Bizness104

Asterisks And Investigations

2007-12-13T15:56:00.000-08:00

If Bud Selig hadn't read Game of Shadows, would we even have had today's Mitchell Report?
The 2006 book, by San Francisco Chronicle investigative reporters Mark Fainaru-Wada and Lance Williams, detailed the alleged use of performance-enhancing drugs by home-run record holder Barry Bonds, and was seen as instrumental in prompting congressional hearings into baseball's attitude toward steroids, both among players and administrators.
If Baseball Commissioner Selig and players union boss Donald Fehr had been more proactive a decade ago in investigating and dealing with what was fundamentally a health issue rather than a performance issue, would we be listening to the list of implicated players read by the former Senator, like an announcer's roll-call of All-Stars on opening day?
Then again, if Al Gore had won the 2000 presidential election, maybe George W. Bush would have become baseball commissioner after all, and this particular cup would have passed from Selig's hands.
That's a lot of "ifs." What we know for certain today, though, is that, as former Sen. George Mitchell's report says, this wasn't just an "isolated problem involving just a few players or a few clubs."
Confirming exactly how widespread a problem the game now faces, Mitchell said that "each of the 30 clubs has had players who have been involved with such substances at some time in their career."
Mitchell went on: "Everyone involved in baseball over the past two decades--commissioners, club officials, the players' association and players--shares to some extent the responsibility for the steroids era. There was a collective failure to recognize the problem as it emerged and to deal with it early on."
Often times, the hardest thing and the right thing are the same thing. It may never be harder than to lead professional baseball in a time of such upheaval. That will be Bud Selig's legacy.
Allan H. "Bud" Selig, the former owner of the Milwaukee Brewers, was elected the ninth commissioner of baseball in July 1998 on a unanimous vote by the 30 major league owners. He has said he will step down in 2009, when his contract expires. He'll be 75.
Regardless of what he "should" or "could" have done, what can he do now? What effective, practical measures can the commissioner put in place in what remains of his time in office?
Even the people who agree with this investigation say a better leader would've acted sooner. Selig still maintains he is glad he acted when he did.
"When I decided to do this [ask Sen Mitchell to investigate] one fateful day in Scottsdale, Ariz., no one was happy with my decision," Selig said from the podium. "I was happy with that decision, and I'm still happy with it today."
Active and retired players were named in the report. Among them, Roger Clemens, undoubtedly a future Hall of Fame candidate. But, at least from Selig's perspective, he won't be around to have to decide on either Clemens' or Bonds' passage to Cooperstown.
Selig said he would move "swiftly" in disciplining the players identified, although Mitchell warned against having the game bogged down in lengthy proceedings. The commissioner also said he would judge on a "case-by-case" basis, a comment the players' union likely didn't digest well. He also said he would "embrace" Mitchell's wide-ranging recommendations for further action.
Today's vocabulary was all about "lessons learned" and directing efforts toward "the future." Mitchell even asked the public to give the game "a fresh start."
Said Selig, "The important thing here is that we're moving forward today."
Suffice to say, Selig may leave his post with few friends among players, and at best a mixed image to those involved in--and who follow--baseball. But perhaps a "better late than never" approach to the steroid issue could still work in Selig's favor.
Don Hinchey, vice president of communications for the Bonham Group, a sports marketing firm, believes overall Selig has generally done his job well, not just in handling the performance-enhancing drugs predicament.
"As for [his] legacy, it should be judged on many different issues--labor peace, league expansion, revenue enhancement, inter-league play, the embrace of the new media, etc.," Hinchey said.
"In all of these areas, he inherited an imperfect system," Hinchey continued. "Overall, he's performed remarkably well in implementing and presiding over significant improvements. He has a similar opportunity in regard to drug testing and enforcement in Major League Baseball, provided he's able to win the support of the players and their union in establishing the level playing field he envisions. If he can do that, his legacy will not only be intact, it will be enhanced."

Microsoft Declares War On VMWare

2007-12-13T15:47:00.000-08:00

With no great excess of modesty Microsoft gave a self-styled “holiday surprise” as it announced it begun public trials of new virtualization software called Hyper-V, to be featured on some versions of Windows Server 2008.
Microsoft Corp. (nasdaq: MSFT - news - people ) previously said the first public release of the test version of Hyper-V would come out in the first quarter of next year.
The Redmond, Wash.-based company’s announcement gave its shares a 2.2%, or 76 cent, lift in late-afternoon trading on Thursday to $35.23.
"Virtualization" software lets a single computer function like multiple machines, allowing companies to spend less on equipment and energy in its data centers.
Microsoft's virtualization software will compete head-on with programs from VMware (nasdaq: VMW - news - people ) whose own shares were down 3.7%, or $3.68, to $95.55, in response to the news.
Numerous analysts had warned that encroaching competition from companies such as Microsoft would rain on VMware’s parade (See "Storm Clouds Ahead For VMware").
Canaccord Adams analyst Mark Kelleher said that the risk for VMware is that Microsoft decides to add virtualization as a feature for free in its products.
“There’s a lot of competition coming into the market right now and I think some of that competition put a little more reality around VMware,” Kelleher said three weeks ago.
When the 2007 fiscal year does finally come to a blessed close, one of the highlights should be VMware and its spectacularly successful initial public offering in August (See "Investors Can't Get Enough Of VMware").
When it first had its IPO, VMware had near-exclusive claim on the idea of virtualization, but once its competitors caught on, investors realized the firm was going to be just one player in the larger virtualization market. Now virtualization software is being duplicated for free by Xen hypervisor and being added as a feature of products sold by Citrix Systems (nasdaq: CTXS - news - people ) and Oracle (nasdaq: ORCL - news - people ).
The first dose of reality for VMware investors came at the Oracle OpenWorld user conference, which took place November 11-15, where Oracle unveiled Oracle VM. The company shipped Oracle VM free to its users as a feature of its technology, and it got positive feedback.
Meanwhile, VMware’s rivals Hewlett-Packard (nyse: HPQ - news - people ), Sun Microsystems (nasdaq: SUNW - news - people ), and IBM (nyse: IBM - news - people ) began using Xen hypervisor’s open source software in their products. Since Xen hypervisor is free the companies are able to sell their virtualization products at one-fifth of the price of VMware’s products.
At the same time, operating systems providers such as Novell (nasdaq: NOVL - news - people ) began providing virtualization in their operating systems.

Struggling Palm Lays Off Workers

2007-12-13T15:42:00.000-08:00

SAN JOSE, Calif. -
Palm Inc., the troubled maker of Treo smart phones, laid off about 10 percent of its work force this week to cut expenses, according to a person familiar with the situation.
The Sunnyvale-based company issued a statement Thursday confirming some layoffs were made as part of a restructuring. The person said Palm, (nasdaq: PALM - news - people ) which has a worldwide staff of 1,150, was eliminating more than 100 jobs. The person spoke on condition of anonymity because Palm did not publicly disclose the number of layoffs.
Palm's statement said the restructuring, which also included some reassignments, was part of its ongoing effort to "focus and better align resources behind core initiatives" and "to ensure that our expenses are in line with projected revenues."
Palm has struggled against stiffening competition over the past year. Some missteps, including product delays and the cancellation in September of a portable computer call Foleo, have compounded the problem.
When the company reports its fiscal second-quarter results Tuesday, it has said it will swing to a wider loss than had been expected because of yet another delay in a product launch. The company did not name the product but analysts widely believe it is a Treo model slated for a major wireless carrier.
Palm warned last week that it now expects to post a second-quarter loss of 22 cents to 24 cents per share, compared to its projection made in October of a loss of 1 cent to 3 cents per share.
Revenue is expected to land between $345 million and $350 million, below Palm's earlier guidance of $370 million to $380 million.
The company said other factors behind the sales shortfall were an unforeseen increase in warranty repair expenses and higher-than-expected shipments of its low-priced Palm Centro smart phone, which cut into profit margins.
Shares of Palm, which have fallen more than 70 percent since October, were up 8 cents at $5.57 in afternoon trading Thursday.

AT&T Completes Acquisition of Ingenio

2007-12-13T15:17:00.000-08:00

SAN ANTONIO --(Business Wire)-- AT&T Inc. (NYSE:T) announced today the completion of the acquisition of Ingenio, a leading provider of Pay Per Call(R) technology. The combination will allow AT&T to better serve business directory and local search customers across its entire advertising and publishing portfolio. AT&T plans to quickly begin integrating Ingenio within AT&T's YELLOWPAGES.COM, and the organization will be overseen by Charles Stubbs, president and CEO of YELLOWPAGES.COM.
Integrating Ingenio's Pay Per Call solutions into AT&T's suite of offerings for advertisers will allow AT&T to provide additional options and tools for businesses to manage their advertising programs. The technology will provide an alternate performance-based lead-generation tool for businesses that want to reach customers. "AT&T remains committed to providing advertisers with comprehensive solutions," said Ray Wilkins, AT&T group president-Diversified Business. "The addition of Ingenio's capabilities will give advertisers the flexibility to easily manage their advertising needs across all platforms -- online, mobile and print."
The transaction is expected to have minimal impact on AT&T's results, including earnings per share. The addition of Ingenio's services further enhances AT&T's portfolio of directory and local search offerings. YELLOWPAGES.COM and AT&T Real Yellow Pages deliver unsurpassed visibility and value to advertisers. AT&T delivers print directories to more than 83 million residences and businesses in 22 states and has a premier online presence nationwide with the YELLOWPAGES.COM Network. Together, these products receive more than 5 billion consumer searches a year for local business information and provide more than 1 million advertisers with valuable sales leads to help their businesses grow.

AT&T and BellSouth Merger

2007-12-13T15:15:00.000-08:00

AT&T Inc. (NYSE:T) and BellSouth Corporation (NYSE:BLS) announced today an agreement to merge the two companies, a combination that will create a more effective and efficient provider in the wireless, broadband, video, voice and data markets.
The merger will streamline the ownership and operations of Cingular Wireless, which is jointly owned by AT&T and BellSouth. The new company will be more innovative, nimble and efficient, providing benefits to customers by combining the Cingular, BellSouth and AT&T networks into a single fully integrated wireless and wireline Internet Protocol network offering a full range of advanced solutions.
As a result, the combined company will be better able to speed the convergence of new and improved services for consumers and businesses, and embrace the industry's shift to Internet Protocol network-based technologies.
"Logical Next Step That Creates Substantial Value"
"This merger is a logical next step that creates substantial value for customers and stockholders of both AT&T and BellSouth," said AT&T Chairman and CEO Edward E. Whitacre Jr. "It will benefit customers through new services and expanded service capabilities. It will strengthen Cingular through unified ownership and a single brand. And we are confident that this is a merger we can execute, based on our track record with previous integrations and our experience working closely with BellSouth to create and build Cingular Wireless, and operate Yellowpages.com.
"This transaction combines two solid, very well-run companies," Whitacre added. "BellSouth operates in an attractive region with a growing economy. It has great employees and an outstanding network, with fiber optics deeply deployed in its service area. It has a strong record in terms of customer service and a sound, conservative balance sheet. These strengths, added to those of AT&T, will improve our ability to provide innovative services to more customers while returning substantial value to our owners and improving our growth profile."
"Technology changes and convergence are shaping a new competitive dynamic and creating tremendous opportunity," said Duane Ackerman, chairman and CEO of BellSouth. "We're creating a company with much better capabilities to seize these opportunities while maintaining its strong focus on customer service and community involvement.
"This was the right time for this merger," said Ackerman. "This combination is good for our employees, our customers and our stockholders."
AT&T has committed to continue BellSouth's historic levels of charitable contributions and community activities, including the continued funding of charitable activities and economic development and education initiatives throughout BellSouth's nine–state area.
"Our focus is on providing great service and innovative, competitively priced products for consumers and businesses throughout the Southeast, the nation and the world," said Whitacre. "Together, we will lead the way into a new era of converged and bundled communications, video and entertainment services while also improving our ability to manage complex networks."
Customer Benefits
Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP television networks and similar services as a result of AT&T's groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouth's extensive deployment of fiber networks for DSL and other broadband services.
Business customers in the southeastern United States and the rest of the country stand to benefit from the expertise and innovation of AT&T Labs, as well as the combination of AT&T's state-of-the-art national and international networks and advanced services with BellSouth's local exchange and broadband distribution platforms and expertise.
The combined company will have greater financial, technical, research and development, network and marketing resources to better serve consumers and large-business customers, and will accelerate the introduction of new and improved product and service sets for those customers.
The merger would also give business and government customers, including military and national security agencies, a reliable U.S.-based provider of integrated, secure, high-quality and competitively priced services to meet their needs anywhere in the world.
Since AT&T and BellSouth are not actual competitors in the local, long distance and video markets, and because BellSouth is not a significant competitor with AT&T in the enterprise market, the merger will not reduce competition in any of those markets

Fed extends lifeline to ailing banks

2007-11-27T12:00:00.000-08:00

WASHINGTON (AP) -- To help alleviate any end-of-year cash crunch, the Federal Reserve announced Monday that it will conduct a series of special operations starting this week.
The Federal Reserve Bank of New York, in a brief statement, said it will make the first such operation on Wednesday, for about $8 billion. The operation essentially makes available short-term, six-week loans, maturing on Jan. 10, to financial institutions, and thus boosts cash available to them.
The Fed didn't say when its next operation would be conducted. "The timing and amounts of subsequent term operations spanning the year-end will be influenced by market and reserve developments," the Fed said in its statement.
The Fed has engaged in such special operations in previous years, most recently in 2005.
By making sure there is ample cash, or liquidity, in the U.S. financial system, the Fed hopes to remove any upward pressure on its key short-term interest rate called the federal funds rate. The current target for the funds rate, the interest banks charge each other on overnight loans, is 4.50 percent. It is the Fed's main tool for influencing overall economic activity because the funds rate affects many other interest rates charged to people and businesses.
The end of year typically can be a time when financial institutions scramble for cash and the recent credit crisis has heightened concern.
The move was designed to reassure the markets.
The next credit scandal
Separately, the New York Fed announced some steps Monday to make it easier for financial institutions to borrow Treasury securities from the central bank. There's been increased demand for super-safe Treasury securities. A meltdown that started in the "subprime" mortgage market made to borrowers with spotty credit has since spread to other more creditworthy borrowers and has spooked investors and increased their appetite for super-safe Treasuries.

Microsoft, Autodesk Lose Patent Appeal

2007-11-27T11:58:00.000-08:00

NEW YORK (Associated Press) - Microsoft Corp. must pay more than $140 million for infringing on software patents owned by a Michigan-based technology company, a federal appeals court has ruled.
Z4 Technologies Inc. sued Microsoft and Autodesk Inc., maker of drafting software, in 2004, claiming the technology they used to activate newly installed software and deter piracy infringed on patents created and owned by David Colvin, the owner of privately held z4.
Commerce Township, Mich.-based z4 argued that Microsoft's Windows XP and Office 2003 suite of productivity software used its patented method of asking computer users to supply two passwords, or authorization codes, before they could fully use new software.
The technology in question also can be used to deactivate software.
In April 2006, a federal jury in East Texas ordered Microsoft to pay $115 million to z4, plus attorney fees and $25 million for willful patent infringement. Microsoft, which had argued that the patents were invalid, appealed the decision.
The jury also ordered Autodesk to pay $18 million to z4.
On Nov. 16, the U.S. Court of Appeals for the Federal Circuit, which considers all patent appeals, upheld the lower court's decision in its entirety.
Microsoft spokesman David Bowermaster said Windows Vista and Office 2007 are not affected by the appeals court decision. Bowermaster also said the company does not have to make any technical changes to Windows XP or Office 2003.

Consumer confidence drops near 2-year low

2007-11-27T11:18:00.000-08:00

NEW YORK (CNNMoney.com) -- A key barometer of consumer sentiment dropped for a fourth consecutive month, sending the index near its lowest level in two years.
Rising gasoline prices, falling home sales and unstable financial markets have weighed on consumers' spending, the Conference Board reported.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index fell to 87.3 from a revised 95.2 in October. The reading marked the lowest level since October 2005 when it was 85.2. Analysts had expected 91.5.
"We expected a downward trend but it was significantly down," said Anika Khan, an economist at Wachovia.
Economists repeatedly pointed to the worsening housing crisis, tougher lending standards and rising energy prices for the dampened attitudes.
"Consumers' apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump and the likelihood of larger home heating bills this winter," Lynn Franco, director of the group's Consumer Research Center, said in a statement.
Holiday shoppers show restraint
Consumer confidence is considered a key to Americans' willingness to make purchases, and therefore is a key economic barometer, since consumer spending fuels nearly three-quarters of all U.S. economic activity.
"It has a lot to do with energy and real estate," said Maury Harris, chief economist at UBS. "Energy is going up and real estate is going down."
The report also signaled that consumers are more nervous about the economy going into the next year than experts are.
The index's two main components, the Present Situation Index and the Expectations Index, both declined. The Present Situation Index fell to 115.4 from 118.0 in October, while Expectations Index posted a sharp decline of 68.7 from 80.0.
"I think that certainly people's outlooks are shaped by the media and there are a lot of reported economic news that are bad," Harris said.
Federal Reserve battles recession fears
Consumers who think conditions are "good" fell to 22.3 percent from 23.2 percent. Meanwhile, those saying conditions are "bad" increased to 19.1 percent from 16.6 percent.
As to the labor market, consumers who are expecting more jobs in the months ahead fell to 10.8 percent from 13.3 percent, while those anticipating fewer jobs rose to 23.1 percent from 20.2 percent. Those expecting their incomes to decrease in the months ahead increased to 11.0 percent from 9.1 percent.
Those expecting business conditions to worsen increased to 16.7 percent from 13.9 percent. Those anticipating business conditions to improve declined to 12.4 percent from 14.0 percent.
"Despite this rather bleak outlook, consumers have not lost their holiday spirit and anticipate spending more on gifts this season than they did last Christmas," Franco said.
"This isn't quite a recession because wages and salaries are still going up, but people are still concerned about their wealth," said Harris, who expects a very tepid increase in sales this holiday season.

AT&T Announces Expansion of Mobile Broadband Network in New York

2007-11-27T11:13:00.000-08:00

AT &T has announced the expansion of its mobile broadband network providing customers in New York City and Northern New Jersey with several options including Internet, e-mail and other entertainment services. The addition of 200 3G( third generation) cell sites has expanded the network which now encompasses Bay Ridge, Coney Island, Flushing, Bayside and College Point besides other places in New Jersey according to a PRNews release . The 3G network was already available in the Manhattan area and areas around the international airports.

Tom DeVito, vice president and general manager, AT&T’s (News - Alert) wireless unit in New York and New Jersey said that it was the company’s goal to give its customers the best wireless experience regarding coverage and service quality. “We are staying ahead of the growing demand for fast, dependable wireless broadband access to feature-rich Internet content, such as streaming video,” he said.
AT&T has invested $1.2 billion in enhancing the wireless network in and around New York City to expand its 3G network. Further AT&T has spent nearly $ 18 billion throughout the country to upgrade existing networks according to the news release.

The 3G network services offer several new features not offered by most other providers such as voice and data delivery at the same time. It offers ‘Video Share’ which allows users to share video while engaged in a voice call. This allows customers to carry on with a conference call while downloading a presentation or accessing the internet all from their 3G mobile device.

This feature also permits customers to share live video using the wireless phone over long distances said DeVito. “That’s the power of Video Share and the 3G network. It’s another example of how advanced wireless services enhance our everyday lives,” he pointed out.AT&T’s 3G network has several advantages. The network uses HSDPA/UMTS (High Speed Downlink Packet Access/Universal Mobile Telephone System) technology. It is also based on a standard used world wide called Global Systems for Mobile Communications or GSM standard. About 85 percent of wireless users world wide which is more than 2.6 billion people, use GSM powered devices and the 3G network is available in several countries enabling AT&T customers to use their handsets where ever they go besides within the company’s network in the U.S.
AT&T offers the EDGE (Enhanced Data Rate for GSM Evolution) network so that a call is not disturbed when a customer goes beyond the 3G network. The EDGE network is available in more than 13,000 cities, along 40,000 miles of highways and roads in the U.S.

AT&T enters fast-growing Vietnamese market

2007-11-27T11:12:00.000-08:00

NEW YORK (MarketWatch) -- AT&T Inc. became the latest foreign firm to tap into the fast-growing Vietnamese market, launching its services in one of the top investment destinations in Asia.
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T 36.75, +0.40, +1.1%) said Monday that it has begun its commercial operations in Vietnam. The U.S. telecom firm is partnering with Viettel Corp., a local carrier, to connect AT&T global customers with their offices in Vietnam.
"Vietnam is the fastest-growing market in Southeast Asia, and demand is increasing rapidly from global enterprises for world-class networking solutions to support their business operations in Vietnam," said Hiko Minato, the newly appointed vice president of AT&T Asia Pacific.
Initial services available to multinational customers include virtual private networks and frame relay, AT&T said.
"Foreign-led investment in Vietnam has been rising rapidly on the back of the country's membership to the World Trade Organization," said analysts at Business Monitor International. Vietnam finally joined the WTO in January this year after over a decade of negotiations.
After China and India, Vietnam ranked third among Asian countries in attracting investment between 2005 and 2007, according to a survey by the Asian Business Council cited by BMI.
The biggest investors in Vietnam come from other Asian nations. From January through September this year, South Korea was the number one investor, with $2.1 billion, followed by Singapore with $1.4 billion and the British Virgin Islands with $1.2 billion. The U.S. ranked eighth, with $215 million invested in Vietnam.
AT&T's partner Viettel is owned by the defense ministry and was the market leader in the country this June with 14 million mobile subscribers, according to BMI.
Investment by telecommunications companies made up 5.4% of Vietnam's total foreign direct investment of $3.6 billion in the first nine months of this year.
"This percentage should rise, given the country's general consensus to liberalize the telecoms sector, not to mention the rapid growth of its mobile sector," said BMI analysts. BMI is estimating mobile subscriber growth of 52% for 2007.
"Viettel makes an attractive partner for AT&T, largely as it has the highest number of base stations providing increased network coverage, but also on account of the gains it has made in market share," said BMI analysts.

AT&T rolls out mobile banking

2007-11-14T10:29:00.002-08:00

If you’re an AT&T subscriber as well as a customer of Wachovia, SunTrust, Bancorp South, FirstBank, Synovus, Regions Financial Corp, America First Credit Union, or Arvest Bank Group, you’ll now be able to view your balances and conduct online bill paying right from your cell phone. The nation’s No. 1 wireless carrier has teamed with Firethorn Holdings and CheckFree in addition to these banks in order to brings its subscribers and added convenience. The application is set to be pre-loaded on all new handsets introduced by AT&T later this year. It can also be downloaded to over 30 of AT&T’s existing models.
“The ability to perform banking functions using a wireless handset is attractive for people who need to make financial decisions on the go — business travelers, college students, and anyone who desires the flexibility that wireless delivers,” said Mark Collins, VP of Consumer Data at AT&T’s wireless unit, in a statement.
The process is to first sign up with your bank or credit union. This can be done each firm’s online banking site. Customers will then get a code which links the mobile banking application to their bank account. Of course, a PIN will be required to access the application.
Once enrolled, subscribers can use the application to view account balances and history, transfer funds, and pay bills. All data is encrypted for security purposes and service is immediately deactivated if a cell phone is lost or stolen.
And guess what? It’s free. Okay, well, not really. It costs in the form of data transfers, which can be costly on a per-minute basis. Users are encouraged to sign up for AT&T’s mobile web, which starts at $10 per month.

AT&T, Costco Ink Retail Kiosk Deal

2007-11-14T10:29:00.001-08:00

AT&T (News - Alert) has begun offering its wireless products and services at 370 Costco Wholesale stores in the United States. The telecom recently partnered with Wireless Advocates, a third-party provider of mobile phones and offered services at Costco stores and is expecting to reach more than 35 million of the store's cardholders.

In addition to Costco, AT&T currently offers wireless services in 10,000 retail locations like Best Buy, Radio Shack, Wal-Mart, Sam's Club, and Target.The kiosks located inside Costco stores will offer the carrier's products and services by Wireless Advocates and AT&T. The kiosk will also offer phone models from popular manufacturers, including Samsung, Nokia, and Motorola (News - Alert). In some select locations, Costco will be selling the Samsung Blackjack.AT&T opted for Costco because it ranks as one of the top retailers in mobile phone activations, according to the company. AT&T expects the combined efforts between the two leading companies to reach many shoppers this holiday season, as Costco is the largest membership warehouse club chain in the world.Recent studies indicate that instead of ordering the mobile phones online or going to wireless carrier-owned stores, customers prefer mainstream retailers to make the purchase. Mainstream retailers are becoming the first choices for the purchase of mobile phones and related services. This option is better for those customers who do not want to be tied to an annual plan as these stores offer many options for prepaid wireless services.For example, Virgin Mobile (News - Alert) USA provides plans without annual contracts ranging from prepaid to pay-as-you-go services. Few days ago, the company started selling its first cell phone with streaming music capability. The phone, named “Wild Card”, is being sold at Best Buy, Radio Shack, Target, and Wal-Mart.The Costco members who buy the AT&T wireless products and services from AT&T on Costco will get special benefits, such as a waived activation fee when they sign up for an AT&T wireless plan. They also get an accessory kit that comes with a vehicle power adapter, ear bud, and wireless case.

AT&T Foundation gives $181,000 to 11 nonprofits

2007-11-14T10:25:00.000-08:00

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The AT&T Foundation on Tuesday awarded $181,000 in grants to 11 area nonprofits as part of nearly $9 million in grants awarded nationwide this year.The grants, made through the AT&T Excelerator program, help nonprofits integrate technology into their operations and community outreach. They also fund access to technology-related programs for underserved populations. Since its inception in 2002, the AT&T program has made more than 2,500 technology grants totalling more than $47.8 million.The following nonprofits each received grants:
Judson Center in Royal Oak.
Midwest AIDS Prevention Project in Ferndale.
Madonna University in Livonia.
The Guidance Center in Southgate.
Inkster Senior Service Inc. in Inkster.
Think Detroit Police Athletic League Inc. in Detroit.
Detroit Entrepreneur Institute Inc. in Detroit.
Detroit Artists Market in Detroit.
Volunteers in Prevention, Probation & Prisons Inc. in Detroit.
Samaritan Counseling Services in Ann Arbor.
Nonprofit Enterprise at Work Inc. in Ann Arbor.

Intel ready for 2008 with Penryn

2007-11-11T13:42:00.000-08:00

The planned launch of Intel's Penryn processors on Monday is the first blow in a one-two punch that might stagger AMD heading into 2008.
Just a few months after the launch of AMD's quad-core Barcelona chips, Intel is hitting back with Penryn, now known as the Xeon 5400 family of processors. A total of 15 server chips are set to launch Monday as well as a new Core 2 Extreme desktop processor, with Penryn chips for mainstream desktops and notebooks scheduled to launch in the first quarter of next year.
Penryn is essentially a shrink of the Core architecture that brought Intel out of the woods in 2006. But these are also the company's first chips to use Intel's 45-nanometer manufacturing technology, and they will usher in the first change to the basic properties of the transistor since the 1960s.
For the first time, Intel plans to use a metal gate and a new material for the oxide layer around the gate in its transistor designs. This fundamental part of the transistor provides the foundation for computing as the part that determines whether a transistor is off or on, a "0" or a "1."
"We needed the scaling and power/performance, and it would be very hard to do it on the previous technology," said Dadi Perlmutter, senior vice president and general manager of Intel's Mobility Group.

Intel and other chipmakers were running into problems making the gates smaller and smaller. The gates were getting down to the point where the gate dielectric--an insulating layer that sits between the gate and the rest of the transistor--was only a few atoms thick. The chipmaking industry has figured out lots of amazing things, but it hasn't figured out how to split an atom without causing a bit of an energy problem.
The new materials allowed Intel to build thicker gates with the same switching properties as the older ones, which helps control current leakage and also buys the industry a few more generations of scaling. IBM and AMD plan to release chips based on similar technology in 2008.
And the combination of the new transistors and some design tweaks appears to have been enough to give Intel a performance lead with the Penryn generation of chips. The company said some of its partners set world records for scores on well-known benchmarks such as TPC-C and SPECint_rate2006 with the basic Xeon chips. When paired with the 1600MHz front-side bus available on some chips, Intel said it also set records on SPECfp_2006rate, long a stronghold of AMD's. SPECint_rate is a general measure of transactional performance that's important to business customers, while SPECfp_rate measures floating-point performance and is important to high-performance computing customers.
Intel avoided making direct comparisons to AMD's chips in briefing materials distributed ahead of the announcement. It plans to have a Web site up and running on Monday with more detailed performance information.
Intel did say that the new Xeons will be about 28 percent faster than their older brothers on SPECint_rate2006, and 30 percent faster on SPECfp_rate2006. Barcelona barely edged out the older generation of Xeon chips on SPECint_rate2006, so it looks like Intel will have an edge in that area.
If you make a server-buying decision based solely on these numbers, however, you're making a mistake. There are some truths to benchmarks, but companies like Intel and AMD spend millions of dollars trying to get an edge on benchmark results, which don't always mirror real-world performance. Still, they're the best comparison vehicles we've got, though those who are contemplating a serious server purchase test their applications on a system before making the leap.
Penryn marks the second generation of Intel's quad-core designs. Around this time last year, Intel packaged its dual-core Core generation processors into quad-core chips that enjoyed several months free from competition from AMD.
That free ride ended with the Barcelona launch. AMD gained back some market share in the third quarter, as Barcelona systems trickled into the market. Still, going into the launch the company didn't expect Barcelona to contribute meaningful revenue until the fourth quarter.
And it seems that AMD is having a little trouble getting Barcelona into the market. Reports surfaced last week in the run-up to the Penryn launch that some server vendors are quoting 2008 as the time frame for Barcelona's availability, even though AMD executives said they plan to ship "hundreds of thousands" of Barcelona chips this quarter.
That, of course, is exactly when Intel will fire back with the Penryn chips. The new Xeons will arrive in the same pricing bands that Intel's current lineup of Xeon chips occupy, and Intel plans to have systems available right away from the usual suspects in the server market.
And next year, it will get even tougher for AMD. The company has two new designs for desktops and notebooks (known as Spider and Puma) that are set to arrive over the next few months. But Intel isn't sitting still, either: the first quarter of next year will see Penryn chips arriving for desktops and notebooks, as well as an extremely low-power chip called Silverthorne that could open new markets for Intel that AMD can't touch until 2009.
To top it all off, Intel's main plan for 2008 is to release chips called Nehalem that borrow many of the same design techniques, such as an integrated memory controller and point-to-point connections, that made AMD's Opteron chips a winner for several years. AMD would say it's a sign that it was right all along, but it doesn't really matter: Intel has managed to stay very competitive without those techniques, and when it adopts them, AMD could be in more trouble next year.
The smaller chip company is clearly pinning its hopes on 2009, when it aims to release "Fusion" chips that integrate a high-powered GPU with a PC and server processor. The "Bulldozer" chips will also be assembled from smaller building blocks, which could let the chipmaker target specific customers with designs tailored for their needs.
For now, though, Intel is in excellent shape--assuming it doesn't run into any problems during the first few months of the Penryn launch. In just two years, Intel has managed to get beyond the embarrassment of its abrupt change in course at the hands of AMD to get its server group back on track.
Few of us will ever buy a server based on these chips, but this market is extremely important to both Intel and AMD because it's so much more profitable than cranking out chips for your desktop or notebook. That helps fund the development of other technologies that do have an impact on the rest of us, meaning that the competitive balance between the two companies in this segment has far-reaching implications.

Vonage Expects to Settle AT&T Patent Lawsuit by Month’s End

2007-11-11T13:41:00.000-08:00

Vonage has reached an “agreement in principle” to settle its intellectual property dispute with AT&T, the VoIP pioneer announced yesterday.
The deal under discussion would have Vonage pay $39 million over five years, in exchange for AT&T dropping its patent infringement lawsuit. Vonage would also agree to drop its counter suit against the telecom giant.
“We’re moving in the right direction with regard to AT&T and are focused on finalizing our agreement by the end of this month,” said Charles Sahner, a spokesman for Vonage. “We would like to be able to put AT&T behind us together with Verizon, Sprint and our other recent settlements.”
Vonage’s new strategy of settling patent infringement complaints has been a convenient and effective way of avoiding crippling injunctions against its technology, but it has also been very costly, cutting into the unprofitable company’s ever-dwindling supply of cash.
“The company’s cash requirements in the fourth quarter increased due to the release of $78 million of restricted cash to Verizon, an additional $2 million to Verizon, $40 million placed into escrow and reported as current restricted cash until the Verizon appeal is decided, $80 million to Sprint and $2 million in other IP litigation settlements,” the company said in its most recent financial statement.

AT&T Whistle-Blower Hits D.C. To Stop Telecom Spying Immunity

2007-11-11T13:40:00.001-08:00

Former AT&T technician and wiretapping whistle-blower Mark Klein traveled to the nation's marble halls of power Wednesday, hoping to persuade lawmakers not to crush the lawsuit against AT&T that is largely based on his allegations that his former employer wiretapped the internet on behalf of the government.
The Senate Judiciary plans Thursday to mark-up a measure passed by the secretive Senate Intelligence Committee would let telecoms like AT&T and Verizon escape the bevy of lawsuits accusing them of massively violating Americans' privacy, so long as the attorney general writes a letter to the judge saying that the government told the companies that the president thought he had Constitutional authority to evade the nation's privacy laws.
In January 2006, after the Los Angeles Times killed an article on his allegations after editors met with senior government officials, Klein walked into the Electronic Frontier Foundation and handed them a set of AT&T documents he took with him when he retired.
Those documents detail how AT&T diverted portions of fiber optic internet cables, -included powerful snooping hardware and a fat fiber connection out of the room.
The EFF filed those documents under seal with the court as part of their ongoing class action suit against AT&T. Wired News independently acquired and published the documents in May 2006 -- see editor's note here.
Even prior to the Senate Intelligence committee's assent to the president's push for immunity for the telecoms, Klein believed that Congress was helping the administration cover up the spying, according to an interview with Wired News in May.
I've called and sent letters to senators and Congress members. They haven't called back. I don't think they want to pursue it. They want to talk about this behind closed doors. These days I am angry at Congress for helping them keep it secret.
They could hold hearings and subpoena people and give them immunity. Right now there are people who could come forward and say what they know, but they need immunity. That's the bottleneck. I don't see a resolution coming from this Congress. It's a conspiracy against the American people.
But on Wednesday, Klein had a full D.C. day -- meeting with senators and Congressional staffers and doing rounds of interviews with the press, who have largely ignored the soft-spoken retiree.
Klein's stated intent for the visit is to stop Congress from giving immunity to well-connected telecom firms that the administration and its platoon of consent manufacturers say are being treated unfairly.
He told Wired News in May that he wants more than just that, though:
I want this program ended. I will be satisfied when I can get a tour of the Folsom Street building and I can see the equipment has been ripped out. I want to see the physical stuff ripped out. I will not be satisfied with assurances from the government that this program is stopped or being overseen by a court.
They have embedded spying into the infrastructure of the internet. I'm not sure people are fully conscious of what is going on, and I want it exposed and stopped.
Read more from the New York Times and TPM Muckraker's Spencer Ackerman.
You can see Klein speak here in this video from Senator Christopher Dodd's campaign site.

Further Review

2007-11-06T16:13:00.001-08:00

Part 1: Business in a Global Environment

Chapter 1: Business: 2005 and Beyond

Chapter 2: Business Ethics and Social Responsibility

Chapter 3: Economic Challenges Facing Global Business

Chapter 4: Competing in Global Markets

Part 2: Starting and Growing Your Business

Chapter 5: Options for Organizing Small and Large Businesses

Chapter 6: Starting Your Own Business: The Entrepreneurship Alternative

Chapter 7: Electronic Commerce: The Internet and Online Business

Part 3: Management: Empowering People to Achieve Business Objectives

Chapter 8: Management, Leadership, and the Internal Organization

Chapter 9: Human Resource Management, Motivation, and Labor-Management Relations

Review of Class Discussions and Chapters Covered

2007-11-06T15:52:00.000-08:00

What is business?
Business consists of all profit seeking activities and enterprises that provide goods necessary to an economic system. Some businesses produce tangible goods and others produce services.

Non-for-Profit business-like organization to serve the public in some way. Revenues for nfp organizations come from donations, fund raisers, grants, etc.

Factors of Production

Human Resources- Everyone who works for the company

Entrepreneurship- the willingness to take risk

Capitalism- another name for private enterprise

Natural Resources- Agriculture, Land.....

One must first decide the demographic before attempting the production aspect of business.

Basic Rights in a Privatized System:

Fair Competition
Private Property

Double Damn- GM employee strike augmented by competition releasing new attractive product

AT&T Helps Military Families Stay Connected During the Holidays With Free Phone Calls and Support From the USO

2007-11-06T15:18:00.000-08:00

SAN ANTONIO, Nov. 6 /PRNewswire-USNewswire/ -- AT&T Inc. has announced the donation of 20,000 prepaid phone cards for distribution to military personnel stationed overseas as part of a program to keep U.S. Armed Forces members and their families connected during the holiday season. So far this year, AT&T has contributed 50,000 prepaid cards, valued at more than $450,000, that the USO is distributing to military personnel in November and December 2007.

Of the current 20,000 card donation, half will be distributed during USO entertainment tours at military bases slated for the weeks before Thanksgiving. The remaining half will be distributed in early December. The USO will make the phone cards available to troops who are serving in Iraq, Kuwait, Afghanistan, South Korea, Japan and Europe. Each donated phone card will provide 20 free minutes of talk time from Iraq to the U.S.

Since January 2006, AT&T has donated more than 450,000 prepaid phone cards -- valued at more than $4 million -- to help support U.S. military members and their families. In the past 20 years, AT&T has contributed tens of millions of dollars to the USO in support of Operation USO Care Package, USO Operation Phone Home(R) and USO entertainment tours. AT&T also has provided assistance to the USO through funding regional operations in Europe, Southwest Asia and the Pacific.

"The holiday season provides us with the opportunity to lend meaningful support to U.S. military families," said Carmen Nava, AT&T senior vice president-Distribution. "We know many military families will be separated during this special time of the year and are proud to do our part to help keep them connected."

"The USO is the way Americans support the nation's troops," said Edward A. Powell, USO president and CEO. "This kind of generosity by our Worldwide Strategic Partners, such as AT&T, and the American people makes our work possible."

Since 1941, the USO has provided morale, welfare and recreation-type programs and services to enhance the quality of life for military personnel and their families around the world. The USO currently operates more than 130 centers, including 10 mobile canteens, and offers free Internet and e-mail access, prepaid international phone cards, entertainment and lounge areas, libraries, travel assistance, educational programs and refreshments. USO entertainment tours bring volunteer celebrities to entertain and lift the morale of troops and to express the gratitude and support of the American people.

For more than 85 years, AT&T has remained dedicated to supporting active military personnel, their families and veterans through charitable contributions, sponsorships, the hiring of military veterans and maintaining policies that support reservists when called to duty. Since 2000, AT&T has donated nearly $8 million in free prepaid phone cards to military members and has provided nearly $6 million in grants that support military members and related nonprofit organizations. The company also has built 70 calling centers in Iraq, Kuwait and Afghanistan that help keep military members in touch with their families.

Note: This AT&T release and other news announcements are available as part of an RSS feed at http://www.att.com/rss.

About the USO

For more than 66 years, the USO (United Service Organizations) has been providing morale, welfare and recreational services to U.S. military personnel and their families. The USO is a nonprofit, charitable organization, relying on the generosity of the American people to support its programs and services. The USO is supported by Worldwide Strategic Partners AT&T Inc., BAE Systems North America, Clear Channel Communications, The Coca-Cola Company, DRS Technologies, Inc., S & K Sales Co., TriWest Healthcare Alliance and The Walt Disney Company. Other corporate donors, including the United Way and Combined Federal Campaign (CFC-11381), have joined thousands of individual donors to support the USO. For more information on the USO, please visit us at http://www.uso.org.

About AT&T

AT&T Inc. is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the United States and around the world. Among their offerings are the world's most advanced IP-based business communications services and the nation's leading wireless, high speed Internet access and voice services. In domestic markets, AT&T is known for the directory publishing and advertising sales leadership of its Yellow Pages and YELLOWPAGES.COM organizations, and the AT&T brand is licensed to innovators in such fields as communications equipment. As part of its three-screen integration strategy, AT&T is expanding its TV entertainment offerings. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com.

Oil Hits $97 on Bombs, Demand Forecast

2007-11-06T12:06:00.000-08:00

Oil futures jumped to a new record above $97 a barrel Tuesday after bombings in Afghanistan and an attack on a Yemeni oil pipeline compounded the supply concerns that have driven crude prices higher in recent weeks.
Those concerns were also fed by a government prediction on Tuesday that domestic oil inventories will fall further this year while consumption rises.
At the pump, meanwhile, gas prices continued to rise, following oil's 39 percent price rally since August. The national average price of a gallon of gas jumped 2 cents overnight to $3.024 a gallon, according to AAA and the Oil Price Information Service.
Separately, the federal Energy Information Administration reported that diesel fuel prices reached a national average of $3.303 a gallon, a new record.
Oil was already up before news of the blasts in northern Afghanistan that killed 64 people and the attack in Yemen. Severe weather forecasts for the North Sea, expectations that domestic crude supplies fell last week and the weak dollar all contributed to the latest move upward.
While Afghanistan doesn't produce much oil, traders watch for the possibility that any escalation in the conflict there between U.S. armed forces and Islamic militants could spill over into other countries, disrupting oil supplies out of the Middle East.
John Kilduff, vice president of risk management at MF Global UK Ltd., noted that the attack in Yemen "has disrupted a pipeline that carries 155,000 barrels a day of crude."
Meanwhile, investors believe crude supplies are declining in the U.S. Analysts surveyed by Dow Jones Newswires predict, on average, that crude oil inventories fell by 1.6 million barrels last week. The Energy Department's Energy Information Administration will issue its weekly inventory report on Wednesday. Oil futures' rise above $90 a barrel has been fueled in part by two weeks of unexpected declines in inventories.
On Tuesday, the EIA predicted oil consumption will rise in the fourth quarter and next year despite higher prices, and that inventories will fall.
"Strong demand, limited surplus capacity, falling inventories and geopolitical concerns continue to weigh on the market," the EIA said in its monthly Short-Term Energy Outlook.
The weak dollar, which fell to a new low against the euro Tuesday, is also lifting oil prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
Light, sweet crude for December delivery rose $2.61 to $96.59 a barrel on the New York Mercantile Exchange Tuesday after earlier rising as high as $97.10, a new trading record.
Other energy futures also rose Tuesday. December gasoline futures jumped 4.96 cents to $2.4307 a gallon on the Nymex, while December heating oil futures added 6.40 cents to $2.6079 a gallon.
Natural gas for December delivery fell 16.9 cents to $7.83 per 1,000 cubic feet on the Nymex on predictions for mild temperatures next week in the Midwest and Northeast, and expectations that inventories, already at record levels, will continue to rise.
In London, Brent crude rose $2.61 to $93.10 a barrel on the ICE Futures exchange. A number of North Sea oil platforms were being evacuated Tuesday in advance of expected severe weather.
On Wednesday, analysts also expect the EIA to report that gasoline inventories rose by 200,000 barrels during the week ended Nov. 2, while supplies of distillates, which include heating oil and diesel fuel, fell by 500,000 barrels.
The analysts expect that refinery use grew by 0.8 percentage point to 87 percent of capacity.
Oil inventories likely fell due to a suspension of output at Mexico's state oil company Petroleos Mexicanos, a major crude exporter to the United States, which temporarily shut its ports last week due to severe weather.
"The oil market is really supported by the tight inventories in the U.S. market and the general expectations for the inventory report this week are that the crude inventories will likely fall," said Victor Shum of Purvin & Gertz Inc. in Singapore.
Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Strike Stops Production on 3 More Shows

2007-11-06T12:02:00.001-08:00

Production of three sitcoms filmed before live audiences has been halted because of the Hollywood writers strike, networks said Tuesday.
"Back to You," starring Kelsey Grammer and Patricia Heaton, will not return from a planned hiatus on Wednesday, said Chris Alexander, a spokesman for 20th Century Fox Television.
In addition, the sitcoms "'Til Death," which airs on Fox, and "Rules of Engagement," on CBS, will also stop production immediately because of the strike, according to a Sony Pictures Television executive not authorized to be quoted who requested anonymity.
The shows are typically written the same week they are filmed, with jokes being sharpened by writers even on the day of production.
It was not immediately clear how many shows might already be finished.
The disclosures came as the strike by the Writers Guild of America entered its second day. Pickets returned to studios in Los Angeles and New York.
In Toluca Lake, near Warner Bros. studio, writers converged on a house that serves as a location shoot for "Desperate Housewives."
"We write the story-a, Eva Longoria," about 30 strikers chanted, referring to one star of the hit ABC show.
"It is a very serious business," said Larry Wilmore, a writer on "The Daily Show," explaining the protesters were marching "so we can get back to being funny."
Shooting continued inside the house despite the protests, said Chandler Hayes, a spokesman for ABC.
The protesters were joined by actress Julia Louis-Dreyfus.
"I'm really here because I'm a union member," said Louis-Dreyfus, a member of the Screen Actors Guild whose husband is a member of the writers guild.
"If we prevent them from working today, that's a small victory," she said.
In New York, strikers picketed outside Silver Cup Studios in Queens, the site of shooting for "30 Rock" and "Gossip Girls."
The strike began Monday after last-minute negotiations between the Writers Guild of America and the Alliance of Motion Picture and Television Producers failed to produce a deal on how much writers are paid when shows are offered on the Internet.
No new negotiations were scheduled.
The walkout immediately sent late-night comedy shows going into reruns.
It will not immediately have an impact on production of movies or most prime-time TV programs. Most studios have stockpiled dozens of movie scripts, and many TV shows have enough scripts or completed shows in hand to last until early next year.
Nick Counter, chief negotiator for the producers union, said he expected a long standoff.
"We're hunkered down for a long one," he said Monday. "From our standpoint, we made every good faith effort to negotiate a deal, and they went on strike. At some point, conversations will take place. But not now."
Writers said the next move was up to the studios.
"My hope is that it won't be too long," said John Bowman, chief negotiator for the writers.
Some producers were torn about trying to keep filming finished scripts.
Tim Kring, a producer and writer of the NBC hit "Heroes," said he had to revise the ending of the show's 11th episode on the chance that it might be the last one to air this season.
"Fortunately we were able to hustle back," Kring said from a picket line in an effort to shut down the show. "The audience won't be left in a lurch."
While scripted shows suffer from the strike, reality shows could flourish because they don't use union writers, despite an aggressive attempt by the writers guild to organize the staffers on the programs.
Viewers could also check out more entertainment on the Internet, ranging from user-generated fare on YouTube to professionally produced shows such as "Quarterlife."
Writers have not gone on strike since 1988, when the walkout lasted 22 weeks and cost the industry more than $500 million.

FBI raids WellCare Health Plans

2007-11-01T12:36:00.001-07:00

-- Federal authorities searched the headquarters of Florida's largest provider of managed healthcare for the poor Wednesday and trading of its stock was suspended, but nobody would say why the company is being targeted.
FBI agents along with various other federal law enforcement personnel -- including some from the attorney general's Medicaid Fraud Control Unit -- raided the offices of WellCare Health Plans. Authorities said the raid will not affect the 350,000 poor Floridians who receive Medicaid through the Tampa-based company.
''The ongoing investigation does not directly concern, nor should it have any impact upon, the delivery of any healthcare service to any person,'' the U.S. Attorney's Office said in a statement.
Trading in WellCare stock on the New York Stock Exchange was halted at 10:59 a.m., about 90 minutes after the market opened, after it had fallen $5.47 a share or 4.5 percent to $115.50.
The company acknowledged the search and said it is cooperating with authorities.
''Our No. 1 priority is making sure that our members have access to needed care and services,'' the company said in a statement. ``Our essential services are operational and will remain uninterrupted.''
A spokeswoman said WellCare would have no further comment.
Andrew Agwunobi, secretary of the Florida Agency for Health Care Administration, which administers the state's $16.6 billion Medicaid program, said he is ``deeply concerned.''
''Our highest priority is to ensure that there is no disruption of services to the citizens who are served by these companies,'' Agwunobi said. ``We have been in communication with WellCare officials [Wednesday] and they have indicated that there will be no effect on beneficiaries. We will continue to monitor this situation closely and respond appropriately if necessary.''
WellCare's website describes it as a leading provider of managed care services dedicated to government-sponsored healthcare programs focusing on Medicaid and Medicare plans, including health plans for families, children, the blind and disabled, and prescription drug plans. It has 2.3 million members nationwide.
WellCare was among seven companies that in June agreed to suspend marketing until measures could be put into place to protect people from aggressive and misleading tactics reportedly used by some of their sales representatives.

AT&T must sell off some assets

2007-11-01T12:32:00.001-07:00

No, it’s not another antitrust deal. But the Department of Justice is requiring AT&T to ax some of its properties in seven markets in order to gain approval of their Dobson Communications acquisition. The given reason is that as it stands, there wouldn’t be adequate competition in some of the areas. These include Kentucky, Missouri, Oklahoma, Pennsylvania, and Texas. There is no word from AT&T on this ruling, but we have to figure that they’ll comply. We’re sure they were aware of such an issue arising at the time of purchase.
In three of these markets, AT&T and Dobson are the primary competitors, and in two others, AT&T has a substantial minority interest in a rival to Dobson. In the final two markets, a licensee of Cellular One, Dobson’s retail brand, competes with ATT.
Those seem like perfectly legitimate reasons to us.
After AT&T satisfies the wishes of the Justice Department, they must next move to the FCC for approval. Reports abound that FCC Chairman Kevin Martin would approve the deal, though there are conditions tied to that, too:
In order to win FCC approval, AT&T will have to agree to cap the amount of federal subsidies used to offset the cost of deploying and maintaining cellular service in rural areas.
According to the not-for-profit group that administers the Universal Service Fund, AT&T received about $82 million from the fund between January and September this year while Dobson, which operates under the retail name Cellular One, got around $32 million in the same period.
Once again, makes sense to us. Also once again, we’re sure AT&T had figured on these issues arising. If they didn’t well, we’d have to question their executives

AT&T and Motorola Introduce MOTO Q global, exclusively in U.S

2007-11-01T12:30:00.001-07:00

On Thursday, both the companies announced that the MOTO Q 9h global will be available exclusively to AT&T customers in the U.S. beginning November 2. “AT&T and Motorola (News - Alert) are teaming up to provide AT&T customers with a world-class device, operating platform, applications and services and network experience that they can take with them around the globe,” Michael Woodward, vice present of Business Voice/Data Products at AT&T’s wireless unit, stated in a statement to the press.

The MOTO Q global will provide access to AT&T’s BroadbandConnect network in more than 200 major metropolitan areas across the U.S. It will also provide coverage outside 3G service areas through AT&T’s nationwide 3 EDGE network, available in more than 13,000 cities and towns along 40,000 miles of major highways.

In addition, Woodward informed that, outside the U.S., AT&T users can use the MOTO Q global in more than 135 countries to access e-mail and other data applications and to browse the Web, and users can make or receive phone calls in more than 190 countries.

Juergen Stark, corporate vice president of Productivity at Motorola Mobile Devices, informed that, MOTO Q global offers AT&T users a full ergonomic, integrated QWERTY keyboard; downloads at up to 3.6 Mbps through AT&T’s UMTS/HSDPA-based BroadbandConnect network; Windows Mobile 6; built-in GPS capabilities; and Documents to Go for document editing.

In addition, the device also features Opera browser; seven shortcut keys; a 2.0-megapixel camera with flash; and support for both a host of applications and services, which includes the My Q Paks, a suite of third-party application bundles. Stark pointed out that AT&T MOTO Q global users will be the first to have access to My Q Paks.

Stark also stated, “With AT&T, the MOTO Q global delivers unparalleled download speeds, on-board memory, messaging, processing power and voice quality, all packaged within a sleek design for the modern consumer.”

AT&T Makes It Easier, More Affordable for Small Businesses to Protect Critical Computer Files Automatically

2007-10-18T11:47:00.000-07:00

WEBWIRE – Wednesday, October 17, 2007
For $10 a Month, Service Offers Remote Data Backup and Storage Capabilities Proven by AT&T Large Business Customers
AT&T Inc. (NYSE:T) today announced that small businesses can now order the AT&T Remote VaultSM service with a credit card via a new e-commerce Web site, making it easier than ever to purchase the remote data backup and data storage service. The new credit-card ordering capabilities were developed for the country’s more than 5 million small businesses, including small offices and home offices (SOHOs), many of which understand the importance of backing up their critical information, but have yet to do so.
"While small businesses are increasingly aware of and interested in advanced storage solutions to protect their business information, they still have quite a way to go" said Raymond Boggs, vice president of small/medium business research at IDC. "Even those that know they should be taking appropriate steps can find the task too daunting. Given their increasing storage needs, though, and the availability of new affordable and automated solutions, we anticipate that more small businesses than ever will be backing up their critical data remotely in the coming years"
According to a May 2007 IDC report,* businesses with fewer than 100 employees indicated that systems designed to support business continuity and disaster preparedness — while providing advanced storage and data protection functions — must be simple to install and manage, with most functionality automated and moved to the back end.
The AT&T Remote Vault service enables small businesses, equipped with a broadband Internet connection, to remotely access, copy and store data from PCs or laptops to an AT&T Internet Data Center, where it is centrally managed and securely protected. The service is fully automated and secure, removing the guesswork and time commitment often associated with manually backing up multiple PCs.
AT&T Remote Vault is another example of how the company is bringing the products, services and tools that were previously available only to large, global enterprises down-market to small and medium sized businesses. The service requires no capital investment other than a broadband Internet connection, and it allows small businesses to add PCs as their business grows. Backups can be scheduled to automatically occur daily or as needed, with backup data easily restorable to customer PCs, through the Remote Vault application.
"Many home-based businesses and other small businesses understand the importance of backing up files and data; yet, with the hassle and time involved in manual methods, they don’t back up their data as often as they should" said John Regan, vice president of Small Business Marketing for AT&T. "AT&T Remote Vault enables small businesses to easily and affordably take advantage of data backup and recovery offerings"
Today’s announcement comes on the heels of the 2007 AT&T Business Continuity Study, which indicated that business continuity and disaster recovery planning is less of a priority for small businesses.
With Remote Vault, these companies now have an easy, affordable solution to assist in their disaster recovery planning. Specific survey results indicated that:
* More than one-third (36 percent) of smaller businesses say that business continuity planning is not a priority/not important compared with only one-fourth (27 percent) of large companies.
* Smaller businesses are also less likely to have a business continuity plan. One-third (34 percent) of smaller businesses do not have a business continuity plan compared with only one-fifth (21 percent) of large companies.
* One-fifth (22 percent) of smaller businesses say cybersecurity is not part of their overall business continuity plan (compared with 14 percent of large companies).
It’s surprising how few small businesses are really worried about data loss" Boggs said, "especially when a devastating loss can come from something as common as a power outage or computer virus" Boggs also noted that because smaller firms don’t typically have multiple offices and redundant systems, their entire business may be on hold when they lose information, costing time and lost revenue.
For PCs and laptops, AT&T Remote Vault is available for a standard monthly fee of $10 for five (5) gigabytes of storage space and $2 per gigabyte thereafter. The service is available to all small businesses equipped with high speed Internet. Small businesses interested in more information or ordering the service via credit card can visit www.att.com/RemoteVaultPC or call toll-free 1-866-ATT-2222.

AT&T to ease termination fees

2007-10-18T11:41:00.000-07:00

WASHINGTON (MarketWatch) -- AT&T Inc. said Tuesday it will reduce termination fees for wireless customers who cancel plans early and allow them to change contracts without restrictions.
AT&T becomes the second major carrier to ease penalties on consumers seeking to exit or alter their calling plans. Verizon Wireless, the joint venture owned by Verizon Communications Inc. (VZ:
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VOD 36.11, +0.14, +0.4%) , has already taken those steps.
Customers and U.S. lawmakers have criticized phone companies for what some have called unfriendly consumer policies, including flat early-termination fees of up to $200. Companies have been asked to give subscribers more choice and flexibility.
The moves by AT&T and Verizon are likely to put pressure on rivals such as Sprint Nextel Corp. and T-Mobile USA Inc. to adopt the same approach. In terms of subscribers, AT&T (T:
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Last: 17.68-0.04-0.23%2:21pm 10/18/2007Delayed quote data
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S 17.68, -0.04, -0.2%) , the No. 3 wireless operator, is the target most likely in the crosshairs. The company has lost more than 1 million of its best customers over the past year, owing to poor service and other problems. Most of them have switched to AT&T or Verizon.
Last week, Sprint said it expected to lose an additional 337,000 "postpaid" subscribers in the third quarter. The warning was accompanied by the resignation of Chief Executive Gary Forsee. See related story.
Lower cost of canceling
Wireless customers in the U.S. are generally required to sign up for one- or two-year plans, with early-termination fees typically set at $175 to $200. When they want to alter monthly plans, customers are usually required to extend their current contract or enter a new one.
Under AT&T's new approach, the early-termination fee would be progressively reduced over the life of the plan. It would apply "early in 2008" to new and current customers who sign one- or two-year contracts.
Spokesman Mark Siegel said AT&T has not yet determined how much the fee would decline. The company will inform customers shortly before the change takes effect, he said.
Late last year, Verizon became the first company in the industry to reduce its early-termination fee. Customers whose contracts were signed after Nov. 16, 2006, get $5 off their early-termination fee of $175 for each month of service they have completed.
For example, customers who quit a two-year plan after one year would pay a termination fee of $115. If they quit after 18 months, the fee would be $85.
AT&T, meanwhile, will also give consumers more flexibility to change their plans starting in November. Subscribers would no longer have to extend or renew contracts when they switch to one of AT&T's "standard wireless calling plans," the company said.
"Customers have told us they do not like one-size-fits-all approaches," said Paul Roth, AT&T's president of wireless sales and marketing. "They are right, and that is why we have made these important changes."
Verizon enacted the same policy earlier this month.
The shift in strategy by AT&T and Verizon could put pressure on rival operators to follow suit. Sprint and T-Mobile charge flat early-termination fees of up to $200.
Asked if Sprint would reduce its early-termination fee, spokeswoman Roni Singleton said: "We're always evaluating our programs."
She said the carrier already lets subscribers change their monthly plans in the first six months without being required to extend their contract.
T-Mobile officials could not immediately be reached for comment.
Tied to incentives
Most wireless customers in the U.S. accept annual contracts because they have little choice. Wireless operators charge up to $500 for new phones, especially fancier handsets, unless subscribers agree to a one- or two-year plan.
Subscribers who select two-year plans reap the biggest savings. At AT&T, for example, the new MotoRazr V9 from Motorola Inc. (MOT:
Motorola, Inc
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Last: 19.26-0.03-0.16%2:21pm 10/18/2007Delayed quote data
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MOT 19.26, -0.03, -0.2%) , listed at $499, is available for $299 to customers who sign a two-year commitment. And an LG flip phone listed at $209 can be obtained for free with a two-year contract.
Phone plans tied to annual contracts also tend to cost less. Although all wireless companies offer prepaid service or plans that do not require contracts, per-minute or monthly prices are typically higher.
What's more, those customers are not given sharp discounts on the latest wireless phones and usually have to choose from older models.
By making it cheaper for subscribers to cancel service, AT&T might win public praise, but it also risks losing customers to competitors. Yet the shift in strategy reflects AT&T's long-term view that its new policies will win over consumers.
"We think it's going to be a net positive," Siegel said.

AT&T Website

2007-10-09T12:06:00.000-07:00

http://www.att.com/gen/landing-pages?pid=3308

AT&T to Hit the Airwaves

2007-10-09T12:04:00.000-07:00

AT&T Takes SpectrumEvelyn M. Rusli, 10.09.07, 11:40 AM ET
AT&T

The wireless wars are heating up.
On Tuesday, AT&T (nyse: T - news - people ) said it will purchase spectrum licenses from Aloha Partners for $2.5 billion. By buying the 700-megahertz spectrum licenses, the telecommunications giant will significantly expand its footprint in top cities.
Under the deal, AT&T will get 12 MHz of spectrum in the 700 MHz frequency, which covers 196 million people in 281 markets. This spectrum contains 72 of the top 100 metropolitan areas, including ’s top 10 markets.
"Customer demand for mobile services, including voice, data and video, is continually increasing," AT&T senior executive Forrest Miller said. "Aloha's spectrum will enable AT&T to efficiently meet this growing demand.”
Investors warmed up to the deal, as shares of AT&T edged up 0.2%, or 8 cents, to $42.01 in morning trading.
The deal will give AT&T a leg up in the race to claim a large stake in the highly coveted 700 MHz frequency. The 700MHz frequency is prized for its signal strength, making it an attractive channel for data and video transfers. In January, the Federal Communications Commission will auction 60MHz of spectrum in the 700 MHz. Many expect the bidders to include traditional mobile services companies, such as AT&T and Sprint Nextel (nyse: S - news - people ), and a smattering of unexpected tech names, like Google (nasdaq: GOOG - news - people ).
This may be the first of many big-ticket purchases for AT&T, as it builds its empire.
In September, Oppenheimer analyst Thomas Eagan predicted that AT&T would takeover EchoStar, a satellite television company. Eagan said the acquisition was inevitable because AT&T has struggled to jump-start its own internet television service. "Given the lack of success of AT&T's U-Verse rollout, it seems to us a matter of when, NOT if, AT&T acquires EchoStar," said Eagan. He added that the telecommunications giant would be willing to shell out a hefty premium for the company, saying that AT&T will pay shareholders more than $56 a share.
Indeed, AT&T has the cash power to back these acquisitions. In April, the company said profits doubled from a year ago, amid strong wireless sales and cost synergies from the 2006 takeover of BellSouth. In addition, AT&T is riding the iPhone craze, as the only service provider for Apple (nasdaq: AAPL - news - people )’s new mobile device. (See: " iLove iPhone?" )

AT&T Marketing Plan

2007-09-25T11:43:00.000-07:00

AT&T marketing plan to project innovative, hip image
By Jon Van Tribune staff reporter
September 11, 2007
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AT&T Inc., striving to remake its image from one of stodgy dependability to a more daring, innovative and hip concern, is launching a marketing initiative Tuesday that borrows aspects of virtual reality and social networking.While the phone giant's marketing push will include traditional television commercials, billboards and print ads, it will also include an online AT&T Souvenir Store that will launch next month, inviting customers to make up their own worlds.Riding a crest of popularity of the iPhone, which operates exclusively on AT&T's wireless network, Apple announced Monday that it has now sold 1 million iPhones.
"One million iPhones in 74 days," said Steve Jobs, Apple chief. "It took almost two years to achieve that milestone with iPod."The iPhone has helped AT&T appear more youthful, said Jeff Kagan, an Atlanta-based telecom industry analyst, but acquiring a new image for the consumer market while continuing to appeal to corporate and government customers may be a challenge."AT&T is a wireless leader but it's still got this big wired business, and that's not going away," said Kagan. "This is about putting on a new youthful coat for the consumer market. It's a follow-on to what they did last year with their logo when they went from using AT&T in capital letters to using at&t in lower case."This time, AT&T will shift from using blue as its predominant color to using orange, which had been the theme for Cingular, the wireless service that AT&T has rebranded as AT&T Mobility. ."It's the corporate version of getting a new hairstyle," said Kagan.The Web-centric part of the marketing effort will encourage customers to list the cities they most often frequent, say Chicago, Austin and San Francisco, that would be turned into a mythical place, perhaps called Chitinfrisco. Customers will be invited to describe their personalities, such as whether they are "lovers" or "fighters," said Troy Ruhanen, executive vice president and managing director of BBDO North America."We use the jumble of city names to make a word, add a personality profile and then offer T-shirts or coffee mugs with slogans reflecting the places and personalties of the individual," said Ruhanen. "It's not meant to be a home page. It's more an expression of their world."

This Blog will now follow AT&T

2007-09-25T11:41:00.000-07:00

Novastar Financial waives healthy dividend

2007-09-19T11:58:00.000-07:00

NovaStar Financial’s stock plummets after waiving dividend
By DAN MARGOLIES
The Kansas City Star
In the latest sign of mounting woes that threaten its survival, NovaStar Financial lost about a fifth of its value Monday after deciding to stop paying dividends to investors.
The Kansas City-based subprime mortgage lender said its inability to pay the dividend would cost the company its status as a real estate investment trust. The action also could lead to its delisting by the New York Stock Exchange.
The struggling company said that it expected the change in its corporate structure to have “a significant adverse impact” on its third-quarter results, although it said it was in the process of determining its tax liability.
NovaStar’s stock took a beating in after-hours trading following the announcement. Shares tumbled nearly 20 percent in the evening to $6.70, down $1.54.
NovaStar has been scrambling to surmount the turmoil that has engulfed the subprime mortgage market in recent months. Among other actions, the company has slashed its work force from more than 2,000 last year to about 600 employees.
Crimped access to the credit and equity markets has roiled the once fast-growing company, which focused on providing mortgages to borrowers with shaky credit records. Monday’s announcement came two weeks after NovaStar canceled a $101 million stock offering to raise capital.
The company has gotten out of the retail and wholesale lending business and is now confining itself to managing its investment portfolio and servicing existing loans.
“We continue to take steps to preserve liquidity, mitigate risks and manage our portfolio in the midst of a difficult environment for the mortgage industry and capital markets,” Scott Hartman, NovaStar’s chairman and chief executive, said in a prepared statement Monday.
“Clearly, we did not anticipate the drop in market value or the level of demands on liquidity caused by the market turmoil this summer. Based on these events, we now believe canceling the previously planned dividend is the only reasonable and prudent course of action.”
Company officials could not be reached for further comment.
NovaStar had expected to drop its REIT status after reporting earlier this year that it expected little or no taxable income through 2011. The company, however, had planned to declare a dividend in the third quarter of 2007 to satisfy tax code requirements governing the distribution of its 2006 taxable income.
REITs are companies that specialize in owning and managing real estate for the benefit of shareholders. They pay little or no federal taxes on their profits provided they distribute most of those profits to shareholders in the form of dividends.
But NovaStar’s plan to distribute about $157 million in dividends to shareholders, by way of convertible preferred stock, fell by the wayside amid questions raised by its auditor, Deloitte & Touche, about its viability as a going concern. The company’s lush dividends — $5.60 per share last year — have been one of its chief attractions to investors.
One analyst, Scott Valentin of the investment firm Friedman Billings Ramsey Group, said in a report two weeks ago that the odds of NovaStar becoming insolvent had “increased significantly.” Valentin also said the eventual liquidation of the company was “highly probable.”
Like scores of other subprime lenders, NovaStar has experienced increased delinquencies and defaults among its borrowers, who do not qualify for conventional mortgage loans.
In the past, NovaStar has sold most of its loans to investors, but investors have stopped buying them because of the loan problems. Likewise, lenders to subprime companies have cut off much of their funding, forcing scores of subprime lenders to shut down, declare bankruptcy or look for investment partners.
NovaStar said the termination of its REIT status will be retroactive to Jan. 1, 2006. It said it expected the resulting tax liabilities to be offset by its tax losses this year.

2007-09-14T11:44:00.000-07:00

Lenders ease requirements on NovaStarWednesday September 12, 6:41 pm ET
Wachovia Bank National Association and its affiliates loosened certain lending requirements for NovaStar Financial Inc.
In a filing after the market closed on Wednesday, Kansas City-based NovaStar (NYSE: NFI - News) said that Wachovia, NovaStar's primary lender, and its affiliates on Sept. 7 eliminated the requirement for a certain ratio of NovaStar's adjusted tangible net worth to equity and cut the amount of net worth NovaStar must maintain by 71 percent, to $150 million from $517 million.Further amendments to lending agreements enable Wachovia to name a back-up servicer to service some or all of the securitization deals and loans NovaStar currently services, the SEC filing said.
NovaStar has suffered damaging blows the past few months as the subprime-loan market has virtually collapsed. Subprime loans are those made to customers with weaker credit and typically carry higher interest rates.
Published September 12, 2007 by the Kansas City Business Journal

2007-09-14T11:41:00.000-07:00

NovaStar Financial shares rise as lenders grant some relief
By RICK BABSON
The Kansas City Star
NovaStar Financial Inc. late Wednesday said Wachovia Bank and its affiliates have eased some lending requirements for the troubled subprime lender.
In a filing with the Securities and Exchange Commission after markets closed, Kansas City-based NovaStar said Wachovia and affiliates cut the net worth the company must maintain by 71 percent, from $517 million to $150 million.
In midday trading, NovaStar shares were up 66 cents, or 8.99 percent, at $8 on the New York Stock Exchange. Shares closed at $8.18, up 84 cents, or 11.44 percent.
In recent weeks, troubles in the subprime sector and a national credit crisis have forced NovaStar to close both is retail and wholesale lending operations and trim down to 600 jobs from the 2,000 employees it had last year.
The company also had to cancel a stock offering that was to raise $100 million in badly needed cash after its auditor raised questions about its ability to survive.
It will try to live off its mortgage loan portfolio until the credit crisis runs its course.

2007-09-09T01:13:00.000-07:00

Novastar Financial, Inc. originates and services "nonconforming" residential loans to borrowers who generally do not qualify for conventional mortgages.
NovaStar retains interests in the nonconforming loans it originates and purchases through its mortgage securities investment portfolio and is taxed as a real estate investment trust.
Its four operating units are mortgage portfolio management, mortgage lending, loan servicing and branch operations.

[edit] Stock Price Volatility
Its stock was selling for $70 until the appearance of a Wall Street Journal story in 2004, which implied that the company's basic business model (making "high-risk loans to people with poor credit") would prove unsustainable. After that story, the price fell to $30 almost immediately. That figure served as a floor over the next couple of years. It would move upward for a time, only to return to $30. The company had some enthusiastic fans, who made the case that the stock price declines weren't so important as the fact that the company kept paying solid dividends.
During this period, too, the stock of NovaStar became a favorite of short sellers, and has become one of the foci of the controversies over short selling in general -- whether public policy ought to make it more difficult or easier, whether certain reporters and analysts are doing the bidding of the shorts, and so forth.
Liz Moyer of Forbes did a story on the retailization of securities lending in December 2006. NovaStar was her leading example of a stock that gets lent out by the new breed of retail-level lenders. She wrote that she had talked to (unnamed) investors who said they had received an 8% return on lending Novastar stock. That figure indicated an extraordinary amount of demand for shares to short sell.
On February 20, 2007, the company announced its fourth quarter 2006 figures: a loss that quarter of $14.4 million, or 39 cents per share. Analysts polled by Thomson Financial said they had expected a profit of 73 cents a share. This signaled the end of the dividend stream that had so re-assured investors in the past, as the company also announced that it did not expect any profits for the period 2007-2011. On this news the stock price halved overnight from $18 to $9. On March 12, when rumors swilrled that competitor New Century was nearing bankruptcy[1], NovaStar's stock price halved again to $4.

[edit] Legal Action
On March 20, 2007, the law office of Howard G Smith initiated a class action suit on behalf of investors against certain executive officers of NovaStar for inflating the stock price by deceptively reporting the company's financials. On April 2, 2007, the law office of Keller Rohrback initiated a class action suit on behalf of NovaStar 401(k) plan members on similar grounds. A third class action concerning NovaStar's charging of yield spread premiums, fees paid by the lender to the broker which has come under notable criticism, is set to go to trial in May 2007.[2]
In 2006, forty shareholders in NovaStar Financial, Inc. sued ten Wall Street prime brokers, claiming a scheme to manipulate rhw companies' stock by allowing naked short selling.[3]
Retrieved from "http://en.wikipedia.org/wiki/NovaStar_Financial%2C_Inc."
Categories: Companies listed on the New York Stock Exchange Real estate investment trust

Novastar

2007-09-05T14:06:00.000-07:00

NovaStar Financial to cut 275 jobs, cancel stock offering
By DAN MARGOLIES and MARK DAVIS
The Kansas City Star
Bad news continues to batter NovaStar Financial Inc., the Kansas City-based subprime mortgage lender caught in the undertow of a sinking industry.
The company on Tuesday said it was slashing an additional 275 jobs and canceling a stock offering aimed at raising $101 million to enable it to survive ongoing market turmoil.
NovaStar also reported that its auditor, Deloitte & Touche, had raised questions about its ability to survive.
Wall Street hammered NovaStar’s stock, with shares falling as much as 18 percent before closing at $7.16, down nearly 16 percent.
An analyst at investment firm Friedman Billings Ramsey Group said Tuesday that the odds of NovaStar becoming insolvent had “increased significantly.” The analyst, Scott Valentin, also said the eventual liquidation of the company was “highly probable.”
NovaStar, through its spokesman, declined to comment on the speculation swirling around the report.
NovaStar’s president and chief operating officer, Lance Anderson, said in a statement that the company’s goal was “to preserve and maximize” the value of its mortgage portfolio “through this difficult period for the industry” and that it would continue to “consider all necessary or appropriate changes or strategies.”
The layoffs and canceled stock offering were among several steps NovaStar said it was taking or considering as it sought to remain afloat amid the wreckage of the subprime industry.
The company plans to close 12 retail loan offices, laying off 275 employees, which will leave it with about 600 employees overall, including 440 at its headquarters at 8140 Ward Parkway. Last year the company had more than 2,000 employees nationwide.
NovaStar said it would focus for now on managing its portfolio of $15.45 billion in securitized loans, or loans that have been bundled into financial instruments.
Meanwhile, the company said it planned to evaluate “strategic alternatives for its loan servicing business,” which includes the collection of payments from more than 100,000 borrowers. Those alternatives include partnering with other companies, though NovaStar said it “cannot predict the outcome of that process at this point.”
The moves essentially mean that NovaStar is getting out of the lending business, at least for now, and focusing instead on managing its portfolio and servicing existing loans.
NovaStar said it might resume its wholesale business — loans originated through brokers and other third parties — if market conditions improved. The company announced last month that it was suspending new wholesale loans.
“We are pulling back to focus on NovaStar’s core strengths and preserve liquidity,” NovaStar’s chairman and chief executive, Scott Hartman, said in the company’s news release. “In better times for the industry, operating a sizable mortgage banking business to feed loans into the portfolio made strategic sense.
“But the secondary market has deteriorated substantially, so we are modifying our business model and further reducing costs for this difficult environment.”
The subprime mortgage market, which caters to borrowers with risky credit, has been buffeted in recent months by falling housing prices and soaring loan delinquencies. Its woes have spread to the larger credit markets and led to wild gyrations in U.S. and overseas financial markets.
Dozens of mortgage companies have curtailed or stopped lending or found buyers this year. Others have shut their doors or declared bankruptcy.
Next page >
To reach Dan Margolies, call (816) 234-4481 or send e-mail to dmargolies@kcstar.com. To reach Mark Davis, call (816) 234-4372 or send e-mail to mdavis@kcstar.com.
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This is not a NovaStar problem. This is a case of a bankrupt...
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