Month: October 2012


Covering the World of Business, Digital Only

October 30, 2012

Business

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Business titans are generally not prone to self-appraisal, and when they do take stock, it usually begins and ends with a list of their conquests.

David G. Bradley, the owner of Atlantic Media, has never been like that. He built and then sold the Advisory Board and the Corporate Executive Board, two research advisory firms, but he never trumpeted that or his fancy education — he was a Fulbright scholar with a law degree from Georgetown and an M.B.A. from Harvard — as a significant credential.

When I worked for him — briefly — and then covered him, he made an impression because underneath his waspy, patrician manner he had a very practical understanding of his own limitations, and as a result, Mr. Bradley, 59, is a bit of a brain collector, seeking out intellectual talent and listening closely at every turn.

At lunch a few weeks ago, we talked about Quartz, Atlantic’s new, strictly digital play in global media, a site for business news that is making its debut on Monday at qz.com. He was clearly excited about the new enterprise, but Mr. Bradley spoke candidly about his costly education in the economics of publishing.

“It was expensive and painful,” he said. “I clearly didn’t know what I was getting into.”

After selling his shares in his companies for a reported after-tax gain of $300 million in 1997 and realizing he didn’t have the people’s touch when it came to politics — his first love — he had hoped to buy Newsweek. But that did not work out. So in 1998 he bought The Atlantic Monthly instead, along with National Journal and Government Executive, in part because he wanted to be a Beltway player and in part because he loved the physical aspects of print.

He hoped to turn The Atlantic into a weekly, a glossy artifact that he could proudly display in his office at the Watergate complex, overlooking the Potomac River. But even as a monthly, the economics were baffling.

I called him back after our lunch and he repeated something he had said.

“In a sense, I was born 50 years too late,” he said. “I love the romance of print, but after I took over The Atlantic, I quickly began losing $8 to $10 million a year. It was not a sustainable business, no matter how much I loved being part of it.”

After spending 10 years and $100 million on the Atlantic brand, he realized that making baubles for the coffee table would soon leave him bereft. He hired Justin Smith, the publisher of The Week who had also worked at The Economist, in 2007. Mr. Smith has Mr. Bradley’s polish, but is more ruthless in business matters and less sentimental about print. The pair set about building a ladder out of the hole that the company — and most of print publishing, for that matter — found itself in.

What is the way forward for a 155-year old-magazine that once published Emerson and Longfellow? Digital first and last, with ancillary revenue from conferences. The magazine, edited by James Bennet, is still very much in the middle of the conversation, but these days it is prized mostly for bringing luster to digital assets like TheAtlantic.com, Atlantic Wire, Atlantic Cities, and beginning Monday, Quartz.

Mr. Bradley shared the financials that suggested that revenue at the various Atlantic properties had doubled in the last four years, from $20 million to $40 million, and that the company was profitable for the third year in a row. Digital revenue, he said, now makes up 65 percent of all advertising revenue. (Even though Atlantic Media is a private company, I believe Mr. Bradley; he was always honest when he was losing gobs of money, so I have no reason to doubt him now that he says they are in the black).

“It’s become very, very clear to me that digital trumps print, and that pure digital, without any legacy costs, massively trumps print,” Mr. Bradley said.

At a time when other media properties are leaning hard on subscriptions and paywalls, Mr. Smith believes that a free product, with revenue from sponsorships and events, can avoid the dependency on commodity ads and play in more rarefied, lucrative terrain.

“We don’t want to be the Royal Navy,” he said. “We want to be the pirate ship attacking the Royal Navy. I’m bearish on print, including our own. It is an inexorable trend that has to be met with some very radical changes.”

Quartz is the company’s effort to take advantage of a changed environment, not just in publishing, but in the world at large. The editorial product is aimed at the front half of airplanes that crisscross from Zurich to São Paulo to Singapore, serving executives who are increasingly having similar conversations no matter where they land. It was built for tablets, conceived as a mobile product for mobile people.

“This is a global audience, one that is growing very rapidly,” Mr. Smith said. “When you walk through a busy Asian airport, nobody is talking about or thinking about the American economy. The world has gotten much bigger than that.”

Quartz is staffed by 20 journalists, including Kevin Delaney, its editor in chief, who was managing editor of The Wall Street Journal Online, and Gideon Lichfield, global news editor, who was deputy digital editor and media editor at The Economist. Of course, Quartz won’t have the financial data resources of Dow Jones, Reuters or Bloomberg, but Mr. Delaney suggested that data is ubiquitous while real insight on the news is a rare commodity.

“Any good blog or magazine has defining obsessions, and we’ll structure around the ones that we think smart, globally minded people will be interested in,” he said.

He said that the sudden abundance of energy, chronically flat interest rates, and the behavior of Chinese consumers would be themes, among others, that the site would return to again and again. Quartz has four sponsors — Boeing, Cadillac, Chevron and Credit Suisse — that have bought out the site until the end of the year.

The site is built for mobile, which means banner ads are not part of the picture; sponsored content will be built into the editorial stream. (Whether that represents significant innovation or a worrisome trend depends on your take on church-and-state advertising issues.)

Because the site is free, the people behind Quartz expect it to have maximum traffic in social media streams, freed of the paywalls that provide revenue to The Economist, FT.com and WSJ.com, but which limit the sharing of information. So, does the world need more business news, really?

“Nobody is ever going to say that they need you,” said Mr. Bradley. “The market never needs what you have until they decide they do.”

Yes, it may be hard to picture Mr. Bradley as a digital pirate in an eye patch. But as Mr. Smith points out: “David is a kind and thoughtful person, which is very much a part of our culture. But he is also very competitive. He wants to win.”

E-mail: carr@nytimes.com;

Twitter: @carr2n.


Small Business: Beware the scorpion

October 18, 2012

Business

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COMMENTARY

Comment: Small businesses at risk of subcontractor abuse

Jaime Gracia is president and CEO of Seville Government Consulting, a federal acquisition and program management consulting firm.

As the 2012 Fiscal Year comes to a close, procurement shops are in full gear awarding contracts in the shadow of sequestration. Many large firms are also trying to close business after months of business development, only to see last minute decisions to make their solicitation a small business set-aside. This creates another potential avenue of abuse, where small businesses are used to prime a contract for a large business.

We have seen constant abuse of small businesses as subcontractors, most notably large firms using small businesses to check boxes, win awards, then not provide what was promised. Although small business subcontracting plans are required per FAR Subpart 19.7, they are rarely enforced.

However, the misuse of small businesses as primes is really the perfect storm of potential abuse, and calls to small businesses are going on all over the greater Washington area this time of year, as large businesses cannot afford to realize loss of revenues after months of business development, and looking for a pawn to realize profit.

Small businesses struggle to get a toehold in the government contracting arena. It is a very tempting offer to prime a contract for a large business, as it creates new relationships, new sources of revenues, and opportunities for growth. Further, the past performance experience is vital for new work.

However, careful consideration and “bid/no-bid decisions,” similar to submitting a Request for Proposal, need to be made if the small business wants to prevent being used by government officials and large businesses.

First, what is the firm’s relationship with the agency, and the contracting official? Understand that the large business has a very close relationship with procurement personnel, and perhaps a relationship that is beyond what many consider ethical or arms-length. The large business is trying to steer a contract to you, but at what price?

Second, and under no circumstances, can the small business allow the large business to occupy the program manager position. The large business will make the case that they have the relationship, they understand the customer’s needs and requirements, and they are better positioned to support the client. Further, they may play hardball, and insist that they get the PM position, or no deal.

Be prepared to walk away. The benefits do not outweigh the costs, as it is the small businesses’ past performance and reputation on the line, not the large business. The arguments made by the small business are false. If you could not support the customer yourself, how can you even be considered for the award?

Small businesses are trusting large businesses to treat them fairly, equitably, and to ensure mutual success. Seems like a no-brainer? Think again.


Inaugural US-Poland Business Week October 10-12

October 12, 2012

Business

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NEW YORK, Sept. 24, 2012 Top US and Poland economic leaders convene to discuss ongoing economic partnership

NEW YORK, Sept. 24, 2012 /PRNewswire-USNewswire/ — The first ever US-Poland Business Week will be held in New York on October 10-12. In order to deepen economic collaboration between United States and Poland, business partners from both countries will attend a series of conferences and debates. In attendance will be representatives of government, business, and academia including US Under Secretary of Commerce for International Trade Francisco Sanchez, the Head of NYSE Euronext Duncan L. Niederauer, the Minister of Treasury of the Republic of Poland Miko#x142;aj Budzanowski, Under Secretary of State for Foreign Affairs Beata Stelmach, Under Secretary of State at the Ministry of Treasury Pawe#x142; Tamborski, President of the US-Poland Business Council Eric Stewart, EU Commissioner for Financial Programming and Budget Janusz Lewandowski, President and CEO of the Warsaw Stock Exchange Ludwik Sobolewski, and Vice president of Citi Handlowy Witold Zielinski.

The US-Poland Business Week primarily focuses on the business community and serves as an additional platform for economic dialogue and an exchange of experience. The event, mostly business-like in character, enriched with elements of cultural promotion, will constitute a comprehensive approach to the promotion of Poland with the use of various public diplomacy, economic, and cultural instruments said Under Secretary of State Stelmach, the initiator of the event.

The initiative consists of important complementary events, including the US-Poland Economic Forum hosted at the New York Stock Exchange, a business conference devoted mostly to the issue of the economic crisis in Europe, and new opportunities, challenges, and innovations in the energy sector. The US and Poland are primed for mutually-beneficial cooperation in many sectors, such as defense, health care and energy, but our physical distance from each other requires a deliberate effort to fully realize our potential as trading partners. This forum demonstrates the commitment from both countries governments and businesspeople to go the extra mile to further deepen our already close economic relationship, said Eric Stewart, of the US-Poland Business Council, on the significance of next months conference.

There will also be a roundtable focusing on the role of women in business and economic transformation. Business debates will be accompanied by a cultural event #x2013; an exhibition entitled#xA0;Alina Szapocznikow Sculpture Undone, 1955#x2013;1972, to be held at The Museum of Modern Art.

Polands Ministry of Foreign Affairs together with the US-Poland Business Council, the Ministry of Treasury, the Polish Agency for Enterprise Development the Polish Cultural Institute in New York, Museum of Modern Art in Warsaw, THINKTANK, New York University Stern School of Business, Global Summit of Women, Vital Voices Global Partnership have organized these series of events. Partners include the Warsaw Stock Exchange, Citi Handlowy, Dom Maklerski Citi Handlowy, Janssen Poland, Headlines Porter Novelli, Porter Novelli, and other Polish and US companies.

New challenges that stem from political, economic and technological changes all over the world increasingly determine Polish and American relations and, thus, require new broad-based initiatives and innovative forms of cooperation, added Under Secretary of State Stelmach.

Following the Poland-US Business Summit that was held in Warsaw in June, the Business Week is an element of Polands strategy to strengthen US-Polish relations in the context of the Polish-American Strategic Dialogue.

More information on the US-Poland Business Week can be found here.

SOURCE US-Poland Business Council


‘Shareable’ Business Cards Are The Only Ones Worth Carrying

October 10, 2012

Business

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Your business card isnt just a calling card, its a snapshot of your brand.

Its a tiny piece of your personality, says Prescott Perez-Fox, owner of Starship Design. Business cards tell a story, and can transmit the essence of your brand. A business card is a sales piece, a sort of mini ad for you and everything you stand for.

Many will argue the importance of investing in a great business card. A memorable card creates a memorable brand. If you create a beautiful artifact that is kept rather than thrown away, it will live on, says Perez-Fox. In many cases, people will save a great card even after copying the info they may even give the card to a friend just to experience it.

The perfect business card is intended to be an experience as much as a source of information. Creatingthe perfect business card is just a matter of finding the right balance between the two. Taken from experts on the subject, weve compiled the most successful tips for creating the perfect business card for your brand.

Make it clean.

Its essential to create a clean design with readable text and less clutter. A card that looks too busy will hide the message your business is trying to convey, and it will become lost on potential customers. Entrepreneurs small business encyclopedia suggests using your companys logo as the basis for the design, making it the biggest element on the card. If making it the biggest isnt the way you decide to go, you may still want to consider making it the most noticeable.

Ancillary Magnet is a creative and technical solutions company based in Brooklyn that uses a simple design to convey the brands signature the pink elephant and illustrate the company business cards.

Make it shareable.

When it comes to a memorable design, keep in mind that your card will reach a wider audience if it becomes one that people want to share. This brings us back to the card as an experience. People will share your card if they enjoy the experience of it. Kyle Laser created a business card for his Dallas-based company, Laser Printing, that emulated a Google search result. He estimates that the company signed on up to 10 of their biggest clients based on their business card.

When people remember your business card, theyll remember your business and that goes for memorability in design as well as delivery. A snazzy business card is no good if you hand it out left and right, says Josh Spiro in his article on Inc. Spiro cites Bonnie Ross-Parker, CEO of The Joy of Connecting as a an example of proper business card distribution technique. Ross-Parker never hands out her business card unsolicited; it is reserved for only quality connections she makes with people shes met. This preserves the meaning and thought that goes into a great card.

Make it unique.

A poor quality card can undermine even the best rapport or the most persuasive conversation, says Spiro. A unique business card will make you, and your business, stand out. You may choose to use some unorthodox materials such as metal, fabric, or glass. You can also experiment with different patterns, textures, colors, and fonts. Emboss it, embellish it, or try a different shape. Dont be afraid to be a bit lsquo;out there, but remember that an out-there design isnt for everyone. Depending on what line of work youre in, and even your personality, you may want a more traditional design, says Spiro.

InterFUEL Interactive is a social media marketing and web design agency with offices in California and New York that uses a creative and interactive design to ensure that clients remember its brand. InterFUEL president David Holifield showed his card to Inc, explaining that people interact with [the card] in a way that is unexpected. While a more traditional business card would work, its often a missed opportunity to create something memorable.


Business, town officials seek funds for group to boost Route 3 corridor

October 10, 2012

Business

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State transportation officials spent hundreds of millions of dollars to widen Route 3 from Burlington north to Lowell.

Now, a new group of local officials and business leaders are trying to make sure the area gets the biggest bang for those bucks, in terms of economic development in the Route 3 corridor.

Robert Buckley, a senior partner at Riemer Braunstein, says his law firm and a couple other businesses (developer Gutierrez Co. and Enterprise Bank) each ponied up $10,000 to launch the Middlesex 3 Coalition early this year. All five towns along the corridor — Burlington, Bedford, Billerica, Chelmsford and Lowell — are also on board. Theyve each chipped in $5,000, and their top municipal managers serve as directors of the new organization.

Middlesex 3 will hold its first formal meeting on Oct. 2 — at 8 am at 600 Technology Park in Billerica –to kick off fund-raising efforts. The goal, Buckley says, is to bring all five towns together to focus on employers, needs along the widened Route 3 — namely workforce training, transportation and housing.

Buckley says the group differs from a traditional chamber of commerce — a few chambers already serve the area — in a number of ways. Theres the active involvement and backing of Greg Bialecki, Gov. Deval Patricks economic development secretary. Bialeckis receptiveness could prove important in the years to come, especially as the towns along the route lobby for more transit, housing or education dollars from the state. Theres also the unusual situation of having the five top municipal officials from Lowell and the four towns interacting and discussing whats best for the corridor.


This Week in Small Business: $931 Billion in Cash

October 9, 2012

Business

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What’s affecting me, my clients and other small-business owners this week.

Economy: Still Sitting on Their Cash

Matthew Philips thinks 2013 is going to be a bummer. FedEx turns pessimistic. A Citibank study of small businesses finds that their biggest problem is a lack of sales growth. Still, retail sales rose in August. And in real estate, builder confidence and residential building growth (PDF) continued to gain momentum, existing home sales and prices went up and architectural billings turned positive. Manufacturing in both the New York and Philadelphia regions weakened. Port traffic in Los Angeles is down compared with the previous year, and weekly rail traffic is mixed. Businesses now hold a record $931 billion in cash.

Management: Eat

These are the 50 most powerful women in business. Michelle Patterson says women are leading the economic turnaround. Suzie Humphreys just loves to do payroll! Mark Cuban explains how to make $2.3 billion: “Either you know your business inside and out or you don’t. Either you’re willing to do whatever it takes to win or you won’t. Very simple.” Here are 27 everyday ways to get inspired. Here’s how to tell if you are a micro-manager. Jacquelyn Smith suggests some things you should do on your lunch break every day, including: “Eat. Don’t try to be a hero and starve yourself for the sake of being a hard worker or checking off another to-do item.” Brett and Kate McKay offer advice on getting your kids to do their chores. The Exotic Entrepreneur says there are three steps to expanding your business online. Randall King believes every entrepreneur should read these three Kindle books. Michael Hartzell lists three ways to establish a good reputation, including: Keep informed about fund-raisers and other events in your area and find ways to get involved. … Not only will you be embracing the needs of your neighborhood but it is a great networking opportunity.”

The Campaign: 47 Percent

Here are the 47 percent in one graphic. Gallup says the race is still a dead heat. A guy gets bored during a campaign stop. President Obama leaves a nice wedding gift and celebrates Talk Like a Pirate Day. The cast of The West Wing jumps into the fray.

Finance: Two Questions

Here’s what it’s like when two people are dating and start a company together. Ryan Matthew Pierson offers his thoughts on why start-ups fail. Anna Farmery has five tips for developing your freelance career. This is an investors-eye view of the Chicago start-up scene. Philip Campbell says beware the phrase, “Cash is a little tight now.” Caleb Wojcik says¬†getting personal finances in order is the not-so-sexy step that every profitable entrepreneur must take: “The reason that entrepreneurs need to have their personal finances in order before they start taking risks is the freedom and flexibility it offers.” The mobile payment company Square is now worth more than $3 billion. This interactive graphic will help you understand how different financing strategies will affect you and your investors over time. Warren Berger reveals the secret phrase innovators use. Here are two important questions to answer before you invest in a small business. Is Shark Tank a good deal?

Your People: Forget Qualifications

Ken Oboh offers advice on finding the right people: “In our hiring, we’ve never looked at what the individual has in terms of formal qualifications; we’ve always looked for people who love the Internet and have a passion for building an online business.” Julie Rains shares the secret for finding great temps. These companies offer work-life balance. One in five job-seekers rejects employers who ban social media. Jill Jusko explains how to develop high-potential employees. An infographic shows where the jobs will be in 2020. This is how obese employees hurt your bottom line. Finally, someone explains why the chicken crossed the road.

Marketing Offline: A Really Sweet Halloween

Alyson Stanfield gives advice for promoting events six months out. Susan Ward thinks Halloween could be a really sweet business opportunity: “Large parties with participants wearing elaborate costumes are becoming increasingly popular — excellent news for people looking for niche business opportunities.” Heres an interesting case study on how a high-end closet company segments its customers. Here are three reasons successful business owners still rely on print materials. This sentence will blow your mind. Hootsuite’s Ryan Holmes explains how to build a recognizable brand. Is this the sexiest, coolest, most epic bus commercial ever?

Marketing Online: Social Media Insurance

Ninety-eight percent of small businesses do not have mobile-ready Web sites. These are the six landing-page questions your visitors want answered. Studies show eye contact is the antidote to online animosity. Here’s how small businesses can use six LinkedIn marketing tools. A conference call provider, InterCall, starts a new online community for small businesses. As managing your company’s Facebook page becomes easier, AJ Kumar explains how a Facebook search engine could change the way people find your business. Denise Keller explains how to reactivate your lapsed e-mail subscribers. And you knew it was coming: social media insurance.

Around the Country: Sweepstakes

Philadelphias zoo will use cards and scanners to track guest behavior, and the citys opera company gives a surprise performance at the train station. Hershey’s new plant could bring $1 billion to Pennsylvania. The Small Business Administration increases its support for Hispanic entrepreneurs, and the Morris County Hispanic-American Chamber of Commerce in New Jersey celebrates its Business Man of the Year. New York City businesses sound off on the mayor’s sugar ban. Small businesses can go here to win a “neat” prize. JetBlue plans free Wi-Fi and other airlines add routes to the North Dakota oil patch. NCR announces a $10,000 sweepstakes for small businesses. The UPS Store makes a pitch to small businesses.

Around the World: Chinas Tantrums

Japanese businesses in China are hit by protests, but Wayne Arnold says that markets are dismissing China’s “anti-Tokyo tantrums.” Here is China by the numbers. The world’s central banks flex their muscles. Russia reveals it is awash in diamonds. Small businesses in France are facing job-creation hurdles. Greece readies further budget cuts. Arctic ice melting is providing opportunities. A company in Britain builds hotels from shipping containers. A fire tornado in Australia burns up the Web. The Obama administration denies plans to invade Canada.

Red Tape: Hanging With NASA

A new poll finds that most people still don’t understand the health care overhaul, and the Congressional Budget Office raises its estimate of those who will pay the mandated tax. Health care costs are expected to continue to rise (PDF) in 2013. NASA’s chief hangs out with a small-business partner and the agency seeks more small-business proposals for high-tech research and development. It’s estimated that pending federal legislation would restrict state and local governments’ ability to levy sales and gross receipts taxes and cost state and local governments $3 billion a year in forgone revenues.

Technology: Setting iPhone Records

The iPhone 5 has record orders, and Walter S. Mossberg loves it. But Anita Li reports that the smartphone’s connectors could be a headache for businesses. Nearly half of business travelers would give up brushing their teeth before giving up their iPads. Anton Wahlman thinks it’s more likely than not that Microsoft will take a beating from Google and Apple in the wake of the Windows 8 introduction. Twitter’s chief executive says that Apple is his mentor and unveils a new look. Mile-high buildings will be possible by 2025, and this robot could transform manufacturing. Amazon Web Services introduces a new hunt for innovative cloud companies. Yahoo gives employees smartphones (but not BlackBerrys). A Web meeting scheduler, Tungle.me, closes its doors. An investment strategist names the biggest growth sector. Here’s how tablets are making cash registers obsolete.¬†This is how to use Microsoft Excel to manage your life.

Tweet of the Week

?@charlesarthur: Which statistics package do pirates use to count their treasure? R.

The Week’s Best

Erica Douglass writes about why 99 percent of entrepreneurs don’t make it: “I often hear teachers, coaches and even bloggers describe this as a passion. You have to find what you’re passionate about and then do that, they say. And to that, I say: Hogwash. You don’t need to go on a mission and find your passion to start a business. You just have to throw away much of your guilt and self-doubt … and own the fact that you were put on this planet to do this very thing that you’re doing right now.”

This Weeks Question: Do you understand how the health care overhaul will affect your business?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.


Google Shares Log All-Time High

October 8, 2012

Business

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Google Inc shares set an all-time high on Monday, with the Web giants reliable advertising business back in vogue among Wall Street investors disenchanted with younger social media companies.

The stock reached $748.90 in afternoon trading, inching past a previous record set in November 2007 of $747.24. It traded below $300 in 2009 during the global economic crisis and remained under pressure in the ensuing years as investors worried that Googles best years were behind it.

The worlds No.1 search engine, which generated $38 billion in revenue last year, now looks increasingly attractive compared with a new crop of social Web companies, analysts say.

Facebook Inc, as well as once-hot companies Zynga Inc and Groupon Inc, came to the public markets amid sky-high expectations during the past year, but have fallen out of favor on concerns about their future business prospects.

The markets have to come to appreciate that Googles been making money hand over fist all this time, said Brian Wieser, an analyst at Pivotal Research Group.

Googles lucrative search advertising business, as well as its efforts expanding into display and mobile advertising, have helped the company maintain robust revenue growth.

In contrast, Facebook faces much more uncertainty.

Its so new that theres a lack of data points for anyone to point to, Wieser said.

AT THE HELM

The stock was up almost 2 percent at $748.20 in early afternoon trade. It has surged roughly 27 percent since mid-July, compared with the Dow Jones Industrial Averages roughly 6 percent gain and a 9.5 percent rise on the Nasdaq.

But at roughly 17 times expected 2012 earnings, it still trades at a hefty discount to Facebooks roughly 47 price-earnings multiple.

Googles rising stock price comes about a year-and-a-half after co-founder Larry Page returned to the chief executives role, replacing Eric Schmidt, who had the helm of the Web company for the previous decade.

Page has moved aggressively to pare the companys sprawling portfolio of products, eliminating projects involving green energy and health among others, while stepping up Googles social networking efforts.

But many of the challenges that pressured its stock in the past have not gone away. The companys ability to manage the $12.5 billion acquisition of Motorola Mobility — Googles first major foray into the lower-margin hardware business — remains unproven.

And Google is now facing significant regulatory scrutiny around the world, including antitrust investigations in the United States and in Europe. (Editing by Tim Dobbyn)


Business economists vs. Obama and Romney

October 7, 2012

Business

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Two economic advisers to President Barack Obama and Republican challenger Mitt Romney squared off today before the National Association for Business Economics.

The result was a predictable partisan squabble.

Heres what Obama adviser Jeffrey Liebman, professor of public policy at Harvard University, had to say about Romneys plan to cut taxes on everyone — without increasing the deficit: The numbers just dont add up.

Heres what Romney adviser Kevin Hassett, director of economy policy studies at the American Enterprise Institue, had to say about Obama: He seems to be looking for every excuse to have a tax hike.

But instead of giving you a blow-by-blow account of this slugfest, lets look at what business economists think should be done to boost the economy. Then compare that with what Obama and Romney are saying. NABE today released a survey of 236 of its members — heres what they think about economic policy:

Extend current tax rates for a year

The NABE survey found that most business economists favor extending the payroll tax cut, current marginal income tax rates, and current rates for dividends and capital gains through the end of 2013. Thats consistent with their consensus view that fiscal stimulus will still be needed for another year, because of the economys sluggish recovery.

Romney supports extending all the current tax rates, at least until he can get his tax reform plan passed. That plan calls for a 20 percent reduction in all personal income tax rates coupled with broadening the tax base by eliminating tax deductions that he has declined to identify.

Obama supports extending lower tax breaks for households who make under $250,000, but favors increasing the rate for higher-income Americans.


German business mood worsens for fifth straight month

October 7, 2012

Business

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BERLIN (Reuters) – German business sentiment dropped for a fifth straight month in September, raising fears of recession, as companies struggled with a bleaker economic outlook and the European Central Banks bond buying plan failed to create much boardroom cheer.

Germanys relative resilience to the euro zone debt crisis has been steadily fraying as its firms see falling demand for their products from European partners and signs of a slowdown in other markets.

The European Central Banks plan for potentially unlimited government bond-buying has raised hopes on financial markets of an end to the most acute phase of the crisis, but that optimism has not spread to the real economy.

The Munich-based Ifo institutes monthly sentiment index reached its lowest since early 2010 and the outlook component hit its worst level since May 2009.

Todays Ifo index shows that German companies remain skeptical about the economic impact of (ECB president) Mario Draghis magic, ING Bank economist Carsten Brzeski said.

Despite fears of a looming Eurozone break-up clearly fading away, German businesses are downscaling their expectations. The German economy could see a contraction in the third quarter.

Ifo said its business climate index, based on a monthly survey of some 7,000 firms, fell to 101.4 in September from 102.3 in August, defying expectations for a slight rise to 102.5 in a Reuters poll of 45 economists..

The expectations index dipped to 93.2 from a previous 94.2, and fell well short of a forecast 95.0.

In its monthly report, the Bundesbank said the domestic economy was robust, but added it saw signs of weaker dynamics and great uncertainty.

Foreign trade could be hit more strongly than before by developments in the euro area, the central bank added, also pointed to the labor market, where the rise in employment is slowing as companies become less willing to hire.

Dutch business confidence also fell in September to -6.7 points from -4.6 in August, other data showed on Monday, adding to signs that the euro zones stronger core economies are succumbing to the downturn.

While they have not been punished by debt markets like much of the euros southern half, both Germany and the Netherlands have slashed public spending to secure the future of public finances.

The drop in Ifo business confidence is a potent reminder that the outlook for the German and Eurozone economies still hangs in the balance, said Holger Schmieding, German economist at investment bank Berenberg.

Further policy steps to contain the Euro crisis may be needed for the Eurozone to turn the corner.

TOUGH CUTS

While the German economy steamed ahead in the first three months of the year, saving the euro zone from recession by growing 0.5 percent, it lost momentum in the second quarter, with growth slowing to 0.3 percent.

Dragging on the Ifo index in September was a sharp decline in sentiment among manufacturers, although companies in retailing and wholesaling reported a slightly brighter mood. Last weeks ZEW survey also showed German analyst and investor morale picked up in September.

Industrial group Bosch and steelmaker ThyssenKrupp, have announced plans to introduce Kurzarbeit or government-subsidized short-time work at German plants.

The index would have fallen further had it not been for a ruling by Germanys constitutional court on Sept 12 in favor of the ratification of Europes permanent bailout fund. Half of the responses in the survey came after the ruling.

The Finance Ministry warned in its monthly report last Friday that data pointed to weaker growth in the remainder of the year. Many economists are now predicting a contraction for the third and possibly the fourth quarters.

Another forward-looking indicator, the Purchasing Managers Index (PMI), last week showed Germanys private sector shrank for a fifth month, and a separate index for the euro zone showed that the ECBs bond-buying plan had so far failed to inspire any major improvement in business at ailing euro zone companies.

However, economist Gerd Hassel said he believed news of the ECBs bond-buying plan had yet to fully sink in.

Im optimistic that the Ifo climate index will rise again in the coming months, he said.

(Reporting by Berlin bureau; writing by Alexandra Hudson; editing by Gareth Jones and Patrick Graham)


Salesforce.com: Pushing social business into the mainstream

October 6, 2012

Business

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Salesforce.com hosted Dreamforce,the companysannual cloud computing love fest, in San Francisco last week. With 90,000 registered attendees, the conference brought a sea of people to the Bay Area; throngs of people everywherein hotels, on the street, in the hallways.

Interpretive artists at Dreamforce (Photo credit: Michael Krigsman)

The primary focus and message of this years event was social enterprise (which some vendors call social businessbut, more or less, its the same thing). By getting behind social business on such a massive scale, salesforce.comremains the largest, unequivocal proponent of social computing.

READ MORE POSTS FROM THE IT PROJECT FAILURES BLOG

Although other megavendors offer product lines based on social computing,over the last severalyears Marc Benioff, CEO of salesforce, has reengineered the entire company using social computing asthe reference point.

Marc Benioff during Dreamforce press conference (Photo credit: Michael Krigsman)

The enormousscale of Dreamforce is testament to the growing interest in cloud computing and increasing market penetration of social business. Although salesforce has a been a steadfast proponent of cloud since its inception in 1999, the push into social enterprise began seriously with the release of Chatter in 2009; with Chatter, salesforce committed itself to the path of social computing in the enterprise.

Whensalesforce released Chatter, I questioned the companys commitment to this new and different product. At that time, I asked Brett Queener,nowExecutive Vice President at salesforce, whether the company was prepared to get behind Chatter for the long term. His response was a definite yes, a commitment that time has proven to be accurate.

The opportunity and challenge of social enterprise. Benioffs keynote referenced a study by theMcKinsey Global Institute on social computing in the enterprise. The study offers a powerful statement on social business, saying that, 72 percent of companies use social technologies in some way. Thereport (PDF download) adds that social computing offers the promise of substantial productivity increases for knowledge workers:

MGIs estimates suggest that by fully implementing social technologies, companies have an opportunity to raise the productivity of interaction workershigh-skill knowledge workers, including managers and professionalsby 20 to 25 percent.

The following diagram from the McKinsey report shows the various ways that social business adds value to the enterprise:

While the report lauds social technologies in the enterprise, it alsomakes clear that very few [companies] are anywhere near to achieving the full potential benefit. The report then explains that organizational challengesare the key obstacle tosocial business transformation in most companies:

To reap the full benefit of social technologies, organizations must transform their structures, processes, and cultures: they will need to become more open and nonhierarchical and to create a culture of trust. Ultimately, the power of social technologies hinges on the full and enthusiastic participation of employees who are not afraid to share their thoughts and trust that their contributions will be respected. Creating these conditions will be far more challenging than implementing the technologies themselves.

The challenge to salesforce.com.There is little doubt that salesforce.com is the most vocal, large scaleproponent of social business today; this three billion dollar companyhas bet the farm on social enterprise.The large attendance at Dreamforcetestifies to the success of the companys marketvision.

However,as the McKinsey reportdescribes, becoming a social enterpriserequires organizational change that goes far beyond technology alone. For salesforce, this means helping customers through the learning process required to achieve real business transformation.

Burberry CEO, Angela Ahrendts, with Marc Benioff (Photo credit: Michael Krigsman)

Although salesforce has a services organization, and even bought a consulting firm called Model Metrics, the companys DNA is all about self-service,cloud-based software. Because success with social business software requires a significant organizational change effort, salesforce may find its deep focus on product, rather than professional services,to be a cause of growth restraint in the future.

In fairness, salesforce understands the imperative need to guide customers through the transformation process. For example:

  • Hiring former United States federal CIO, Vivek Kundra, to work with government clients. Although his role is surely business development, Vivek understands the transformation issues that government agencies experience.
  • Bringing on top industry analyst, Bruce Richardson, as Chief Research Officer to advise customers
  • Engaging formerBT Group(BritishTelecom)executive, JP Rangaswami, to be Chief Scientist at salesforce

These three hires symbolize salesforce.coms intention to develop a body of thought leadership,guidance, andcredibility to help customers through the transformation process. Nonetheless, they are not a substitute for feet-on-the-street organizational change experts, which salesforce customers will increasingly need. Delivering enterprise services will be along-term challenge for salesforce as it grows.

It is worthwhile to briefly discuss on-premise ERP vendors, like SAP and Oracle, for whom services are an essential part of the mix. Like social enterprise, ERP systems involve process transformation across a company; services are therefore an integral part of the established enterprise software ecosystem.

From a services perspective, the long-term challenge to salesforce thus becomes creating a services ecosystem that avoids the IT project failures rampant among the on-premise vendors. For now, salesforce is surrounded by a group of modern age system integrators such as Appirio [disclosure: Appirio is a client], Blue Wolf, and Astadia — all of which presumably strive to avoid the excesses and poor communication that cause project failures on ERP projects.

THE CIO IMPERATIVE

Social enterprise, or whatever you want to call it, is here to stay and it is important. Frankly, if you are a CIO developing a social business strategy is essential to your survival. Today, or in thenearfuture,the business will expect it from you and your customers will demand it of you.

For more on this, read two articles I wrote for the Wall StreetJournal:

Social Media for the Innovative CIO

Transformational CIOs Need to Promote Business Social Networking

Regarding salesforce.com, the company has become a social business steamroller, pushing forward with determination. So far, the strategy has achieved rapid growth and delivered large enterprise customers.

[Disclosure: salesforce.com paid myhotel and airfare to attend Dreamforce]