Monday, February 28, 2011

Who Owns the U.S.?

Regardless of how much closer Obama's budget brings our economy into a balance of payments not seen since 2001, we will continue to run deficits for the next decade, and the national debt will keep growing every year that happens.

While most of the country's $14 trillion debt is held by private banks in the U.S., the Treasury Department and the Federal Reserve Board estimate that, as of December, about $4.4 trillion of it was held by foreign governments that purchase our treasury securities much as an investor buys shares in a company and comes to own his or her little chunk of the organization.

Looking at the list of our top international creditors, a few overall characteristics show some interesting trends: Three of the top 10 spots are held by China and its constituent parts, and while two of our biggest creditors are fellow English-speaking democracies, a considerable share of our debt is held by oil exporters that tend to be decidedly less friendly in other areas of international relations.

Here we break down the top 10 foreign holders of U.S. debt, comparing each creditor's holdings with the equivalent chunk of the United States they "own," represented by the latest (2009) state gross domestic product data released by the U.S. Bureau of Economic Analysis. Obviously, these creditors won't actually take states from us as payment on our debts, but it's fun to imagine what states and national monuments they could assert a claim to.

1. Mainland China

Amount of U.S. debt: $891.6 billion

Share of total foreign debt: 20.4%

Building on the holdings of its associated territories, China is undisputedly the largest holder of U.S. foreign debt in the world. Accounting for 20.4% of the total, mainland China's $891.6 billion in U.S. treasury securities is almost equal to the combined 2009 GDP of Illinois ($630.4 billion) and Indiana ($262.6 billion) in 2009, a shade higher at a combined $893 billion. As President Obama -- who is from Chicago -- wrangles over his proposed budget with Congress he may be wise to remember that his home city may be at stake in the deal.

2. Japan

Amount of U.S. debt: $883.6 billion

Share of total foreign debt: 20.2%

The runner-up on the list of our most significant international creditors goes to Japan, which accounts for over a fifth of our foreign debt holdings with $883.6 billion in U.S. treasury securities. That astronomical number is just shy of the combined GDP of a significant chunk of the lower 48: Minnesota ($260.7 billion), Wisconsin ($244.4 billion), Iowa ($142.3 billion) and Missouri ($239.8 billion) produced a combined output of $887.2 billion in 2009.

3. United Kingdom

Amount of U.S. debt: $541.3 billion

Share of total foreign debt: 12.4%

At number three on the list is perhaps our closest ally on the world stage, the United Kingdom (which includes the British provinces of England, Scotland, Wales and Northern Ireland, as well as the Channel Islands and the Isle of Man). The U.K. holds $541.3 billion in U.S. foreign debt, which is 12.4% of our total external debt. That amount is equivalent to the combined GDP of two East Coast manufacturing hubs, Delaware ($60.6 billion) and New Jersey ($483 billion) -- which was named, yes, after the island of Jersey in the English Channel. The two states' combined output in 2009 came to $543.6 billion.

4. Oil Exporters

Amount of U.S. debt: $218 billion

Share of total foreign debt: 5%

Another grouped entry, the oil exporters form another international bloc with money to burn. The group includes 15 countries as diverse as the regions they represent: Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. As a group they hold 5% of all American foreign debt, with a combined $218 billion of U.S. treasury securities in their own treasuries. That's roughly equivalent to the combined 2009 GDP of Nebraska ($86.4 billion) and Kansas ($124.9 billion), which seems to be an equal trade: The two states produce a bunch of grain for export, which many of the arid oil producers tend to trade for oil.

5. Brazil

Amount of U.S. debt: $180.8 billion

Share of total foreign debt: 4.1%

Rounding out the top five is the largest economy in South America, Brazil. The country known for its beaches, Carnaval and the unbridled hedonism that goes along with both has made a big investment in the U.S., buying up $180.8 billion in American debt up to December. That's almost equal to the $180.5 billion combined GDP of Idaho ($54 billion) and Nevada ($126.5 billion), a state that is no stranger to hedonism itself.

6. Caribbean Banking Centers

Amount of U.S. debt: $155.6 billion

Share of total foreign debt: 3.6%

You have to have cash on hand to buy up U.S. government debt, and offshore banking has given six countries the combined capital needed to make the Caribbean Banking Centers our sixth-largest foreign creditor. The Treasury Department counts the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles, Panama and the British Virgin Islands in this designation, which as a group holds $155.6 billion in U.S. treasury securities. That's equivalent to the GDP of landlocked Kentucky ($156.6 billion), whose residents may not actually mind if they were ever to become an extension of some Caribbean island paradise.

7. Hong Kong

Amount of U.S. debt: $138.2 billion

Share of total foreign debt: 3.2%

At No. 7 on the list of our foreign creditors is Hong Kong, a formerly British part of China that maintains a separate government and economic ties than the communist mainland. With $138.2 billion in U.S. treasury securities, the capitalist enclave could lay claim to Yellowstone Park and our nation's capital: The combined GDP of Wyoming ($37.5 billion) and Washington D.C. ($99.1 billion) totaled $136.6 billion in 2009.

8. Canada

Amount of U.S. debt: $134.6 billion

Share of total foreign debt: 3.1%

They say that a friend in need is a friend indeed, and our neighbor to the north has proven to be a kind and generous creditor in our time of financial need. Canada holds about 3.1% of our foreign debt, or $134.6 billion. If friend were to become enemy and Canada were looking to annex some U.S. land to cover the debt though, the country would have an easy time of it. The combined GDP of Maine ($51.3 billion), New Hampshire ($59.4 billion) and Vermont ($25.4 billion) comes close to Canada's debt holdings at $136.1 billion.

Residents of the three states in our extreme northeast corner should start practicing their French: They might become Québécois one of these days.

9. Taiwan

Amount of U.S. debt: $131.9 billion

Share of total foreign debt: 3.0%

Taiwan, an island barely 100 miles off the coast of China, is claimed by the People's Republic of China, despite having its own government and economic relations with the outside world. Part of those economic relations includes the island's holding of $131.9 billion of U.S. debt, roughly equivalent to the combined GDP of West Virginia ($63.3 billion) and Hawaii ($66.4 billion), which totals $129.7 billion.

Unless we get our spending in check, we risk losing some of our most visually stunning territory (West Virginia, obviously) to our friendly neighbors on the other side of the Pacific Ocean.

10. Russia

Amount of U.S. debt: $106.2 billion

Share of total foreign debt: 2.4%

Starting off the list of our major foreign creditors is Russia, which holds about 2.4% of the U.S. debt pie that sits on the international dinner table. Its $106.2 billion in treasury securities is equivalent to the 2009 GDP of our sparsely populated North: The combined output of North Dakota ($31.9 billion), South Dakota ($38.3 billion) and Montana ($36 billion) matches up nicely with the Russian holdings, at $106.2 billion.

Let's hope Russian president Dmitry Medvedev doesn't come to collect.

Sunday, February 20, 2011

Satellites to predict earthquakes, claim scientists

In what may help save thousands of lives worldwide, scientists have launched a project which they claim could predict exactly when and where earthquakes will happen.

A team of British and Russian scientists has signed an agreement to work together on the project in Moscow.

The TwinSat project involves the launch of two satellites -- one of which the scientists say is about the size of an old TV set and the other smaller than a shoebox -- which will orbit the Earth a few hundred miles apart, 'The Independent' reported.

The two linked satellites will monitor zones with high seismic and volcanic activity, such as Iceland and the Kamchatka Peninsula in the far east of Russia. Data from the satellites will be collated with data from the ground as the scientists try to understand what natural warnings are given prior to earthquakes.
"As stress builds up in the Earth prior to an earthquake, subtle electromagnetic signals are released that can be read from the upper atmosphere.

"We want to try to work out how these signals differ from all the other things that are present at any given time," said Prof Alan Smith of University College London who launched the project.

Prof Vitaly Chmyrev of the Institute of Physics of the Earth in Moscow, one of the Russian partners, said the possibilities for progress in quake research were exciting and the project will "benefit both Russian and British science in addition to making the Earth a safer place".

Saturday, February 19, 2011

Obama's mysterious dinner with tech executives

For technology spectators, a dinner on Thursday evening with President Obama and a dozen Silicon Valley executive seems like a scene straight out of an Agatha Christie novel: a pile of questions and very few answers surrounding the dinner and its guests.

Who determined the seating arrangement? What did they all eat? How did Steve Jobs look? Did Mark Zuckerberg really wear a jacket and not his signature hooded sweatshirt? And of course, what did this group of tech executives talk about?

But just like any secret dinner in a good mystery novel, spectators are left with many more questions than answers.

The New York Times reached out to several of the attendees with the hopes of finding out more, but most did not respond or declined to comment. Oracle, Netflix, Apple, Facebook and Yahoo, whose chief executives were all in attendance, had nothing to share. Steve Westly, one of the guests at the dinner, said via a spokesman that he was "unwilling to express the specifics of the dinner as it was a private event."
Still, with scraps of information, the Internet was buzzing Friday:

Searching Twitter for the term "fly on the wall" resulted in a thousands of people saying they would like to have been in disguise as a fly on the wall at the dinner.

The blog Search Engine Land dissected an image that was released by the White House, pointing out who sat where. Mr. Jobs and Mr. Zuckerberg were the lucky two who sat next to President Obama.

The San Francisco Chronicle followed the money trail while reporting on the dinner and listed the political contributions of each guest. The Chronicle also cited people who believed that the agenda was not to discuss innovation in Silicon Valley, but instead "suggested that the president was paving the way for his 2012 re-election campaign."

Jay Carney, the White House press secretary, issued a statement about the President's trip to Silicon Valley, and although he didn't share too much about the dinner, Mr. Carney insisted the event was meant to discuss new investments in Silicon Valley.

"The president specifically discussed his proposals to invest in research and development and expand incentives for companies to grow and hire," Mr. Carney said. Referring to the dinner attendees, he said, "The group also discussed the importance of new investments in education and the new White House initiative Startup America, a partnership with the private sector aimed at supporting new startups and small businesses."

Friday, February 18, 2011

After Robocop, Robochef. Now in China

The robot chefs at the Wishdoing restaurant on Shanghai's Nanjing Road can cook delicious Chinese cuisine within three minutes. They can serve customers eight popular dishes, including "crowd-puller dishes" like Kung Pao chicken, spicy diced chicken with peanuts and Mapo Tofu, bean curd with chilli sauce.

The workers only have to press buttons on the robots to choose a dish and they will display the name of the ingredients and their quantities, the Shanghai Daily reported.

In appearance, the robots look like huge kitchen surfaces equipped with iron pots.

It only takes three minutes for a robot to clean the pot from a previous meal, stir the ingredients, finish cooking and then move the food onto a plate for serving.
Although the robots cost 200,000 yuan ($30,350) each, the fast food chain is planning to install them in all of its 100 outlets across the country, said an official surnamed Ma, working with the restaurant's parent company, Shanghai Qi Ding Food Development Co.

The robots were earlier displayed at the Shanghai World Expo in 2010 and attracted a lot of attention, Ma said.

"We believe the cooking robots will become a trend in the future for the fast food industry as they guarantee low-carbon emission, food safety and standard tastes that don't change from one outlet to another."

The coming of the robots has, however, raised concerns among some chefs, who are worried they could lose the jobs.

But Ma said the concern was totally unnecessary.

"The robot chefs will be one part of the restaurant, but it doesn't mean that we would abandon traditional cooking methods."

Apple is weighing a cheaper iPhone

Apple has been exploring ways to broaden the appeal of the iPhone by making the popular device less expensive and allowing users to control it with voice commands.

But contrary to published reports, Apple is not currently developing a smaller iPhone, according to people briefed on Apple's plans who requested anonymity because the plans are confidential.

Apple's engineers are currently focused on finishing the next version of the iPhone, which is likely to be similar in size to the current iPhone 4, said one of the people. The person said Apple was not planning to introduce a smaller iPhone any time soon. Analysts expect the new iPhone to be ready this summer.

Another person who is in direct contact with Apple also said that the company would not make a smaller iPhone at this time, in part because a smaller device would not necessarily be much cheaper to manufacture and because it would be more difficult to operate.
More important, a phone with a smaller screen would force many developers to rewrite their apps, which Apple wants to avoid, the person said.

Steven P. Jobs, Apple's chief executive, appeared to reinforce that last point recently when he praised the iPhone's uniformity, contrasting it with phones based on Google's Android software, which come in many formats.

"We think Android is very, very fragmented and getting more fragmented by the day," Mr. Jobs told financial analysts in October. "We think this is a huge strength of our approach compared to Google's."

Another senior Apple executive said during a private meeting recently that it did not make sense for the company to make multiple iPhone models, noting that Apple would stick with its practice of dropping the price of older models when it introduced a new one.

The iPhone 3GS is now available for $49 with a two-year contract that helps subsidize the price of the device in the United States.

As part of its effort to find new customers for the iPhone, Apple plans to make it easier to operate the device through voice commands, removing an obstacle for people who do not like using a virtual keyboard, said another person with knowledge of Apple's plans.

Apple is also considering changing internal components of the device to bring costs down. "Although the innards of the phone, including memory size or camera quality, could change to offer a less expensive model, the size of the device would not vary," said the person, who has worked on multiple versions of the device.

Another person with knowledge of Apple's plans said that the company was actively building a more versatile version of its MobileMe service, which allows users to store music, photos and files online and have them accessible on all their devices.

The current version of MobileMe, which costs $100 a year, has failed to catch on with consumers. Rivals like Google and others offer similar services free.

The new version of MobileMe is expected to be free and would allow users to synch their files without using a cable.

"The goal is that your photos and other media content will eventually just sync across all your Apple devices without people having to do anything," the person said. If more iPhone users stored files online, Apple could make cheaper devices with less storage. Flash storage is one of the iPhone's most expensive components.

Apple has dominated the high end of the smartphone market, but the company is facing increasing competition from devices running Google's Android, which collectively outsell the iPhone. Analysts said it would make sense for Apple to introduce a cheaper iPhone, especially in overseas markets where carriers do not subsidize handsets. Unsubsidized handsets are often called "prepaid."

"If they are going to be a player in the global market they have to have a prepaid option," said Gene Munster, an analyst with Piper Jaffray. But Mr. Munster said that to be successful, a prepaid iPhone would have to be able to run the more than 300,000 apps available in the App Store.

A. M. Sacconaghi Jr., an analyst with Sanford C. Bernstein & Company, said that a low-priced iPhone could help Apple expand its unit sales of the device sixfold.

In recent days, some published reports, citing anonymous sources, said that Apple was building a smaller iPhone. One report gave the code name of the project as N97. Several people with knowledge of Apple's plans said that N97 was the code name for the Verizon iPhone 4, which was introduced this month.

Wednesday, February 16, 2011

Google feels 'sorry' for Nokia-MSN alliance

Google chief Eric Schmidt has said that he felt "sorry" for Nokia striking a partnership with rival Microsoft, which would see the Finnish handset maker adopting Windows platform for its smartphones.

However, Schmidt said that Google would like Nokia to adopt its Android operating system at some point in the future.

"We would have loved if they chose Android. They chose the other guys, that other competitor, Microsoft," search engine giant Google's CEO Schmidt said at the Mobile World Congress here.

"We think Android was a good choice for Nokia. We're sorry that they made a different choice," he noted. Nokia and software major Microsoft last week announced they would form a broad strategic partnership that would use their complementary strengths and expertise to create a new global mobile ecosystem.

As part of the deal, Nokia would adopt Microsoft's Windows Phone as its main smartphone platform.

"I think we would like them to adopt Android at some point in the future. That offer remains open," Schmidt said.

Nokia-Microsoft partnership is widely seen as a move by the two companies to fight stiff competition from rivals Apple and Google in the smartphone market.

Faced with intense competition from Apple and Google, the Finnish major has seen its smartphone market share going down in recent times.

The partnership with the software major came a few months after former Microsoft veteran Stephen Elop took over the reins of Nokia.

Tuesday, February 15, 2011

Million-Dollar ‘Supercar’ Will Be Sold Through U.S. Dealers

Italian supercar manufacturer Pagani Automobili SpA. said today it will enter the U.S. market with its new model called the Huayra. The company says it will begin selling the 700-horsepower car in the U.S. through a dealer network beginning later this year. Its price is expected to be more than $1 million.

Pagani released pictures of the new two-seater and information about its specifications late last month, but its pending availability in the U.S is big news for the speed-addled and well-heeled. Pagani’s current model, the Zonda, has been a perennial leader in top-speed and brute-power contests run by car magazines for the past decade and has been tantalizingly out of reach for many would-be customers in the States.

Named after Huayra Tata, an ancient God of wind, the Huayra has a six-liter, 12-cylinder engine with two turbochargers built by Mercedes-Benz’s AMG performance unit, which is responsible for the German company’s most powerful models. The engine breathes through a pair of air intakes behind the occupants that the company describes as “a tribute to the supersonic aircraft of the late 1950s and 1960s.” They were designed to allow air into the engine without unnecessarily disturbing aerodynamics.

Pagani, which is based in San Cesario sul Panaro, near Modena, Italy, says it has built five Huayra prototypes and has been road testing them for the past four years. The test cars have traveled more than 300,000 miles and will cover about 600,000 miles before entering the U.S. market. The company says the car complies with the strictest European and American safety and emissions standards.

The car is to make its debut at the Geneva Motor Show next month. The company says it will reveal its specific plans for unveiling the Huayra in the U.S. in the coming weeks.

US admiral: Carrier killer won't stop US Navy

A new "carrier killer" missile that has become a symbol of China's rising military might will not force the U.S. Navy to change the way it operates in the Pacific, a senior Navy commander told The Associated Press.

Defense analysts say the Dong Feng 21D missile could upend the balance of power in Asia, where U.S. aircraft carrier battle groups have ruled the waves since the end of World War II.

However, Vice Adm. Scott van Buskirk, commander of the U.S. 7th Fleet, told the AP in an interview that the Navy does not see the much-feared weapon as creating any insurmountable vulnerability for the U.S. carriers — the Navy's crown jewels.

"It's not the Achilles heel of our aircraft carriers or our Navy — it is one weapons system, one technology that is out there," Van Buskirk said in an interview this week on the bridge of the USS George Washington, the only carrier that is home-based in the western Pacific.

The DF 21D is unique in that it is believed capable of hitting a powerfully defended moving target — like the USS George Washington — with pinpoint precision. That objective is so complex that the Soviets gave up on a similar project.

The missile would penetrate defenses because its speed from launch would not allow enough time for carriers or other large ships to complete countermeasures.

That could seriously weaken Washington's ability to intervene in any potential conflict over Taiwan or North Korea, as well as deny U.S. ships safe access to international waters near China's 11,200-mile (18,000-kilometer) -long coastline.

Van Buskirk, whose fleet is responsible for most of the Pacific and Indian oceans, with 60-70 ships and 40,000 sailors and Marines under its command, said the capabilities of the Chinese missile are as yet unproven. But he acknowledged it does raise special concerns.

"Any new capability is something that we try to monitor," he said.

"If there wasn't this to point to as a game changer, there would be something else," he said. "That term has been bandied about for many things. I think it really depends in how you define the game, whether it really changes it or not. It's a very specific scenario for a very specific capability — some things can be very impactful."

The development of the missile comes as China is increasingly venturing further out to sea and is becoming more assertive around its coastline and in disputes over territory.

Late last year, China and Japan were locked in a heated diplomatic row over several islands both claim in the East China Sea, an area regularly patrolled by U.S. Navy vessels. A flotilla of 10 Chinese warships, including advanced submarines and destroyers, passed through the Miyako Strait last April in the biggest transit of its kind to date.

Experts saw it as an attempt by China to test Japan and the United States and demonstrate its open water capabilities.

China has also expressed strong displeasure with U.S. carrier operations off the Korean Peninsula, saying that they posed a security risk to its capital.

Still, van Buskirk said the Navy has no intention of altering its mission because of the new threat and will continue to operate in the seas around Japan, Korea, the Philippines and anywhere else it deems necessary.

"We won't change these operations because of this specific technology that might be out there," he told The AP while the USS George Washington was in its home port just south of Tokyo for repairs last week. "But we will carefully monitor and adapt to it."

The faster-than-expected development of the missile has set off alarm bells in Washington. Further, China is developing a stealth fighter jet that could be used to support its navy in a potential conflict and hopes to deploy its first aircraft carriers over the next decade.

Before visiting Beijing last month, U.S. Defense Secretary Robert Gates said he has been concerned about the anti-ship missile since he took office.

In December, Adm. Robert Willard, the head of the U.S. Pacific Command, told Japan's Asahi Shimbun newspaper he believed the missile program had achieved "initial operational capability," meaning a workable design had been settled on and was being further developed.

The missile is considered a key component of China's strategy of denying U.S. planes and ships access to waters off its coast. The strategy includes overlapping layers of air defense systems, naval assets such as submarines, and advanced ballistic missile systems — all woven together with a network of satellites.

At its most capable, the DF 21D could be launched from land with enough accuracy to penetrate the defenses of even the most advanced moving aircraft carrier at a distance of more than 900 miles (1,500 kilometers).

To allay regional security fears, van Buskirk said, China needs to be more forthcoming about its intentions.

"It goes back to transparency," he said. "Using the United States as an example, we are very clear about our intent when conducting routine and normal operations in international waters ... That is what you might expect from other nations that might operate in this region.

Thursday, February 3, 2011

San Francisco Bay’s only private island still for sale

The housing bust has even extended to fancy private islands, apparently. The last patch of privately owned real estate in San Francisco Bay has been lingering on the market since at least 2007, though the price has increased to $22 million since then.

According to the real estate site, the 5.7-acre Red Rock Island is still up for sale, and whoever buys it also gets the mineral rights, though it's unclear if the owner would be allowed to build on the island.

Red Rock has a long history: Rumors circulated in the early 18th century that pirates buried gold there. According to a 1970 New Vista magazine article, the first full-time occupant of the island was Selim Woodworth, who built a house there in 1851. The government claimed ownership of the land after that, before finally relinquishing its rights in the 20th century.

San Francisco attorney David Glickman bought the island for $50,000 and planned a massive hotel and casino complex there in the 1960s. The nearby city of Richmond blocked the project, though.

Glickman, a Thai-based gem dealer, tried to unload the island for years. He was shopping it around for $10 million in 2007, according to the Associated Press, but we at The Lookout haven't found a record of anyone purchasing the property then. Prior to that, the California Department of Fish and Game considered buying the land in 2001 to preserve its wildlife. The island has been on sale at the $22 million price since at least May of 2008.

And the eight-figure asking price would just be the first hurdle that a new  owner would have to clear. The boundaries of three California counties converge on the island, so any development would have to placate at least three sets of zoning and building officials--to say nothing, of course, of whatever additional barriers to entry that the financially strapped state of California might concoct.

We've contacted the real estate agent on the property to see if anyone has made an offer, but have yet to hear back. We'll update this post with any new information that surfaces.

Wednesday, February 2, 2011

Google launches online store for Android users

In an effort to compete with rival, Apple, search engine giant Google, has launched a new online store of advanced software applications that run on mobile phones powered by the Android software.

Google's new online store,, will allow Android users to find new applications from their computers more easily, according to Google. The company also claims that the store will help see recommendations by friends and download applications to their mobile devices.

Users of Android devices such as Motorola Mobility Inc.'s Droid and HTC Corp.'s Evo smartphones, previously had access to the application market via their devices, but many application makers complained it was difficult to get noticed there because the marketplace was partly built around lists of featured applications and top downloads.

Earlier, Apple had an edge over Android because it allowed users to find applications and buy them through the iTunes programme on their computers.

These "important changes to the Android market meet the needs of both users and developers", Chris Yerga, a Google engineering director, was quoted as saying.

Google said that the application makers could create Android applications that charge users for in-app purchases of virtual goods in games, among other things - a feature already available on applications running on Apple devices.

Developers can also set prices for their applications in foreign currencies, which previously they had been unable to do, Google said.

There are more than 350,000 mobile applications available on Apple devices compared with more than 100,000 on Android devices.

Stop the presses: First iPad newspaper debuts

A daily newspaper designed by News Corp. exclusively for Apple's iPad is available for $40 annually, comparable to what some big-city publishers charge monthly to deliver their print editions.

The digital newspaper, called The Daily, debuted Wednesday in Apple Inc.'s App Store. News Corp. CEO Rupert Murdoch unveiled it in New York after weeks of anticipation.

The Daily is the latest example of how media companies are trying to mine the iPad's popularity for new streams of revenue. Last month, a company backed by The New York Times Co., The Washington Post Co. and USA Today publisher Gannett Co. launched Ongo, a website that, for $7 a month, pulls together stories from various outlets in one place and lays them out in a clean, ad-free format.

Newspaper publishers are especially desperate because the print advertising revenue they have traditionally relied upon has been falling for the past four years.

News Corp. hasn't been as hard hit as many publishers, mostly because it can fall back on revenue coming from its ownership of the Fox television network and the 20th Century Fox movie studio. News Corp. also owns The Wall Street Journal, one of the few newspapers able to sell a large number of digital subscriptions.

The Daily will cost 99 cents per week, substantially less than the Journal's iPad subscription rate of $3.99 per week. The Daily is also available for $39.99 annually — about the same as what the San Francisco Chronicle charges a month for home delivery and less than The New York Times' monthly rate of about $47 in the New York City area.

Home delivery prices have risen sharply in the past few years as publishers have asked their subscribers to help offset the drop in advertising. The higher prices have contributed to circulation decreases as more readers get their news for free from the Web.

Murdoch says The Daily can afford a low price because it won't have to pay for printing presses or fuel to deliver editions. It will rely on reporters in New York and Los Angeles, as well as freelancers, to produce up to 100 pages of coverage focused on news, sports, gossip, opinion and entertainment.

The Daily will be the first newspaper whose subscriptions will be billed directly through Apple's iTunes store. The Journal, by contrast, has been allowed to charge users of its iPad app through its own billing system. Apple typically keeps 30 percent of the revenue from sales made in its app stores.

The iPad's rising popularity presents The Daily with a vast audience to target. Nearly 15 million iPads were sold in just nine months last year and research firm Gartner Inc. expects 55 million tablets to be shipped this year. Most of those tablets will likely be iPads.

Newspaper analyst Ken Doctor believes less than 1 percent of iPad owners are likely to subscribe to The Daily, making it difficult for the digital newspaper to make money. He said The Daily's financial success will hinge on how much advertising revenue it can bring in, much like print editions.

Google accuses Bing of copying search results

Google has weathered criticism in the past that it has copied some features of Microsoft's Bing search engine, like background images. Now it has turned the tables, alleging that Bing copies something much more important: search results.

Danny Sullivan, head of the blog Search Engine Land, wrote Tuesday about "a sting operation" by Google that the company says proves that Bing watches Google's search results to improve its own.

Google says it suspects Microsoft is doing this by using Internet Explorer 8 and the Bing toolbar, both of which send user data to Microsoft, to watch how people use Google. In a company blog post, Microsoft did not deny that. But Harry Shum, corporate vice president of Bing, called Google's sting "a spy-novelesque stunt" and "a creative tactic by a competitor."

Google grew suspicious when it noticed a few odd things about Bing's search results, such as surprising similarities between the top results in the two search engines -- including results that Google considered to be mistakes, Amit Singhal, who oversees Google's search ranking algorithm, wrote in a company blog post.So Google went into detective mode.
It invented about 100 gibberish search queries, like "hiybbprqag," and matched them with results that had nothing to do with the query, like a theater seating chart. Mr. Singhal likened these queries to "the search engine equivalent of marked bills in a bank."

Then it asked 20 of its engineers to install Microsoft's Internet Explorer 8 with the Bing toolbar, search for the rigged words and click on the made-up results. Sure enough, Bing soon started pointing people to the nonsensical search results for seven to nine of the 100 queries.

The result? "Some Bing results increasingly look like an incomplete, stale version of Google results -- a cheap imitation," Mr. Singhal wrote.

Mr. Sullivan, a long-time search industry analyst, came to the same conclusion. "It strongly suggests that Bing was copying Google's results, by watching what some people do at Google via Internet Explorer," he wrote in his comprehensive piece.

Mr. Shum wrote that Bing uses more than 1,000 signals to determine search results -- including "clickstream data we get from some of our customers, who opt in to sharing anonymous data as they navigate the Web in order to help us improve the experience for all users." Translation: Bing watches what people click when they visit Google and other sites.

The tussle is the latest in an ongoing battle between Google and Microsoft on many fronts. In search, Google has prided itself most on the relevance of its search results -- which no doubt contributes to its 67 percent search market share. So it is particularly sensitive for Google that Bing, in some cases, mimics its top results.

Mr. Sullivan wryly noted that when Bing started in 2009, people joked that it stood for "Because It's Not Google," and wrote that now it may as well stand for "Bing Is Now Google."

Tuesday, February 1, 2011

Android system overtakes Symbian

Google's operating system for cellphones has overtaken Nokia's Symbian system as the market leader, ending the Finnish company's long reign, a British research firm said Monday.

In the three months through December, manufacturers shipped 33.3 million cellphones running Android, Google's free, open-source cellphone operating system, up from just 4.7 million a year earlier, according to Canalys, a research firm in Reading, England.

Shipments of phones running the Symbian operating system jumped 31 percent in the quarter, to 31 million, Canalys said.

Analysts said the figures represented a tectonic shift in the industry, cementing the influence of Google's advertising-driven business on the mobile Internet. And this year, according to the research firm Gartner, more people will gain access to the Internet through mobile devices than with personal computers.
"Google only wins with this," said Pete Cunningham, a Canalys analyst. "There will be more eyes on the mobile Web and more eyes seeing their advertisements."

Phones powered by Android first appeared on the global market two years ago. They are produced by a host of manufacturers, including Samsung, HTC, Motorola, Sony Ericsson, LG, Huawei and ZTE.

Around the world, 1.3 billion people use Nokia phones, and the company remains the leading cellphone maker, with 31 percent of the global market, according to Strategy Analytics, a research firm based in Boston. But Nokia has struggled to develop an operating system for high-end smartphones, the fastest-growing and most lucrative part of the business.

Nokia's fourth-quarter profit fell 21 percent, to €745 million, or $1 billion. Last week, the company's new chief executive, Stephen Elop, hinted that radical changes might be coming to Nokia, which he said faced "significant" challenges. Mr. Elop, a former Microsoft executive, said his top priorities were instilling a "challenger mentality" at Nokia and increasing its U.S. market share, currently 2 percent, according to Strategy Analytics.

Neil Mawston, an analyst for Strategy Analytics in Milton Keynes, England, said Symbian still held a narrow lead over Android in the fourth quarter, according to his company's provisional figures, with 31 percent of shipped cellphones running Symbian and 30 percent using Android. But he said he expected Android to overtake Symbian in the second half of this year.

"The surge in Android devices shows that Nokia's neglect of the U.S. market has cost it dearly," Mr. Mawston said. "In less than three years, Symbian has gone from the dominant operating system to a follower, which was unthinkable just a few years ago."

Mr. Mawston said that in the U.S. market Nokia might be considering adopting Android or Microsoft's Windows Mobile 7 software, instead of Symbian. Android's success, he said, only underscored the reality that U.S. technology companies, including Apple and Google, were now setting the pace in the industry.

"Nokia has its work cut out to stop the rot," he said. "They have to do something radical."

Mr. Cunningham, the Canalys analyst, said Nokia might be more likely to adopt Windows in the U.S. market instead of Android, which is already widely available on phones made by the market leader, Samsung, and other companies.

A Nokia spokesman, Leo McKay, said the company would not comment on the Canalys report. Nokia is planning to discuss its strategy at an investor conference on Feb. 11 in London.