Google has more than 20% of the Chinese search market and the country is a new battleground for the two firms, which offer online and desktop search tools. Dr Kai-Fu Lee, who played a key role in the development of Microsoft's search tools, said he was leaving on Monday. His contract forbids working for direct rivals within a year, Microsoft said. Google said the claim had no merit. Growth market: Google said Dr Lee would "lead the [Chinese] operation and serve as president of the company's growing Chinese operations."

In its lawsuit, Microsoft said it was seeking a court order forcing Dr Lee to abide by terms of confidentiality and non-compete agreements that he signed at Microsoft. It has also accused Google of "intentionally assisting Lee" in flouting his 2000 contract. There are forecast to be 135 million internet users in the fast-growing Chinese market by the end of the year. It is second in size only to the US internet market. According to web consultancy Shanghai iResearch, Google already has a 21.2% share of web searches in China, making it the country's third most popular web search engine after Baidu.com and Yahoo.

The firm said it was vital unions agreed to tough restructuring of its unprofitable operations. Delphi also announced it had started to draw $1.5bn (£844m) from a $1.8bn revolving credit facility in order to stay afloat. The company is also said to be seeking help from former parent General Motors. Delphi was spun out from GM in 1999 and the US car giant remains its main customer. 'Pressure': Some analysts suggest Delphi may seek to shift some of its plants back to GM. Fellow car parts business Visteon achieved a similar arrangement with its former owner Ford back in May. Delphi reported a $403m net loss for the first quarter of 2005, and is struggling with high wage and benefit costs. "Delphi certainly is turning up the pressure on the unions during a critical phase of negotiations," said analyst Mark Oline, managing director of Fitch Ratings. Delphi releases its second quarter results on Monday.

They're first-name type of guys; they wear sandals; they never, ever stick to the point. "I'm a figure of beauty," Craig proclaims, lounging in his comfortable chair, feet firmly on the table. "But while I reek of glamour, it's just an illusion". "Even when I was youthful, I was not very youthful," the 52-year-old blurts, only for Jim to chip in: "Old young man becomes young old man." Global reach: Don't be deceived, though: this sunny Californian banter conceals an online venture that has become a cultural phenomenon. Craigslist.com, their classified adverts website has quietly emerged as one of the top 10 internet companies in the world in terms of page views, attracting more than 10 million unique visitors per month and with a presence in 175 cities across 34 countries. The sites' success has come in spite of, or perhaps because of, their notably basic, almost amateurish, design. "Brevity is the soul of wit," Craig declares, insisting that "the site is deliberately very plain". Everything and nothing is a commodity on this virtual flea market, whose addictive nature has arisen from a bizarre blend of shopping and flirting: anything from cheap sofas or bicycles or electronic gadgets, to new apartments and casual sex is brokered here. It is free as well, for everyone except companies placing job adverts in San Francisco, Los Angeles and New York, and even these fees are low, ranging from $25 to $75.

"We're a business," responds Jim hesitantly. Although the company is tight-lipped about its finances, estimates put its annual earnings at around $10m; not enormous compared with its potential, yet sufficient to ensure Craig can afford the "few luxuries" he enjoys - namely "gadgets and overpriced coffee". "We think of ourselves as a community service, but we have a business structure out of necessity," explains Craig. Craig and Jim are actively resisting the temptation to maximise profits, though with investors desperate to get in on the act they are having to fight hard to stay true to their beliefs. Share and share alike: Already, though, shares in Craigslist have trickled through their fingers: Ebay recently acquired a 25% stake from a former employee, a deal neither Craig nor Jim is keen to comment on. "We don't talk about who owns us," says Jim, insisting that Ebay "has a similar philosophy to ours". The deal seems to be a sore point, though. When asked about what the former employee has done with the money from Ebay, Jim's reply is curt. "We're not really in contact with them so we're not sure what they're doing." Lack of trust: Craigslist's rivals are not fooled by its apparently listless approach to business. Some analysts are already predicting that newspaper classified advertising could vanish entirely. Investment bank Goldman Sachs describes Craigslist as "a real menace" to newspapers, and warns that "all publishers face a significant threat to their profitability". Neither Craig nor Jim seem to lament the threat they pose to the future of local newspapers, however. "People trust conventional media less and less," says Craig. Adds Jim: "Where do you want to throw your sympathies? With huge conglomerates or with millions of people who can use our services to get on with their lives?". By Jon Madliesn.

Marconi talks boost for shares.

Telecoms equipment firm Marconi has said it is in talks with other parties over "potential business combinations"...

The firm was reacting to reports saying it is in takeover talks with Huawei Technologies, a group it already has a business partnership with. However, Marconi did not reveal the name of the other party and said talks may not result in any takeover offer. Shares in Marconi, which had halved in April after losing out on a BT contract, were up 17% to 314 pence. Optical networks: "Marconi is continuing to pursue all strategic options with the objective of maximising shareholder value," the firm said in a statement. Earlier, a Marconi spokesman had declined to comment on reports which suggested the firm could be bought up in a £600m deal. Marconi supplies optical networks, broadband access technologies, data networks and related professional and support services. In terms of the potential for business tie-ups, Marconi said: "The discussions are at a preliminary stage and there can be no assurance that an offer will ultimately take place." Last week it revealed that losses had widened to £36m ($64m) from £11m a year ago in the first three months of the financial year. The Coventry-based group added that revenues in the three months to June had fallen by £4m to £285m as sales fell and margins tightened. Shake-up: It was the latest set of bad news for the firm which missed out on a key BT contract in April. The group warned it would lose out on £50m when BT decided not to select it as one of eight companies to work on a £10bn upgrade of its network. Since then the firm has been carrying out a strategic review of its options amid concerns it is too small to compete with industry heavyweights such as Ericsson and Siemens. The review has seen it cut costs which have included axing 800 jobs and closing the group's Edge Lane plant in Liverpool where the company began life in 1903.

UK bank benefits from Asian trade.

Standard Chartered, the UK-based bank which does the majority of its business in Asia, has seen half-year pre-tax profits rise by 20%.. .

The firm saw its shares rise 8.5% to a record high of 1221 pence after it said it was well-placed for strong growth. Profit was $1.33bn (£744m), from $1.1bn in the first half of 2004, helped by the inclusion of results from Korea First Bank. Standard bought South Korea's seventh largest bank for $3.3bn in April 2005. "Standard is firing on all cylinders. I think both businesses (consumer and wholesale banking) have good income momentum and we expect them to deliver continued income growth," said chief executive Mervyn Davies. Mr Davies said the firm was interested in buying a stake in a Chinese bank. Standard Chartered already has a 19.99% holding in China's Bohai Bank. Debts issue: In the past half year, Standard Chartered has been the best-performing firm in the UK banking sector. It has been insulated from recent concerns expressed by other major British banks about the rise in UK bad debts. Standard Chartered makes about two-thirds of its earnings in Asia, and also operates in Africa and the Middle East. "Revenue increases have been genuinely across the board," said Leigh Goodwin, analyst at HSBC. "Costs were in line with what we had been expecting and provisions for bad debts were slightly below."

The AGF RSP Global Bond Fund will remain in its current form. Unlike the RSP clone funds, it does not incur incremental costs given its investment objective to hold foreign currency bonds from Canadian issuers. AGF also announced its intention to merge four Harmony RSP portfolios into their corresponding non-registered portfolio. Details of the proposed mergers will be announced at a later date. AGF is one of Canada's premier investment management companies with offices across Canada and subsidiaries around the world. With approximately $33 billion in total assets under management, AGF serves more than one million investors with offerings across the wealth continuum. AGF's products and services include a diversified family of over 50 mutual funds, AGF Harmony tailored investment program, AGF Private Investment Management and AGF Trust GICs, loans and mortgages.

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TOKYO, Japan- Apple Computer Inc. launched its music download service, the iTunes Music Store, in Japan on Thursday with 1 million songs, the maker of the hit iPod portable player said. Apple's announcement for the online music store was made in a nation that's home turf for Sony Corp. and other Japanese electronics makers. Sony's Walkman and other companies' music players had been unchallenged sources of income until the arrival of the iPod, now the overwhelming leader among digital music players. "We're super excited about this," Apple CEO Steve Jobs said in Tokyo as he announced the launching of the iTunes service. "The future looks very, very bright for the iPod in Japan." It could also change the local music business, where people who download music are still accustomed to paying more money for a limited lineup of tunes from sites for PCs and mobile phones that cost about 200 yen (US$1.80) a tune or charge monthly fees. Jobs said iTunes will have 1 million songs in Japan, including Japanese and international, with most costing 150 yen ($1.35) each. Only 10 per cent of the songs cost 200 yen ($1.80), he said. Most iPod owners in Japan now either buy or rent CDs. CD rentals, offered at DVD and video rental stores, are very popular in Japan. Earlier this month, Apple said it sold more than 20 million iPods worldwide since it went on sale in October 2001, and more than 500 million songs through its iTunes Music Store, two years after the online store's inception. Apple, based in Cupertino, Calif., does not give a regional breakdown for its sales, but the iPod has been a big hit in Japan, growing into a fashion statement. Since the iPod caught on, Sony and others have also introduced portable players for MP3 music files, including those with hard drives like the iPod.

The new 2005 Q45 offers a sanctuary from the ordinary. Here, you’ll find an environment designed to indulge you with its unique style and materials worthy of the Q45’s flagship distinction. From its class-leading* 340 HP V8 engine, to its powerful 7-lens HID Xenon headlights, the Q45 demonstrates the unmistakable draw of the unique. With its many elegant appointments and sophisticated features, the Q45 will, quite simply, steal your heart and soul.

Malawi telecoms sale put on hold

Malawi President Bingu wa Mutharika has ordered the immediate suspension of the controversial privatisation of the state-run telecommunications firm..

Photo: The government says MTL has been undervalued.

"One or two issues need to be clarified" before the Malawi Telecommunications Limited (MTL) is sold, the president's office said. The suspension comes after directors raised objections to the sale. Ken Msonda, who heads the board of directors, said the price officials set for the firm was not high enough. "The proposed price of $30.7m (£17m) for MTL is too low to match the value of the firm's assets, projects and its viability," he said. Press Corporation, a state-controlled holding company, and the National Insurance Company (Nico), Malawi's largest insurance firm, are leading a consortium of local and international partners to buy an 80% stake in MTL, the southern African nation's only fixed telephone operator. "MTL has invested over $200m in projects between 1999 and 2005 and it cannot be sold for $30.7m," said Mr Msonda. 'Lucrative': Mr Msonda said the company had assets worth more than $60m. "MTL is a lucrative and profitable entity," he said. He said MTL directors were also concerned about benefits of its staff, foreign debts, and its 40% shares in the mobile phone company, Telekom Networks Malawi (TNM). He accused the Privatisation Commission of fixing the price tag and offering it to the consortium. "The value and procedure taken by the commission is not in good faith," he said. The consortium was chosen a year ago to buy MTL after a five-year search for an international partner failed to yield results. President Mutharika, who also heads the ministry of statutory corporations, has approved the sale of MTL, officials said. Maziko Sauti-Phiri, executive director of the Privatisation Commission, said the sale price would be announced Wednesday, when the sale agreement is signed between the government and the consortium, to be called Telecom Holdings Limited (THL). THL includes Germany's Detecon International as technical partners and minority shareholders and insurers Old Mutual. The Development Bank of Southern Africa and Standard Group of South Africa will finance the purchase, officials at the Privatisation Commission said. Weak infrastructure: The government, under pressure from the International Monetary Fund (IMF) to privatise MTL, is selling 80% of its stake to the consortium to speed up structural reforms aimed at freeing up the economy, which is mostly controlled through parastatals. Malawi has 40,000 fixed telephone lines for a population of 11 million, one of the lowest rates in the world. Only 4,000 lines are in rural areas, where 80% of Malawians live. The Privatisation Commission says Malawi is failing to attract foreign investment because of its poor telecom infrastructure. "We want to increase efficiency in MTL because the government on its own is unable to improve telecoms. We have the lowest tele-density in southern Africa," Mr Phiri said. Malawi has privatised half of its 100 loss-making parastatals since 1996. The sale of MTL is the largest transaction of all parastatals. The government in the past spent nearly $70m annually to bail out parastatals, who employ 500,000 people and account for 20% of Malawi's GDP. By Rafael Tentami.

Net firms face up to tougher future.
The Webby Awards, hailed as the so called Oscars of the Internet, lost some of its fizz this year as a lack of money and the general economic gloom forced organizers to tone things down. The producers also said the fallout from the terrorist attacks of 11 September played a part in their decision to turn the San Francisco extravaganza into a more sober affair.

Photo: The Webby awards hand out 60 prizes.

The founder and creative director of the Webbys, Tiffany Shlain, admits that just like the internet industry itself, the Webbys are not what they used to be. "It's more core and we felt it made sense this year with everything that has happened since the last show, September the 11th and the continuing hard times in the economy. We just wanted to be respectful." Rough ride ahead: The event has always been regarded as a barometer for the health of web businesses. But putting a less than rosy glow on things is Stewart Brand of the Long Now Foundation who says the industry can expect this rough ride that has led to thousands being laid off to continue for some time. "Lean years are not just punctuations between periods of fat years," he said. "They are the discipline years when civilization consolidates its gains and invents its way out of trouble. "In the Long Now Foundation these are the good years. Don't waste them."

Photo: Google's founders celebrate another success.

Avoiding burn-out: John Bates who co-founded a web company that sold text books online feels he has wasted some of his good years. His company Bigwords.com burned through $80m leaving him with little to show for it. "It was fun to call my mum and say I'm a multi- millionaire. But the life was awful. I was on planes 25 out of 30 days. I had no personal life. "I burned the candle at both ends. It's nice now to have the time to go surfing and walk the dog. That's the legacy of the dot com boom and bust." Long run benefits: Some feel the shakedown that resulted in the dot bomb was all to the good. "I think it's very healthy the downturn we have seen," says Sergey Brin, a co-founder of the search engine Google. "The past year and a half has really pruned out a lot of companies who were not viable and the ones that are remaining are really strong." And as the head of a successful internet business, Brin says the battering that the industry has taken will benefit everyone in the long run. "I found that the people who are in the market are the more dedicated people, not the people looking to make a quick buck. "So I think it has made it a more honest place and a place where it's easier to do business even though there isn't piles and piles of money floating around." Survival the key: Some are just happy to still be in existence.

Craig Newmark, who is a former Webby winner and founder of the online community bulletin board Craigslist says "We're just grateful we got over the bubble. Now we're just waiting for the next mass hallucination." Google's co-founder Larry Page is less cynical and remains optimistic about a real turnaround for the sector. "There is still a tremendous amount of innovation going on. There are new sites all the time. "People are still using the internet more and more as part of their everyday lives and I think you really see that from the Webbys. "But there is also less money and less exuberance than there was last year." International development: Webbys' director Maya Draisin says the internet is in robust health and forever evolving. She says that is obvious from the types of websites that were nominated and won awards. "You see a lot of dot.org, dot.net and dot.edu as we come out of the hype and all the focus on the dot.coms. "We've also seen a lot more international nominees, so I think the epicentre of web development is also moving out into the world as more and more people everywhere are on line." Despite the harsh economic climate forcing the organisers of the Webbys to lay off the glitz and the glamour this year, they remain confident that the internet will continue to make a major impact on our lives. Tiffany Shlain says they are inspired by Arthur C Clarke who said: "When it comes to technology most people over estimate it in the short term and underestimate it in the long term." By Maggie Shields.

Bribery probe for DaimlerChrysler

The US Justice Department has begun an inquiry into allegations of bribery at DamilerChrysler's Mercedes unit, the German-US carmaker has confirmed...

Photo: Allegations centre on DaimlerChrysler's luxury Mercedes range.

DaimlerChrysler said it was co-operating fully, and has made all its accounts available. The criminal probe escalates a civil one by the US market watchdog, the Wall Street Journal reported on Friday. At issue is whether Mercedes staff paid bribes, and whether senior DaimlerChrysler executives knew. DaimlerChrysler revealed last year it was being investigated by the US Securities and Exchange Commission. 'Co-operating': There are now two investigations. "We are working with the SEC and the Justice Department on the investigation. We have made all our accounts available," said a DaimlerChrysler spokesman following the Wall Street Journal on Friday. In July, DaimlerChrysler said in its interim financial results statement that it had identified "accounts, transactions and related payments that are subject to special scrutiny". It said it was "voluntarily sharing....information from its own investigation" after subpoenas from US federal agencies. DaimlerChrysler said in July that it had not yet reached "any definitive conclusions" about whether the payments it had identified breached the US Foreign Corrupt Practices Act. Troubled times: The latest embarrassment to hit the carmaker comes one day after the German financial market watchdog launched a probe into possible insider trading in the firm's shares. DaimlerChrysler's share price surged up 10% last week ahead of chief executive Juergen Schrempp's announcement that he was planning to step down two years early. Mr Schrempp will step down at the end of 2005. He had become a target of investor criticism, drawing fire over the firm's global expansion plans and problems at its flagship Mercedes division. DaimlerChrysler has seen its earnings come under pressure as steel prices have increased and competitors have offered cut-price deals to lure customers.

US jobs growth at five-month high

The US economy created 207,000 new jobs in July, the biggest gain in five months, according to official figures.. At the same time, US unemployment remained steady at 5% for the second month in a row, continuing at a four-year low. New positions were created in retailing, education, health services, finance and construction, the US Labor Department said. By contrast, factories shed jobs for the second straight month.

Photo: Despite the growth in jobs, US factories are shedding workers.

Upwards revision: The 207,000 new jobs created in July beat market expectations for a total of 180,000. At the same time, the Labor Department revised upwards its previous job creation figures for June and May. June was increased from 146,000 to 166,000, and May from 104,000 to 126,000. The health of the jobs market is vital for economic confidence in the US, with consumer spending remaining the biggest influence on American growth. 'Sustainable growth': Analysts broadly welcomed the latest figures. "This is a crystal clear indication that the labor markets are very healthy and it reinforces the notion that the economy is growing in a healthy, sustainable way," said Dana Johnson, chief economist at Detroit-based Comercia. However, the growing labor market would likely lead to the US Federal Reserve continuing to raise interest rates to prevent inflationary pressures, Ms Johnson said. The Fed has raised interest rates by one-quarter of a percentage point 10 times since June 2004. It next meets on Tuesday and is widely expected to raise rates by that same amount again. The US base rate currently stands at 3.25%. And some commentators point to a number of other employment statistics which suggest that there is still plenty of slack in the labor market. Among them are wages which have stayed broadly static, and the proportion of adults employed or looking for work which is at a ten-year low. Similarly, the length of time people remain unemployed is at a level last seen in the early 1990s.
 

Worldcom manager gets five months

A former Worldcom manager has been sentenced to five months in prison for her role in the accounting fraud that led to the firm's bankruptcy.. Betty Vinson is the first of five former Worldcom officials - who all assisted prosecutors - to be sentenced over the next week. Her sentencing comes three weeks after former Worldcom boss Bernard Ebbers was given a 25-year jail term.

Photo: Bernie Ebbers was sentenced on 13 July.

Worldcom collapsed in 2002 following a $11bn (£6.2bn) accounting fraud. 'Bogus accounting': Ms Vinson, 49, who helped prepare Worldcom's financial documents, was also ordered to serve five months home detention. She had pleaded guilty to one count of securities fraud and one count of conspiracy. At Mr Ebbers' trial, Ms Vinson described how Worldcom used bogus accounting to help meet its profit expectations. Federal judge Barbara Jones said Ms Vinson had been given a reduced sentence because her court testimony had "played a very significant role in the unravelling of the fraud". Worldcom's 2002 collapse was the biggest bankruptcy in US corporate history. Some 20,000 workers lost their jobs, while shareholders lost about $180bn when the company filed for bankruptcy protection. Back in the 1990s the telecoms company had been a Wall Street darling, with its shares reaching an all-time high. Worldcom emerged from bankruptcy in 2004, renaming itself MCI.
 

Jinxed computer users might be sending out a bad vibe, researchers suggest

Photo: Computer wizard and scientists York Dobyns.

TORONTO, Canada - Some people seem to carry a computer curse, frustrated by a plague of viruses, hard-drive failures, power surges and software conflicts that appear and disappear without rational explanation. They blame their machines and suffer the scorn of others who accuse them of doing something wrong. But researchers at Princeton University may have an explanation: these computer users, it seems, could be sending out bad vibes. "There are some people who seem to have a natural rapport with computers and other complex machines, and there are other people who seem to manage to break everything even without touching it," said York Dobyns, analytical co-ordinator at Princeton Engineering Anomalies Research (PEAR). The laboratory has for 26 years studied a phenomenon that just might have something to do with it. Through countless experiments, the researchers have tested whether people, through their consciousness alone, can somehow affect the output of various devices. The devices - including mechanical and electronic gadgets - produce random outputs when there are no humans around. The experiments appear to demonstrate a small, but statistically significant, anomaly: study subjects seem to be able to change the output of the machines merely by thinking about them. "Viewed collectively across all of the experiments, the odds that this is all just a statistical fluctuation are ridiculously small," said Dobyns. "One in a trillion would be the right general ballpark."

Photo: Professor Robert Jahn.

The researchers believe the effect might not just be limited to these simple machines. In fact, part of the initial funding that launched the program - founded in 1979 by Robert Jahn, then dean of engineering and applied science at the school - came from a major American aerospace manufacturer trying to protect sensitive equipment from this phenomenon, should it exist at all. Computer support experts certainly recognize a small, but perhaps statistically significant, number of their clients who could very well be sending out some strong vibes. "Occasionally you'll come across a person who is just absolutely jinxed," said Lyle Melnychuk, a computer whiz who runs Geeks 2 Go in Kamloops, B.C., and helps people fix their technical problems. "It's not that they're bad people, it's just that they and technology ... they should just go back to pen and paper." But he and other experts say the reason for persistent computer problems is likely something simpler than mind control. "I think it's quite possible that individual people could have statistically noticeable effect on computers, but I don't think it's a vibe," said John DiMarco, information technology director for the University of Toronto's computer science department. "The presence of strange anomalies in the hardware can often be attributed to the environment," he said. People whose machines always seem to be working against them may be the same people who are forever zapping their computers with electric shocks because they live in a dry house and have long hair, fuzzy carpets and a penchant for wool sweaters, he said.

Photo: Dr. John DiMarco.

DiMarco also said the source of mystery problems can often be traced back to a reluctance to admit misuse - like indiscriminate downloading that can bring on spyware and viruses. "They're not always readily admitting what they've done, especially if they have the sense they shouldn't have done it. It's an issue of admission of guilt." Family computers are particularly vulnerable because they have multiple users - including younger ones who might not be particularly concerned about the consequences of their surfing, said Melnychuk. A failure to perform regular maintenance further aggravates the problem. "It's a working piece of machinery. It has to be worked on - it's not a toaster," he said. But Dobyns and other PEAR researchers are accustomed to skepticism and they continue to work on an answer for those who may believe they are better off sticking to pen and paper. "We are hoping to get to the level of practical application in the near future," said Dobyns. He refused to offer specifics on what the lab might make - be it a bad-vibe shield or a machine intended for mind control. "On that topic, I think I would prefer to remain silent for the time being.", said Jon Horsey.

Italy bid bank considers options

Photo: Opposition parties have called on Antonio Fazio to resign.

The board of the Italian bank at the centre of a controversial bid battle has met to consider its options after its two senior officers were suspended.. Popolare Italiana mulled its strategy after the disqualification of its chief executive for two months after he was named in a judicial inquiry. The investigation is focusing on how Pop Italiana and allies built up a near 40% stake in rival bank Antonveneta. Pop Italiana is vying with Dutch Bank ABN Amro for control of Antonveneta. Share options: The ownership battle turned rancorous after allegations that banking regulators had unduly favoured the Italian bid over its Dutch rival. The Italian judge overseeing an inquiry into alleged market rigging and insider trading was due to meet with lawyers representing Gianpiero Fiorani, Pop Italiana's chief executive, on Friday. Mr Fiorani and chief financial officer Gianfranco Boni have been temporarily barred from office pending the outcome of the inquiry. The suspension does not imply any guilt on their behalf. Pop Italiana's stake in Antonveneta and shares held by two financiers, Stefano Ricucci and Emilio Gnutti, have been impounded. Ahead of Friday's meeting, La Repubblica newspaper said the bank may either decide to sell its stake or push ahead with its bid, which is currently being investigated by Italian market watchdog Consob.

Photo: Mr Fiorani has been temporarily disqualified from office.

Pop Italiana may also approach ABN Amro about a deal to divide Antonveneta's assets between the two firms, the paper claimed. 'Fair dealing': In a separate development, Mr Ricucci said he was relaxed about the investigation, telling La Stampa newspaper that his share dealings had been "absolutely regular, legal and transparent". Pop Italiana was seen as the favorite to acquire its Italian rival after Antonveneta shareholders rejected ABN Amro's bid last month. However, its hopes of concluding the deal were thrown into doubt after transcripts of wiretapped conversations between Mr Fiorani and Antonio Fazio, governor of the Bank of Italy, were published. Mr Fazio was heard telling the Pop Italiana boss that its bid had been cleared before the decision was made public, prompting claims that Mr Fazio had unduly favoured its bid. Opposition parties have called on Mr Fazio - who is not under investigation - to resign for his handling of the bid. The Bank said it approved the bid after receiving legal advice.

U.S. economy running on fumes?

David Rosenberg is starting to seem a little prickly and defensive, but the chief North American economist for Merrill Lynch is not retreating from his glum outlook. Rosenberg, a leading prophet of doom for what he regards as a major bubble in the American housing market, also is gloomier than many of his colleagues on the economy as a whole. "We acknowledge that we have not been bullish enough on the U.S. economy - we weren't exactly calling for a recession in 2005 but at the start of the year we were looking for 3.0 per cent growth and it looks like we are going to see something closer to 3.5 per cent," he wrote in a recent commentary. "It always seems as if a three per cent or lower number is going to be in store the next quarter and then what happens is we get sideswiped by some unexpected 'event' that provides a significant lift." If it's not the housing boom, it's a bonanza of auto sales incentives or a surge in capital spending or purchases of transportation equipment. "Outside of the events that are non-recurring but always seem to find a replacement ... the economy has actually been growing at a sub-three-per-cent pace for the past six quarters, or almost a full percentage point below the posted rates," Rosenberg says. "Even the Energizer bunny runs out of batteries eventually," he counsels. "The consumer has been on a non-stop spending spree for 54 quarters in a row, which is unprecedented." He's not alone in his caution. "It won't be long before a credit-fatigued and energy-price-pinched U.S. consumer eases off," writes Avery Shenfeld of CIBC World Markets, arguing that many data watchers are seeing the world through rose-colored reading glasses. "A renewed build-up of unsold goods will bring a reversal of fortune to the bond market, and a challenge to the most cyclically sensitive stocks," Shenfeld predicts. "Investors would be wise to put on their long-distance lenses."

China debuts TV show for the small screen

Photo: This mobile phone is being held in Hong Kong's outlying village of Lau Fau Shan. Chinese firm will debut a TV show for the cell phone screens only.

It's a super-modern love story made for the small screen - the very small screen. Two motorcycle racers vie for the same woman in Appointment, a romance squeezed into five-minute episodes made to be shown on mobile phone screens half the size of a credit card. Its makers hope the 25-minute series will capture attention in China's crowded mobile phone market, where entrepreneurs are competing furiously to come up with the latest gimmick. "Chinese people, especially, like new things," said Gang Wei, a 20-year-old student actress who is making her professional debut in the series. "They want what's next." The competition is intense, but with 400 million customers in the world's biggest mobile phone market, China offers a potential jackpot to the company that invents a new craze. Last year, one company debuted a mobile phone-based novel written to be transmitted in 70-word chapters. In June, Chinese online service Tom Online Inc. announced a deal with U.S. movie studio Warner Bros. to offer games and animation to 60 million wireless customers. The latest innovation comes from Beijing's Le-TV Media Group Corp., which says Appointment is China's first TV show made just for mobile phones. Few will be able to see it, though. The series can be viewed only on sophisticated phones with Internet connections made by South Korea's LG Electronics Inc., one of the sponsors of Appointment. The LG phones cost about $850 - a lavish sum in a country where the average person makes less than $1,000 a year. The price of the average Chinese mobile phone is closer to $150 and the most bare-bones model can cost as little as $36. "It will show what the latest phone technology can do," said Le-TV Media general manager Liu Hong. Appointment is just one early example of what's being pegged as the next boom in mobile entertainment after music, though some industry observers have doubts about whether users will pay very much to watch TV on a phone's tiny screen. This year, Twentieth Television introduced in the U.S. and elsewhere a cellular spinoff of its Fox network suspense serial, 24. Called 24: Conspiracy, this series of 24 original one-minute "mobisodes" (short for mobile episodes) was produced complete with opening titles and cliffhangers. But 24: Conspiracy could play to only a select U.S. audience: Verizon customers with phones equipped for this premium service and located in the limited number of markets that offer it. A new form of storytelling, Cell TV means new challenges for actors, who must tell their story quickly in tight shots. "The gestures I make are very limited," said Luo Ji, who plays one of Gang's suitors. "Your emotions should only come from facial expressions. It's quite difficult acting." "A mobile phone screen is only so big, so it doesn't make sense to have shots that are very wide." said Yu Enyuan, general manager of Le-TV's sister company XBell Technology Group. Yu originated the idea of filming a mobile phone drama. "There's very little dialogue - just a lot of close-ups and gestures, with a soundtrack that'll be added in editing," he said. "We're pursuing a dreamlike beauty." The series was filmed on a budget of $360,000. Le-TV Media hopes to pay for this production entirely through company sponsorships. But if the technology proves popular, viewers would pay to watch future programs. Such services, however, are competing for a small group of customers at the top end of the Chinese mobile phone market. The vast majority of customers sign up for cut-rate services that offer only the features they need, with no premium text-messaging or roaming. Such low-cost accessibility has made mobile phones universal. No small-town taxi driver's business card is complete without a mobile phone number. Women switch phone covers to color coordinate with their outfits. During the morning commute, subway cars are filled with the trilling of ring tones based on tunes ranging from Greensleeves to the theme from the TV series Dallas. A mobile phone TV drama is perfect for a viewer waiting to catch a plane, riding a bus or relaxing after a big meal, Liu said. "Just as computers changed our lives completely," he said, "so will mobile phones.", said Stephany Ho

America Online Inc. buys online storage company Xdrive Inc. to aid consumers

NEW YORK - America Online Inc. said Thursday it has bought the online storage company Xdrive Inc. to meet the growing needs of consumers with rapidly expanding collections of digital music, photos and other files. AOL did not disclose financial terms but said it would operate Xdrive as a wholly owned subsidiary and continue to sell storage and backup services through Xdrive.com. Xdrive's 34 employees have moved to an existing AOL building in Santa Monica, Calif., the company's current headquarters. Nonetheless, AOL will likely incorporate Xdrive's technologies into its existing services, just as it did after buying anti-spam company Mailblocks Inc. last year. The Xdrive platform will also allow AOL to centralize storage for its e-mail, web journal, photo and other services and create new options for consumers. AOL officials, however, refused to provide specifics. Storage needs for AOL have been growing. It recently began offering free web-based e-mail with "aim.com" addresses and gave paid subscribers unlimited e-mail storage, instead of the 100 megabytes previously offered. The expansion improves AOL's ability to compete with the likes of Google Inc., which jump-started a competition over e-mail services by offering more than two gigabytes of free storage. AOL spokesman Nicholas Graham said demand for storage would only grow as more households get high-speed broadband connections, making it possible to move large files, including digital video, off computer desktops. He said the company decided against building a new storage system from scratch because Xdrive already "invested millions of dollars and essentially hundreds of engineering years" to develop it. Shares of AOL parent Time Warner Inc. rose 28 cents, or 1.62 per cent, to $17.55 US in Thursday trading on the New York Stock Exchange.

Google Inc. anticipated fight over hiring of Microsoft executive

SEATTLE, Washington State - Newly released court documents reveal that Google Inc. anticipated a fight when it hired away a top Microsoft Corp. executive to launch a new research and development centre in China. The Internet search company agreed to pay Kai-Fu Lee's full salary and let his stock options vest even if an agreement he signed at Microsoft prevented him from being able to work for up to a year. Microsoft sued Lee and Google on July 19, claiming that by taking the Google job, Lee was violating a noncompete agreement he signed in 2000 that barred him for a year from working for a direct competitor in an area that overlapped with his duties at Microsoft. Lee, 43, helped establish Microsoft's research centre in Beijing, and later worked in the MSN search unit. When he left the company he was a vice-president working on speech recognition and technologies for making it easier for people to interact with computers. On Tuesday, a judge ordered Microsoft to release a set of documents it had hoped he would seal but allowed the company to redact much of the content because it contains trade secrets. The Seattle Post-Intelligencer, joined by The Seattle Times and The Wall Street Journal, filed briefs last week asking the judge not to seal the documents, which included a Google document stating it would continue employing Lee for up to a year and defend him in court if Microsoft wrongfully accused him of breaching the noncompete agreement. Microsoft spokeswoman Stacy Drake said Google's employment agreement with Lee "underscores the fact that Google was aware that Lee had a noncompete agreement with us and had the expectation that by hiring him, he could be breaking that agreement." The document also states that Lee, whom Google's lawyers are representing in court, promised not to disclose any Microsoft secrets and that Google had not asked him to. Google would not say whether it is paying Lee's legal bills in the case. Other documents released Tuesday were largely blacked out, including notes from a May 2004 meeting Lee had with Microsoft chairman Bill Gates and other executives. The subject: Kai-Fu Lee's thoughts on search. Microsoft redacted most of the words, except for Google, MSN, and Longhorn, the former code-name for the Windows operating system update the company plans to release next year. Lee and Google have maintained that he is not a search expert and never reviewed the code for MSN Search while he was an executive in that unit. Last week, Microsoft won the first round of the case when a judge temporarily barred Lee from working at Google on any product, service or project similar to those he worked on at Microsoft, including Internet and desktop search technology. Microsoft wants the judge to extend the restraining order until the case goes to trial in January. A hearing on that request is scheduled for Sept. 6.

Service-sector jobs sluggish in migrating abroad, McKinsey finds

Off shoring: threat or peril?

For those who fear that vast numbers of service-sector jobs are on the move from developed economies to low-wage countries, McKinsey & Co. consultants offer a comforting assessment. "Off shoring will probably continue to create a relatively small global labor market - one that threatens no sudden discontinuities in overall levels of employment and wages in developed countries," according to a study headed by Diana Farrell, director of the McKinsey Global Institute. It estimates 11 per cent of service jobs around the world could be carried out remotely, with this percentage varying widely by sector depending on the amount of face-to-face contact involved. For instance, the McKinsey researchers say, retailing could offshore no more than three per cent of its jobs by 2008, but because retailing is such a huge employer this would total 4.9 million positions. By contrast, almost half the jobs in the packaged-software industry could be done remotely, but in this much less labor-intensive business, that would represent only 340,000 positions. Additionally, "In practice, just a small fraction of the jobs that could go offshore actually will," the study finds. "We estimate that total offshore employment will grow from 1.5 million jobs in 2003 to 4.1 million in 2008 - just one per cent of the total number of service jobs in developed countries. To put this number in perspective ... consider the fact that an average of 4.6 million people in the United States started work with new employers every month in the year ending March 2005." Why is the gap between the potential and actual number of jobs moving offshore so large? Regulatory barriers are widely blamed, but McKinsey says company-specific issues are more powerful deterrents. Cost pressures may not be strong enough to provoke off shoring and many companies lack the scale to justify the expense of moving jobs, the study notes. "Others find that the functions they could offshore in theory must actually stay where they are because their internal processes are so complex. Often, managers are wary of overseeing units on the other side of the world or unwilling to take on the burden of extra travel." And interviews with multinational human-resources managers indicate only 13 per cent of university graduates from 28 low-wage nations are suitable to be hired. "The HR managers give a variety of reasons for the problem, especially a lack of language skills, an emphasis on theory at the expense of practical knowledge and a lack of cultural fit (meaning interpersonal skills, as well as attitudes toward teamwork and flexible work, that are at odds with the norm in multinationals)."

Toyota's North American president bullish on hybrids, future sales

Microsoft names new COO

Photo: Kevin Turner.

Telecom company blocks access to site supporting union in labor dispute

Internet service providers always seem to get the first call when a problem arises on the Internet. Lawmakers want them to assist with investigations into cybercrime, parents want them to filter out harmful content, consumers want them to stop spam, and copyright holders want them to curtail infringement. Despite the urge to hold ISPs accountable for such activities, the ISP community has been remarkably successful in maintaining a position of neutrality, the digital successor (in spirit and often in fact) to the common carrier phone company. Adopting a neutral approach has always required strict adherence to one cardinal rule: that ISPs transport bits of data without discrimination, preference, or regard for content. That rule has served ISPs very well in Canada. When the federal government amended the Canadian Human Rights Act to remove lingering uncertainty about its application to hate on the Internet, ISPs were exempted from liability. Similarly, when the federal government established rules to address the removal of online child pornography, it consciously avoided placing ISPs in the role of judge and jury by requiring them to take down offending content only after receipt of a court order. Most recently, Bill C-60, Canada's proposed copyright reform, envisions the creation of a "notice and notice'' system for allegedly infringing copyright material online. That system mirrors the child pornography approach by leaving it to the courts to determine when content should be taken offline. In fact, Canadian courts have also respected the ISPs' role as intermediaries, setting a high threshold for revealing subscriber personal information in the file sharing lawsuits and upholding their neutrality in last summer's Tariff 22 decision, a Supreme Court of Canada case involving online music streaming. Given the importance of the neutrality principle, it came as a shock to learn last week that Telus, Canada's second largest telecommunications company, was actively blocking access to Voices for Change, a web site supporting the Telecommunications Workers Union. Telus has been embroiled in a contentious labor dispute with the union, yet its decision to unilaterally block subscriber access to the site was unprecedented. The company argued that the site contained confidential proprietary information and that photographs on the site raised privacy and security issues for certain of its employees. Nevertheless, the blockage of the site was completely ineffective since it remained available to anyone outside the Telus network. Moreover, those within the Telus network could access the site with a bit of creative Internet surfing. The appropriate approach for Telus would have been the same formula it advises law enforcement and copyright holders to follow -- to obtain a court order to get the site removed. In fact, that was precisely what Telus ultimately did as late last week it obtained a court order barring the site from posting content with the intent of threatening company employees. By first unilaterally blocking the site, Telus raised a host of challenging legal issues. The company argued that its subscriber contract granted it the right to block content. While that may be true for its roughly one million retail subscribers, the blockage occurred at the Internet backbone level, thereby blocking access for other ISPs (and their customers) that use Telus as their provider. For example, Prince Rupert, a small city on the northwest coast of British Columbia, has established a community ISP to provide its citizens with municipally supported Internet access. Since their connectivity is provided by Telus, last week the entire community found itself unable to access the Voices for Change web site. Canadian law also raises some interesting questions. While not directly applicable to a private sector company, the Charter of Rights and Freedoms guarantees Canadians "freedom of thought, belief, opinion and expression.'' The Supreme Court of Canada has ruled that those rights extend to both the speaker as well as the listener. Telus may not be subject to the Charter, but surely all Canadian corporations should aspire to abide by its principles. The Canadian Telecommunications Act may also be relevant to this situation, though the Canadian Radio-television and Telecommunications Commission's 1999 New Media decision to take a hand-off approach to the Internet may diminish its applicability. Section 27(2) forbids unjust discrimination in the provision of a telecommunication service. This section is primarily applicable to competing services, though the blocked web site may well fit within the definition. Moreover, Section 36 of the Act provides that a "Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.'' The CRTC has sought to limit the applicability of this provision to retail end-user Internet services, yet it is clear that the Telus action extended well beyond its own retail customers. Irrespective of the legal situation, the web site blockage was stunningly bad policy that may ultimately come back to haunt the entire Canadian ISP industry. Earlier this year the federal government launched its Telecommunications Policy Review, a comprehensive review of all aspects of the Canadian telecommunications regulatory framework, including the provision and availability of Internet services. The Telus blockage, combined with ever growing concerns about ISPs that engage in packet preferencing or discrimination against competitive Internet telephony services, as well as doubts about the effectiveness of ISP action against spam, and fears about ISP protection of customer private data in light of potential new law enforcement surveillance requirements, may lead to increasing calls for a new national ISP accountability framework. The Policy Review is accepting comments until the middle of this month, leaving ample time for those affected by the blockage to contribute to the process. Canadian ISPs have been supported for many years by a self-regulatory environment premised on network neutrality and non-discrimination of the traffic on their systems. In light of last week's events, they may soon find the federal government stepping in to back this principle with the force of law. By Micheal Geist

UK boasts world's 'priciest home'.

An English mansion, which is on the market for more than £70m, has been named as the most expensive property in the world...

Updown Court, in Windlesham, north Surrey, has 103 rooms and sits in a 58-acre estate. It also boasts more guest accommodation away from the main building, a private helipad and five swimming pools. Forbes.com put the mansion at the top of its list of "the priciest residences on the planet" which are for sale. The business and finance specialists surveyed the five most expensive properties on each continent, through property listings and contact with brokers and owners. Marketing agents Savills and Hamptons International described Updown Court as "the most important private residence to be built in England since the 19th Century". Forbes said the home was "totally over the top".

Updown Court - what is on offer :

 

22 bedroom and bathroom suites

Gate lodge and estate manager's office

Private cinema

Bowling alley

Squash and tennis courts

Stables

Heated marble driveway

Underground garaging for eight limousines.

It was built in 2000 on the site of an earlier property owned during the 1970s by His Highness Prince Sami Gayed of Egypt. Forbes said neighbours included the Queen at Windsor Castle and Sir Elton John. Updown Court was said to be $50m (£28m) more expensive than the priciest American residence on the list.

Business confidence 'is falling' .

Confidence among businesses has fallen in all parts of the UK for the first time in two years, a study suggests.. .

Photo: The CBI has blamed the slowdown in the economy.

The CBI said its survey of 750 firms found 18,000 manufacturing jobs were cut in the three months to July and blamed the economic slowdown. It said manufacturing jobs had been cut in London and the South East, the east of England and Northern Ireland. These areas, and the North West and West Midlands, were more gloomy about possible employment than other regions. Last month Tiny computers said about 1,500 jobs would go after the UK's largest computer maker, which made Tiny and Time PCs, went into administration and closed its 80 shops. Owner, Lancashire-based Granville Technology Group, had been making monthly losses of up to £2m since the start of the year. The CBI, which has issued a number of warnings in 2005 that the sector is in decline, said manufacturers saw orders fall in the latest quarter of the year. Eurozone stagnant: Trends in manufacturing output were mixed, the CBI said, with Wales and Yorkshire experiencing a sharp decline, but firms in the South West of England reporting a rise. "This generally gloomy survey offers a slight silver lining, with the growth of companies' unit costs becoming more manageable," said Doug Godden, the CBI's head of economic analysis. He said firms were not able to turn increased output into profit, with their pricing power weakened in the face of tough conditions in the domestic market. "Whereas, in April, factory gate prices increased everywhere outside the South West, this time, eight of the 11 regions are reporting net price reductions." Peter Gutmann, of economic forecasting group Experian, which helped produce the research, said new orders had been undermined by "the slowdown in UK retail sales, continued import penetration and stagnant exports to the eurozone".