Facebook Inc. will probably put offits initial public offering until 2012, giving Chief ExecutiveOfficer :S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Mark Zuckerberg more time to gain users and boost sales,three people familiar with the matter said.
Facebook would benefit from another year of growth absentthe added scrutiny that comes with a public listing, instead ofholding an IPO in 2011 as investors speculated, said the people,who asked not to be identified because Facebook doesn’t discussshare-sale plans. Still, Zuckerberg, who holds board control,could push for a stock sale at any time, they said.
Waiting lets Zuckerberg, 26, hone the skills needed tosteer a company that issues quarterly results while facingcriticism on such matters as user privacy. Facebook, valued at$24.9 billion, would use the time to propel its user base beyondthe 500 million mark reached this month and add to sales thattwo of the people said may double to at least $1.4 billion in2010 from $700 million to $800 million last year.
“The burden of being public has never been greater,” said:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Kevin Landis, who manages about $260 million at Firsthand Fundsin San Jose, California, and has invested in the technologyindustry for 16 years. “Zuckerberg doesn’t have to put his nameat the bottom of four 10-Q statements every year and attest thateverything in there is true or else he’s responsible. The minuteit’s public, he does.” Landis doesn’t have direct knowledge ofFacebook’s IPO plans.
:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Jonathan Thaw, a spokesman for Facebook, owner of theworld’s largest social network, declined to comment. Zuckerberg,in a television interview this month, said Facebook will gopublic “when it makes sense,” without elaborating.
Pressure Allayed
Some investors had speculated a share sale might happen in2011 after venture capitalist Jim Breyer, a member of Facebook’sboard, said in January that the Palo Alto, California-basedcompany isn’t focused on a 2010 sale. Instead, Facebook’smanagement is trying to woo more users and developers, Breyersaid at the time.
Startups are often urged to sell shares by employees andinvestors eager for a return on their equity. In Facebook’scase, some of that pressure has been allayed by private sales,often facilitated by such exchanges as SecondMarket Inc. andSharesPost Inc., which help find buyers for startup shares.
SharesPost values Facebook at $24.9 billion, more thandouble its value in March.
Zuckerberg faces a range of challenges, includingmanagement of a rapidly growing workforce and rising competitionfrom companies including Twitter Inc., the blogging service thathas amassed more than 190 million monthly visitors.
Zuckerberg’s Challenges
Facebook is also contending with heightened regulatoryscrutiny over how it handles users’ personal data. And it’s upagainst a lawsuit that contests ownership of the company. A NewYork man, Paul Ceglia, claimed in state court in June that heowns an 84 percent stake, based on an April 2003 contract.
“If they have other sources of capital, the company wouldprobably be better off deferring an IPO until Zuckerberg hadmore experience under his belt,” said Ray Valdes, a San Jose,California-based analyst at Gartner Inc.
Facebook’s timetable may disappoint technology investorswho speculated an IPO would encourage other startups to wadeinto the public markets. Venture-backed IPOs dwindled in thepast 2 1/2 years as the financial crisis wiped out investmentbanks such as Lehman Brothers Holdings Inc. and Bear StearnsCos. and forced many hedge funds to close.
This year, 40 companies put off or have withdrawn IPOs inthe U.S., according to Bloomberg data.
IPO Dearth
“The companies that went public in the second quarter hadto have readjusted price expectations on average,” said HansSwildens, founder of Industry Ventures LLC, a San Francisco-based investing firm that owns a Facebook stake. “The capitalmarkets are swinging week by week. It’s a very hard time.”
Facebook, founded in 2004, now has about 1,400 employees.Investors include Accel Partners, Microsoft Corp. and ElevationPartners LP, the private-equity firm among whose founders areBono and :S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Roger McNamee. Besides Zuckerberg and Breyer, boardmembers are Internet entrepreneur :S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Marc Andreessen, money manager:S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Peter Thiel of Founders Fund and :S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">Donald Graham, CEO of TheWashington Post Co.
Zuckerberg holds board control, according to “The FacebookEffect,” a chronicle of the social network’s origins by :S:d1&partialfields=-wnnis:NOAVSYND&lr=-lang_ja">David Kirkpatrick.
Elevation Partners has bought Facebook shares in privatetransactions that total $210 million, a person familiar with thematter said in June. Digital Sky Technologies, a Russianinvestor, has accumulated a stake of almost 10 percent, peoplefamiliar with the matter said in May.
Mutual fund managers and individual investors want theirown chance to invest in Facebook’s growth, said Ted Hollifield,a partner at law firm Dorsey & Whitney LLP in Palo Alto,California.
“There’s definitely the market demand and appetite for avery successful IPO,” said Hollifield, who works with venturecapital firms and startups. “Facebook’s IPO is going to be ahuge watershed for the whole Valley.”
WASHINGTON (AP) -- The recovery lost momentum in the spring as growth slowed to a 2.4 percent pace, its most sluggish showing in nearly a year and too weak to drive down unemployment.
Consumers spent less, companies slowed their restocking of shelves and the nation's trade deficit dragged more on the economy in the April-to-June quarter. In a separate report, the Commerce Department said the recession was deeper than previously estimated.
Together, the reports raise doubts about whether employers will hire enough and consumers will spend enough to invigorate the economy. As unemployment remains near double digits, Congress could feel pressure to pass more stimulus measures to speed the recovery. So far, Republicans and some Democrats have blocked additional spending because of their concerns about the size of the deficit.
Investors reacted to the report with disappointment. Stock futures fell in the hour before the markets opened. However, losses moderated in morning trading after the University of Michigan/Reuters consumer sentiment index for July rose slightly more than expected.
The Commerce Department report released Friday did offer some encouraging news. Businesses invested the most in 13 years on equipment and software during the second quarter. For the first time in two years, builders boosted spending on commercial projects. And home builders spent the most in 27 years, although many expect that to fade now that government homebuying tax credits have expired.
The report also showed that the economy grew at a 3.7 percent pace in the first three months of this year. That was much better than the 2.7 percent pace estimated just a month ago.
Still, the recovery has been losing power for two straight quarters. That raises concerns about whether it will fizzle out. Or worse, tip back into a "double-dip" recession.
The economy began to grow in the third quarter of last year after having suffered the worst recession since the Great Depression. And in the following quarter the economy's growth surged at a 5 percent pace, the high water mark of the rebound.
Much of the expansion was driven by the government's massive $862 billion stimulus package of tax cuts and increased spending. Also, companies helped energize growth with a burst of spending to replenish inventories that were cut down during the recession.
Now, as those forces are fading, concerns are growing as to whether the private sector can boost spending and investment enough to keep the recovery afloat.
Consumer spending, usually the lifeblood of economic activity, slowed in the second quarter. Such spending rose at an anemic 1.6 percent pace. That was down from a 1.9 percent pace in the first quarter and was the weakest showing since the end of last year.
Instead, Americans saved more. They saved 6.2 percent of their disposable income in the second quarter, the highest share in a year.
The 2.4 percent growth rate logged in the April-to-June quarter was the weakest since a 1.6 percent pace in the third quarter of last year, when a record streak of four straight losing quarters came to an end.
"The economy is growing but not enough to make most Americans happy. At this weak pace, it will take more time than many hoped for people to really feel the benefits of this upturn," said Joel Naroff, president of Naroff Economic Advisors.
In the revisions issued Friday, the government estimated that the economy shrank 2.6 percent last year -- the steepest drop since 1946. That's worse than the 2.4 percent decline originally estimated. The economy's plunge underscores why the unemployment rate surged to 10.1 percent in October, a 26-year high.
With the economy growing at a subpar speed, the current 9.5 percent unemployment rate is not expected to fall.
It takes about 3 percent growth in gross domestic product just to create enough jobs to keep pace with the population increase. Growth would have to equal 5 percent for a full year to drive the unemployment rate down by 1 percentage point. Neither the Obama administration nor the Federal Reserve expect that to happen.
Gross domestic product measures the value of all goods and services - from machinery to manicures - produced within the United States. It is the best gauge of the nation's economic health.
The weak economy leaves Democrats and Republicans on Capitol Hill vulnerable as they head into the November midterm elections. Democrats, who now control both chambers, have the most to lose. The gloomier outlook is also a liability for President Barack Obama.
However, there were some encouraging signs in terms of business spending.
Spending by businesses on equipment and software increased at a blistering 21.9 percent pace in the second quarter. Builders boosted spending on commercial projects, such as office buildings and plants, at a 5.2 percent pace. And, home builders, who have cut spending for the last two quarters, ratcheted up their outlays at a hot 27.9 percent pace, the most in nearly 27 years. Still, with the expiration of the government's homebuyer tax credit, housing activity has started to turn sluggish again.
Looking ahead, though, businesses still aren't showing signs of ramping up spending that would translate into the explosive kind of growth needed to drive down unemployment.
Uncertain about the strength of the recovery, companies are sitting on record piles of cash, loath to use the money to hire new workers and expand operations. Caterpillar Inc., Dupont Co. and Microsoft Corp. are among companies reporting strong second-quarter earnings in the past two weeks yet they aren't ready to bulk up their work forces.
"There is a high degree of uncertainty. There is a recovery under way. It is going to be choppy," said United States Steel Corp. Chairman and CEO John Surma earlier this week.
Overall economic growth was bolstered in the second quarter by strong spending by the federal government. It boosted spending at a 9.2 percent pace, the most in a year. And, state and local governments, coping with budget shortfalls, increased their spending for the first time in a year.
Associated Press
PROTEST PARADE: Immigrant rights advocates march across the Brooklyn
Bridge in New York to demand full repeal of Arizona's new illegals law.
The Obama administration is considering a backdoor approach to stop many deportations.
KABUL, Afghanistan – NATO announced Friday that six more U.S. troops have died in Afghanistan, bringing the death toll for July to at least 66 and surpassing the previous month's record as the deadliest for American forces in the nearly 9-year-old war.
In Kabul, police fired weapons into the air Friday to disperse a crowd of angry Afghans who shouted "death to America," hurled stones and set fire to two vehicles after an SUV, driven by U.S. contract employees, was involved in a traffic accident that killed four Afghans on the main airport road, according to the capital's criminal investigations chief, Abdul Ghaafar Sayedzada.
A statement issued by the U.S. Embassy in Kabul said a vehicle carrying four U.S. contract workers was involved in a two-car accident near the airport.
"Our sympathies go out to the families of those Afghans injured or killed in this tragic accident," the embassy said.
Witnesses said foreigners fled the scene, but the embassy said the contractors were cooperating with local Afghan security forces.
Afghan police, some carrying riot shields, converged on the area, firing warning shots into the air to disperse the protesters. Sayedzada said the crowd burned two foreigners' vehicles, causing heavy black smoke to rise from the scene.
"It is our right to raise up our voice and protest when innocent Afghans are harmed," said Azizullah, a 25-year-old student, who like many Afghans uses one name.
Ahmad Jawid, who also was at the scene, asked: "Are we not Muslims? Are we not from Afghanistan? Infidels are here and they are ruling us. Why?"
A fatal traffic accident caused by a U.S. military convoy in 2006 triggered an anti-American riot in Kabul that left at least 14 people dead and dozens injured.
A NATO statement Friday said one service member died following an insurgent attack and two others were killed in a roadside bombing the same day in southern Afghanistan. A U.S military official confirmed all three were American troops.
Earlier in the day, a U.S. military official confirmed three other American service members died in two separate blasts in southern Afghanistan on Thursday.
The six deaths raised the U.S. death toll for the month to at least 66, according to an Associated Press count. June had been the deadliest month for the U.S. with 60 deaths.
U.S. and NATO commanders had warned casualties would rise as the international military force ramps up the war against the Taliban, especially in their southern strongholds in Helmand and Kandahar provinces. President Barack Obama ordered 30,000 reinforcements to Afghanistan last December in a bid to turn back a resurgent Taliban.
British and Afghan troops launched a new offensive Friday in the Sayedebad area of Helmand to try to deny insurgents a base from which to launch attacks in Nad Ali and Marjah, the British military announced. Coalition and Afghan troops have sought to solidify control of Marjah after overrunning the poppy-farming community five months ago.
The American deaths this month include Petty Officer 2nd Class Justin McNeley from Kingman, Arizona, and Petty Officer 3rd Class Jarod Newlove, 25, from the Seattle area. They went missing last week in Logar province south of Kabul. McNeley's body was recovered Sunday, and Newlove's body was pulled from a river Wednesday evening, Afghan officials said.
Senior military officials in Washington, who spoke on condition of anonymity because of the sensitivity of the case, said the sailors were never assigned anywhere near where their bodies were found.
Newlove's father, Joseph Newlove, told KOMO-TV in Seattle he was baffled why his son had left the relative safety of Kabul. "He's never been out of that town. So why would he go out of that town? He wouldn't have," he said.
New York Times reporter David Rohde was kidnapped in Logar in 2008 while trying to make contact with a Taliban commander. Rohde and an Afghan colleague escaped in June 2009 after seven months in captivity, most spent in Taliban sanctuaries in Pakistan.
Elsewhere, violence continued Friday.
Four Afghan civilians were killed and three were injured when their vehicle was hit by a roadside bomb in Zabul province of southern Afghanistan, provincial spokesman Mohammed Jan Rasoolyar said. When police arrived at the scene, Taliban fighters opened fire. One insurgent was killed, the spokesman said.
In Kandahar, a candidate in September's parliamentary election escaped assassination Friday when a bomb planted on a motorcycle exploded, city security chief Fazil Ahmad Sherzad said. The Interior Ministry said a woman and a child were killed and another child was wounded.
July 29 (Bloomberg) -- Canadian stocks fell for a third day as Cenovus Energy Inc. dropped after missing analysts’ profit estimates and pipeline companies declined as the Michigan oil spill continued.
Cenovus, Canada’s sixth-largest energy company by market value, sank 5.2 percent after missing the average analyst estimate by 53 percent. Manulife Financial Corp., North America’s third-biggest insurer, jumped 3.6 percent on speculation new regulations won’t affect the company as much as previously thought. Enbridge Inc., Canada’s biggest pipeline company, lost 2 percent after Michigan’s governor warned of “a tragedy of historic proportions.”
The Standard & Poor’s/TSX Composite Index decreased 22.47 points, or 0.2 percent, to 11,674.16 at 11:40 a.m. in Toronto.
The S&P/TSX fell 0.4 percent this year through yesterday as economic data indicating a slow recovery has overshadowed stronger-than-estimated corporate earnings. Of 21 companies in the S&P/TSX 60 index that have reported quarterly earnings since July 12, 14 have topped the average analyst forecasNEW YORK (Dow Jones)--U.S. stocks slipped into the red Thursday, as mixed earnings reports weighed on utilities and consumer stocks and optimism about the U.S. economic recovery dissipated.
Erasing its earlier gains, the Dow Jones Industrial Average fell 53 points, or 0.5%, to 10444 in recent trading. Consumer staples companies dragged the measure lower, led by a 2.4% decline in Kraft Foods and a 1.9% drop in Procter & Gamble following a string of disappointing quarterly reports from other consumer companies.
Colgate-Palmolive slid 7.9% after its second-quarter earnings rose 7.3%, but sales missed analysts' expectations. Kellogg's second-quarter profit fell 15% on weakness in cereal sales in the U.S. and U.K. and impacts from a recent recall. The cereal maker also cut its 2010 growth target, sending shares down 4.9%.
The Nasdaq Composite shed 1.2% to 2236. The Standard & Poor's 500-share index broke through the 1100 level, declining 0.9% to 1096, weighed by its utilities and consumer staples sectors.
Leading the declines among utilities, natural-gas and energy company EQT fell 3.3% after its second-quarter earnings missed analysts' expectations. Constellation Energy Group tumbled 4.8% after Macquarie downgraded the company to neutral from outperform in part based on concerns over its retail business one day after its earnings report.
LAS VEGAS (AP) -- A hacker has discovered a way to force ATMs to disgorge their cash by hijacking the computers inside them.
The attacks demonstrated Wednesday targeted standalone ATMs. But they could potentially be used against the ATMs operated by mainstream banks.
Criminals have long known that ATMs aren't tamperproof.
There are many types of attacks in use today, ranging from sophisticated to foolhardy: installing fake card readers to steal card numbers, hiding tiny surveillance cameras to capture PIN codes, covering the dispensing slot to intercept money and even hauling the ATMs away with trucks in hopes of cracking them open later.
Computer hacker Barnaby Jack spent two years tinkering in his Silicon Valley apartment with ATMs he bought online. These were standalone machines, the type seen in front of convenience stores, rather than the ones in bank branches.
His goal was to find ways to take control of ATMs by exploiting weaknesses in the computers that run the machines.
He showed off his results here at the Black Hat conference, an annual gathering devoted to exposing the latest computer-security vulnerabilities.
His attacks have wide implications because they affect multiple types of ATMs and exploit weaknesses in software and security measures that are used throughout the industry.
His talk was one of the conference's most widely anticipated, as it had been pulled a year ago over concerns that fixes for the ATMs wouldn't be in place in time. He used the extra year to craft more dangerous attacks.
Jack, who works as director of security research for Seattle-based IOActive Inc., showed in a theatrical demonstration two ways he can get ATMs to spit out money:
-- Jack found that the physical keys that came with his machines were the same for all ATMs of that type made by that manufacturer. He figured this out by ordering three ATMs from different manufacturers for a few thousand dollars each. Then he compared the keys he got to pictures of other keys, found on the Internet.
He used his key to unlock a compartment in the ATM that had standard USB slots. He then inserted a program he had written into one of them, commanding the ATM to dump its vaults.
-- Jack also hacked into ATMs by exploiting weaknesses in the way ATM makers communicate with the machines over the Internet. Jack said the problem is that outsiders are permitted to bypass the need for a password. He didn't go into much more detail because he said the goal of his talk "isn't to teach everybody how to hack ATMs. It's to raise the issue and have ATM manufacturers be proactive about implementing fixes."
The remote style of attack is more dangerous because an attacker doesn't need to open up the ATMs.
It allows an attacker to gain full control of the ATMs. Besides ordering it to spit out money, attackers can silently harvest account data from anyone who uses the machines. It also affects more than just the standalone ATMs vulnerable to the physical attack; the method could potentially be used against the kinds of ATMs used by mainstream banks.
Jack said he didn't think he'd be able to break the ATMs when he first started probing them.
"My reaction was, 'this is the game-over vulnerability right here,'" he said of the remote hack. "Every ATM I've looked at, I've been able to find a flaw in. It's a scary thing."
Kurt Baumgartner, a senior security researcher with antivirus software maker Kaspersky Lab, called the demonstration a "thrill" to watch and said it is important to improving the security of machines that can each hold tens of thousands of dollars in cash. However, he said he doesn't think it will result in widespread attacks because banks don't use the standalone systems and Jack didn't release his attack code.
Jack wouldn't identify the ATM makers. He put stickers over the ATM makers' names on the two machines used in his demonstration. But the audience, which burst into applause when he made the machines spit out money, could see from the screen prompts on the ATM that one of the machines was made by Tranax Technologies Inc., based in Hayward, Calif. Tranax did not immediately respond to e-mail messages from The Associated Press.
Triton Systems, of Long Beach, Miss., confirmed that one of its ATMs was used in the demonstration. It said Jack alerted the company to the problems and that Triton now has a software update in place that prevents unauthorized software from running on its ATMs.
Bob Douglas, Triton's vice president of engineering, said customers can buy ATMs with unique keys but generally don't, preferring to have a master key for cost and convenience.
"Imagine if you have an estate of several thousand ATMs and you want to access 20 or so of them in one day," he wrote in an e-mail to the AP. "It would be a logistical nightmare to have all the right keys at just the right place at just the right time."
Other ATM manufacturers contacted by the AP also did not immediately respond to messages.
Jack said the manufacturers whose machines he studied are deploying software fixes for both vulnerabilities, but added that the prevalence of remote-management software broadly opens up ATMs to hacker attacks.