BANGALORE (Reuters) - Google Inc said it will buy Motorola Mobility Holdings Inc for about $12.5 billion in cash.
The $40 a share offer is at a 63 percent premium to Motorola Mobility's Friday close on the New York Stock Exchange.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Saumyadeb Chakrabarty)
The US Securities and Exchange Commission has launched a probe into the process by which Standard & Poor's downgraded the US credit rating, the Wall Street Journal reported.
US officials lashed out at S&P after it docked the country's credit rating from AAA to AA+, accusing the agency of committing a $2 trillion math error and of using a faulty baseline. S&P has stood by its analysis.
The Journal, citing unnamed sources, said the SEC would investigate the mathematical model used by the agency and look into which S&P employees knew of the decision to downgrade before it was announced.
Rumors of a possible downgrade circulated on the market the Friday before last, hours ahead of the announcement, which came after markets had closed.
However, the Journal said there was no evidence that any employees leaked news of the downgrade or engaged in any suspicious trading ahead of it.
S&P said the decision to downgrade the US long-term credit rating came as a result of divided US lawmakers failing to agree on a deal to reduce the ballooning US debt by some $4 trillion over 10 years.
The decision followed a bruising fight on Capitol Hill over raising the country's congressionally-set debt ceiling, which resulted in a limited agreement to cut some $2 trillion over that period.
Five book publishers and computer manufacturer Apple have been sued for allegedly colluding to drive up the price of e-books, lawyers for the plaintiffs said.
The class-action suit, filed in the US District Court here, claims HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster had worked with Apple to break Internet retailer Amazon.com's discount pricing strategy and help Apple's iPad compete with the Kindle marketed by Amazon.
According to the suit, the publishers believed that Amazon's popular Kindle e-reader device and the company's discounted pricing for e-books would increase the adoption of e-books, and feared Amazon's discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.
"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon's popularity and pricing structure, and that was Apple," said Steve Berman, an attorney representing consumers.
"We intend to prove that Apple needed a way to neutralize Amazon's Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," Berman added.
Five book publishers and computer manufacturer Apple have been sued for allegedly colluding to drive up the price of e-books, lawyers for the plaintiffs said.
The class-action suit, filed in the US District Court here, claims HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster had worked with Apple to break Internet retailer Amazon.com?s discount pricing strategy and help Apple?s iPad compete with the Kindle marketed by Amazon.
According to the suit, the publishers believed that Amazon?s popular Kindle e-reader device and the company?s discounted pricing for e-books would increase the adoption of e-books, and feared Amazon?s discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.
"Fortunately for the publishers, they had a co-conspirator as terrified as they were over Amazon?s popularity and pricing structure, and that was Apple," said Steve Berman, an attorney representing consumers.
"We intend to prove that Apple needed a way to neutralize Amazon?s Kindle before its popularity could challenge the upcoming introduction of the iPad, a device Apple intended to compete as an e-reader," Berman added.
The complaint claims that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices and extinguished competition so that retailers such as Amazon could no longer offer lower prices for e-books.
If Amazon attempted to sell e-books below the publisher-set levels, the publishers would simply deny Amazon access to the title, the complaint claims.
The defendant publishers control 85 percent of the most popular fiction and non-fiction titles.
According to the lawsuit, Apple and publishers were concerned that Amazon?s $9.99 uniform pricing for bestsellers would create market pressures for other e-booksellers -- including Apple -- to do the same, cutting into profitability.
The named plaintiffs included Anthony Petru, a resident of Oakland, California, and Marcus Mathis, a resident of Natchez, Mississippi.
The law firm Hagens Berman, which posted the complaint on its website, announced the filing of the suit on August 9.
WASHINGTON/NEW YORK (Reuters) - U.S. consumer sentiment worsened sharply in early August, falling to the lowest level in more than three decades, after retail sales posted the biggest gain in four months in July.
High unemployment, stagnant wages, gridlock in Congress, and a stock market slump all contributed to a consumer mood that was as grim as when Jimmy Carter was President during the recession of 1980 and interest rates were more than 20 percent.
Despite the gloom U.S. consumers kept spending in recent weeks with retail sales up in July by the most in four months.
"People's spending doesn't always correspond with their mood," said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut. "I doubt things are as weak as the sentiment readings suggest, but no doubt people will be cautious in August."
After one of the most volatile weeks in memory, U.S. stocks ended higher on Friday as the encouraging retail sales data overshadowed the weak consumer sentiment data.
But "the tumultuous last 10 days or so hasn't given our core customer, the middle income family, any reason to be more confident," said J.C. Penney Co Inc Chief Executive Myron Ullman on an analysts conference call Friday morning after the chain store retailer forecast weaker-than-expected third-quarter earnings.
GLOOM ABOUT GOVERNMENT
The preliminary August reading on the consumer sentiment index fell to 54.9 in early August, down from 63.7 in July, and the index has fallen for three straight months in the Thomson Reuters/University of Michigan survey.
Unemployment at 9.1 percent of the workforce, low wage rises, and the protracted debate in Congress over raising the U.S. government debt ceiling spooked consumers, survey director Richard Curtin said in a statement.
"Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government's role," Curtin said.
"This was more than the simple recognition that traditional monetary and fiscal policy measures were largely spent. It was the realization that the government was unable or unwilling to act," Curtin added.
Bad economic times were expected by 75 percent of all consumers in early August, just below the all-time peak of 82 percent in 1980. Buying plans for household durables and vehicles declined in early August, falling back to their recession level lows.
"There is no doubt that the American families are having difficulty, wanting to invest in big-ticket home items during this economic situation," J.C. Penney's CEO Myron Ullman said.
Furniture sales in the second quarter were down 20 percent from a year earlier, Ullman added.
The current gloomy consumer sentiment suggests restaurant sales will slip as autumn approaches also, according to the Kurt Salmon's Restaurant Spending Trajectory report.
"Economic uncertainty and protracted unemployment continue to impact consumers' spending decisions across all categories," said Todd Hooper, a Kurt Salmon restaurant industry analyst.
U.S. RETAIL SALES JUMP IN JULY
Despite the decline in consumer confidence in recent months, U.S. retail sales in July posted the biggest gain since March, tempering fears the world's largest economy might be slipping back into recession.
The 0.5 percent increase in retail sales reported by the U.S. Commerce Department was in line with analyst forecasts and followed an upwardly revised 0.3 percent gain in June.
Consumer spending accounts for two thirds of U.S. economic activity, and the data indicates the third quarter was off to a decent start.
Excluding autos, sales increased 0.5 percent, well above forecasts for a 0.2 percent gain. The figures were bolstered by a 1.6 percent jump in gasoline station sales, in part reflecting the higher cost of fuel. Retail sales excluding autos, gasoline and building materials rose 0.4 percent.
"When you look at the overall data that's been coming out, it's really a mixed bag, and this shows that the economy is not falling off its wheels," said Rudy Narvas, senior economist at Societe Generale in New York.
After one of the most volatile weeks in memory, U.S. stocks ended higher on Friday in a tentative sign that the worst of the selling may be over.
The Dow Jones industrial average gained 125.71 points, or 1.13 percent, to 11,269.02. The Standard & Poor's 500 Index added 6.17 points, or 0.53 percent, to 1,178.81.
U.S. economic growth was anemic in the first half of the year and unemployment remained elevated, raising worries that the recovery might again falter and triggering speculation that the Federal Reserve might need to resort to additional monetary easing [ID:nN1E77B0I4].
The global financial market volatility of the past week and the state of the U.S. economy was on the agenda when President Barack Obama met on Friday with U.S. business leaders, including chief executives from Johnson & Johnson, Wells Fargo & Co, US Bancorp, Xerox Corp, BlackRock Inc and Silver Bridge.
Obama's hopes for re-election in 2012 will likely hinge on his success in lowering unemployment from its current 9.1 percent, boosting sluggish economic growth, and restoring confidence lost from the fractious debt debate in Congress and Standard & Poor's downgrade of the government's credit rating on August 5.
(Editing by Neil Stempleman and Clive McKeef)
Source: Reuters US Online Report Business News
WASHINGTON — US consumer confidence plunged to the lowest level in more than three decades in early August, according to data published Friday by Reuters and the University of Michigan.
Their index of consumer sentiment tumbled to 54.9, its lowest reading since May 1980, when the index sank to 51.7.
The decline was much sharper than expected, and followed an equally sharp fall in July, to 63.7 from 71.5 in June.
The average analyst forecast for the August number had been 62.5.
The survey was taken during a period of high volatility in markets and when US politicians were battling over the country's debt and deficit-paring plan.
"Most of the hit was in the expectations index, which is most sensitive to stocks," said Ian Shepherdson of High Frequency Economics.
"This is grim, obviously, but remember that GDP is a measure of spending, not sentiment... If the index were to remain at this level, history would tell us to look for slower spending, but one month is not a trend."
PARIS — Europe's main stock markets mainly opened lower on Friday after France, Italy, Spain and Belgium banned on short selling amid continued volatile trade due to concerns over the US and eurozone debt crisis.
In Paris, the CAC 40 stock index dropped 2.06 percent to 3,019.84 points, as official data showed the French economy recorded zero growth in the second quarter of 2011 after a robust 0.9 percent in the first.
Shortly after the open, London's FTSE-100 index of leading shares was down 0.70 percent at 5,126.81 points, with the short selling ban in the main continental markets having little apparent effect.
The Frankfurt stock market bucked the trend, bouncing back into positive territory as equity markets faced more choppy action. The DAX index of leading shares showed a gain of 0.87 percent to 5,847.99 points at around 0800 GMT, after initially falling as low at 5,678.62 points.
Milan stocks lost 2.5 percent in early trade but the FTSE Mib index then recovered some ground to show a loss of 0.73 percent at 15,166 points at around 0735 GMT.
Spanish share prices also slid into the red, rapidly losing feeble gains made at the open despite the short selling ban. After nine minutes of trade, the Madrid stock market's IBEX-35 index of leading shares had dropped 1.47 percent to 8,127.8 points, erasing the tentative gains of the first few minutes.
Belgian stocks were firmer, with the Bel-20 index of leading shares up 0.85 percent.
The speculative practice of short selling was being restricted in Belgium, France, Italy and Spain to combat "false rumours" that have destabilised the markets, European regulators said.
The European Securities and Markets Authority (ESMA) said the aim was "to restrict the benefits that can be achieved from spreading false rumours or to achieve a regulatory level playing field, given the close inter-linkage between some EU markets."
The decisions were taken after securities regulators in Paris said the French stock market had plunged since Wednesday because of unfounded rumours, with the banks and Societe Generale in particular very badly hit.
NEW YORK — Piles of cash built up since the financial crisis have left big US companies sitting pretty as financial markets gyrate, but their reluctance to invest is holding back US growth.
The result is that while corporate America is looking good amid all the instability, the country is still suffering a 9.1 percent unemployment rate two years after the "Great Recession" officially ended.
Even as they build up rainy day money, nervousness over weakness not only in the US but world economy is keeping the country's corporate leaders cautious.
"Companies have a lot of cash on the balance sheet," Mitchell Petersen, a finance professor at Northwestern University in Chicago, told AFP.
But they "are concerned about being able to get capital if they need it," he said.
Memories of easy credit that evaporated in the financial meltdown from the Lehman Brothers bankruptcy in September 2008 are still vivid, he explained.
Financial directors prefer to hold cash on their balance sheets rather than risk finding themselves short of capital if credit lines were to suddenly dry up again.
Excluding the financial sector, companies on the Standard & Poor's 500-stock index are holding a cash pile of $1.15 trillion, according to S&P's research unit Capital IQ.
US companies ended 2010 with cash holdings 11.2 percent higher than end-2009, and that was despite spending "far more" on capital expenditures, shareholder distributions and mergers and acquisitions, rating agency Moody's said in a recent report.
The industries hoarding the most were technology ($264 billion), pharmaceuticals ($141 billion) and energy and consumer products (each holding more than $100 billion).
Apple, Microsoft, Cisco, Pfizer and Google had the deepest cash cushions.
And although interest rates are at historic lows, the ratio between corporate debt and cash is at its lowest since 2006, as companies use their added funds to retire old debt, Moody's said.
The big US companies could choose to invest, to launch share buy-backs, or raise dividends paid to their shareholders.
But many are taking a wait-and-see approach "because the expected future is kind of gloomy and... very uncertain," Petersen said.
With the sovereign debt crisis rattling Europe and the United States struggling to reduce its rising debt and deficits, the huge uncertainty makes investment riskier than a few years ago, he said.
A chief executive or chief financial officer is going to want to wait "three months, six months, one year" before building a new factory, for example, he said. "Why would they want to invest?"
For the same reasons, companies are delaying expanding operations and workforces.
"With the economy still teetering, most companies are not willing to make a commitment to job creation," John Challenger, at outplacement firm Challenger, Gray & Christmas, told AFP.
"They don't want to hire 1,000 workers next month only to lay them off six months later because demand did not materialize."
But that is not helping those who expect business to power up the economy and generate more jobs for the 14 million unemployed.
Sinking equity prices and wider spreads "tell businesses that this is not the time to expand operations and that it might be best to put off replacing worn-down and obsolete capital equipment," said Moody's economist John Lonski in a research note Thursday.
"Moreover, sharply lower share prices might compel businesses to conserve cash by trimming payrolls," he added.
A case in point: disinfectants maker Ecolab, which announced in late July a $5.4 billion deal to buy rival Nalco, said it was "continuing to invest in our sales force and innovations."
But Ecolab spokeswoman Kari Bjorhus stressed to AFP that the company was "continuing to manage our expenses very prudently."
SAN FRANCISCO — Google+ added games, including the hugely popular Angry Birds, to the fast-growing social network vying with Facebook to be the hub for people's online lives.
"We want to make playing games online just as fun, and just as meaningful, as playing in real life," Google senior vice president of engineering Vic Gundotra said in a blog post.
"When you're ready to play, the Games page is waiting."
Along with global game sensation Angry Birds, the initial array of offerings available at Google+ included Bejeweled Blitz, Zynga Poker, and Dragon Age Legends.
A standalone version of Crime City lets Google+ members play as a ruthless crime boss.
"We're excited to partner with Google to bring Crime City to Google+ users," said Ken Chiu, chief executive of Funzio. "We can't wait to release more great games on Google+ in the future."
A Facebook version of Crime City leapt to popularity after being released in September of last year.
Just hours after Google+ added games, Facebook touted a set of new features for playing online with friends.
"When you're playing games, you'll now see a separate stream of your friends' game activity, scores and achievements in a ticker," Facebook's Jared Morgenstern said in a post late Thursday at the social network's blog.
"The best way to find new games is through friends, and now you'll have more opportunities to see what they're playing," he continued.
Facebook increased the screen size of games, and made it easier to bookmark favorite titles or adjust settings regarding which friends can see what is being played, according to Morgenstern.
Google is a latecomer to social networking but its new site, Google+, has grown rapidly to more than 10 million members since its launch on June 28.
While Google+ may be the fastest-growing social network ever, it remains to be seen whether it can pose a serious threat to the social networking titan Facebook, which has more than 750 million members.
Google has a billion users worldwide that could be drawn into the California-based Internet giant's social network.
Games are among the most popular activities at Facebook, where social game startup Zynga rose to stardom.
Most Google+ users -- 6.4 million -- are in the United States, followed by India, with 3.6 million, Canada, with 1.1 million, Britain, with 1.1 million, and Germany with over 920,000, according to online tracker comScore.
In unveiling Google+, Google stressed the ability it gives users to separate online friends and family into different "Circles," or networks, and to share information only with members of a particular circle.
One of the criticisms of Facebook is that updates are shared with all of one's friends unless a user has gone through a relatively complicated process to create separate Facebook Groups.
SAN FRANCISCO — Prosecutors on Apple's home turf have decided not to pursue criminal charges against Gizmodo technology bloggers who got hold of a lost iPhone 4 prototype.
A man who purportedly found the gadget in a bar and another who brokered a deal to sell it to Gizmodo will face charges, according to a release online Thursday from the district attorney's office in San Mateo County, California.
Early last year, Gizmodo published pictures and details of the iPhone prototype after buying it for 5,000 dollars from Brian Hogan, who claimed to have found it in a beer garden where it was lost by an Apple software engineer.
Hogan, 22, was charged with misappropriation of lost property while 28-year-old Sage Wallower faces that charge plus one accusing him of possession of stolen property, according to prosecutors.
The California men are to be arraigned in court on August 25.
"After a consideration of all of the evidence, it was determined that no charges would be filed against employees of Gizmodo," the district attorney's office said in the release.
While investigating how the supposedly secret prototype misplaced in March of last year ended up with Gizmodo, police raided the home of Gizmodo editor Jason Chen, seizing computers and other equipment.
US pharmaceutical giant Pfizer on Thursday began long-awaited compensation payments to families over a 1996 drug trial blamed for the deaths of 11 children and disabilities in dozens of others.
But even as the compensation process began, the company faced further criticism since only four families were paid in the initial disbursements, while some 200 children participated in the trial of meningitis drug Trovan.
Parents of four of the children who died received cheques of $175,000 each at a ceremony in the northern Nigerian city ofKano, where the trial took place.
A dispute over whether DNA testing should be used to verify the identification of victims had held up compensation payments.
Thursday's payments followed the release of eight results of DNA tests of 546 saliva swabs of claimants, said Abubakar Bashir Wali, who heads the claims verification committee.
"Out of these eight results, four died as a result of their participation in the clinical trial and each is entitled to ... $175,000 as full and final settlement of compensation," Wali said at the ceremony.
The other four claimants suffered deformities and would be paid compensation commensurate with their disabilities, Wali said.
"We are pleased that these four individuals, the first group of qualified claimants...have received compensation," Pfizer said in a statement it issued from New York.
The statement described the initial payments as a "milestone in the implementation of the settlement agreement reached by Kano state government and Pfizer".
"The compensation cannot replace my loss, but will only cushion the hardship the drug trial caused me and my family," Hauwa Umar, who lost a child, said between sobs.
Outside the ceremony, a group of claimants accused the compensation committee of unnecessary delay in the verification and payment of claims.
"It is frustrating that 10 months after taking over 500 swabs for DNA tests only eight results have been released despite assurance that the results would be out within six weeks," Surajo Hassan said.
Hassan said his nephew suffered deafness from the trial.
"The procedures contained in the settlement agreement are quite cumbersome, and we appeal to all stakeholders to be patient...," Wali said at the ceremony.
The payments were part of a $75 million out-of-court-settlement reached between Pfizer and Kano state government in July 2009 over the drug trial.
The trial occurred during a meningitis epidemic that, according to Pfizer, killed nearly 12,000 people.
Pfizer says it was given approval from government authorities and about 200 children were involved in the trial, half of whom were treated with Trovan. It has argued that Trovan helped save lives.
But France-based medical charity Doctors Without Borders, which was at the time urgently trying to treat meningitis victims in Nigeria, has harshly criticised Pfizer over the trial.
Britons took to social networking sites on Wednesday to expose the rioters who went on the rampage for four nights, posting photos of masked gangs looting and hurling missiles.
Much of the violence, which started in London but has since spread to other parts of the country, was captured on mobile phone cameras, video recorders or CCTV, and the images quickly found their way into cyberspace.
London's Metropolitan Police made a tentative attempt to use social media to track down suspects, putting up 25 photos of youths breaking into shops and lobbing missiles on photo-sharing site flickr.
But the official effort paled in comparison to the surge of activity by amateur web investigators.
One such project is a web page called "Catch A Looter", which has been set up on blog-hosting website tumblr and features dozens of photos from the London riots.
Images showed looters walking out of shops with electrical goods, clothes and bottles and close-up shots of rioters hurling missiles.
The anonymous creator of the site urged web surfers to get in touch with Crimestoppers, a charity that allows people to anonymously pass on information about crimes, if they recognised anyone on the site.
But just a day after it was set up, the creator announced the web page would no longer be updated, saying that with the riots spreading across the country "there are loads of photos and I can barely keep up".
"The beauty of social media is you can put these things up quickly, and take them down again too, without any cost," he said.
Another, more controversial, effort was under way to track down rioters, with a Google Group set up called "London Riots Facial Recognition".
Members of the group are reportedly using technology similar to Facebook's photo recognition tools to identify looters whose faces appear on the web.
It was quickly restricted to current members of people invited to join after concerns were raised in the media following discussions by the group's members on the legality of using facial recognition.
As well as using the web to hunt rioters, 'netizens' also launched a very British "anti-riot" on Wednesday with a Twitter and Facebook campaign entitled "OperationCupOfTea".
People were asked to "Stay in and drink tea" and post a photo of their beverage online, instead of going on the rampage. The project was one of the top trending topics on Twitter.
Update: Official Twitter accounts associated with "Anonymous" contradicted this story, claiming it was a hoax.
SAN FRANCISCO — A splinter group of notorious hacker collective Anonymous was fomenting support Wednesday for a plan to "kill" online social networking star Facebook.
A YouTube video labeled as a message from Anonymous claimed that "Operation Facebook" would take place on November 5 to destroy the social network for supposedly abusing the privacy of users.
An Anonymous spokesman told AFP that even heads of the group were uncertain how seriously to take the threat since the loosely-knit organization doesn't have a strict command structure and members mask their identities.
"I found groups of people who say we absolutely are and have a trick up our sleeves," said the spokesman. "I found others that say it isn't us and that this is stupid."
The video displayed a gray image of the Anonymous logo as a digitally masked voice announced a plan to destroy Facebook and called for others to join in the cyber attack.
The video accused Facebook of holding onto the data people post in accounts and of even sharing some of it with law enforcement agencies.
"Join the cause and kill Facebook for the sake of your own privacy," the speaker urged in the video, which has been viewed more than a million times since being posted three weeks ago.
A cadre within Anonymous was evidently trying to rally cyber warriors in a Facebook attack, but the plan did not have the backing of the majority of the group, according to the spokesman.
A message on an "Anonops" account at microblogging service Twitter acknowledged that some members of the group were organizing a Facebook attack but that didn't mean the sentiment was unanimous.
"This could be as dumb as one person making a video or as big as someone having already broken into the Facebook network," said the Anonymous spokesman.
Facebook declined a request for comment.
Hackers bent on derailing Anonymous clashed with members of the group at a DefCon gathering in Las Vegas over the weekend.
"Hubris" and "Asherah" of startup Backtrace Security condemned Anonymous for "bully behavior" and argued that the group was trying to pass of reckless opportunism as Internet-age activism.
"When Anonymous started it was a good idea," Asherah said during what exploded into a fiery session at the infamous DefCon hacker get-together.
"Now, it is in violent freefall," she continued as the audience divided into opposing camps of hackers cheering in agreement and angry Anonymous fans heckling and shouting.
"We are trying to derail something that has gone wrong very quickly and is going to get worse."
The session turned into a shouting match when representatives of Anonymous interrupted from the audience and then joined Hubris and Asherah on stage to field questions.
"I believe what (Anonymous is) doing is for the good of everyone," said an Anonymous member with a mask similar to the one worn by the protagonist in the film "V for Vendetta," sparking applause from one side of the large room.
Anonymous representatives, one in a toy bear costume, defended actions such as releasing looted computer data including names of police informants or credit card numbers on the grounds networks should be better protected.
Asherah portrayed Anonymous as a formless mob that does what it feels and then justifies it after the fact, often under the guise of activism.
"They have become the monsters they are claiming to fight against," she said. "If anonymous wants to be taken as a legitimate activist group they need to excise the bullies and the jerks."
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