Asia stocks continue to rise POSTED: 0726 GMT (1526 HKT), December 14, 2006 SINGAPORE (Reuters) -- Asia stocks rose on Thursday, led by electronics firms such as Sony, after surprisingly strong retail sales figures from the United States raised hopes for the key year-end shopping season. Australian stocks hit a record high, South Korea's benchmark index jumped 2.5 percent and Japan's Nikkei closed at its highest level in seven months. "Japanese stocks are getting a boost（增长） after the U.S. reported solid retail sales for November, which prompted investors to expect stronger Christmas sales," said Tsuyoshi Segawa, an equity strategist at Shinko Securities. Tokyo's Nikkei rose 0.8 percent, while MSCI's broadest index of shares elsewhere in Asia gained 1.2 percent by 0615 GMT. Sony shares rose 1.8 percent and cameras and copiers maker Canon gained 1.7 percent. In Seoul, LG Electronics soared 4.1 percent and Samsung Electronics rose 2 percent. Australia's S&P ASX 200 rose 1.6 percent to close at an all-time high, with Qantas Airways up 3.7 percent after agreeing to an $8.7 billion takeover bid （收购报价） led by Macquarie Bank and private equity firm Texas Pacific. The main indexes in Hong Kong, Singapore and Taiwan all posted gains, while China's benchmark index hit a record high. Japanese government bond prices dipped, taking their cue from a sharp slide in U.S. Treasuries, but trade was quiet as investors awaited the Bank of Japan's influential tankan survey of business sentiment on Friday. "The market might be caught in a tug of war between losses in U.S. Treasuries and fading expectations for a rate hike here," said Goldman Sachs JGB strategist Hiroyoshi Sandaya. Japan's March 10-year futures edged 0.09 point lower to 134.79, above a session low of 134.63. The benchmark（水准点） 10-year yield rose 1.5 basis points to 1.620 percent. Q: What companies led Asia stocks rise on Thursday? A: Electronics firms.
Q: Who offered a takeover bid for Qantas Airways? A: Macquarie Bank and private equity firm Texas Pacific. http://edition.cnn.com/2006/BUSINESS/12/14/asiastox.thursday.reut/index.html
Europe lifted by U.S., Asia POSTED: 0926 GMT (1726 HKT), December 14, 2006 FRANKFURT, Germany (Reuters) -- European shares opened higher on Thursday, with strong gains in British bank HBOS, after Asian stocks rose on upbeat (乐观的) U.S. retail sales data. The FTSEurofirst 300 Index had risen 0.5 percent to 1,478.39 points by 0813 GMT. London's FTSE 100 gained 0.6 percent, Paris' CAC-40 rose 0.5 percent, and Frankfurt's DAX climbed 0.4 percent. Shares in Britain's fourth-biggest bank HBOS rose 2.5 percent after it said it was on course to beat market expectations（市场预期） for earnings growth this year. Shares in Britain's PartyGaming rose 4.2 percent after it said its daily online poker revenues had recovered and it was in talks to buy smaller businesses. Nestle shares rose 0.5 percent, after the world's largest food group agreed to buy the medical nutrition business of Swiss pharmaceutical group Novartis for $2.525 billion. Novartis was up 0.4 percent. Investors will also be keeping a close eye on the oil price as the OPEC oil exporters' cartel （卡特尔） meets to set output policy. Q: What is Britain’s fourth biggest bank? A: HBOS. Q: Which company is the world’s largest food group? A: Nestle. http://edition.cnn.com/2006/BUSINESS/12/14/europe.shares.reut/index.html
New record for Shanghai index POSTED: 0855 GMT (1655 HKT), December 14, 2006
SHANGHAI, China (AP) -- Chinese stocks rose to a new high Thursday, surging （飙 升） past the previous peak set in 2001 amid renewed confidence in the country's markets and expectations for a stronger local currency. The Shanghai Composite Index gained 1.2 percent to close at 2,249.11, its highest closing level ever. It hit an intraday high of 2,250.32, compared with the previous intraday high of 2,245.43 hit in June 2001. "Investors keep putting money into the market and most of them believe that the long-term prospects of market are positive given the hopes for yuan gains and better corporate earnings （公司盈利）," said Hao Guomei, an analyst at Huatai Securities. The Shenzhen Composite Index at Shanghai's smaller counterpart rose 1.4 percent to 516.95, also a new record high. The strong showing marks a remarkable recovery for both of China's exchanges, whose total value has doubled this year after languished for most of the past five-years amid trading scandals. Their combined market capitalization has more than doubled to US$945 billion from US$411 billion at the end of 2005. Plans by China's top life insurer and other major companies to issue shares in Shanghai and Shenzhen have given the already booming markets an extra boost. China's stock markets, founded in the early 1990s, originally were set up to raise funds for state owned companies and have long suffered from the lackluster reputation of most of the equity on offer. A constant stream of trading scandals and other abuses also helped keep wary investors away. Regulators are encouraging star companies to list shares, hoping to improve the quality of equity traded and lure investors who have stayed away in recent years. Shareholding reforms that are gradually shifting government-held, nontradable shares into the market have also helped. China still limits foreigners' purchases of the yuan-denominated stocks that make up the biggest share of the markets. But that is gradually changing as regulators allow increasing participation by so-called qualified foreign institutional investors. Meanwhile, the Chinese currency's gradual gains against the U.S. dollar have also boosted （促进） investor sentiment. Many Chinese companies stand to benefit from a stronger yuan, especially asset-rich banks and property developers. The yuan rose to a new high against the dollar Thursday as high-level China-U.S. trade talks began, with U.S. Treasury Secretary Henry Paulson pointing to Beijing's
controls the currency as the most pressing issue. The yuan was trading at 7.8220 to the dollar in the over-the-counter market late Thursday, compared with Wednesday's close of 7.8265. Since the currency was revalued in July 2005, the yuan has risen 3.6 percent against the U.S. dollar -- not enough for American manufacturers who complain that Beijing's restrictions on trading in the yuan keep it undervalued against the dollar. They claim that gives Chinese exporters a price advantage and contributes to the trade imbalance between the two countries. The flood of money into China's stock market, meanwhile, prompted the securities regulator to warn this week of potential risks from a surge in mutual fund sales. The China Securities Regulatory Commission said it had temporarily stopped processing applications for new funds to invest in the stock market. Still, analysts say the market is far from overvalued, since the average price per share is at 5 yuan (US$0.64; euro0.38) a share, compared with three times that level five years ago. "We don't need to worry that the index will decline sharply," said Peng Yunliang, a senior analyst at Shanghai Securities. "I think the stock prices and the whole market are now on track, increasing gradually and stably."
Q: What are regulators encouraging star companies to do? A: To list shares. Q: What did the flood of money into China's stock market prompt the securities regulator to do? A: To warn this week of potential risks from a surge in mutual fund sales. http://edition.cnn.com/2006/BUSINESS/12/14/china.stox.record.ap/index.html
Nestle in $2.5 billion Swiss swoop POSTED: 0958 GMT (1758 HKT), December 14, 2006 ZURICH, Switzerland (Reuters) -- Nestle, the world's largest food group, is buying the medical nutrition business of Swiss pharmaceutical group Novartis AG for $2.525 billion (1.88 billion euros), the companies said on Thursday. The deal, which was the subject of wide speculation, will propel （推动，促进）
Nestle to the No. 2 position globally in the fast-growing niche business of providing specialised food to hospital patients. Novartis said the proceeds of the sale would be used to strengthen its financial position as well as provide additional strategic flexibility. The sale does not include the Gerber baby food division, Novartis said. Swiss-based Nestle said it did not expect the deal to have any material impact on earnings in the short term. Under Chief Executive Peter Brabeck-Letmathe, Nestle has been moving steadily toward high-margin, value-added food production in addition to its core operations in food staples （主食）. The nutrition unit sale comes on the heels of Nestle's $600 million purchase of U.S. food company Jenny Craig. Jenny Craig makes a range of food products and services such as weight management programs in the United States, Canada, Australia and New Zealand. "This is the medical nutrition part of Novartis nutrition -- foodstuffs destined for people who are hospitalized （住院） and have specific nutritional needs and often need to be fed through a tube," said a Nestle spokesman. Shares in Novartis rose 0.5 percent and Nestle added 0.8 percent by 0843 GMT. The deal was widely predicted after Novartis CEO Daniel Vasella said earlier this month that nutrition was not a central part of the drug group's operations and a sale was on the cards. But by failing to shed Gerber, Novartis leaves a question about whether another divestment could be coming shortly. Equity analysts at private bank Vontobel said Novartis could also sell its infant and baby nutrition unit in the medium term. Novartis's Medical Nutrition unit is active in around 40 countries and has about 2,000 employees. The business is expected to generate approximately $950 million in net sales in 2006 and approximately $90 million of operating income. The sale news overshadowed a separate Novartis announcement on Thursday that possible U.S. regulatory approval for its blood pressure drug Tekturna, developed with biotech firm Speedel, had been delayed by up to three months as the U.S. Food and Drug Administration reviews new data.
The news knocked around 3 percent off Speedel shares. Q What did the deal lead to? A: A wide speculation. Q: In how many countries is Novartis's Medical Nutrition unit is active? A: In around 40 countries. http://edition.cnn.com/2006/BUSINESS/12/14/swiss.nestle.reut/index.html
Qantas agrees to revised buyout POSTED: 0745 GMT (1545 HKT), December 14, 2006 MELBOURNE, Australia (Reuters) -- Australia's Qantas Airways agreed on Thursday to a sweetened $8.7 billion buyout（全部买下）offer from a group led by Macquarie Bank and private equity firm Texas Pacific Group in the world's biggest airline takeover. The sale of the national icon, dubbed the flying kangaroo, has stirred nationalistic sentiment and reached the top levels of Australian politics, prompting the bidding group to stress that the airline would remain majority Australian owned. However, Prime Minister John Howard signaled the government was unlikely to interfere in any change of hands of the airline, founded 86 years ago in outback Queensland as an air taxi service. "I hope that the Qantas we know is the Qantas we keep. People like Qantas. It is an icon. That doesn't mean to say its shares can't change hands," Howard told Australian Broadcasting Corp. radio. The offer tops an $8.6 billion bid for bankrupt Delta Airlines by U.S. Airways Go up in November, and would be the biggest private-equity buyout in Asia, outside of Japan, if approved by shareholders early next year. It coincides with a wave of consolidation talk across the industry, including recent merger talks between UAL, parent of United Airlines, and Continental Airlines. The offer of A$5.60 a share, 10 percent above Qantas's last trade on Wednesday, was unanimously endorsed（同意） by the Qantas board after the bidders dropped a demand for a break-up fee and simplified other conditions, Qantas chairman Margaret Jackson said.
The board rejected an offer of A$5.50 on Wednesday. Qantas shares jumped 5.5 percent to a record high A$5.37, but remained below the offer price, suggesting investors were not going to hold out for a better bid. "Qantas never traded anywhere near this before. So we are happy with the price that is being offered," said Ross Barker, chief executive of Australian Foundation Investment, which manages about A$4 billion in funds including Qantas. The offer price is 29 percent higher than Qantas's share price before the airline said on November 22 that it had been approached with a buyout offer. Remaining Australian Looking to reassure politicians and unions, the bid team Airline Partners Australia said it has no plans to break up Qantas, send its maintenance operations offshore, or cut regional Australian routes. However, Qantas Chief Executive Geoff Dixon refused to bow to a union call for the new owners to guarantee existing jobs and entitlements of Qantas workers. The bid values Qantas at a 61 percent premium to its average share price in the six months to November and at 15.9 times forecast earnings for 2007, compared with regional rivals Singapore Airlines trading at 12.9 and Cathay Pacific Airways at 17.8, according to Reuters data. "I think we've done a very good job for the shareholders," Qantas chairman Jackson told reporters. The bidding team has been carefully shaped to ensure it meets ownership caps on Australia's flag carrier, which require the airline to remain majority Australian-owned, with no individual shareholder owning more than 25 percent. The airline will be 27-percent owned by Allco Equity Partners, with Texas Pacific Group owning 25 percent, Allco Finance Group 8 percent, Macquarie with less than 15 percent, Canadian investment firm Onex 12.5 percent and other foreign investors combined with 11.5 percent. Voting stakes are slightly different. Qantas management will hold 1 percent, with Dixon, 66, staying on as chief executive for at least the next three years. All the key members of Airline Partners have been deeply involved with the airline industry. Allco Finance's directors include former British Airways chief executive Rod Eddington and former Cathay Pacific chairman David Turnbull.
Texas Pacific rescued Continental Airlines from bankruptcy in 1993 and has held stakes（股份） in the former America West and Ireland's Ryanair. Allco Finance has long-term aircraft leasing deals with airlines including Qantas, British Airways and Singapore Airlines. Macquarie is involved in aircraft leasing and has stakes in airports, and Onex's investments include the world's largest supplier of commercial airplane components, Spirit Aerosystems. Dixon said there were no plans for asset sales built into the financial assumptions for the deal, but Qantas would continue to look at spinning off businesses like its catering arm. Allco Equity Partners said that it would raise A$682 million to part fund its share of the acquisition, which would see it become Qantas's largest shareholder. The consortium did not give any other details on how it would fund the deal, but said it would keep A$2 billion in cash on Qantas's balance sheet. "We've had access to management's current plans and their vision for the future. Over time, with patient capital, we believe it can give us the returns we expect," Airline Partners Australia director Bob Mansfield said. The government has only once before blocked a takeover on national interest grounds, stopping Royal Dutch Shell buying Woodside Petroleum on fears that Shell would develop offshore projects ahead of Woodside's local gas projects. The consortium will have to win over the U.S. and European arms of U.S. fund manager Capital Group, which together own 12.7 percent of Qantas, as the bid is conditional on securing 90 percent acceptance. UBS advised Qantas on the deal, while Macquarie advised the consortium. Q: What has the sale of the national icon caused in the country? A: It has stirred nationalistic sentiment. Q: Which takeover has the government once blocked? A: Royal Dutch Shell buying Woodside Petroleum. http://edition.cnn.com/2006/BUSINESS/12/13/qantas.reut/index.html
China-U.S. Trade: The Real Issues As the two nations talk trade in Beijing, the yuan is front and center, but radically different savings and spending rates are more to the point by Brian Bremner There is shadow play aplenty at the U.S.-Chinese "strategic economic dialogue" taking place in Beijing. A Team America of policy bigwigs（权贵之人,大亨）led by Treasury Secretary Henry M. Paulson, including Bush Administration Cabinet officials and Federal Reserve Chairman Ben S. Bernanke, are in China to show U.S. displeasure over the country's swelling global trade surplus and reluctance to let the yuan trade more freely against other currencies. Right on cue, both sides are making nice in front of reporters and television cameras. Paulson told reporters in Beijing on Dec. 15 after emerging from a meeting with Chinese Vice-Premier Wu Yi that "we agreed on many principles" and that Beijing is open to more currency flexibility. At the same time, the yuan, which is carefully managed by Chinese financial authorities, has been trading at its highest levels against the dollar since Beijing abandoned a decade-long fixed exchange rate 固定汇率） of roughly 8.3 back in July （ of 2005. It's up about 3% this year and nearly 6% since the dollar peg gave way to a new system in which the yuan fluctuates against a basket of currencies including the yen and euro in a tight trading band. So another mission accomplished for the Bush team? Not quite. The reality is that Washington is going to have to live with supersized bilateral Chinese trade deficits for many years to come. The colossal U.S. trade imbalance with China has less to do with currency rates than most people assume—and is far more driven by the radically different savings and spending behavior of both countries. Fixing this will take a lot more than trade missions to Beijing and jawboning with the Chinese about their currency. Here is a guide to the real issues involved. Well, how much stuff is China actually exporting around the globe and what's the outlook for the sensitive bilateral numbers with the U.S.? China's export machine is white hot. The mainland is now the world's No. 3 trading nation, exporting and importing about $1.5 trillion worth of goods and services a year. The country is on track to record a global surplus of $208 billion in 2006, predicts Standard Chartered Bank, more than double last's year $102 billion figure. China's mind-boggling（令人难以置信的）bilateral surplus with the U.S. is expected to finish the year in the $230 billion range, vs. $202 billion in 2005. That will be one
for the record books. But if the yuan is now rising, won't that fix things? It's a baby step in the right direction, sure, but one needs to keep a couple of things in mind. In today's economically integrated global economy, the old maxim that an appreciating currency automatically means a country's exports get more expensive in global markets, and therefore translates into a lower trade surplus, isn't so true anymore. Chinese companies that exclusively build and sell stuff on the mainland and then export abroad will feel the pinch. However, scores of Chinese outfits import components from abroad, and a stronger yuan means foreign-currency-denominated parts will be cheaper. Also, a big chunk of Chinese exports come from multinationals that source globally and use the mainland as a final assembly staging ground before selling goods back home or to other foreign markets. So the price of finished products clearing customs out of China and arriving in foreign ports may not change much, at least at the level of yuan appreciation so far. Q: When did Beijing abandon a decade-long fixed exchange rate. A: In July of 2005. Q: How does the mainland ranks in trading? A: It is now the world's No. 3 trading nation. http://www.businessweek.com/globalbiz/content/dec2006/gb20061215_420725_page _2.htm
Inflation Goes Missing Prices didn't rise at all in November, to economists' surprise. But core inflation remains above the Fed's "comfort zone" by Michael Englund and Rick MacDonald Inflation appeared to take a vacation in November, according to the government's consumer price index report for the month, released Dec. 15. The November overall CPI was flat, vs. economists' median forecast of a 0.2% rise, while the core index, which excludes food and energy prices, also was unchanged (median 0.2%). The November CPI report was much more benign than expected, and certainly less troublesome than the trade price figures for the month, where we saw firm export
prices and a solid import price figure, excluding petroleum, that suggest upward price pressure from foreign trade. The energy component in the report was fairly neutral (-0.2%) following the big drop over the last two months, although trends through early December suggest risk of another big rebound （反弹） next month. Food prices decreased 0.1% despite strength in some related commodity prices and the export food price measure. A Big Pop The core aggregate was held down by a 0.3% decline in apparel, a 0.7% drop in new vehicle prices, a 0.2% moderation in education & communication, and a 0.3% fall in tobacco. The core aggregate has been surprisingly firm so far in 2006, with an average monthly gain of 0.25% through the first nine months of the year, although we have seen an average growth rate of just 0.07% over the last two months. Despite the lean price figures in November, the year-over-year figures still revealed a big pop in the headline rate to 2.0% from the 1.3% rate of October. That was due to the unwinding（消退） of the easy post-Katrina comparison, while the core rate downtick to 2.6% from 2.7% in October is modest. If we get 0.2% gains for the headline and core in December, the headline rate will rise further to 2.2%, and the core rate will tick back up to 2.7%. We will continue to expect a bounce in the November producer price index report on Dec. 19 following the big October declines, but with a slightly lower core reading given the lean CPI figures. We now expect PPI to show 0.5% gains for both headline and core. Our personal consumption expenditure (PCE) chain price forecasts are changed to 0.1% overall and flat for the core. Capping the Downside Risk The lean CPI figures make the robust November retail sales report even more dramatic, as the hefty 1% surge in sales on the month likely included no help from price gains. We at Action Economics now expect real (adjusted for inflation) PCE to post 4.2% growth in the fourth quarter, following the 2.9% rate of the third that is poised for an upward bump to 3.1%. This news further caps the downside risk to our 2.0% fourth-quarter GDP estimate, despite the market's focus on the risk of further deterioration（恶化） in production growth into the fourth quarter. The November CPI figures were no doubt welcomed by the Federal Reserve, but there is still a way to go before the core figures get back into the central bank's 1.5% to 2.5% "comfort zone." Until core inflation can drift back into this range, Fed policymakers will remain focused more on price pressures than economic risks. Q: What does the November CPI report suggest? A: upward price pressure from foreign trade.
Q: What is the central bank’s “comfort zone” regarding CPI? A: 1.5% to 2.5%. http://www.businessweek.com/investor/content/dec2006/pi20061215_490203.htm?ch an=top+news_top+news+index_businessweek+exclusives
Phone, cable companies to battle in 2007 By BRUCE MEYERSON NEW YORK Vonage tanked after its IPO. It's not entirely clear anymore why eBay paid $2.6 billion for Skype. And the long-awaited rollout of advanced TV services based on Internet technologies has resembled the drip of a faucet. It wasn't a banner year for some of the biggest names in Internet Protocol, the technical standard that makes the Web hum（嗡嗡声,哼声,杂声）. But the technology itself continued to blossom, with newer innovations picking away at every corner of the telecommunications business, from voice to video to wireless. No doubt the main event for 2007 will be the impending smack-down between the traditional phone and cable TV industries. The regional Bell companies, after losing millions of customers to rival phone services from cable providers in 2006, are just starting to ramp up their risky push into TV. Verizon Communications Inc. expects its FiOS TV service will be available to 1.8 million homes by January. AT&T Inc. finally appears to be pushing past technological holdups with U-verse, maintaining the IP-based service will be offered in parts of 15 markets by the close of December. The competitive response couldn't come a minute too soon, as cable companies have had a field day in the phone business thus far. Just over 6 million homes will have switched to cable phone service by the end of 2006, a gain of 2.5 million for the year, the industry research company TeleGeography estimates. In advance of the TV push, Verizon and AT&T have battled back with DSL Internet connections priced as low as $15 a month, hopeful of keeping and winning households that can be sold FiOS or U-verse later. The effort has borne some fruit: Although a rapid overall decline in residential phone lines 住宅电话） continues, the （ percentage of remaining homes with phone and DSL service is growing fast, and the Bells are now signing up more first-time broadband users than their cable rivals.
As the giants of phone and cable do battle, however, both sides will find themselves flicking away at technological termites that threaten to hollow their victories by offering new ways to communicate and deliver content, always for less and sometimes for free. Daily it seems, there's another renegade company launching some form of calling or video that bypasses the normal mode of consumption, usually by exploiting IP, a network language that reduces all forms of communication into simple building blocks of data, one indistinguishable from the next. In the past month alone, a half dozen small companies have introduced applications and services to enable cell phone users to make cheaper wireless calls, many exploiting different elements of Voice over IP, or VoIP, the technology also being used by the cable companies and Vonage Holdings Corp. Some of the new services, with names like Talkster, Efonica's Mobilink, Jajah and iSkoot, mimic aspects of a long-distance calling card -- providing cheaper rates by first connecting with a local phone number -- while blending in new capabilities drawn from the world of instant messaging and Skype. Other startups such as Raketu are providing mobile VoIP calling by exploiting a phone's Internet connection rather than the regular voice channel. By adding online buddy lists to the mobile mix, these services can enable a cell user to see whether friends are available before trying to call them, avoiding a waste of time and precious plan minutes. They also can enable quick-click dialing from one listing containing a friend's various phone numbers, Skype account or IM identity. It's entirely possible, maybe probable, that all these newcomers will fail to catch on with enough people to ever resemble a real business. To date, there's only been one Skype, which boasts 8 million simultaneous users at peak hours. And while Skype has only grown in popularity since being acquired last year by eBay Inc. for a stunning $2.6 billion, it's not clear that success will ever produce pots of gold. Yet collectively, Skype and all the would-be Skypes keep nibbling away at the core business model of the telecom industry, which treats a phone call and its length as something far more valuable than mere packets of data traversing a giant computer network. Driving home the contrary point of view, Skype is now launching an unlimited calling plan for the United States and Canada costing just $30 a year. That's roughly the same amount charged every month by the Bells, cable providers, and even Vonage, whose
stock has plunged more than 50 percent since its initial public offering in May, a stark sign of the competitive dangers investors see. Meanwhile, with leading IM services playing up their own calling features, there's a growing critical mass of online users with an alternative way to speak without a regular phone. The big stumbling（障碍的）block here remains incompatibility between different IM providers. But should a few companies like AOL, ICQ, Skype and Yahoo ever decide to bridge their services, the size of the resulting user base would suddenly begin to approach the public phone network. It's not that anyone foresees the imminent collapse of traditional phone and cable providers. To begin with, the upstarts often don't deliver the same level of reliability and sound quality as the mainstream offerings. They all also rely in some fashion on high-speed Internet lines to deliver their services to end users. So while Skype phone traffic has continued to balloon, the vast majority of those calls are placed over DSL and cable broadband lines. Many are connected to traditional phone numbers, producing at least some revenue for the owners of those wires. TeleGeography estimates that Skype users are on track to make over 27 billion minutes of computer-to-computer calls this year, with about half of them used for international long distance (all free). While that sounds like a lot, it still represents just 4.4 percent of total international traffic in 2006, up from 2.9 percent in 2005. "Someday, all calls will be routed over the Internet," said Stephan Beckert, research director at TeleGeography. "But the numbers suggest that traditional international carriers aren't going to disappear anytime soon." Another key factor working in favor of the establishment is convenience. Skype and other insurgents require users to jump through an extra hoop or two: installing additional equipment or software, punching in extra numbers or passwords, sitting at a computer, or maybe leaving your computer running at all times. These requirements make them that much less easy to use than just picking up a phone or flipping on the TV. Such simplicity and familiarity are the bread and butter on which big phone and cable companies are banking to make their investments in network upgrades and new services worthwhile. Even if their overall customer base shrinks, they expect to sell more to each household that stays. Along the same lines, they too are exploiting IP technologies to introduce new capabilities and greater integration between home and mobile services. AT&T, for
example, recently launched a video home surveillance system that can be monitored and controlled on the company's Cingular cell phones. "Some customers are going to want to buy access from us (AT&T) and use other technologies because it gives them an interesting value proposition," AT&T Chief Financial Officer Rick Lindner said in an interview. "But for some customers, they're going to want the convenience of one provider.... That value proposition may not appeal to 100 percent of all people, but it will appeal to the majority."
Q: What will be the main event for 2007? A: It will be the impending smack-down between the traditional phone and cable TV industries. Q: What are the bread and butter on which big phone and cable companies are banking to make their investments in network upgrades and new services worthwhile? A: Such simplicity and familiarity. http://www.businessweek.com/ap/financialnews/D8M1OMHO0.htm
Amazon countersues IBM over patents By CURT WOODWARD SEATTLE Amazon.com Inc. denies it violated IBM Corp. patents 专利） in building its massive （ retail Web site, and alleges instead that IBM infringed on Amazon's technology to beef up its own offerings. In countersuits filed Thursday in federal court in Texas, Amazon says IBM's previous legal claims of patent infringement are a meritless and misleading attempt to cash in on its vast patent holdings and Amazon's success. "IBM's broad allegations of infringement amount to a claim that IBM invented the Internet," Amazon's lawyers wrote in the filings. IBM did not return a phone message seeking comment Friday night. IBM, based in Armonk, N.Y., filed its lawsuits in October in federal court in the Eastern District of Texas. Texas has become a frequent site for patent cases because districts there move quickly and are perceived as relatively responsive to intellectual-property claims.
Amazon, which this year will sell $10 billion worth of everything from books and CDs to pet supplies and jewelry, is accused of infringing （侵犯） on five IBM patents. IBM says the technologies covered by the patents govern how the site recommends products to customers, serves up advertising and stores data. In its counterclaims, Amazon denies the allegations and says IBM violated five of Amazon's patents, for ventures including IBM's WebSphere business software. The countersuits 反诉） also claim IBM's lawsuits "represent a belated attempt to tap （ into this dynamic new industry by an old company built on business principles and innovations of the past." IBM is the world's leading patent holder, spending $6 billion a year in research and development and earning about $1 billion a year in royalties. Amazon's relationship with patents has been more heavily contested; the company's patent of the "one-click" checkout method in 1999 was derided as overly broad and obvious. The U.S. Patent and Trademark Office is re-examining that patent. Q: Whose patents does Amazon.com Inc. deny it violated in building its massive retail Web site? A: IBM Corp. Q: How many IBM patents is Amazon accused of infringing on? A: Five. http://www.businessweek.com/ap/financialnews/D8M1MNTO0.htm
Morgan Stanley CEO gets $40M 2006 bonus By JOE BEL BRUNO NEW YORK Morgan Stanley Inc., the second-largest U.S. investment house, gave chief executive John Mack $40 million in stock and options for 2006, reflecting the largest bonus awarded to a Wall Street CEO. Mack, 62, was awarded 461,821 stock units valued at $36.2 million on December 12, according to a filing with the Securities and Exchange Commission late Thursday. He was also awarded 178,945 options（股权） to buy Morgan Stanley shares, valued at
about $4 million. Morgan Stanley is expected to report its best year ever on Tuesday, buoyed by a record run in the stock market and an unprecedented level of takeover activity. Goldman Sachs Group Inc., Bear Stearns Cos. and Lehman Brothers Holdings Inc. turned in record profit reports this week. The record bonus comes 18 months since he rejoined Morgan Stanley after an internal struggle over the company's lackluster performance caused the ouster of CEO Philip Purcell. At the time, Mack pledged to investors that he would turn around the company's sagging stock price and bolster profits. He appears to be holding up his end of the bargain. Since joining Morgan Stanley in June 2005, shares in the company have risen about 62 percent -- with some 40 percent of that coming in 2006. Analysts project the company will report earnings of $6.77 per share on $33.73 billion of revenue, according to Thomson Financial. Most on Wall Street expect Morgan Stanley will easily surpass these projections. Mack's compensation eclipses the $38.3 million former Goldman Sachs CEO Henry Paulson received in 2005. Earlier this week, Lehman Brothers disclosed（透露） that CEO Richard Fuld received $10.9 million in stock for 2006. Bear Stearns, Goldman Sachs, and Merrill Lynch & Co. have yet to file regulatory reports detailing bonus packages for their top executives. However, on average, 2006 will go down as some of the highest overall compensation numbers in Wall Street's history. Goldman Sachs said in its full-year earnings report that overall compensation（补偿） this year was about $16.4 billion, or an average of about $622,000 per employee. Lehman said it would pay its employees an average of $335,441 this year -- paying 25,936 workers a total of $7.7 billion in salary, bonuses and other benefits. At Bear Stearns, staff would receive an average of $321,740 in compensation. Morgan Stanley also reported stock bonuses for seven of its other top executive officers, according to regulatory filings. Among them was co-presidents' Zoe Cruz, who received $17 million in stock and $1.92 million in options, and Robert Scully, was awarded $11.4 million in stock and $1.28 million in options. Chief Financial Officer David Sidwell was paid $7.98 million in stock and $890,291 in options. Shares of the company slipped 34 cents to close at $79.26.
Q: What did Mack pledge to investors? A: He pledged that he would turn around the company's sagging stock price and bolster profits. http://www.businessweek.com/ap/financialnews/D8M1LGE80.htm