Showing posts with label CNN Money. Show all posts
Showing posts with label CNN Money. Show all posts

Sunday, October 7, 2012

Foxconn workers strike over iPhone 5 demands, labor group says




Apple CEO Tim Cook visited Foxconn's Zhengzhou factory in March, months before Friday's report of a massive strike at the plant's iPhone 5 production lines.




NEW YORK (CNNMoney) -- Thousands of factory workers at Foxconn went on strike Friday to protest their working conditions on the iPhone 5's production lines, according to a report from an independent workers' rights organization.



Workers at Foxconn's plant in Zhengzhou, China, were furious after management enacted "overly strict demands" for production of Apple's (AAPL, Fortune 500) new iPhone 5, according to a report late Friday from China Labor Watch (CLW), a New York-based advocacy group that works closely with sources in China.




The work stoppage lasted several hours on Friday and "paralyzed the production lines," the group said.



The majority of its participants were from the quality control line for the iPhone 5. Workers and inspectors clashed in fights that sometimes turned physical, CLW said, with some hospitalized as a result.



China's state-run news agency Xinhua also reported on the disturbance. More than 100 quality inspectors refused to go to work Friday "after one of the inspectors was allegedly assaulted by the workers, who have been dissatisfied with the new inspection standards," Xinhua said, citing an unnamed regional government spokesman in Zhengzhou.



The work stoppage lasted roughly one hour, according to Xinhua's source, who said that the plant has now resumed production. Workers on the scene reported a much longer outage to CLW, saying the shutdown extended from mid-day Friday into the next day.



Foxconn released an official statement on Saturday denying both reports, but acknowledging "disputes" earlier in the week.



"Any reports that there has been an employee strike are inaccurate," Foxconn said. "There has been no workplace stoppage in that facility or any other Foxconn facility and production has continued on schedule."



The Zhengzhou plant had clashes on Oct.1 and 2 between "a small group of production line workers" and quality control personnel, according to Foxconn.



"These were isolated incidents and were immediately addressed and measures taken, including providing additional staff for the lines in question," Foxconn said. "This is consistent with our efforts to work with our employees to continuously enhance any aspects of our production that can improve the workplace and manufacturing practices."



Foxconn's Zhenghou complex employs around 190,000 people, according to CNET, which recently visited the area. Apple CEO Tim Cook made an appearance at the plant in March.



Both Xinhua and CLW cited tension over iPhone 5 quality standards as the event's catalyst.



Workers were given new, impossibly strict standards, demanding precision down to increments as small as two-hundredths of a millimeter, according to CLW.



"Employees could not even turn out iPhones that met the standard," CLW's report said, because of "design defects" in the iPhone 5.



Apple ordered stricter inspections in the wake of customer complaints over "aesthetic flaws" in the iPhone 5, the Zhengzhou government spokesman told Xinhua.



Apple did not respond to messages from CNNMoney seeking comment.



Bessie Chang, a CLW program assistant, said it was the organization's Chinese-based staff that first heard rumors of the strike. CLW director Li Qiang spoke to his sources at Foxconn to verify the report.



Tensions at the Zhenghou plant were already running high because workers were not allowed to take vacation time during China's recent Golden Week holiday, according to CLW. That holiday typically involves three days of paid time off.



Employees who worked through the holiday did so voluntarily, Foxconn said, and were paid overtime of three times their normal hourly rate, in accordance with Chinese labor laws.





Foxconn has been in the spotlight amid growing public concern about labor conditions in the overseas factories that many U.S. gadget makers rely on to produce their devices. Apple is just one of many companies that outsources its manufacturing, but as the industry's most popular and profitable company, it's under the most intense scrutiny.



A spate of suicides at Foxconn factories in 2010 garnered media coverage of allegedly harsh working conditions, including unsafe facilities and illegal amounts of overtime.



In January 2012, Apple joined the independent labor-rights organization Fair Labor Association (FLA), which promptly began inspections of the working conditions at Foxconn's many factories.



FLA released an assessment in March that documented dozens of major labor-rights violations, including excessive overtime, unpaid wages and salaries that aren't enough to cover basic living expenses. The FLA's report said Foxconn agreed to work with the group on improvements, including enacting "full legal compliance" with Chinese work-hour laws by July 2013.



Last month, a large-scale incident involving 2,000 workers forced the temporary closure of Foxconn's Taiyuan factory. One worker at the scene termed the situation a riot, and it led to the hospitalization of about 40 people.








Source & Image : CNN Money

Friday, October 5, 2012

Foxconn workers strike over iPhone 5 demands, labor group says




Apple CEO Tim Cook visited Foxconn's Zhengzhou factory in March, months before Friday's report of a massive strike at the plant's iPhone 5 production lines.




NEW YORK (CNNMoney) -- Thousands of factory workers at Foxconn went on strike Friday to protest their working conditions on the iPhone 5's production lines, according to a report from an independent workers' rights organization.



Workers at Foxconn's plant in Zhengzhou, China, were furious after management enacted "overly strict demands" for production of Apple's (AAPL, Fortune 500) new iPhone 5, according to a report late Friday from China Labor Watch (CLW), a New York-based advocacy group that works closely with sources in China.




The strike began at 1 p.m. local time (1 a.m. ET) on Friday, CLW said, and the majority of its participants were from the on-site quality control line for the iPhone 5. It remained ongoing into the evening, causing a work stoppage that "paralyzed the production lines," the group said.



Foxconn did not respond to emailed requests for comment that were sent after normal business hours at its Taipei, Taiwan, headquarters. Apple also did not respond to a request for comment.



The trouble began after workers were given new, impossibly strict standards, demanding precision down to increments as small as two-hundredths of a millimeter, according to CLW.



"Employees could not even turn out iPhones that met the standard," CLW's report said, because of "design defects" in the iPhone 5.



Foxconn's exacting demands, coupled with the fact that workers were not allowed to take vacation time during a recent week-long holiday, created a high-pressure situation. Workers and inspectors clashed in fights that sometimes turned physical, the CLW said, with some hospitalized as a result.



Foxconn's Zhenghou complex employs around 190,000 people, according to CNET, which recently visited the area. Apple CEO Tim Cook made an appearance at the plant in March.



CNNMoney spoke to U.S.-based staffers at CLW, which is a frequently cited source for Western media outlets reporting on Chinese labor issues.



Bessie Chang, a CLW program assistant, said it was the organization's Chinese-based staff that first heard rumors of the strike. CLW director Li Qiang spoke to his sources at Foxconn to verify the report.



Qiang, speaking through Chang as a translator, said the strike continued as of 11 p.m. local time (11 a.m. ET) Friday. He hasn't received information since then, but he noted that Foxconn production lines typically run 24 hours a day. He did not know whether workers on every shift are participating in the strike.





Foxconn has been in the spotlight amid growing public concern about labor conditions in the overseas factories that many U.S. gadget makers rely on to produce their devices. Apple is just one of many companies that outsources its manufacturing, but as the industry's most popular and profitable company, it's under the most intense scrutiny.



A spate of suicides at Foxconn factories in 2010 garnered media coverage of allegedly harsh working conditions, including unsafe facilities and illegal amounts of overtime.



In January 2012, Apple joined the dependent labor-rights organization Fair Labor Association (FLA), which promptly began inspections of the working conditions at Foxconn's many factories.



FLA released an assessment in March that documented dozens of major labor-rights violations, including excessive overtime, unpaid wages and salaries that aren't enough to cover basic living expenses. The FLA's report said Foxconn agreed to work with the group on improvements, including enacting "full legal compliance" with Chinese work-hour laws by July 2013.



Last month, a large-scale incident involving 2,000 workers forced the temporary closure of Foxconn's Taiyuan factory. One worker at the scene termed the situation a riot, and it led to the hospitalization of about 40 people.








Source & Image : CNN Money

Jack Welch: Unemployment rate cooked






NEW YORK (CNNMoney) -- The big drop in the unemployment rate a month before the presidential election brought cries of disbelief and conspiracy theories from Jack Welch and other critics of the Obama administration Friday. But the Labor Department was quick to dismiss such claims.



"Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers," tweeted Welch, the former CEO of General Electric (GE, Fortune 500). Welch did not respond to a request for further comment on his tweet.




The unemployment rate fell to 7.8% in September, down from 8.1% a month earlier. The drop was due to the Bureau of Labor Statistics' survey of households showing that 873,000 more people had jobs than in the previous month. That was the biggest one-month gain in more than nine years.



Welch wasn't alone in raising questions about the jobs numbers. Americans for Limited Government, a conservative group that has been a steady critic of the Obama administration, issued a statement that said the numbers the BLS "used to calculate the unemployment rate are wrong, or worse manipulated. Given that these numbers conveniently meet Obama's campaign promises one month before the election, the conclusions are obvious...Anyone who takes this unemployment report serious is either naive or a paid Obama campaign adviser."



Conn Carroll, a senior writer at the conservative Washington Examiner suggested a slightly less nefarious form of manipulation of the data.



"I don't think BLS cooked numbers. I think a bunch of Dems lied about getting jobs. That would have same effect," he tweeted. "Would love to see the partisan breakdown of the 873,000 Americans who say they got new jobs."



Related: Unemployment rate tumbles



BLS denied there was any manipulation of the data or anything out of the ordinary about the unemployment rate calculation.





"No political appointee is involved in the collecting, processing and analyzing of the data," said Thomas Nardone, the associate commissioner for employment and unemployment statistics. He said the Council of Economic Advisers doesn't get the numbers until Thursday afternoon, and that the Secretary of Labor herself doesn't see them until Friday morning.



Labor Secretary Hilda Solis criticized the conspiracy theories as well Friday.



"This is a methodology that's been used for decades. And it is insulting when you hear people just cavalierly say that somehow we're manipulating numbers," Solis told CNN's Richard Quest.



Related: GE's Immelt - U.S. starved for investment



Even some conservative economists defended the BLS's integrity and legitimacy of the numbers.



"The jobs #'s may look fishy to some, but if you step back, it's just a plow horse economy lumbering along," tweeted Brian Wesbury, chief economist at First Trust.











Source & Image : CNN Money

Exercising leads to higher pay




Working out regularly pays off, in more ways than one.




(Money Magazine) -- Get fit and get a raise?



Exercising three or more times a week leads to 6% higher pay for men, on average, and 10% for women, Cleveland State researcher Vasilios Kosteas reported recently.




The hike is due to exercise-induced productivity boosts, he says, and is separate from the well-established link between obesity and lower earnings.



Fiscal fitness plans



Start at the office. A health club can cost more than $500 a year, but your health plan may give you a break. Customers in 23 Blue Cross/Blue Shield plans (see blue365deals.com for details) can buy memberships for only $300 a year.





Plus, one in five employers subsidize gym costs, says Aon Hewitt.



Join forces. Two-thirds of trainers lower their prices for groups, so team up with friends to request a per-person rate that's 20% to 30% less than for a one-on-one session, advises fitness industry consultant Bryan O'Rourke.



An extra payoff: Exercising with pals gives you accountability and support -- not just a deal.



Related: When not to call your doctor



Buy a gym. For less than $200, you can get a gym bag's worth of essential exercise gear: dumbbells, resistance bands, a jump rope, and a fitness ball. Then use Nike's free Training Club iPhone app to guide you through your workout.








Source & Image : CNN Money

September jobs report: Unemployment rate tumbles






NEW YORK (CNNMoney) -- The unemployment rate tumbled in September as more people returned to the labor force and steady hiring continued.



Employers added 114,000 jobs during the month, down from a revised 142,000 jobs in August, the Labor Department said Friday. But revisions to July and August mean the economy added 86,000 more jobs than originally reported in those months.




Meanwhile, the unemployment rate unexpectedly fell to 7.8% in September, from 8.1% the prior month.



Although the revisions were positive, the economy is growing at the same sluggish pace it has been since the spring, and is showing few signs of speeding up any time soon.



The country generally needs at least 150,000 new jobs each month just to keep up with population growth.



Related: Obama's tax plan aims at rich, but catches small employers too



Most economists predict the U.S. economy will grow no faster than 3% a year, until at least 2014.





That's hardly fast enough to recover all the jobs lost since 2007. Of the 8.8 million jobs cut during the recession, about 4.3 million have been added back. The Labor Department signaled last week that it may revise the job gains higher, but even so, the job market still has a long way to go before it's fully healed.



About 12.1 million people were unemployed in September, and 40% of them have been so for six months or more.


Did you recently find a job? Tweet @CNNMoney using the #igotajob hashtag, and you could be featured in an upcoming article.






Source & Image : CNN Money

Thursday, October 4, 2012

Zynga plummets 19% after cutting 2012 outlook





NEW YORK (CNNMoney) -- Zynga's $183 million acquisition earlier this year of "Draw Something" maker OMGPOP has turned into OMGNO.



The social games maker unveiled "preliminary financial results" Thursday evening a few weeks ahead of its official earnings report -- which is rarely a sign of anything good -- and scaled back its outlook for 2012. Zynga also said it will take $85 million to $95 million write-down on OMGPOP, wiping out half of the deal's value.




Zynga now expects bookings for the full year to come in at about $1.1 billion, down from its previous forecast of $1.15 billion to about $1.23 billion. Earnings before interest, taxes, depreciation and amortization are forecast to come in between $147 million to $162 million, compared the $180 million to $250 million that Zynga previously expected.



Shares were down about 19% in after-hours trading on Thursday.



It's been a challenging year for Zynga, which made its name by creating games for Facebook (FB). Zynga blamed much of its downgraded 2012 forecast on "reduced expectations for certain web games including The Ville, and delays in launching several new games."



Investors aren't thrilled. Zynga's shares are down 70% this year.



The company also previewed results from its most recent quarter, which ended September 30. CEO Mark Pincus called the quarter "challenging," and added that "as a whole we did not execute to our satisfaction."



Specifically, Zynga cited weakness in its flagship -Ville games line, which includes FarmVille.



Zynga's new estimates for the quarter are still in line with or above analysts' expectations. The company expects earnings to come in between 0 and 1 cent per share on sales of $300 million to $305 million. The full results will be released on October 24.



Zynga (ZNGA) also put some of the blame on its purchase of OMGPOP, which it bought in March just six weeks after the company released its smash hit, "Draw Something." The game scored millions of downloads, but the frenzy turned out to be a short-lived fad.



During Fortune's Brainstorm Tech conference in July, CNNMoney's Ben Baer asked Pincus whether he overpaid for OMGPOP.



"I'd say it's too early to call it after one quarter," Pincus replied. Apparently two quarters is long enough.








Source & Image : CNN Money

Obama's tax plan aims at rich, but catches small employers too






President Obama assures his plan to eliminate the Bush tax cuts for top income earners wouldn't hurt small businesses, but a Treasury Department study shows doing so would raise taxes on 24% of employers.




NEW YORK (CNNMoney) -- President Obama's proposal to let the Bush tax cuts expire for top earners would hit only a tiny fraction of all small businesses, but it includes nearly 1 million companies that employ people.



That's according to a recent IRS study, which counted more than 20 million enterprises as small businesses.




Most of them are solo entrepreneurs with no employees. Only a tiny portion of them earn more than the $200,000 threshold ($250,000 if married) that would face an increase if the top two rates go up.



But high-income earners also make up 24% of small businesses with employees, or 923,000 of them, according to a report by Treasury Department economists.



Related: Obama's 18 small business tax cuts - explained



That's why Obama can say his proposal wouldn't affect many small businesses -- between 3% and 10%, depending on how you define a small business. It's also why Romney can say that it is aimed at "job creators," as he did at Wednesday night's debate.



Those small businesses also employ an estimated 60 million Americans -- about half of all private sector employees.



"No matter how you slice it and dice it, it's hard to avoid that this is a tax increase on a significant share of small business owners," said Raymond Keating, chief economist of the Small Business & Entrepreneurship Council.



The Obama plan would raise the top two tax brackets from 33% to 36% and from 35% to 39.6%.



To business owners, higher tax bills would restrict their ability to grow and hire workers.





Brandon Shamim expects to be in the high-income group next year. The consulting firm he co-owns, Beacon Management Group, has been gaining strength since the recession by staying small, keeping only three employees and a few part-timers.



If next year proves profitable enough, he plans to finally get around to hiring a project manager and a marketer. Shamim would also buy an office instead lease one at his current Pasadena, Calif. office building.



However, higher taxes would make him rethink those plans.



"The bold moves we want to make would no longer be afforded to us," he said.



At the New York-based consulting firm Sales Huddle Group, higher taxes wouldn't affect hiring but it would create some extra strain. Its owner, Sam Caucci, said cutting anyone from his 10-person team isn't an option.



"[Higher taxes] are going to make me work harder," Caucci said. "That means I'll need to cut costs and overhead expenses. I can't let the things happening in Washington affect my company's mission and vision."



Related: Big firms that avoid taxes are moochers, small companies say



Startups -- the nation's true source of net job creation -- are also at risk.



The tax increases would affect David Moritz, owner of Society Awards, which makes trophies for prestigious ceremonies like the Golden Globe and the Primetime Emmys. That's a problem for the New York City entrepreneur, who uses the financial success of Society Awards to fund the creation of other companies. Since 2008, Moritz has opened a branding firm and a beverage company, and he now has over a dozen employees in all three.



Moritz is hostile to any talk of raising taxes, insisting he's more efficient at creating jobs with his money than whatever the federal government plans to do with it. If his tax rates increase, Moritz expects his tax bill to increase by $20,000 or more. That's money he planned to use to launch a furniture company and hire two employees to run it.



"Every dollar I spend on my business I pay to another business," Moritz said. "The government would collect more revenue if they would just let me spend it."








Source & Image : CNN Money

Mortgage rates hit record low again








NEW YORK (CNNMoney) -- Mortgage rates fell to a new record low after the Federal Reserve's decision to buy billions in home loans continued to ease costs for home owners and buyers.



The average 30-year fixed-rate mortgage fell to an all-time low of 3.36%, according to a weekly survey by mortgage finance backer Freddie Mac. The rate dropped from 3.40% the previous week.




The fixed-rate 15-year mortgage also hit a new record low of 2.69% from 2.73% a week earlier.



Rates have been falling to news lows since the Fed announced last month that it would buy $40 billion in mortgage-backed securities each month. The central bank hopes that keeping interest rates low through this policy, known as quantitative easing, will fuel home buying, which will lead to more spending, and eventually more hiring.



Related: Home is where the recovery is



Economists are betting that low mortgage rates would give home buyers the confidence to pay more for homes. Already, home prices have rebounded to the same level they were nine years ago.



There's also been a pick-up in sales of existing homes, a leap in new home sales prices , and an increase in home construction, all of which have invigorated the housing market.



Economists surveyed by CNNMoney said they are encouraged by the reports and believe that the nation's housing market has finally turned a corner.



Of the 14 economists who answered questions about home prices in the survey, nine believed that prices have already turned higher or will make that turn later this year. Only three months ago, half of the economists surveyed by CNNMoney believed a turnaround in prices would not take place until 2013 or later.











Source & Image : CNN Money

Stocks open higher



NEW YORK (CNNMoney) -- U.S. stocks opened higher Thursday as investors digested two reports on the U.S. labor market and the European Central Bank's president reiterated its commitment to its new bond buying plan.



The Dow, S&P 500, and the Nasdaq rose between 0.1% and 0.3%.




The Labor Department reported that the number of people filing for first-time unemployment claims rose by 4,000 to 367,000 for the week ended Sept. 29. That was slightly higher than expected.



Ahead of that report, outplacement firm Challenger, Gray & Christmas said U.S.-based employers announced plans to cut 33,816 jobs in September, down 71% from a year earlier.



These reports, along with Wednesday's ADP report on private sector job growth, are all precursors to the government's closely watched monthly jobs report due out Friday.



Investors will also be keeping a wary eye on Mario Draghi, the ECB president who recently said he'd do whatever it takes to preserve the euro. Draghi stood by that decision during a talk this morning.



ECB officials kept rates at 0.75% when they met in Slovenia Thursday.



Meanwhile, the Bank of England left its key interest rate unchanged at 0.5%, where it's been since early 2009.



Related: Get a job? Tweet us



At 2 p.m. ET, the Federal Reserve will release minutes for its most recent policy making meeting, in which it announced the latest round of quantitative easing, or QE3. The report could shed light on the Fed's open-ended program of buying $40 billion in mortgage debt every month.



It's that kind of monetary easing that explains why markets are higher, even though worries about the global slowdown remain severe, said Elisabeth Afseth, a fixed income analyst with Investec in London.



"Central banks providing large amounts of liquidity to the system -- and the search for a pick up above government yields -- is driving the risk markets higher, rather than strong confidence in the economy or the fundamentals," she said.



European stocks were mixed in morning trading. Britain's FTSE 100 and the DAX in Germany rose 0.1%, while France's CAC 40 edged lower.



Meanwhile, Asian markets ended higher, with markets in Shanghai closed this week for a holiday. The Hang Seng in Hong Kong ticked up 0.1% while Japan's Nikkei added 0.9%.



U.S. stocks closed modestly higher Wednesday.



Fear & Greed Index





Companies: Shares of Hewlett-Packard (HPQ, Fortune 500) edged down 4%, after falling 13% Wednesday on a disappointing 2013 earnings outlook.



Facebook (FB) shares rose nearly 2% after CEO Mark Zuckerberg announced that as of Thursday morning, there are more than one billion people using Facebook actively each month.



Target (TGT, Fortune 500) shares rose more than 1% after the retailer reported net retail sales in a recent five-week period were $6 billion, about 2% higher than the same time last year.



Currencies and commodities: The dollar fell against the euro and British pound, but it gained against the Japanese yen.



Oil for November delivery added 63 cents to $88.78 a barrel.



Gold futures for December delivery rose $8.90 to $1,788.70 an ounce.



Bonds: The price on the benchmark 10-year U.S. Treasury slipped, pushing the yield up slightly to 1.64% from 1.62% late Wednesday.








Source & Image : CNN Money

Jobless claims rise



NEW YORK (CNNMoney) -- More Americans filed for their first week of unemployment benefits last week, as improvement in the job market remains choppy.



About 367,000 people filed for first-time unemployment benefits in the week ended September 29, up 4,000 from the previous week, the Labor Department said Thursday.




The weekly claims figure is often seen as a proxy for layoffs, so when it rises, it's considered to be a discouraging sign for the job market.



That said, it's been hard to get a clear reading on jobless claims lately.



"Jobless claims data show little momentum in either direction and continue to signal that labor market conditions have been broadly unchanged in recent months," said Michael Gapen, senior U.S. economist with Barclays, in a note to clients.



Initial claims have been bouncing around between 350,000 to 400,000 per week since the beginning of the year.



Did you get a job? Tweet us about it at #igotajob



Economists often prefer to look at a four-week moving average to smooth out the volatility, but even that indicator has barely changed over the past month.



With that in mind, economists say it's likely the monthly jobs report, due Friday, will once again show rather lackluster jobs growth.



Economists surveyed by CNNMoney predict that employers added 110,000 jobs in September, only a slight improvement over the 96,000 jobs added in August.



Job growth at that level is not robust enough to keep up with population growth, and the unemployment rate is expected to remain at 8.1%.



About 3.3 million Americans continued to file for their second week of unemployment benefits in the week ended September 22, the most recent data available.


Did you recently find a job? Tweet @CNNMoney using the #igotajob hashtag, and you could be featured in an upcoming article.






Source & Image : CNN Money

Facebook reaches one billion users






NEW YORK (CNNMoney) -- It's finally happened: Facebook has exceeded 1 billion users.



Co-founder and Chief Executive Officer Mark Zuckerberg announced Thursday that his social media site had hit the milestone.




"This morning, there are more than one billion people using Facebook actively each month," he said. "Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life."



Facebook Inc (FB) stock edged up 1.6% in premarket trading.



Topping the 1 billion mark means that Facebook now reaches one out of every 7 people on the planet.



The ubiquitous social media giant that was famously created in a Harvard dorm room hasn't had much trouble attracting new members.



While its growth in North America and Europe has leveled off, Facebook continues sucking in new users throughout Asia and the developing world. It has a presence in more than 200 sovereign territories, according to stats tracked by All Facebook, which draws on data Facebook provides to advertisers, and an empire that stretches from a mere 20 users in Vatican City to more than 166 million in the United States.



It took Facebook six years to hit the 500 million user mark and barely two to double it. Facebook's total membership grew nearly 30% over the past year, but in hot regions like Brazil, its membership doubled. (Sorry, Orkut.)



From a money-making standpoint, not all of those users are created equal.



Less than 20% of Facebook's users live in the U.S. and Canada, but those users account for 48% of the $992 million in advertising revenue that Facebook took in last quarter. Facebook makes an average of $3.20 each quarter in revenue off its North American users, versus just 55 cents from those in Asia.





Increasing those figures is one of Facebook's top corporate priorities. Investors remain leery of Facebook, whose shares have fallen more than 40% since the company's rocky public debut in May.



The company is also scrambling to increase its foothold in the mobile world, the next big battleground for social networks. By the end of this year, there will be more mobile devices on Earth than people, according to forecasts from Cisco (CSCO, Fortune 500).



Half of Facebook's users access the site at least once a month through mobile devices, and a whopping 102 million users -- more than 10% of the site's membership -- only use Facebook's mobile site.



Building a better mobile experience is one of Facebook's top priorities, Zuckerberg said in a recent interview: "That's the future."



Research firm eMarketer recently predicted that Facebook's annual mobile ad revenue will hit $629 million by 2014, putting it second only to Google (GOOG, Fortune 500). But for 2012, eMarketer estimates Facebook's mobile sales at a scant $73 million -- a pittance among the $5 billion in revenue that analysts expect Facebook to rack up this year.





Facebook's financial filings emphasize the importance of expanding its membership ranks.



"The size of our user base and our users' level of engagement are critical to our success," the company said in its IPO filing. "Our financial performance has been and will continue to be significantly determined by our success in adding, retaining, and engaging active users."



So where will Facebook's next 1 billion users come from? There's one major market the company hasn't tapped yet: China. Blocked by government censors from reaching Facebook, China's 1.3 billion citizens have turned to their own homegrown social networks, including Renren, Sina, and Tencent.



It's a challenge Facebook will have to take on at some point. "We continue to evaluate entering China," the company said in its latest quarterly.



Its executives have dropped even more direct hints. Zuckerberg studies Chinese and his wife, Priscilla Chan, has relatives in the country. Facebook Chief Operating Officer Sheryl Sandberg suggested in an interview last year with Charlie Rose that the company's ambition will eventually take it into even the most challenging markets.



In Sandberg's own words: "If your mission is to connect the entire world ... you can't connect the whole world and not China."








Source & Image : CNN Money

Wednesday, October 3, 2012

Toys R Us enters video streaming business




The retailer's new video streaming service will allow parents to search through 4,000 titles by age, genre and even popular movie character.




NEW YORK (CNNMoney) -- Toys R Us is getting into the video streaming business.



On Thursday, the toy store company is launching toysrusmovies.com, a new digital service for users to stream and download movies and television shows geared toward children.




The movies are priced at $2.99 for a 24-hour rental and TV shows are $1.99 a pop. The prices are comparable to Apple's iTunes store.



With this move, Toys R Us is wading into a crowded arena of competitors that include Netflix (NFLX), Wal-Mart (WMT, Fortune 500) Stores, Amazon (AMZN, Fortune 500) and Apple (AAPL, Fortune 500), all of which are growing their online video presence.



Toys R Us spokeswoman Katie Reczek said the site's family-friendly content will set its service apart from its competitors.



Toys R Us Movies will offer instant access to more than 4,000 titles. The site will also feature new movie releases on the same day the DVDs hit retail stores. TV shows will be available the day after they air. The site is equipped with customizable parental controls. The site will be powered by Rovi (ROVI)Corp, a digital entertainment technology company.



The store has plans to expand from online streaming into Blu-ray players, TVs and tablets in the future. It also plans to create apps for Apple and Google's (GOOG, Fortune 500) Android devices.



Toys R Us, which has over 1,500 stores globally, has made several moves recently to gear up for the holiday shopping season. It announced a free layaway plan and ramped up holiday hiring by adding 45,000 seasonal workers.





The retailer also announced its own tablet for children, the "Tabeo," set to hit stores Oct. 21. A Toys R Us movies app is being developed for the device.



Related: Holiday sales projected to increase 4%



Competitors are also upping the game. Last month, Amazon reached a deal to expand the roster of movies and shows offered on its Amazon Prime Instant Video service. Wal-Mart (WMT, Fortune 500) has also been growing its online collection and offers discounted prices on digital movies.



The heavy competition has weighed on Netflix, which has seen a 13% decline in its share price so far this year.



Toys R Us hopes to lure users by not requiring a subscription. It will let users pay per movie or download. Amazon Prime subscribers pay $79 a year and Netflix charges $7.99 a month for streamlining.








Source & Image : CNN Money

Facebook wants you to pay $7 to promote your posts




Facebook's experimental new Promoted Posts feature lets users pay to bump posts up in their friends' newsfeeds.




NEW YORK (CNNMoney) -- Is that cat photo you posted on Facebook not resonating? A new feature the company is testing out lets you push Fluffy to the top of your friends' newsfeeds by shelling out cash.



Facebook's experimental "Promote" feature, released on Wednesday to a small group of U.S. users, allows you to pay Facebook (FB) to promote important pictures or announcements. Those who have access to the feature say a promoted post typically costs around $7.




That price tag is part of the experiment: A company spokeswoman said that Facebook is "considering a variety of prices."



A Facebook blog post explaining the new offering features a picture of a recently engaged couple with a new option -- "Promote" -- sitting alongside Facebook's familiar Like, Comment and Share links. The feature was first tested out in New Zealand in May, then expanded to a limited number of users in 20 countries.



Facebook won't say how many U.S. users are now seeing the Promote option, saying only that it's a "limited subset" of the site's 166 million American users. The feature is also restricted right now to those with less than 5,000 friends and subscribers.



Facebook has long given businesses the option of paying to promote their posts to a broader audience, but the new Promoted Posts feature is a foray into generating revenue directly from everyday users. Facebook has run a few experiments along those lines, most recently with a new gift-giving feature that lets users send their virtual friends real-world gifts on special occasions.





Will you soon be seeing "Promote" all over your posts? That's unclear. Facebook calls the experiment a "test," and the company isn't shy about killing off money-making trials that fail. The company recently scrapped its virtual currency, Facebook Credits, and its Groupon-like Facebook Deals died after a four-month test period.



User reaction to Facebook's latest experiment seemed mixed. I asked friends and subscribers on my Facebook timeline how they feel about it.



"It would probably be useful for politicians, business owners, and narcissists, but useless for everyone else," Facebook user Matthew Cole quipped.



"I can't imagine why I would pay to promote my personal posts, most of which are about my cats or some.. pop punk band no one cares about," user Jonathan E. Seely wrote.



But some are intrigued by the idea.



"It depends on two factors: 1) how honestly they implement it and 2) its effect on my newsfeed," said Seth Bannon, the founder of tech startup Amicus. "If 'promoted post' or something similar is clearly displayed, and I'm still seeing relevant and interesting posts I care about in my newsfeed, then more power to them."








Source & Image : CNN Money

Romney signals limits on tax breaks






After months of criticism for not detailing how he would pay for his tax cuts, Romney starts to lay out options for capping tax deductions and limiting breaks.




NEW YORK (CNNMoney) -- With just a month to go before Election Day, Mitt Romney has finally started to talk about more specific ways he could pay for his proposed tax cuts.



In an interview with a Denver TV station earlier this week, Romney offered what a campaign spokeswoman called an "illustrative example" for how to help pay for his plan, which would slash income tax rates by 20%.




Romney said limits could be put on how much a tax filer claims in itemized deductions. "As an option, you could say everybody's going to get up to a $17,000 deduction. ... And higher income people might have a lower number."



Capping itemized deductions alone would not be nearly enough to pay for Romney's tax plan, which the Tax Policy Center estimates could reduce revenue by roughly $500 billion a year.



For example, in 2009, the amount of tax savings realized by those who claimed itemized deductions was just $147 billion. Imposing a $17,000 cap would recapture only a portion of that money.



But a policy official with the Romney campaign told CNNMoney on Wednesday that a deduction cap would be just one part of a broader strategy to pay for Romney's tax cuts. Other elements would include limits on personal exemptions and the tax-free benefit workers get when employers pay for their health insurance.



And, the official said, the $17,000 is not a fixed number. It could change depending on where Congress and the president set the level for personal exemptions and the so-called health care exclusion. (Related: The candidates and your taxes)



The Romney campaign is also counting on economic growth to generate revenue to help pay for the tax cuts.



Without more detail, it's impossible to say how much revenue such a strategy would raise, and the Romney campaign didn't offer estimates. Nor is it possible to say which income groups would be most affected by such a pay-for strategy.





In the interview earlier this week, Romney also highlighted other ways his plan could be paid for that he has discussed in the past. But the deduction cap was a first.



And it came after months of criticism for not naming one tax break he would be willing to limit to help pay for his plan.



Related: How candidates would handle fiscal cliff



Each tax break in federal law has its fierce defenders and army of lobbyists. So it may be politically smarter to bypass the mud fights in Congress over whether to limit, say, the mortgage interest deduction or tax break on charitable contributions. Instead, tax filers could pick their deductions so long as they don't exceed a cap.



Romney isn't the first to propose such an idea. It's been kicked around in various forms by tax experts, including Harvard economist Martin Feldstein, who is an adviser to the Romney campaign.








Source & Image : CNN Money

T-Mobile and MetroPCS to merge





NEW YORK (CNNMoney) -- T-Mobile USA and MetroPCS have agreed to merge, joining together two of the nation's largest low-cost wireless carriers.



Both companies have been struggling. Though each remains profitable, their smartphone offerings are lackluster (i.e., no iPhone), they are far behind the curve on network technology, and both are shedding customers.




The combined company, which will be called T-Mobile, will have 42.5 million subscribers -- 33.2 million from T-Mobile and 9.3 million from MetroPCS (PCS, Fortune 500).



It will also have annual sales of nearly $25 billion, an easier path to 4G-LTE network deployments, and estimated cost savings of up to $1.5 billion per year. The companies said that combining their wireless spectrum, customers and finances will help give the new company the scale and resources it needs to succeed in a market increasingly dominated by AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500).



The deal is complex, complicated by T-Mobile's subsidiary status and the two sides' incompatible wireless technologies.



MetroPCS will send $1.5 billion to its shareholders ($4.09 per share) and then perform a 1-for-2 reverse split of its stock -- meaning that the number of outstanding shares would be halved and the value of each share would double. MetroPCS will then buy all of T-Mobile USA's assets by giving T-Mobile parent company Deutche Telekom 74% of its common stock. That means the German telecom giant will remain in control of the combined company, and will provide financial support through debt and credit offerings.



Customers, though, will continue to deal with two distinct brands operating separately -- at least for now. The two carriers have different network technologies, which means that MetroPCS' phones are incompatible with T-Mobile's network, and vice versa.



That could change eventually, since the new company plans to deploy a 4G-LTE network that will work across both customer bases. Upgrading all customers to that network and discontinue the legacy technologies will be a gradual, multi-year process.



New T-Mobile CEO John Legere will remain at the helm of the new carrier, and MetroPCS' Chief Financial Officer Braxton Carter will stay on as CFO. The companies did not announce plans for MetroPCS CEO Roger Linquist.



The new company will be have its headquarters in T-Mobile's hometown -- Bellevue, Wash. -- with a presence in Dallas, where MetroPCS is based.



Both companies' boards have approved the deal, which they expect to close in the first half of 2013, assuming regulators allow it to go through.



"The T-Mobile and MetroPCS brands are a great strategic fit," René Obermann, CEO of Deutsche Telekom, said in a prepared statement. "We are committed to creating a sustainable and financially viable national challenger in the U.S., and we believe this combination helps us deliver on that commitment."



The merger is between the nation's fourth- and sixth-largest wireless carriers by revenue, but T-Mobile will not move any farther ahead in the list of largest U.S. cell phone companies. The combined company will still be smaller than third-place Sprint (S, Fortune 500) both in terms of sales and number of subscribers.



T-Mobile accepted AT&T's $36 billion buyout offer last year, but that deal was scuttled by U.S. regulators.








Source & Image : CNN Money

Private sector hiring slowed in September






NEW YORK (CNNMoney) -- Private sector hiring slowed in September, according to a report released Wednesday by payroll processor ADP.



Private employers added 162,000 jobs in the month, ADP (ADP, Fortune 500) said.




While that beat economists' forecasts for 133,000 jobs, it nevertheless marked a slowdown from August, when ADP said private employers added 189,000 jobs.



"While this number today is above consensus, it's hardly a strong number," said Joel Prakken, chairman of Macroeconomic Advisers. "It's only barely above the pace that would push the national unemployment rate down."



The unemployment rate stood at 8.1% in August, and economists surveyed by CNNMoney predict it remained there in September. The economy generally needs at least 150,000 jobs created each month, just to keep up with population growth.



Given weak economic forecasts for the foreseeable future, Prakken said he wouldn't be surprised to see the unemployment rate still above 8% a year from now.



Related: Economists say housing recovery is finally here



ADP's report showed a glimmer of hope in the housing sector, as construction companies hired 10,000 workers -- the strongest gain since March, when unusual warm winter weather also boosted construction.



"There's a lot to suggest that the housing sector is turning around," Prakken said. "House prices are up, inventories are down, and financing conditions are at historically low levels. I think we're starting to see some turn in residential construction there."





Small companies -- those with fewer than 50 employees -- hired 81,000 people in September, while large companies with 500 or more employees hired 17,000 new workers.



Medium-sized businesses added 64,000 to their payrolls.



Related: Check the unemployment rate in your state



The ADP report is monitored closely since it comes just days before the government's official monthly job report, due Friday. But the ADP figures are often not a great predictor of what the Labor Department will report.



Unlike ADP, the government report includes the public sector, which has been shedding jobs for two years. The government also revises its figures far more frequently than ADP.



Economists surveyed by CNNMoney predict that Friday's jobs report will show 110,000 jobs were added in September, after accounting for 11,000 government job cuts.








Source & Image : CNN Money

September jobs report probably won't sway election




Economists are predicting more sluggish job growth ahead.




NEW YORK (CNNMoney) -- Only two monthly jobs reports remain before the presidential election, but don't expect either of them to swing undecided voters.



That's because, in all likelihood, both reports will show more sluggish job growth.




Economists surveyed by CNNMoney predict the September jobs report, released Friday, will indicate that employers added 110,000 jobs during the month.



That's a slight improvement over 96,000 jobs created in August, but over the longer term, it's not worth celebrating.



Over the past two years, the economy added an average of 140,000 jobs each month. Hiring at that level is barely enough to keep pace with population growth.



Unless jobs suddenly spike above 200,000 or hiring comes to a near stand-still, voters aren't "going to bat an eyelid," said Dan Hamilton, director of economics at California Lutheran University's forecast center.



Not much has changed lately, and that's why economists expect the unemployment rate to remain at 8.1% in September.



"The bottom line is, the labor picture hasn't materially changed in September," said Wells Fargo Economist Sam Bullard.



Check the unemployment rate in your state



Consumer confidence rose during the month, but that's just an indication of how consumers are feeling. Separate reports show more Americans applied for their first week of unemployment benefits in mid September, than in mid August -- a discouraging sign for job growth.



Meanwhile, the same issues that held businesses back in August still kept from hiring in September. Business owners are still uncertain what their tax rates will be in 2013. Worries about the fiscal cliff remain on the table and the election could change leadership in Congress as well as the White House.



"Layoffs remain very low, but nervous businesses remain equally reluctant to hire more," said Mark Zandi, chief economist at Moody's Analytics. "The looming fiscal issues appear to be weighing on business expansion plans."





Zandi is slightly more optimistic than other economists surveyed by CNNMoney, predicting employers added 130,000 jobs in September. Even so, that's unlikely to impact the election, he said.



"If the report is close to my expectations then it should not have a meaningful impact on the election," he said.



Related: Obama may be a job creator after all



Following Friday's jobs report, President Obama will probably continue to say the private sector has been adding jobs for two-and-a-half years. Mitt Romney is likely to point out that more than 20 million Americans remain either unemployed or underemployed.



Both will be right.








Source & Image : CNN Money

Stocks: Choppy trading ahead






Click on chart for more premarkets data.




NEW YORK (CNNMoney) -- U.S. stock futures were little changed Wednesday, as investors remain on hold ahead of the first of a series of reports this week about the state of the labor market.



At 8:15 a.m. ET, payroll processor ADP will report how many private-sector jobs were added in September. Analysts surveyed by Briefing.com expect the report to show that 133,000 private-sector jobs were added.




The report is a prelude to the government's closely watched monthly jobs data, due on Friday. Investors will be hoping to see the labor market bounce back after last month's grim report.



Investors also remain on edge over Europe, specifically Spain, where there's mounting pressure for the nation to formally request a bailout. Late Tuesday, Spanish Prime Minister Mariano Rajoy said a bailout request was not imminent.



European stocks were mixed in morning trading. Britain's FTSE 100 shed 0.1%, while both the DAX in Germany and France's CAC 40 ticked up 0.1%.



Related: Europe's Debt Crisis



Asian markets ended the session mixed, with markets in Shanghai closed for a holiday. The Hang Seng in Hong Kong added 0.1% while Japan's Nikkei lost 0.5%.



In the U.S., investors started Wednesday with a report showing mortgage applications spiked last week. The Mortgage Bankers Association's index, which measures mortgage applications, rose 16.6% for the week ended Sept. 28. That's a big jump from the prior week's 2.8% increase.



Due after the opening bell, the Institute for Supply Management will release its monthly report on the services sector.



U.S. stocks finished mixed Tuesday.



Fear & Greed Index



Companies: Shares of Best Buy (BBY, Fortune 500)jumped 3% following reports that founder Richard Schultze, and at least four private equity firms, have started examining Best Buy's books in advance of a potential $11 billion buyout offer.



Family Dollar (FDO, Fortune 500) reported fourth-quarter earnings and sales that were in line with forecasts but lowered its guidance for the first quarter. The retailer also said it plans to open another 500 stores next year.



Agribusiness giant Monsanto (MON, Fortune 500) will be the next to release its quarterly results Wednesday morning.





Currencies and commodities: The dollar slipped against the euro, but gained against the British pound and Japanese yen.



Oil for November delivery fell 63 cents to $91.26 a barrel.



Gold futures for December delivery rose $4.20 to $1,779.80 an ounce.



Bonds: The price on the benchmark 10-year U.S. Treasury remained unchanged from late Tuesday, with the yield at 1.61%.








Source & Image : CNN Money

Contrarian fund bets on Europe - and wins big




Tweedy Browne Global Value placed a big investing bet on troubled Europe.




(Money Magazine) -- There's no secret to Tweedy Browne's success. For decades this respected investment-management firm has sought out underappreciated stocks and held them until other investors eventually came around.



This explains why the four managers of the firm's foreign-stock fund (who declined to be interviewed) are willing to keep far more assets in troubled Europe than their competition does.




Yet despite this, Global Value (TBGVX) has generated annual returns of 12% for the past three years, vs. less than 4% for the MSCI EAFE index of foreign shares.



A big bet on Europe



How has Global Value beaten 98% of its peers over the past five years while investing so much in recession-racked Europe?



First, it has largely stayed away from the region's worst debtors, the PIIGS: Portugal, Italy, Ireland, Greece, and Spain. Its biggest stakes are in Switzerland, the U.K., and the Netherlands.



The fund also favors multinationals with emerging-market ties.



Last year nearly a quarter of sales of top holding Nestlé came from fast-growing Asia Pacific and Africa. And the fund tilts toward defensive consumer stocks, led by recession-proof brewer Heineken. Consumer staples make up 31% of the fund, vs. 10% for its peers.



Of course, says Todd Rosenbluth, an analyst at S&P Capital IQ, "it's a risk if consumer staples begin to lag."



As the dollar goes ...



Tweedy Browne plays defense in other ways. The managers are holding nearly 15% of assets in cash. When they buy foreign currencies to invest abroad, they offset that through forward currency contracts that effectively expose the fund to an equivalent amount in dollars.



Related: How to invest in a natural-gas boom



With the buck thriving lately, this strategy has bolstered returns.



Over the past three decades, though, the dollar has fallen more than it has risen, which has been a drag on the portfolio at times. The firm launched a version of the fund that doesn't hedge. But by going unhedged, you'd be exposing yourself to currency risk, says Morningstar analyst Kevin McDevitt. You'd also be betting even more on Europe, since that fund would benefit if the euro rebounds.



Lower highs, higher lows





This fund, which has ranked in the top 1% of its peers during the past 15 years, may seem like a no-brainer.



But Lipper analyst Tom Roseen notes that Global Value's annual fees of 1.4% are "only mediocre" within its category. (The average, in fact, is 1.4%.) And though Global Value has thrived over the long run, there have been shorter periods when it has lagged.



Send your questions about global investing to the Help Desk.



Analysts liken Tweedy Browne's approach to that of Warren Buffett's. Both search for deeply undervalued stocks that may be overlooked for years. Sounds great, but when the markets sizzle, Global Value -- like Buffett -- can underperform. Between March and December 2003, for instance, when foreign stocks soared nearly 49%, Global Value trailed by 14 percentage points.








Source & Image : CNN Money