskan Way, Pier 67, Seattle WA 98121
                                                           Northwest-Asian fusion. Located in the elegant
Library Bistro                                             Edgewater Hotel, Six Seven is one of the best
92 Madison St. Seattle, WA 98104                           restaurants to hit the Seattle waterfront in years.
Library Bistro is a perfect place to enjoy a truly         Gorgeous bay views and masterfully prepared
memorable meal or skip a few chapters and have             Pacific/Northwestern cuisine make this one of
dessert first.                                             Seattle's best restaurants.

Lola Seattle                                               Stanley & Seafort's
2000 Fourth Ave. Seattle, WA 98121                         115 East 34th, Tacoma, WA 98404
Renowned celeb chef Tom Douglas expands his                From the moment you walk through the doors, you'll
empire, serving upscale Greek fare at the                  know it is time to relax and have a great meal. The
resplendently remodeled Hotel Andra.                       breathtaking views, the gracious hospitality and
                                                           honest cuisine work together to ensure that your
Mama Stortini's                                            dining experience is a memorable one. Enjoy a
3207 East Main Avenue, Puyallup, WA 98372                  succulent steak or a plump fillet of Fresh King Salmon.
Voted Best Italian by King 5 Evening Magazine.
Winner of Restaurant Neighborhood Award.                   Tango
                                                           1100 Pike Street, Seattle, WA 98101
Palisade                                                   Tango serves Seattle's finest tapas, focusing upon the
2601 West Marina Place, Seattle, WA 98199                  sun-drenched dishes of Spain & Portugal with flavors
The extensive menu is both reassuring & unexpected.        of North Africa, accompanied by a well-rounded
Palisade's commitment to you is unsurpassed. And           Spanish, Portuguese & Meso-American wine list, and
the view is simply breathtaking.                           Seattle's premiere tequila and rum lounge.

Palomino                                                   Ten Mercer
1420 5th Ave., Seattle WA 98101                            10 Mercer St. Seattle, WA 98109
American. For over a decade, Palomino has stood out        World class cuisine meets neighborhood scene.
among Seattle restaurants. Its casual class mingles        Flavorful artfully presented foods, classic cocktails
the minglers with the moguls, and the celebrity with       and an award winning wine list served by a
chic. The delicious American bistro food, including        professional staff in this Queen Anne neighborhood
locally caught seafood and wood-fired pizza make           dinner house.
dining here more than a social occasion.
                                                           The Melting Pot - Bellevue
Ponti Seafood Grill                                        302 108th Avenue NE, Bellevue, WA 98004
3014 3rd Ave. North, Seattle WA 98109                      The Melting Pot provides a unique, upscale and
Seafood. This Zagat-topping Seattle restaurant,            intimate dining experience with its assortment of
situated on the side of a working canal on the             fondue cooked at the table by the guests. It is the
waterfront, never ceases to impress diners with its        perfect location for a romantic evening, corporate
Pacific Rim touches and its innovative approaches to       dinner party or friendly gathering. Guests enjoy a
seafood.                                                   choice of 4 flavorful fondue cooking styles and a
                                                           variety of tasty entrees combined with special dipping
Ruth's Chris - Seattle                                     sauces. The menu also includes creamy cheese
727 Pine Street, Seattle, WA 98101                         fondues, fresh salads, fine wines and mouth watering
Ruth's Chris Steakhouse is a fine dining restaurant        chocolate fondue desserts.
serving corn fed aged U.S. Prime beef broiled at 1800
degrees to lock in the flavorful juices and served         Tulio
sizzling. The a la carte menu also features mouth-         1100 5th Ave., Seattle WA 98101
watering seafood, lamb and veal. Award winning wine        Italian. It'd be a hard-pressed Seattlite to claim his
list and service that creates raving fans.                 heart didn't rest at Tulio. The northern Italian cuisine
                                                           and stellar service have made it one of the most
Sazerac                                                    reliable Seattle restaurants. Let acclaimed Chef
1101 4th Ave., Seattle WA 98101                            Pisano introduce you to the delights of the
Southern. Southern cuisine in a boutique hotel. It may     Mediterranean rim.
sound oxymoronic, but this Seattle restaurant (located
in the chi-chi-chic Hotel Monaco) brings the Big Easy

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Part of making a great impression on these companies and enhancing Tepper’s
reputation is taking the time to learn more about the companies. By attending this trip,
you are already taking steps in the right direction towards building a relationship with
these companies and perhaps your future employer. But you can also do more to
further your experience by taking the time to research and learn more prior to the visits.

We expect you at minimum to take the time to read the summaries in this packet, but
we strongly encourage you do some research on your own. You will surely get more out
of the visits!

Additionally, think of some knowledgeable questions to ask each company, its
employees, and alumni. There is such a thing as a “bad” question on these trips.
Although this trip can be considered a possible inlet towards getting an internship or a
full-time position, the primary goals are to learn more about the companies, network (!),
and build relationships.

Remember to follow similar rules for asking questions as you do, when you attend the
COC company events.

Examples of “bad” questions:
 What does your company do? (Other variations: What products or services do your
   companies provide? What’s your company’s main business?)
 Who’s your CEO?
 Does your company have internship positions?
 Does your company hire international students?

A rule-of-thumb: If you can find an answer to your question on the Internet, don’t ask it!

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                              Business & Technology Club Seattle Trip

Day 1: Wednesday, March 14
                              2401 Utah Ave South,
                              Seattle, 98134
                              Phone: (206) 447-1575
                              Web Site:

 Start:                       End:
 2224 8th Ave                 2401 Utah Ave S
 Seattle, WA 98121-1906, US   Seattle, WA 98134-1436, US

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Take the elevator to the 8 floor and sign-in at the front desk
8:15-8:45 coffee tasting and meeting with Mak Azadi, Senior Manager, Corporate Development
8:45-9:15 James Potts, Director, International Business Development
9:15-9:45 Tiffany Huey, Marketing Manager
9:45-10:15 Mark Hassan, Senior Recruiter

Company Information:
Wake up and smell the coffee -- Starbucks is everywhere. The world's #1 specialty coffee retailer, Starbucks has
over 13,000 coffee shops in more than 35 countries. The outlets offer coffee drinks and food items, as well as beans,
coffee accessories, and teas. Starbucks owns about 7,500 of its shops, which are located in about 10 countries
(mostly in the US), while licensees and franchisees operate more than 5,500 units worldwide (primarily in shopping
centers and airports). The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In
addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage

What was once a simple chain of coffeehouses has become a force of nature in the retail business. With so many
outlets throughout the world, Starbucks has used its chain to branch out into other retail segments; selling CDs,
books, and other lifestyle products accounts for about 5% of revenue. The company also has big plans for the future,
setting the goal of expanding its chain to 40,000 locations worldwide. It hopes to open about 2,400 new outlets in

Starbucks also continues to invest in product development to expand its brand into new customer segments. With
beverage maker PepsiCo it is developing its own vending machines to deliver premium coffees to customers on the
go, while it continues to develop and market products for grocery retail through its partnership with Kraft Foods. A
licensing deal with Beam Global Spirits & Wine (formerly Jim Beam), meanwhile, has produced a line of Starbucks
coffee liqueurs.

At its coffeehouses, the company is rolling out an expanded menu of breakfast items and other hot foods (previously
being tested at a handful of locations) to more than 6,500 locations by 2008 to increase its revenue from food sales
and to entice customers to spend more time at its outlets. In addition, it continues to add new blends to its selection
of coffee drinks.

Chairman Howard Schultz owns nearly 5% of Starbucks.

Starbucks was founded in 1971 in Seattle by coffee aficionados Gordon Bowker, Jerry Baldwin, and Ziv Siegl, who
named the company for the coffee-loving first mate in Moby Dick and created its famous two-tailed siren logo. They
aimed to sell the finest-quality whole bean and ground coffees. By 1982 Starbucks had five retail stores and was
selling coffee to restaurants and espresso stands in Seattle. That year Howard Schultz joined Starbucks to manage
retail sales and marketing. In 1983 Schultz traveled to Italy and was struck by the popularity of coffee bars. He
convinced Starbucks' owners to open a downtown Seattle coffee bar in 1984. It was a success; Schultz left the
company the following year to open his own coffee bar, Il Giornale, which served Starbucks coffee.

Frustrated by its inability to control quality, Starbucks sold off its wholesale business in 1987. Later that year Il
Giornale acquired Starbucks' retail operations for $4 million. (Starbucks' founders held on to their other coffee
business, Peet's Coffee & Tea.) Il Giornale changed its name to Starbucks Corporation, prepared to expand
nationally, and opened locations in Chicago and Vancouver. In 1988 the company published its first mail-order

Starbucks lost money in the late 1980s as it focused on expansion (it tripled its number of stores to 55 between 1987
and 1989). Schultz brought in experienced managers to run Starbucks' stores. In 1991 it became the nation's first
privately owned company to offer stock options to all employees.

In 1992 Starbucks went public and set up shops in Nordstrom's department stores. The following year it began
operating cafes in Barnes & Noble bookstores. The company had nearly 275 locations by the end of 1993. Starbucks

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inked a deal in 1994 to provide coffee to ITT/Sheraton hotels (later acquired by Starwood Hotels & Resorts). The
next year it capitalized on its popular in-house music selections by selling compact discs. Also in 1995 Starbucks
joined with PepsiCo to develop a bottled coffee drink and agreed to produce a line of premium coffee ice cream with

Starbucks expanded into Japan and Singapore in 1996. Also that year the company created Caffe Starbucks, an
online store located on AOL's marketplace. In 1997 Starbucks began testing sales of whole-bean and ground coffees
in Chicago supermarkets.

In 1998 Starbucks expanded into the UK when it acquired that country's Seattle Coffee Company chain (founded in
1995) for about $86 million and converted its stores into Starbucks locations. It also announced plans to sell coffee
in supermarkets nationwide through an agreement with Kraft Foods. In 1999 Starbucks bought Tazo, an Oregon-
based tea company, as well as music retailer Hear Music, and opened its first store in China. Schultz toned down his
Internet plans in late 1999 after investors and analysts voiced skepticism.

In 2000 Schultz ceded the CEO post to president Orin Smith, remaining chairman but focusing primarily on the
company's global strategy. Starbucks jumpstarted its worldwide expansion the next year, opening about 1,100 stores
worldwide, including locations in a handful of new European countries such as Austria and Switzerland. It also spun
off its Japanese operations as a public company. The following year the company opened its first shop in Spain and
went on to open Starbucks locations in Greece and Germany. Later in 2002 it announced large-scale expansion plans
in Mexico and Latin America.

The next year Starbucks acquired Seattle Coffee Company (and its Seattle's Best Coffee brand) from AFC
Enterprises for $72 million. The deal gave Starbucks an additional 150 coffee shops (as if it needed them) but more
importantly it gave the coffee giant the Seattle's Best Coffee brand and wholesale coffee business. It also got
something new out of the deal: franchised locations.

Starbucks was one of the first national retailers to jump on the Wi-Fi bandwagon, teaming with Hewlett-Packard and
Deutsche Telekom's T-Mobile unit to offer high-speed wireless Internet access at 1,200 of its locations in the US,
London, and Berlin. In 2004 Starbucks and Hewlett-Packard unveiled their Hear Music service, which allows
Starbucks customers to create custom music CDs in some locations. It later premiered the Hear Music channel on
XM Satellite Radio launched a new Hear Music CD-burning media bar (co-developed with HP) in selected stores.

In 2005 the company began offering a hot chocolate in its US and Canada markets, and in conjunction with Jim
Beam Brands (now Beam Global Spirits & Wine) it introduced Starbucks Coffee Liqueur and Starbucks Cream
Liqueur. That same year, Starbucks signed agreements with Suntory in Japan and Uni-President in Taiwan to sell its
ready-to-drink coffees in those countries. Smith retired as president and CEO that year; he was replaced by
Starbucks' North American president Jim Donald.

The company acquired full ownership of joint ventures Coffee Partners Hawaii and Cafe del Caribe (Puerto Rican
outlets) in 2006.

Stock Price (1 Year Chart) and Competitor Comparison:

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                                      SBUX               Pvt1           NSRGF.PK           THI           Industry

Market Cap:                                  22.91B             N/A                N/A        5.71B            5.65B

Employees:                                   145,800            9531               N/A            N/A          1.86K

Qtrly Rev Growth (yoy):                      21.80%             N/A                N/A       15.50%           15.10%

Revenue (ttm):                                8.21B       517.00M1                 N/A        1.41B            1.41B

Gross Margin (ttm):                          58.76%             N/A                N/A       27.64%           35.30%

EBITDA (ttm):                                 1.36B             N/A                N/A      374.45M          375.63M

Oper Margins (ttm):                          10.24%             N/A                N/A       20.73%           12.78%

Net Income (ttm):                           612.27M             N/A                N/A      219.92M           58.85M

EPS (ttm):                                     0.753            N/A                N/A           1.186          0.75

P/E (ttm):                                     40.52            N/A                N/A           25.17         24.79

PEG (5 yr expected):                            1.42            N/A                N/A            1.60          1.45

P/S (ttm):                                      2.74            N/A                N/A            4.05          2.23
Pvt1 = Dunkin' Brands, Inc. (privately held)
THI = Tim Hortons Inc.
Industry = Specialty Eateries
1 = As of 2005

Related Articles:
Starbucks: Down But Not Out
Tuesday March 6, 8:17 am ET

Faisal Laljee submits: Howard Schultz's memo to his associates shows his true mettle as CEO of a
company that has seen its share price increase by 4400% since it went public in 1992.

Recently, after hitting an all time high of $40 back in November, Starbucks (NasdaqGS: SBUX) has seen its share
price drop over 25%. Despite growing earnings at just under 20%, and with aggressive plans to expand in Asia, the
stock is trading at 27 times 2007 earnings - a multiple not seen in over 4 years.

While it is true that the giant coffee company might need to slow its plans for growth overseas and is seeing slower
growth in the US, it is not uncommon for companies to run into a period of slowing growth. Indeed Pepsi (NYSE:
PEP - News) took a tumble from $53 to $41 in early 2002. Considering it was a $80 billion company when the stock
took a hit, Starbucks' correction does not seem that serious in comparison.

Back in April of 2006, I had this to say about the company:

Starbucks (NasdaqGS: SBUX) - Here is some information about Starbucks that you might not know.

            Annualized growth of 25% since 1993.
            Currently 11,000 stores. Long-term growth planned is 30,000 stores.
            There are 5 new stores opening every day.
            They currently serve 40 million customers a week.
            Offers health insurance to all employees including part-time

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        It is less than one-third the size of Pepsi and Coke.
        Currently $6.3 billion in annual sales
        Higher sales per square foot than McDonalds.

The above facts, coupled with Howard Schultz's management and intent to shake things up at Starbucks, lead me to
believe that this stock is about to find a bottom. Be ready to buy at $28 and more if it dips down to $27.

Starbucks Stirred to Refocus on Coffee
Strategy Sharpens As Chairman Sends A Wake-Up Memo
February 26, 2007; Page A12

Starbucks Corp. executives are trying to sharpen the chain's focus on coffee as they plan the company's strategy for
the coming year.

People close to the Seattle company said they weren't surprised when Chairman Howard Schultz sent a memo to
executives on Feb. 14 warning that the chain's growth had moved Starbucks too far from its roots. In the memo,
which surfaced on a blog last week, Mr. Schultz lamented the loss of the coffee-bean aroma in stores and conceded
fast-food chains and other competitors threaten to steal Starbucks's customers.

Starbucks officials said Mr. Schultz's memo isn't likely to cause any major reversal in strategy at the chain. However,
it may deepen the company's focus on making sure customers think of Starbucks as a seller of specialty coffee. Parts
of that effort were in the works before Mr. Schultz sent his memo, executives said. "At the end of the day, that is our
real point of difference," said Anne Saunders, Starbucks senior vice president for global brand strategy.

Starbucks has expanded significantly beyond its original concept of selling espresso drinks in an enticing
atmosphere in the past several years. This year, the chain plans to begin selling hot breakfast sandwiches in more
cities and is adding drive-through windows on a greater percentage of the new stores it opens. In the fall, Mr.
Schultz declared he wants eventually to have 40,000 Starbucks locations throughout the world, 10,000 more than his
previous goal. None of those things are likely to change, officials said.

However, Ms. Saunders said Starbucks is looking at new ways to sharpen the focus on coffee while continuing to
expand beyond it. Starbucks is testing having its baristas scoop loose coffee beans and grinding them in some stores
-- something Mr. Schultz singled out in his memo as an important part of the company's heritage. The company
wants to tweak the merchandise sold at the front of its stores so that it is centered more on coffee, Ms. Saunders said.
That means adding more accessories such as coffee brewers. In recent years, its offerings have expanded to include
everything from mints to stuffed animals.

Competitors are encroaching on the territory Starbucks pioneered. McDonald's Corp.'s upgraded coffee bested
Starbucks' drip brew in a Consumer Reports magazine taste test.

People close to the company said Mr. Schultz frequently writes impassioned memos to Starbucks executives and this
one shouldn't signal an unusual level of concern in Starbucks's top ranks. Mr. Schultz joined Starbucks in 1982 and
expanded the chain of 13,000 locations that it is today.

"That was not an angry memo," said Howard Behar, a former Starbucks executive who sits on Starbucks's board.
"That was a memo of 'Hey, I'm concerned.'" Mr. Behar noted some of the changes Mr. Schultz referenced in the
memo had happened as long as 17 years ago. The automatic espresso machines that Mr. Schultz criticized, although
they may have taken away some coffee-making romance, have reduced the strain on baristas who used to pull shots
by hand, Mr. Behar said. Mr. Schultz declined to comment on the memo.

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Even while Mr. Schultz has engineered the company's massive expansion, he frequently warns executives to make
sure Starbucks doesn't stray too far from its core, Mr. Behar said. "You got to understand Howard, and Howard's
role in the organization," he said. "Howard's role is part accelerator and part brake."

    1.   What do you see as Starbuck’s greatest strength?
    2.   What qualities does Starbucks look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Starbucks?
    4.   This question is for each of the presenters, how would you describe your typical day?
    5.   Is there any advice you would like to share with us as we continue through business school?

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                         3150 139 Ave SE,
                         Bellevue WA, 98005
                         Phone: (425) 679-4227
                         Web Site:

Start:                   End:
2401 Utah Ave S          3150 139th Ave Se
Seattle, WA 98134-1436   Bellevue, WA 98005-4046

                                                      Page 17 of 61
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Go to Building 4, take the elevator to 5 floor, and ask for Ambra Benjamin. Visitor parking available.
11A.M. -12:30P.M. Lunch, Presentation, and Questions

Company Information:
These days, expediting your vacation begins online. As the market leader in online travel services (ahead of rivals
Orbitz, Priceline, and Travelocity), Expedia's travel-planning tools allow users to book airline tickets, hotel
reservations, car rentals, vacation packages, and cruises online. Expedia's destination guides feature travel-related
content, news, and maps. Its portfolio of brands includes, discount travel Web site Hotwire, travel search
engine TripAdvisor, Chinese travel service company eLong, and luxury travel segment Classic Vacations, among
others. Chairman Barry Diller controls 53% of the company.

Going forward, Expedia plans to accelerate its international expansion (in 2005, international revenues accounted
for 22% of total sales). The company took a large step in actualizing this goal in late 2006, when it launched its new
Web site for Japan, one of the largest travel markets in the world. The new site is comprised of 30,000 travel
properties across the globe, complete with prices in Yen.

In 2002 Microsoft sold its majority stake in Expedia to IAC/InterActiveCorp; IAC acquired the minority interest in
Expedia that it did not already own in 2003. Two years later, IAC spun off Expedia into a separate publicly traded

By breaking itself into two separate companies, IAC hopes to put to rest criticism that it is a confusing jumble of
seemingly disparate electronic commerce and travel assets. The new Expedia is one of the largest online travel
companies in the world, valued at about $9 billion.

Since 2002, Expedia has been aggressively acquisitive. Some of its purchases have included Montreal-based
NewTrade Technologies, a developer of software and information services that aid hotels in reaching online
markets; regional corporate travel agency Metropolitan Travel, which it turned into Expedia Corporate Travel; and
Egencia, an online corporate travel management company with operations in France, Belgium, and the UK.

Stock Price (1 Year Chart) and Competitor Comparison:

                                                                                                   Page 18 of 61
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               EXPE     Pvt1    PCLN           Pvt2    Industry
   Cap:        6.19B    N/A     1.96B          N/A     460.92M
   ees:        N/A      N/A      N/A           N/A        63
 Qtrly Rev
  (yoy):      7.40%     N/A    27.50%          N/A     19.20%
  (ttm):       2.24B    N/A     1.12B     829.90M1      52.11M
  (ttm):      77.91%    N/A    35.71%          N/A     63.74%
   (ttm):     638.16M   N/A    108.40M         N/A      7.54M
   (ttm):     17.80%    N/A     5.53%          N/A      7.66%
   (ttm):     244.93M   N/A    72.54M          N/A      2.16M
 EPS (ttm):    0.695    N/A     1.682          N/A       0.07
 P/E (ttm):    29.47    N/A     31.06          N/A      35.24
 PEG (5 yr
 expected):    1.43     N/A      0.91          N/A       1.31
 P/S (ttm):    2.76     N/A      1.74          N/A       3.02
Pvt1 = Orbitz, LLC (privately held)
PCLN = Inc.
Pvt2 = L.P. (privately held)
Industry = Internet Information Providers
1 = As of 2005

Related Articles:

Overseas Sales Lift Expedia's Profit
February 16, 2007
Online travel booking company Expedia Inc. said its fourth-quarter profit rose sharply, driven by strong
international operations.

Expedia, which provides airline ticketing, hotel reservations, car rentals and other travel services through its Web
sites, said net income rose to $67.1 million, or 20 cents a share, from $25.2 million, or seven cents a share, a year

Expedia, which was spun off from IAC/InteractiveCorp in 2005, said revenue rose 7% to $531.3 million from
$494.7 million a year ago, due to increased world-wide merchant hotel revenue. Domestic revenue inched up 1%
while international revenue climbed 25%.

"Begun with adversity, 2006 was a year of change, challenge and investment that ended positively for Expedia,"
said Expedia Chairman Barry Diller in a press release.

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The Bellevue, Wash., company, which also operates and, said gross bookings, the retail
value of all transactions, rose 9% to $3.69 billion from $3.4 billion. Domestic gross bookings grew 1% and
international gross bookings increased 34%, or 27% excluding the impact of foreign exchange rates.

Expedia said its international results were driven by strong performances in Canada, the U.K., Germany, France,
Italy, China, Australia and Japan.

The company said world-wide air revenue fell 14% due to a 15% decrease in revenue per air ticket, which was
partially offset by a 1% increase in air tickets sold. Expedia said the decrease in revenue per air ticket reflects
decreased compensation from air carriers and global distribution system providers.

The online travel company's stock has tumbled since it was spun off from IAC. Expedia has been challenged by a
variety of problems facing the travel booking industry. Airlines, finding it easier to fill flights themselves, are
reducing their commissions to booking services and agencies. And hotel chains, which are launching new incentives
and marketing to drive traffic to their own sites, are using that success to negotiate tougher terms with online travel

In addition, Expedia continues to battle a rash of new competitors and increased competition from old rivals like
Sabre Holdings Corp.'s Travelocity and Cendant Corp.'s Orbitz.

Expedia, Inc. Enters New Partnership with Omni Hotels
Monday February 26, 11:52 am ET

Agreement Delivers One of North America's Leading Luxury Hotel Brands to Expedia Customers

BELLEVUE, Wash., Feb. 26 /PRNewswire-FirstCall/ -- Expedia, Inc. (Nasdaq: EXPE - News), the world's leading
online travel company, today announced it has expanded and extended its multi-year partnership with Omni Hotels.
The enhanced relationship provides Expedia® customers complete access to Omni's luxury hotels while providing
Omni with online marketing opportunities across the Expedia network of travel sites.

"Omni's luxury hotels consistently rank among the leaders in Expedia's customer satisfaction surveys," said Melissa
Maher, vice president of strategic accounts, Expedia® Partner Services Group. "This partnership underscores our
commitment to providing travelers with access to award-winning hotels and illustrates the value Expedia brings to
its partners by helping them build their business through our global network of travelers."

Under the agreement, Omni will use Expedia® Connect technology to increase the speed, security and accuracy of
its bookings through Expedia Web sites while reducing reservation costs. Omni will also gain access to marketing
opportunities across Expedia and® Web sites worldwide.

As the leading online travel company in the world, Expedia, Inc. delivers value to its supply partners by providing
superior marketing and sales opportunities, and driving incremental revenues. More than 60 million unique monthly
visitors worldwide visit Expedia, Inc.'s Web sites.

"Exceeding customer expectations and creating memorable experiences for our guests through unsurpassed service
is our central mission," said Kerry Kennedy, director of e-commerce, Omni Hotels. "Our agreement with Expedia
enables us to extend that service with additional convenience for our customers while leveraging the strength of
Expedia's market presence to help meet business objectives."

    1.   What do you see as Expedia’s greatest strength?
    2.   What qualities does Expedia look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Expedia?
    4.   Is there any advice you would like to share with us as we continue through business school?

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                              15129 NE 40 Street,
                              Redmond WA, 98052-5308
                              Phone: (800) 642-7676
                              Web Site:

Start:                        End:
3150 139th Ave Se             15129 Ne 40th St
Bellevue, WA 98005-4046, US   Redmond, WA 98052, US

                                                            Page 21 of 61
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Meet in the Lobby of Building 22
1pm – 1:15pm: Introduction with Pradeep U.N., Product Planner, Worldwide Enterprise Services
1:15pm – 2pm: MBA recruiter Presents on recruiting/working at MS.
2pm – 215pm: Meet - Laura Longcore, General Manager, Worldwide Enterprise Services
215pm – 3pm: Panel with Tepper Alums who are hiring managers at MS (Group Product Managers &
Director level Alums only)
3pm – 315pm: Break
315pm–330pm: Meet - Norm Judah CTO, Worldwide Enterprise Services

Company Information:
Microsoft's ambitions are anything but small. The world's #1 software company provides a variety of products and
services, including its Windows operating systems and Office software suite. The company has expanded into
markets such as video game consoles, interactive television, and Internet access. With its core markets maturing,
Microsoft is targeting services for growth, looking to transform its software applications into Web-based services for
enterprises and consumers. Microsoft has reached settlements to end a slew of antitrust investigations and lawsuits,
including agreeing to uniformly license its operating systems and allowing manufacturers to include competing
software with Windows.

While desktop applications and platforms remain the cornerstone of its operations, Microsoft has inexorably
expanded its product lines, which include video game consoles, enterprise software, computer peripherals, software
development tools, and Internet access services. In 2006 the company launched its Zune brand of digital
entertainment products and services. The first Zune product, a 30GB digital media player, will compete directly
against Apple's iPod.

Microsoft has also reached major settlement agreements with Netscape (paying the company about $750 million);
Sun Microsystems ($1.6 billion in addition to royalty payments on certain technologies); Novell ($536 million to
settle a suit tied to Novell's NetWare software; Gateway ($150 million); IBM ($775 million and extending $75
million in credit towards Microsoft software deployment); RealNetworks ($761 million in cash and promotions);
and Daum Communications ($30 million in cash, advertising, and other terms).

In early 2007 the company was ordered to pay Alcatel-Lucent about $1.5 billion as part of a patent dispute between
the two companies over digital music technology.

Despite the litigation that has plagued it in recent years, the company has continued to forge ahead in its strategy to
extend its core software products into Web-based services for businesses and consumers. By transforming itself
from a traditional software provider to a broader technology services and media company, Microsoft hopes to
position its operating systems, software, and services as a de facto standard for accessing, communicating, and doing
business over the Internet. The company also operates in the Web search space, directly challenging incumbents
such as Yahoo! and Google. It has also partnered with mobile devices makers such as Hewlett-Packard and
Motorola to develop handheld computers and mobile phones that utilize Microsoft Windows Mobile and Windows
Media software.

Microsoft has used selective acquisitions (including the purchases of Navision and Great Plains Software) to expand
its enterprise software offerings, which include applications for customer relationship management and accounting.
Along with rival enterprise software providers such as SAP and PeopleSoft, Microsoft is increasingly targeting
small and midsized businesses. In 2005 it acquired collaboration software maker Groove Networks (founded by
Lotus Notes developer Ray Ozzie), anti-virus security provider Sybari Software, email security developer
FrontBridge Technologies, and identity management software provider Alacris. Microsoft also bought file
synchronization specialist FolderShare, and, a developer of VoIP technology.

Early in 2006 Microsoft acquired Apptimum, a developer of software used to transfer data between computers, and
Onfolio, an Internet content collection and organization technology provider.

In November 2006 the company announced a partnership deal with long-time rival (and Linux proponent) Novell to
more closely integrate Novell's open-source Linux software platform with Microsoft's Windows operating system.
The agreement included Microsoft paying Novell $240 million up front in subscription fees, as well as an additional

                                                                                                    Page 22 of 61
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$108 million for use of patents; Novell will pay Microsoft at least $40 million over five years for use of Microsoft's
patents, based on a percentage of revenue from Novell's open-source products. Microsoft also agreed not to sign a
similar agreement with any other Linux distributor for three years

Chairman Bill Gates owns about 10% of Microsoft; CEO Steve Ballmer owns nearly 4%. Gates stepped down from
his role as chief software architect in June 2006 to concentrate on his charitable work through the Bill & Melinda
Gates Foundation.

Bill Gates founded Microsoft (originally Micro-soft) in 1975 after dropping out of Harvard at age 19 and teaming
with high school friend Paul Allen to sell a version of the programming language BASIC. While Gates was at
Harvard, the pair wrote the language for Altair, the first commercial microcomputer. Microsoft was born in an
Albuquerque, New Mexico, hotel room and grew by modifying BASIC for other computers.

Gates moved Microsoft to his native Seattle in 1979 and began developing software that let others write programs.
The modern PC era dawned in 1980 when IBM chose Microsoft to write the operating system for its new machines.
Although hesitant at first, Gates bought QDOS, short for "quick and dirty operating system," for $50,000 from a
Seattle programmer, renaming it the Microsoft Disk Operating System (MS-DOS).

Allen fell ill with Hodgkin's disease and left Microsoft in 1983. In the mid-1980s Microsoft introduced Windows, a
graphics-based version of MS-DOS that borrowed from rival Apple's Macintosh system. The company went public
in 1986, and Gates became the industry's first billionaire a year later. Microsoft introduced Windows NT in 1993 to
compete with the UNIX operating system, popular on mainframes and large networks.

The early 1990s brought monopoly charges from inside and outside the industry. In 1995 antitrust concerns scotched
a $1.5 billion acquisition of personal finance software maker Intuit.

When the Internet began transforming business practices, holdout Gates at last embraced the medium; the Microsoft
Network (MSN) debuted in 1995. That year Microsoft licensed the Java Web programming language from Sun and
introduced its Internet Explorer Web browser. It also launched Expedia, an online travel site.

In 1997 Sun sued Microsoft for allegedly creating an incompatible version of Java; Microsoft countersued. (The
ongoing court battle, settled by Microsoft in 2001 for $20 million, prevented the company from releasing new Java
tools or accessing any of Sun's advances). Microsoft also purchased WebTV Networks for $425 million.

The US Justice Department, backed by 18 states, filed antitrust charges in 1998 against the software giant, claiming
that it stifled Internet browser competition and limited consumer choice. Gates turned over the president's job to
longtime Microsoft executive Steve Ballmer.

In 1999 Microsoft agreed to invest $5 billion for a minority stake in AT&T as part of that company's move to
acquire cable operator MediaOne. In addition, Microsoft bought Windows-based technical drawing software
specialist Visio for $1.3 billion, and sold a stake in Expedia to the public.

Gates named Ballmer CEO in 2000. Gates, who had held the CEO spot since the company's founding, remained
chairman and added the title of chief software architect.

A federal judge's ruling later that year that Microsoft used its monopoly powers to violate antitrust laws left the
prospect of two (smaller) Microsofts, a decision the company aggressively appealed. (The initial ruling to split
Microsoft into two companies was later struck down, leading to a settlement between the company and the US
Justice Department. Under the terms of the settlement, Microsoft agreed to uniformly license its Windows operating
systems, cease to offer exclusive contracts with manufacturers, and allow competing software to be included with its
operating systems.)

In 2001 Microsoft completed the acquisition of longtime partner Great Plains Software, a specialist in applications
for midsized and small businesses, in a $1.1 billion deal. A federal appeals court struck down the initial ruling to
break up Microsoft, leading to a tentative settlement (pending approval by the 18 US states involved in the trial)

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between the company and the US Justice Department. The settlement would leave Microsoft intact, but impose
restrictions on the company's licensing policies for its operating systems.

Netscape Communications filed suit in 2002 against Microsoft, seeking unspecified damages and injunctions against
the company's alleged antitrust actions. Later that year the company transferred its controlling stake in Expedia to
InterActiveCorp (formerly USA Interactive) in exchange for stock. The company also acquired enterprise software
provider Navision for about $1.5 billion.

Microsoft settled the suit with Netscape in 2003, agreeing to pay AOL $750 million as part of a larger settlement
that includes AOL licensing Microsoft's Internet Explorer browser and its digital media technology.

In part due to increasing demands from shareholders to explore alternatives for its ever-growing cash hoard, in 2003
the company declared its first ever dividend for common stock. Microsoft also eliminated stock options, instead
moving to a system of distributing shares of its stock directly to employees.

In 2004 the company announced plans to spend up to $75 billion of its cash reserves over four years, including
boosting its dividend payments and repurchasing up to $30 billion of its own stock.

Late in 2005 the company announced a reorganization designed to streamline its decision-making and speed up
execution across its divisions. Its units include Microsoft Platform Products and Services (Windows Client Group,
Server and Tools Group, MSN), Microsoft Business (Information Worker Group, Microsoft Business Solutions),
and Entertainment and Devices (Home and Entertainment Group, Mobile and Embedded Devices Group).

Early in 2006 Microsoft announced that it would spend $1 billion to expand its Redmond campus by a third over
three years.

Stock Price (1 Year Chart) and Competitor Comparison:

                                                                                                 Page 24 of 61
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              MSFT      GOOG        IBM        ORCL        Industry
 Cap:         270.66B   139.93B     141.76B      86.34B      198.10M
 ees:          71,000    10,674     366,486      56,133          170
 Qtrly Rev
 (yoy):        6.00%    67.00%        7.50%      26.50%       16.20%
 (ttm):        46.06B    10.60B      91.42B      16.07B       61.72M
 (ttm):       79.43%    60.33%       42.12%      76.73%       71.28%
 (ttm):        17.94B     4.58B      18.95B       6.51B        7.44M
 (ttm):       36.20%    33.48%       14.35%      33.67%        4.18%
 (ttm):        11.91B     3.08B       9.42B       3.70B      208.00K
 EPS (ttm):      1.17     9.942        6.11        0.697         N/A
 P/E (ttm):     23.62     45.97       15.41         23.9        31.1
 PEG (5 yr
 expected):      1.35      0.95        1.25         1.06        1.61
 P/S (ttm):      5.92     13.21        1.54         5.44        2.83
GOOG = Google Inc.
IBM = International Business Machines Corp.
ORCL = Oracle Corp.
Industry = Application Software

Related Articles:
Microsoft Hits Google's Use of Books
March 6, 2007

A top attorney at Microsoft Corp. plans to fight rival Google Inc. for its use of books online and certain advertising,
decrying what he sees as Google's "cavalier approach to copyright."

In a speech scheduled to be delivered today to the Association of American Publishers, Thomas Rubin, associate
general counsel at Microsoft, adds to recent criticisms of Google over its use of other companies' copyrighted

Mr. Rubin alleges that Google employees "actively encouraged" companies to create advertising programs using key
words referring to pirated software, including software from Microsoft, according to a copy of the speech reviewed
by The Wall Street Journal. His remarks were reported yesterday on the Financial Times' Web site.

David C. Drummond, Google's chief legal officer, said in a statement, "The goal of search engines, and of products
like Google Book Search and YouTube, is to help users find information from content producers of every size ... We
do this by complying with international copyright laws, and the result has been more exposure and in many cases
more revenue for authors, publishers and producers of content."

Much of Mr. Rubin's speech focuses on Google's project to scan millions of books in university and public libraries
so that they can be searched on the Internet. In 2005, that plan prompted separate suits by the Authors Guild and five
major publishers, alleging copyright infringement; the actions were filed in U.S. District Court in Manhattan.

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In his prepared remarks, Mr. Rubin says that after Google received "unfettered access" to the libraries, it then
"basically turned its back on its partners" by making copies of copyrighted books without first obtaining copyright
holders' permission. The approach, Mr. Rubin argues, "systematically violates copyright and deprives authors and
publishers of an important avenue for monetizing their works."

Google has said it believes "fair use" provisions of the law give it the right to digitize books protected under
copyright, and that it provides users of its book-search service only brief excerpts and bibliographical information if
works are still in copyright and it doesn't have permission to show more. The cases are pending.

The speech comes as Google is under fire for alleged copyright violations on a number of fronts. TV companies,
including Viacom Inc., have recently accused the company's YouTube video-sharing site of profiting from copyright
infringement by not sufficiently cracking down when consumers put video clips on the site without owners'

YouTube removes clips when their owners request it -- which it says protects it from liability under copyright law --
and says it is working on systems to give copyright owners more control over the appearance of their clips on the

In his remarks, Mr. Rubin plans to criticize what he sees as YouTube's "cavalier approach to copyright," explaining
that "in the face of YouTube's refusal to take any effective action, copyright owners have now been forced to resort
to litigation."

The speech seeks to find common ground between Microsoft and the AAP, the trade organization for U.S. book
publishers. Mr. Rubin plans to emphasize that as a software company Microsoft is guided by the same principles as
publishers. "I think we have much in common," he is expected to argue. Microsoft also has its own book-scanning
projects that rival Google's, but which it says respect publishers' copyrights.

Finding Value In Microsoft
John Dobosz, 03.07.07, 12:03 PM ET

Whitney Tilson and Glenn Tongue, managers of the Tilson Focus (TILFX) mutual fund, recommend buying
shares of Microsoft.

Tilson, who is also the founder and managing partner of T2 Partners LLC, is a value investor, and he and Tongue
view Microsoft (nasdaq: MSFT - news - people ) as a classic value play. At $27.83, shares of Microsoft have gained
2.8% in the past year, but are up 29.7% from their 52-week low of $21.46 last June 13.

The stock peaked at $31.48 per share on Jan. 25 but has dropped 11.6% in the past month, due to scaled back
expectations for the new Vista operating system as well as weakness in the overall market. On Feb. 15, Microsoft
CEO Steve Ballmer suggested that some Wall Street analysts' revenue forecasts for sales of the company's new
Vista operating system were a bit too rosy.

"This does not concern us, as we did not expect people to upgrade their current computer, but rather to upgrade to
Vista when they purchase a new computer," says Tilson.

"What's important to us from an investment standpoint is that Microsoft has entrenched one of its most important
businesses for an additional few years, and that virtually every new computer sold on the planet going forward will
have Vista pre-installed on it."

Tilson and Tongue point out that Microsoft only makes money in three of its seven product lines. "In other words,
more than 100% of its profits come from Windows, Office and server software," says Tilson. "All three of these
segments have major releases hitting the market in 2007, which we believe are likely to drive robust growth in sales
and profits, as has always been the case historically."

                                                                                                   Page 26 of 61
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For the four quarters ended Dec. 31, 2006, Microsoft produced net income of $11.9 billion on sales of $46.1 billion.
Revenue for the December quarter in 2006 grew 6% compared with the same quarter in 2005, although earnings
dropped 28%, reflecting a deferral of $1.64 billion in revenue and $1.13 billion of net income due primarily to
technology guarantee programs for Vista and 2007 Microsoft Office.

Tilson and Tongue take confidence in the company's revenue growth of 10% to 11% annually for June and
September quarters of 2006 without any new products.

"Let's assume profits keep pace--in fact, given the operating leverage of the business, profits will likely grow faster,"
says Tilson. "Then, consider the $36.2 billion share repurchase authorization. If we assume that the entire repurchase
takes place over the next two years, this will reduce the share count by about 5% each year."

When Microsoft bought back $7.5 billion in stock during the September quarter, cash decreased by only $2 billion.
"That's what's amazing: the company's profits are so enormous that cash barely budges, even with such a huge
buyback program," says Tilson.

Tilson and Tongue expect that 10% to 11% profit growth plus share buybacks will produce 15% annual earnings per
share growth over the next two years. The consensus Wall Street forecast for 2007 (fiscal year ending June 30) is for
EPS of $1.47, representing expected growth of 15.7% over 2006.

Based on these forecasts, Microsoft currently trades for 18.9 times earnings. Tilson and Tongue call this "a modest
multiple for such a high-quality business." Microsoft pays $0.40 per share in annual dividends, giving the stock a
current dividend yield of 1.44%.

    1.   What do you see as Microsoft’s greatest strength?
    2.   What qualities does Microsoft look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Microsoft?
    4.   This question is for each of the presenters, how would you describe your typical day?
    5.   Is there any advice you would like to share with us as we continue through business school?

                                                                                                     Page 27 of 61
                    Business & Technology Club Seattle Trip

                    330 Madison Ave,
                    South Bainbridge Island WA, 98110
                    Phone: (206)780-2403

Start:              End:
15129 Ne 40th St    801 Alaskan Way
Redmond, WA 98052   Seattle, WA 98104-1451

                                                 Page 28 of 61
                                                Business & Technology Club Seattle Trip

Ferry to Bainbridge Island
Our ferry leaves the Coleman Dock (at the end of Marion Street – see map) at 5:30,
which means that boarding will stop about 5:20. If you miss this one, you will be late for
the dinner event, so please take extra care to be on time. It would be wise to get to the
ferry dock by 5:00 or 5:10 just so you can get your bearings and not have to sweat if
there is a line. The ferry crossing takes about half an hour and is really beautiful if the
weather is nice, so you may want to bring your camera. It costs $6.50 per person to get
to Bainbridge Island and there is no charge for the return trip. Don’t even think about
taking a car! Parking lots are available near Coleman Dock or taxis are plentiful and
convenient to and from downtown hotels .

(Note: Each attendee will be responsible for the cost of his/her own dinner.)

Directions: Bainbridge Thai Cuisine 330 Madison Avenue South Bainbridge Island, WA
98110 206-780-2403 INSTRUCTIONS: Leaving the Bainbridge Island station, walk down
the Main Street (Winslow Way) of Bainbridge to Madison (restaurant is at the water at the


Here is a link to general information and “Ferry Etiquette” – seriously…

                                                                            Page 29 of 61
Business & Technology Club Seattle Trip

                         Page 30 of 61
                                Business & Technology Club Seattle Trip

Directions from Coleman Dock to La Quinta Seattle Downtown

Start:                          End:
801 Alaskan Way                 2224 8th Ave
Seattle, WA 98104-1451, US      Seattle, WA 98121-1906, US

                                                             Page 31 of 61
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Day 2: Thursday, March 15
                                                                 2601 Elliott Ave,
                                                                 Seattle WA 98121
                                                                 Phone: (206) 892-6629
                                                                 Web Site:

Start:                                                           End:
2224 8th Ave                                                     2601 Elliott Ave
Seattle, WA 98121-1906, US                                       Seattle, WA 98121-1399, US

Parking is available in the garage across the street. Real Networks will validate the parking for us.

                                                                                                        Page 32 of 61
                                                                Business & Technology Club Seattle Trip

Meet in Main Lobby
8:30-10:30 am Presentation, and Questions

Company Information:
RealNetworks has enjoyed real success in the world of digital media -- hundreds of millions of people have
downloaded the company's RealPlayer product to stream audio, video, and other multimedia content. Its software
and subscription services provide access to news, sports, and entertainment content (RealOne), downloadable games
(RealArcade), and streaming and downloadable music (Rhapsody, RealPlayer Music Store, RadioPass). The
company also serves the enterprise market with tools for creating, delivering, and licensing digital content. Founder
and CEO Robert Glaser owns about 30% of the company.

RealNetworks' media player competes against Microsoft's Media Player and Apple's QuickTime, and competition
with those companies has only increased as the company has grown its music-related lines. RealNetworks' music
strategy is centered on the Rhapsody subscription service gained from its 2003 acquisition of (The
company also owned a stake in MusicNet along with Time Warner, Sony BMG, and EMI, but the former joint
venture was sold to Baker Capital in 2005.)

RealNetworks' push into digital music has put it at further odds with Apple, the current leader in that market.
Rhapsody and RealPlayer Music Store compete directly with Apple's iTunes products, but at the heart of the fight is
the more fundamental issue of digital rights management (DRM). Apple has refused to license technology that
would allow songs downloaded from competing services -- including Rhapsody -- to play on its popular iPod music
player. Microsoft also has DRM technology used by competitors such as Napster. In 2004 RealNetworks released
Harmony, DRM translation software that allowed RealPlayer Music Store songs to play on devices using Apple's
Fairplay, Microsoft's Windows Media Audio DRM, or RealNetworks' own Helix standard. A subsequent iPod
release included firmware that again blocked play of RealPlayer songs, but RealNetworks continues to lobby for
greater compatibility.

In addition to its Helix DRM software, the company's business software includes a suite of multimedia creation and
publishing tools (Real Tools), software development kits, and broadcast servers for network service providers and
enterprises. A key growth strategy for RealNetworks has been the delivery of content to wireless devices,
particularly cell phones. The company has partnered with leading handset makers and service operators, including
Nokia and Siemens.

RealNetworks has seen growth in its game service, a business it augmented with the acquisitions of GameHouse in
2004 and Dutch game developer Zylom Media Group early in 2006. RealNetworks also generates revenue through
online advertising and a range of services.

The company acquired wireless application and service provider WiderThan for about $350 million in 2006.

Robert Glaser, a Microsoft millionaire and VP, left to start Progressive Networks in 1994. Progressive (named for
Glaser's political leanings) was formed with the idea that digital media delivery was more than an operating system
or Web browser tool, but was an entity unto itself.

The company released RealAudio, for downloading audio files off the Web, in 1995. Although Progressive gave
away RealAudio to consumers, it sold more complex, server-based audio programs to broadcasters and corporations.
The software was soon the Web's most popular audio broadcast standard.

In 1997 the company changed its name to RealNetworks and went public. Microsoft paid $30 million for a minority
stake in RealNetworks and began bundling RealPlayer with its Internet Explorer browser.

In 1998 RealNetworks boosted its presence through distribution alliances with players such as AOL (now part of
Time Warner) and IBM subsidiary Lotus Development. Its relationship with Microsoft became strained when Glaser
testified during the software giant's antitrust trial that Microsoft designed its own multimedia player to interfere with
RealPlayer when installed on the same computer. Microsoft pulled the plug on its stake in RealNetworks.

                                                                                                     Page 33 of 61
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Turning to the growing digital music market, RealNetworks in 1999 bought audio compression software developer
Xing Technology and streaming media authoring specialist Vivo Software. The company realigned with Microsoft
in 1999, letting Internet Explorer users connect to its RealGuide multimedia site directory. The popularity of online
music downloading helped the company turn its first annual profit for 1999.

RealNetworks in 2000 acquired closely held Netzip, a specialist in software that handles downloads over the Internet,
in a stock deal worth $268 million. Following its media counterparts, RealNetworks launched a paid subscription
service offering certain customers access to exclusive content.

In 2001 the company established an online music subscription joint venture (MusicNet) with Time Warner,
Bertelsmann, and EMI; the group sold MusicNet to Baker Capital in 2005.

RealNetworks closed a chapter in its long-running dispute with Microsoft late in 2005, agreeing to a settlement in an
antitrust suit it filed against the software giant in 2003. Microsoft agreed to pay RealNetworks $761 million in cash
and promotions.

Stock Price (1 Year Chart) and Competitor Comparison:

              RNWK      Pvt1     AAPL        MSFT       Industry
 Cap:           1.26B     N/A      76.00B     270.95B     322.41M
 ees:            N/A      N/A      17,787      71,000         242
 Qtrly Rev
 (yoy):       50.30%      N/A     23.80%       6.00%       16.00%
 (ttm):       395.26M   8.28B1     20.68B      46.06B     115.95M
 (ttm):       68.67%      N/A     30.35%      79.43%       57.57%
 (ttm):       10.29M      N/A       3.44B      17.94B       9.08M
 (ttm):        -7.38%     N/A     14.63%      36.20%        0.52%
 (ttm):       145.22M     N/A       2.43B      11.91B      -14.88K
 EPS (ttm):      0.81     N/A        2.76        1.17         N/A
 P/E (ttm):      9.53     N/A       31.95       23.65        38.03
 PEG (5 yr
 expected):      2.39     N/A        1.32        1.35         1.45
 P/S (ttm):      3.25     N/A        3.68        5.92         2.93

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Related Articles:

RealNetworks to Launch Best-Selling Casual Game 'Cake Mania' on the Mobile Platform
Wednesday March 7, 9:00 am ET

SAN FRANCISCO, March 7 /PRNewswire-FirstCall/ -- from GDC 2007 -- RealNetworks®, Inc. (Nasdaq: RNWK -
News), one of the world's largest developers, publishers and distributors of casual games, today announced it is
launching the mobile version of the hit casual computer game, Cake Mania. The mobile game will be available in
both North America and Europe through leading wireless carriers.

Published and developed by Real's GameHouse Studios in collaboration with the original developer Sandlot
Games®, Cake Mania for mobile brings the action-packed levels from the computer version to mobile users in an
easy to play format. In Cake Mania, players help Jill open her own bakery, bring in customers and earn enough
money to re-open her grandparents' bakery. Players upgrade and customize the bakery with three ovens, three
decorating and three icing stations, a TV and many other appliances. The new game allows fans of Cake Mania to
snack on a hit game in small doses of easy mobile play.

  Features within Cake Mania for mobile include:

  -- Competition -- Players can help Jill take on "Mega Mart" with her own
    local bakery
  -- The ability to upgrade and customize the bakery as well as create more
    than 1,000 unique cake variations
  -- Famous (and infamous) customers like Santa Claus, Easter Bunny and
    Count Dracula

"Cake Mania's popularity online and at retail has made it a household name, with more than 35 million downloads to
date," said Daniel Bernstein, president and CEO, Sandlot Games. "The game's loyal player base still continues to
grow, so working with RealNetworks to publish for the mobile platform is a natural progression to increase
accessibility. We anticipate success on the mobile platform to mirror the success we've seen to date for the computer

Rhapsody Rolls Into Austin With a Rocking Day Party Line-Up
Tuesday March 6, 8:30 am

Six Stellar Independent Bands to Perform Exclusive Rhapsody Concert Sponsored by Hyundai Elantra at The

SEATTLE, March 6 /PRNewswire-FirstCall/ -- Continuing its support of independent music, RealNetworks® Inc.,
(Nasdaq: RNWK - News) today announced the Hyundai Elantra presents Rhapsody Rocks Austin event, a music
showcase coinciding with the second day of the renowned South By Southwest music festival in Austin, Texas. This
music-packed party kicks off at noon on March 15th, 2007 at Austin's Mohawk club and will feature live sets from
six top independent music acts including Peter, Bjorn & John, Robyn Hitchcock & Peter Buck, Oakley Hall, Oxford
Collapse, Loney, Dear and The Broken West.

Beginning today, music fans can visit to check out music and playlists
from bands playing the Rhapsody Rocks Austin party, as well as view original live performances from bands taped
in Austin last year. Performances from this year's party at The Mohawk will be available through Rhapsody starting
in late March, as will a number of other new, exclusive studio sessions the Rhapsody team is taping this year in

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"Rhapsody makes it easy to discover new music from a wide range of artists," said David Krinsky, director of label
relations for RealNetworks. "Working with Hyundai USA on events like Rhapsody Rocks Austin allows us to bring
that same discovery to a live setting, connecting music fans with exciting performances from some of today's
groundbreaking independent acts."

The Hyundai Elantra presents Rhapsody Rocks Austin event is a continuation of the successful ongoing relationship
between Hyundai and Rhapsody to spotlight independent music and reach taste-making music lovers with exclusive
live performances. Last fall, Rhapsody launched a Hyundai-sponsored Rhapsody Independent Music Hub, featuring
free indie music downloads, exclusive interviews and Rhapsody Original live performances from some of
independent music's top artists. And in November 2006, Hyundai USA presented The Independent Music
Experience with Rhapsody, featuring four emerging bands in concert in San Francisco. Performances from that
exclusive show can be viewed for free in Rhapsody at .

"Exciting live independent music captures the essence of our Hyundai Elantra brand," said Joel Ewanick, vice
president of marketing for Hyundai. "By partnering with Rhapsody on events like Rhapsody Rocks Austin, we're
able to reach our audience with effective and meaningful brand messaging."

  Full Rhapsody Rocks Austin line up:

  5:00 PM Peter, Bjorn & John
  4:00 PM  Robyn Hitchcock & Peter Buck (featuring Sean Nelson)
  3:00 PM  Oakley Hall
  2:10 PM  Oxford Collapse
  1:20 PM  Loney, Dear
  12:30 PM The Broken West
  12 PM    Doors open

The Mohawk is located at 917 Red River St. between 9th and 10th Streets in Austin.

        1.   What do you see as Real Networks’ greatest strength?
        2.   What qualities does Real Networks look for in potential hires/interns?
        3.   What advice do you have for students interested in pursuing a career at Real Networks?
        4.   This question is for each of the presenters, how would you describe your typical day?
        5.   Is there any advice you would like to share with us as we continue through business school?

                                                                                                Page 36 of 61
                         Business & Technology Club Seattle Trip

                         705 5 Ave South,
                         Seattle WA 98104
                         Phone: (206) 892-6629
                         Web Site:

Start:                   End:
2224 8th Ave             705 5th Ave South
Seattle, WA 98121-1906   Seattle, WA 98104-4425

                                                     Page 37 of 61
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Meet in the lobby of US2 building
1:45-5 pm Presentation, Questions, Tour

Company Information:
What started as Earth's biggest bookstore has rapidly become Earth's biggest anything store. Expansion has
propelled in innumerable directions. The firm's main Web site offers millions of books, CDs, DVDs,
and videos (which still account for the majority, 65%, of the firm's sales), not to mention auto parts, toys, tools,
electronics, home furnishings, apparel, health and beauty goods, prescription drugs, groceries, and services including
film processing. Long a model for Internet companies that put market share ahead of profits, also
made acquisitions funded by meteoric market capitalization and is now focused on profits. Founder Jeff Bezos owns
more than 24% of the firm.

Although it still goes toe-to-toe with Barnes & Noble and others in the book business, has competition
on many fronts. The company debuted clothing sales in 2002, and it continues to invest in that area, most recently its
2006 purchase of Hundreds of retailers, including The Gap, Nordstrom, and Lands' End, own and
deliver the merchandise, but customers are able to purchase it all in one place. has launched a site called devoted to shoes and purses; the draw is that the site offers free
overnight shipping on all products. The firm also allows individuals and companies to sell their wares through -- for a price.

The company has linked its virtual stores to the bricks-and-mortar players, such as its operation of rival bookseller
Borders' Web presence. It also relaunched CDNOW's music retailing Web site; Amazon handles all Web site
operations including inventory management, customer service, and shipping. Additional syndicated store programs
include Virgin Group's and the UK's HMV Group's Waterstones Web site. In the rapidly changing
world of e-tailing, not all of its investments have panned out though, such as the defunct and

In October 2006 IBM filed a pair of patent infringement lawsuits alleging that has been violating at
least five of its patents -- including technologies that govern how the online retailer handles product
recommendations and displays advertising -- for about four years. IBM, the world's leading patent holder, is seeking
unspecified damages.

In 2004 launched, a start-up company aimed at developing commercial search engines for
both and other e-commerce Web sites. It also purchased, which operates the top online retail
Web sites in China for books, videos, music, and a variety of other items. The deal was valued at about $75 million. has entered the online DVD rental market in the UK, but there are no immediate plans to offer the
service in the US. It also owns The Internet Movie Database, one of the Web's top information sites for historical
movie and television research. struck a deal with TiVo in early 2007, announcing they would partner to bring Web content to the
television through Amazon's Unbox digital video download service. Unbox debuted in 2006; the TiVo service
launched in spring 2007.

Jeff Bezos was researching the Internet in the early 1990s for hedge fund D.E. Shaw. He realized that book sales
would be a perfect fit with e-commerce because book distributors already kept meticulous electronic lists. Bezos,
who as a teen had dreamed of entrepreneurship in outer space, took the idea to Shaw. The company passed on the
idea, but Bezos ran with it, trekking cross country to Seattle (close to a facility owned by major book distributor
Ingram) and typing up a business plan along the way.

Bezos founded in 1994. After months of preparation, he launched a Web site in July 1995 (Douglas
Hofstadter's Fluid Concepts and Creative Analogies was its first sale); it had sales of $20,000 a week by September.
Bezos and his team kept working with the site, pioneering features that now seem mundane, such as one-click
shopping, customer reviews, and e-mail order verification.

                                                                                                   Page 38 of 61
                                                              Business & Technology Club Seattle Trip went public in 1997. Moves to cement the brand included becoming the sole book
retailer on AOL's Web site and Netscape's commercial channel.

In 1998 the company launched its online music and video stores, and it began to sell toys and electronics. also expanded its European reach with the purchases of online booksellers in the UK and Germany,
and it acquired the Internet Movie Database. Bezos also expanded the company's base of online services, buying
Junglee (comparison shopping) and PlanetAll (address book, calendar, reminders).

By midyear had attracted so much attention that its market capitalization equaled the combined values
of profitable bricks-and-mortar rivals Barnes & Noble and Borders Group, even though their combined sales were
far greater than the upstart's. Late that year formed a promotional link with Hoover's, publisher of this

After raising $1.25 billion in a bond offering early in 1999, began a spending spree with deals to buy
all or part of several dot-coms. However, some have since been sold ( and others have gone out of
business or bankrupt --, (furniture). It also bought the catalog businesses of Back to Basics and
Tool Crib of the North. began conducting online auctions in early 1999 and partnered with venerable auction house Sotheby's.
Also that year added distribution facilities, including one each in England and Germany.

In 2000 inked a 10-year deal with to set up a co-branded toy and video game store. (The
partnership came to a bitter end in 2006 after Toys "R" Us sued when it began selling toys from other
companies.) Also that year added foreign-language sites for France and Japan.

In 2001 cut 15% of its workforce as part of a restructuring plan that also forced a $150 million charge.
That year the company also made a deal with Borders to provide inventory, fulfillment, content, and customer
service for As part of a deal to expand their marketing partnership, AOL invested $100 million in in 2001. Later that year, purchased some assets from (which filed Chapter
11 in August) and relaunched the Web site.

In 2002 the firm introduced clothing sales, featuring hundreds of retailers including names such as The Gap,
Nordstrom, and Lands' End. The company received accreditation from ICANN (the Internet Corporation for
Assigned Names and Numbers) as an Internet domain name registrar, becoming one of about 160 entities permitted
to register Internet addresses.

The company launched its Search Inside the Book feature in 2003. The tool allows customers to search the text
inside books for more relevant search returns. At launch, the search feature covered more than 120,000 books from
over 190 publishers. In 2004 the company expanded into China with the purchase of The company
acquired shopping site in 2006, boosting its apparel offerings.

Stock Price (1 Year Chart) and Competitor Comparison:

                                                                                                  Page 39 of 61
                                                             Business & Technology Club Seattle Trip

              AMZN       BKS         Pvt1   EBAY      Industry
 Cap:          15.92B       2.39B     N/A    42.60B    322.41M
 ees:          13,900       39,000    N/A      N/A          242
 Qtrly Rev
 (yoy):       33.90%        2.80%     N/A   29.40%      16.00%
 (ttm):        10.71B       5.14B     N/A     5.97B    115.95M
 (ttm):       22.93%    31.13%        N/A   79.50%      57.57%
 (ttm):       695.00M   442.41M       N/A     2.30B      9.08M
 (ttm):        3.63%        5.24%     N/A   24.02%       0.52%
 (ttm):       190.00M   146.78M       N/A     1.13B     -14.88K
 EPS (ttm):     0.448        2.115    N/A      0.79         N/A
 P/E (ttm):     85.67        17.38    N/A     39.39       38.03
 PEG (5 yr
 expected):      2.51         1.32    N/A      1.19        1.45
 P/S (ttm):      1.49         0.46    N/A      7.19        2.93
BKS = Barnes & Noble Inc.
Pvt1 = Columbia House Company (privately held)
EBAY = eBay Inc.
Industry = Internet Software & Services

Related Articles:
TiVo, Amazon to Deliver Web Video to TV Sets
February 7, 2007; Page B3

TiVo Inc. and Inc. are joining to help bring movies and television shows from the Internet to TV sets,
in the latest move to bring online video into consumers' living rooms.

In a deal announced today, TiVo and Amazon announced a new way for consumers to watch movies and TV shows
downloaded from Amazon's Unbox service on their TV sets via their TiVo digital-video recorders. Under the
program, TiVo subscribers can rent and purchase TV shows and movies from networks and studios such as CBS
Corp. and Viacom Inc.'s Paramount Pictures, among others.

The offering, called Amazon Unbox on TiVo, is the latest step by TiVo -- which pioneered the DVR but now faces a
slew of new rivals -- to blur together watching TV with watching Web video. In the past, these had been largely
separate activities, usually occurring in different rooms of the house on different devices, such as a TV set and a
personal computer. In November, TiVo moved to close that gap by introducing several new features to enhance the
array of content available to TiVo users to download from the Internet for playback on TV sets.

"It's the single biggest issue people have asked us about -- when does this content get to the television set?" said
Tom Rogers, TiVo's CEO.

The agreement also raises the profile of Amazon's Unbox service, giving its consumers more options of where they
can watch the content they downloaded. Amazon Unbox, one of several initiatives that the Internet retailer has
launched in recent months to try to increase its growth, has had a relatively lukewarm reception since its debut in

                                                                                                 Page 40 of 61
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TV episodes will sell for $1.99 and movies for $9.99-$14.99; movies will rent for $1.99 and up. Amazon will store
all bought videos for future access. Invests in Shelfari Series A Financing
Wednesday February 28, 9:30 am ET and Angel Investors Infuse Burgeoning Social Media Site With First Round of Funding; Shelfari
Appoints Seasoned Business Veterans to Board of Advisors

SEATTLE, WA--(MARKET WIRE)--Feb 28, 2007 -- Shelfari (, the leading social media site for
people who love to read, today announced that it has closed its Series A round of funding, led by along
with several other strategic angel investors. Launched in October 2006, Shelfari provides tens of thousands of
bibliophiles with a new place to meet and share their passion for reading online. Proceeds from the financing will be
used to fund site development, sales and marketing initiatives, and general administrative costs.

" has long recognized that giving users the necessary tools to express themselves is the most powerful
way to feed and nourish an online community," said Greg Greeley, VP of Books for "In a short period
of time, Shelfari has succeeded in building a vibrant community around the experience of reading, and we are
pleased to support them in their efforts."

In addition to today's funding announcement, Shelfari also announced the formation of its board of advisors. These
individuals include Alex Algard, founder of and; Geoff Entress, an experienced
entrepreneur and venture investor; Brad Feld, a managing director at Foundry Group; Andy Sack, a co-founder of
Judy's Book; and Kelly Smith, a partner in Curious Office. In addition, Stefan Pepe, Director for Amazon's Books &
Magazines stores, joins the Shelfari board of directors. pioneered user-driven content ten years ago when it provided its customers with a vehicle to add their
own reviews and Shelfari seeks to build on that legacy by giving readers a place where they can connect with others
who share their passion," said Josh Hug, Shelfari's CEO and co-founder. "We are also very fortunate to have such a
high-caliber group of industry experts as both investors and advisors whom we can call upon to help us deliver on
our mission to connect readers online."

    1.   What do you see as Amazon’s greatest strength?
    2.   What qualities does Amazon look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Amazon?
    4.   This question is for each of the presenters, how would you describe your typical day?
    5.   Is there any advice you would like to share with us as we continue through business school?

                                                                                                  Page 41 of 61
                             Business & Technology Club Seattle Trip

                             Bell Harbor International Conference Center,
                             2211 Alaskan Way, Pier 66,
                             Seattle, WA 98121
                             Phone: (206) 441-6666
                             Web Site:

Start:                       End:
2224 8th Ave                 2211 Alaskan Way
Seattle, WA 98121-1906, US   Seattle, WA 98121-1604, US

                                                            Page 42 of 61
                                   Business & Technology Club Seattle Trip

Directions from Conference Center to La Quinta Seattle Downtown

Start:                             End:
2211 Alaskan Way                   2224 8th Ave
Seattle, WA 98121-1604, US         Seattle, WA 98121-1906, US

                                                                Page 43 of 61
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Day 3: Thursday, March 16
                                                               Boeing Commercial airplanes Headquarters
                                                               25-20 Building
                                                               1901 Oakesdale Ave SW,
                                                               Renton WA 98055
                                                               Phone: (206) 655-2121
                                                               Web Site:

Start:                                                         End:
2224 8th Ave                                                   1901 Oakesdale Ave Sw
Seattle, WA 98121-1906, US                                     Renton, WA 98055-1222, US

Parking information (if applicable) There is a large parking lot on the south side of the building. Go to the far end
and park in any spot that does not have a white or red box marked on the pavement

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7:50 meet at the main door of 25-20 building (south entrance). Todd will take us to the Spokane Room.
8:00 - 8:30 Overview of Boeing (Todd Stark)
8:30 - 9:00 Boeing personnel will sketch their business careers at Boeing
9:00 - 9:30 Questions from students
9:30 - 10:00 Board bus and go to the Renton airplane factory
10:00 - 11:00 Tour the factory
11:00 - 11:30 Board bus and return to the BCA Headquarters building and our cars
Company Information:
Boeing's Commercial Airplanes unit may be less exciting than its Integrated Defense division, but it's more practical
to fly home for Christmas in a 747 than an F-15. Boeing Commercial Airplanes -- which has fallen behind Airbus as
the world's #1 maker of commercial airliners -- makes planes that seat from 50 to more than 500 passengers. Models
include the BBJ (Boeing Business Jet), 717, 737, 747, 767, 777, and upcoming 787 Dreamliner. The unit also
provides airplane services, including used aircraft sales and leasing, maintenance, modifications, spare parts sales,
and flight support services. Boeing Commercial Airplanes has major facilities in California and Washington.

Devastated by the fall in aircraft orders and downturn in the commercial aviation industry after the 9/11 attacks,
Boeing laid off thousands and delivered only 281 planes in 2003, 285 in 2004, and 290 in 2005 -- down from more
than 500 in 2001. In 2001, Commercial Airplanes accounted for almost 60% of Boeing's sales; in 2005 it accounted
for only 41%.

As Boeing's commercial aircraft fortunes fell after 9/11, Airbus -- the only other maker of large commercial airliners
-- caught up and surpassed Boeing in orders and deliveries: In 2003 Airbus delivered 305 planes, besting Boeing for
the first time ever. Airbus repeated the feat in 2004, delivering 320 planes to Boeing's 285; and in 2005, delivering
378 to Boeing's 290.

Boosted by new offerings and a recovering sector, Boeing booked a record 1,002 aircraft orders in 2005 thanks to
strong demand for the 737 (569 orders), 787 Dreamliner (235 orders), and 777 (154 orders), but Airbus trumped it
again, with 1,055 orders. Boeing forecast that it would deliver 395 planes in 2006 and as many as 445 in 2007. Both
Boeing and Airbus expect orders to fall by 50% or more in 2006, however.

After abandoning plans for the super-fast (15-20% faster than typical planes) Sonic Cruiser, Boeing is pinning its
hopes on its latest project, the 787 Dreamliner (initially known as the 7E7), which uses the technologies planned for
the Sonic Cruiser to attain a similar percentage of savings in fuel costs. Boeing formally launched the Dreamliner
project in April of 2004 after receiving an order for 50 of the aircraft from Japan's All Nippon Airways.

Despite early rosy forecasts and a goal of 200 787 orders by the end of the year, Boeing had landed only 52 orders
by December; the paucity of sales can be partly attributed to rumors (later proven true) that Airbus was planning a
competing plane. In the face of such low numbers, Boeing replaced Toby Bright, its head of commercial sales, with
Scott Carson, the head of its Connexion unit. (A late flurry of orders in December brought the announced 787 order
total to 126 by the end of 2004.) As of mid-2006 Boeing had secured nearly 400 orders from 29 airlines.

The 787, which seats between 200-250 passengers, contrasts sharply with Airbus' next new offering, the A380, a
double-decker due in 2007 that will seat more than 550 passengers. Boeing also stepped up its attack against Airbus'
1992 government loans deal in 2004, contending more strenuously than ever that the deal amounts to unfair
subsidies. The heightened rhetoric began in early 2004 in the wake of rumors that Airbus was considering another
plane, the A350 (based on the A330 platform), that would compete directly with the 787 -- in December of 2004
Airbus announced that it was, in fact, going ahead with the A350 plan. If the schedules pan out as projected, the
arrival of the 787 in 2008 will be bracketed by the A380 in 2007 and the A350 in 2010.

On the cargo-carrying front, Boeing announced late in 2004 that it was developing a cargo version of its long-range
777 plane that would be ready in 2008. As part of its plan to dispose of minor manufacturing operations, Boeing
sold its commercial electronics unit to BAE SYSTEMS' North American subsidiary in 2004.

                                                                                                   Page 45 of 61
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Boeing announced in January 2005 that it was discontinuing the 100-passenger 717. It also announced that it had
taken a $615 million fourth quarter charge to cover 717 discontinuation costs and expenses related to its collapsed
Air Force 767 fuel tanker deal.

Boeing has been increasing its focus on "large-scale systems integration" -- for commercial airplanes, that translates
to aircraft design and final assembly. To that end, the company sold three of its aircraft facilities in Kansas and
Oklahoma to Canadian investment company Onex Corporation. The facilities will still make Boeing structures and
parts, but will also be able to seek outside business.

Although Boeing's order rate for commercial planes improved markedly in 2005, the company was hobbled in
September when more than 18,000 machinists struck over such issues as pensions and health care. The company
expressed fears that a prolonged strike might sent customers to competitor Airbus as Boeing's aircraft deliveries are
delayed, but the machinists agreed to a new contract in less than a month.

And the gamesmanship between Airbus and Boeing continued in November 2005: Eleven months after Airbus
announced its A350 to compete with Boeing's Dreamliner, Boeing announced that it would build a stretch 450-
passenger 747-8 to compete more directly with Airbus' A380.

At the Dubai Air Show in November, Boeing landed a $9.7 billion order for long-haul 777 aircraft from Dubai's
Emirates airline and a $4 billion deal for 737 aircraft from Chinese airlines. Boeing has generally been more
dominant than Airbus in China, while Airbus has been winning more orders in the Middle East.

In March 2006 Boeing announced that, due to demand from customers, it would go forward with an expanded, 300-
seat version of the 787 Dreamliner. Boeing had been reluctant to make a larger version in fear that an enlarged 787
would cannabalize sales from the 777-200 ER.

Boeing Commercial Airplanes sales VP Scott Carson was named President and CEO in 2006 when Alan Mulally
accepted the challenge of becoming CEO of Ford Motor Company

Stock Price (1 Year Chart) and Competitor Comparison:

                                                                                                   Page 46 of 61
                                                               Business & Technology Club Seattle Trip

               BA        Pvt1       LMT         NOC       Industry
 Cap:         70.02B       N/A      40.79B       25.26B      23.80B
 ees:         154,000   550,001     140,000     122,200       9.70K
 Qtrly Rev
 (yoy):          N/A       N/A       6.00%       4.60%      12.20%
 (ttm):       61.53B    26.41B1     39.62B       30.15B      20.29B
 (ttm):       18.03%       N/A      10.20%      18.20%      18.03%
 (ttm):        5.95B       N/A        4.42B       3.27B       2.27B
 (ttm):        5.96%       N/A       8.61%       8.51%        5.94%
 (ttm):        2.21B       N/A        2.53B       1.57B      49.96M
 EPS (ttm):     2.812      N/A        5.795       4.367        2.81
 P/E (ttm):     31.55      N/A        16.66       16.51       31.23
 PEG (5 yr
 expected):      1.17      N/A         1.45        1.32        1.17
 P/S (ttm):      1.13      N/A         1.03        0.84        1.17
Pvt1 = Airbus S.A.S. (privately held)
LMT = Lockheed Martin Corp.
NOC = Northrop Grumman Corp.
Industry = Aerospace/Defense - Major Diversified
1 = As of 2005

Related Articles:

One 'World's Biggest Jet,' Please
Airbus to Sell Giant A380 To a VIP Customer; $300 Million, Interior Extra
February 16, 2007; Page W1

The superrich are launching the next wave in air travel: the wide-body private jet.

With some 10,000 private jets flying in the U.S., a few billionaires are signing up for something roomier -- jumbo
jets that can be outfitted as mobile mansions. Boeing says it has taken orders for 11 wide-bodies -- planes typically
configured with two aisles, such as the 747 series or the new 787 Dreamliner -- over the past two years for "VIP
use." The price of a Dreamliner, interior not included, is about $150 million.

Now an individual customer is raising the bar, signing up for the largest passenger plane in history. European jet
builder Airbus has signed a letter of intent with a Middle East buyer for one of its new A380s, which sell for about
$300 million, according to John Leahy, Airbus's chief commercial officer for customers. Commercial versions of
this plane can be configured to seat as many as 853 passengers on two decks. But this buyer, whom Airbus declined
to identify, will spend an additional $100 million to turn the craft into a more exclusive conveyance Airbus calls The
Flying Palace.

New York-based jet-interior expert Edése Doret says he is designing the A380 for the customer, who he says is a
head of state. While the jet hasn't yet been built -- Airbus is as much as two years behind schedule for the A380 --
Mr. Doret says his plan includes two dining areas, a 600-plus-square-foot master bedroom and a game room. His

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plans also call for a lounge with giant curtains that will mimic tents of the Arabian desert, and a fiber-optic mosaic
that will depict a shifting desert scene.

Mr. Doret says he is including a whirlpool tub, believed to be the first in the air. To comply with Federal Aviation
Administration regulations, the tub will have a rapid drainage system that can empty the standing water in seconds
to a tank in the cargo hold. The plane is also slated to include a missile-defense system, he says. (Such systems aren't
certified for civilian use.) In all, Mr. Doret expects the job will run $100 million to $150 million.

The tabs for the wide-body jets easily surpass the prices paid by a previous generation of jumbo-jetsetters, including
Donald Trump. In 2005, for example, Google founders Sergey Brin and Larry Page bought a used 767-200 that had
seated 180 during its years in commercial service. Industry sources estimate Messrs. Brin and Page paid less than
$15 million, 1/20th the cost of the big new Airbus. The latest private jets dwarf the most expensive Gulfstreams and
Learjets, as well. The top-of-the-line Gulfstream, the G550, carries 10 to 15 passengers and costs about $47 million.

These newest flying mansions can also equal or surpass the cost of the world's biggest yachts ($200 million and
$300 million) and are well beyond the most expensive estates on the market ($100 million to $150 million).

Interest From Americans

Boeing says the majority of private buyers for new planes are from the Middle East, but that Americans, Europeans,
Russians and Asians are also starting to place orders. The company says seven of its orders from private customers
are for Dreamliners, and the other four are for 747-8s, the planned update to its storied jumbo jet. (Private buyers
were the first in line to order versions of the 747-8, it says.) Those who order now -- in other words, who have
signed purchase contracts and deposited about 10% of the purchase prices -- will typically get their planes in a few
years. Customers for the A380 may have to wait longer still.

The companies that outfit these jumbo jets are preparing for more business. Customizer Lufthansa Technik, a
subsidiary of the German carrier, has been in talks with "a couple of potential A380 customers" and their interior
designers, says spokesman Aage Duenhaupt. The company, with a work force of 1,100 engineers and outfitters,
expanded one of its wide-body hangars in Hamburg last year to prepare.

Swiss-based customizer Jet Aviation Management AG is spending $50 million to build a hangar big enough for
A380s and Boeing 747-8s. The company recently finished an Airbus 320-200 (which normally seats about 150) for
Saad Group, a Saudi conglomerate involved in banking, construction and property development that is run by Maan
A. Al-Sanea, a former pilot. Jet Aviation says the plane was outfitted with two bedrooms with en-suite bathrooms, a
conference and dining area and programmable fiber-optic lighting in the carpet.

The Swiss company is working on a second plane for Saad Group, a larger Airbus 340-600, according to Jet
Aviation's chief marketing officer Leon Hustinx. That plane, expected to be delivered in 2009, will include guest
suites, bars, master bedrooms with bathrooms, and dining and private areas. Saad Group didn't respond to emailed
requests for comment.

Airbus says the jumbo-jet buyers want self-contained worlds where they can eat, sleep and hold meetings even when
they've landed. "You can host an elegant dinner party on the ground in a third-world country," says Mr. Leahy.
"After you bid your guests a fond farewell, you close the door and head home."

Landing in Aspen

The new airships are, of course, expensive to operate. Maintenance and fuel costs are astronomical compared with
those of smaller jets. A 747-400 costs about $10,500 an hour to fly. An A320, by comparison, costs around $3,000
an hour, according to consultants BACK Aviation Solutions, while a Gulfstream G550 costs about $2,300 per hour.
Makers of smaller jets say widebodies have other drawbacks, including noisier cabins than those in smaller models.

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Perhaps the biggest problem with the biggest private jets: They're too big to land at many of the world's high-end jet
ports, including Nice, France; Aspen, Colo.; and New Jersey's Teterboro. Many facilities have runways too short for
the huge planes, or lack the ground equipment to handle them. Teterboro blocks any planes heavier than 100,000
pounds, about one-third the weight of the A380. And Aspen is limited to planes with wingspans of 95 feet, a fraction
of the A380's 350-foot spread.

That means owners of big jets have to pick their spots. Asked whether an A380 could try to fly into Aspen, Airbus's
Mr. Leahy responded: "Only once."

Boeing's 'Dreamliner' Hits New Bump
Move to Scrap Wireless System For In-Flight Entertainment Heightens Production Scrutiny
January 24, 2007 10:17 p.m.;

Boeing Co. is abandoning plans to use a wireless network to deliver in-flight entertainment on its 787 "Dreamliner"
after encountering problems in developing the technology, a move that comes as the development schedule for the
twin-aisle airplane is coming under greater scrutiny.

Monday, Boeing's stock tumbled 3.4% after one aerospace analyst suggested Boeing would be at least three months
late delivering what has become the biggest-selling new plane in the company's history, with 448 preproduction
orders. Boeing officials have acknowledged "challenges" with the schedule, but they insist the jet maker is on track
to deliver the first of the $160 million airplanes as promised in May 2008.

The change is likely to stir speculation about other issues that may be lurking in the 787's development. With less
than eight months until the scheduled first flight, Boeing has poured an extra $635 million into additional research
and development meant to address schedule problems.

The company began notifying airline customers last week that it had decided to move away from wireless in-flight
entertainment, or IFE, after determining the technology wasn't going to work as well as initially believed. Boeing
hoped to be able to wirelessly beam content like movies to entertainment units built into seat backs. The biggest
concerns focused around the availability of bandwidth to simultaneously deliver DVD-quality movies and
indications some countries weren't willing to grant regulatory approval for the use of certain wireless frequencies.

"We had been tracking a number of risks relative to wireless IFE, and two of them started taking turns for the
worse," said Mike Sinnett, director of systems for the 787 program.

Boeing officials had touted the 787's wireless in-flight system as a way the Chicago company was insulating itself
against similar wiring headaches that tripped up rival Airbus, a unit of European Aeronautic Defence & Space Co.,
and contributed to a two-year delay in the first deliveries of the A380. Mr. Sinnett acknowledged the decision "could
be perceived as a step back" by some customers, but he said Boeing still is delivering on its promise to build the 787
so airlines will be able to reconfigure passenger cabins without having to rewire much of the plane. Boeing initially
had believed a wireless system would make this easier. Instead, it found each seat row would have to be fitted with a
one-pound antenna, and 23 wireless access points weighing two pounds each would need to be installed on beefed-
up ceiling panels. Mr. Sinnett said the additional equipment increased the 787's weight by 200 pounds, compared
with 50 pounds for traditional wiring. The wires now will be routed through the seat tracks on the airplane's floor,
still making it possible for carriers to move seats around without tearing apart the airplane, he said.

    1.   What do you see as Boeing’s greatest strength?
    2.   What qualities does Boeing look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Boeing?

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                                                               4820 150 Ave NE,
                                                               Redmond WA 98052
                                                               Phone: (425) 882-2040
                                                               Web Site:

Start:                                                         End:
1901 Oakesdale Ave Sw                                          4820 150th Ave Ne
Renton, WA 98055-1222, US                                      Redmond, WA 98052-5111, US

4820 parking lot: Park in visitor parking by the main entrance near the middle of building

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Meet in Main Lobby
12:45 PM – 2:30 PM Presentation, Questions, Tour

Company Information:
It's not a game, boy, it's serious business, and Nintendo -- one of the Big Three videogame console makers -- knows
it. Nintendo's GameCube and Wii systems battle with Microsoft for second place in its industry while Sony leads the
trio. In the handheld console segment, however, Nintendo's Game Boy system remains the leader. The firm debuted
a videogame player called Nintendo DS (Nintendo Double Screen) in 2004, the Game Boy Micro in late 2005, and
the DS Lite in 2006. Its Wii, pronounced "we," videogame system arrived in time for 2006 holiday sales.

Nintendo is also the game software market leader and has sold more than 2 billion games since 1985; hit series
include Pokémon, Super Mario Brothers, and The Legend of Zelda.

Nintendo (which, loosely translated, means "leave luck to heaven") once ruled the golden age of the video game
industry until more powerful machines introduced by SEGA (in 1989) and Sony (in 1994) pared down its kingdom
(SEGA has since stopped making console systems). Microsoft entered the gaming hardware market in 2001, leaving
Nintendo with a shrinking piece of the pie.

The company plans to broaden its previous focus on kids and concentrate its efforts on its games, in contrast to
competitors Sony and Microsoft, which are developing increasingly complex multimedia systems. The introduction
of the Nintendo DS system is a competitive move designed to counter the launch of Sony's PlayStation Portable.
The company launched Nintendo Wi-Fi Connection, a free service that will allow DS system players to play other
users simply by connecting to a wireless network.

Nintendo introduced a new game console, named Wii in late 2006. The system follows its competitors' new
offerings -- Microsoft's Xbox 360 and Sony's PlayStation 3 (within the same week). Unlike those two offerings, Wii
is a game console first and foremost and not a digital entertainment hub. The company hopes that its Wii system,
priced at about half of what Sony's Playstation 3 sells for depending on features, will woo game players and make
gaming a family activity.

In a bold move that signals a strong focus on just gaming, Wii does not play DVDs and requires an add-on unit to do
so. In addition to being backwards compatible with GameCube titles, players also have access to an online library of
popular classic Nintendo titles dating back to 1985.

Nintendo owns a majority stake in the Seattle Mariners baseball team, which it purchased for $125 million in 1992.

Nintendo Co. was founded in 1889 as the Marufuku Company to make and sell hanafuda, Japanese game cards. In
1907 the company began producing Western playing cards. It became the Nintendo Playing Card Company in 1951
and began making theme cards under a licensing agreement with Disney in 1959.

During the 1950s and 1960s, Hiroshi Yamauchi took the company public and diversified into new areas (including a
"love hotel"). The company took its current name in 1963. Nintendo began making toys at the start of the 1970s and
entered the budding field of video games toward the end of the decade by licensing Magnavox's Pong technology.
Then it moved into arcade games. Nintendo established its US subsidiary, Nintendo of America, in 1980; its first hit
was Donkey Kong ("silly monkey") and its next was Super Mario Bros. (named after Nintendo of America's
warehouse landlord).

The company released Famicom, a technologically advanced home video game system, in Japan in 1983. With its
high-quality sound and graphics, Famicom was a smash, selling 15.2 million consoles and more than 183 million
game cartridges in Japan alone. Meanwhile, in 1983 and 1984, the US home game market crashed, sending pioneer
Atari up in flames. Nintendo persevered, successfully launching Famicom in the US in 1986 as the Nintendo
Entertainment System (NES).

To prevent a barrage of independently produced, low-quality software (which had contributed to Atari's demise),
Nintendo established stringent licensing policies for its software developers. Licensees were required to have

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approval of every game design, buy the blank cartridges from the company, agree not to make the game for any of
Nintendo's competitors, and pay Nintendo royalties for the honor of developing a game.

As the market became saturated, Nintendo sought new products, releasing Game Boy in 1989 and the Super Family
Computer game system (Super NES in the US) in 1991. The company broke with tradition in 1994 by making
design alliances with companies like Silicon Graphics. After creating a 32-bit product in 1995, Nintendo launched
the much-touted N64 game system in 1996. It also teamed with Microsoft and Nomura Research Institute on a
satellite-delivered Internet system for Japan. Price wars between the top contenders continued in the US and Japan.

In 1998 Nintendo released Pokémon, which involves trading and training virtual monsters (it had been popular in
Japan since 1996), in the US. The company also launched the video game The Legend of Zelda: Ocarina of Time,
which sold 2.5 million units in about six weeks. Nintendo issued 50 new games for 1998, compared to Sony's 131.

Nintendo announced in 1999 that its next-generation game system, Dolphin (later renamed GameCube), would use
IBM's PowerPC microprocessor and Matsushita's DVD players.

The company bought a 3% stake in convenience store operator LAWSON in early 2000 in hopes of using its online
operations to sell video games. Nintendo also teamed with advertising agency Dentsu to form ND Cube, a joint
company that develops game software for mobile phones and portable machines.

In September 2001 Nintendo launched its long-awaited GameCube console system (which retailed at $100 less than
its console rivals, Sony's PlayStation 2 and Microsoft's XBox); the system debuted in North America in November.
In addition, the company came out with Game Boy Advance, its newest handheld model with a bigger screen and
faster chip.

Nintendo formed a business alliance with game software developer Namco in May 2002 for the development and
sales of games for the GameCube platform. In October the European Union fined Nintendo $165 million for
colluding with seven of its distributors to limit the cross-border flow of its products in a scam to raise prices.

In April 2003 the company cut its royalty rates (charged to outside game developers), in an effort to enhance its
video game titles portfolio. Later in the year Nintendo bought a stake (about 3%) in game developer and toy maker
Bandai, a move expected to solidify cooperation between the two companies in marketing game software.

Related Articles:

Nintendo's 9-Month Net Beats Full-Year Target
January 26, 2007
TOKYO -- Nintendo Co. said its net profit for the nine months ended in December surpassed its target for the full
fiscal year.

The Kyoto, Japan, game maker has been in the spotlight with the launch of its Wii console late last year, but its
hand-held Nintendo DS system has been its star product. The games have soared in popularity as Nintendo
increasingly has focused on novice users over hard-core gamers.

"Nintendo's focus has always been kids. Now they've expanded to adults, who have a lot more disposable income,"
said Macquarie Securities analyst David Gibson.

This led to a net profit of 131.92 billion yen ($1.09 billion) for the first three quarters of the year ending in March, a
43% rise from the year-earlier period. Its profit target for the full year is 120 billion yen. The company, which bases
its financial results on Japanese accounting standards, didn't break down results by quarter.

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Rivals Sony Corp., which released its PlayStation 3 in November, and Microsoft Corp., maker of the Xbox 360,
which hit stores more than a year ago, are focused on luring technology-savvy gaming enthusiasts with advanced
hardware and graphics.

Nintendo has neatly sidestepped this arms race by appealing to a broader audience -- its best-selling software
includes the DS games Brain Age, a mental-conditioning game aimed at adults, and Nintendogs, a game where users
raise and play with virtual puppies. Its new Wii console features wireless virtual controllers that users slash and
swing to control game actions.

Consumers have responded enthusiastically. In the three-month quarter ended in December, which includes the peak
holiday season, Nintendo said it sold 5,064 software titles for the DS, more than double what it sold in the first six
months of the fiscal year. From the Wii's launch Nov. 19 in the U.S. and Dec. 2 in Japan through Dec. 31, it sold a
net 3.19 million consoles, putting it well on its way to its target of six million by the end of March.

An important part of this strategy, analysts say, is that its games are more profitable than those of rivals. "Game
development for the Nintendo DS is 1/10 the cost of other platforms," said Mr. Gibson, adding that such software
has a 70% profit margin.

In contrast, Sony's PS3, which is loaded with high-end graphics, processing and a next-generation DVD player, is
expensive to build and has been hit with launch delays because of shortages of parts.

Game makers often sell their consoles at a loss initially, counting on economies of scale and game revenue for profit.
Nintendo already is at or near break-even on its Wii console, while "Sony will have no profit on [PS3] hardware for
the next three years," according to Mr. Gibson.

Separately, Nintendo is to start helping gamers keep in touch with the outside world this weekend as it launches an
online-news service through its Wii console, according to the Associated Press. The Wii News Channel, scheduled
to debut tomorrow, will feature top news stories and photographs from the AP. Terms of the deal weren't disclosed.
Consoles with a broadband Internet connection and the Opera Web browser will be able to access the free news
channel, which will offer AP news in multiple languages.

The Fundamental Case for Nintendo
Monday March 5, 2:11 am ET

Paul Tracy submits: Japan-based Nintendo is the world's third-largest video game console maker, trailing only
Sony and Microsoft. The company was among the pioneers of the industry, gaining notoriety in the late-1980s and
1990s with its original Nintendo console.

The company also produces a portfolio of popular games, including Metroid, The Legend of Zelda, and Super Mario
Brothers. These longstanding favorites were developed in-house and have been around for nearly two decades.

Competitive Advantage
Nintendo benefits from its strong reputation and brand recognition with slightly older gamers. Most were introduced
to the company back in the 1980s and are familiar with the company's popular software titles and on-screen
characters. These consumers are intensely loyal to the brand. In addition, while there is certainly some overlap, this
is a slightly different niche than that targeted by Sony and Microsoft.
We also see the new Wii console's price, availability and unique design as key advantages for Nintendo over the
next few years. Specifically, the PS3 retails for $499 to $599, depending on which version of the system you
purchase -- and Sony is losing money even at that price. Meanwhile, the Nintendo Wii costs about $250 and is made
out of more generic, easier-to-source components.
As a result, the Wii is both cheaper and easier to find than the PS3. While both consoles have been selling well, the
Wii has been exceeding analysts' expectations by a wider margin. In short: the console cycle for the Wii is ramping
up faster than for the PS3. And while price is rarely a sustainable competitive advantage longer term, in this case it's
giving Nintendo a leg-up in the sweet spot of the console cycle.

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On the design front, the Wii incorporates a highly innovative controller that is sensitive to hand motions made by the
user. This allows users to play games like golf and tennis on the machine more realistically. That feature has proven
popular and has opened up a line of games unique to the Wii. While Sony could design a similar controller, it would
take well over a year to develop the hardware and games compatible with the new controllers.

Growth Drivers
The primary growth driver for Nintendo over the next few years will be the Wii. Supplies are tight at the moment,
but availability of the console is already improving somewhat. With millions of new Wii systems being shipped all
over the world, Nintendo is essentially opening up its software to a wider audience.
All those new consoles represent an opportunity for the company to start selling even more of its iconic software
titles. Since many of the most popular titles and characters are unique to Nintendo, the firm gets to keep all of those

Valuation and Outlook
Nintendo trades at about 32 times forward earnings. While no analysts publish five-year growth expectations,
earnings are expected to soar over the next two years, which makes that multiple look much more reasonable. And
with Wii sales ramping up faster than expected, Nintendo has a good shot at beating Wall Street's expectations over
the next few years.

    1.   What do you see as Nintendo’s greatest strength?
    2.   What qualities does Nintendo look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Nintendo?
    4.   This question is for each of the presenters, how would you describe your typical day?
    5.   Is there any advice you would like to share with us as we continue through business school?

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Weyerhaeuser Corporate Headquarters
33663 Weyerhaeuser way South,
Federal Way WA 98003
Phone: (253) 924-2345
Web Site:

Start:                                                         End:
4820 150th Ave Ne                                              33663 Weyerhaeuser Way S
Redmond, WA 98052-5111, US                                     Federal Way, WA 98001-9620, US

Parking is available for free in the unmarked parking spaces of the corporate lots

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Take the elevator to the 4 floor and collect the visitor passes at the front desk
3:30 – 4:30 PM Corporate Overview
4:30 – 5 PM    Q&A
Speakers: Tom Cook, Director, Investment Evaluation Department
          Robert Sappington, Project Director, IED
          Other members of IED

Company Information:
If a tree falls in a Weyerhaeuser forest, someone is there to hear it -- and he has a chainsaw. One of the top US forest
products companies, Weyerhaeuser operates in five business segments: Wood Products produces lumber, plywood,
and other building materials; Containerboard, Packaging, and Recycling makes corrugated boxes, linerboard,
industrial and agricultural packaging, and recycling; Pulp and Paper produces pulp and coated and uncoated papers;
Timberlands manages 6.4 million acres of company-owned US timberland and 30 million acres of leased Canadian
timberland; and Real Estate and Related Assets develops housing and master-planned communities. Weyerhaeuser
has merged its copier paper business with Domtar.

According to the terms of the $3.3 billion deal, Weyerhaeuser shareholders get a 55% stake in the new company.
Weyerhaeuser will control the new company's board, and several Weyerhaeuser executives have been assigned to
manage the new company. Transferred operations include about a dozen paper and pulp mills, 14 converting centers,
a coated groundwood mill, and two softwood lumber mills.

In light of the downturn in the home building market, the company is scaling back on its housing business, delaying
land purchases and limiting housing starts.

As part of its ongoing efforts to streamline operations, Weyerhaeuser has announced an agreement to sell its 16
Canadian wholesale building materials distribution centers to Platinum Equity. The company also plans to sell 10
(out of about 50) US distribution centers.

Three divisions -- Wood Products; Containerboard, Packaging and Recycling; and Pulp and Paper -- account for
about 80% of Weyerhaeuser's sales. For the future, Weyerhaeuser plans expansion in the Southern Hemisphere in
places such as Australia, Brazil, New Zealand, and Uruguay, where the company already has operations.

Frederick Weyerhaeuser, a 24-year-old German immigrant, bought his first lumberyard in 1858 in Illinois. He also
participated in joint logging ventures in Illinois, Minnesota, and Wisconsin. In 1900 he and 15 partners bought
900,000 timbered acres from the Northern Pacific Railway. The venture was named Weyerhaeuser Timber

During the Depression the business recouped losses in the deflated lumber market by selling wood pulp. Frederick's
grandson, J. P. "Phil" Weyerhaeuser Jr., took over as CEO in 1933.

Diversification into the production of containerboard (1949), particleboard (1955), paper (1956), and other products
led the company to drop "Timber" from its name in 1959. In 1963 Weyerhaeuser went public and opened its first
overseas office in Tokyo.

In the 1970s George Weyerhaeuser (Phil's son) diversified further to insulate the company from the forest-product
industry's cyclical nature and ended up with a mishmash of businesses and products, from private-label disposable
diapers to pet supplies.

The eruption of Mount St. Helens in 1980 destroyed 68,000 acres of Weyerhaeuser timber. That disaster and the soft
US lumber market depressed the company's earnings through 1982. Weyerhaeuser reduced its workforce by 25%
during this period.

Under John Creighton (president since 1988 and CEO from 1991 until 1998), Weyerhaeuser refocused on forest
products and organized along product lines rather than by geographic region. Less-successful ventures were put up

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for sale, including milk carton, hardwood, and gypsum board plants. The company took a $497 million pretax
charge in 1989 related to the decision to close unprofitable operations. Earnings improved in 1990 but dropped again
in 1991, reflecting the recession in the US and plant closures.

In 1992 the company outbid Georgia-Pacific, paying $600 million for two pulp mills, three sawmills, and more than
200,000 acres of forest land to boost its market-pulp capacity by 40%. The following year the company sold its
disposable-diaper business through a public offering in a new company, Paragon Trade Brands. It also sold GNA
Corporation to General Electric subsidiary GE Capital.

The federal government in 1995 allowed the company to harvest trees in an area inhabited by the endangered
northern spotted owl. The move angered environmental groups. In 1997 Weyerhaeuser began to reorganize its
recycling business by selling or closing noncore units. It also purchased a stake in 193,000 acres on New Zealand's
South Island, the company's first overseas investment in more than a decade. In 1998 the company restructured its
joint venture with Nippon Paper, with Weyerhaeuser decreasing its stake in North Pacific Paper Company from 80%
to 50%, and closed a lumber mill in Canada. Also that year Steve Rogel, a veteran from competitor Willamette,
succeeded Creighton as CEO and became the first outsider to head Weyerhaeuser.

In 1999 Weyerhaeuser paid $2.45 billion for Canada's MacMillan Bloedel, and early in 2000 it acquired TJ
International, 51% owner of leading engineered lumber products company Trus Joist MacMillan (Weyerhaeuser
already owned the other 49%). Also in 2000 Weyerhaeuser purchased two sawmills and a 70% stake in lumber
distributor Pine Solutions from Australia-based CSR Limited. Weyerhaeuser sold its Marshfield Door architectural
wood door business and closed some of its manufacturing operations to consolidate its business.

After a protracted courtship, in March 2002 Weyerhaeuser acquired Oregon-based Willamette Industries in a $6.1
billion cash deal. The company closed three North American plants (in Colorado, Louisiana, and Oregon) later that
year. In October the company closed a Canadian containerboard mill, cutting 140 jobs in the process. At the close of
the year Weyerhaeuser sold approximately 115,000 acres of timberlands in western Washington to Boston-based
Hancock Timber Resource Group (international timber investment and management) for about $211 million to aid
in paying down its debt associated with the Willamette acquisition.

On the heels of the deals for MacMillan Bloedel, Trus Joist MacMillan, and Willamette, Weyerhaeuser moved to
pay down debt. It sold more than 320,000 acres of the timberland (in the Carolinas and Tennessee) that it acquired
with the Willamette purchase. Before the end of 2003, Fountain Investments had acquired about 168,000 acres of
the west-central Tennessee acreage and Forest Investment Associates purchased about 160,000 acres of western
North Carolina and South Carolina timberlands. Weyerhaeuser gained about $140 million in after-tax proceeds from
the latter sale.

Also in 2003 Weyerhaeuser sold its Nipigon Multiply hardwood plywood underlayment operation in Ontario,
Canada, to Columbia Forest Products. Late in the year the company closed its fine-paper operations in Longview,
Washington (eliminating 119 jobs there). Altogether, Weyerhaeuser closed 12 facilities and sold about 444,000
acres of non-strategic timberlands in 2003 in keeping with its plan to reduce company debt and increase productivity.

The company closed its Grande Cache, Alberta, sawmill in February 2004 (affecting more than 150 jobs there) and
sold its oriented strand board (OSB) mill in Slave Lake, Alberta, to Tolko Industries for about $43 million. Also in
2004 Weyerhaeuser sold roughly 270,000 acres of timberlands in central Georgia for about $400 million to
investment and property firms in Georgia and South Carolina.

In October 2004 the company's Weyerhaeuser Brasil Participações Ltda. subsidiary acquired two-thirds ownership
in Brazil-based Aracruz Produtos de Madeira (APM), a subsidiary of Aracruz Cellulose S.A., to produce lumber
made from a eucalyptus hybrid for use in furniture, flooring, cabinetry, and other applications. Aracruz Cellulose
holds the remaining third ownership in the joint venture. Also that year Weyerhaeuser changed the name of its pulp
business to Weyerhaeuser Cellulose Fibers to reinforce its focus on developing unique or specialized applications
for cellulose fibers.

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Early in 2005 Weyerhaeuser agreed to sell five Canadian sawmills, two finishing plants, 635,000 acres of timber,
and some government land cutting rights to Brascan for $970 million. Weyerhaeuser had acquired the timber and
sawmill assets when it acquired MacMillan Bloedel in 1999.

The company's debt reduction strategy continued in 2004. Weyerhaeuser sold roughly 270,000 acres of its
timberlands in Georgia and several mills in the US and Canada. The sale of the assets helped the company more than
quadruple net earnings for 2004: $1.3 billion, its best result of the decade. The company used the proceeds to reduce
its debt by some $730 million. In the meantime, Weyerhaeuser reported that it wrung out the $300 million in
expected Willamette-related synergies in half the time predicted.

Weyerhaeuser continued to streamline and focus on its softwood lumber business in 2005, selling $970 million in
assets (five sawmills, two finishing plants, 635,000 acres, and timber rights) to Brascan. Weyerhaeuser also closed a
Saskatchewan pulp and paper mill in 2006, cutting 690 jobs; not long afterward, amid weak profits, it announced
multiple plant closures and sales, including another pulp mill, another sawmill, several corrugated plants, and a
paper bag plant.

In 2006 Weyerhaeuser sold its North American composite panels business, including five mills to the American arm
of Canada-based Flakeboard.

Stock Price (1 Year Chart) and Competitor Comparison:

               WY       Pvt1        IP         LPX       Industry
 Cap:          20.09B     N/A      15.80B        2.06B    563.78M
 ees:            N/A    70,181           N/A      N/A        1.98K
 Qtrly Rev
 (yoy):        -1.10%     N/A      -4.00%      -40.80%      7.80%
 (ttm):        21.90B   3.25B1     22.00B        2.24B    811.22M
 (ttm):       21.73%      N/A      26.13%      18.27%      21.73%
 (ttm):         3.33B     N/A       2.72B      239.60M     98.38M
 (ttm):        9.06%      N/A       6.60%       5.19%       3.44%
 (ttm):       355.00M     N/A       1.28B      125.50M     15.84M
 EPS (ttm):     1.844     N/A       2.175        1.173        1.17
 P/E (ttm):     45.63     N/A       16.05        16.85       20.74

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 PEG (5 yr
 expected):      4.19         N/A       2.72         N/A         1.58
 P/S (ttm):      0.94         N/A       0.72        0.94         0.88

Related Articles:
Weyerhaeuser Swings to Profit
February 9, 2007 11:36 a.m.

NEW YORK -- Weyerhaeuser Co. swung to a fourth-quarter profit aided by gains, but depressed lumber prices and
the home-building market continue weigh on operations.

The Federal Way, Wash., forest-products company reported net income of $450 million, or $1.88 a share, on net
sales of $5.66 billion. The results included a gain of $227 million, or 95 cents a share, for the refund of
countervailing and antidumping duties on Canadian softwood lumber sold in the U.S.

Last year, the company reported a fourth-quarter loss of $211 million, or 86 cents a share, largely due to charges, on
net sales of $5.72 billion.

Analysts surveyed by Thomson Financial estimated the company earned 75 cents a share on revenue of $5.36 billion.

The company noted that the downturn in residential housing construction, combined with normal seasonal slowing,
caused a significant reduction in demand and prices for wood products. In December, Weyerhaeuser executives had
warned that fourth-quarter earnings would be hit by weak prices for lumber and structural panel.

Weyerhaeuser sees some improvement in market conditions for wood products in the first quarter, but still expects
to experience significant losses in its wood-products business -- the biggest in the U.S. The segment is getting hit by
a downturn in home building and construction, which is cutting demand and prices. Sales at the wood-product
segment dropped to $1.62 billion from $2.18 billion in the year-earlier quarter, on declines in composite panels and
oriented strand board, or OSB, sales.

Weyerhaeuser's cellulose fiber and white paper business, much of which is being merged with the operations of
Domtar Inc., contributed $120 million in pretax earnings for the quarter. Excluding the assets transferring to Domtar,
the earnings contribution was about $44 million. The company expects the completion of the Domtar transaction,
which is slated for next month, to affect first-quarter earnings. The company noted that market conditions should
remain favorable in the quarter for fine paper.

Weyerhaeuser agreed in August to spin off its fine-paper products businesses into a new, publicly traded company,
which will then merge with Domtar, a Montreal manufacturing company, in a deal valued by the companies at about
$3.3 billion.

The company also projects a significant decline for its real estate business from the fourth quarter, due to seasonally
lower single-family home closings and the lack of significant land sales. The segment contributed $293 million to
pretax earnings, up from $250 million year earlier, as it benefited from $138 million in sales of land, lots and an
apartment project, as well as seasonally increased single-family home closings and higher average sales prices. In
the timberland segment, Weyerhaeuser expects first-quarter earnings to be slightly lower from the fourth quarter due
to lower demand.

Weyerhaeuser projects earnings for its containerboard segment -- which produces products used to make boxes --
will decrease slightly in the first quarter from the fourth quarter. It expects prices to increase in the first quarter and
shipments to decline due to the effect of California's cold weather on produce markets.

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Weyerhaeuser detailed plans to cut production at two OSB mills in Canada and one in West Virginia, citing weak
demand, beginning the first week of March. The reduction will take 500 million to 600 million square feet of
production out of Weyerhaeuser's system on an annual basis, the company said.

Weyerhaeuser is the second-largest supplier of OSB, next to Louisiana-Pacific Corp., and prices of the product -- a
structural board widely used in construction -- recently hit four-year low. Analysts cite a large amount of new
production capacity scheduled to come on line during the next year.

Weyerhaeuser, Domtar conclude plans to create new paper co.
By Laura Mandaro
Last Update: 10:40 AM ET Mar 7, 2007

SAN FRANCISCO (MarketWatch) -- Canada's Domtar Inc. said Wednesday it had completed a deal, agreed in
August, to combine with Weyerhaeuser Co.'s [s:wy] fine paper business, creating a new company that will be traded
on New York and Toronto stock exchanges. Domtar Corporation, headquartered in Montreal with an operations
center in Fort Mill, South Carolina, is now North America's largest manufacturer and marketer of uncoated freesheet
paper, the type of paper commonly used in office copy machines. Shares in the new 14,000-employee company
started trading Wednesday under the symbol UFS. In a separate release, Federal Way, Wash.-based Weyerhaeuser
said it received $1.35 billion in cash from divesting the business, money which it will use to pay down debt. U.S.-
listed shares of the new Domtar rose 2.7% to $8.76. Shares in Weyerhaeuser fell 2.3% to $84.21

Weyerhaeuser To Become A REIT?
R.M. Schneiderman, 01.22.07, 6:00 PM ET

The past eight weeks have been good for Weyerhaeuser, as the stock price of the forest products giant has risen
roughly 15%.

The reason: increased speculation that the company will become a real estate investment trust (REIT), a business
structure that offers major tax advantages as well as benefits to shareholders.

On Friday, Weyerhauser (nyse: WY - news - people ) said it had appointed Debra Cafaro, the chief executive of
Ventas (nyse: VTR - news - people ), a health care real estate investment trust, to its board.

Some analysts viewed this move as a sign that the company was once again seriously pursuing changing the format
of its timberland assets into a REIT structure.

In a recent note, Mark Wilde, an analyst for Deutsche Bank said it's significant that a company press release said
Cafaro's potential as a board member surfaced in recent conversations with Franklin Mutual Shares, Weyerhaeuser's
number two shareholder, and a leading voice for the switch to the REIT format.

The reasons for the switch are compelling, said the analyst, as the company has been under pressure to make money
off its timber assets.

"The forest products industry simply hasn't managed vertical integration effectively," said Wilde.

"There are several dimensions of this issue, including poor use of timberland cash flows, failure to fully optimize
land values and poor operating performance in downstream businesses."

Paul Latta, an analyst for McAdams Wright Ragen, said the structural shift would also offer a big tax benefit to the
company, as it would significantly reduce the corporate income taxes Weyerhaeuser would have to pay.

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"There's a tax savings write off," he said. "Investors would be paid out of the cash flow on the timber business and
the profit would effectively not be taxed."

Whether or not the move will occur, however, remains to be seen. Stuart Benway, an analyst for Standard & Poor's
Equity Research put the chances at 50-50.

Yet last May, the company said such a structure wouldn't make sense. When a firm applies to become REIT, the
Internal Revenue Service (IRS) reviews the application and determines if it was done for legitimate business
reasons. If the IRS decides it wasn't, the company can be fined. Benway estimated that Weyerhaeuser's penalty
could be in the range of $3 to $4 billion dollars.

Richard Schneider, an analyst for UBS said on limiting factor is that the company would have to sell a number of its
assets that wouldn't qualify for REIT status.

"This is not a good time in the cycle to sell wood products or homebuilding operations," he said.

"We believe that tax issue and asset sales complicate the picture and would take time to address."

On Aug. 23, the company merged its fine paper division with Domtar (nyse: DTC - news - people ), the Canadian
paper marker, in a roughly $3.3 billion deal.

By the closing bell on Monday shares fell roughly 1.2%, or 87 cents, to $73.38.

    1.   What do you see as Weyerhaeuser’s greatest strength?
    2.   What qualities does Weyerhaeuser look for in potential hires/interns?
    3.   What advice do you have for students interested in pursuing a career at Weyerhaeuser?
    4.   This question is for each of the presenters, how would you describe your typical day?
    5.   Is there any advice you would like to share with us as we continue through business school?

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