Celebrity blogging goes wireless with BlogStar Yahoo! News
Nick Lachey and Jessica Simpson are back together. In the wireless world, anyway. Both are participating in a new mobile blogging service offered by Sprint called BlogStar, which also counts Wesley Snipes, the Game and Bam Margera as contributors. The rich and famous stars are documenting their lifestyles with camera phones and posting pictures, text and, eventually, video to their personalized mobile blogs. Access to each blog costs $5 per month. Subscribers receive alerts when new posts are uploaded, to which they can leave replies as well as discuss content with other subscribers. It's just one example of how the blogging and social networking that have taken the Internet by storm are going wireless. At a time when ringtone and wallpaper image sales are beginning to flatten, the music industry is looking for new mobile revenue streams and promotional opportunities. MySpace has a tremendously strong impact on the music industry, and now the pieces are in place for a wireless version to do the same. BlogStar CEO Keith Yokomoto -- founder of the original ArtistDirect service -- says he and ArtistDirect co-founder Ted Field formed BlogStar to better capitalize on MySpace's promise. "Just imagine if 100,000 of your fans were all connected," Yokomoto says. "You send out a blog that goes straight to their cell phone, and you've got an army of folks out there blogging back in real time. How powerful is that?" On paper, the marriage of blogs and mobile phones seems like a perfect match. Everyone seems to have a mobile phone, and increasingly these devices have photo and video cameras included. Supporters say the ability to blog on the fly rather than hold off until reaching a computer adds a more intimate, real-time element to the experience.

STILL AN UPHILL BATTLE
Yet mobile blogging is no slam-dunk. Camera phones may be ubiquitous, but only the most expensive actually take decent pictures, and video phones are even more expensive. What's more, carriers face a herculean task in convincing subscribers -- who for years have been trained to view their mobile devices as a tool for making voice calls -- to start thinking of their phones as a mobile computer. Companies like Text100, MyMMSBlog.com and SMS.ac pioneered the mobile blog space by providing wireless subscribers a means of posting camera phone pictures and text messages online. But their services never grew much beyond their novelty factor. Sprint's BlogStar service is one of many attempts to put a recognizable face on mobile blogging to generate interest and awareness among mobile phone subscribers -- in this case by relying heavily on star power. In the last two months, however, the 800-pound gorillas of the online social networking scene began muscling their way into mobile as well. In March, MySpace -- by far the most influential service, with 36 million unique visitors and more than 60 million members as of March -- struck a deal with startup youth-oriented wireless operator Helio. Users will be able to update their MySpace profiles with text and photos, as well as access the profiles of others, from their mobile phones. It's expected to go live later this spring. At the CTIA Wireless 2006 industry conference in early April, MySpace rival FaceBook -- with about 10.5 million monthly unique visitors -- rolled out a mobile extension to its service with Cingular, Sprint and Verizon Wireless. Members initially will only be able to post text updates to their FaceBook profiles, with photos expected over time. Others are following their lead. Intercasting's Rabble mobile blog service now runs on Cingular and Verizon Wireless, which charge subscribers $3 per month to join. Los Angeles-based startup Juice Wireless launched its Juicecaster blog service at CTIA as well. Unlike online blogs now creating wireless extensions, Juicecaster was built from the ground up to integrate online and wireless posting and access. Buzznet has been doing the same for the past two years, and recently won a contract with concert promoter Goldenvoice to power the integrated online and mobile social networking site of the upcoming Coachella music festival in Indio, Calif. Wireless operators could not be more thrilled. The wireless industry has long believed that the successful mobile content and applications will be those that best take advantage of the communication elements of wireless. For years, the industry has been throwing everything it had at consumers to see what would stick.
By Antony Bruno

More Doors opening with concert downloads Yahoo! News
As part of the Doors' 40th-anniversary celebration, the band will soon make 12 concerts from 1967 to 1970 available for download from its Web site, TheDoors.com. Fans will be able to choose favorites from the quartet's performances, many of which are previously unreleased, rather than having to buy a complete show. The initiative is powered by Basecamp Productions, which built Pearl Jam's successful concert download store last year. Elektra released the Doors' first album in January 1967. The extensive anniversary slate includes a comprehensive 12-disc boxed set (due this fall via Rhino) as well as reissues, merchandise and an interactive Las Vegas attraction, targeted to open in 2008. A traveling Doors memorabilia exhibit also is in the works, and a Rock and Roll Hall of Fame and Museum exhibit will open in April 2007. In addition, a documentary film is on tap, along with a summer 2007 multi-night TV special ("Six Nights, Six Years, Six Records") and a pair of coffee-table books ("The Doors by the Doors With Ben Fong-Torres" and "Jim Morrison: Treasures" by Rock Hall curator Jim Henke). A specific date has not yet been set for the concert downloads. "These huge bands have all these fans that spend hours online," Basecamp principal Joshua James says. "Why send them off to iTunes to buy music when they want to hang out right there on the band's Web site?"

If GM Fails, Then What?

The carmaker says it has no intention of entering Chapter 11, but
some analysts say a bankruptcy filing in the next few years is a
definite possibility. The ripple effects on the economy would be
huge. By Tom Petruno and John O'Dell.
http://email.latimes.com/cgi-bin1/DM/y/e1x...Io30G2B0HTOv0EA

TV's Path to Web Remains Unclear

Networks are offering some shows on their own, bypassing Web
giants. But Yahoo and others can't be ignored. By Chris Gaither.
http://email.latimes.com/cgi-bin1/DM/y/e1x...Io30G2B0HTOw0EB

GDP data could zap Wall Street excitement The Boston Globe
Investors will likely enjoy another round of solid earnings reports this week, but those numbers could be easily ignored as the market shifts its focus back to the economy. Wall Street has so far been impressed by first-quarter earnings, most of which have managed to beat analysts' lofty expectations. If this week's earnings data are anything like the last, the market will certainly have reason to continue celebrating a successful start to the year. But the market nonetheless has some obstacles to overcome. Investors' optimism over a possible end to the Federal Reserve's interest rate hikes was quickly spoiled last Wednesday by a bigger-than-forecast jump in consumer prices. This week, strong readings on labor costs and first-quarter gross domestic product could feed inflation fears and send the market sliding. And crude oil that surged past a record $75 per barrel and gold prices standing at a 25-year high also pose a threat. Analysts say those growing inflationary pressures are all the more reason for the Fed to keep raising rates, which could drive down bond prices and cause investors to lose interest in stocks. And so continues Wall Street's uncertainty about the pace of economic growth and inflation. More skittish trading is expected as data-sensitive investors mull this week's raft of earnings reports and anticipate what the Fed will say at its May 10 meeting. Signals from the Fed that it is almost done raising interest rates helped the market rally last week, with upbeat earnings reports bolstering stocks' gains. The Dow Jones industrial average rose 1.88 percent, while the Standard & Poor's 500 index rose 1.72 percent and the Nasdaq composite index gained 0.72 percent.

ECONOMIC DATA
Among this week's closely watched reports will be the Commerce Department's preliminary reading of the first-quarter gross domestic product on Friday. Inflation-weary investors have been looking for signs of a moderating economy; however, economists expect GDP growth to rebound to 5 percent from 1.7 percent in the fourth quarter. Another critical datapoint will be the Labor Department's employment cost index for the first quarter, which is forecast to gain 0.9 percent after rising 0.8 percent in the prior period. Wage inflation is considered a major driver of increasing prices throughout the economy. The Commerce Department on Wednesday reports new home sales for March, which gives Wall Street an assessment of whether rising mortgage rates have affected housing demand. Analysts currently predict new home sales will total 1.1 million, up slightly from 1.08 million the month before. Elsewhere, both the Conference Board's and University of Michigan's consumer sentiment measures are expected to be nearly unchanged. Investors could also see another drop in weekly unemployment claims as hiring improves and the job market tightens.

EARNINGS DATA
The second big week of the first-quarter earnings season brings reports from several more Dow industrials, including heavy equipment manufacturer Caterpillar Inc., financial services firm American Express Co., defense contractor Boeing Co. and energy interest ExxonMobil Corp. Results from defense contractor Lockheed Martin Corp. are due before the opening bell Tuesday. Increased defense spending has given the stock a boost over the past six months, with shares climbing 32 percent from a November low of $58.28 to close Friday at $77.04. Analysts see Lockheed's profit rising to $1.14 per share from 83 cents last year. Amazon.com Inc. reports after the close Tuesday, and Wall Street is expecting the online retailer's earnings to fall to 12 cents per share from 18 cents a year ago. Amazon's stock is 28 percent below its 52-week high of $50 in December, and finished at $36.03 on Friday. Consumer products maker Procter & Gamble Co., also a Dow component, releases results before the opening bell Thursday. Analysts expect P&G to earn 61 cents per share, almost even with year-ago income of 63 cents. Its shares closed at $56.34 Friday, about 10 percent off a March all-time high of $62.50 amid concerns that rising costs will dampen its profit margin.

EVENTS
Investors may monitor comments from Fed governor Susan Schmidt Bies on Tuesday as they continue scouring for hints regarding the central bank's opinion on economic growth and inflation.
By Christopher Wang, AP Business Writer

For MySpace, Making Friends Was Easy. Big Profit Is Tougher. New York Times
ALMOST on a lark, Chris DeWolfe bought the Internet address MySpace.com in 2002, figuring that it might be useful someday. At first, he used the site to peddle a motorized contraption, made in China and called an E-scooter, for $99. Selling products online comes naturally to him. Having jumped into the Internet business in the early days, Mr. DeWolfe had become a master of the aggressive forms of online marketing, including e-mail messages and pop-up advertising. After the Internet bubble burst, he even built a site that let people download computer cursors in the form of waving flags; the trick was that they also downloaded software that would monitor their Internet movements and show them pop-up ads.

Chris DeWolfe, left, and Tom Anderson of MySpace.com credit the site's owner, Rupert Murdoch, with understanding today's younger generation.
Very quickly, however, Mr. DeWolfe's tactics for MySpace changed. He had noticed the popularity of Friendster, a rapidly growing Web site that let people communicate with their friends and meet the friends of their friends. What would happen, he wondered, if he combined this type of social networking with the sort of personal expression enabled by other sites for creating Web pages or online journals? He convinced the executives of eUniverse, the company that had bought his own marketing firm, ResponseBase, to back his plan. As soon as the site was reintroduced, in the summer of 2003, Mr. DeWolfe saw it grow quickly with little marketing. And although his scrappy backer was hungry for cash, he resisted pressure to flood MySpace with advertising and to turn all of its members into money.

Steve Goldstein for The New York Times - Ross Levinsohn, president of Fox Interactive Media, says he wants advertisers to have their own MySpace profiles, just like the teenagers'.
"Chris came from ResponseBase, and they knew all the direct marketing tactics to get money out of almost anything," said Brett C. Brewer, the former president of eUniverse, which was later renamed Intermix Media. "But I give him credit: from literally the first or second month, he realized MySpace could be something we really need to protect because user confidence in the site was paramount." Now MySpace has a new owner — Rupert Murdoch's News Corporation, which bought MySpace and Intermix last year for $649 million — and the pressure on Mr. DeWolfe to find a way to make much more money from MySpace is far greater. But the opportunity is greater, too. More than 70 million members have signed up — more than twice as many as MySpace had when Mr. Murdoch agreed to buy it — drawn by a simple format that lets users build their own profile pages and link to the pages of their friends. It has tapped into three passions of young people: expressing themselves, interacting with friends and consuming popular culture. MySpace now displays more pages each month than any other Web site except Yahoo. More pages, of course, means more room for ads. And, in theory, those ads can be narrowly focused on each member's personal passions, which they conveniently display on their profiles. As an added bonus for advertisers, the music, photos and video clips that members place on their profiles constitutes a real-time barometer of what is hot. FOR now, MySpace is charging bargain-basement rates to attract enough advertisers for the nearly one billion pages it displays each day. The company will have revenue of about $200 million this year, estimated Richard Greenfield of Pali Capital, a brokerage firm in New York. That is less than one-twentieth of Yahoo's revenue. In buying MySpace, Mr. Murdoch also bought a tantalizing problem: how to tame a vast sea of fickle and unruly teenagers and college students just enough to notice advertising or to buy things, yet not make the site so commercial that he scares off his audience. At the same time, he must address the real and growing concerns of parents and teachers who see MySpace as a den of youthful excess and, potentially, as a lure for sexual predators. Mr. Murdoch's initial strategy seems to be to do nothing to interfere with whatever alchemy attracted so many young people to MySpace in the first place. So he has embraced Mr. DeWolfe, 40, and Tom Anderson, 30, the company's president and co-founder, and their close-knit management team. And he is providing them with the cash to reinforce MySpace's shaky computer system and to hire armies of sales representatives to bring in more money from the banner ads and sponsored pages that MySpace sells.

He also gave them multimillion-dollar bonus payments to smooth the feelings that were ruffled when Intermix was sold, dragging MySpace along with it against the will of its founders, who received only a small portion of the sale price. Still, change is coming. In Beverly Hills, nine miles and worlds away from MySpace's beachside office, the News Corporation is assembling its overarching online unit, Fox Interactive Media. Run by Ross Levinsohn, the longtime manager of FoxSports.com, Fox Interactive Media is stitching together several Web properties into a big Internet company focused on youth. The top priority is MySpace.

Hiroko Masuike for The New York Times - Heather Candella, center, and Sabine McDonald, waited for free tickets to a concert by Franz Ferdinand that was sponsored by MySpace.
"We have some very aggressive goals on how to build this thing into a real contributor to News Corp. financially," Mr. Levinsohn said last month. Mr. Murdoch, he added, "is focused on that, and he rightfully holds my feet to the fire." To expand ad sales, especially to big brands, Mr. Levinsohn plans to supplement the MySpace staff with a second sales force linked to the Fox TV sales department. He wants to expand one of Mr. DeWolfe's advertising ideas — turning advertisers into members of the MySpace community, with their own profiles, like the teenagers' — so that the young people who often spend hours each day on MySpace can become "friends" with movies, cellphone companies and even deodorants. Young people can link to the profiles set up for these goods and services, as they would to real friends, and these commercial "friends" can even send them messages — ads, really, but of a whole new kind. Mr. Levinsohn is also developing plans for MySpace to be paid by some of the bands and video producers whose songs and short films are woven into its gaudy profiles like so many electronic stickers on a high-school locker. And he sees a chance for MySpace to rival eBay and Craigslist as a place where nearly anything is bought and sold.

Mr. Greenfield, the Pali Capital analyst, says that these moves have potential — especially if MySpace can convince members to put clips from Fox movies, television programs and other youth-oriented "content" on their profile pages. "I don't know how big a business this can be, but it can clearly be a lot bigger than it is today," he said. "The question is: Can you take it to the next level by making a business that leverages all the consumers who are telling you what they want to do?" Another question is this: Can the News Corporation achieve these goals if the executives in charge don't agree on how to do so, or even on whether they want to? Mr. Levinsohn, for example, said he saw opportunity in the one million bands that have established profiles on MySpace; he said MySpace could charge bands to promote concerts or to sell their songs directly through the site. In an interview the next day, however, Mr. DeWolfe dismissed the idea. "Music brings a lot of traffic into MySpace," he said, "and it lets us sell very large sponsorships to those brands that want to reach consumers who are interested in music. We never thought charging bands was a viable business model." Mr. Levinsohn brushed aside the discord, saying it was appropriate for the people running MySpace to be more concerned at this point about serving users than making money. And, for now, Mr. DeWolfe and Mr. Anderson say they are happy working for the News Corporation and Mr. Murdoch, its 75-year-old chairman and chief executive. "Rupert Murdoch blew me away," Mr. DeWolfe said. "He really understands what youth is doing today." BY many accounts, the MySpace culture reflects the style of Mr. DeWolfe, who has a hard-nosed business approach under a laid-back exterior. "Chris is a very strong personality," said Geoff Yang, a partner in Redpoint Ventures, which invested in MySpace last year as part of an effort to separate it from Intermix; the News Corporation's acquisition of Intermix thwarted that effort. "He will listen to a lot of ideas, make up his mind and be laser-focused to get a few of them done." Mr. DeWolfe, who focuses on business affairs, and Mr. Anderson, who designs features for the site, have deliberately kept MySpace rudimentary, with an almost homemade feeling, to give the most flexibility to users. In spirit, the site reflects its Southern Californian home with all of its idiosyncratic performers, designers, demicelebrities and other cultural hustlers, many of whom the founders recruited to be early members. Mr. DeWolfe, in particular, is a fan of Los Angeles nightlife and has become something of a public figure himself. "Chris has become this living persona of MySpace," said Mr. Brewer, who recalled a trip to Aspen, Colo., with Mr. Anderson and Mr. DeWolfe last December. "Chris is wearing an awesome leather jacket, some sort of designer shirt, with his hair all over the place. He has this whole rock-star persona. And you hear people going: 'Psst, psst. That's the MySpace guy.'" When he is not basking in the MySpace spotlight himself, Mr. DeWolfe has begun using it to promote music events around the country. MySpace members can become "friends" with a profile for "MySpace Secret Shows," for instance, and they will receive tips about free concerts — sponsored by companies like Tower Records — in their hometowns. On a recent Friday in Manhattan, several hundred people trekked through drizzling rain to the Tower Records store in the East Village for free tickets to a concert by Franz Ferdinand, the Scottish postpunk band, at the Hammerstein Ballroom. Heather Candella, a college student from Sloatsburg, N.Y., was among those at the show. She said the shows were "a really good idea because it's kind of a secret kind of thing — it's not so commercial." She added that MySpace had become a main way to stay in touch with her friends. While she does not use the site to meet people, it has become part of the dating ritual. "When you meet someone, the question is not 'What's your number?' " she said. "It's 'What's your MySpace?'" By checking out a guy's profile, she said, "you can actually get a feeling for who they are." MySpace users pepper their profiles with their own photographs, musings and poetry, and with their favorite music and video clips. That maximizes the individuality of each profile but turns the typical media-company business model upside down, which is one reason that it is so hard for the News Corporation to use the audience to sell ads or to promote its own programming. The best way to get, say, a television show in front of the MySpace audience is not to cut a deal with a programming czar at a Hollywood restaurant, but to win the hearts, one by one, of thousands of members who will display the show to all of their friends. "We can't look at this as a media property," said Peter Chernin, the News Corporation's president. "This is a site programmed by its users." For that reason, MySpace is only gingerly pushing users into other Fox properties. Right now, Fox's relationship to MySpace is not explicit, although Fox movies and television shows are frequent advertisers. Ultimately, the News Corporation will make it easy for MySpace members to put clips from its television programs and trailers for its movies on their profile pages. But there will be nothing to stop them from using material from other companies. Mr. Levinsohn calls MySpace the antiportal. "It's not about a central hub, because that's not where things are going," he said. "The under-30 set wants choice. It's not about one destination; it's about 65 million." Indeed, rather than squeeze all its Internet ambitions into MySpace, Fox Interactive is assembling a network of Web sites, including IGN, a collection of sites focused on video games, and Scout, which runs Web sites for about 200 local sports teams. The News Corporation is also developing a portal devoted to entertainment, drawing from its Fox network programs, the Page Six gossip column of The New York Post and show-business reporters at the 35 local television stations it owns, Mr. Levinsohn said. AT MySpace, the first challenge is to raise advertising rates. Because its supply of pages so greatly outstrips demand from advertisers, it has offered deep discounts. Indeed, the average rate paid for advertising is a bit over a dime for 1,000 impressions, Mr. Levinsohn said, far lower than rates at major competitors. "If we can raise that by 10 cents, think of the upside," he said. One way to coax more money from advertisers is to build special sections — areas devoted to music and independent filmmakers — that provide a neutral home to advertisers that want MySpace's youthful audience but don't want their ads associated with the risqué content of some members' profiles. A sign of that challenge is seen in Mr. Levinsohn's effort to expand the use of text ads — the rapidly growing format pioneered by search engines. He has been running tests with Yahoo, Google and several smaller ad providers and has sought proposals from them for longer-term deals. The answer he received was a shock. Not one of them, not even the mighty Google, was sure that it could provide enough advertisements to fill all the pages that MySpace displays each day, Mr. Levinsohn said. The search companies did not want to dilute their networks with so many ads for MySpace users, whom they said were not the best prospects for most marketing because they use MySpace for socializing, not buying.

Mr. Levinsohn says he also hopes to raise ad rates by collecting more user data so advertisers can find the most promising prospects. To use the site, people need to provide their age, location and sex, and often volunteer their sexual orientation and personal interests. Some of that information is already being used to select ads to display. Soon, the site will track when users visit profile pages and other sections devoted to topics of interest to advertisers. People who put information about sports cars in their profiles or who frequent MySpace message boards about hot-rodding, for example, would be shown ads for car parts, even while reading messages from friends. The bigger opportunity, however, is not so much selling banner ads, but finding ways to integrate advertisers into the site's web of relationships. Wendy's Old Fashioned Hamburgers, for example, created a profile for the animated square hamburger character from its television campaign. About 100,000 people signed up to be "friends" with the square. Fox officials wonder whether this sort of commerce, built on relationships, can be extended to small businesses. A Ford dealership in, say, Indiana could create a profile, said Mark A. Jung, the chief operating officer of Fox Interactive. The profiles themselves, he said, would probably be free, but MySpace would sell enhancements to help businesses attract customers and complete transactions, Mr. Jung said. Yet here is another place that executives at Fox and MySpace don't see eye to eye. Mr. DeWolfe discounted the idea of people creating profile pages for small businesses. "If it was a really commercial profile — the gas station down the street — no one is going to sign up to be one of their friends," he said. "There is nothing interesting about it." For now, Mr. DeWolfe said, he has more down-to-earth plans. With the News Corporation's help, he is opening an office in London to coordinate MySpace's expansion in Europe. He is cutting deals to let members connect to MySpace over cellphones. The News Corporation, he said, is helping MySpace achieve his goals sooner than it could on its own. So far this year, MySpace has spent $20 million of the News Corporation's money, in part to nearly double its staff of 250. About one-third of its employees focus on customer service and, increasingly, on responding to parents' concerns about what teenagers do on the site and what else they can see there. In the last six months, there has been a torrent of letters from schools to parents — as well as newspaper articles — about the glorification of drinking, drug use and sex on many MySpace profiles. MySpace has long had rules that forbid anyone under 14 to join and that ban pornographic images and hate speech. Beyond those, however, the site is very open to frank discussion, provocative images and links to all sorts of activities. It didn't stop Playboy magazine, for example, from creating a profile page on its site to recruit members to pose in the magazine. Nor does it object to Jenna Jameson, the pornographic film star, maintaining a profile with links to her hard-core Web site. Ms. Jameson "is more than a porn star," Mr. Anderson said. "She is an author and a celebrity and has been on Oprah." He added that "if we had a site that was 'My name is so-and-so and this is my porn site,' we would delete that." Mr. Levinsohn, Mr. DeWolfe and others at the News Corporation say the site has no more or fewer problems than any other community on the Internet, and their primary response to parents' concern is a campaign to educate users about safe surfing techniques. "There are a couple of basic safety tips that can make MySpace safe for anyone over 14," Mr. DeWolfe said. "Just like you tell kids not to get in the car with strangers and to look both ways before you cross the street." A sign that MySpace can play a role in some of the most distressing experiences of growing up came last week, when five teenage boys were arrested in Riverton, Kan. Law enforcement and school officials there said that the group planned to go on a shooting spree at their high school but were stopped after one of them discussed the plot on MySpace. IN some ways, MySpace has assumed the role America Online held a decade ago when it introduced e-mail services and Internet chat to the masses. But AOL's example is a cautionary one. For many reasons, largely its failure to keep up with trends, AOL lost its place in the social lives of young people. Mr. DeWolfe argues that MySpace won't suffer that fate because, in just two years, it has already become so entrenched in so many lives. "People are truly invested in the site," he said. "All their friends are on it. They spent months building their profiles. And so the cost of switching is too high. If we keep building the features they want, they will stay on the site." If he is right, MySpace will be more than just a trendy toy to be discarded like last year's E-scooter.
By SAUL HANSELL

Online contest lets "L Word" viewers plot action Yahoo! News
Should "The L Word's" Bette confront Cari while Alice finds her heart broken, or would a true confession by Alice risking the demise of Dana make for better melodrama? Showtime Networks, in conjunction with entertainment services company FanLib, is letting viewers of the lesbian cable drama make those decisions, and more. Fans have a chance to wrest control of the plot from its writers -- while getting some online notoriety of their own -- by crafting their own scenes according to parameters set by series scribe Ariel Schrag. Participants read, judge and discuss each other's work, all of which was entered in a contest that ended last week and resulted in a "fanisode," the first fan-written script for an existing show. Many popular shows inspire fans to create their own scenes and post them to community Web sites, a phenomenon referred to as fanfic. Showtime is unusual in sanctioning and even encouraging this activity. "They're going to do it whether we invite them to or not in this interactive culture we live in," said Ilene Chaiken, creator and executive producer of "The L Word." "From the beginning, the audience claimed the show and felt like they owned it." The project also kept fans engaged between seasons, she added, and Schrag's guidelines ensured that followers didn't stray into inappropriate territory. While Showtime has the option to produce the finished script, participants at the very least will receive a downloadable digital magazine featuring the completed script, alternative scenes and profiles of winning contributors. They also qualified to win a gamut of prizes from Showtime and event sponsors. The grand-prize winner, aspiring novelist Jan Naugle from Colorado Springs, Colo., received a personal online writing session with Chaiken. "Ours is probably in the top tier of shows that have such an engaged fan base," Chaiken said. "Fans really want to be involved and to provide feedback about what should happen with these characters, and this is a great way to interact with our audience." The series' ratings are up more than 50% from last season, and the "L Word" fanisode site logged 175,000 visits during the eight-week contest, success Chaiken attributes to the creative involvement it has allowed its loyal viewers along with the community it fosters on blogs and discussion boards. Chaiken could not confirm another fanisode contest in "L Word's" future, but Rob Hayes, Showtime's senior vp and general manager of digital media, said he would love to do another one linked to the series. "This whole aspect of positive consumer-generated content allows viewers and fans to interact with the show beyond the one hour they watch it," Hayes said. He gave credit to the way in which the contest was presented. "If it's done within a safe context where the creators are involved in it, and it's structured so fans can share with their friends, it can be very positive," Hayes said. "Ultimately fans become brand ambassadors for the show." Hayes said the strong response to the "L Word" online venture will most likely lead to similar interactive contests in Showtime's future, noting in particular some associated with the network's "Master of Horror" franchise. "The L Word," which has been renewed for a fourth season, stars Jennifer Beals, Laurel Holloman and Mia Kirshner.
By Carly Mayberry

Google and Yahoo results show more room for ad growth Yahoo! News
The two top Internet search engine companies proved last week there is still plenty of room for advertising growth, though Google's dominance marks a major advantage over Yahoo, according to analysts. The health of the Internet advertising market shone in the results that Google and Yahoo released and allayed fears the high-flying companies would get stuck in neutral. Shares in both companies rose on the news. "The results this week show there is room in the market for both a Yahoo and a Google," Denise Garcia, an analyst with WR Hambrecht+Co. in New York said on Friday. But Garcia said Google is positioned to continue to capture the majority of growth in the Internet search market, which represents the largest share of the Internet advertising market, at 41 percent. Yahoo's results met Wall Street expectations on strong demand for online graphical ads and a 15 percent to 20 percent rise in traffic to its Web search system, which company executives said showed that it had held rival Google at bay. And while Google returned to form by once again blowing past analysts' forecasts with a 79 percent jump in revenue as it took a greater share of the overall search market, analysts said demand is strong enough to support several major players. Google has grown two to three times faster than the estimated 30 percent increase estimated by the trade group Internet Advertising Bureau in the overall market in 2005. The health of the Internet advertising market should spread to smaller Internet advertising stocks, Garcia said in a report. AQuantive Inc., Digitas Inc., Marchex Inc. and ValueClick Inc. are expected to report their quarterly results this week and into May. "We expect these companies to experience similar top-line growth as they are fueled by the same industry dynamics," she wrote. The torrid growth has spurred eBay to consider a partnership with Microsoft or Yahoo, as Google takes direct aim at the Web auction company's business with an online classified service. The Wall Street Journal reported that eBay, a major buyer of Web search keyword advertising, is talking to Yahoo and Microsoft, as well as Google, about forming an alliance that could create a windfall for the winning partner. Quoting unnamed sources, the Friday story said eBay has been in talks with all three since last year about a deal whereby eBay could increase advertising spending with a chosen partner, provide that partner with data on eBay customers, and feature advertising from the partner alongside eBay auction listings. "I see this more as eBay trying to bolster their negotiating position when they have to go back to the table with Google," Jan Klein, a professor of technology management at Stevens Institute of Technology in Hoboken, New Jersey said. Klein is a former telecoms analyst at Morgan Stanley. "The history of alliances and joint ventures is that they just don't last," he said. EBay declined to comment on whether it was engaged in talks on a potential advertising pact with either Microsoft, Yahoo or Google. Spokesman Hani Durzy said that eBay is in constant conversation with all three about aspects of their business, as eBay is major buyer of keyword advertising from the three Web search providers. Google also declined to comment on the report. "EBay is a valued partner and we look forward to a long, successful relationship," Google spokesman Steve Langdon said.
By Michael Kahn and Eric Auchard

Judge orders record labels to turn over documents Yahoo! News
A federal judge has ordered major record labels to turn over privileged documents after finding they may have used misleading information to convince the government to abandon a major antitrust probe. The ruling late on Friday from U.S. District Judge Marilyn Hall Patel in San Francisco came out of a dispute over which documents Vivendi Universal's Universal Music Group and EMI Group Plc should be forced to release in a lengthy copyright battle over Bertelsmann's investment in music-swapping service
Napster. Prosecutors in 2001 began investigating whether music labels secretly worked together to use two joint ventures, MusicNet and Pressplay, to discourage digital downloading and protect CD sales by fixing digital music distribution terms. During the investigation, the joint ventures and their record label parents each submitted a "white paper" to the DOJ summarizing their arguments. They also provided documents that included redacted, or blacked out, sections to remove privileged material. The U.S. Justice Department abandoned the probe in December 2003, citing no evidence of wrongdoing. Napster investor Hummer Winblad Venture Partners, Bertelsmann's co-defendant in the lawsuit, charged that the arguments offered in the white papers were known to be false or misleading. In the ruling, Patel said Hummer Winblad provided reasonable cause to believe that information in the white papers was "deliberately misleading." Patel ordered UMG and EMI to turn over all previously held communications related to the antitrust investigation within 30 days of the order. The parties could not immediately be reached for contact.

U.S. and China Still Must Resolve Key Trade Issues

Last week's U.S.-China presidential meeting produced no
breakthroughs on sensitive trade issues, and analysts say that
could mean the two countries are heading into rough waters in the
months ahead. By Evelyn Iritani and Don Lee.
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Foes Aim to Limit Company Oversight

WASHINGTON-A federal panel's proposal that smaller public
companies should be shielded from certain rules meant to keep
their books squeaky clean is the latest shot in a growing
rebellion against corporate reforms. By Jonathan Peterson.
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Intel Poised to Unveil Business Platform

Seeking to expand its dominance in microprocessors that run
computers, Intel Corp. is expected to announce a new brand of
desktop computer "platforms" for business customers. By Terril Yue
Jones.
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Supply Fears, Speculators Pumping Up Oil Prices

Investors are seeking big returns amid growing demand and threats
to global production. By Ronald D. White.
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http://www.atimes.com/atimes/South_Asia/HD25Df02.html
Enter the barbarian
By Indrajit Basu

KOLKATA - The recent acquisition of the Indian software development arm of Singapore-based Flextronics International, the world's largest contract electronics manufacturer, by the New York private-equity firm Kohlberg Kravis Roberts (KKR) was not only the first leveraged buyout in India, but it also exemplifies an increasing trend of debt-backed private equity deals in Asia, which has emerged as a new focus for global private-equity investors.

In last week's deal, which stunned the financial world, KKR agreed to buy out 85% of Flextronics Software Systems in a two-part transaction totaling US$900 million. The first part calls for KKR to pay $600 million in up-front cash to Flextronics International for the controlling stake. The second part will be funded by the 10.5% interest on a $250 million face-value note, which will earn Flextronics International between $210 million and $305 million, depending on how it is structured over the next eight years.

The deal was historic in several respects. It was simultaneously India's largest-ever corporate buyout and its first conducted using leveraged-buyout methods. The transaction also marked the first India foray of KKR, the world's biggest buyout firm, which earned public notoriety in 1989 from a bitterly contested $31 billion takeover of cookie maker RJR Nabisco, made famous by the book Barbarians at the Gate, later a made-for-TV movie.

Reportedly, KKR is borrowing about $400 million to leverage the buyout Indian software unit, which would make it the country's first debt-backed merger-and-acquisition (M&A) deal. In leveraged buyouts, the acquirer puts up a little of its own funds and borrows the rest to pile the debt on the target company, then expands the company or otherwise improves its performance (sometimes by asset-stripping) before selling it again. All private-equity-funded M&A deals in India were, in the past, funded mostly by private-equity investors' own money.

All these firsts were not, however, what really set tongues wagging in Indian private-equity finance circles: that would be the price paid for Flextronics, which eclipsed all previous M&A deals in the country's information-technology sector, setting a new Indian record in the process. According to analysts, KKR paid four times the annual revenues of Flextronics Software Systems, which beats the just-concluded RR Donnelley-Office Tiger (a back-office service provider) deal - concluded at a revenue multiple of 3.4 - and Electronic Data Systems Corp's buyout offer of the local software-services company MphasiS (at three times).

"If anything, the recent deals signal that valuations have touched new highs that show no signs of easing. Just [a] couple of years back, the valuations were about twice the revenue multiples, compared to the deals now at almost four times the revenue," said an analysis in the Economic Times, India's largest financial daily, adding that "the coming months will see more M&A activity and valuations could go up further".

But more important, this deal also signifies that Asia has again emerged - as Forbes magazine put it - as "the new Shangri-La" for global private equity investors after the region lost its attractiveness for such deals in the Asian financial crisis of eight years ago.

Take Kohlberg Kravis Roberts for instance. Despite its three decades of existence, the Flextronics Software buyout was the firm's first deal in India (and only its second in Asia). In fact, KKR opened it first Asia office in Hong Kong only late last year and in Tokyo a short while later.

Similarly, Bain Capital LLC, a Boston-based buyout firm, is recruiting all over Asia, while Carlyle Group, which claims to be one of the world's largest private-equity firms, also claims that it is now the biggest private-equity investor in the region.

According to Bloomberg, buyout firms have already announced $11.7 billion of Asia-Pacific acquisitions so far this year, more than twice the amount in the first four months of 2005. The amount of money raised for Asian investment in 2005 was impressive, too, nearly tripling from $6.5 billion in 2004 to $17.6 billion, according to the Center for Asia Private Equity Research.

Although India still lags far behind its Asian peers, particularly China and Japan, in terms of private-equity investment, this is starting to change. According to Venture Intelligence India, private-equity and venture-capital firms invested $2.2 billion in India in 2005, spread across 146 deals.

India's prospects have drawn some of the sector's biggest names to set up shop in the country, including Blackstone Group, Carlyle Group, General Atlantic Partners, Warburg Pincus and Temasek Holdings. The industry says that about 15-20 private equity funds, including new players, are set to enter the domestic market this year and despite rising valuations, about $3 billion to $4 billion is lined up for fresh investments this year, compared with about $2.2 billion invested in 2005.

But why - with global equity investors pumping billions into India to cash in on "the new hotbed of innovation", as Oracle chairman Jeff Henley put it - did Flextronics International sell out its Indian software arm? After all, the software unit was not an organic expansion of Flextronics: it bought the company only two years ago, when it was the offshore software-development subsidiary of US-based Hughes Electronics. At the time, Flextronics paid $226 million for a 55% stake, which, ironically, was one of the highest-valued deals then too.

Reports in India say that Flextronics was forced to sell out. In fact, rumors suggested that the deal had its roots not in India, not even in Singapore, but on Wall Street, because Street analysts were not happy with the company's recent diversification in software and were pressuring Flextronics to concentrate on its core electronics manufacturing business.

Indeed, increasing competition from multinational software giants such as Electronic Data Systems Corp, Accenture, Computer Sciences Corp, Hewlett-Packard, and IBM as well as local software biggies such as Infosys, Wipro Technologies, and Satyam Computer Services, are making it increasingly difficult for mid-tier software companies to stay afloat. Most high-profile mid-tier software companies, including MphasiS, Hexaware, Geometric, and Hindustan Computers Ltd, have been relative under-performers in recent times.

Even Flextronics chief executive officer Michael McNamara hinted at a similar reason for the firm's divestiture of its software unit: "This transaction is in line with our strategy to focus on 're-acceleration' of growth opportunities in our core electronics manufacturing services business - which includes design, vertically integrated manufacturing services, components and logistics," he said.

"By monetizing non-core assets at substantial gains over carrying values, Flextronics will have generated cash proceeds of over $1 billion," McNamara said. "In addition, we will have retained ownership interests in both the software and network services businesses, which should provide additional cash and potential future upside when monetized."

Nevertheless, analysts say the recent mega-deals in India may well usher in the next phase of change in the Asian private-equity space: According to Asian Venture Capital Journal, a Hong Kong-based newsletter, with institutional investors' interest in Asian private equity at an all-time high, there will be an increasing number of prominent American and European private-equity firms setting up operations in Asia. And the recent deals confirm that Asia, India in particular, is a place the new private-equity funds can really put money to work for big returns.

Indrajit Basu is a Kolkata-based equity analyst turned journalist with more than 12 years of experience in business/finance and technology journalism. Besides writing for Asia Times Online, he also writes for US-based publications, as well as IT companies.

(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing .)

Lay Says Enron Fell on Deceit of Fastow

HOUSTON-The former chairman blames the ex-CFO, who has pleaded
guilty to conspiracy. By Thomas S. Mulligan.
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Another Record for State Gasoline

Gasoline prices at the pump continued to soar over the last week,
jumping more than 17 cents a gallon in California and 13 cents
nationwide. By Elizabeth Douglass.
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Oil 'Windfall' Tax Gains Momentum

SACRAMENTO-A state bill would enact a levy on producers and
refiners. Calls grow for price-gouging inquiries. By Marc Lifsher.
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Intel's Magic Marketing Forbes
Intel’s gone brand-crazy in the last year. Its marketing department has designed a new company logo and rewritten its slogan from “Intel Inside” to “Leap Ahead.” Millions of dollars have been put behind new product brands, like Core Duo for chips with two computational brains; and Viiv, for computers that hook up to your TV. In ceremonial unveiling Monday, Intel released its latest new brand: vPro, the new name for Intel-powered desktop office computers. So will vPro be the next Pentium? Or will it be the next ProShare—the videoconferencing brand that Intel pumped for years with little success? Features aside--and vPro has a lot of them--the answer will again be about marketing. Intel executives had debated whether to bother branding desktops destined for the office, since it’s not the kind of thing that plays well in consumer advertising, but ultimately realized that the new platform would be a great way of making their computers stand out and thus, command a premium. Eric Kim, who made his reputation at Samsung by taking the Korean giant from a cheap copycat to a Sony competitor and is now pulling the marketing strings at Intel, studied the success of Centrino, the now ubiquitous wireless chips that were marketed heavily starting in 2003. Customers, seeking wireless Internet connections and longer burning battery power, flocked to Centrino and gave Intel’s mobility business thick margins and high double-digit annual growth. Kim arrived in 2004 and surveyed laptop computer customers and found that their satisfaction was greater if they had a Centrino system, even if they had the same functionality in a laptop with parts from other vendors, like archrival Advanced Micro Devices. Will the same approach work for office computers? There’s not much sex appeal to the ordinary computer user. But Intel’s vPro platform is hoping that a slew of new features, like fixing a computer while it’s turned off, shutting it down when it receives a virus, and dividing a computer’s processing power into compartments that are dedicated to individual programs, will standardize PCs in ways that many corporate IT departments might find helpful. Kim Stevenson, vice president of information technology at EDS, which manages four million computers, seems optimistic. “With the vPro platform we can support all PC types with the same processes,” she says. Intel could use another hit. The company's been beaten up this year, with the news only growing more dismal each quarter. This month, it reported that in the first quarter revenues were $8.9 billion, down 5% from a year ago. Profits, at $1.3 billion, were down 45%. Improving the desktop business could have a major impact on the overall bottom line, since it’s the heart of Intel’s biggest operating division. It’s also the division that needs the biggest boost. In the recent quarter, the enterprise group, which includes desktops and servers, saw sales down 19% to $5.1 billion and profits drop 43% to 1.4 billion. So later this year, vPro desktop computers will roll out with little stickers much like the ones that now say Centrino or Intel Inside. If that succeeds in getting office workers more excited about their office computers, Intel will be able to claim victory. “Intel has been very responsive to me and my crazy ideas,” says Eric Kim. “Intel is at a critical juncture. It needs to jump to the next level.” Let’s hope some marketing fizz can help.
David Whelan

Viacom Gets Xfired Up Forbes
Viacom announced Monday that it has agreed to acquire Menlo Park, Calif.-based Xfire, an online gaming community platform, for $102 million in cash. The gaming and social networking site, which allows gamers instant messaging capability, will be the latest to join a growing portfolio of web sites in Viacom's MTV Networks business. The acquisition allows Viacom to enter the social networking and online gaming markets that Rupert Murdoch's News Corp. entered last year with the acquisitions of MySpace and IGN Entertainment, as well as instant messaging, now dominated by Yahoo! and Time Warner's AOL. Founded in 2004, Xfire is a free service allowing online game players to track other online gamers, and communicate through instant messaging. According to the company web site, "it works regardless of game type, server browser, or gaming service that a player is using." Revenue is generated through advertising. (See also: " Keep Crankin' Those Games"). "We're always looking to follow our core audience," said Michael Wolf, president and chief operating officer of MTV Networks, in a phone interview. And he seems confident he can target some of that core audience with Xfire, which he called "the hub of the gaming industry." This is the latest in a series of Viacom acquisitions of other web-based properties. In October 2005, the company acquired IFILM, an Internet streaming media network. IFILM is also now a part of MTV Networks. In November, Viacom's MTV Networks acquired GameTrailers, a web site providing gamers with information, previews, reviews and forums. Xfire will become a part of Viacom's MTV Networks, joining the company's more than 90 branded web sites such as targeted properties like GoCityKids.com, Neopets, Parents Connect, and its broadband networks, MTV’s Overdrive, Nickelodeon’s Turbo Nick and VH1’s VSPOT. The acquisition gives Viacom a piece of the sought-after social networking space, albeit targeted to gamers, particularly young men. Xfire has four million registered users and one million active users. Last year, Viacom is thought to have bid on perhaps the most popular social networking site, MySpace.com, but lost out to Rupert Murdoch's News Corp., which bought MySpace owner Intermix last summer for $580 million in cash. Allowing users to access other gamers through instant messaging capability allows them to bypass popular instant messengers like AOL's AIM and Yahoo! Messenger. Cassidy said that prior to Monday's announcement, Xfire had seen a lot of interest from other "major media networks." Wolf said he expects the deal to close within the next thirty days.
Kate DuBose Tomassi

Skype Users, Madonna Is Calling Forbes
EBay’s web-based phone service Skype has been given the go-ahead by EMI Music Publishing and Warner Music Group to sell song downloads from the two companies at an online music store. Skype could sell the songs via its existing online store, which offers Skype-compatible hardware and accessories to the service’s nearly 95 million users. The music store has not yet launched, but more information will be available this week, according to a company spokeswoman. At the site personal.skype.com, users can already purchase generic ring-tones for $1.20 each, but the deals with EMI and Warner could include tracks from artists such as Madonna, Rob Thomas and Green Day at undetermined pricing. According to EMI, Skype now has license to use songs from the publisher’s catalog for downloading, subscriptions and master-tones on a world-wide basis, though in order to do so, Skype must also get permission from individual record labels. So far, only Warner has consented. Mobile phone-based ring tones represented a lucrative boon to the music industry in 2005, racking up about $4.5 billion in sales, according to Billboard. Sales of mobile music at EMI were up about 140% in the first half of fiscal year ended March 31. But it is unclear how large a market voice-over-IP ring tones represent. Because Skype’s deal with EMI allows for downloading and subscriptions, Skype’s future music store could eventually sell full versions of digital songs and begin to compete with mobile and MP3 music offerings from Apple Computer iTunes, Napster, Microsoft MSN Music, Sprint and Verizon. ITunes currently dominates the legal downloadable music business with nearly 78% of the market, according to NPD Techworld.
Rachel Rosmarin

Google's Rivals Struggle To Compete Forbes
Google’s first-quarter earnings, reported after the closing bell Thursday, left investors happy but its competitors scrambling. Google reported blockbuster first-quarter sales of $1.53 billion and earnings per share of $2.29. Management calculated net revenues have risen 79%, year over year, handily beating street estimates. “So far, it seems for Google, ‘the law of large numbers’ means that the numbers just keep getting larger,” quipped Morgan Stanley analyst Mary Meeker in a Friday research note to investors. Many analysts seem to agree that there is no end in sight when it comes to Google’s growth. Its search monetization systems, Google AdWords and Adsense, raked in $1.3 billion and $206 million, respectively -- good news for a company that wins 95% of its revenue from online advertising. All this leaves rivals Yahoo! and Microsoft MSN scrambling to compete. A March 2006 survey conducted by market research firm comScore showed Google’s market-share lead had improved to 42.7% from its year-ago level of 36% of all online searches. Yahoo’s market share fell 8% to 28% and Microsoft’s MSN ranked a distant third with 13.2%. “Google is so far ahead they have a certain level of understanding of the search business that is well beyond what a lot of folks are capable of and are able to drive share gains,” said Standard & Poor’s Equity Research analyst Scott Kessler. So what are Google’s competitors to do? Yahoo! had its own good news April 18, when management reported strong first-quarter results, with in-line revenue of $1.9 billion and a 16% sequential increase in daily average page views to 3.8 billion from 3.2 billion in the fourth quarter of 2005. Yahoo! chief executive officer Terry Semel, in a conference call with investors, said Yahoo! expects big growth in paid content like games, music and photographic services as the number of Yahoo! paid subscribers continues to increase to 13.3 million. One of the bigger tricks up Yahoo’s sleeve is a new and improved search monetization system that could rival Google’s. Dubbed “Project Panama,” the new system is based on a model similar to Google’s, ranking search-engine ads by both the amount advertisers pay for keywords and the relevance of the ad. Semel said the new platform should be rolled out during the second half of the year. Since both Google and Yahoo! derive nearly all of their earnings from online advertising, this could boost Yahoo’s share in the surging online advertising market. According to the Interactive Advertising Bureau, online advertising revenue in the United States alone totaled $12.5 billion in 2005, up 30% from the year before, and search-generated revenue accounted for 41% of total online revenue for the year. UBS analyst Benjamin A. Schachter, whose firm has been retained by both Google and Yahoo! for banking and consulting services, thinks Project Panama has the potential to help Yahoo’s market share. But initially, “it’s about increasing revenue per search more than increasing market share,” he said. “Yahoo is running up against a very strong brand and Google has won people’s mindshare for search.” Kessler agrees, but thinks, for now, Google had the easier job of making adjustments to an already leading brand. Microsoft, which plans to roll out its own monetized search engine this summer called Microsoft MSN’s adCenter, and Yahoo! have the tougher job of introducing completely new offerings. It’s possible, Kessler added, that Microsoft MSN and Yahoo! could start gaining market share from Google in 2007 with their new offerings. Another rival, eBay, is reportedly in talks with Yahoo! and Microsoft MSN as potential allies against Google. The Wall Street Journal, which reported the news Friday, said any prospective eBay partner would be able to display ads on eBay’s millions of web pages. EBay, which has worked closely with Google for many years, could soon face fierce competition from one of Google’s latest offerings, “GBuy,” an online payment service. With Google’s encroachment into the classifieds and payment systems, the Wall Street Journal reported that eBay is eager to find some kind of ally with which it could increase advertising spending, integrate systems and cross-promote their businesses. The online auctioneer posted soft, but in-line, first-quarter earnings April 19, with lowered average sales prices and a conservative company guidance for the second quarter. “The eBay platform may have reached the point of equilibrium and cheaper avenues to sell goods are beginning to present themselves, wrote RBC analyst Jordan Rohan in a research note to investors Thursday. But there is hope for eBay. The debut next week of its fixed-price service eBay Express, along with the new PayPal Mobile, which allows consumers to buy goods and services from their mobile phones, could offer upside to the company’s stock as PayPal and Skype continue to grow at impressive rates. Ultimately, the inherent risk for eBay, Yahoo!, Google and Microsoft -- tech leaders all of them -- is the ever-changing nature of the online ad market. “Google’s growth in market share will slow down at some point,” Schachter said. Though Google is well-positioned in the online advertising market, “we’re still in the first inning of a decades-long secular trend and the game is far from over.”
Mary Crane

World's digital divide is narrowing: study Yahoo! News
The digital divide is narrowing as citizens in emerging markets get online via computers and mobile phones, with some regions now on a par with developed nations, a ranking of Web-savvy nations showed on Wednesday. "Encouraging is the apparent narrowing of the digital divide," said the annual study published by U.S. computer company International Business Machines Corp. and the intelligence unit of British magazine The Economist. "This is particularly evident in basic connectivity: emerging markets are providing the vast majority of the world's new phone and Internet connections," the study found. Within China and India, regions such as Shanghai and Bangalore have almost the same level of Internet and mobile phone connections as developed nations, said Peter Korsten, European director at IBM's Institute for Business Value. "This is the first time we see a level playing field between developed and developing nations in terms of connectivity. It's up to governments to take advantage with education and other initiatives," he said. The survey looks beyond basic connections and also studies how the Internet is being used to improve productivity and reduce costs, including online access to public services. "Virtually all countries have improved their scores over the past year. The improvement is greater in the lower tiers of the rankings than at the top. As a result, the distance separating the best from the rest has declined," the study said.

HUGE DIFFERENCE
The difference between the world's Web-savviest nation Denmark and the least "e-ready" country Azerbaijan remains nevertheless huge, with respective scores of 9.0 and 2.9 out of a possible 10. India and China, including their less developed provinces, scored 4.25 and 4.02, ranking No. 53 and 57 respectively. Switzerland entered the top three, replacing Sweden which dropped to fourth place, while the United States held on to its No. 2 spot. Denmark remained No. 1 in taking advantage of the Internet, both connecting citizens securely over broadband and wireless networks as well as using its near ubiquitous hook-ups for Internet banking and government services such as tax returns. "E-procurement (for public services) is saving Danish businesses 50 million euros ($62.1 million) and taxpayers as much as 150 million euros per year. The rest of Europe is expected to follow Denmark's lead," the study said. Six nations in the top 10 are European, taking advantage of cheaply available broadband offerings and good education. The U.S., Australia, Canada and Hong Kong complete the top 10. In central and eastern Europe, the new European Union member states formed an upper tier while other nations lag far behind. Mobile phone penetration is ubiquitous, but fixed line Internet connections are not widely available, while the business and legal environment is weak. Overall, the region remains well behind the EU, North America and developed markets in Asia Pacific.
By Lucas van Grinsven, European Technology Correspondent

Ford to promote green investments to consumers Yahoo! News
Ford Motor Co. said it will give consumers concerned about harmful greenhouse emissions an opportunity to invest in clean energy projects via a new Web Site that will calculate suggested investments based on the amount of carbon dioxide produced while driving. In a program called "Greener Miles," which is expected to be announced on Thursday, consumers can go to the Web Site to calculate the amount of carbon dioxide produced in one year of driving. The Web site will then suggest an investment linked to the cost of producing an amount of clean energy equivalent to the carbon dioxide produced. Ford is partnering with TerraPass, a group that helps finance solar, wind and methane-driven energy projects, for the project, Niel Golightly, director of Ford's sustainable business strategies, told Reuters in an interview. "We know that there is a growing number of customers out there that are starting to raise questions about this whole subject of climate change and energy security... and looking for things they can do to address it," Golightly said. The consumer contributions -- ranging from $29.95 to $79.95 annually depending on the type of vehicle, amount of carbon dioxide emitted and miles traveled -- will be invested in U.S.-based projects such as wind power energy or making power from dairy farm manure. An average car produces between 10,000 pounds and 12,000 pounds of carbon dioxide a year, Tom Arnold, TerraPass chief environmental officer, said. The initial projects that would benefit from contributions from Ford buyers are a wind farm in Ainsworth, Nebraska, and Haubenschild Farms near Princeton, Minnesota, which converts manure into electricity, he said. In exchange, consumers get a sticker for their windshield verifying the offset of carbon dioxide the vehicle emits. Ford said it has no plans to run a broad-based advertising campaign for the initiative. Instead, Ford dealers will be given brochures on the project and consumers will be directed to the Web site from several Ford product sites, Arnold said. Arnold said it was hard to say how many consumers will participate in the project. Ford Chairman and Chief Executive Bill Ford, great-grandson of the company founder and a lifelong environmentalist, has made efforts to portray the automaker as an environmentally aware "green" company. But the company and Bill Ford have often been the target of environmental groups that decry the company's dismal fuel economy record. Golightly said Ford is also working to improve the fuel-efficiency of its fleet, investing in alternative-fuel vehicles and working to reduce emissions from its factories. The Greener Miles project "is a very incremental part of our overall climate change policy," Golightly said. "This is an opportunity for us to engage our consumers a bit more."
By Poornima Gupta

Bill seeks music royalties for satellite downloads Yahoo! News
A bipartisan group of lawmakers has introduced legislation that would require satellite radio companies to compensate the music industry for downloads, industry and congressional sources said. The legislation, by U.S. Senators Dianne Feinstein, D-Calif., Lindsey Graham, R-S.C., and majority leader Bill Frist, R-Tenn., is aimed at compensating copyright holders as satellite radio services become distribution services. The "PERFORM Act" or the "Platform Equality and Remedies for Rights Holders in Music Act of 2006" would require satellite, cable and Internet broadcasters to pay fair market value for the performance of digital music. Additionally, the bill would require the use of readily available and cost-effective technological means to prevent music theft. "The birth of the digital music place has been a boon for businesses and consumers. However, these new technologies and business models have become so advanced that the clear lines between a listening service and a distribution service have been blurred," Feinstein said. "I believe that the PERFORM Act would help strike a balance between fostering the development of new technologies and ensuring that songwriters and performers continue to be fairly compensated for their works." Record industry executives want so-called "parity" among the different download platforms. They argue that the new devices XM Radio is bringing to the market that allow customers to save songs on the receivers without paying for the download rip off the copyright holder. "Digital sales are finally replacing physical losses," said Mitch Bainwol, chairman and CEO of the Recording Industry Assn. of America, which lobbies for the major labels. "If someone gets a distribution right without paying for it, that blows a hole in the digital marketplace." Warner Music Group chairman and CEO Edgar Bronfman Jr. endorsed the legislation in testimony prepared for a hearing on the issue scheduled for Wednesday. "When I see a device that permits consumers to identify the specific tracks they want from a satellite broadcast, record them and library them for future use, I call that device an iPod and I call the satellite service making that device available a download service," Bronfman said. "What is clear to everyone is that these services no longer resemble and will increasingly stray from our collective understanding of what constitutes a traditional radio service." The bill protects copyright holders by ensuring that "the same rules apply to all of the satellite, cable and Internet services, which avail themselves of a compulsory license under" the nation's copyright laws. Sirius Satellite Radio has reached deals with the major record companies that compensate them for downloads on its S-50 receiver that allows customers to record content, but XM has not. A pair of devices, the Pioneer Inno and Samsung NeXus, allow customers to record programming. XM executives contend that the devices are nothing more than a high-tech way to record radio programming, which is protected. In XM chairman Gary Parsons' prepared testimony, he said that the Feinstein-Graham bill, tentatively known as the Perform Act, will "lead to a new tax being imposed on our subscribers." The company already pays millions in copyright royalties to the record companies, and said their push for a new royalty is a negotiating tactic designed to push those rates higher. The copyright office is currently reviewing those rates. "The reason the recording industry is now insisting on a different standard has nothing to do with fairness," Parsons said. "XM and the record industry are in the middle of renegotiating their performance license. By changing the standard now, the recording industry hopes to stack the deck in its favor." Bainwol denied the charge. "Competition should be based on the offering. Their license is for a performance, not a distribution," he said. "I was struck by the power of their slogan: 'It's not a pod. It's a mother ship."'
By Brooks Boliek

Scrutiny of Sick Patients Is Detailed

Blue Cross reviews patients with certain illnesses and cancels any
policies with errors or omissions, according to an employee
deposition. By Lisa Girion.
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Lay Says Articles Hurt Faith in Enron

HOUSTON-Former Enron Corp. Chairman Kenneth L. Lay testified that
when the Wall Street Journal was preparing a crucial series of
articles about his company in September 2001, he let subordinates
talk him into stonewalling the newspaper even though it went
"against every bone in my body." By Thomas S. Mulligan.
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Media firms work to stay ahead of online consumers Yahoo! News
Big media companies must keep finding ways to reach on-the-go users and make money doing it to stay relevant in an online marketplace that values convenience and novelty, the leaders of three of the largest U.S. media and tech companies said on Wednesday. In a wide-ranging discussion on tech trends at the Milken Institute's 9th Annual Global Conference, Walt Disney Co. Chief Executive Robert Iger, News Corp Inc. President and Chief Operating Officer Peter Chernin and AOL Chairman and Chief Executive Jonathan Miller agreed; standing still while users find ways -- legal or not -- to obtain the content they want is not an option. "I think anyone who loses is anyone who tries to protect their traditional business. I think you've got a bad 10-15 years ahead of you if you try to do that," Chernin told conference-goers. Chernin said the U.S. government should help facilitate the spread of broadband technology to bring "very backward" U.S. broadband adoption into line with Asia. "We should have a government policy that addresses it," Chernin said. "You're already seeing certain products in certain areas (in Asia) that are much more advanced than we are. I think you will see products come out of those areas that are really innovative that should be coming out of the U.S." While consumers' desire for home-grown content and social networking has grown with the rise of sites like MySpace.com and YouTube.com, so has their demand for branded content, Iger and Chernin said. "What's both exciting and frightening is the pent-up demand for video products," Chernin said. "We did a survey and more than 90 percent of (users') favorite material on (video sharing site) YouTube.com is copyrighted material (from studios)." Iger noted that consumers' appetite for user-generated content like ABC's "America's Funniest Home Videos," which debuted while he was running the network more than a decade ago, has only grown. "I don't know how many times you can watch a pet bite someone in the crotch but somehow this is interesting to people," Iger said. "I'm not sure it's necessarily bad for the traditional industry because we are living in a world where people are consuming more (media content)." Miller predicted that overall media consumption would continue to rise, along with the importance of online social networks to help users find the content in an increasingly crowded marketplace. Miller said AOL plans "to make a very significant move in that area very shortly." AOL was considering an online model that made content, such as television reruns from Time Warner sister company Warner Bros, available for an extended period to let the audience accumulate. "If it gains an audience that grows over time that's fine," Miller said. "You don't have to sell it day and date." Chernin said there was no longer a "first mover advantage" to finding an online distribution business model that works. "I think the best possible thing is all the experiments that are going on," Chernin said. "I would be thrilled if Bob (Iger) stumbles on the right economic formula before I do because I'll turn around and steal it from him and vice versa." Disney's partnership with Apple Computer Inc.'s iTunes Music stores has produced "upwards of 7 million downloads" of Disney television shows and movies, Iger said. Chernin said News Corp's Fox television network, which now allows viewers to buy episodes from DirecTV of "The Shield" and "Rescue Me" ahead of their broadcast air dates for $4, was considering offering the same deal for wireless devices.
By Gina Keating

Disney to test new interactive ads on abc.com
Walt Disney Co. will try a new type of advertising when it begins showing prime-time ABC television shows on the Web, using a single, interactive ad during each break rather than the flurry of short spots that are the norm on network TV. Ten major advertisers have delivered new interactive online commercials as part of Disney's two-month test of whether consumers will watch ads if they can download hit TV shows on abc.com for free. The test, which starts May 1, offers streaming video of "Desperate Housewives," "Alias," "Commander in Chief" and "Lost" about 12 hours after each episode airs on the East Coast. The company charged advertisers only for the cost of setting up the online player and may actually lose money if the site becomes wildly popular, Alan Ives, vice president of interactive sales for ABC, said on Tuesday. Disney asked major ad agencies to recommend advertisers who "are willing to push the envelope" for the test, Ives said. The company had no problem finding advertisers once news of the trial hit the press, he said. The companies, including AT&T Inc, Cingular, Toyota Motor Corp., Ford Motor Co., Procter & Gamble Co., Unilever Plc, General Electric Co's Universal Pictures and Walt Disney Pictures, turned in their ads about two weeks ago. "It's a new and different ad model," Ives said. "We got some pretty creative stuff. If you had unlimited time and interactivity to get your message across, what would you do?" Each online episode will kick off with a 10-second sponsorship message from a single advertiser and will feature one commercial from that sponsor per commercial break, Ives said. Commercials from each advertiser will cycle through an episode every time it is viewed online, meaning that different commercials could appear each time the show was watched online. Only three of the five commercial breaks built into episodes for broadcast television will be used in the online model, Ives said. Viewers will have to watch or click through ads to get to the next segment of the program. The commercials were designed to last at least 30 seconds, but some feature interactive games, coupon offers or product information that may engage viewers longer. There is the option of clicking out of the advertisements and returning to the program after 30 seconds, he said. By the time ABC presents its new fall schedule on May 16 in New York, Disney will have two weeks' worth of data showing how consumers are responding to the online ads. Disney plans to review partial results of the trial at that presentation, a company official said. Disney-ABC Television Group President Anne Sweeney said this week that the network plans to launch an enhanced version of its the program later this year. Sweeney said the company would work with network affiliates, who were angered by the company's decision to offer premium content online, to build an online business model. Disney officials said they do not expect abc.com to replace TV advertising or even to provide a meaningful revenue stream in the near future. Sweeney said the online program will offer the network information about online technology and how consumers use it. ABC already sells digital downloads of its highest-rated shows for the popular iPod music and video player.
By Gina Keating

Judge queries Microsoft decision BBC News
The judge chairing Microsoft's appeal against a European Commission antitrust ruling has asked why the firm had to give technical codes to other firms. The five-day hearing stems from Microsoft's rejection of a landmark ruling by the Commission in 2004. The firm was fined 497m euros ($613m; £344m) after a ruling it abused its dominance by muscling out rivals. Now the judge has asked the Commission why Microsoft was also forced to share "commercial information" with rivals.

Innovation arguments
As part of the 2004 decision, the Commission said Microsoft should give competitors technical information to allow them to make server software that works smoothly with Microsoft's Windows, used by 95% of the world's PCs. The Commission said without this information, rivals cannot compete with viable, or interoperable, non-Microsoft software. However, the software giant claims that this amounts to losing control of key technology that is protected by intellectual property rights. It also argues it is being asked to reveal trade secrets that would dampen innovation. Court of First Instance Judge John Cooke said: "The information which forms interoperability is hugely valuable commercial information." He asked the Commission whether "competition rules require that (to) be taken away from Microsoft, conveying a huge commercial advantage". Earlier in the day Microsoft's rivals claimed they have been forced to "play catch up" because the company has limited access to its software. Speaking on the fourth day of the trial, Andrew Tridgell of an open source project Samba, said "we are more than 10 years behind." The 2004 ruling also ordered Microsoft to change how it sells its Media Player software.

Crucial case
In court European Commission lawyer Anthony Whelan said the "super-dominant" position enjoyed by Microsoft prevents its rivals from innovating. Mr Whelan said that even if Microsoft provided other software operators with the information to facilitate using their software on Microsoft operating systems, "an attack of the clones" was unlikely. If the panel rules in favour of the Commission, it will confirm the EU's powers to tackle market dominance and also force Microsoft to alter the way it does business. But if not, it could be seen as a major blow to the EU's ability to challenge anti-competitive behaviour. While the hearing will end on Friday, a decision by European Court of First Instance is not expected for months and could take as much as a year.

Prosecutors seek Hyundai arrest BBC News
South Korean prosecutors have asked for an arrest warrant for Chung Mong-koo, head of the Hyundai motor group, on embezzlement charges. He is at the centre of allegations of illegal political lobbying. The car giant is suspected of creating a slush fund to pay politicians and officials for business favours. Prosecutors said they also planned to indict his son, Chung Eui-sun, president of Hyundai subsidiary Kia Motors, although without detaining him. The Hyundai group has been under investigation since March, over suspicion that it sought to buy political favours by channelling cash through third parties to figures in the government. Prosecutors have already raided the offices of Hyundai Automotive Group - South Korea's top carmaker - and three affiliate companies, and questioned key officials about the scandal. Two lobbyists have also been arrested on suspicion of receiving money from the company, although it is unclear whether they actually sought to pay government officials.

Multi-million slush fund
In an act of public penance and to restore confidence in the firm's activities, Mr Chung and his son have already apologised to the South Korean people over the scandal, and promised to donate their 60% stake in an affiliate company, Glovis, to charity. But it appears that more may be required. The request for an arrest warrant came just days after Mr Chung spent about 15 hours being questioned at the Supreme Prosecutors' Office in Seoul. Senior prosecutor Chae Dong-Wook is quoted as telling a press briefing on Thursday that Mr Chung was wanted on charges "of raising some 100 billion won ($106m) in slush funds and embezzling it". Shares in Hyundai plunged 3% on the news that prosecutors were seeking Mr Chung's arrest, according the French news agency AFP. Hyundai spokesman Jake Jang admitted that news of the warrant was "shocking". "Hyundai executives are all in a panic. The absence of Chairman Chung is enormous, and its ramifications are beyond description," he told the Associated Press.

Exxon Mobil Earnings Top $8 Billion

Exxon Mobil Corp. brought home huge barrels of money in the first
three months of the year - more than any first quarter in company
history, the oil giant said - but it was less than Wall Street
expected. By Elizabeth Douglass.
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Monday Protests Could Hit Local Economy Hard

Some businesses will close or look the other way if workers skip a
day for immigration rallies. By Molly Selvin and Ronald D. White.
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China Ups Loan Rates to Slow Economy

BEIJING - Seeking to cool its runaway economy, China unexpectedly
raised its bank lending rates, sending ripples through global
markets that have become increasingly dependent on the Asian
nation's growth. By Don Lee and Mark Magnier.
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Judge OKs Race Suit Against Universal

A federal judge has ruled that Universal Pictures must go to trial
in the first racial discrimination case brought by the government
against a Hollywood studio. By Lorenza Muñoz.
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Your Tube, Whose Dime? Forbes
The Web lets users watch whatever they want, whenever they want to watch it. So what do they want to see? A home-made video of two boys lip-synching along to the Pokémon television theme song. Internet video site YouTube has streamed the video more than 9.5 million times in the last four months, making it the site's most-watched movie. Startup of the moment YouTube, which garnered 12.9 million unique visitors in March, doesn't care what viewers watch, as long as they keep tuning in. Making money is another matter: The site, which has raised $11.5 million in venture capital in the last year, didn't see a penny in revenue until March, when they cautiously began selling ads. Meanwhile the site's bandwidth costs, which increase every time a visitor clicks on a video, may be approaching $1 million a month--much of which goes to provider Limelight Networks. Internet optimists predict that online video, long-rumored to be the next big thing, is finally taking off: IDC estimates that video generated $230 million in revenue but will jump to $1.7 billion by 2010. In the meantime, the best play in Internet video may not be the companies that show off the clips, but the ones who deliver them to users' PCs. The content-delivery business may be a $500 million a year business--twice the value of Internet video advertising and users fees--and is growing 25% per year, IDC estimates. It is dominated by big, publicly traded hosting providers such as Akamai Technologies and AT&T, as well as boutique shops such as Limelight, which also serves News Corp.'s MySpace and Microsoft's Xbox Live videogame service. Some of the biggest portals, like Yahoo! and Google, have built up their own content-delivery networks and don't need to pay a third party for many services. The bandwidth companies typically charge video sites up to a penny per minute of video streamed. Big players who buy in bulk get discounted rates: Industry observers estimate that YouTube, which is streaming 40 million videos and 200 terabytes of data per day, may be paying between a tenth of a cent and half a cent per minute. Neither YouTube nor Limelight would comment on their pricing. And while privately held Limelight doesn't open its books, Akamai this week posted earnings of $11.5 million in on revenue of $91 million for the first quarter of this year; the company's stock has tripled in the last year. IDC analyst Rona Shuchat says Akamai may control half of the content-delivery market. Some upstarts in the video Web market are betting on a different content-delivery model. Instead of paying for professional hosting, they're hoping people will open their digital subscriber lines and cable modems to transfer data between users instead of sending everything from a central server. This "peer to peer" setup has been successful for online phone service Skype, purchased last year by eBay, and underground file-sharing networks using software called BitTorrent, which some say is responsible for one-third of all Internet traffic. Gilles BianRosa, chief executive of BitTorrent-software maker Azureus, says peer-to-peer networking could save his company 95% in hosting costs when it launches a community-based video site in the next few months. Other companies are already onboard: WurldMedia Chief Executive Gregory Kerber, whose company will start serving movies and television shows for General Electric's NBC-Universal this year, says the peer-to-peer model is the next step in Web video evolution. "We can sell to the consumer at the same price point that they're used to, but we'll be giving them a higher-quality product that's more versatile," Kerber says. But peer-to-peer transfers can be flaky. They require willing participation and good behavior from users, including access to their upstream bandwidth that most broadband service providers already cap tightly. As a result, some video-delivery specialists such as Solid State Networks are hedging their bets with a mix of peer-to-peer and traditional content-delivery. Solid State Chief Executive Rick Buonincontri eyeballs cost savings around 50% over standard hosting while maintaining a professional service-quality level.
Dan Frommer

Big growth spurt for US economy BBC News
The US economy roared ahead in the first quarter of 2006, growing at its fastest rate in two and a half years, according to the Commerce Department. Gross domestic product grew at a 4.8% annual rate, more than twice the 1.7% recorded in the last quarter of 2005. Growth was boosted by government spending to deal with damage from last year's Gulf Coast hurricanes. Earlier this week, the Federal Reserve chairman said he expected growth to slow to a more sustainable level.

Inflation fears
In its report, the Commerce Department said that consumer and business spending and investment all helped drive the economy forward. The main drag on growth is America's huge trade deficit, which chipped 0.8 percentage points from first quarter growth. "With crude oil prices soaring and China investing in new export capacity at a breakneck pace, the trade deficit will continue to pull down U.S. growth," said Peter Morici, a University of Maryland economist. "Without a devaluation of the dollar against the Chinese yuan, U.S. growth will slow significantly in the second half of this year." On Wednesday, Fed boss Ben Bernanke told Congress that the main risks to growth were a sustained period of high very high oil prices and a big slump in the housing market. He hinted that the Fed might stop raising interest rates soon, but warned that inflationary pressures could change this strategy if energy prices continue to rise. However, despite the strong growth seen between January and March, the most recent core inflation data, ignoring food and energy costs. slowed to 2% from the 2.4% seen in the last quarter of 2005. Elsewhere on Friday, figures from the University of Michigan suggested that consumers were beginning to fret about high petrol prices. Its index of consumer sentiment for April dropped to 87.4 from March's 88.9. "So consumers feel happy but they are beginning to become a little less happy about gasoline price increases," said Brian Fabbri, chief economist at BNP Paribas in New York. "This is not a big move in confidence but it does say that confidence is probably levelling off and would probably continue to do so while gasoline prices go up."

U.S. Economic Growth Surges in 1st Quarter

WASHINGTON-The 4.8% rate is the best since 2003, but analysts
expect a slower pace the rest of the year and a report suggests
workers' pay is trailing inflation. By Joel Havemann.
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Dollar Slumps, Reviving Worries

Stocks gain even though the dollar's recent slide lifts doubt
about how willing foreigners are to invest in the U.S. Gold soars
to a 25-year high. By Tom Petruno.
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Chevron Posts 49% Increase in Profit

A consumer group accuses the company of profiteering after it
reports earnings of $4 billion, boosted by oil extraction and
refining. By Elizabeth Douglass.
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Turks, Kurds Keep Ties Businesslike in New Iraq

SULAYMANIYA, Iraq-Despite tension between the ethnic minority and
the government over the border, Turkish firms are eagerly
investing where Westerners won't. By Solomon Moore.
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Editorial: From 0 to 60 in 40 Watts

Gas prices may be going through the roof, but it hasn't fazed car
buyers yet. Sales figures from the first three months of 2006 show
that Americans are still buying just as many gas guzzlers as they
were last year. It's not a question of whether that will change
but when - for both economic and environmental reasons.
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Crude Economics

Big Oil already pays big taxes. A windfall profits tariff would
stunt domestic production and cost consumers at the pump. By
Jonathan Williams.
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Bush approval rating drops as oil price soars ABC Online
This has sent shockwaves round the globe over the past week with some of the strongest reverberations felt in the United States, where one American gallon of regular gasoline now costs about $US 3. While higher petrol prices are depleting the wallets of American motorists, they're also presenting a political problem for President Bush, who's struggling to get his presidency back on track and whose approval rating has fallen to a record low of 32 per cent. The President has tried to pacify voters by announcing a series of measures to reduce petrol prices and promote alternative fuels. But as Michael Rowland reports, not everyone is convinced about his sincerity. MICHAEL ROWLAND: Image plays a large role in US politics. It's something George Bush's handlers obsess about, paying just as much attention to visual props as to what the President actually says at his set piece events. Who can forget the sight of the Commander in Chief, in full combat garb, climbing out of a fighter jet on a US aircraft carrier back in May 2003 to announce the end of major combat operations in Iraq. The banner proclaiming "mission accomplished" completed the made for TV setting. In that case images proved to be deceptive, as they were earlier this week when the President made an appearance at the Renewable Fuels Association in Washington to announce his strategy for reducing sky high petrol prices. Standing in front of a giant picture of corn fields, Mr Bush talked up the environmental advantages of ethanol, a by-product of corn that's touted as an alternative to oil. GEORGE BUSH: Ethanol is good for drivers. Ethanol is home grown. Ethanol will replace gasoline consumption. It's a good… ethanol is good for the whole country. MICHAEL ROWLAND: Encouraging investment in ethanol production is one of the key weapons in Mr Bush's battle against soaring fuel prices and watching him at the renewable fuels event, it was easy to get the impression the former Texan oil-man had undergone something of a energy conversion. You could have formed the same view when the President declared in his State of the Union address this year that America was addicted to oil, particularly the sort that comes from countries that see the US as the great Satan.

But appearances can be deceptive.
America may be addicted to oil but George Bush's Republicans are just as hooked, it seems, on the big oil companies. As New York Times columnist Maureen Dowd put it this week, it's a case of the oil men in the oval. Both Mr Bush and Vice President Dick Cheney have strong ties to the oil industry and have been unwilling to take on the corporate titans at a time when big oil executives are about as popular as Osama Bin Laden. Fuelling this sentiment has been the revelation that the recently retired Chief Executive of Exxon-Mobil, Lee Raymond, earnt nearly $200,00 a day while running the company and walked away with a retirement package worth more than $400 million. The President has sought to quell the brewing voter mutiny at the bowser by vowing to crack down on price gouging. GEORGE BUSH: Americans understand, by and large, that the price of crude oil is going up and that the prices are going up but what they don't want and will not accept is manipulation of the market. And neither will I. The Federal Trade Commission is investigating whether the price of gasoline has been unfairly manipulated in any way. BART STUPAK: When the President calls for an investigation, it doesn't do us any good because the FTC, Federal Trade Commission, has never brought a case for price gouging on petroleum products ever. MICHAEL ROWLAND: Democrat Congressman Bart Stupak was among those accusing the President of making hollow threats as part of his petrol pain relief prescription. The head of the National Petrochemical and Refiners Association was quoted this week as saying the President's strategy "does smack of round up the usual suspects". At the same time as Mr Bush was unveiling his action plan, Republican law makers were quietly moving to kill legislation aim at increasing taxes on the big oil companies. All of this has been the source of what's been a high octane political assault by Democrats keen to capitalise on the fury of voters being forced to fork out more and more of their hard earned cash to fill their tanks. Deputy Democrat Senate Leader, Dick Durbin. DICK DURBIN: We have followed the Cheney energy policy into this ditch. It's time for the President to call the Vice-President in and tell him, "heck of a job, Cheney. You could have done a lot better." And it's time for the oil executives to be held accountable. Exxon-Mobil, record breaking profits? Money going straight from our credit cards at the gasoline pumps, right into the board rooms. MICHAEL ROWLAND: Energy experts have also criticised the President over what they see are some fairly major omissions from his petrol action plan. There was no mention, for instance, of improving fuel efficiency standards for cars, and more particularly, the gas guzzling sports utility vehicles that dominate American roadways. Daniel Lashof is the Science Director of the Natural Resources Defence Counsel. DANIEL LASHOF: I don't think there is anything in the President's plan that will have a short term impact on gas prices. Jimmy Carter definitely gave the wrong approach when he indicated that what the primary mechanism to save oil was to sacrifice American's living standards. What we need to do is, as the President did say, embrace technology that can allow us to use energy much more efficiently. MICHAEL ROWLAND: Mr Bush also believes one way of easing the pain at the pump is to boost domestic oil production, including in Alaska's Arctic National Wildlife Refuge, a proposal that's long been the subject of bitter political debate. But even if the wilds of Alaska are taken over by oil rigs, there's no guarantee the extra output would in fact drive down local petrol prices. With world demand for oil far outstripping supply, any extra barrels rolling onto the market are just as likely to end up in energy hungry India or China. And that's an image the White House would certainly not like American voters to see.
Bush Calls Higher Oil Prices Wake-Up Call Voice of America
Bush rejects most congressional remedies to high gas prices MarketWatch
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Wal-Mart of Wine

Since the first bottle of "Two-Buck Chuck" sold four years ago,
vintner Fred Franzia's company has shaken up the industry by
driving down prices By Jerry Hirsch.
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TV Wants Clear Rules on What's a Bad Word

WASHINGTON-Television executives have embarked on what probably
will be a long legal struggle. But they believe their goal -
bringing more clarity to what they describe as the increasingly
blurry and outdated world of federal indecency rules - is key to
assuring the continued viability of the broadcast TV business. By
Jim Puzzanghera.
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Can Raw Materials Continue Their Run?

A veteran investor sees risk in commodities' surge. But global
demand remains robust. By Tom Petruno.
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Microsoft not hatching plan with eBay: paper Yahoo! News
Microsoft is not plotting against Google with eBay, Microsoft's chief executive told a German newspaper, but he said he did often talk with his counterpart at eBay about working together. "Of course we talk with eBay all the time," Steve Ballmer told Germany's Die Welt in an interview published on Friday. "But we don't get together in a secret circle and hatch plans about what we could do together against Google." Google posted a 79-percent jump in revenue earlier this month as it took a greater share of the Internet search market. Its rapid growth has spurred eBay to consider a partnership with Microsoft or Yahoo, the world's second-biggest Internet search engine company, as Google takes aim against Web auction company eBay with an online classified service. The Wall Street Journal has reported that eBay, a major buyer of Web search keyword advertising, is talking to Yahoo and Microsoft as well as Google about forming an alliance. But Ballmer said: "A tie-up with the sole aim of shutting out a competitor makes no sense. The partnership must produce something that is useful for users and advertisers." He added, however, that he did regularly talk to eBay's CEO Meg Whitman, who he said was a close personal friend. "I've known her for 22 years, and so we talk a lot about what Microsoft and eBay could do together," he said. Ballmer added that he had no plans to pay for Microsoft's new version of Windows, Vista, through advertising. "You mean, would we finance Vista more by advertising than by selling software? Not likely," Ballmer said. "Part of the screen would then be covered in advertisements. I'm sure most customers would rather pay $50 or $60 more for their PC."

Natural Gas Economy Is Losing Steam Yahoo! News
On the brink of the 21st century, a group of energy experts peered into the future of natural gas, and what they saw was quite rosy — and quite wrong. To satisfy growing demand, producers could crank out a third more natural gas over the next decade at "competitive prices." It could "power our economy" for decades beyond. Or so said the National Petroleum Council in its 1999 report. But natural gas prices soon headed skyward, with prices charged by producers spiking late last year at nearly five times 1999 levels. This past winter, though starting off warm, saw the average gas-heating household spend a record $867, a 17 percent increase, according to federal data. As for that predicted robust supply, the country's annual gas output has strangely slipped by 3 percent over the past six years. Something is broken in the economics of natural gas, say people inside and outside the industry. The bright dream of an economy built squarely on clean-burning natural gas is slowly deflating. Although we still derive almost a quarter of the country's energy from natural gas, its share will slip in coming decades, federal forecasters now say. "What's going on now is so dysfunctional, it is really remarkable," says industry consultant Jim Choukas-Bradley. Retired Yale economist Paul MacAvoy says price jerks and fuel crimps could soon rival California's electricity nightmare of 2000-2001. "Everything that has gone wrong in electric power is going to go wrong with natural gas, unless we do something," he says. "It's just a few miles down the road." What went so wrong with natural gas? The industry largely blames old fields and self-defeating government policy, and such explanations are widely accepted. The trouble is, they don't explain the breakdown very well. Skeptics are beginning to suspect other powerful forces — ones at work within the industry itself.

Some consumers simply look to their gut and blame the industry. After 26 years, retirees Anna and Frank Siracusa are selling their nine-room, gas-heated home in Methuen, Mass., for something smaller. At age 72, they're tired of turning down the thermostat and piling on sweaters each winter. "Someone is ripping us off," grumbles Mrs. Siracusa. The level of discontent even makes the industry nervous. "We're good corporate citizens. We'd like to have prices at a level where people and congressmen are not screaming all the time," says R. Skip Horvath, president of the National Gas Supply Association. Industry leaders say they're trying to fix things, but declining gas fields and harder-to-reach new ones are limiting output. "You've got to drill more wells, you've got to run faster, just to replace what has declined," says Bobby Shackouls, CEO of producer Burlington Resources and past chairman of the Petroleum Council. While government policy turned less-polluting natural gas into the fuel of choice for new electric plants in the late 1990s, federal rules kept drillers away from vast stretches of public land, the industry complains. Then came last year's hurricanes. However, most drilling restrictions were imposed years ago and added no new impediments to output during the price run-up, say federal energy officials. And the hurricanes only added the latest insult to a market with much bigger, older injuries. Also, other trends should have cooled off prices. Yes, gas-fired generators did use almost 1 trillion more cubic feet of natural gas last year than in 1999. But at the same time, factories cut back, using almost 1.5 trillion less, federal data show. The country is not running out either. There's enough natural gas to last beyond 65 years — much longer than oil, according to the best forecasts. Despite the federal barriers to drilling, the amount of economical, ready-to-capture gas — under existing wells within reach of pipelines — rose 15 percent during the four years ending in 2004, according to the latest federal data. The American Gas Association, a group of utilities, has made a preliminary estimate of another 4 percent rise last year. "There's a lot of natural gas in the world," says Jerry Langdon, an executive at producer and marketer Reliant Energy. Why, then, isn't it reaching users? Despite their protests, maybe some producers aren't really trying, industry critics suspect. Maybe they're happy to take it easy and rake in record yearly profits. Many natural gas producers are the same companies benefiting from rocketing gasoline prices in recent years — familiar petroleum names like Exxon Mobil, Chevron, Shell and BP. Drivers, of course, can respond immediately to high prices by traveling less. It's harder for people to turn down their natural-gas heat. "As soon as companies that control the resource figure out how to keep prices high, they'll do it, and I believe that's what were seeing in gas," says Ezra Hausman, analyst for Synapse Energy Economics in Cambridge, Mass. Some Midwestern cities are accusing producers of doing it by collusion. In an antitrust lawsuit, they suggest that producers have reached either a secret agreement or tacit understanding to bottle up production. "I think the increase in prices is a designed thing," says Charles Wheatley, a lawyer for the 18 communities from Texas to Indiana suing five leading gas producers in federal court. They haven't found a smoking gun proving that. Yet, in Associated Press interviews, some industry executives acknowledge that, during their 1999 sessions, members of the Petroleum Council talked privately of a supply and price crunch in the near future — purportedly as a result of external factors. Why, then, didn't they warn people? Former council leaders indicated that they wanted to keep pressure on demand. "We needed to give comfort to our customers that gas was going to be available," says Joe Foster, a retired gas executive who was council chairman in 1999. Shackouls, his successor, puts it this way: "We were doing it to grease our own wheels." In the end, the council issued its reassuring report, and demand stayed strong. On the other hand, industry leaders insist that collusion to sit on supplies cannot happen. After all, the five leading producers supply less than a fifth of domestic natural gas. So if they were to charge unjustifiable prices, smaller ones could undersell them, right? Maybe not, if producers are more unified than they seem. Many small producers own rights, not rigs. They take a back seat to bigger companies that actually do the drilling under joint ventures, shared leases and royalty agreements. Former federal energy regulator John Wilson estimates that the five producers named in the antitrust lawsuit can influence most domestic output through such arrangements, without changing their official production figures. "Prices have stayed up because people in control of supply decided they could keep them up," says Wilson, who has supported the lawsuit with his analysis. "That's not how we operate," answers Bob Davis, a spokesman for lead defendant Exxon Mobil Corp. "This concept ... is simply ridiculous." And ridiculous it would have been a generation ago, when government regulators set prices across the whole marketplace. Since the 1990s, the marketplace itself has increasingly set producer and pipeline prices under pressure from new hordes of traders, many betting on the future prices of natural gas. In theory, traders would enable better deals through the magic wand of competition. And the theory seemed sound in the first years of market pricing, when supplies were robust. During the production-pricing bind, though, something else appears to have happened. Conditioned by an irrepressible string of price increases, futures traders — who contract for future gas deliveries at fixed prices — tend to settle at even higher fixed prices, many analysts believe. Since the market uses these fixed prices as a reference point for its day-to-day prices, overestimates by traders can turn in