Reuters - Niche social sites seek growth under Facebook's shadow

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Niche social sites seek growth under Facebook's shadow

Tuesday, Jul 28, 2009 7:3PM UTC

By S. John Tilak

BANGALORE (Reuters) - What do you do when you're a small online social network trying to compete against a behemoth like Facebook?

The answer may be to try to carve out a separate path by becoming a niche website for a specific audience base that advertisers, hopefully, want to target.

While this is no easy challenge -- given Facebook's intention to become everything to everyone -- some small social media sites appear to be finding their footing and growing at rapid rates, albeit from a very low base.

Ning.com, which allows users to build their own social networks, opinion aggregator Sodahead and fansite Fanpop have shown triple-digit growth and notched up a few million users very quickly.

"There will always be a place for niche sites that have a focus, whether the focus is gaming, or a regional focus, or a functional focus like Twitter, or a vertical or demographic focus," Gartner analyst Ray Valdes said, though he added that does not see them becoming as big as Facebook.

Facebook's popularity with professionals and older users might be putting off some younger users, according to Chuck Schilling, a director at Nielsen Online.

"The original people who were on Facebook -- those of college age -- are becoming a bit disenchanted and will soon find their own outlets, now that their parents are coming to Facebook in droves," Schilling said.

"People are branching out from the popular sites. They are exploring," he said. "There's a lot of room in the game."

Advertisers are spotting an opportunity with smaller sites.

"The promise of niche social networks and social networking applications is a more targeted audience around a specific interest that will be extremely attractive to advertisers seeking relevant content and conversations against which to place their ads," IDC analyst Caroline Dangson said.

BIG GAP

Clearly, the gap between the biggest social networks and the rest is huge.

Facebook had about 77 million U.S. users in June. With the exception of Facebook, News Corp's MySpace and privately held Twitter, only a couple of social media sites had more than 10 million U.S. users, comScore data shows.

But there are many rapidly growing sites with 2 million to 10 million users, including Ning, Sodahead, Fanpop and Funadvice. And steadily growing in double digits are older sites like Hi5, Digg and LinkedIn.

"The fact that this is such a growing space overall does enable other players in the space to ride the coattails of some of these bigger sites," comScore analyst Andrew Lipsman said.

Funadvice is a site where users give answers to all sorts of queries; Sodahead lets people to participate in instant polls; Fanpop gathers fans of movies, television and music under one roof.

Then there is Imeen, which focuses on music, and Eons, which targets the baby boomer generation. United Online's Classmates.com helps users track acquaintances from school and college. Along ethnic lines, BlackPlanet is for African Americans and MiGente eyes Latinos.

Behind some of these smaller sites are big names: Time Warner's AOL owns Bebo and Google owns Orkut.

Being second rung to Facebook is no fun, especially as developers of applications that attract users to these sites, such as games, tend to flock the biggest players.

Some of the second-tier social media sites have formed a consortium to address the problem. Google-led OpenSocial's members include Yahoo, Hi5, MySpace, Friendster and LinkedIn.

Advertisers go where users are, but it is no easy task to amass an audience. So some Internet startups have chosen to become an application provider rather than try build a site.

Application maker Slide had an audience of 32 million in the U.S. in June; Rock You had 26 million, said comScore's Lipsman. Zynga provides social gaming applications. The three have a strong presence on Facebook.

"In order to build a destination site, there are more challenges to gain that audience," Lipsman said. "So it's an increasingly viable business model to build an application that can reside or build off the infrastructure of other sites."

(Editing by Tiffany Wu and Jarshad Kakkrakandy)

Reuters - Media moguls rethink Web advertising in downturn

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Media moguls rethink Web advertising in downturn

Monday, Jul 27, 2009 1:10PM UTC

By Gina Keating and Alex Dobuzinskis

PASADENA, Calif (Reuters) - The recession-fueled advertising downturn underlines the urgency of using the Web to glean data and target consumers directly, rather than blasting them with a barrage of TV-style ads, media executives say.

At the Fortune Brainstorm: TECH conference in Pasadena last week, Walt Disney Co Chief Executive Robert Iger opened a discussion about new ways to market to consumers, when he described himself as, "pretty bullish about what technology is going to allow in terms of behavioral tracking."

Executives from AOL, a division of Time Warner Inc, News Corp and IAC/InterActiveCorp echoed similar hopes about the potential to reach consumers online.

As advertising dollars grow ever more scarce, companies have been forced to rethink how they reach consumers and have moved away from the traditional 30-second spot to the kinds of targeted, Internet-driven marketing campaigns that have been talked about for years.

Internet advertising in the United States -- a $23.4 billion market in 2008 -- was down 5 percent in the first quarter of this year and Iger and other executives say the sector may not return to the historic growth trajectory seen before the recession.

Jonathan Miller, head of News Corp's Digital Media Group, believes advertising is undergoing, "fundamental changes ... and you have to tease them out of the recession effects.

"Marketing is on an arc to become more efficient. My dollar should go further. And that says the advertising pool may not grow at the rate that it's traditionally grown at, even out of this recession."

HITTING THE TARGET

Targeting consumers via demographics, profiling, and their social networks, "you learn a lot about people and you can identify them," Miller added.

The thinking among these media executives is that advances in technology is enabling them to build more detailed profiles of consumers -- which can then either be sold as a commodity or employed in their own marketing campaigns.

AOL Chief Executive Tim Armstrong, former sales chief at Google Inc, also sees new marketing opportunities from consumer referrals and tracking.

"Where people actually go, what they do, how they do it," he said. "It's not just about data, it's about the insight. If you're Procter & Gamble, or Kellogg's, or Coke or whatever, forget all the data. What is the insight you get out of it? How does that actually change your perception?"

But Ed Moran, director of product innovation for Deloitte, said tracking tastes and developing profiles is fine, as long as advertisers do not make the old media mistake of finding their optimum consumers, only to show them a commercial.

Moran said next-generation advertising will be driven by the tastes and habits of 14 to 24 year-old "millennials" whose lives center on social networks and Internet-enabled handsets.

"A more effective way of reaching these young folks ... is to use their social networks as influencers, rather than bombarding them with ads," Moran said.

To that end, Barry Diller, chief executive of Web giant IAC/InterActiveCorp, said Internet advertising must evolve from displays and become integrated into the content of websites.

Even actor and media producer Ashton Kutcher chimed in at the conference, saying the billboard-style display ad is already outdated.

"People who have grown up on the Internet have trained themselves not to see it," he added.

(Reporting by Gina Keating and Alex Dobuzinskis; editing by Edwin Chan and Andre Grenon))

Reuters - Skype singled out as threat to Russia's security

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Skype singled out as threat to Russia's security

Friday, Jul 24, 2009 3:49PM UTC

By Simon Shuster and Anastasia Teterevleva

MOSCOW (Reuters) - Russia's most powerful business lobby moved to clamp down on Skype and its peers this week, telling lawmakers that the Internet phone services are a threat to Russian businesses and to national security.

In partnership with Prime Minister Vladimir Putin's political party, the lobby created a working group to draft legal safeguards against what they said were the risks of Skype and other Voice over Internet Protocol (VoIP) telephone services.

VoIP software has used the Internet to let hundreds of millions of people talk long-distance for free, or at far cheaper rates than traditional service providers can offer.

At a meeting of the lobby this week, telecom executives portrayed the most popular VoIP programs like Skype and Icq as encroaching foreign entities that the government must control.

"Without government restrictions, IP telephony causes certain concerns about security," the lobby's press release said. "Most of the service operators working in Russia, such as Skype and Icq, are foreign. It is therefore necessary to protect the native companies in this sector and so forth."

Skype was not immediately available for comment.

In a presentation posted on the lobby's Web site, Vice President of TTK, a telecoms unit of state-owned Russian Railways, Vitaly Kotov, called on regulators to stop VoIP services from causing "a likely and uncontrolled fall in profits for the core telecom operators."

Valery Ermakov, deputy head of Russia's No.3 mobile phone firm MegaFon, drove the point home with a picture of two hands in handcuffs, the caption running, "protect investments and fight VoIP services."

Delegates at the meeting also warned that it has been impossible for police to spy on VoIP conversations, Vedomosti business daily reported on Friday.

The lobby, called the Russian Union of Industrialists and Entrepreneurs, forecast that 40 percent of calls could be made through VoIP services by 2012.

As an alternative to Skype and its peers, the telecom executives proposed creating VoIP services inside their own firms, which would then make them safely available to the Russian public.

"MegaFon is interested in this market. We're interested in providing analogous services. We don't support limiting competition, but we want the market to be civilized," Ermakov said.

TTK's press service said on Friday that it will take until September for the relevant legal amendments to be drafted by the special committee, whose members include top telecoms executives and lawmakers from Putin's United Russia party.

(Editing by Rupert Winchester)

CNN - Does your doctor judge you based on your color?

Sent from bombastic4000@yahoo.com's mobile device from http://www.cnn.com.

Does your doctor judge you based on your color?

John Reid, a retired businessman, came home from a Caribbean cruise a few years ago with an infected toe as a souvenir. As a diabetic, he knew it was serious, so he went to the emergency room near his home in New York City. There, he says, the first doctor he saw ordered an immediate amputation, scheduling him for surgery right then and there.

Horrified, he argued with the doctor, insisting there had to be a way to avoid lopping off his toe. "You'd better bring the head doctor in here," he said.

Reid says the more senior doctor prescribed a long-term regimen of intravenous antibiotics and physical therapy -- a treatment much more expensive and time-consuming than an amputation -- and saved his toe.

Reid, who is African-American, firmly believes that if he'd been a white man, the junior doctor wouldn't have been so quick to order the cheaper and more drastic solution over his objections.

"I think it was very disrespectful. As a matter of fact, I think she was looking down on me," he said. "She just decided that, this guy was a minority [and] we're going to do whatever we feel like doing without consulting you."

Reid says he thinks the young doctor assumed he wasn't smart enough to think through a medical decision. "She just felt like minorities are all the same -- they don't know anything, they're not intelligent, they're not educated," says Reid, a retired real estate agent who once ran his own business with nearly two dozen employees. "If she had known my background, I don't think she would have treated me that way."

CNN contacted the hospital but Montefiore Medical Center refused to discuss his case.

Studies show blacks and whites are treated differently

While it's extremely difficult to tell in any given situation how much race -- consciously or subconsciously -- plays a role in a doctor's decision making, multiple studies over several decades have found doctors make different decisions for black patients and white patients even when they have the same medical problems and the same insurance.

"It's absolutely proven through studies that a black man and a white man going to the hospital with the same complaint will be treated differently," Dr. Neil Calman, a family physician and president of the Institute for Family Health in New York, said. Calman is also Reid's regular physician.

For example, a 2005 study found African-American cardiac patients were less likely than whites to receive a lifesaving procedure called revascularization, where doctors restore the flow of oxygen to the heart. The study authors at RTI International, a research institute, noted that all of the patients had Medicare, which covers the cost of revascularization.

In a study conducted in 2007, Harvard researchers showed doctors a vignette about a 50-year-old man with chest pain who arrived at the emergency room, where an EKG showed he'd had a heart attack. Sometimes the researchers paired the medical history with a photo of black man and other times with a photo of a white man.

The doctors were significantly more likely to recommend lifesaving drugs when they thought the patient was white than when they thought the patient was black.

Is it racism or something else?

"Racism in health care is a common experience of people of color," Calman recently wrote on his blog.

But he said disparities in medical care are about much more than race. "[Race] is one very important factor in why people get bad medical care," he wrote. "So is poor education, poverty and lack of insurance."

Dr. Cornelius Flowers, a cardiologist at the Emory University School of Medicine, in Atlanta, Georgia, agrees there are several reasons for racial disparities in medicine.

"It's about respect. If a patient is of a low socioeconomic status, a doctor might think, why do I need to go out of my way for this guy? I'll just do the minimum I have to do and send him on his way," Flowers says.

He adds that sometimes African-American patients don't insist on quality care.

"Back in the 1950s and 60s, hospitals in places like Atlanta had a black side and a white side, and the care for blacks was second rate," he says. "People who remember those days still consider themselves second-class citizens, and a lot of times they allow people to treat them that way."

Flowers said times are changing; younger minority patients are more likely to insist on good care, he says.

"Younger people demand better. Younger people demand more," he says.

Studies also show that doctors can be biased against patients because of their body size.

A study out this week from researchers at the New York University School of Medicine found more than 40 percent of the doctors surveyed had a negative reaction to obese people.

"The lesson learned is, I tell people all the time to seek a doctor who will care about you," Flowers says. "If you feel like you have a doctor who isn't genuinely concerned about you, just get another doctor next time."

Reuters - Black scholar agrees to beer with Obama, policeman

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Black scholar agrees to beer with Obama, policeman

Saturday, Jul 25, 2009 6:24PM UTC

WASHINGTON (Reuters) - A prominent black Harvard University scholar has accepted an invitation to have a beer with President Barack Obama and the white police officer who arrested him in a racially charged case.

Professor Henry Louis Gates said Saturday he was willing to have a peace-making beer with Obama and Cambridge, Massachusetts, police Sgt. James Crowley.

Gates was arrested last week at his home after a neighbor called police to say that a man was breaking into the house. Obama said Cambridge police had "acted stupidly," prompting an outcry from police groups and a resulting media blitz.

Obama later telephoned both men and, on Crowley's suggestion, invited the two to the White House for a beer.

"I am pleased that he, too, is eager to use my experience as a teaching moment, and if meeting Sgt. Crowley for a beer with the president will further that end, then I would be happy to oblige," Gates said in a statement on TheRoot.com, an Internet newsletter he edits.

Gates said he hoped his arrest would help reduce racial profiling by law enforcement agencies.

(Reporting by David Lawder; Editing by Doina Chiacu)

Reuters - Hacking Oracle's database will soon get easier

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Hacking Oracle's database will soon get easier

Wednesday, Jul 22, 2009 7:55PM UTC

By Jim Finkle

BOSTON (Reuters) - Hackers will soon gain a powerful new tool for breaking into Oracle Corp's database, the top-selling business software used by companies to store electronic information.

Security experts have developed an easy-to-use, automated software tool that can remotely break into Oracle databases over the Internet to simulate attacks on computer systems, but cybercrooks can use it for hacking.

The tool's authors created it through a controversial open-source software project known as Metasploit, which releases its free software over the Web.

Chris Gates, a security tester who co-developed the Metasploit tool, will unveil it next week at the annual Black Hat conference in Las Vegas, where thousands of security experts and hackers will gather to exchange trade secrets.

"Anyone with no skill and knowledge can download and run it," said Pete Finnigan, an independent consultant who specializes in Oracle security and who advises large corporations and government agencies.

He has not yet studied the Oracle tool but is familiar with other Metasploit software and said it works by automating many of the complicated procedures required to hack into Oracle databases, allowing amateurs to hack into them.

Oracle, which declined to comment, has already issued patches to protect against vulnerabilities that the Metasploit tool targets. But some companies are not diligent in upgrading their software to add the patches, so they are vulnerable to attackers using the new tool. They hire consultants like Gates to help them make sure they are protected.

Metasploit hacks are available for other software programs, including Microsoft Corp's Windows as well as the Firefox and Internet Explorer browsers.

Gates said this is the first Metasploit program to target Oracle's database.

"There is no way to keep these tools out of the hands of people who want to use them for nefarious purposes," said Alan Paller, director of research for the SANS Institute. SANS trains security professionals in areas including use of Metasploit.

Security testers and hackers have previously used other programs to break into Oracle databases, but the new software from Metasploit is easier to operate and runs more quickly than existing options, said Gates.

Metasploit is the most widely used free hacking tool and has a loyal following in the security community.

In addition to letting hackers break into databases over the Internet, the Metasploit tool allows rogue employees to access them from their work PCs.

Workers could break into an Oracle system and secretly steal confidential data such as credit card numbers, give themselves pay raises or make other changes to corporate databases, said Finnigan, who has specialized in Oracle security for eight years.

(Reporting by Jim Finkle; Editing by Richard Chang)

Reuters - Amazon buying shoe seller Zappos

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Amazon buying shoe seller Zappos

Wednesday, Jul 22, 2009 11:54PM UTC

By Nicole Maestri and Alexandria Sage

SAN FRANCISCO (Reuters) - Amazon.com made an aggressive move to grab market share in shoes and apparel on Wednesday, announcing a deal to buy online shoe retailer Zappos.com Inc for $927.9 million, mostly in stock.

Amazon, the world's largest online retailer, should benefit from the fiercely loyal customer base at Zappos, which had about $1 billion of gross merchandise sales last year.

Zappos is known for its attentive customer service, free shipping and a free returns policy which inspires shoppers to gamble on shoes. The company said Amazon will allow it to continue running its business as it always has.

Analysts applauded the deal. Bernstein Research analyst Jeffrey Lindsay called it an "outstanding acquisition." But the move also signaled Amazon had fallen short in its online shoe site Endless.com, launched in 2007.

"This is, in some ways, Amazon throwing in the towel on footwear because they've tried to compete with Zappos," said Forrester Research analyst Sucharita Mulpuru. "If you can't beat them, buy them."

Amazon, which began as an online bookseller, has greatly expanded its range of offerings while also allowing third-party sellers to showcase their own items on its site.

That has allowed the company to post robust online sales in recent years, outpacing brick-and-mortar retailers, even as former online stalwarts like eBay Inc, have stumbled.

"A big part of the reason why Amazon is interested in us is because they recognize the value of our culture, our people, and our brand," said Zappos Chief Executive Tony Hsieh in a letter on its blog. "Their desire is for us to continue to grow and develop our culture (and perhaps even a little bit of our culture may rub off on them)."

IRREVERENT SHOE SELLER

An irreverent company, Zappos' website calls its executives monkeys and Hsieh joked in his letter that the deal's headline should read "Zappos and Amazon sitting in a tree ...," a reference to a nursery rhyme.

Zappos has put customers at ease buying shoes online because it guarantees free shipping on deliveries as well as returns. It also places a big emphasis on service, saying its No. 1 core value is to deliver "wow" through service.

"To WOW, you must differentiate yourself, which means doing something a little unconventional and innovative. You must do something that's above and beyond what's expected," it states on its website.

Pacific Crest analyst Steve Weinstein said the deal allows Amazon to dominate a big new category.

"It (Endless.com) certainly hasn't been as successful as Zappos," he said. In shoes I think Zappos is clearly the brand in the mind of consumers."

The acquisition is slated to close this autumn, and Amazon said the Zappos management team will remain intact. Zappos said it will be run as an independent entity and its brand will be separate from the Amazon brand.

"We think that there is a huge opportunity for us to really accelerate the growth of the Zappos brand and culture, and we believe that Amazon is the best partner to help us get there faster," Hsieh said in his letter to employees.

Amazon said it will acquire all of the outstanding shares of Zappos and assume its outstanding options and warrants in exchange for approximately 10 million shares of Amazon common stock. It will provide Zappos employees with $40 million of cash and restricted stock units.

Based on Amazon's closing price of $88.79, the deal is valued at about $927.9 million.

The Zappos website says the company, founded in 1999, has more than 1,300 employees and stocks more than 3 million shoes, handbags, clothing items and accessories from more than 1,136 brands.

Morgan Stanley, and Fenwick & West advised Zappos on the deal. Lazard Ltd advised Amazon.

(Editing by Gary Hill, Steve Orlofsky and David Gregorio)

Reuters - Microsoft releases Windows 7 code to PC makers

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Microsoft releases Windows 7 code to PC makers

Wednesday, Jul 22, 2009 10:1PM UTC

SEATTLE (Reuters) - Microsoft Corp said on Wednesday it is releasing the code for Windows 7 to PC manufacturers, keeping the software company on track to have machines running its new operating system in the stores by late October.

The move means Hewlett-Packard Co, Dell Inc, Acer Inc and other computer makers can start to load up new PCs, laptops and netbooks with the operating system, the successor to the unpopular Vista.

Both Microsoft and the manufacturers are hoping the full launch of Windows 7, scheduled for October 22, will help lift PC sales out of the slump caused by the global economic downturn, and give the holiday shopping season an extra lift.

Manufacturers have been testing early versions of Windows 7 for several months, but this week marks the release of the "gold code," according to a Lenovo Group Ltd executive, referring to the software industry jargon for the finished product.

PC makers no longer have to fly discs in helicopters to their manufacturing plants, as the transfer is now done electronically. But it still marks a dramatic day as manufacturers hustle to get new products into stores in time for the release date.

Machines that have Windows 7 installed, or devices that are compatible with it, will simply have the Windows 7 logo on them, a Microsoft executive said. The company will not be splashing the word "capable" around in marketing efforts, after it received complaints at its last launch that some machines branded "Windows Vista Capable" could only run the lower-end versions of the software.

Few industry watchers expect such problems to hit Microsoft this time around as the company has spent more time making sure PCs will be able to run the new software.

(Reporting by Bill Rigby; Editing by Steve Orlofsky)

CNN - Obama: Health care reform central to economic recovery

Sent from bombastic4000@yahoo.com's mobile device from http://www.cnn.com.

Obama: Health care reform central to economic recovery

President Obama said Wednesday that health care reform is "central" to successfully rebuilding the U.S. economy after the current economic crisis.

"Even as we rescue this economy from a full-blown crisis, we must rebuild it stronger than before -- and health insurance reform is central to that effort," Obama said in a nationally televised news conference Wednesday night.

Spiraling health care costs are bankrupting Americans, causing 14,000 people to lose their health insurance coverage every day, and also will bankrupt the nation if allowed to continue, Obama said.

"Let me be clear: If we do not control these costs, we will not be able to control our deficit. If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket," he said.

"These are the stakes of the debate we're having right now."

As he laid out the list of benefits that health care reform offers, he dropped a direct reference to a government-funded public health insurance option.

Until now, Obama has consistently touted the government-funded public option as competition for private insurers in expanding access to health coverage.

It was unclear if Obama changed the wording to avoid a label opposed by Republican supporters, or if he was signaling a policy shift toward a compromise being negotiated by the Senate Finance Committee to have health insurance cooperatives rather than a government-funded public option.

Instead, he promised that his plan would offer "security" and "stability" to sick and healthy Americans.

"It will prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, move, or change your job, you will still be able to have coverage. It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care like check-ups and mammograms that save lives and money," he said.

He also said his program would not add to the deficit over the next decade, addressing concerns from Republican opponents and fiscally conservative Democrats over the costs of the program.

"Already, we have estimated that two-thirds of the cost of reform can be paid for by reallocating money that is simply being wasted in federal health care programs. This includes over $100 billion in unwarranted subsidies that go to insurance companies as part of Medicare -- subsidies that do nothing to improve care for our seniors," he said.

Earlier Wednesday, Obama worked the phones, urging lawmakers to embrace health care reform, White House Communications Director Anita Dunn said Wednesday.

It follows the president's Tuesday meeting with Democrats at the White House, dubbed a "serious working session" where "major progress" was made, Dunn said.

Officials said Obama will be taking a more hands-on approach with members of Congress in the days and weeks to come regarding the health care debate.

Tuesday, House Energy and Commerce Chairman Rep. Henry Waxman of California and six other committee members met at the White House for more than two hours -- and during one hour the president was with them, aides said.

During that meeting the six so-called Blue Dog Democrats gave their list of 10 demands on how they want the bill changed, including ways to cut costs, according to aides.

Some argued the Medicare advisory council, which advises Congress in setting rates for reimbursement to medical providers under the Medicare program, should be empowered to make changes in cost-related issues. White House aides said they want the panel to be empowered to make cuts in benefits and increases in premiums, and to force those changes, unless Congress rejects.

While lawmakers say a tentative deal was reached on this point, White House officials would only say the president "agreed with the lawmakers he met with [on] the need to cut costs."

They refused to confirm there was a verbal agreement because there was "not an actual ink agreement" regarding the council. "The process is still going on," one official said.

White House aides say the administration is concerned about three centers of serious opposition from House Democrats: the fiscally conservative Blue Dog Democrats who are worried about the cost of a public health care plan; the freshmen and other Democrats from high-income districts who are concerned about taxes for high-income Democrats, and the anti-abortion Democrats who are concerned about federal funding going for abortion services, and whether health care providers can opt out of certain procedures.

One official said the administration is aware that "if any of these three groups abandon the effort the bill would be impossible to get out of committee, much less pass."

Aides say the president and lawmakers also discussed the public option versus a co-op option.

Reuters - Apple smashes profit forecasts, iPhone shines

This article was sent to you from bombastic4000@yahoo.com, who uses Reuters Mobile Site to get news and information on the go. To access Reuters on your mobile phone, go to:
http://mobile.reuters.com

Apple smashes profit forecasts, iPhone shines

Wednesday, Jul 22, 2009 10:29AM UTC

By Gabriel Madway

SAN FRANCISCO (Reuters) - Apple Inc's quarterly profit blew past Wall Street forecasts thanks to strong sales of Macs and iPhones and higher-than-expected gross margins, boosting its shares 4 percent on Tuesday.

The company continued to defy the global recession with a solid 13 percent jump in fiscal third-quarter net profit. It sold more than seven times as many iPhones -- 5.2 million units of its latest signature device -- as the year-ago period.

"The numbers are great. Their gross profits continue to surprise people and there is a return to product momentum ... a return to growth in the Mac business," said Andy Hargreaves, an analyst at Pacific Crest Securities. "And then the iPhone is doing tremendously well and that is a potent combination."

Apple reported a net profit of $1.23 billion, or $1.35 a share, for its fiscal third quarter ended June 27, up from $1.07 billion, or $1.19 a share, in the year-ago period.

Earnings per share beat by far the average Street forecast of $1.18 according to Reuters Estimates, and topped even the most bullish "whisper" numbers of $1.30 to $1.35.

Sales of Macs and iPhones both beat analysts' expectations, helped by product refreshes and lower prices, while iPod shipments were toward the low end of forecasts.

Apple said it sold 2.6 million Macs, up 4 percent from a year ago, and 5.2 million iPhones in the June quarter, during which the company launched its third-generation iPhone 3GS and cut the price on the second-generation model to $99.

The iPhone is often thought of as more of a consumer device, but Apple said nearly 20 percent of Fortune 100 companies have bought at least 10,000 units and it is unable to make enough iPhone 3GSes to meet demand -- a shortfall the company said it is working to address.

Although the smartphone segment continues to grow more crowded with competitors, Chief Operating Officer Tim Cook said on a conference call the company is "years ahead of other people" in its competitive position.

IPHONE DRIVES

The install base for the iPhone and the iPod Touch -- which share operating systems -- is now 45 million, Apple said.

"The iPhone is the biggest driver right now, because the profitability is really high," said Frost & Sullivan analyst Ronald Gruia. "It's been an absolute success."

Yet there had been some concern about margin pressure heading into the results, given the product price cuts and the trend of higher component costs.

Although Mac units rose, revenue in the segment fell 8 percent from a year ago as average selling prices came down, a trend seen throughout the PC industry.

But Apple posted a gross margin of 36.3 percent, above the 34 percent some analysts predicted. That compared with 36.4 percent in the last quarter and 34.8 percent a year ago. The company saw margins at 34 percent in the September quarter.

Apple said component costs rose, but not as much as expected and it spent less than it planned in several areas.

"The overall takeaway is that Apple continues to execute in this tough environment," said Kaufman Bros analyst Shaw Wu.

"They do the hardware, software and service, and that really allows them to have a leg up against competitors."

Investors have pushed Apple's stock about 75 percent higher this year, well ahead of other big technology issues.

Apple issued a typically conservative outlook for the current quarter, forecasting earnings of $1.18 to $1.23 a share on revenue of $8.7 billion to $8.9 billion.

While that was below the average analyst estimate of $1.30 in earnings per share and $9.1 billion in revenue for the fiscal fourth quarter, it had little impact on investors.

Revenue rose 12 percent to $8.3 billion in the June quarter, versus analysts' average estimate of $8.2 billion.

Cash and marketable securities totaled more than $31 billion, one of the biggest cash hoards in all of technology.

The results demonstrated the consumer appeal of Apple's products despite a troubled economy that has dented sales at competitors selling less expensive products.

Apple reported relative strength in consumer demand, and weakness in education, one of its key markets.

But iPods were a chink in its armor. Apple shipped 10.2 million iPods in the quarter, down 7 percent on the year. As iPod sales slow down, analysts see alternative catalysts on the horizon, with the expected launch of an iPhone in China and a rumored tablet PC or Internet device in the works.

Cook said the company hoped to have an iPhone in China within a year.

Chief Executive Steve Jobs did not make an appearance on the company's conference call, despite rumors that he might. Jobs recently returned from a nearly six-month medical leave, where he underwent an a liver transplant.

Shares of Cupertino, California-based Apple closed at $151.51 on Nasdaq and rose to $158.34 in extended trading.

(Reporting by Gabriel Madway; Additional reporting by Doris Frankel and Tiffany Wu; Editing by Edwin Chan and Richard Chang)