Google is being scrutinized by European antitrust officials, who have notified the Internet search giant that three companies have complained about its practices.
The European Commission is investigating complaints made by Ciao! from Bing, which is a unit of Microsoft (MSFT, Fortune 500); UK price comparison site Foundem; and French legal search engine ejustice.fr, Google said.
The three are arguing that the search firm suppresses the ranking of its competitors in search results.
"The Commission has not opened a formal investigation for the time being," according to a statement released by the executive arm of the European Union. "As is usual when the Commission receives complaints, it informed Google earlier this month and asked the company to comment on the allegations cash advance."
Google (GOOG, Fortune 500), which revealed the inquiry in a post on an official company blog early Wednesday, said that given its growth, it wasn’t surprised its search and search advertising practices were being examined.
"This kind of scrutiny goes with the territory when you are a large company," senior competition counsel Julia Holtz said on the company’s European Public Policy blog.
She said that Google will provide information on the complaints and said that the company is confident its business operates in line with European competition law.
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Private equity firm TPG could partner with American Airlines on a minority investment in Japan Airlines to prevent its defection to a rival airline group, the chief financial officer of American parent AMR Corp said.
The emergence of TPG as a potential investor comes as the loss-making Japan Airlines seeks its fourth state bailout since 2001, saddled with $15 billion in debt, a massive pension deficit and dozens of unprofitable routes.
The Japanese government pledged on Tuesday to enlist a state bank to offer bridge loans to prevent the airline from running short of cash and said it may introduce legislation to cut a pension shortfall that hit $3.7 billion in March.
Even as it struggles to avoid bankruptcy, JAL is being wooed separately by American Airlines and Delta Air Lines, which are keen to gain access to JAL’s network in Asia and a stronger foothold in Japan. JAL is Asia’s largest carrier by revenues.
AMR’s Thomas Horton said TPG, which helped fund Continental Airlines emergence from bankruptcy in 1993 and backed a failed takeover attempt for Australia’s Qantas Airways in 2007, has agreed to potentially invest in JAL as part of any deal with American Airlines.
“As appropriate and if it were welcomed by Japan Airlines and the government of Japan, TPG could also be part of a comprehensive recovery plan,” Horton told reporters in Tokyo.
“They have been active in the airline space over the years payday cash loan.”
A spokesman for TPG in Tokyo declined to comment.
American partners JAL in the Oneworld alliance, which pools frequent flyer miles and feeds passengers between members, and is keen to block it from joining Delta in the rival SkyTeam group.
American has argued that JAL and Delta would have difficulty clearing regulatory hurdles if they sought antitrust immunity for closer business ties because the alliance would give SkyTeam control of 60 percent of air traffic between Japan and the U.S.
American, which has hired Rothschild ROT.UL as an adviser on the deal, also estimates that defecting to SkyTeam could drain JAL of about $500 million in revenues during a transition period of 18-24 months.
A Delta spokeswoman in Tokyo declined to comment.
SIDE SHOW
In addition to a capital investment, American has been talking with JAL on forming a joint venture to cooperate more closely on scheduling, pricing and marketing. American estimates this could bring another $100 million in annual revenue to JAL.
Such close cooperation requires an “open skies” agreement between Japan and the United States. The two governments are in negotiations and are aiming for a deal this year.
Microsoft is banking on Windows 7 to breathe new life into a PC world where most computer users are running XP — an operating system that was released in the early days of the Bush administration.
Experts expect that PC users will change their operating system for the first time in about eight years when Microsoft (MSFT, Fortune 500) launches Windows 7 on Oct. 22.
Microsoft’s last operating system, Windows Vista, was a disaster when it was released in 2007. Vista was plagued by bugs, software incompatibilities, sluggishness and annoying security alerts. The episode nearly destroyed the tech giant’s reputation with consumers.
"The stakes for Microsoft are astronomically high after the Vista debacle," said Scott Anthony, managing director of Innosight Ventures, a venture capital and consulting firm. "There is a lot of hunger for computing power around the world, and this release will be a real test for Microsoft."
Positive reviews for Windows 7 have been pouring in. Computer experts say that Windows 7 is good — if not perfect — and has a shot at eventually usurping XP as the world’s most prevalent operating system.
Right now 71.5% of PCs are still running XP, according to OS market share tracker netmarketshare.com, while 18.6% of PCs are running Windows Vista.
"There was lots of negativity around Vista, and Microsoft lost a lot of goodwill with its customers," said Ken Allen, a portfolio manager at T. Rowe Price who manages a tech fund that includes Microsoft as one of its holdings.
Microsoft has aggressively been rolling out products and services (think Bing and Zune HD) to boost its sales, which have declined in the previous two quarters. Its third quarter ended March 31 marked the first time sales fell in Microsoft’s 23-year history as a public company.
"The ‘bad will’ that Microsoft engendered could be reversed if Windows 7 is well received," said Allen.
It appears Microsoft is on the right road. Demand for new computers is starting to heat up again, and many users are looking for an operating system upgrade. Windows 7’s release coincides with holiday season shopping. With the economy showing signs of recovery, consumers may be more willing to loosen their purse strings.
What XP users can expect: Windows 7 is faster, more secure and easier to network with other computers than XP. Microsoft has also added a number of features to simplify tasks.
For instance, Windows 7 unveils a more efficient task bar allowing users to switch more easily between programs than the current Alt-Tab function in Windows XP. It also allows users to preview programs by hovering over icons on the taskbar.
Users will also be able to simply shake their mouse to unclutter their desktop rather than having to minimize multiple windows.
"Windows 7 is a far superior product than previous versions, and no one will be disappointed if they use it," said Vishal Dhar, co-founder of iYogi, a global tech support company for consumers. "At the right price point, [consumers] will upgrade for the new features."
Dhar said people used to XP will be most pleased with Windows 7’s video editing capabilities, which XP did not accommodate, and speed. He also said the $119 upgrade price is likely low enough to lure people to upgrade.
But there’s one hitch and it’s a biggie: upgrading is far from easy. XP users who choose to upgrade their computers to Windows 7 will have to either wipe their hard drives or re-install all of their applications. That means finding the product keys and old CDs. As a result, some experts say XP users interested in Windows 7 are better off just buying a new computer.
Slow boost to PC sales: While many experts expect a brief pop in PC sales from Windows 7, most anticipate the bulk of those sales to occur next year.
"Adoption of Windows 7 may take a while longer than some expect," said Scott Anthony, managing director of Innosight Ventures, a venture capital and consulting firm. "A lot of consumers are going to wait because they heard about people getting burned on Windows Vista."
Tech analysts also expect businesses to delay adoption of Windows 7 until next year.
"We don’t expect the release of Windows 7 to significantly influence PC demand at year-end," said George Shiffler, analyst at Gartner. "At best, Windows 7 may generate a modest bump in home demand and possibly some added demand among small businesses."
Shiffler said he doesn’t expect most larger businesses to start switching to Windows 7 en masse until late 2010, and believes vendors have overestimated how many people will be interested in the product right off the bat.
Even Microsoft CEO Steve Ballmer said earlier this month that the rise in PC sales as a result of 7’s release "will probably not be huge."
Experts say it will be difficult to judge the success of Windows 7 for a year or maybe more, but what’s clear is that Microsoft has a lot riding on the latest update to the world’s favorite operating system.
Nintendo said it is cutting the price of its popular Wii video-game console by $50 to $199.99.
The 20% price drop on the Wii, which features a motion-sensor remote, will take effect Sunday, according to a Nintendo statement released early Thursday.
The new price is the first reduction since the console launched in November 2006.
The interactive Wii immediately proved wildly popular across demographics — including rehabilitation centers, to aid patients’ recovery — and demand for the console outstripped supply more than a year after its initial release in November 2006.
Earlier this year, Nintendo Chief Executive Satoru Iwata said the company had sold 50 million Wii units.
The company said in a statement Thursday that it hoped the new price would attract consumers who were on the cusp of becoming gamers. According to its own research, Nintendo said there are about 50 million Americans who fall into that category.
Nintendo’s price cut mirrors recent moves by two rivals. In August, Microsoft (MSFT, Fortune 500) slashed the price of its high-end Xbox 360 "Elite" model by $100 — just days after Sony (SNE) cut its console PlayStation 3 by the same amount.
‘It’s-a me, Mario’
In its statement, Nintendo also confirmed the release date of "the first truly multiplayer" game in its ever-popular "Mario Brothers" series no fax cash advances.
The "New Super Mario Bros." for Wii will hit stores Nov. 15. It’s the first title in the classic series that allows four users to play the game at the same time.
Customers can try this and other games at a "sampling tour" coming to three cities in October.
"Differentiating between thousands of [game] alternatives is nearly impossible," said Nintendo in a statement, adding that the ideal solution is allowing consumers to test drive the games before they plunk down cash for a game or system.
Users will be able to try out one of several Wii games, including "Sports Resort" and "Wii Fit Plus," as well as DS titles like "The Legend of Zelda: Spirit Tracks."
The tour will come to Long Beach, Calif., Oct. 2-4; to Philadelphia Oct. 9-11; and end in New York City Oct. 16-18.
The housing industry has been universal in its opposition to the Home Valuation Code of Conduct, and on Tuesday leaders met with New York Attorney General Andrew Cuomo to discuss modifying the rules.
The code was originally designed to protect appraisers from pressure to inflate their home valuations because such actions helped fuel the housing bubble and resulting bust.
In fact, the code grew from case in which Cuomo went after now-defunct lender Washington Mutual because it pressured a title company to raise appraisal values in order to push deals through.
But realtors, mortgage brokers and builders have charged that one result of the code has been an increase in below-market valuations that have killed sales and further slowed already moribund housing markets. A recent survey from the National Association of Realtors reported that 20% of its members claimed to have lost at least one deal due to low valuations.
"The good news is they were very concerned" said Jerry Howard, the CEO of NAHB, "and they offered to be part of the solution."
He said few specifics came out of this meeting but that the lead attorneys from the AG’s office agreed to join with a "summit" of industry representatives next month, in which Howard expects to refine the details of the HVCC.
Prohibitions
Right now, the HVCC bans loan officers, realtors, mortgage brokers and builders — anyone, basically, whose compensation depends on home sales — from ordering appraisals or exerting undue influence on appraisers. And mortgage giants Freddie Mac and Fannie Mae won’t back any loan that doesn’t comply with the HVCC standards.
Everyone agrees that’s a noble goal and one that should be maintained, but there is a lot of room for confusion and misinterpretation of the guidelines.
"The HVCC does not prohibit interaction between housing professionals and appraisers," said Bill Garber, spokesman for the Appraisal Institute, a trade group. "But it could state more clearly what it’s legal to do."
What the codes says and what it has been interpreted to mean are two very different things, according to John Brenan, Director of Research and Technical Issues with The Appraisal Foundation. "Communication boundaries have not been interpreted consistently and that has limited the amount of information available to appraiser," he said.
Real estate professionals are scared they’ll be accused of violating HVCC, which can impact their bank accounts. If a mortgage loan does not follow HVCC guidelines, neither Fannie nor Freddie will buy it or guarantee it. That essentially kills the deal — and any commission — because there’s virtually no operating secondary market for loans not backed by those agencies.
Howard would like to see a new set of guidelines, done in a frequently-asked-questions format, that more explicitly spells out the rights and responsibilities of everyone involved. That way, a home builder would know exactly how much input he could give to appraisers without going over the line.
This would be especially helpful to those operating in areas where foreclosures are predominant. These are hot zones for strife between realtors and appraisers as they try to determine what qualifies as a comparable home sale on which to base valuations.
"To say a house that needs $200,000 in repairs to make it livable should appraise at the same level as a new house next door is ridiculous," said Howard. "Right now, using these foreclosures as comparables without adjusting for condition can go unchallenged."
Realtors and builders want to be able to discuss why homes were valued at a certain level and show other comparables without fearing violation of HVCC.
Brenan believes the HVCC will reach its goal of preserving interaction while protecting appraisers from intimidation. "Over time, HVCC will evolve and will benefit all the parties," he said.
With a growing number of homebuyers depending on government-insured loans, the Obama administration is taking steps to shore up the Federal Housing Administration program.
Rising demand and a slower-than-expected rebound in home prices are pushing one of FHA’s reserve accounts below the 2% ratio mandated by Congress, said Commissioner David Stevens. The capital reserves are a cushion against expected losses in the program, which has suffered soaring defaults amid the housing collapse.
The FHA has skyrocketed in popularity during the mortgage crisis since it backstops banks if borrowers stop paying. Housing experts are growing increasingly concerned about the agency’s ability to handle rising numbers of defaults.
The drop in reserves, however, will not require a taxpayer-funded infusion into the housing agency, nor an increase in insurance premiums that FHA borrowers pay, Stevens said. The capital reserves, which are determined by an independent auditor and reported to Congress in November, will rise above the minimum threshold within a few years as the housing market recovers.
The agency’s overall reserves stand at more than $30 billion, a record level thanks to the large influx of premium-paying borrowers, Stevens said. It covers more than 4.4% of its insurance commitments.
"To be clear, the fund’s reserves are sufficient to cover our future losses, so the FHA will not require taxpayer assistance or new congressional action," Stevens said.
Still, the agency is taking a number of steps to reduce the riskiness of the program, which allows borrowers to purchase a home with as little as 3.5% down. It plans to hire its first chief risk officer in its 75-year history and to increase net-worth requirements for approved lenders to $1 million, up from $250,000. Lenders will also be responsible for any losses resulting from fraud on the part of mortgage brokers.
The changes may eliminate some smaller FHA lenders and will likely weed out some of the riskier borrowers, Stevens said.
These moves, particularly hiring a chief risk officer, are important steps that need to be taken, said Howard Glaser, head of the The Glaser Group, a financial services analytics firm. The agency grew so quickly that it was difficult to monitor the quality — and riskiness — of the loans being made.
While the FHA may want to raise borrower premiums or tighten its underwriting standards if defaults continue to rise, Glaser said the agency’s $30 billion reserve is enough to cover its current loss estimates.
"It’s surprising they are doing as well as they are," said Glaser, a former Clinton administration housing official.
FHA propping up housing market
As banks have clamped down on mortgage lending, the FHA program has emerged as one of the few ways people can buy a home these days. Banks are more willing to make FHA loans because they come with a federal guarantee to cover losses if the borrower defaults. And borrowers can more easily qualify for FHA loans because they only need 3.5% down and can have lower credit scores.
As a result, demand for FHA loans has exploded. FHA loans now account for 23% of the market, up from 2% in 2006, Stevens said. Some 80% of first-time homebuyers go through the agency.
The agency, however, has also seen a spike in delinquencies amid the mortgage meltdown. Some 14.42% of FHA loans were past due in the second quarter, up .58 percentage points from the same period a year earlier, according to the Mortgage Bankers Association. Just under 3% of FHA loans were in foreclosure, up .22 percentage points.
Concerned about rising defaults, the agency has raised its standards for new borrowers. Only 7.5% of the portfolio has a credit score below 620, down from 50% two years ago. The average score is 690, versus 630 two years ago.
"The quality of the current FHA book is significantly better than anything seen in the FHA portfolios in recent years," Stevens said.
The job market is showing signs of improvement, according to the latest economic reports. But for those out of work and pounding the pavement, there are few signs of a turnaround.
After peaking in January, the pace of job losses has slowed dramatically, according to the Labor Department. Employers cut 216,000 jobs from their payrolls in August — 22% fewer than the previous month.
But even though job cuts have abated, hiring is close to a standstill, as most employers are still hesitant to add workers. The number of new hires remains near an all-time low, according to the Bureau of Labor Statistics.
And job hunters aren’t seeing much improvement either.
"I’ve applied to over 80 positions and only gotten one callback from a company that ‘wasn’t hiring but was interested in me for future openings,’" said Shalon Brown, 27, who was laid off in December and has struggled to find something else in her field of landscape architecture.
"I’d be willing to take any job that pays at least $30,000 and offers health insurance right now."
But that might be harder than it sounds. One problem is that companies are trending away from filling full-time positions with benefits. For those businesses in need of extra help, employers are much more likely to bring on temporary workers to meet demand, explained Janette Marx, senior vice president of Ajilon Professional Staffing. "They are not quite sure of hiring full time yet," Marx said.
In fact, almost 70% of U.S. companies surveyed expect no change in their fourth-quarter hiring plans, according to a recent study by employment services company Manpower Inc.
Jo Prabhu, who runs placement firm 1-800-Jobquest in Long Beach, Calif., has no intention of bringing on any full-time workers in the year ahead. "We will be taking advantage of the new and acceptable methods of hiring, and will only be hiring independent consultants or contractors for 2010 on an as-needed basis."
Prabhu also says the other companies she works with share her sentiment. "The old standards of hiring and retention have given way to the new concept of jobbing and outsourcing, and employers are seeking a greater percentage of ‘at will’ services without having to finance and support medical, retirement and other benefits."
And that leaves many unemployed workers out of luck and still out of a job.
Rebecca Natale, 42, is hopeful there will be more employment opportunities going forward, but is realistic that her situation might not improve until next year. Natale left her position as a human resources manager in May planning to start her own business or find another position in her industry. In the last four months, she says she has only received calls for commission-based sales jobs.
"I applied for summer help to stay busy and nothing," she said. "I figure it will be the same response if I apply for upcoming seasonal positions."
Natale views her job prospects as being
"pretty nonexistent in my field until the middle to the end of next year."
Some experts agree with that outlook. Many recruiters expect hiring to pick up again in 2010, albeit at a very slow pace. "I do believe we will start to create jobs again," although likely "after the first of the year," said Bob Damon, the president of North America for recruiting firm Korn/Ferry.
But Shalon Brown is less optimistic. Even with lowered expectations, "I’ve got no job prospects," she said. "I’m expecting a long, cold winter ahead."
Talkback: When do you see the job market improving? Share your comments below.
TORONTO–Nearly 500,000 more Canadians will be unemployed this Labour Day than last, and while economists say the recession is over, job losses are expected to continue well into next year, and many of those who lost their jobs don’t qualify for Employment Insurance.
Labour leaders say even those who still have jobs are fighting cuts to pension benefits and other attempts by employers to get concessions, including moves by some companies that unions say are "taking advantage" of the economic downturn to cut costs.
"People that can’t collect EI are being forced to go on welfare, which is driving them further into poverty," said Canadian Labour Congress president Ken Georgetti, who speaks for Canada’s largest federation of unions.
While nearly 500,000 jobs have been lost in the last year as a deep restructuring took place in the automotive, forestry and machinery sectors, Canadian workers are starting to feel more confident that they have seen the worst of the job losses and the employment picture is starting to brighten.
A Labour Day conducted poll by Harris-Decima and commissioned by online job search firm Monster.ca shows 46 per cent of Canadian workers feel they have more job security today than they did a year ago. That compares with 38 per cent of respondents who feel less secure.
The feeling increased among public sector workers, with 53 per cent feeling secure with their employment.
The survey, conducted in mid-August, also found that 88 per cent of Canadians were satisfied with their current job situation.
For unions, the biggest issue facing laid-off workers is EI reform, and unions have been pressing the federal Conservative government to raise benefits and loosen up eligibility requirements guaranteed approval cash loans.
The EI fund had a $57 billion surplus that was spent by Liberal and Conservative governments, complained Georgetti.
"The understanding was that they could spend the surplus, but when the funds were needed they would borrow money if necessary and not cut people off (EI benefits)," he said.
CAW president Ken Lewenza, in a Labour Day message Thursday, said that in the last recession of the early 1990s, only two in 10 laid off workers failed to qualify for jobless benefits. Today it is five in 10.
"What we need to improve this system is a change to the number of qualifying hours, an extension of the benefits period and increase in the benefit level, and an elimination of the waiting period and the severance clawback," he said. "Political parties of all colours must recognize the necessity of these reforms."
Georgetti said workers know they didn’t cause the recession and that’s why they’re willing to strike when necessary if they think an employer is demanding concessions that aren’t really necessary.
A bitter strike has shut down Vale Inco’s nickel mines in Sudbury over company concession demands. Recent municipal strikes in Toronto and were also sparked by concession demands.
Almost 25 per cent of Canadians are working more than one job to make ends meet, says Don Thibert, director of academic affairs at Everest College.
He said some workers are taking advantage of the recession to bolster their skills with some post-secondary education, noting employers want staff with a good work ethic, which people who are already working two or more jobs clearly demonstrate.
Oil fell below $68 a barrel on Friday after a report showing weak consumer confidence undermined expectations of a rise in demand and tanked stocks on Wall Street.
U.S. crude oil futures fell $3.01 to settle at $67.51 a barrel Friday.
U.S. consumer confidence in early August dropped to the lowest level since March, according to the Reuters/University of Michigan Survey of Consumers, weakening the economic outlook and dragging down Wall Street.
"Crude futures are down, following a slide in the stock market and after the Reuters/University of Michigan survey showed consumer confidence down earlier this month," said Tom Pawlicki, analyst at MF Global Research in Chicago.
Earlier in the day, oil had climbed with support from data Thursday that showed Germany and France had posted second quarter growth, ending their recessions in April-June, which was earlier than expected online payday loans.
Oil prices have more than doubled from below $33 in December. Most of the support for the commodity so far has come from hopes for a recovery from the economic downturn, rather than fundamentals of demand and supply.
Some of the market’s attention has also been on the weather in the Atlantic Ocean, which could soon see its first named storm of the hurricane season.
Tropical storms and hurricanes can disrupt operations at offshore platforms and coastal refineries but many forecasts are for a mild hurricane season this year.
Time Warner Inc. paid $283 million for Google Inc.’s 5% stake in AOL, the Internet company said in a U.S. regulatory filing Monday.
Time Warner (TWX, Fortune 500), which plans to spin off AOL by the end of the year, bought the stake from Google (GOOG, Fortune 500) on July 8, AOL said in the filing with the U.S. Securities and Exchange Commission.
The price that the company paid for Google’s stake implies that AOL has a total value of about $5.7 billion.
The filing is a registration statement with the government that AOL must file before its long-expected separation from Time Warner, and brings the company one step closer to ending a troublesome eight-year-old merger.
Current Time Warner shareholders are expected to be holders of the new AOL shares once the company is separated easy payday loans. Time Warner is the parent company of CNNMoney.com.
AOL Chief Executive Tim Armstrong told Reuters last week the company will focus primarily on being a Web advertising business.
In its registration statement, AOL said that it expects to incur up to about $90 million of additional restructuring charges in the last nine months of 2009.
The company already incurred $58.3 million in restructuring charges during the first quarter of 2009, which it said were related primarily to layoffs and closing facilities.
Time Warner shares rose 2 cents to close at $27.60 on the New York Stock Exchange. Google shares fell $1.92 to close at $444.80 on the Nasdaq stock market.
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