Late Edition January 13 2009 at 03:07 PM Harry Maurer
Yahoo! Picks Bartz
The beleaguered Web portal will soon announce that Carol Bartz has accepted the CEO post, two months after Jerry Yang stepped down, according to people familiar with the situation. Bartz, 60, is executive chairman of software maker Autodesk and was the CEO there from 1992-2006.
Bartz will take over at a tough time for Yahoo. Yang, a co-founder and early CEO, returned to the company last year for a short stint during which he resisted a takeover attempt from Microsoft, only to see the stock plunge afterward. Many investors are calling for a breakup of Yahoo.
Source: Wall Street Journal
Stimulus Alone Won't Do It, Says Bernanke
Fed Chairman Ben Bernanke endorsed tapping the second $350 billion in bailout funds and suggested various ways it could be used. He said that the enormous stimulus program being readied by the incoming Obama administration would help revive the economy but opined that it won't be sufficient. Bernanke said some of the money should be spent on one of its original purposes, to buy troubled assets from financial institutions. He added that more government cash may need to be invested in banks, and that some should be spent helping homeowners fend off foreclosure.
Source: Washington Post
U.S. Trade Deficit Narrows
The trade gap shrank in November by the most in 12 years as oil prices plunged and pinched consumers spent less on imports. Coming in at $40.4 billion, the deficit dropped by 29%, propelled by a record 12% fall in imports. Exports also slid for a fourth straight month. November's deficit was the smallest in five years.
Source: Bloomberg
Pfizer Sheds Some Researchers
The giant drugmaker will lay off 5% to 8% of its worldwide research staff, which could total 800 jobs. That's not a big portion of its 87,000 total employees, but it's a signal that R&D has not been paying off sufficiently. The company portrayed the move as an effort to raise productivity. Pfizer spends more money on R&D than any rival, as much as $7.5 billion a year, estimates one analyst.
Source: CNNMoney.com
Amazon Loses One in Court
A judge threw out Amazon's lawsuit challenging a New York State law requiring certain Internet retailers to collect New York sales tax. The judge said there was "no basis on which Amazon can prevail."
Source: Wall Street Journal
Western Banks Cool on China
After years of trying to break into the Chinese market, Western banks now are cutting back. According to sources familiar with the situation, Citigroup will close its private banking unit in the country and combine the business unit with its consumer banking arm in order to reduce costs. Employees at the three-year-old private banking unit will be transferred to other positions inside the bank, which is close to selling a stake in its Smith Barney retail brokerage business to Morgan Stanley. Yet Citigroup isn't the only Western bank curbing its Chinese operations. Britain's Royal Bank of Scotland (RBS) -- which now is almost 60% state owned -- is selling its stake in the Bank of China, according to people familiar with the matter. RBS holds 10.8 billion shares of China's third-largest lender, valuing the stake at 2.6 billion based on the Jan. 13 closing price in Hong Kong. The announcement could be made as early as Jan. 13.
Source: Reuters, Bloomberg
China's Exports/Imports Fall Again
China's latest trade data showed the country's exports and imports declined for a second straight month in December, raising concerns that the Asian powerhouse is heading for more economic trouble. The country's General Administration of Customs said on Jan. 13 that the country's exports fell 2.8% annually to $111.2 billion, while imports dropped 21.3% to $72.2 billion.
Source: Wall Street Journal
Japan's Tech Outfits Falter
Japanese industrial giants Sony and Toshiba could post operating losses in the current financial year as falling demand and the strength of the yen erode sales, according to analysts. One source said Sony may post an operating loss of roughly $1.1 billion in the 12 months to the end of March, 2009. Both Sony and Toshiba will report their performance for the three months to the end of December, 2008 on Jan. 29.
Source: New York Times
Obama Shelves Tax Breaks for Business
U.S. President-elect Barack Obama will drop plans to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, according to aides. Obama previously had outlined a $3,000-per-job credit as one of five individual and business tax incentives aimed at winning Republican support. Yet under pressure from Democrats, who don't support such a move, the incoming president is expected to shelve the proposal.
Source: Washington Post
GM Focuses on Core Brands
While General Motors remains tight-lipped about what it will do with its underperforming brands, the U.S. automaker already is reworking its business plan. The company's four "core" brands, which aren't under strategic review -- Chevrolet, Cadillac, Buick, and GMC -- now get the lion's share of new cars and marketing cash. And GM will continue to spend more to market these four brands than it does on the four that are under review.
Source: BusinessWeek
Oil Falls Below $37 a Barrel
Oil fell more than $1 on Jan. 13 to below $37 a barrel -- its lowest level in more than two weeks. That follows a near 8% overnight loss as investors grow more pessimistic about energy demand due to the downturn in the global economy.
Source: Reuters
CEOs Join List of Unemployed
The economic crisis cost 524,000 Americans their jobs in December -- and formerly high-flying Chief Executives are now also feeling the pinch. William Watkins, ousted on Jan. 12 at Seagate Technology, is the sixth CEO of a publicly held U.S. company to be replaced in just the last eight days. His exit follows the departures last week of executives at Tyson Foods, Borders Group, Orbitz Worldwide, Chico's FAS, and Bebe Stores.
Source: Wall Street Journal
Germany Unveils $66 Billion Stimulus Package
The German government has agreed to spend an extra $66 billion over the next two year and has backed a fund to guarantee loans to companies in attempt to bolster the domestic economy. The package, approved late on Jan. 12, continues from steps passed in November, 2008, which bring Germany's total fiscal stimulus to $109 billion over two years -- about 1.6 percent of gross domestic product.
Source: Bloomberg
European Countries Face Ratings Downgrade
On Jan. 12, Spain became the third euro zone country in the last three days to be warned about its deteriorating public finances. Ratings agency Standard & Poor's said Spain's triple-A credit ratings could be downgraded after the country entered in the fourth quarter what is likely to be a deep recession. On Jan. 9, S&P also warned Greece and Ireland that their ratings could be similarly downgraded.
Source: Financial Times
Conversation of the Day: Silicon Valley -- What's Wrong
Reader Steven Andersen Writes:: "Silicon Valley companies saw their competitiveness eroded by the region's inability to sustain a balanced workforce."
Tell Us: Are VCs and Startups Risk-Averse or Prudent?
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