Facebook Planatir, Visually See People Connecting


A team of Facebook engineers have developed an application dubbed Palantir which visually shows activity on facebook in real time geographically on a map. The project isn’t going to be scaled right now, but it does look really kool and gives a great insight as to how people are using Facebook to connect with friends worldwide.

Facebook to Charge App Developers $375


There are almost 50,000 custom Facebook Applications running now on Facebook, and many more will spring up. Developers never had any costs, until now. Facebook has made its Verified App Program official. The idea is that trust worthy apps would be approved based on their usefulness and bad ones would essentially be screened out. However, the catch is that developers must pay a $375 USD fee to Facebook just to try to get approved. If your app is approved, it will get more publicity including in a new approved app list and in the news feeds. If your app isn’t on the list, it will become increasingly difficult to scale your app because it will be less visible and people simply won’t install it due to security concerns – no matter how good it really is.

Facebook is continuing to experience exponential growth, according to Compete, its traffic is up 84.1% (to 45 million visitors per month) year over year (Oct 08). Facebook has never released any financial information, though it is believed it is operating cash flow negative because of the immense operations costs and its main source of revenue is simply from advertising. This is probably why we won’t be seeing a Facebook IPO. Facebook needs to become more competitive given increased competition from Google and Apple. It must also diversify its business model to generate more revenue, but charging all developers a hefty fee shouldn’t be one of the ways. However, I do agree that it would be reasonable for Facebook to apply some fee to the highly profitable apps – it’s only fair, right? Hopefully Facebook will change its stance about charging all developers, especially as developers can easily port their apps to the iPhone. The new Facebook principles can be found here.

Jerry Yang Steps Down as Yahoo CEO


Yahoo is announcing that the co-founder and CEO, Jerry Yang, has stepped down as company CEO to his previous postion and a Chief Yahoo Board Member. Jerry has been heavily critisized for not accepting the Microsoft takeover offer of about $33 per share as the Yahoo stock is currently hovering at about $10 per share and its not expected that the stock will reach $30 again any time soon. Jerry said “from founding this company to guiding its growth into a trusted global brand that is indispensible to millions of people, I have always sought to do what is best for our franchise,” he went on to say “when the Board asked me to become CEO and lead the transformation of the Company, I did so because it was important to re-envision the business for a different era to drive more effective growth.” A replacement has yet to be announced.

Fed to Help The Big 3 Automakers, Likely Bailout GM


US House Speaker Nancy Pelosi has announced today that the big three Detroit automakers will be getting part of the $700 billion government bail out. Pelosi did not confirm how much money the companies will get but they are asking a combined $25 billion in loans. The amount of money that will be given to GM should be sufficient to bailout GM, which desperately needs a cash infusion or it will run out of money entirely by early March 2009. Pelosi said that the big three would need to develop better, more fuel efficient vehicles and restructure “to ensure their long-term economic viability” as a condition part of the deal.

United Auto Workers President Gettelfinger told reporters that automakers are struggling because of problems beyond their control, including the credit crisis. He also said that union labor costs are not the main problem and they only account for up to 10% of any vehicles cost made by the big three (GM, Chrysler, Ford). I personally believe the union is cutting into their bottom and line and making them less competitive because the other foreign automakers don’t pay nearly as much in total labor cost per vehicle.

I said it before that GM will be bailed and that we should bail GM out because if it fails, a catastrpohic chain reaction will hit the economy hard that could eliminate 1 million jobs alone. The Center for Automotive Research has also warned that the collapse of the Big Three could eliminate up to 3 million jobs and more than $150 billion in tax revenue for the US Fed over the next three years. However, all 3 wouldn’t fail, but even GM alone would hit everyone hard, especially the people of Detriot, which could result in more foreclosures. Scary stuff.

GM is a Mess but We Still Need to Bail GM out


Since 2007, GM has lost 90% of its total value and it dropped by 25% alone just yesterday (Nov 10 08) and it is now trading at its lowest price ever and edging closer to $0. As part of GM’s aggregate cost savings plan to try stay in business, it has terminated 3,600 jobs effective immediately and has halted R&D expenditure completely. In addition, it has also stopped contributions to pension funds. Implicit costs at GM are now also skyrocketing. GM is inefficiently utilizing resources to maintain the company, including by paying fees to attorneys and lobbyists, instead of using resources towards the effort of further developing the company.  GM is continuing to burn cash, it can’t get credit as a direct result of the credit crisis, and I would expect it to run out of cash completely by March 09 assuming it doesn’t get bailed out.

GM needs to cut costs and move vehicles, but the question now is: why would you consider buying a GM vehicle? No rational buyer should buy a GM car right now. The company is too volatile and it is no longer an innovator because it has discontinued R&D expenditure therefore quality will further diminish. Also, how will a company that goes under service your vehicle?

However, the problem is GM is too big to fail. It can’t fail. People argue that if companies make bad investment decisions, they should be held accountable (and I agree), but people don’t realize GM is just too big to fail. If it does, everyone will suffer. If GM now goes under completely, the consequences will be profound as it employees close to 266,000 people and about 1,000,000 people would be directly affected with their jobs. And lets not forget the ripple effects where suppliers and other stakeholders would also lose business and also layoff yet more people. Where will all these people find work, what about pension beneficiaries? The costs are just too great for GM to fail.

The government needs to bail GM out, and I think it’s going to happen. The Obama camp hinted it would give GM money during the campaign, though there is no other indication as of yet. If GM acquired Chrysler about a week ago, at least, it would have gave GM more time (about a year) to reorganize as Chrysler has $11 billion in cash. Some would argue that would just be avoiding the inevitable because GM still wouldn’t produce quality vehicles and cut costs. However, a GM/Chrysler merger just isn’t likely anymore and the truth is that GM needs $11 billion in new working capital now otherwise it will run out of cash completely by March 09 and it will go under where we would all be adversely affected. If GM gets this money, I hope it learns its lesson and restructures management, cuts costs, and produces quality vehicles, than maybe, it can get out of this mess.

So, what do you think? If GM was bailed out, could it survive? Will it change? Is it too late, or do they simply not desrve to be bailed out? Do you think its just too big to fail?

Considerations for Global e-Marketers


So, you have your online business that’s getting global hits, but, within these markets there are many differences you should be aware of that can help ensure you provide the most value to all your visitors that will help maximize your sales.

In this post, I examine various issues that you should consider when you develop marketing campaigns and applications for your online business.

One of the biggest pitfalls to having a truly successful online business is the failure to realize that dissimilar markets require different needs. This is especially true for people in North America. We’ve become accustom to making instant payments online with PayPal and Google Checkout, and to constantly being connected with very few service interruptions. But the truth is many profitable markets in the rest of the world aren’t as nearly as advanced as North America.

One primary issue to consider is that different markets have different infrastructure. Connection speeds will therefore vary and it could be fairly costly for a user to use the internet. For that reason, you should remember to build your web applications as simply as possible to minimize load times. For example, subscription costs in Japan are about $25 per month, compared to about $50 for comparable service in Switzerland. Continue Reading

Exactly How the Financial Crisis Started


Many people don’t understand the fundamental reasons why the US financial system is failing and the reasons behind the day to day volatility. In this post, I try to explain to you how this mess happened.

It all started about a decade ago when banks started redlining urban centers which immediately disqualified people from obtaining mortgages in the hypothetical red areas. The problem began when banks thought the solution to redlining was with sub-prime mortgages. Banks deceitfully offered significantly discounted interest rates that would eventually skyrocket after an initial 2 year term. In some cases, the principal was higher after the two year period! The problem was that loans were being granted to people with very poor credit ratings, including to people with Loan to Value (LTV) ratios of more than 88%, compared to the maximum current cut off of 75% which is arguably also pushing it. Another problem was that people were able to provide their own income which was never verified. If you’re wondering why people would take the loans, we can generalize with these main reasons: the banks deceitfully didn’t disclose the teaser rate wouldn’t last, the loan seemed so affordable it was basically free money, and people wanted to own their homes and didn’t have another alternative to get a mortgage.

So, what did the banks do with all of these loans? They grouped the loans into Mortgage Backed Securities (MBS) which were bought by various investment banks who converted the MBS into new financial instruments called Collateralized Debt Obligations (CDO). The banks originally developed MBS because they are only required to hold 1.6% of capital for mortgage backed securities, compared to 4% to hold a mortgage. The CDO instruments were then setup in the Cayman Islands to avoid taxes where they were then artificially rated by credit agencies who received most of their income from structured finance products. The real problems were for firms that invested in CDO securities based on the artificial ratings. Essentially, as people began to default on their mortgages because of the new high rates after the initial 2 year term and falling home values, the CDOs failed along with the firms heavily invested in these securities. Continue Reading

Telus to Cut Costs, Reduces Expectations


Telus, the 2nd largest mobile telecom in Canada, has posted a Q3 profit of $285.3 million ($0.89 per shar), down from $409.3 million ($1.23 per share) year over year. The company earned $2.45 billion in revenue, down from $2.31 billion YoY. The lower profits were essentially expected. Telus now plans to materially cut costs even more than it originally planned. Telus recently has made varoius large investments, including in Koodoo, a subsidary discount telecom, has invested in network upgrades with Bell (who shared the costs – both use CDMA networks), and also spent $882 million in a government airwave spectrum auction. Telus has also lowered its expected fiscal 08 total revenue.

Telus currently offers the most smartphone selection in Canada, and is the only carrier to offer unlimited internet on mobile phones (however, there are still some restrictions in the TOS). Bell and Telus are believed to make the switch to the more desirable GSM mobile network standard from the current CDMA systems. This will help the companies offer more selection, and it will also bring some competition to the GSM Canadian mobile market space where Rogers (also owns Fido) currently has a complete monopoly over. The transition will likely take about 3 years to complete.

Warren Buffett’s Berkshire Hathaway Earnings Drop 77% in Q3


Warren Buffett’s company, Berkshire Hathaway, has announced a staggering 77% drop in Q3 earnings to $1.06 billion, as a result to a $1.05 billion investment loss, and declining insurance profits because of the financial crisis. The value of the company declined so much because Berkshire Hathaway’s derivative positions including options and futures, which are tied to the overall markets, declined the most. I think it will get worse before it gets better, and Warran Buffett also thinks the financial crisis will get better, too. That is why Warren Buffett says his company will not sell their derivative positions and he believes they will eventually become profitable, which will take years from now. The results do not take into account the $5 billion investment in Goldman Sachs and a $3 billion stake in General Electric. Aggregately, Berkshire’s net-worth is now at $120.15 billion, down from $120.73 billion YoY.

Yang says Yahoo For Sale, Will Microsoft/AOL Buy?


Jerry Yang spoke in front of more than 1,000 people at the Web 2.0 Summit in San Fransisco where he provided his commentary about the last year and also expressed he and the Yahoo board of directors never at any point had any regrets concerning the failed acquisition with Microsoft. Yang also says that he went back to Steve Ballmer (CEO of Microsoft) to re-interest MS though to no avail. Yang has confirmed Yahoo is not in any direct acquisition talks with Microsoft and he notably refused to comment about a possible acquisition with AOL. We can expect Microsoft’s interest to re-open assuming serious talks develop with AOL. Most importantly, Yang went on to say “to this day, I’d say the best thing for Microsoft to do is buy Yahoo,” and he added: “We’re willing to sell the company.” Very interesting. Yang has been very heavily criticized (probably rightfully so) for not accepting the Microsoft acquisition bid for about $33 per share, considering Yahoo stock is now trading at about $12 and it isn’t expect to recover to $33 anytime soon. In more recent news, Yang also expressed disappointment towards Google who recently dropped the Yahoo ad partnership after antitrust concerns from the US Justice Department and strong critisism from various corporate opponents including Microsoft. Complete information from the Web 2.0 Summit can be found here.

Business 2.0 Press publishes exclusive business tech news and analysis covering start-ups to large-caps from Bay & Wall streets since 2008 from a group of highly knowledgeable industry professionals that abide by the toughest industry codes of conduct and professional standards lightMore

lightAdd value by subscribing (RSS)

logo

StockFractions.com has the most stock ratios for public companies. Get the most comprehensive micro insight on public firms available on the web, all for free.
Stock Fractionsgo

title

Colon cancer is one of the leading causes of death. Irrespective of family history, everyone is exposed to the risk. About 90% of colon cancer cases begin from non-cancerous tumors, polyps, which could form in the large bowel. Screening with a colonoscopy will painlessly remove any polyps hence almost entirely reducing your risk of developing the horrible disease. The good news is that about 90% of colon cancer cases are preventable through a simple (yes, simple) colonoscopy.
Learn moreatom
Public service message from Business 2.0 Press