The announcement came Tuesday through separate postings at Google’s and JotSpot Inc.’s Web journals. Terms were not disclosed.

JotSpot Chief Executive Joe Kraus said JotSpot would be able to tap into the Internet search leader’s large user base and robust data centers capable of handling any growth.

“Our vision has always been to take wikis out of the land of the nerds and bring it to the largest possible audience,” Kraus said in an interview. “There’s no larger audience that you can reach than one you can reach through Google.”

Wiki tools, popularized by the online encyclopedia Wikipedia, let users create, modify and even delete information on items that others in a group have produced.

In July, JotSpot released a new version that aims to make shared pages similar to spreadsheets, photo albums and other software people already use. In the past, Wiki tools have generally mimicked basic Web pages or word-processing documents - photographs, for instance, might appear as a list of attachments, with no thumbnails previewing the image before downloading.
Shared vision

Kraus said Google shared his company’s vision for helping groups collaborate online. As the two companies talked over the past nine months, he said, “we were completing each other’s sentences.”

The deal isn’t Kraus’ first encounter with Google. Long before Google became a household name, co-founders Larry Page and Sergey Brin considered forgoing their own search engine and licensing their technology instead. According to John Battelle’s book “The Search,” Page unsuccessfully tried to get $1.6 million from Excite, an early search engine Kraus had co-founded.

Google’s acquisition of JotSpot, which closed Monday, comes as the search company prepares to purchase the online video-sharing site YouTube Inc. for $1.65 billion in stock.

Earlier in the year, Google said it bought Upstartle, the maker of the online word-processing program Writely. Google has since packaged Writely with an online spreadsheet it developed in-house. The free tools could help groups simultaneously work on documents over the Web and provide alternatives to Microsoft Corp.’s dominant business-software applications, which largely run on computer desktops rather than the Internet.

Kraus said Google’s acquisition of JotSpot “validates the notion that people want to do more online than just read. The Web is moving from a monologue to a dialogue.”

As JotSpot makes the transition to Google’s systems, new registrations have been suspended. Existing users can continue using the service, and JotSpot will stop billing for paid accounts.

Kraus declined to discuss future product plans under Google. In the past, Google turned the Picasa Inc.’s $29 photo organizer into a free download, but it sold a premium version of Google Earth, a mapping product that incorporated technology acquired from Keyhole Corp.

JotSpot currently has 30,000 paid users at about 2,000 companies using a service hosted on premise or at JotSpot. About 10 times as many people use the free, JotSpot-hosted service, which restricts the number of pages and the size of the collaborating group.
Universal ID

Kraus said Google has yet to determine whether existing users would eventually have to sign up for free user IDs through Google, as Writely users ultimately had to do.

The universal identity could heighten privacy concerns, making it easier for governments to obtain one’s search history, e-mail messages, word-processing documents and now wiki data with just one subpoena. Kraus said users could delete accounts before migrating to Google.

JotSpot’s 27 employees will move about six miles from Palo Alto, Calif., to Google’s Mountain View headquarters.

Shares of Google fell 18 cents to close at $476.39 on the Nasdaq Stock Market.

Source - CNN

The company introduced Office Genuine Advantage in April as a voluntary way for people to ensure that they only used licensed and legal copies of the productivity software. But as of Friday, Office Online templates downloaded from within Microsoft Office System 2007 applications will require validation of the Office software in use.

And as of January 2007, people will also have to complete the authentication test if they want to use Office Update.

The move means that users who are caught using software that can’t be proved to be 100 percent legal won’t get access to add-ons and updates from Microsoft. Those denied access because their version does not pass the authentication test will need to prove that their software is valid before they can proceed.

Microsoft says it will “continue to provide a complimentary copy of Microsoft Office to help qualifying customers who unknowingly acquired counterfeit versions of Microsoft Office 2003.” But users will need to “fill out a counterfeit report, provide proof of purchase and send in their counterfeit CDs” to prove their entitlement to a free replacement copy of Office.

Customers who have “unknowingly acquired” a counterfeit version of Office and can’t provide these details will have to pay a license fee, Microsoft said. This will be $359 for the Office Genuine Advantage kit for Microsoft Office Professional Edition 2003, while the Microsoft Office Small Business Edition 2003 costs $269 and the Microsoft Office Student and Teacher Edition 2003 costs $139. This offer is available for November, the company said.

Tony Lock of analyst firm Sageza said that the licensing changes were not unexpected. He believes it makes sense for Microsoft to bring its licensing strategies for Office and Windows in line. “But I think most of the problems come from Windows and not Office,” he said.

Microsoft has escalated its battle with software pirates during the past two years through the “Genuine Advantage” add-ons for Windows and Office, its biggest cash cows. The company is now expanding its push by putting antipiracy features in its new products and taking more drastic action when it finds that a product was illegitimately acquired.

Earlier this month, Microsoft owned up to problems with Windows Genuine Advantage when some validated customers were denied access to their applications because of a software problem.

The world’s largest software maker also said it will defer revenue of $1.5 billion related to the upcoming launches of a new Office software suite and Windows Vista, the first major upgrade of its operating system in five years.

Including the effects of the deferral, which will reduce profit this quarter by 11 cents per share, Microsoft forecast second-quarter profit of between 22 cents and 24 cents per share on revenue of $11.8 billion to $12.4 billion.

Analysts, on average, had forecast second-quarter earnings of 36 cents per share on sales of $13.4 billion, according to Reuters Estimates.

In after-hours trade, Microsoft shares rose to $28.50 from a close of $28.35 on Nasdaq.

The revenue deferral stems from a coupon program announced this week to allow buyers of personal computers to upgrade to Vista and Office 2007 when they debut next year.

“People might be concerned that operating income may drop in the next quarter, but what’s happening is that they’re deferring revenues for an upgrade program to Windows Vista,” said Toan Tran, an analyst with Morningstar.

“It really has no effect on the cash flow Microsoft has. It just won’t be recognized until the third quarter.”

The company also gave a full-year earnings outlook range of $1.43 to $1.46 per share on revenue of between $50 billion and $50.9 billion. Wall Street analysts have been looking for a full-year profit of $1.44 per share on sales of $50.3 billion.

Microsoft Chief Financial Officer Chris Liddell told Reuters in an interview that the full-year outlook was stronger than it might first appear.

A $20 billion tender offer for shares set for August was not fully completed, leaving a larger share base that would lower earnings by 4 cents per share more than previously anticipated, he said. But the company aimed to make that up with a better performance and other share repurchase programs.

“That’s primarily due to the fact that the tender was not fully subscribed, but we’re obviously very happy that we are able to maintain the range we previously had,” Liddell said.

“The way I look at it, we are able to make up all of that shortfall.”

In its first quarter ended Sept. 30, net profit was $3.48 billion, or 35 cents per diluted share, up 11 percent from $3.14 billion, or 29 cents per diluted share, a year ago. Sales rose 11 percent to $10.8 billion in the quarter.

Analysts, on average, had forecast earnings per share of 31 cents on revenue of $10.7 billion, based on Reuters Estimates.

Microsoft posted sales and profit growth at its server and tools business, powered by a 30-percent year-on-year rise in sales of its database software platform, SQL Server, and solid demand for its Windows server software.

The company also said it had sold 6 million Xbox 360 video game consoles since the launch last November, and losses at its entertainment and devices division shrank to $96 million from $173 million a year ago and $414 million the previous quarter.

“We’re progressively lowering the manufacturing costs of the console,” Liddell said. “So even for the ones we do sell, we are in a better shape from a loss-per-console perspective.”

He added that the number of games sold per Xbox rose in the quarter. While video game machines often sell at a loss, the games themselves are highly profitable.

Microsoft shares have risen about 25 percent since June, hitting a near-two-year high on investor optimism that the much-anticipated Windows and Office upgrades will pay off.

Microsoft is expected to launch Windows Vista and Office 2007 for corporate customers this quarter, and for retail consumers early next year. The two product lines comprise more than half of Microsoft’s revenue and almost all of its profit.

Source - CIOL

LOS ANGELES (Reuters) - No one was buying hell on Friday — or at least its red-hot Web address.

HELL.com was among hundreds of Internet domain names up for auction in Hollywood, Florida, by domain asset management provider Moniker.com, a unit of marketing services firm Seevast Corp.

The owner put a minimum price of $1 million on the underworld’s domain, confident of high interest after the salacious address, Sex.com, sold for about $12 million earlier this year. But there were no takers with bids failing to reach the reserve price.

“The world is still alive and well. Nobody is going to hell right now,” Seevast Chief Executive Lance Podell told Reuters, adding that the domain would now be part of a silent auction.

Moniker was selling HELL.com on behalf of a group called BAT Flli LLC, whose founder Kenneth Aronson registered the name in 1995.

It’s not the first time that Aronson has tried to sell HELL.com. He put the address on the auction block in April 2000, at a starting bid of $8 million.

In an interview with Reuters in 2000, Aronson said members of The Final.org, an enigmatic collective of digital artists and creative visionaries, were using HELL.com as a private destination for their work.

According to the site, HELL.com is a “private parallel web” not accessible with a Web browser.

The auction on Friday included a list of domain names such as cameras.com, which pulled in $1.5 million. Sexeducation.com that sold for $120,000 and babies.net which went for $26,000.

Flowers.mobi, an address with the new extension for mobile devices, went for $200,000, while fun.mobi pulled in $100,000.

A boom in Internet advertising driven by companies such as Google Inc. and Yahoo Inc. have sent prices for sought-after domain names soaring.

Source-Reuters

SAN JOSE, California (Reuters) - A federal judge on Friday questioned whether Google Inc. defamed a small company by cutting it from its Web search ranking system or whether Google is free to choose which sites it features.

Judge Jeremy Fogel of the U.S. District Court for the Northern District of California heard arguments in a lawsuit by KinderStart.com LLC that seeks to challenge the fairness of how Google calculates the relative popularity of Web sites.

KinderStart, a Norwalk, Connecticut-based Web parenting site that features links to information about raising children, alleges violations of antitrust, free speech, unfair competition and defamation and libel laws in its suit.

Fogel said in opening comments that he was concerned attorneys for plaintiff KinderStart had not met the legal standard for defamation at the core of its complaint.

“I guess I am still not convinced … that a provably false statement has been alleged,” Fogel said during a court session on whether the suit should advance to the evidence discovery stage or be dismissed outright.

The judge asked whether Google has a free speech right to prioritize some sites over others in how it constructs computer formulas in its search system. “Assuming Google is saying that KinderStart’s Web site isn’t worth seeing. Why can’t they say that? That’s my question,” Fogel said.

KinderStart argues the site’s sudden demotion in March 2005 to a “zero” ranking in Google’s search system has severely harmed its business. It seeks class action status on behalf of what is says are many other sites that have suffered the same fate as Google regularly fine-tunes its rankings.

“The fact that they (Google) have used a computer shouldn’t affect whether it is defamatory,” KinderStart counsel Gregory Yu said after the hearing.
“Using a computer to do that is a smoke screen,” he said.

Fogel said he would take until at least the end of the year to render a formal ruling on whether the case should proceed or be dismissed, either with right of appeal or for all time.

“Judge Fogel’s comments make it clear that he has read the papers very carefully,” Hilary Ware, Google’s senior litigation counsel, said. “We look forward to his ruling.”

Apart from the basic way it counts the number of inbound links to any particular Web page, Google zealously defends the secrecy of the complex mathematical algorithms it uses to determine a site’s ranking. Earlier this year, Google went to court to protect those trade secrets in a successful bid to limit a U.S. Justice Department request for search data.

Google maintains that such secrecy is necessary to prevent the manipulation of its search system to gain attention.

“This is a case that challenges Google’s very right to operate,” Google outside legal counsel David Kramer told the court. “It is not a case about KinderStart’s free speech.”

Source-Reuters

by David Welch

General Motors (GM) looks pretty good these days when you compare its performance to the huge losses reported this week by rivals Ford Motor (F) and DaimlerChrysler’s (DCX) Chrysler Group. But GM’s meager profits and burning cash pile show that the struggling automaker still has a long way to go before management and shareholders can start popping champagne corks.

GM made $529 million in the quarter if you exclude $644 million in special charges, including a big one for the sale of 51% of its GMAC finance arm. That’s a $1.6 billion turnaround from last year. But dig in to the numbers a bit and all but $81 million of that came from a few one-time tax windfalls. “These are baby steps in a long road to recovery,” says Gimme Credit analyst Shelly Lombard. “The quality of earnings was disappointing because most of it came from tax benefits and they are still burning cash.”

The bottom line for GM is that the company still has a very long way to go. The latest results, while much better than last year’s $1.1 billion third-quarter loss, are hardly enough to keep dissident shareholder Kirk Kerkorian from trying to woo shareholders should he decide to launch a proxy fight. Kerkorian was displeased when GM nixed his proposal to form an alliance with Renault-Nissan (NSANY) early this month, prompting his deputy, Jerome B. York, to quit the board that he joined only in February.

Cash Concerns

The arguments on the two sides are this: GM says that its small operating profit is evidence that Chairman and CEO Richard Wagoner Jr.’s turnaround plan is taking hold. Kerkorian’s camp argues that the company still has most of the long-term problems that got the company into its big mess in the first place.

Without a doubt, GM has big problems still to manage. While some new vehicles are generating strong margins, GM still has a lot of older models for sale that don’t drop much to the bottom line. GM also burned through $5 billion in cash in the quarter, including restructuring costs, and can’t yet say when the company will stop the burn. “Relative to where we came from, there is significant improvement,” GM Vice-Chairman and CFO Frederick “Fritz” Henderson said in an interview. “But our starting point was really bad.”

Henderson readily admits that turning GM’s cash flow around is still a big job. Even though GM—which has $20.4 billion in cash—will realize about $6 billion in cost cuts this year, only $2.5 billion of that is in real cash savings. The rest is purely savings on an accounting basis. Even the $448 million tax windfall GM enjoyed in the third quarter did not bring in any cash, Henderson said.

Next year, GM will get the full impact of Wagoner’s $9 billion cost-cutting plan. But $3 billion of that is also noncash.

Plus, GM still hasn’t paid for all of the severance packages and buyout deals that eliminated 35,000 jobs. The company paid $1.9 billion in cash in the third quarter for restructuring costs. Henderson says GM will be paying more separation costs into the first quarter of next year.

Burden of Delphi

Former GM parts unit Delphi will also drain GM’s cash in the future. GM still has contractual obligations to employees of the bankrupt parts maker. It may have to assume up to $7 billion in pension and health-care liabilities that would boost its cash expenses, albeit over many years.

Plus, to get the union to accept a lower wage-and-benefits package so that Delphi can drop costs and GM can possibly sell the company, the automaker may have to subsidize the wages of some of the employees. That could cost GM $400 million in pretax payments next year and $100 million a year after that. That, too, will eat some cash.

That doesn’t mean GM is headed toward bankruptcy, says Lombard. Its $20 billion cash pile is shrinking, but when the sale of 51% of GMAC goes through this quarter, GM should get $10 billion in cash.

Automotive profits still remain elusive, though. GM’s auto business lost $116 million, with the struggling North American business losing $367 million. What’s worse is that even as GM’s revenue per vehicle jumped almost $370 a car from the second quarter, the amount of profit its cars contribute actually fell.

Long Way to Go

Henderson blamed a number of factors, including rising shipping costs and a big jump in prices for raw materials, especially precious metals used in catalytic converters.

Another factor is GM’s model lineup. The new full-size SUVs launched in January pushed up per-vehicle margins because buyers tend to order loaded vehicles with lots of expensive options when new models hit dealerships. But as a new model rolls through its first year on the market, consumers buy less pricey models and their profit power slips.

Even though new models represent 30% of GM’s volume, the older models are under pressure from competition and have a tougher time making stronger profits, Henderson said.

It’s no wonder. GM’s U.S. market share is down from 26.6% to 24.5%, according to Autodata. To keep market share up, the company has pushed up incentives to more than $3,400 per vehicle—about $1,100 above what GM spent in the second quarter.

Those kinds of numbers are why Henderson says that GM is “a long way from where we want to get to.” Kerkorian would probably agree. Looking ahead, the question will be whether Wagoner and Henderson can get GM where it needs to be fast enough to keep Kerkorian at bay.

Welch is BusinessWeek’s Detroit bureau chief.

“Corus Directors consider the terms of the acquisition to be fair and reasonable, so far as shareholders are concerned. The Directors intend to unanimously recommend that Corus shareholders vote in favour of the scheme,” a joint statement released by Tata Steel and Corus said.

The acquisition will be made by Tata Steel UK, a wholly-owned indirect subsidiary of Tata Steel. The Indian firm has also been able to satisfactorily address the concerns of Corus’ two main pension funds.

“This proposed acquisition represents a defining moment for Tata Steel and is entirely consistent with our strategy of growth through international expansion,” Tata Group chief Ratan Tata said.

“We have compatible cultures of committment to stakeholders and complimentary strengths in technology, efficiency, product mix and geographical spread,” he said.

Corus Chairman Jim Leng said the combination with Tata represented “the right partner at the right time at the right price and on the right terms.

“This creates a well balanced company, strategically well placed to compete in an increasingly competitive global environment,” Leng said.

The Tata-Corus deal comes close on the heels of the acquisition of Luxembourg-based Arcelor by Rotterdam-based Mittal Steel, owned by India-born industrialist LN Mittal. Arcelor-Mittal is now the world’s largest steel company with a combined output of about 110 million tonnes per year.

“The combined entity would be better equipped to remain at the leading edge of the fast changing steel industry,” Ratan Tata said.

Leng said the deal with Tata followed talks with a number of Brazilian and Russian companies over the past one year.

The price of 455 pence per Corus shares is a premium of 26.2 per cent to the average closing price of 360.5 pence per Corus share for the twelve months period ended October 4, when the two sides first confirmed of the negotiations.

Tata Steel would fund the deal through its own cash resources and loans. The company is likely to raise about 1.8 billion pounds on its own and would get a loan of about 3.3 billion pounds from Deutche Bank, ABN Amro and Credit Suisse.

As per the deal, at least 75 per cent Corus shareholders must tender their shares for Tata Steel to complete the transaction. The Indian firm has also been able to address the concerns of Corus’ two pension schemes - the Corus Engineering Steels Pension Scheme and British Steel Pension Scheme - by increasing its contribution rate and paying additional funds.

Corus is Europe’s second largest steel producer, after Arcelor-Mittal, with revenues of 9.2 billion pounds in 2005 and steel output of 18.2 million tons in UK and Netherlands.

Tata Steel is India’s largest private sector steel firm with revenues of 5.0 billion dollars in 2005-06 and steel production of 5.3 million tonnes across India and South-East Asia. Tata Sons, Tata Steel and other Tata firms had combined revenues of about 22 billion dollars in 2005-06.

A fact highlighted by the report is that people who check blogs do not necessarily blog themselves, surely a big respite from the general conception that the blogs mostly thrive on bloggers “scratching each others’ backs”, that only a close group of bloggers generally read each other’s blogs. Another fact is that 42% of the Indian netizens also read blogs in Indian languages.

The CIA Factbook believes there are 50 million internet users in India.

Annanya Sarin, a spokeswoman for Corus, did not confirm or deny that the board had reached a decision on Tata’s takeover offer, but said that any decision would have been announced to regulators.

The Corus board’s reported agreement to Tata’s bid does not necessarily mean that the takeover will go through. It will need to be accepted by shareholders and industry sources were expecting counter-bids from the Russian Severstaal and the Brazilian steel maker Companhia Siderurgica Nacional (CSN).

A merger of Corus with Tata Steel will create the sixth largest steel producer in the world and would amount to the biggest takeover of a foreign firm by an Indian company.

Corus is currently ranked the ninth largest steel producer in the world while Tata is ranked 56th. Corus has 24,000 employees in Britain and 16,000 in Holland.

A year ago as the Tatas unveiled ambitious plans in Jharkhand, Orissa and Chattisgarh, analysts were worried about whether its balance sheet would be able to bear the strain of over Rs 80,000 crore.

Now, as Tata Steel prepares to bid for Corus at USD 10.4 billion, the strain on the balance sheet will increase.

Tata Steel has free reserves of Rs 8,900 crore and its debt equity ratio is a very healthy 0.3. By global standards, there’s a lot of scope for leverage, but the Tatas have always prided themselves on maintaining the lowest debt-equity ratios.

Here’s why the Corus deal might have to go the Tetley way, 100% of the Corus equity would be put into a Special Purpose Vehicle shared between the Tata Steel-Tata Sons combine and three bankers, Deutsche, Standard Chartered and Citibank.

This will mean Tata Steel will have to pick up debt of about USD 2 billion. This will see its debt-equity ratio at 1:1, which is still very respectable.

So at current valuations of 580 pence per share or USD 10.4 billion, there’s no cause for concern. But the problem is that if Tata Steel were to make an offer for Corus experts believe it could spur Russian companies like Severstal and Eraz or also Brazilian company CSN to make counter offers.

And this could push up the price like it did in the famous Arcelor-Mittal deal, in which Mittal ended up paying 40 percent more than its initial offer for Arcelor.

Going by that sort of valuation the Tatas may have to shell out USD 15.9 billion or 888 pence/share. And that’s what analysts are worried about.

Would that sort of valuation justify the fact that it would catapult the Tata Steel-Corus combine output to 22 million tonne of steel a year? That would be behind the 110 million tonne Arcelor Mittal and the 30 million tonne of Nippon Steel, JFE and Posco.

That’s the USD 15 billion question the Tatas will have to grapple with.