Business Edge

Netanyahu hopeful of compromise at end of talks in US

2010-03-25T02:28:00.001-07:00

Israeli Prime Minister Benjamin Netanyahu says he is hopeful of a compromise on the row over Jerusalem settlements after talks in Washington.

He boarded his plane back to Israel talking of a "golden way" to revive Mid-East peace talks but there was no official comment from the White House.

Mr Netanyahu met President Barack Obama and held last-minute talks with Mid-East envoy George Mitchell.

Neither he nor US officials gave details of what was discussed.

The row over Israel's plans for homes in occupied East Jerusalem has caused one of the worst crises in US-Israeli ties for decades.

There were no photo calls with President Obama

The White House had reportedly been trying to persuade Mr Netanyahu to commit to several trust-building measures to revive hopes for indirect "proximity talks" between Israel and the Palestinians.

The Palestinians pulled out of moves towards talks two weeks ago, after Israel unveiled plans to build 1,600 homes in the East Jerusalem settlement of Ramat Shlomo.

The project was approved during a visit by US Vice-President Joe Biden - a move which Washington initially branded an insult.

Extended visit

Scant information on the content of Mr Netanyahu's negotiations has emerged and rarely has so little been said about such high-level meetings, lasting so long, between the US and one of its closest allies, says the BBC's Richard Lister in the US capital.

Mr Netanyahu was quoted by news agencies as saying he thought a "golden" way had been found to move the peace process forward while preserving Israeli interests.

However, the Israeli daily Haaretz quoted him as saying that Israel was "trying to find the golden path".

Israeli sources quoted by Reuters news agency said Mr Netanyahu could not finalise any confidence-building measures until he presented them to his cabinet.

US officials speaking on condition of anonymity to the Associated Press news agency said the talks had not ended tensions over Israel's construction in East Jerusalem.

Mr Netanyahu had extended his stay by hours to work on a deal but the talks with Mr Mitchell ended at about 2000 (0100 GMT) on Wednesday without any announcements, one of the officials said.

Mr Mitchell had returned to the US following a meeting in the West Bank with Palestinian Authority President Mahmoud Abbas.

Earlier on Wednesday, White House spokesman Robert Gibbs said that President Obama had held "honest" talks with Mr Netanyahu, urging him to take steps to build confidence in the peace process.

Mr Gibbs added that the US was seeking "clarification" about the latest plans to build homes in occupied East Jerusalem.

Minutes before Mr Netanyahu's fence-mending visit to the White House on Tuesday, it emerged the Jerusalem municipal government had approved another development.

Twenty apartments are to be built for Jewish settlers on the site of an old hotel in the predominantly Arab neighbourhood of Sheikh Jarrah.

Mr Gibbs told reporters on Wednesday there were areas of agreement and disagreement between the sides.

"The president has asked the prime minister for certain things to build confidence up to proximity talks that we think can make progress," Mr Gibbs said.

He reiterated the American position that there was an "unbreakable bond" between the US and the Israeli people.

The Israelis said there had been a "good atmosphere" during Tuesday's talks.

But the BBC's Kim Ghattas in Washington notes Mr Netanyahu did not get the reception usually reserved for America's allies.

There was no press conference, no lavish welcome, and the White House did not even release a picture of the meeting.

It all signals that the US is playing tough, making clear it is upset with the Israeli government, says our correspondent.

Palestinians want East Jerusalem for their future capital, but Israel insists the city cannot be divided.

Nearly half a million Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem.

They are considered illegal under international law, although Israel disputes this.

Dubai World gets $9.5bn government backing

2010-03-25T02:23:00.000-07:00

The Dubai government has announced it will provide $9.5bn (£6.4bn) in funding to help its Dubai World investment vehicle to restructure its debt.

The troubled company has presented a plan to restructure $23.5bn of debt to its creditors, including converting $8.9bn of debt into equity.

Creditors will now decide on whether to accept the plan.

Dubai World stunned global markets in November last year when it asked for a six-month delay on debt repayments.

'Strong future'

The restructuring plan also involves a cash injection of $1.5bn from the Dubai Financial Support Fund (DFSF), as well as issuing two tranches of new debt to be repaid over five- and eight-year periods.

"This proposal represents the best possible solution for all stakeholders," Dubai World said.

"It follows extensive discussions with our creditors, a thorough review of Dubai World's businesses and significant financial support from the government."

Sheikh Ahmad bin Saeed al-Maktoum, chairman of the Dubai Supreme Fiscal Committee, said the proposals would ensure that both Dubai World and property company Nakheel were "key contributors to the strong economic future of the Emirate of Dubai".

"The government of Dubai, acting through the DFSF, will support these proposals with significant financial resources, including a commitment to fund up to $9.5bn in new funding over the business plan period."

'Good response'

Analysts said the proposals would be well received by investors.

"It boosts sentiment because this is a strong commitment," said Ayman al-Saheb at Darahem Financial Brokerage.

He said the companies could now begin "restructuring properly".

"Information is key in the capital markets, and now that we have received some information, we definitely expect a good response from investors."

After Dubai World first asked for extensions on debt repayments last year, major global stock markets fell as investors worried about the health of the Dubai economy.

Banks were hit particularly hard on concerns over Dubai's ability to pay back its debts.

Dubai World is the centrepiece of Dubai's economy and helped to drive the emirate's economic expansion.

Another US Internet company pulls back in China

2010-03-25T02:20:00.000-07:00

By JOELLE TESSLER

WASHINGTON -- Two U.S. companies that sell Internet addresses to Web sites said Wednesday they had stopped registering new domain names in China because the Chinese government has begun demanding pictures and other identification documents from their customers.

One of the domain name companies, Go Daddy Inc., announced its change in policy at a congressional hearing that was largely devoted to Google Inc. ( GOOG - news - people )'s announcement Monday that it will no longer censor Internet search results in China.

Christine Jones, executive vice president and general counsel of Go Daddy, said the company's decision was not a reaction to Google but instead reflects its concern about the security of its customers and "the chilling effect" of the new Chinese government requirements.

"We just made a decision that we didn't want to act as an agent of the Chinese government," Jones told lawmakers.

Separately, a company that offers similar services, Network Solutions LLC, also said Wednesday it had stopped handling China Web registrations in December, for the same reason.

Zhong Shan, China's vice commerce secretary in charge of foreign trade, said he hadn't been briefed on the Go Daddy decision.

Speaking to reporters at the Chinese Embassy in Washington, however, Zhong called Google's decision an "exceptional case" that wouldn't undermine the confidence of foreign investors in China. He said China's economy wasn't perfect, but that the government is working to create a more attractive investment environment.

"China's policy of opening up remains unchanged," Zhong said through an interpreter. "We still welcome foreign investment."

Go Daddy - a company known for risque ads that mock congressional hearings - has been registering domain names in China since 2005 under authorization from the China Internet Network Information Center, a quasi-government agency. The company currently manages about 27,000 ".cn" domain names. That's a small slice of Chinese Web sites, and ".cn" names continue to be available through other resellers.

Go Daddy said the agency has always made the company, known as a registrar, collect customer names, addresses and other contact information since it began registering ".cn" Internet domain names. But late last year, Go Daddy said, the Chinese agency changed its policy to require ".cn" domain name registrars to also collect head shots, business identifications and signed registration forms from new customers and then forward that information to the agency.

Then, Jones said, the agency instructed domain name registrars to obtain this same information from existing customers and forward it too - warning that Web sites of customers who refuse to register would be disabled.

Go Daddy said it has contacted 1,200 of its customers with ".cn" Web sites, asking for the additional documentation and informing them that it would be handed over to the China Internet Network Information Center. The company said only about 20 percent of those customers have provided the documentation.

Now, Jones said, the company won't register new names. She did not say how much of the company's revenue the business was bringing in.

Network Solutions said in a statement that it dropped the service in December because the Chinese policy was "intrusive" and would have placed a burden on its customers.

Similarly, another domain name registrar based in the U.S., eNom Inc., wants to continue offering ".cn" Web addresses, but is worried that the changes China has ordered "could make it almost impossible to do it," said Jeffrey Eckhaus, general manager at eNom.

Obama Widens Approval Above All as Democrats, Republicans Lag

2010-03-25T02:07:00.000-07:00

By John McCormick

March 25 (Bloomberg) -- President Barack Obama receives lukewarm ratings from Americans, at least until you compare him with other major political figures and institutions.

Fifty percent approve of the job he is doing, a Bloomberg National Poll shows, down from 54 percent in December.

Those favorability numbers look solid when compared with House Speaker Nancy Pelosi, Treasury Secretary Timothy Geithner, 2008 Republican presidential candidate Mitt Romney and both political parties, with voters unhappy about U.S. finances and the direction the nation is heading.

“It’s about the money,” says J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the nationwide survey. “His scores are lowest when it comes to dealing with the budget, and it is the thing that inflames the American public. Government spending is the hot-button issue right now.”

Obama’s approval rating is roughly equal to what Bill Clinton had at this point in his presidency, according to data maintained by Gallup. It’s higher than the 45 percent Ronald Reagan recorded in April 1982.

Obama, 48, still enjoys an 85 percent job-approval rating among Democrats, compared with 46 percent among independent voters and 11 percent among Republicans.

Disturbed by Deficit

He receives higher marks for his handling of foreign affairs than on matters closer to home. Fifty-eight percent approve of Obama’s management of relations with other countries, while 54 percent approve of his running of the war in Afghanistan, the poll found.

Obama’s performance is viewed more critically when it comes to the budget deficit, dealing with the aftermath of the 2008 financial crisis, health care and job creation.

“The terrible economy has been a magnet pulling down Obama’s approval ratings,” says Mark Mellman, a Democratic pollster who worked for John Kerry’s 2004 presidential bid. “The fact that he has only been pulled down to 50 percent is a sign of the respect and affection people have for him. Being at 50 percent is actually a pretty strong place to be.”

The weakest category among those tested for Obama was the deficit. Only about a third of Americans approve of the way he’s dealing with the nation’s finances.

With 80 percent of poll participants agreeing with the statement “government spending is out of control,” Selzer says there is a political opening for Republicans in November’s congressional elections, if they can maintain the notion that Obama and Democrats are spending too freely.

Can’t See Progress

“Everything sounded good when he was running, but nothing is really getting done yet,” says John Gabrys, 46, a stay-at- home father and former physical education instructor who lives in Somonauk, Illinois. “I haven’t seen any progress.”

Gabrys, who considers himself an independent, says he voted for Obama. He gives the president a “C+” on his presidency so far, although he says he could improve his grade by generating more jobs.

“Everyone’s numbers are atrocious because nobody is delivering,” says pollster Doug Schoen, who worked for Clinton during his presidency. “If the Democratic Party is unable to address the economic problems, then they are gone.”

With unemployment at 9.7 percent, 58 percent of Americans believe the nation is headed in the wrong direction, essentially unchanged from December. Ninety percent of Republicans and 62 percent of independents think things are going poorly, while less than a third of Democrats feel that way.

Worried About Leaders

The depressed mood is reflected in concern about the nation’s leaders, with 56 percent of respondents pessimistic they will find solutions to challenges facing the U.S. That skepticism rises to 83 percent among Republicans and 62 percent among independents.

The poll of 1,002 U.S. adults was conducted March 19-22. It has a margin of error of plus or minus 3.1 percentage points.

Obama’s numbers look better when measured against other public figures.

Federal Reserve Chairman Ben Bernanke is viewed favorably by 34 percent and unfavorably by 23 percent, with 43 percent saying they weren’t sure what to think about him.

Like Bernanke, Obama attracts more favorable than unfavorable ratings, 53 percent to 42 percent, with just 5 percent not sure.

Geithner Down

Geithner is less popular, with 25 percent holding a favorable view, 28 percent having a negative view and 47 percent unsure.

Pelosi is seen favorably by 31 percent, while 48 percent have an unfavorable view and 21 percent are unsure.

Both major political parties have numbers better than Pelosi. The Democratic and Republican parties have almost equal favorability at 42 percent and 39 percent, respectively.

Romney is regarded favorably by 31 percent and unfavorably by 26 percent, with 43 percent unsure.

At 31 percent, the economy was most often cited as the top issue facing the nation, followed by health care at 22 percent, and government spending and the federal deficit at 20 percent.

For Republicans, government spending and the deficit are virtually tied with the economy for the top spot at 32 percent and 33 percent, respectively. Just 8 percent of Democrats say government spending and the deficit is the most important issue.

“I feel like we are creating problems that my daughter’s kids someday will pay the price for,” says Laurie Hartman, 49, an administrative assistant and Republican who lives in Syracuse, New York. “We think we can fix problems by throwing money at them.”

To contact the reporter on this story: John McCormick in Washington at jmccormick16@bloomberg.net;

How Westerners in China Can Fight Back

2010-03-25T01:59:00.000-07:00

The best strategy for dealing with Beijing's chilly new business climate is not to copy Google's example

By Daniel Michaeli

No matter how tense commercial relations between the U.S. and China become, American corporations cannot afford to mimic Google's (GOOG) mistake and give up huge growth opportunities in the world's largest market. That's why business leaders need to adjust their strategies quickly to stem the damage.

First, they must cultivate untapped sources of support within China, beginning with independent executives who also chafe at Beijing's market-unfriendly policies. Coordinating a message with these leaders would change the narrative, removing the perception that greater economic openness means giving in to foreign pressure.

Some are already willing to join U.S. companies in public support of better Chinese economic policies. On Mar. 24, for instance, Bloomberg reported that Chinese executives including Yang Yuanqing, CEO of Lenovo (LNVGY), have gone public with their support of the currency realignment U.S. exporters need to be more competitive in China.

Allies Inside China

One place to look for allies is among the private executives upset because they cannot secure loans from state banks that pump cheap money into state-owned enterprises. Case in point: Last year, Liu Jieyin, the founder of Okay Airways, complained about the unfair dominance of state companies to Forbes. And he said the business climate for independent firms was so bad that "if you asked me to set up a private airline now, I would not dare."

American companies should also try to enlist help from state-owned enterprises that have an interest in open trade and investment. For example, the Commercial Aircraft Corp. of China (Comac)—which is making the C919, China's first jumbo jet—recently signed a $10 billion contract for an engine made by a joint venture of General Electric (GE) and France's Safran (SAF:FP). Comac is already taking orders for the C919, but whether the jet will be ready by 2016 as pledged depends on the successful execution of the engine contract. A worsening of the business environment could put such contracts, and even access to future export markets, at risk.

Despite the shrill rhetoric coming from Beijing, many government officials appreciate the concerns of foreign businesses. Some have long histories with foreign companies; others hope to restore economic openness for other reasons. They worry about stifling innovation and weakening the private sector, which has fueled growth for decades; creating housing and equity bubbles; and paying the environmental and public health costs of overinvestment. These worries were all raised publicly at the National People's Congress meeting in March.

Choose Your Battles

In addition to mustering support within China, U.S. companies must choose their battles more carefully. So when an attempted hacking raised the prospect of local competitors stealing trade secrets, Google should have focused on compelling authorities, perhaps by dangling the threat of going public about the hacking, to commit to protecting its intellectual property. Instead, Google threatened to leave China's search engine market if search censorship wasn't lifted—an impossible request of an authoritarian state. This action invited a hard-line response, failed to secure Google's intellectual property, and will only hinder Chinese citizens' access to information.

When threats are necessary, they should come from business groups with substantial combined leverage. U.S. companies manufacturing in China are collectively responsible for the livelihood of millions of Chinese workers. They also have the ability to build up the capabilities of regional competitors such as India. This gives them political leverage if they act in unison.

Market openness serves China's long-term interests. It strengthens the country's dynamic private companies and improves access to Western technologies. But it may take time for China's leaders to realize that. In the meantime, U.S. companies need to challenge Chinese policies more effectively. If American businesses fail in China, they put at risk both U.S. economic competitiveness and the most important bilateral relationship of this century.

Michaeli is a research associate at the Council on Foreign Relations. He blogs at www.asiaruminations.com.

Google's Quixotic China Challenge

2010-03-25T01:46:00.000-07:00

The Web search leader may make little progress getting other companies to join it in publicly criticizing Beijing's Internet policies

By Douglas MacMillan

Google (GOOG) is stepping up a campaign to get other companies and the U.S. government to join it in putting pressure on China's government over alleged human-rights violations. The Web search company may make limited headway.

Following a decision to stop censoring search results in China, Google co-founder Sergey Brin said in a Mar. 25 interview with the U.K. newspaper The Guardian that the U.S. government and other businesses should put a "high priority" on calling attention to human-rights abuses in China.

While one company did just that and some U.S. government officials have championed Google's cause, there's unlikely to be a groundswell of businesses willing to take public issue with China, the world's most populous country and third-largest economy. "Just because the situation got bad for you doesn't mean it's bad for everybody else," says Danny Sullivan, editor-in-chief of the Web site Search Engine Land.

On Mar. 22, Google said it had stopped censoring its Chinese Web site and shifted search services from the mainland to an unfiltered Hong Kong site, an act criticized as "totally wrong" by China. Google said on Jan. 12 it was no longer willing to censor content on its Chinese site after being targeted by cyber attacks from within China. Hackers obtained proprietary information and e-mail data of some human-rights activists in a "highly sophisticated attack," the company said at the time.

Crossroads for Internet Companies

The standoff provoked global debate about how Internet businesses should operate in a country with a questionable record of protecting the online privacy and freedom of expression of its citizens. "A lot of businesses around the world are now realizing they have to think through and figure out how to respond to these kinds of controls—not just in China but in other parts of the world," says Ed Black, CEO of the Computer & Communications Industry Assn. "What Google has done is made them realize they may be facing a fork in the road that they better start planning for."

Two days after Google's withdrawal, Internet domain registrar GoDaddy.com announced it had stopped selling new Web domain names in China, citing dismay with government policies it says are designed to tighten control over Internet use by residents. "We don't want to be an agent for the Chinese government," says Christine Jones, Go Daddy's general counsel.

Some politicians applauded Google's move. "Google, more than any other business or force, has been the game-changer," says Representative Chris Smith (R-N.J.) in an interview. Smith and other U.S. officials are pushing for new policies that would see the U.S. government play a role in ensuring the protection of American Internet businesses in China and other countries.

In remarks in January, Secretary of State Hillary Clinton called on Beijing to investigate the hacking attacks that affected Google. "Countries or individuals that engage in cyber attacks should face consequences and international condemnation," she said during a public speech at the Newseum.

How Much to Push Back?

It's not clear that condemnation will emanate from corporations. "How far are [companies] willing to go?" asks Leslie Harris, president of the Washington nonprofit Center for Democracy & Technology. "How much are they willing to push back and what steps are they willing to take to try to mitigate the human-rights impact to their users?"

Seeking to help provide businesses a template for addressing these problems, Harris and others formed the Global Network Initiative (GNI) in 2008, a coalition of major U.S. Internet businesses like Google, Microsoft (MSFT), and Yahoo (YHOO), as well as think tanks and universities. The group meets periodically to draft and update guidelines on what procedures to take when, for example, foreign governments ask for sensitive information about users.

Yet when it comes to publicly upbraiding the Chinese, other companies may be less willing to cooperate. Google approached other companies to seek their help drawing attention to the cyber attack and was frustrated by their reluctance to come forward, a person familiar with the matter told Bloomberg News in January.

Representative Smith says the government should play a bigger role in calling out foreign countries that restrict access to the Web. Four years ago, he drafted the Global Online Freedom Act, legislation that would, among other provisions, require the U.S. State Dept. to issue an annual list of "Internet restricting countries," and require American companies to notify the State Dept. before complying with requests from foreign governments.

The bill is supported by Google, Smith says. The question now is whether other companies can get behind getting tough on China.

Douglas MacMillan is a staff writer for Bloomberg BusinessWeek in New York.

Star Insurance

2007-08-30T02:24:00.000-07:00

Owen Wilson's alleged suicide attempt has left executives at Paramount and News Corp.'s 20th Century Fox in a bind. His health aside, the Wedding Crashers star has two films in production and another two to promote for their studios.

But there is one group that stands to benefit from the funnyman's troubles: the insurance companies. While it isn't the sexy story that sells tabloids, a star's downfall translates to higher premiums for the firms that agree to underwrite them.

In order for any film to be made, its stars--track record or not--must be insured. The rationale: With production costs on a typical feature film already at exorbitant sums, any delay--be it from weather, an injury or a star's poor health--can set movie makers back between $100,000 and $400,000 per day. The more likely a star is to cause that delay, the more costly he or she will be to insure.

But just how much more is a decision left up to insurance or underwriting companies. With only a handful in the business, including Fireman's Fund and the Chubb Group, these firms make it their business to understand the film industry and its players. Among other things, each has confidential files on every actor, which include everything from prior medical certificates to claims histories to newspaper or Web clippings pertaining to the star. With that information, and the medical exam and affidavit a star must complete some 30 days before the cameras roll, firms are able to assess the risk.

Advocating on behalf of the production companies are insurance brokerage firms, a similarly small cadre, which include AON/Albert G. Ruben Insurance Services and D.R. Reiff & Associates. Often brought on board before any actor is ever hired, the role of these companies is to compile a list of what they believe are necessary coverages associated with the film. After the insurance carriers quote their terms and conditions for those risks, the brokerage firm selects and recommends the best proposal to the production company.

So while Wilson's example may be garnering greater media attention than troubles past, his behavior, and the insurance implication it carries, is nothing new. From Robert Downey Jr. to Courtney Love to the more recent Lindsay Lohan, underwriting companies have long been feasting on Hollywood's wayward.

The way Ross Miller, a partner with New York-based insurance brokerage firm D.R. Reiff sees it, no actor is actually uninsurable. Or that's what he'd like to believe, since it's his job is to find underwriters to take on the risk that stars pose. "If a studio wants something, or somebody has enough money to throw at a project, then they will make it work," he says.

Brian Kingman, the director of strategic account management at AON/Albert G. Ruben Insurance, agrees: "If you've got enough time, talent and money, anything is insurable."

The reality is this: While the conditions for hiring errant stars may be unappealing--too expensive or too risky--it is almost always possible.

"Some people like to declare [trouble-prone stars] uninsurable, but I think that's way too easy an answer," says Joe Finnegan, vice president of entertainment at Fireman's Fund Insurance Company, the film industry's leading underwriter. Instead, he says it's companies like his that look to find solutions for the production companies. After all: no insurance, no film--or not with the star of choice, anyway.

More often than not, those solutions entail higher deductibles. Miller says production companies are often looking at hundreds of thousands of dollars as opposed to a typical deductible, which can range from $25,000 and $100,000, depending on the movie.

And while most underwriting experts hesitate to provide exact figures--they vary greatly depending on the picture's budget, a star's past, etc.--insurance rates for these troubled types can range from 85 cents to $3 for every $100 of a film's production budget.

The stars can also be asked to put their salary in escrow, making them personally accountable for any losses if their actions were to cause production delays. And if the troubles are drug-related, regular testing can also be required, and chaperones, or "minders," as they're called in the business, can be placed on set to ensure a star doesn't slip up.

Now, whether the star is worth all of this is a question the movie maker must weigh heavily. While that star's record is a critical piece to consider, the box-office potential of the film is worth factoring in as well. As in, are we dealing with The Life Aquatic or Wedding Crashers?

Lifestyles Of The Pets Of The Rich And Famous

2007-08-30T02:21:00.000-07:00

Everybody knows it's not a dog's life to be rich, but no one knows this better than a rich person's dog.

Leona Helmsley, dubbed the "Queen of Mean" for personifying the 1980s stereotype of greed and excess, made her pet Maltese Trouble her biggest heir, leaving a $12 million trust fund for the pet in a will that disinherits two grandchildren and doesn't even mention great-grandchildren.

Helmsley, who died last week, put contingencies on the inheritances of the two grandchildren who will actually get some money: They have to visit their father's grave site once a year. No such demands are made of Trouble.
In Pictures: Lifestyles Of The Pets Of The Rich And Famous

And her chauffeur got $100,000.

Sound wacky? It may be, but it isn't rare. Inheritances for pets are not uncommon among the wealthy, according to Russ Alan Prince, of Prince & Associates, who tracks the habits of the rich. That's especially true of people who tend to alienate all other humans in their lives.

"For some wealthy people, the only true love they get is from their pets," Prince says. "They're estranged from their children, they are at war with their business partners, but their pets are always there for them."

It would not be a stretch to put Helmsley in that camp, if tabloid tales of her terrorizing employees and executives of her husband's real estate empire are to be believed. She is perhaps most infamous for telling a housekeeper that "only the little people pay taxes," a comment that came out during her trial for tax evasion in the late 1980s.

Trouble once appeared in ads for Helmsley hotels and no doubt led a pampered life. The dog is to be buried alongside Helmsley and her husband, Harry Helmsley, in their $1.4 million mausoleum in suburban New York.

According to Prince, rich people who love to lavish money on their pets (a category he calls "pet-focused") spend $328,000 on their pets annually. His survey, released this year, included 304 affluent families who describe themselves as pet lovers, 46% of whom say their love is singularly focused on their own pets and the rest who are animal lovers in general. The survey group was 58% female with a mean age of 56 and a mean net worth of $46.7 million.

The biggest spending area is in "life enrichment" services.

This includes everything from deep-muscle massage (pet masseuses can make up to $2,000 an hour, Prince says) and psychic readings to life coaching and "cosmic sensitivity."

One-third of pet-focused owners paid for special diets for their pets, not for medical purposes, mind you, but because it was seen as being good for the animals. This includes meals prepared by famous chefs.

More than a fourth of pet-focused owners surveyed said they spend $25,000 or more on wardrobes for their pets. Yes, 25 thousand.

Even better, 16% of pet-focused owners recently surveyed by Prince & Associates spend $25,000 or more on a birthday party for a pet.

Several pets regularly fly around on private aircraft, alone (except for flight crew).

But pet inheritances really raise the bar. More than a quarter of so-called pet-focused owners surveyed had established trusts for their pets in their wills before their deaths. This makes it harder for surviving family members to fight the will, Prince says, and ensures the owner will have at least some say in what happens to the pet after the owner's death.

Seventy-eight percent of pet-focused owners leave money to pets in their wills, to the tune of $526,000, according to Prince. Mostly, the money is to ensure a quality of life for the pet.

Pet trusts are increasingly popular, so much so that 39 states now have statutes outlining them, says Frances Carlisle, a New York estate lawyer who specializes in pet trusts. In most cases, the trusts left behind are small, in the $30,000 range, and meant to ensure that the pet left behind has adequate care and won't be dumped on the street or sent to a shelter.

Because pets are pets, money cannot be left to them directly in a will, so trusts are the next best thing to leaving money to a designated guardian, Carlisle says. The stigma of the kooky old rich lady, present company excluded, is gone. "This sort of thing used to be laughed at," Carlisle says. "But a lot of animals really do end up on the street."

Sometimes the arrangements are punitive, however, and directed at getting revenge on family members.

Prince says he knows of an ostrich that stands to inherit $4 million, all because the owner's children once threatened to cut the ostrich up into food. Somewhere out there a parrot stands between his owner and the owner's children, who stand to lose tens of millions of inheritance money if they fail to follow specific instructions about the parrot's safekeeping and well-being after the owner's death.

"True pet lovers can be off-the-wall already, and what you're doing here is adding money to it," Prince says. So true.

Web Ad Spending To Eclipse Radio In '07

2007-08-30T02:17:00.000-07:00

U.S. Internet advertising spending is poised to overtake radio advertising for the first time, providing a reminder that broadcasters need to be more aggressive in their embrace of online opportunities.

U.S. radio ad spending is expected to inch up 1.5% in 2007, to $20.4 billion, short of online ad expenditures of $21.7 billion, which will be up 22% from last year, eMarketer senior analyst Ben Macklin said in a report.

Over the next several years, radio station Web sites and online audio advertising "will be the principal drivers for radio advertising growth,'' Macklin said.

But he doesn't think that growth will add up to much. He expects the sluggish radio advertising market to continue experiencing slow growth, climbing to an estimated $22.6 billion in 2011, when online ad spending is expected to surge to $44 billion.

Terrestrial radio companies like Clear Channel Communications (nyse: CCU - news - people ), CBS (nyse: CBS - news - people ) and Cox Radio (nyse: CXR - news - people ) still retain massive audiences, but consumers are spending less time listening to radio than they do surfing the Web or watching TV.

In addition, only 17% of U.S. consumers consider radio the "most" essential medium, down from 26% five years ago, according to a study released earlier this year by Arbitron and Edison Media Research.

For many advertisers, the choice between radio and non-radio online ads won't be an either-or proposition, Macklin said, pointing to studies showing that consumers often listen to the radio while consuming other media and that a mix of terrestrial radio and online ads can be far more effective than online ads alone.

"There are many synergies between radio and the Internet and, for the most part, they complement rather than compete with each other,'' he said. "Advertisers should not abandon radio in favor of the Web but combine the two media to take advantage of the unique attributes of each."

Those might sound like encouraging words for the radio industry. But as Macklin's estimates show, these new opportunities don't appear likely to kick-start the radio industry out of its doldrums.

Sony's Spyware Strikes Back

2007-08-30T02:15:00.000-07:00

Sony can't seem to keep its hands off its customers' hard drives. Earlier this week, two security companies found that fingerprint-scanning USB drives sold by the company install hidden software on users' computers, just two years after a similar tactic led to mass recalls of another Sony product and a string of lawsuits.

In this case, the hidden program, known as a "rootkit," was used to enable a security feature on Sony's (nyse: SNE - news - people ) Microvault USB drives, which verify the identity of the user by reading his or her fingerprint. Paradoxically, security researchers say, it instead creates a gaping security vulnerability; the rootkit creates an invisible folder that allows cybercriminals to install their own malicious software where it can operate undetected, potentially stealing passwords or sending spam e-mail.

Sony spokesman Tom Di Nome points out that the three Microvault models that employ the fingerprint-scanning technology are no longer being manufactured. He also says the company is currently investigating the source of the problem and "taking the issue very seriously," though no security problems have yet been reported by the USB drives' users.

The rootkit's discovery, originally made by the Finnish company F-Secure and later verified by McAfee (nyse: MFE - news - people ), opens a barely healed wound for Sony. In 2005, digital rights management software on Sony BMG music CDs, designed to control users' attempts to distribute and copy music, was found to install an invisible rootkit folder when customers played the CDs on their computers.

Consumers soon protested Sony's aggressive restrictions on copying music and disregard for security. Sony's executives were initially unresponsive; the company's global digital business president Thomas Hesse infamously told NPR's Morning Edition in November 2005 that "most customers don't even know what a rootkit is. So why should they worry about it?"

But as viruses and malicious software exploiting the rootkit began to surface, Sony issued a recall of all affected CDs later that month. Not soon enough, however, to avoid lawsuits from the Federal Trade Commission, multiple state attorney generals, and several class actions, alleging that Sony's CDs violated state laws defining fair business practice and prohibiting spyware. The company eventually paid around $6 million in settlements; the negative publicity surrounding one of the country's first commercial spyware scandals likely cost Sony much more.

Given that history, it's hard to imagine why the company would repeat its careless coding, says Ari Schwartz, deputy director of the Center for Democracy and Technology. "I can't see why any company would use this kind of software after the legal action taken against Sony," he says. "The fact that this is actually another Sony subsidiary is especially shocking."

In fact, the timing of the discovery is especially ironic, given that Sony just last month filed a lawsuit against one of the developers of DRM software that led to the company's 2005 blowup. Sony is demanding $12 million in damages, arguing that The Amergence Group breached the terms of its licensing agreement by delivering software that was negligently designed.

Sony's newest instance of the rootkit coding, which again invites exploitation from malicious software writers, is a symptom of the software industry's general inattention to security issues, says Dave Marcus, a spokesman for McAfee. "It's a huge problem," he says. "This is reflective of the fact that software vendors simply aren't thinking from the perspective of malicious coders."

Siemens challenges defence min tender in SC

2007-08-30T02:11:00.000-07:00

Siemens Public Communication Networks has moved the Supreme Court challenging the defence ministry's decision to award a contract for supply of telecommunication software to rival Selex Communications SpA.

Challenging the Delhi High Court order that dismissed its petition, Siemens sought to restrain the ministry and Bharat Electronics (BEL) from negotiating with any other bidder contending that it was the lowest bidder for the tender.

The high court while refusing to stall the entire project had rejected its plea on the ground that it did not deserve interference as the decision making process adopted by BEL was not malafide or intended to favour any of the vendors.

BEL was the prime contractor for the Indian Army's modernisation plan for its technical communication system (TCS) and had invited bids on behalf of the ministry of defence. The bids were for supply and transfer of technology of 80 Digital Radio Trunking System, also known as Terrestrial Trunked Radio (TETRA), a major component in the TCS programme of the army.

An Empowered Technical Committee had recommended three vendors - Siemens, Selex and Thales Land and Joint Systems. However, the army in January this year informed the government that it required 1,200 vehicle mobile terminals (VMTs).

The contract was later awarded to Selex. The high court had also held that Siemens itself was responsible for the inadequacy in its bid and cannot blame BEL under the garb of saving revenue.

Apollo Health buys US BPO for Rs 700 crore

2007-08-30T02:10:00.000-07:00

Apollo Health Street (AHS), a part of the Chennai-based Apollo Hospital Group, has acquired Zavata Inc, an Atlanta-based business process outsourcing (BPO) and enterprise support (ES) solutions company, for about Rs 700 crore.

The combined organisation will have more than 100 customers and over 2,500 employees spread across multiple locations in the US and India.

Post acquisition, AHS will become the largest healthcare-focussed BPO company in the country.

Satish Sanan, executive chairman and CEO of Zavata, will stay on as a consultant in the merged entity. Zavata's employees are located in client centers and offices in Georgia, Pennsylvania, New York, California and Florida in the US and Hyderabad in India.

"There are significant synergies to be achieved from this transaction, and the acquisition of Zavata has helped us position AHS as one of the largest, fully integrated healthcare BPO companies in the world with further capabilities in providing enterprise support services. In addition to the set of services we already offer, Zavata adds a complementary set of services including expertise in areas such as full business office and emergency medical transport billing," said Sangita Reddy, managing director, Apollo Health Street.

This is the fourth acquisition by Apollo Health Street and the second in the US.

Bank of India and Barclays Capital jointly structured and provided the debt financing for the transaction, sources said.

BHEL bags Rs 1,900cr Vallur Project order

2007-08-30T02:06:00.000-07:00

Public-sector power equipment maker Bharat Heavy Electricals today announced it has bagged a Rs 1,990-crore order for supply and installation of steam generator and steam turbine packages at the upcoming Vallur Thermal Power Project at Ennore in Tamil Nadu.

Outbidding leading European equipment suppliers, BHEL received the order from NTPC-Tamil Nadu Energy Company (NTECL), a joint venture between NTPC and Tamil Nadu Electricity Board (TNEB).

The order comes close on the heels of BHEL winning three contracts for supply and installation of seven sets of 500 MW each at Jhajjar STPS, Koderma TPS and Durgapur Steel TPS, it said in a release.

Being set up under the government's mega power project policy, the Vallur project is targeted for synchronisation during the 11th Plan and would add nearly 24 million units every day to the grid on commissioning.

As per the order, BHEL's scope of work would involve designing, engineering manufacturing, supply, erection and commissioning of steam and turbine generators, electrostatic precipitators, associated auxiliaries and controls and instrumentation system.

So far, BHEL has won orders for supply and installation of 60 units of 500 MW each, of which 31 have been commissioned.

Aimed at equipping itself to meet the country's power capacity addition targets in the 11th Plan and beyond, BHEL is enhancing its manufacturing capacity in the next three years, from the current level of 6,000 MW to 15,000 MW per annum, the release said.

Oracle Makes Strong Upgrade Case for 11g

2007-08-30T02:05:00.000-07:00

It’s no secret which vendor is the 800-pound gorilla of the database market.

According to a BusinessWeek article, which cites information from Gartner, Oracle commanded more than 47 percent of the $15.2 billion market in 2006, far ahead of No. 2 IBM with 21 percent and Microsoft with 17.4 percent. Not only that, but it dazzled financial analysts with its 46 percent operating margins and booked an impressive $14.2 billion in revenue.

Being big does have its burdens. The more dominant the vendor, the louder the chorus of voices questioning the need for upgrades when new iterations of flagship products are introduced. Microsoft found itself in this spot earlier this year with Vista, and now it’s Oracle’s turn with 11g, the first new version of its relational database since 2004.

The software includes more than 400 new features, many of which are detailed in this IT Jungle piece. Among them: something called Real Application Testing, that Oracle says can cut the typical testing cycle for database applications from 150 days to just 11 days, and integrated compression, which helps companies reduce the cost of disk storage even as they store larger amounts of data.

The Oracle faithful (that is, members of the Independent Oracle User Group) appear ready to bite, with 35 percent of them saying they plan to move to 11g within the next 12 months and more than half expressing intent to upgrade within two years.

ZDNet blogger Larry Dignan thinks uptake may be even more rapid than that since Oracle provided a set of what he calls “quite logical” ROI cases at yesterday’s product launch.

BusinessWeek points out that Oracle CEO Larry Ellison’s penchant for power plays such as poking a stick at leading Linux distributor Red Hat by selling Linux support at cut-rate prices and accusing rival SAP of espionage generated more headlines than any Oracle product news in 2006.

The rest of 2007 should be interesting.

Talent Hunt to Cyberspace

2007-08-30T02:03:00.000-07:00

With the competition for talented employees remaining hot and heavy, it’s no surprise that companies don’t want to leave any recruitment avenues unexplored — including those in cyberspace.

Social networking sites like Facebook, while still primarily used for staying in touch with friends, are also attracting the interest of corporations interested in using them as recruitment tools.

UK job recruitment site Jobtonic created a Facebook add-on that allows Facebook members to display job openings from Jobtonic in their personal profiles and to earn £2,200 (U.S.$4,480) for successful referrals, reports vnunet.com.

This seems a good fit for Jobtonic, which appears to position itself as “edgy,” based on a cursory Web search that turns up an employee predilection for blogging, with one blog referencing a bright orange Jobtonic-branded VW Camper van that is cruising the streets this summer. Representation on Facebook isn’t confined to the edgy, though, based on an 8,000-member Ernst & Young group that is used to attract potential hires.

And Facebook isn’t the only virtual venue for recruitment. The Wall Street Journal has reported that some companies now conduct job interviews in Second Life. (The vnunet.com piece mentions that Accenture has opened a virtual “office” there.)

KPMG also notes in a recent report that large corporations are using professional headhunters less and relying on their own Web sites more for recruitment.

In our best Luddite fashion, we feel compelled to point out the hazards in relying too heavily on such approaches. As vnunet.com notes (and offers a real-world example to prove), the automatic filtering tools on Web sites mean that prime candidates can get overlooked if they don’t include the “right” wording on their online resumes.

There’s also the little problem of how easy it can be to deceive folks (including recruiters) on the Internet.

Intersection of Social, Business Lives

2007-08-30T02:01:00.000-07:00

Despite the Internet’s famously short attention span, Google has been the most buzz-worthy tech company for nearly a decade. Computerworld recently named the search giant the top e-commerce development of the past 10 years.

Yet, now Google appears to be in danger of losing that status to Facebook.

Once merely an also-ran to MySpace, Facebook is now being touted as “a do-everything site with the potential to devour the whole Internet,” according to a Slate article. The article speculates that Facebook wants to become “an all-encompassing portal” similar to MyYahoo or iGoogle.

While that prediction sounded radical enough when first published in late June, it now seems almost laughably small-potatoes in light of the current speculation following Facebook’s acquisition of Parakey, a Web-based operating system created by two co-founders of Firefox.

As blogger Simeon Simeonov points out, the Parakey buy positions Facebook to become a new breed of operating system that allows content to flow freely between the desktop and the Web. In one swoop, Facebook appears to have advanced beyond what Google has been doing with Google Apps and Google Gears.

Facebook trumps Google, which has been buying up apps, by opening up its platform to third-party developers and offering to let them make money by advertising. Translation: You’ll see the “next big thing” on Facebook before Google.

What, if anything, does all of this mean for the enterprise?

IT Business Edge blogger Loraine Lawson isn’t sure. Facebook will hold great appeal for the increasing numbers of folks who want to merge their business and social lives “in ways that are not intrusive, that feel intuitive and which are both highly productive and deeply satisfying,” says ZDNet’s Dan Farber. Translation: That’s everyone under 30, some of whom will work for you soon — or eat your lunch at their own startup.

Weak Link in Customer Service Chain

2007-08-30T01:59:00.000-07:00

Despite their significant investments in CRM technologies, banks don’t seem to have particularly close relationships with their customers.

According to an IBM survey released late last year, two-thirds of U.S. consumers don’t feel valued by their banks. IBM concluded that while banks have largely succeeded in “rational” aspects of customer relationships such as correcting errors and providing multiple banking channels, they haven’t fared as well in fostering “emotive” contact.

More recently, Accenture advised British banks to revamp their customer databases so they could provide marketing offers of relevance to their customers — especially women, who are typically more willing than males to switch banks.

The key, says an Accenture analyst quoted in The Register, is “delivering carefully-crafted products supported by clear, targeted and timely advice utilizing both the Internet and well-informed advisers.”

Oops. According to a recent survey by customer service software provider Transversal, most banks were able to provide answers for only about half of routine customer questions online — mostly through static FAQ sections. Some 30 percent of bank Web sites struggled to answer more than two out of 10 product or service questions.

Having spent lots of time browsing through bank Web sites at my previous job, I suspect these numbers are true. I had frustrating experiences at many of the sites I visited and would often resort to picking up the phone and calling the banks.

That’s what many customers do as well, notes Transversal in a silicon.com story about the survey. The good news, according to Transversal, is that bank contact centers have “dramatically” improved their response times, answering 60 percent of calls within three minutes. The bad news, of course, is that contact centers would likely get a lot less business if banks adopted a “cohesive online customer interaction strategy.”

At least some experts, including Gartner, recommend that banks incorporate so-called Web 2.0 features such as wikis, podcasts and blogs on their Web sites. Gartner also says that banks should consider partnerships with online social networks. It’s a strategy already being used by a few strong tech adopters like Wells Fargo, Bank of America and KeyBank.

Poor Wal-Mart

2007-08-30T01:55:00.000-07:00

Poor Wal-Mart. The retailer just can’t seem to master the whole Web 2.0 thing. (Though to be fair, the company is far from the only one.)

Still stinging from the negative publicity fallout of a botched blog, Wal-Mart is trying to adopt some of the same Web 2.0ish features that have been successfully employed by other companies, notably consumer product reviews and ratings, reports Reuters.

The company’s chief marketing officer called such reviews (which have been popular on other sites) “the No. 1 customer-requested feature.” Wal-Mart is hoping the feature engenders warm-and-fuzzy feelings among at least some of the approximately 130 million people who visit its stores and/or its Web site every week. In the future, it may use the reviews to help make decisions about the products it sells.

A little more than a month after the feature was added and with an admittedly fuzzy value proposition, it’s too early to tell if this feature is living up to the company’s expectations. A sign that Wal-Mart may still not quite “get” it: its intention to take five to seven days to review the reviews before publishing them.

Already considered a success, reports Reuters, is a feature that allows customers to order stuff online and have it shipped for free to a Wal-Mart store for pick-up. Wal-Mart says customers typically spend an additional $60 in stores during the pick-up process. Taking a cue from Amazon, it makes sense for Wal-Mart to leverage its formidable supply-chain and logistics expertise.

Less successful for the retailer was a foray into Facebook, where members of a group ostensibly created to help college students swap decorating tips for dorm rooms have been more interested in discussing controversies over Wal-Mart’s treatment of its employees. Like digg.com before it, Wal-Mart has learned that it’s tough to control how users behave online.
According to the Washington Post, other retailers have had considerably better luck with their online marketing strategies to reach the desirable teenage demographic, many of whom spend as much time on social networking sites as they do watching TV. American Eagle Outfitters, for instance, has more than 46,000 friends on its MySpace page as well as a site called 77E that features “It’s a Mall World,” a series of three-minute adventures of fashion-conscious friends.

The stakes for retailers and other businesses could be quite high if folks like Internet visionary Vint Cerf are right. Speaking recently at the MediaGuardian Edinburgh International Television Festival, Cerf predicted that folks will ultimately choose to consume the majority of their entertainment and other content online.

“You’re still going to need live television for certain things - like news, sporting events and emergencies - but increasingly it is going to be almost like the iPod, where you download content to look at later,” says Cerf in a Guardian story about the event.

The Problem is that People are Human

2007-08-30T01:54:00.000-07:00

This PC Advisor story — which focuses on the carelessness of UK Facebook members — will depress security personnel. Facebook, of course, is worlds away from corporate applications. But not all Facebook users are teenagers and some of the behaviors described in this story no doubt are carried into the workplace.

That’s a scary thought. Without getting too deeply into the minutiae of how Facebook works, the story describes how easily folks allowed access to vital information, including in some cases their mother’s maiden name. The bulk of the story is based on Facebook members’ reaction to a fake profile set up by security firm Sophos. Twenty percent of those who received random requests allowed access to their full profiles. The story says that 72 percent of those who allowed access also gave out their e-mail addresses, 84 percent revealed their dates of birth and 23 percent provided their phone numbers.

The key point isn’t that Facebook users are careless. It’s that people in general are careless. Perhaps such behavior so boogles the collective mind of the IT department that they have trouble dealing with it. Unfortunately, there are a legions of folks out there who just don’t get it. Some of these use corporate computer networks. Worse yet, some of these folks actually run the companies.

There are a number of ways that user sloppiness can hurt the organization. Phishing, of course, is one. The danger of criminals’ clever rouses designed to separate people from their identifying data is evident by research done by Markus Jakobsson at Indiana University. Jakobsson — whose work was outlined in ComputerWorld’s coverage of the Usenix Security Symposium in Boston — ran experiments that showed people are willing to trust half-signed digital certificates. While subjects did a good job of not clicking on links in e-mails, some did copy URLs and paste them into their browser, which also is potentially dangerous. Finally, Jakobsson found potential problems with credit card procedures and the willingness of professors to use university passwords to gain access to sites that didn’t look like they were hosted by the school.

DogReader does a good job of describing the next phase of phishing, which is spear phishing. This is the practice of using specific information to send a request for information that appears more realistic. The example used in the posting is an e-mail that appears to come from the IT department asking for an employee’s security code. If done well, it is difficult to distinguish between these forays and legitimate e-mail.

Phishing is one way in which user ignorance or laziness can cause losses. Another is physical. TechNews offers several tactics to ensure the safety of laptops: Treat the device as cash; keep it locked; store passwords elsewhere; don’t ever leave it alone, and be especially vigilant in hotels, airports and, presumably, similar venues such as public hot spots.

The unfortunate reality is that there are many ways in which employee ignorance, laziness, or even, in some cases a desire to do a good job can cost a company. Perhaps the most frightening single issue, however, is that the awareness of the dangers seems to be strikingly low. Combining this with the cleverness and brazenness of cyber criminals creates great danger for organizations. This drives home the need for proactive corporate policies backed by strong technology.

Watch Security Vendors Closely

2007-08-30T01:52:00.000-07:00

This nicely done Computerworld column lists 10 statements coming from security vendors, consultants or partners that could spell trouble.

The theme is that the person on the receiving end of the pitch must listen very carefully and dismiss anything that sounds even remotely categorical, hyperbolic or makes promises that, if kept, actually can lead to problems (such as making data too easily available). Thus, security buyers simply need to use the same common sense and skepticism as when they buy a car or a flat screen television. A big danger is that the person making the pitch could be cutting corners with full disclosure. This sort of thing is natural, and is bound to become more common as the security sector consolidates and the business gets more cutthroat.

Of course, there is no direct correlation between what software salesmen may say and the possibility of attaching legal penalties to insecure products. However, both speak to the bigger issue of security software integrity. Though it seems farfetched, a report by the Lords Science and Technology Committee — a link to it is available in this Techworld piece — suggests holding companies responsible for flaws in their software products.

Vendors reacted predictably. Symantec said such laws would have the opposite of the intended impact and hurt end-user security, while a Sophos executive pointed out the difficulty of figuring out who was to blame. A representative from McAfee said implementation often is the culprit, not the security itself.

The mix of opinion extends to Bruce Schneier — a well-known security analyst who testified in favor of the approach in front of the House of Lords — and this blogger, who argues in a long post that forging a set of rules to force improved security is impossible in as immature an area as security software.

The reality is that competition among security vendors is rising, prices are shrinking and many products are moving toward becoming commodities. That’s good for end users, of course. But it also means that there is more pressure on vendors and the ecosystem of which they are part. The bottom line is that every statement vendors make must be vetted very carefully and, in the long run, financial pressure may mean that less care may be paid to products. Does this mean the logical conclusion — that vendors be held legally responsible for bad software — will come to pass? We think it’s unlikely. But it clearly is an interesting idea.

Wipro Major Stake in U.S.

2007-08-30T01:49:00.000-07:00

Back in June, we blogged about the plans of a couple of Indian outsourcing firms, including Wipro, to step up their hiring of American workers in the U.S. Mentioned in that blog was Wipro’s intent to open two software development centers in the States.

Now Wipro is making good on at least part of those plans, with its announcement that it will employ up to 1,000 U.S. workers at a development center in metro Atlanta over the next three years. About 6,000 of Wipro’s 80,000 employees currently work in the U.S.

An executive with the Metro Atlanta Chamber of Commerce tells the Atlanta Journal-Constitution that Wipro is “the right kind of global company we have been trying to recruit”and adds, “This could open the door to other companies from India.”

Indeed, Georgia is so committed to going after Indian firms that the state’s Department of Economic Development is interested in opening a trade office in India by 2009, according to the Journal-Constitution story.

There is an element of irony, of course, since many U.S. IT workers say the industry has been losing jobs to Indian firms like Wipro for years.

Several factors are behind Wipro’s decision: a weak dollar/strong rupee combination that makes it more cost-effective to hire folks in the U.S.; wage inflation and high attrition rates among workers in India; and a desire for more U.S.-specific business expertise.

Wipro already has some big-time clients based in or near Atlanta, including Delta Air Lines, BellSouth (recently acquired by AT&T) and the Coca-Cola Co. Wipro is reportedly considering opening two other development centers in the U.S., with Texas and Virginia among the leading candidates.

While the Journal-Constitution story is largely positive, it wraps with a quote from an Economic Policy Institute expert: “There’s no doubt some jobs will be created, but who are they putting out of business with the products they’re selling to the U.S. business community? For the first time we’re seeing the process of in-sourcing eliminating domestic jobs.”

Highly Critical’ Vulnerability Found in MSN Messenger

2007-08-30T01:14:00.000-07:00

A “highly critical” flaw in MSN Messenger could allow hackers to execute code by getting users to accept an invitation to a video chat, reports ZDNet blogger Ryan Naraine.

Windows Live Messenger 8.1, the latest version, is not affected. Microsoft is investigating the flaw, according to vnunet.com, but for now is advising users to update to 8.1