Online News Paper

Microsoft Yahoo, Microsoft Corp. appears to have finally locked up rival Yahoo Inc. in a long-awaited Internet search partnership aimed at narrowing Google Inc.’s commanding lead in the most lucrative piece of the online advertising market.
The details of the Microsoft-Yahoo alliance are expected to be announced Wednesday, a person with knowledge of the talks told The Associated Press. This person spoke Tuesday night on condition on anonymity, confirming earlier reports, because the deal was not yet final.
Both Redmond, Wash.-based Microsoft and Sunnyvale, Calif.-based Yahoo declined to comment late Tuesday.
The deal may not be as far-reaching as many investors envisioned. It does not appear to call for Microsoft to pay Yahoo in advance, which could disappoint Wall Street. Yahoo Chief Executive Carol Bartz had said she would join forces with Microsoft only for “boatloads of money.”
Instead, the companies would share revenue generated by search ads on their Web sites. Yahoo would use Microsoft’s search engine, Bing, and it is likely – though not certain – that a “powered by Bing” message will appear on Yahoo’s highly trafficked pages, according to the person who described the talks to the AP.
The companies would also use Microsoft’s advertising technology to deliver appropriate ads alongside search results, while Yahoo will handle the ad sales and customer service.
The person with knowledge of the talks said it is not clear whether the final deal will also cover sales of billboard-style “display” ads, or what will happen to Microsoft’s own ad sales team.
Microsoft, the world’s largest software maker, has been courting Yahoo for several years in hopes of expanding its share of the lucrative online search market.

WASHINGTON: Leading US banks are not lending as much as bankers and borrowers refrain from taking risks in the uncertain economy.
An analysis by the Journal showed the total loans held by 15 large US banks shrank by 2.8 percent in the second quarter, and that more than half of the loan volume in April and May came from refinancing mortgages and renewing credit to businesses and not fresh loans.
The banks surveyed include financial giants such as J.P. Morgan Chase, Bank of America and Citigroup as well as regional banks such as Fifth Third Bancorp, based in Cincinnati, and Regions Financial Corp. of Birmingham, Alabama.
The 15 banks hold 47 percent of federally insured deposits and got 182.5 billion dollars in taxpayer-funded capital infusions through the Troubled Asset Relief Program, the report said.
As of June 30, the banks had 4.2 trillion dollars of loans on their balance sheets, down from 4.3 trillion dollars on March 31.
Loan portfolios shrank at 13 of the big banks, with the steepest decline at Comerica Inc., Dallas, where the loan total was down 4.3 percent to 46.6 billion dollars in the latest quarter, the paper noted.
Bank of America reported its loan portfolio slipped 3.6 percent to 942.2 billion dollars in the second quarter, the report said.
A spokesman for the largest US bank by assets said the decrease reflected higher loan losses and lower loan demand as borrowers pay off outstanding debts.
“There were fewer opportunities to make high-quality loans because of the recession,” he said.
The 15 banks reported about 803 billion dollars in loan volume in the second quarter, up 12.7 percent from the first quarter, The Journal said.
But nearly 60 percent of the increase in April and May came from refinancing mortgages and renewing business loans, according to the report. In contrast, new home purchases accounted for just 23 percent of all mortgage loans.
On a year-to-year basis, total loans held by the 15 big banks rose 17 percent from 3.6 trillion dollars in the second quarter of last year, the paper reported.
But the increase was skewed by the impact of acquisitions that included J.P. Morgan’s takeover of the banking operations of Washington Mutual and Wachovia’s purchase by Wells Fargo Bank, it said.
Excluding purchases, loan portfolios shrank by about 10 percent as of June 30 from a year earlier, according to the report.

SINGAPORE: Oil rose in Asian trade on Monday, with investor mood upbeat that the global economy was over the worst of the slump, analysts said.In particular, a stronger-than-expected set of US corporate earnings has fuelled hopes that the world’s largest economy was on the mend from a recession that started late last year, they said.
New York’s main contract, light sweet crude for September delivery, put on 39 cents to 68.44 dollars a barrel.
Brent North Sea crude for September delivery was 38 cents firmer at 70.70 dollars.
“People concluded that Asia seems to have turned the corner — now the US is also thought to be recovering,” said Tony Nunan, a Tokyo-based manager with Mitsubishi Corp’s international petroleum business unit.
In Asia, a strong 7.9 percent surge in second quarter growth from China’s economy has bolstered hopes that the region is also starting to shake off the US-led global slump.
After the United States, China is the number two energy user in the world.
Crude prices have surged about 10 dollars in New York over the past two weeks, energised by strong US corporate earnings and economic data suggesting the US and other key economies are starting to recover.
However, Phil Flynn of PFG Best Research cautioned that the rise in oil prices was not supported by economic fundamentals.
“Oil has ignored bearish supply and demand fundamentals as the fundamentals of expectations of an improving economy seem to be a bit more exciting,” Flynn said.
“After this pop, oil will fall hard.”

JEDDAH: The Saudi companies demanded the government to lift ban on cement export, as they have 10 million additional stock of cement with them.
The cement manufacturing companies said this ban has caused to dwindle their income to a great extent.
Saudi Cement Company, the country’s second-largest producer, said its second-quarter net profit declined 2.3 per cent as a government export ban hit sales.
Saudi Cement made SR167.7 million ($44.72 million) in the three months to June 30, compared to 171.6 million riyals a year earlier, the firm said in a statement on the bourse website.
‘The decline in quarterly profits compared to the same quarter last year is due the continued ban on exports of cement and clinker,’ the firm said.
Saudi Cement is the latest cement company to see declines in second-quarter earnings, blamed on the export ban.
The year-long export ban was imposed after domestic cement prices soared last year as Saudi Arabia, undergoing multi-billion dollar infrastructure projects, faced shortages as cement producers exported large quantities abroad in search of higher profits.
The ban, compounded by the launch of new production facilities, saturated the local market and caused cement prices to fall.
In May, the government allowed cement manufacturers to export part of their surplus production provided they sell their product at the local market for 200 riyals a tonne.
The stock of Saudi Cement last traded flat at 56 riyals on Saturday. Earnings were released after the market closed.

SINGAPORE: Oil prices rose in Asian trade Monday, lifted by positive US housing construction data that suggested the crisis-hit housing market was over the worst, analysts said.New York’s main futures contract, light sweet crude for delivery in August, gained 21 cents to 63.77 dollars a barrel.
Brent North Sea crude for September delivery climbed 27 cents to 65.65 dollars.
Data released Friday by the US Commerce Department showed construction starts on privately owned homes rose 3.6 percent in June to a seasonally adjusted rate of 582,000, the fastest pace since November.
The jump in housing starts was much stronger than the 530,000 pace expected by most analysts and followed a revised 562,000 starts in May, up 30,000 from the initial estimate.
“Oil prices drew support from the US housing starts data,” the Commonwealth Bank of Australia said in a report.
David Bensimon of financial advisory firm Polar Pacific said crude markets were currently “in the midst of a consolidation” and could rise in the near term.
“The market has begun a new multi-year advance… there is some potential, if oil holds at (current) levels, for it to move to 80 dollars in the next four to six weeks,” he said.
Oil prices have slumped amid the economic downturn after striking all-time highs above 147 dollars a barrel a year ago, but have slowly clawed back ground on hopes that the global recession is on the mend.

KARACHI: Bulls dominated the capital market this week, pushing the benchmark KSE-100 Index beyond 7,700 level.The investors actively invested in cement and energy stocks on expectation of discount rate cut by the State Bank of Pakistan in its upcoming monetary policy.
The Index gained 261 points this week to close at 7,764.
The average market turnover was recorded at 200 million shares, showing an increase of 43 percent compared to last week.

SAN FRANCISCO, USA: Google has reported that its second-quarter profits have climbed to 1.48 billion dollars despite stark global economic conditions.
Google said it earned 4.66 dollars per share in the quarter ending June 30, up from 3.92 dollars per share, or a total of 1.25 billion dollars, in the same quarter last year.
The search engine giant said its net revenue for the quarter rose to 4.07 billion dollars as compared to 3.9 billion dollars the same period in 2008.
“Google had a very good quarter, especially given the continued macro-economic downturn,” chief executive Eric Schmidt said in a release.
“These results highlight the enduring strength of our business model and our responsible efforts to manage expenses in a way that puts us in a good position for the economic upturn, when it occurs.”
Google reported that “paid-click” advertising was 15 percent higher than in the same quarter last year, down two percent from last quarter, but Schmidt said the company’s advertising business appears to have stabilized.
“We are not looking at the downward spiral we were seeing six months ago,” he said during an earnings conference call.
“It is too early for us to tell when the recovery will materialize. I wish we could just prove it. The recovery will eventually come; it always comes.”
Schmidt said the money brought in by Google-owned YouTube has tripled in the past year and the service could be “a really profitable business in the not too distant future.”
“YouTube is now on a trajectory we are very pleased with,” he added, though Google has yet to see any profit from the video-sharing site, which it bought in 2006 in a stock deal valued at 1.65 billion dollars.
Schmidt said Google will continue to invest in developing new enterprises, including its recently-announced open-source Chrome OS operating system project, which could challenge Microsoft’s ubiquitous Windows software. The company plans to target Chrome OS at netbooks, providing users of the low-cost computers with fast, powerful connections to the Internet.
It is also in talks with computer hardware makers who may develop complementary products for the system.
Chrome OS will be free, with Google expecting to cash-in on people invariably using its services and clicking on its online ads.
“We have ways we plan to make money from it,” Schmidt said. “We look at it strategically… getting more people online ultimately results in revenue growth for us.”
As it spends money on development, Google has also cut back spending in other areas, protected its cash reserves and ended the quarter with fewer employees despite continued hiring.
The company ended June with 19,786 employees, down from 20,164 at the close of the previous quarter, after it cut staff in marketing and sales.
Google stock dropped more than three percent to 427.80 dollars in after-hours trading after the release of the earnings report.

MUMBAI : Tata Motors Ltd, India’s largest vehicles maker, said on Thursday it would deliver the Nano, the world’s cheapest car, to its first customer on Friday.Chairman Ratan Tata had showcased the Nano at an auto show in New Delhi in January last year, but consumer bookings began only in April this year after the project was delayed due to land disputes at its planned site in the eastern state of West Bengal.
The plant for producing the Nano was shifted to a new site in Gujarat on the west coast, but the first batch of Nanos would come from its car plant in Pantnagar in northern India.
Tata has assured price protection for the first 100,000 customers, for whom the cars will beavailable for 100,000 rupees ($2,053), excluding taxes.

WASHINGTON: The Federal Reserve has predicted that unemployment in the United States will top 10 percent this year, but noted that the end of the recession might be in sight.The pace of job losses in the United States quickened in June to 467,000, driving the jobless rate to 9.5 percent, the highest in more than 26 years, the Labor Department reported last week.
Since the recession began in December 2007, the U.S. economy has lost a net total of 6.5 million jobs.
According to the Federal Reserve, the unemployment rate could rise to as high as 10.1 percent this year, compared with the previous forecast of 9.6 percent.
Meanwhile, the central bank said that the U.S. economy will shrink between 1 and 1.5 percent this year, better than a decrease of 1.3 to 2 percent it forecast in May.
For 2010, the Federal Reserve said the growth rate in the United States will be in a range of 2.1 to 3.3 percent. For 2011, the economy will continue to expand in a range of 3.8 to 4.6 percent.
Moreover, the Federal Reserve said that there were signs of a recovery in some sectors, including the financial markets.
“Almost all participants viewed the near-term outlook for domestic output as having improved modestly relative to the projections they made at the time of the April FOMC meeting, reflecting both a slightly less severe contraction in the first half of 2009 and a moderately stronger, but still sluggish, recovery in the second half,” said the Fed in the minutes released on Wednesday.
“It seemed likely that economic activity was in the process of leveling out, and the considerable improvements in financial markets over recent months were likely to lend further support to aggregate demand,” said the documents.

SEATTLE: The head of Boeing Co.’s Integrated Defense Systems has told employees that the defense division will have to cut about 1,000 jobs because of Pentagon budget reductions.
In an internal memo Monday, Boeing’s Jim Albaugh says the job reductions are needed to keep the company competitive.
Jim Albaugh, president and chief executive of the company’s Integrated Defense Systems, told the division’s employees of the cuts.
Albaugh said the company is “facing significant funding reductions” on the Ground-based Midcourse Defense program and a halt to the ground-vehicle program in the Army’s Future Combat Systems.
Boeing spokesman Dan Beck said the company is not prepared to release specifics about the job cuts. But they will affect employees at several IDS sites, including St. Louis, Southern California and Puget Sound.
Employees affected by cuts will be notified beginning this week.
Boeing’s IDS, with headquarters in Hazelwood and production facilities in the St. Louis region, is the area’s second-largest employer with 16,000 workers.
Albaugh said in his internal message that recent steps by Boeing customers forced the company’s hand.
Defense Secretary Robert M. Gates proposed restructuring the Future Combat Systems modernization program in April.
He made it clear he wanted to cancel the ground vehicles, saying they were ill-suited for the kinds of wars the United States is fighting in Afghanistan and Iraq.
Boeing is the lead contractor for the modernization program along with Science Applications International Corp. of San Diego.

LONDON: Oil recovered somewhat on Tuesday, in line with stronger equity markets, and after OPEC predicted crude demand growth would settle this year before turning positive in 2010.In London trading, Brent North Sea crude for August delivery added 75 cents to reach 61.44 dollars a barrel.
New York’s main contract, light sweet crude for delivery in August also rose 75 cents to 60.44 dollars.
Europe’s main stock markets rallied Tuesday, mirroring earlier gains in Asia and overnight on Wall Street, as investor optimism grew ahead of this week’s major data releases and results from troubled US banks.
“Crude futures were higher as risk appetite improved following a rally in equity markets,” added analyst Nimit Khamar at the Sucden Financial Research brokerage in London.
“The economic data on tap combined with a collection of heavyweight US corporate earnings results out this week will be keenly monitored by market participants to see whether a recovery is in the works.”
Oil had fallen on Monday on concerns over the pace of recovery in the global economy, especially in the United States.
But in Vienna on Tuesday, the OPEC crude producers’ cartel painted a brighter picture of worldwide demand for energy.
“World oil demand is settling down in line with the current world economic situation,” the Organization of Petroleum Exporting Countries wrote in its latest monthly report.
And “after two consecutive years of negative growth … world oil demand is expected to turn positive in 2010. (It) is projected to show a moderate increase of 0.5 million barrels per day (bpd)” or 0.59 percent to 84.34 million bpd.
For this year, OPEC estimated that demand would contract by 1.65 million barrels per day (bpd) or 1.93 percent — only a marginal downward revision from its earlier forecast.
In its previous monthly bulletin released in June, OPEC had been pencilling in a contraction of 1.62 million bpd or 1.89 percent for 2009.
Next year, “the bulk of the recovery in oil demand is projected to be seen in the second half of the year when the global economic rebound strengthens.”
Growth was expected to come mostly from developing economies such as China, India, the Middle East and Latin America.
One year ago, oil prices had struck record peaks above 147 dollars — but they have since collapsed in line with slumping energy demand.
On July 11, 2008, New York crude had rocketed to a record high point of 147.27 dollars and London Brent struck a historic peak of 147.50 on heightened concerns about supplies.
But over the past 12 months, prices have nosedived, striking 32 dollars in December before clawing back some ground on economic recovery hopes.

BOSTON: Microsoft Corp will release three versions of its dominant Office software that users can access over the Web, catching up with products that rival Google Inc launched three years ago.The news helped send shares in the world’s largest software maker up 2.7 percent by midday, more than double the gain in the Nasdaq Composite Index.
It is the latest salvo in an intensifying war between Microsoft and Google. Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, Bing, last month.
“Microsoft is finally making the conversion through the Web-based world. First, we saw that through Bing. Now we are seeing that through Office,” said Jefferies & Co analyst Katherine Egbert.
Microsoft will offer for free to consumers Web-based versions of its Office suite of programs, including a word processor, spreadsheet, presentation software and a note-taking program.
Microsoft will also host one Internet business version of Office at its own data centers, charging companies a yet-to- be-announced fee. Companies with premium service contracts will have the choice of running a second Web-based version from their own data centers at no extra cost.
The company hopes to make money by using the free software to lead users to its ad-supported websites, including Bing. Analysts have said that Bing’s early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.
Still, a free version of Office could hurt sales of Microsoft’s top-selling and most profitable unit.
One of Office’s most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.
“Microsoft is in a tough spot. Their competition isn’t just undercutting them. They are giving away the competitive product,” said Sheri McLeish, an analyst with Forrester Research.
The Office division rang up operating profit of $9.3 billion on sales of $14.3 billion in the first three quarters of the software maker’s current fiscal year.
McLeish expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.
Microsoft will release the web offerings when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.
The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.
Company spokeswoman Janice Kapner said the free Web version will provide “a very rich experience” and probably have more functionality than Google.
Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.
Microsoft shares rose 2.7 percent to $23, while the Nasdaq was up 1.2 percent at 1777.50