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Archive for February, 2008

Supermodel Naomi Campbell released from Brazilian hospital

Friday, February 29th, 2008

SAO PAULO, Brazil (AP) — Naomi Campbell was released Friday from the hospital where she underwent abdominal surgery.

The 37-year-old British supermodel, a frequent visitor to Brazil, was admitted for an emergency operation Monday.

“She recovered very well from her surgery,” said Mirtes Bogea, a spokeswoman for the Sirio Libanes hospital in Sao Paulo. “Doctors signed her release and she left in the afternoon in a helicopter that someone sent to pick her up.”

Bogea declined to provide further details.

On Tuesday, the model’s publicist, Jeff Raymond said she had been hospitalized “to have a small cyst removed.”

She was operated on by gynecologist Jose Aristodemo Pinotti, who would only say he performed abdominal surgery on her.

He described the procedure as a laparoscopy, in which doctors use a thin, lighted scope to view internal organs.

“She came to Brazil to be treated for a condition I am not authorized to reveal,” he said earlier this week, declining to comment further.

Dr. David Uip, one of Brazil’s leading experts in infectious diseases, also cared for Campbell during her stay at the hospital.

Dollar Falls to Record as Weaker Economy Bolsters Rate-Cut Bets

Thursday, February 28th, 2008

By Ye Xie and Bo Nielsen

Feb. 29 (Bloomberg) — The dollar fell to a record below $1.52 per euro, extending its three-day rout to 2.5 percent, as a cooling economy fueled bets the Federal Reserve will cut interest rates through at least twice more.

The U.S. currency also approached a 2 1/2-year low versus the yen yesterday and dropped to a record against the Swiss franc, deepening its losses after Fed Chairman Ben S. Bernanke said it was “fair” to say it was tougher for the bank to respond now than to the recession of 2001.

“There is very real concern that there is a possibility of a dollar crisis,” said Paul Chertkow, head of global currency research at Bank of Tokyo Mitsubishi UFJ Ltd. in London, in an interview with Bloomberg Radio. “I don’t use the word crisis lightly; we are in uncharted territory for the dollar, especially against the euro.”

The U.S. currency traded at $1.52 per euro at 6:53 a.m. in Tokyo, after touching $1.5229 yesterday, the weakest since the euro began trading at about $1.17 in January 1999. The U.S. currency traded at 105.31 yen, after yesterday approaching the 2 1/2-year low of 104.97 yen touched on Jan. 23. The dollar fell as low as 1.0485 francs yesterday.

The slide may stop at $1.55 per euro, though there’s a growing risk of a “dollar crisis” that drives it lower, Chertkow said.

The yen rose against its major counterparts as falling stocks led investors to cut holdings of higher-yielding assets funded with carry trades in Japan.

Steepest Since 2004

The dollar’s three-day slide was its steepest since January 2004. It extended its slump yesterday as the government said initial jobless claims rose 19,000 to 373,000 in the week to Feb. 23. The U.S. grew at an annual rate of 0.6 percent last quarter, from 4.9 percent the prior three months, the government also said. The median forecast in a Bloomberg survey was for growth of 0.8 percent last quarter.

The U.S. currency has dropped 13 percent versus the euro in the past year as subprime-mortgage losses, the worst housing market in 25 years and soaring credit costs spurred the Fed to cut rates five times since September. The U.S. Dollar Index, which tracks the currency against six major counterparts, yesterday touched 73.63, the lowest since its start in 1973. The index is traded on ICE Futures in New York.

The yen yesterday advanced 2.8 percent to 13.92 per rand and gained 1.2 percent versus the New Zealand dollar as investors reduced carry trades, where they get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between them.

`Strong Dollar’

Japan’s benchmark rate of 0.5 percent, the industrialized world’s lowest, compares with 11 percent in South Africa, 8.25 percent in New Zealand and 7 percent in Australia.

The Standard & Poor’s 500 Index fell 0.9 percent.

President George W. Bush yesterday said his administration supports a “strong dollar,” and the currency’s value will be reflected by markets as the economy grows. He spoke at a news conference at the White House.

The so-called synthetic euro, which estimates the European currency’s value before 1999, reached the strongest since at least January 1989, when Bloomberg’s data on the measure begin.

The euro is 30 percent above its debut level, and up 84 percent from a record low of 82.30 U.S. cents in October 2000.

After trading in a range since November of about $1.43 to $1.49 per euro, the dollar’s decline gained momentum this week after Fed Vice Chairman Donald Kohn said on Feb. 26 that turmoil in credit markets and the possibility of a slower economy pose a “greater threat” than inflation. The comments drove the euro above $1.50 for the first time.

Inflation Complications

The dollar then weakened past $1.51 per euro on Feb. 27 after Bernanke said the bank “will act in a timely manner” to insure against “downside risks” to the economy. His remarks came in testimony to the House Financial Services Committee.

Bernanke said before a Senate panel yesterday that accelerating inflation at a time of slowing growth is “complicating” the Fed’s job.

“He said the Fed is in a more difficult situation than 2001,” said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. “He sent a signal that the Fed may be pushing on a string, and they will have to cut rates more aggressively.”

`Powerful Move’

Futures on the Chicago Board of Trade show a majority of traders expect the Fed to cut rates to at least 2 percent by mid-year, from 3 percent now. The bank has slashed its benchmark from 5.25 percent in September, and is scheduled to meet next on March 18.

“This powerful move in favor of the euro has drawn a lot of people into this trade, particularly momentum model type buyers,” said David Mozina, a senior currency strategist at Lehman Brothers Holdings Inc. in New York. “The interest-rate support for the dollar is melting across-the-board.”

European Central Bank President Jean-Claude Trichet yesterday said “price stability is a necessary condition” for ongoing economic expansion and employment. The ECB next meets on March 6 to decide on the main rate, which is at 4 percent.

“The ECB is taking a more hawkish stance than the Fed, which is undermining the dollar,” said Larry Kantor, co-head of research at Barclays Capital Inc. in New York, and a former Fed economist.

Newspaper Roundup: Media General; Gannett; McClatchy, Journal Communications

Thursday, February 28th, 2008

By Joseph Weisenthal

Some fresh data for the first month of the year from a handful of newspapers… Note that two of them, Media General (NYSE: MEG) and Gannett (NYSE: GCI), have announced changes to the way they report, offering less info on print, ostensibly because of the increased importance of digital. Neither, however, offered much more information on digital than they have in the past.

Media General: It won’t get any easier to fend off the activist shareholders … Media General, under siege by Harbinger, reported total January revenue of $71.5 million, down 8.3 percent from $77.9 million in the year-ago period. Publishing revenue was down 14.9 percent to $41.2 million, on characteristic weakness, while interactive media revenue dropped 4.7 percent on weak results in online classifieds. It did say that local ad revenues were up 11.8 percent. As for the above mentioned change, compare the level of detail in today’s release to the one from the month before. From here on, the monthly report will offer less info on the print side than it used to. The company claims it’s because the traditional newspaper business is less relevant than it used to be, in light of new offerings, including its digital properties, and so there’s less reason to include as many line items. But it does have the effect of making the dead-tree business harder to analyze, while digital remains just 3.6 percent of the business.

Gannett: The USA Today parent reported a 7.5 percent decline in January revenue to $575.4 million. Newspaper revenue slid 9.2 percent, with classifieds dropping by 16.2 percent. From now on, print ad volume will no longer be included, which, the company claims, has to do with the increasing role of digital advertising. Fair enough, but if they’re going to reduce the print data, how about some color to the digital info, particularly if the rise of digital is the reason? As it is, the only digital data point they offer is 25.8 million unique users in the month.

McClatchy: January ad revenue fell 14.4 percent to $176.8 million from $206.7 million. Ad revenue was down 15.7 percent, with extreme weakness seen in employment and real estate classifieds. No digital data was broken out, but they’re not reducing the amount of print data for now. 

Journal Communications: A relatively modest January decline for Journal Communications (NYSE: JRN), as it reported revenue of $31.92 million, down 3.1 percent from the year-ago period. Ad revenue at the newspaper business fell 6.4 percent to $10.72 million. Interactive revenue was up 17 percent to $1.08 million.

California Businessman Kyriakos Tsakopoulos Joins Barack Obama National Finance Team

Thursday, February 28th, 2008

 

 

SACRAMENTO – Kyriakos Tsakopoulos, Executive Vice President of AKT Development Corporation and long active in national Democratic politics, has joined the Obama Finance Council to support Senator Barack Obama’s bid for the Democratic nomination for President.

 

“Barack Obama is the right leader to unite our country and to restore the United States to its rightful place as the enlightened leader of the world,” Mr. Tsakopoulos said. “He has inspired and moved people across our country with a campaign that focuses on how all Americans can work together to enhance our future.”

 

Mr. Tsakopoulos said he has been consistently impressed by Senator Obama and his ability to inspire Americans to action. He reached his decision following a recent candidate debate in Los Angeles and was inspired by California First Lady Maria Shriver’s recent decision to publicly support Senator Obama.

Mr. Tsakopoulos said he will play an active role in fundraising for the Obama campaign as one of the 200 major national fundraisers for Senator Obama. He participated in meetings last week of the Council, chaired by Penny Pritzker.

Mr. Tsakopoulos is active in regional, national and international civic affairs and educational policy. He is a Member of the Board of Trustees of Columbia University, and also sits on the Board of Visitors of Columbia College. He is a Trustee of the California State University System, the largest university system in the world, and sits on the Board of the University of California, Davis M.I.N.D. Research Institute, the American Hellenic Institute Advisory Committee, the Crocker Museum of Art, and various other public service Boards and Commissions. He was/is a California Elector in the Electoral College of the United States in 2004 and 2008.

Also endorsing Senator Obama and joining his National Finance Committee is Demetrios A. Boutris, Mr. Tsakopoulos’ business partner and President of the Boutris Group, Inc. Mr. Boutris is the former California Corporations Commissioner and Counsel to the Governor of California.

AKT, led by its Founder and Chairman, Angelo K. Tsakopoulos, is a diversified, family-owned, land development company headquartered in Sacramento, California, operating real estate, farming, ranching, water and minerals, building, and land development projects throughout North/Central California.

Bush Calls Surveillance Bill an Urgent Priority

Thursday, February 28th, 2008

WASHINGTON — Using some of his toughest language in weeks, President Bush prodded Congress on Thursday to pass his preferred version of surveillance legislation, asserting that every day of delay could put the country in danger.

Mr. Bush said again that renewing the surveillance legislation is “a very urgent priority,” and that it must include controversial provisions that would shield telecommunications companies from wholesale lawsuits over their assistance in monitoring the phone calls and e-mail messages of suspected terrorists without warrants.

Failure to give the legal protection to the telecom companies would not only be unwise and dangerous policy but plain unfair, the president said at a White House news conference. The companies were told by government leaders after the attacks of Sept. 11, 2001, “that their assistance was legal and vital to national security,” the president said. “Allowing these lawsuits to proceed would be unfair.”

Contrary to what administration critics say, “people who analyze the program fully understand that America’s civil liberties are well protected,” President Bush.

The Senate passed a surveillance bill to the president’s liking on Feb. 12, by a hefty margin. The chamber rejected a series of amendments that would have imposed greater civil-liberties checks on government surveillance powers, and it afforded legal protection to the telecom companies.

But the House has resisting passing that bill, prompting a heated debate over the proper balance between individual liberties and national security in the age of terrorism. If the final legislation does not include protection for the companies, a wave of lawsuits could reveal how the United States conducts surveillance “and give Al Qaeda and others a road map as to how to avoid surveillance,” Mr. Bush said.

Without the cooperation of private companies, “we cannot protect our country from terrorist attack,” the president declared, adding that the dispute was “not a partisan issue.”

Although there was nothing really new in the stance the president took, he adopted unusually robust language — saying, for instance, that it was “dangerous, just dangerous” for the legislation to be delayed, and pledging to continue speaking out about the issue until the American people understand and, by implication, the lawmakers follow the will of their constituents.

Mr. Bush also used one of his favorite themes, that of the trial lawyer who salivates at the money to be made through frivolous lawsuits. Perhaps, he said, these lawyers “see a financial gravy train” if they can sue the deep-pockets telecom companies.

Democrats counterattacked while the president was still speaking.

“If the President had not rejected an extension of current law and refused to negotiate with Congress, it is very likely that the new FISA bill could already be law today,” said Senator Harry Reid of Nevada, the majority leader, using the acronym for the Foreign Intelligence Surveillance Act. “It is disingenuous for the president to claim the country is less safe when he is the one responsible for holding up the legislative process.”

And Senator Edward M. Kennedy of Massachusetts said the president was using “the specter of terrorism” to push his own agenda.

“If the telecommunications companies didn’t break the law, they do not need immunity,” the senator said. “If they broke the law, the American people deserve to know the size and scope of their lawbreaking. Adhering to the rule of law would not ‘aid our enemies’ — it would uphold the very principles we are fighting for. The President’s position has nothing to do with protecting Americans and everything to do with sweeping under the rug illegal activity by his administration and his corporate partners.”

Mr. Bush used the news conference to reiterate several other long-held positions: The “temporary” tax cuts set to expire over the next few years, he said, should be made permanent to bolster the economy, which he said was not slowing down but was not skidding into recession. Big new taxes on the major oil companies would backfire, driving up energy costs, he said.

And the president showed no interest in getting acquainted with Raúl Castro, whom he described as just an extension of his brother Fidel, whose half-century tenure as president of Cuba has kept the island in isolation and poverty.

President Bush was asked whether he agreed with Senator Barack Obama that the United States would be better off if the president were willing to hold direct talks with leaders of countries like Iran and Cuba.

Republicans, and some Democrats, have harshly criticized Mr. Obama for his original suggestion that he would be willing to sit down with people like President Mahmoud Ahmadinejad of Iran in order to explore important differences. Mr. Obama has since clarified his stance, saying he would do so only if adequate preparations were made for such talks.

Though the president has generally shied away from commenting directly on the presidential campaign, he launched immediately into a vigorous criticism of Mr. Obama’s idea.

“Embracing a tyrant?” he asked, seeming worked up at the idea. “It’ll send the wrong message. It’ll send a discouraging message to those who wonder if America will continue to work for the freedom of prisoners, it’ll give great status to those who have suppressed human rights and human dignity.”

Mr. Bush said he had been deeply moved by meetings with the wives of Cuban dissidents, and that embracing a leader like Mr. Castro without first bringing greater pressure for improvements on human rights in Cuba “would be counterproductive and send the wrong signal.”

Mr. Bush continued in the same critical vein: “Sitting down at the table, having your picture taken with a tyrant such as Raúl Castro lends the status of the office and the status of our country to him,” he said. “He gains a lot from it by saying, ‘Look at me: I’m now recognized by the president of the United States.’ ”

The president indicated that there was no chance his policy on meeting such leaders would change.

In a similar vein, he was asked whether his plan to attend the Summer Olympics in Beijing this year might undercut the impact of American complaints about Chinese human rights violations.

“I’m going to the Olympics because it’s a sporting event,” he said. But he said that this would not preclude him from trying to persuade Chinese leaders that freedom of religion, for example, can “benefit society as a whole.”

He said he was “not the least bit shy” about bringing such questions up, and expected to do so.

Mr. Bush was also asked whether he was concerned that Turkey might keep a protracted military presence in Kurdish regions of northern Iraq.

“I strongly agree with the sentiments of Secretary Gates, who said the incursion must be limited and must be temporary in nature,” he said. “The Turks need to move, to move quickly, achieve their objectives and get out.”

Pressed by a reporter about whether quickly meant a matter of days or weeks, he declined to be specific, saying only, “As quickly as possible.”

But he also expressed sympathy over the problems Turkey faces in its border region.

“The Turks, the Americans and the Iraqis — including the Iraqi Kurds — share a common enemy in the P.K.K.,” he said, referring to an armed Kurdish group.

A reporter asked Mr. Bush what he knew about Dmitri Medvedev, the man chosen to be the next Russian president, succeeding Vladimir V. Putin. Senator Hillary Rodham Clinton and Senator Obama had been asked about him in their debate Tuesday night, and Clinton wrestled with the pronunciation of his name.

“I don’t know much about Medvedev either,” Mr. Bush said.

He said he was waiting to see who will represent Russia at this year’s Group of Eight meeting in Hokkaido, Japan. Mr. Putin is in line to become prime minister, but it remains unclear how much power he will retain after Mr. Medvedev’s expected accession.

Above all, Mr. Bush sought to emphasize the importance for the United States of maintaining a good working relationship with the new Russian leadership, regardless of their unavoidable differences.

“I want to try to leave it so whoever my successor is will be able to have a relationship with whoever’s running foreign policy in Russia,” he said. “That doesn’t mean we have to agree all the time, and obviously we didn’t agree on Kosovo.”

The United States supports Kosovo’s recent declaration of independence of Serbia, while Russia has sharply criticized it.

Mr. Bush said he had appreciated Russian cooperation in efforts to halt Iran’s uranium-enrichment work, particularly Moscow’s offer to provide enriched uranium to Tehran so that it need not make its own.

“There’s areas where we need to cooperate,” the president said. His advice to the next president, he added, “is to establish a personal relationship with whoever’s in charge of foreign policy in Russia.”

At a time when both Mrs. Clinton and Mr. Obama have been critical of the North American Free Trade Agreement, which they say has cost jobs in places like Ohio, Mr. Bush said bluntly that a unilateral withdrawal from the treaty “is not good policy.”

As a former Texas governor, he said, he had seen the South Texas border area evolve from an area of great poverty to one considerably more affluent. “This agreement has meant prosperity on both sides of our border, north and south,” he said.

Though both Democratic candidates have been critical of NAFTA, both have taken nuanced positions on the treaty in the past, and have supported similar trade deals.

Mr. Bush also strongly urged Congress not to block a free-trade agreement with Colombia that the administration signed in 2006. Democratic legislators have cited human rights violations in Colombia, and its inhospitable treatment of labor organizers, in refusing to go along.

The president said rejecting the trade agreement would “encourage false populism in our neighborhood.”

Kelsey Report: Interactive Advertising Leads Revenue Growth

Tuesday, February 26th, 2008

Overall advertising revenues worldwide are projected to reach $707 billion by 2012, with much of the growth coming from interactive advertising formats, according to latest forecast from the Kelsey Group market research firm. That’s up from just over $600 billion last year.

Excluding mobile advertising, interactive advertising is expected to increase from $45 billion in 2007 to $147 billion by 2012. This represents more than a 23% growth in ad revenues globally.

“It’s no surprise that the global advertising industry is experiencing a full scale shift to mixed media platforms, with interactive advertising driving a significant share of overall industry growth,” said in a statement Matt Booth, senior vice president of interactive local media at Kelsey Group.

Growth in interactive advertising is being fueled by a migration from traditional ad spending to new interactive media formats, in addition to growth of the overall Internet audience and broadband connections.

Kelsey Group projects spending on Internet search and other interactive advertising formats, will account for 21% of global spending on advertising by 2012.

U.S. interactive advertising revenues will grow from $22.5 billion in 2007 to $62.4 billion by 2012, reflecting a 22.6% increase, according to Kelsey’s forecast. It projects Canadian interactive advertising will increase from $1.3 billion (U.S) in 2007 to $3.3 billion (U.S.) by 2012, a 21.3% increase.

Worldwide, Kelsey expects local search engine ad revenues will grow to $6.6 billion, up from $2.1 billion in 2007.

Kelsey says international growth in Internet Yellow Pages advertising will reach $9.2 billion, compared to $3.7 billion in 2007. However, it anticipates print Yellow Pages advertising will decline from $27.5 billion in 2007 to $25.6 billion by 2012, a small 1.4% drop.

The Canadian market is one of the few worldwide where Kelsey forecasts a growth in print Yellow Pages, specifically a 1.8% increase in print directory advertising through 2012.

 

 

Microsoft Executive: Online Ad Duopoly Better Than Monopoly

Monday, February 25th, 2008

PHOENIX -(Dow Jones)- Microsoft Corp.’s (MSFT) top advertising executive said Monday that an Internet advertising industry duopoly formed through a combination with Yahoo Inc. (YHOO) would be preferable to allowing one company to establish a monopoly in the sector.

“A duopoly is better than a monopoly,” said

Brian McAndrews, Microsoft’s senior vice president for advertiser and publisher solutions. “Two is better than one.”

McAndrews never specifically referred to rival Google Inc. (GOOG) as the monopoly in question, but he told an audience at the Interactive Advertising Bureau conference in Phoenix that only Microsoft and Google had the resources to develop the massive online advertising platforms for the future.

Microsoft has argued that taking over Yahoo would be the quickest way for the software giant to close the gap with Internet search and advertising giant Google. The global Internet advertising market is expected to grow from $45 billion in 2007 to $147 billion in 2012, at which time online ads will account for 21% of overall advertising budgets, the Kelsey Group said Monday.

McAndrews made his duopoly comment in response to advertisers’ concerns that they would have fewer options for placing Internet ads should Microsoft succeed with its $41.2 billion bear hug for Yahoo.

One digital advertising executive with a major U.S. corporation told Dow Jones that the combination of Microsoft and Yahoo would mean his company could no longer play the two off each other to secure better ad rates.

McAndrews, the former chief executive at aQuantive, an Internet advertising group recently bought by Microsoft, also said his company would soon start testing new technology that could change the way advertisers measure the effectiveness of their ads. The new technology is designed to improve Internet advertising accountability at a time that advertisers are demanding better data about who is seeing their ads and how those users are responding to them.

The current system ties traffic, leads and sales to the last ad that users see before engaging in an online transaction. But McAndrews said the current system is outdated and flawed because it does not take into account all the other ads that consumers have seen - across many Web sites - that helped influence their buying decision.

The new technology will track the frequency that consumers see ads and identify the most recent ads they saw, as well as factor in ad format and size, McAndrews said. Groups such as Citi Cards and Best Western International Inc. have signed on for the trial, he said.

Pakistan Causes Worldwide YouTube Outage

Monday, February 25th, 2008

NEW YORK Most of the world’s Internet users lost access to YouTube for several hours Sunday after an attempt by Pakistan’s government to block access domestically affected other countries.

The outage highlighted yet another of the Internet’s vulnerabilities, coming less than a month after broken fiber-optic cables in the Mediterranean took Egypt off line and caused communications problems from the Middle East to India.

An Internet expert explained that Sunday’s problems arose when a Pakistani telecommunications company accidentally identified itself to Internet computers as the world’s fastest route to YouTube. But instead of serving up videos of skateboarding dogs, it sent the traffic into oblivion.

On Friday, the Pakistan Telecommunication Authority ordered 70 Internet service providers to block access to YouTube.com, because of anti-Islamic movies on the video-sharing site, which is owned by Google Inc.

The authority did not specify what the offensive material was, but a PTA official said the ban concerned a trailer for an upcoming film by Dutch lawmaker Geert Wilders, who has said he plans to release a movie portraying Islam as fascist and prone to inciting violence against women and homosexuals.

The block was intended to cover only Pakistan, but extended to about two-thirds of the global Internet population, starting at 1:47 p.m. EST Sunday, according to Renesys Corp., a Manchester, N.H., firm that keeps track of the pathways of the Internet for telecommunications companies and other clients.

The greatest effect was in Asia, were the outage lasted for up to two hours, Renesys said.

YouTube confirmed the outage on Monday, saying it was caused by a network in Pakistan.

“We are investigating and working with others in the Internet community to prevent this from happening again,” YouTube said in an e-mailed statement.

A YouTube spokeswoman did not immediately respond to an e-mailed question on whether the clips that offended Pakistan’s government had been removed. Several clips with interviews of Wilders were still up on the site Monday afternoon.

Two apparent errors allowed the outage to propagate beyond Pakistan, according to Todd Underwood, vice president and general manager of Internet community services at Renesys.

Pakistan Telecom established a route that directed requests for YouTube videos from local Internet subscribers to a “black hole,” where the data was discarded, according to Renesys. Pakistan Telecom’s mistake was that it then published that route to its international data carrier, PCCW Ltd. of Hong Kong, Underwood said.

The second mistake was that PCCW accepted that route, Underwood said. It started directing requests from its customers for YouTube data to Pakistan. And since PCCW is one of the world’s 20 largest data carriers, its routing table was passed along to other large carriers without any attempt at verification.

“Once a pretty big network gets an error like that, it propagates to most or all of the Internet very quickly,” Underwood said. As he put it, Pakistan Telecom was impersonating YouTube to much of the world.

Pakistan Telecom and the Pakistan Telecommunications Authority were unavailable for comment on Monday night local time. Rex Stover, vice president of enterprise sales for PCCW Global in Herndon, Va., said the company is still trying to figure out what happened and why.

John Palfrey, executive director for the Berkman Center for Internet & Society at Harvard Law School, said that while all the facts in the case are not yet known, it appeared that the repercussions were due to Pakistan taking a relatively heavy-handed approach in trying to censor YouTube.

“It points in many respects to the difficulty, if not the folly, in Internet filtering at the state level,” he said.

Misrouting occurs every year or so among the world’s Internet carriers, usually as a result of typos or other errors, Underwood said. In a more severe example, a Turkish telecom provider in 2004 started advertising that it was the best route to all of the Internet, causing widespread outages for many Web sites over several hours.

“Nobody ran any viruses or worms or malicious code. This is just the way the Internet works. And it’s not very secure or reliable,” Underwood said, adding that there is no real solution to the problem on the table.

While most route hijacking is unintentional, some Yahoo networks were apparently taken over a few years ago to distribute spam.

“To be honest, there’s not a single thing preventing this from happening to E-Trade, or Bank of America, or the FBI, or the White House, or the Clinton campaign,” Underwood said. “I think it’s a useful moment for people to decide just how important it is that we fix problems like this.”

Surprise! Home Sales Spark Hope

Monday, February 25th, 2008

Investors found a sliver of hope to line the dark clouds of the housing slump on Monday.

Investors latched onto the National Association of Realtors’ upbeat tone Monday, sending the U.S. stock market higher in direct contrast to the stark data in the report, which said that sales of single-family homes and condominiums dropped by 0.4% in January to a seasonally-adjusted annual rate of 4.89 million units, the slowest pace on record since 1999. Despite this dire news investors seemed optimistic that the housing market may be bottoming out and that the increase in loan limits could lead to a rally in home sales toward the end of 2008.

The yield on the 10-year Treasury note jumped to 3.89% on Monday from 3.79% on Friday, as investors moved from the safety of bonds into equities, creating what has become a rarity in recent months–a boost in confidence in the equities market. The Dow Jones Industrial Average was also up to 12,486, a 106 point, or .85%, jump. The median price of a home sold in January slid to $201,100, a drop of 4.6% from a year ago, the fifth consecutive decline in home prices.

Existing-home sales in the Midwest rose 3.4%, but the median price of a home in the Midwest was $154,200, down 4.0% from a year ago. Existing-home sales in the Northeast fell 3.6%, although median home prices rose 3.1% from January 2007 to $270,800.

Investors found a knight in shining armor in Lawrence Yun, the NAR’s chief economist, who said there are still many potential buyers on the sidelines. “Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” he said.

Yun said he expects demand for homes to rebound later in the year as caps on the size of loans that can be backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration are raised as part of the economic stimulus bill passed by Congress. But the problem of a housing glut still remains as inventories continue to build, putting downward pressure on prices. Total housing inventory rose 5.5% at the end of January to 4.2 million existing homes available for sale, representing a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December.

But Global Insight U.S. economist Patrick Newport wasn’t so optimistic. “We think the credit crunch is hurting all corners of the mortgage market, and partly accounts for the 10% decline in sales in the past five months,” Newport said.

Newport said falling home prices may be the greatest hindrance to a recovery, but they are ultimately the solution as well. “In cities with falling home prices, homebuyers must weigh whether to buy an asset that is depreciating or rent instead,” he said. “We think that a growing share will choose to rent and wait things out. Over time, shifts in demand will cause rents to rise, house prices to drop, and home sales to turn around.”

But Newport thinks that turnaround is still months away.

Meanwhile, Lowe’s, the second biggest home retailer in the U.S., reported a 33.4% drop in profit, a result of the weakness in the U.S. housing market. But investors were expecting worse. As a result Lowe’s shares rose 4.1%, or 96 cents, to $24.55 at the close.

News Corp. quickly shoots down rumors of MySpace ad shakeup

Monday, February 25th, 2008

Don’t expect News Corp. to jump ship on its advertising contract with Google for social network MySpace, representatives from the company said on Monday.

TechCrunch had reported earlier that News Corp. was potentially in negotiations with Microsoft, which serves ads on MySpace rival Facebook, as a replacement for the Google ads that have run on MySpace and other Fox Interactive Media sites since August 2006. Google co-founder Sergey Brin had said in the company’s most recent earnings announcement that its advertising contract with Fox Interactive had proven less lucrative than expected.

But a News Corp. representative told the Silicon Alley Insider soon after that the report was “100 percent categorically untrue.” A Fox Interactive Media representative then confirmed to CNET News.com that “There’s no truth to rumors that Fox Interactive Media is interested in getting out of a strategic search deal with Google.”



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