Also: Japan’s economy bounces, but deflation may spoil party; Frustrated Bharti throws down gauntlet to MTN, might get clobbered; Americans to wind down housing subsidies even as foundations wobble; London home prices take off on stock shortage; Samsung presents Apple with bitter tablet to swallow; Chrysler dealers like the Italians, but need some help now.
Google Buzz irritates many Gmail users
Google, fresh from its controversies in China, is trying to contain criticism of its social network Buzz, after it was widely seen as endangering user privacy. So, now it’s altered one of the most-criticised features in the network – the ready-made circle of friends provided to new users based on their most frequent e-mail and chat contacts in Gmail. Instead of automatically connecting people, Buzz will allow new users to choose who they want to follow or be followed by. Google’s trying to compete with Facebook and Twitter, but its efforts drew angry responses as users feared the names of their e-mail correspondents would be made public. It appears the firm’s latest modifications have addressed most of the serious privacy concerns, but that leaves the world largest search-engine with a new set of questions over choice, ethics, hacking and censorship.
Japan’s economy bounces on global springboard, but deflation may spoil party
Japan’s economy has grown faster than expected in the fourth quarter, but instead of focusing on 1.1% growth, government and markets are worried about a possible large gap between supply and demand that may push the country deeper into deflation and economic slowdown this year. Domestic demand in the quarter ended December added 0.6 percentage points to gross domestic product growth. But the dwindling impact of the country’s economic stimulus leaves Japan with the question of how to achieve high growth at the same time as huge public debt limits more priming of the economy. GDP rose at an annual 4.6% rate in the fourth quarter, but the so-called GDP deflator, the broadest measure of prices in Japan’s economy, fell a record 3%, leading market watchers to fear that better export figures, increased consumer spending and more corporate investment may not last.
Frustrated Bharti throws down gauntlet to MTN, might get clobbered
Bharti Airtel, the Indian telecom that couldn’t strike a deal with MTN, now wants to buy nearly all of Kuwaiti telecom Zain’s African assets for $10.7 billion, to create one of the largest emerging-markets cellphone operators. That would make MTN a fierce competitor, rather than a partner, and Bharti’s assumption of Zain’s $4.6 billion of debt could be just the market fillip the South Africans are looking for. Bharti and Zain say they’re entering the exclusive negotiations until March 25. The proposal doesn’t include Zain’s Morocco or Sudan operations, and is subject to the usual due diligence and regulatory approval. Zain’s African business would give Bharti access to an estimated 42 million customers in 15 African nations from Nigeria to Uganda. But still, Bharti may have to walk away, as other telecoms that looked at Zain raised questions over its financial affairs. Analysts say Bharti’s offer is very expensive, as Zain’s Africa unit is not profitable, and its business outlook is substantially inferior to that of MTN.
Americans to wind down housing subsidies even as foundations wobble
US authorities expect to wind down many of the emergency programmes for the nation’s housing market in the next six months, to see if it can stand on its own. But median prices of houses are still at a level last seen a decade ago, and many homeowners still owe far more than their homes are worth, with foreclosures recently hitting a record. Sub-prime mortgages peddled by Wall Street crashed the market in the first place, and now the government’s emergency programmes have further pushed down interest rates and offered buyers a substantial tax credit, leaving government to take the risk of another default. But any rise in interest rates would kill off a recovery, as homeowners can’t take another hit. There’s a Nobel Prize in economics for anyone who can turn this around.
London home prices take off on stock shortage
The Americans will be watching enviously as London home-sellers raised asking prices to a record high this month in the face of a severe shortage in the housing market. The average cost of a home in the British capital soared 5% to $671,000. Elsewhere, the average asking prices in England and Wales increased by 3.2%, which is the most since April 2007, presaging a come-back in the beleaguered real estate market on the back of hot money flows, rather than good economic health. The Bank of England says the strength in the housing market may reflect unusually weak housing supply, as a 5% leap in prices is comparable to the boom before the market collapsed. The inevitable increase in interest rates will hit the UK’s many mortgage-slaves and new buyers hard. A one-bedroom property in a desirable area of London sold close to $470,000.
Samsung presents Apple with bitter tablet to swallow
Samsung says it’ll make a tablet computer to compete with Apple’s iPad. The South Korean company is the world’s second largest maker of cellphones, but now it sees a new market and new demand. It’s got an advantage in that it provides the processor that powers the iPad, meaning that it drove a hard bargain when it signed up to supply Apple’s book-like, touch-screen device. Goldman Sachs’ research reckons 6 million iPads will be sold in 2010. By contrast, the market for cellphones will reach a billion units, and PC sales will hit some 300 million. Mobility is all the rage, so Samsung has already started offering a 1-gigahertz handset called the “Wave” to bolster its smartphone business, running on its own Bada operating system. The company’s tablet computing strategy may soon become a problem for Apple.
Chrysler dealers like the Italians, but need some help now
Chrysler dealers seem impressed by the company’s new Italian management, but they’ve still got to survive a poor line-up of vehicles that pushed sales down 36% in 2009. The once-bankrupt carmaker plans to release 16 new or significantly revamped models by the end of 2010, including a lighter and more fuel-efficient Jeep Grand Cherokee. Chrysler’s marriage to Daimler fell apart in 2007, but its subsequent buyout by New York private-equity firm Cerberus Capital Management was a complete mismatch, and it’s now controlled by Fiat. Dealers say they’re still paying for the Cerberus years, when little was invested in new products, and so far Chrysler hasn’t offered to help them get through the period it takes for new models to arrive. Sales last month were down 55 percent from January 2009, so Fiat’s got a lot of picking up to do.
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Canola oil is named such as to remove the "rape" from its origin as rapeseed oil.