June 25, 2017

A Profit, Though Slim, for BlackBerry

The annual loss, which tax benefits reduced from an operating loss of $1.2 billion, compared with $1.16 billion in net earnings a year earlier.

In the latest quarter, which ended March 2, the company lost $18 million from operations. But recovery of income taxes transformed that into a $98 million profit for the quarter, or 19 cents a share.

BlackBerry has struggled with decining sales. Revenue in the latest quarter was $2.6 billion, compared with $2.7 billion in the same period a year ago. Annual revenue fell to $11 billion, from $18.4 billion a year earlier.

For about one month of the quarter, the first of its new phones, the BlackBerry Z10, was on sale in Canada, Britain and some other markets, but not the United States. BlackBerry said that it shipped about a million of the handsets during that time.

It nevertheless reported that there were 79 million BlackBerry subscribers worldwide at the end of the period, a loss of about three million users. Until the third quarter of the fiscal year, BlackBerry, formerly known as Research in Motion, had consistently increased the number of subscribers.

In an unanticipated move, the company announced that Mike Lazaridis, one of its co-founders, would cut all formal ties to BlackBerry in May. Along with Jim Balsillie, Mr. Lazaridis stepped down as co-chairman and co-chief executive in January 2012. Although Mr. Balsillie left shortly afterward, Mr. Lazaridis remained on BlackBerry’s board as vice chairman.

Last week, he announced plans to start an investment fund focused on companies working on computers based on principles from quantum physics.

“With the launch of BlackBerry 10, I believe I have fulfilled my commitment to the board,” Mr. Lazaridis said in a statement.

ATT became the first American carrier to offer the new phone last week. But visits to several wireless stores on Wednesday found striking differences in sales support for the phone that BlackBerry hopes will revive its much diminished fortunes.

At several locations, including an ATT store on Fifth Avenue in New York and another near Union Square in San Francisco, the Z10 was lumped in with other phones, some two years old, while signs and promotional material were absent. But at an ATT store in New York’s busy Union Square, the Z10 was heavily promoted. A salesperson there who identified himself as a BlackBerry specialist gave a deep demonstration of the device, including its ability to switch between corporate and personal apps.

The unevenness of presentation was also apparent at T-Mobile USA stores, which this week began selling the Z10, as well as the Apple iPhone 5 and Samsung Galaxy S 4, for $100 down and 24 monthly payments of $20. Verizon Wireless, which has a long association with BlackBerry, was to begin selling the Z10 on Thursday.

Brian X. Chen contributed reporting from New York and Quentin Hardy from San Francisco.

Article source: http://www.nytimes.com/2013/03/29/technology/a-profit-though-slim-for-blackberry.html?partner=rss&emc=rss

Wealth Matters: Money Advice for People in Boom-or-Bust Fields

Advisers can, of course, organize their practices in other ways. Many focus on a dollar amount. They promise to give good advice to any client with more than $1 million, $5 million or more, regardless of where that money came from. By taking this tack, they are also eliminating the need to have more, less wealthy clients.

And some advisers organize a practice around a life event, like retirement or divorce. But what does a divorced woman with three young children and a deadbeat former husband have in common with Elaine Wynn, who received nearly $1 billion when she divorced Steve Wynn, the casino mogul?

Still, is managing money for a group of lawyers, say, any different from managing money for another high earner? A dollar is a dollar, after all. Or is it just a way for advisers to market themselves?

“To the adviser, the benefit is he is not having to continue to reinvent himself,” said Mindy Diamond, president and chief executive of Diamond Consultants, a firm that recruits advisers. “It creates economies of scale and a more effective deployment of resources when the adviser is focused. It also creates a steady stream of clients.”

Ms. Diamond said clients benefited as well. “You’re not paying for him to figure out a situation because he’s done it before,” she said. “He has insights into your fears and challenges. It creates an atmosphere of customized service. Typically, they’ll have superior knowledge versus the generalist because they speak the language.”

While being comfortable with an adviser is important, what ultimately matters is the quality of advice. Is it true that different professions have certain tendencies as a group, both good and bad, that could benefit from being managed? It turns out that they do.

This week, I’m going to look at some highfliers whose income can rise to unbelievable levels one year and all but disappear up the next — in this case, people in the oil and gas business and professional athletes. Next week, I’m planning to look at executives in Silicon Valley and in real estate whose wealth is predicated on a volatile asset: the company they are building and hope to sell before interest dries up. And last, I’ll look at the slow but steady earners: doctors and lawyers.

In all of them, I have found behavioral tendencies that may frustrate their advisers but that the rest of us can use to make better decisions.

RIDING OUT BOOMS AND BUSTS To say wealth in West Texas and other oil and gas regions is cyclical is putting it mildly. Booms and busts go with the business.

Jay Reynolds, president and chief executive of Rod Ric Drilling in Midland, Tex., followed his father into the oil and gas business. But when he struck out on his own, he got a lesson in the fickleness of the business. He borrowed heavily to buy Rod Ric Drilling in 1980 and then watched for nearly two decades as demand for drilling equipment for oil and gas fields fell or remained below what it had been. Over that time, the bank he borrowed from failed, and he worried that his loan would be called.

“We were able to get through those years by being very careful with what we did and how we did it,” Mr. Reynolds, 56, said. “These recent years have been a surprise. Hydraulic fracturing has brought these fields to life.”

What he learned from the experience was the need to manage cash and the benefit of diversifying sources of income as well as investments. He said he has been buying real estate recently with an eye toward mineral rights and royalties, which could be a source of income.

Mr. Reynolds said he had balanced the high risk in this business by taking less risk in his investment portfolio — an approach anyone with a volatile or lumpy income could benefit from.

“Our clients’ businesses are so capital-intensive that they could easily sink all their net worth into their business,” said Dane E. Crunk, co-founder and managing director of Syntal Capital Partners, which works primarily with oil and gas clients like Mr. Reynolds. “When they’re bringing capital to us, it’s not for rates of return. It’s seeking diversification away from their core business and preservation of capital.”

Mr. Crunk said his firm worked to keep some money safe, creating a modern rainy day fund. That idea is often overlooked in the oil and gas business and beyond.

Article source: http://www.nytimes.com/2013/03/09/your-money/money-advice-for-people-in-boom-or-bust-fields.html?partner=rss&emc=rss

Media Decoder: Time Warner Announces Spinoff of Magazines

Correction Appended

Time Warner’s magazines include Sports Illustrated and People.Mario Tama/Getty Images Time Warner’s magazines include Sports Illustrated and People.

9:14 p.m. | Updated What do you do with a group of celebrated magazines that no one seems to want?

Time Warner found its answer on Wednesday. It announced it would spin off its Time Inc. magazine unit into a separate, publicly traded company, a move that will allow the media conglomerate to focus entirely on its cable television and film businesses.

The announcement came hours after Time Warner and Meredith Corporation ended negotiations on a proposal that would have joined in a separate company many Time Inc. titles with magazines published by Meredith.

Laura Lang, the chief executive of Time Inc. who started the job just over a year ago, said she would depart once the spinoff of the magazine division was complete.

The deal with Meredith fell apart in part because of Time Warner’s concern over the fate of four of Time Inc.’s famous but struggling magazines — Time, Sports Illustrated, Fortune and Money, according to three people with knowledge of the negotiations who could not publicly discuss private conversations. At one point Meredith expressed some interest in the news and sports magazines, but Meredith decided not to pursue them because such a deal would have diluted its controlling family’s shares in the new company, another person with knowledge of the negotiations said. If Time Warner retained those four titles, the economics of a full spinoff proved more appealing, this person said.

Time Inc. is the nation’s largest magazine publisher, and the revelation last month that it was in talks to sell off many of its titles was viewed as another clear sign that the industry was buckling under intense financial pressures. The breakdown in talks threw into sharp relief how once-glamorous magazines like Time and Sports Illustrated have become troubled assets, with Time Warner wanting to shed them and Meredith not wanting them.

Time Inc., suffering from industrywide declines, has consistently lagged in Time Warner’s quarterly earnings. In the three months that ended Dec. 31, revenue at Time Inc. fell 7 percent to $967 million. In the same period, revenue at the company’s cable television channels, including TNT, TBS and HBO, grew 5 percent to $3.67 billion.

In a statement late Wednesday, Jeffrey L. Bewkes, chairman and chief executive of Time Warner, said a complete spinoff would provide clarity for the company as it concentrated on its high-growth businesses, primarily in cable television.

Jeffrey L. Bewkes, chairman and chief executive of Time Warner, said a spinoff would provide clarity for the company.Brian Snyder/Reuters Jeffrey L. Bewkes, chairman and chief executive of Time Warner, said a spinoff would provide clarity for the company.

“After a thorough review of options, we believe that a separation will better position both Time Warner and Time Inc.,” Mr. Bewkes said. “Time Inc. will also benefit from the flexibility and focus of being a stand-alone company,” he added.

Meredith’s prevailing interest in a deal had been to put together what would have essentially been a women’s magazine publisher. The new entity would have combined its National Media Group, which includes stalwarts like Ladies’ Home Journal and Better Homes and Gardens, with Time Inc.’s Lifestyle and Style Entertainment brands, which include People and InStyle.

Meredith executives had wavered in their interest in Time, Fortune, Money and Sports Illustrated, the people with knowledge of the negotiations said. Time Warner originally planned to keep them, citing news-gathering synergies with the company’s CNN channel, but that thinking changed. Time Warner executives walked away from the deal, believing they would be better off spinning off all of Time Inc.’s magazines without Meredith.

”We respect Time Warner’s decision and certainly remain open to continuing a dialogue on how our companies might work together,” said Stephen M. Lacy, Meredith’s chairman and chief executive.

The new company would have borrowed money to pay a one-time dividend of around $1.75 billion back to Time Warner.

Another sticking point in the negotiations was over which company would have ownership of Time Inc.’s London-based property, IPC Media, which publishes a mix of general-interest and upmarket titles like InStyle, Country Life and Decanter. IPC also includes an advertising business and a news trade and sales distribution company called Marketforce.

Founded by Edwin Thomas Meredith in 1902 with the publication of Successful Farming magazine, Meredith, based in Des Moines, Iowa, has always been a folksy, domestic company with strong Midwestern roots. Acquiring Time Inc.’s international business would have made for an odd pairing.

Time Inc. would be only the latest asset Time Warner has shed as it has evolved into a cable television and movie production company. Once a corporate giant, in recent years Time Warner has divested itself of AOL, Time Warner Cable, the Warner Music Group and the Time Warner Book Group.

Publishing divisions have been financial drags on other media companies as well. This summer, News Corporation is expected to complete a split of its publishing assets, including The Wall Street Journal, The New York Post and HarperCollins, into a separate, publicly traded company. The cable channels FX and Fox News and the 20th Century studios will remain in a company called Fox Group.

Ms. Lang, the former chief executive of Digitas, a digital advertising firm, took over at Time Inc. at a tumultuous time. The company had a nine-month leadership vacuum after the departure of its previous chief executive, Jack Griffin, a former Meredith executive who clashed with the culture of Time Inc.

Shortly after she was hired Ms. Lang brought on Bain Company, a Boston consulting firm, to help her turn the company around. She moved quickly to strike a deal that made all of its magazines available via Apple’s newsstand. But her efforts were not enough to stem the industrywide declines in subscription and advertising revenue.

Revenue at Time Inc. has declined by around 30 percent over the past five years. Last month, Time Inc. said it would lay off 6 percent of its 8,000 employees, which will cost Time Warner $60 million in restructuring.

Christine Haughney and Michael J. de la Merced contributed reporting.


Correction: March 7, 2013

An earlier version of this article misstated the name of Meredith’s founder. He was Edwin Thomas Meredith, not Edwin Thomas.

Article source: http://mediadecoder.blogs.nytimes.com/2013/03/06/fate-of-four-time-inc-magazines-are-an-issue-in-talks-with-meredith/?partner=rss&emc=rss

Barnes & Noble Weighs Its Nook Losses

Barnes Noble, the nation’s largest book chain, warned that when it reports fiscal 2013 third-quarter results on Thursday, losses in its Nook Media division — which includes sales of e-books and devices — will be greater than the year before and that the unit’s revenue for all of fiscal 2013 would be far below projections it gave of $3 billion.

The problem was not so much the extent of the losses, but what the losses might signal: that the digital approach that Barnes Noble has been heavily investing in as its future for the last several years has essentially run its course.

A person familiar with Barnes Nobles’s strategy acknowledged that this quarter, which includes holiday sales, has caused executives to realize the company must move away from its program to engineer and build its own devices and focus more on licensing its content to other device makers.

“They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalog of content,” said this person, who asked not to be identified discussing corporate strategy.

On Thursday, the person said, the company will emphasize its commitment to intensify partnerships with other tablet producers like Microsoft and Samsung to make deals for content that it controls.

If Barnes Noble does indeed pull back from building tablets, it would be a 180-degree shift for a company that as late as last year was promoting the Nook as its future. “Had we not launched devices and spent the money we invested in the Nook, investors and analysts would have said, ’Barnes Noble is crazy, and they’re going to go away,’ ” William Lynch, the company’s chief executive, said in an interview last January.

Since 2009, when Barnes Noble first decided to invest in building the device, its financial commitment to the division has been substantial. (The company does not disclose exact figures.) At the beginning of 2012, that bet seemed to be paying off and the digital future seemed hopeful.

In May, Microsoft decided to give a cash infusion to the product by pledging more than $600 million to Nook Media. In December, the British textbook publisher Pearson bought a 5 percent stake in the unit for nearly $90 million.

Going into the 2012 Christmas season, the Nook HD, Barnes Noble’s entrant into the 7-inch and 9-inch tablet market, was winning rave reviews from technology critics who praised its high-quality screen. Editors at CNET called it “a fantastic tablet value” and David Pogue in The New York Times told readers choosing between the Nook HD and Kindle Fire that the Nook “is the one to get.”

But while tablet sales exploded over the Christmas season, Barnes Noble was not a beneficiary. Buyers preferred Apple devices by a long mile but then went on to buy Samsung, Amazon and Google products before those of Barnes Noble, according to market analysis by Forrester Research.

“In many ways it is a great product,” Sarah Rotman Epps, a senior analyst at Forrester, said of the Nook tablet. “It was a failure of brand, not product.

“The Barnes Noble brand is just very small,” she added. “It has done a great job at engaging its existing customers but failed to expand their footprint beyond that.”

Others pointed out that even if the Nook itself was a nice device, its offerings were not as rich as that of its rivals. Shaw Wu, a senior analyst at Sterne Agee, a midsize investment bank in San Francisco, said, “It is a very tough space. It is highly competitive, and extras like the depth of apps are very important. But it requires funding and a lot of attention, and Barnes Noble is competing against companies like Apple and Google, which literally have unlimited resources.”

Horace Dediu, an independent analyst based in Finland who focuses on the mobile industry, said that the difference in quality among the products was so small as to be increasingly irrelevant.

“We’ve moved beyond a game of specs,” he said. “Now it is about your business model, about distribution and economics of scale.”

He said that while the cellphone business used to have numerous competitors, it now has only two companies that are really profitable: Apple and Samsung. He said he expected a similar consolidation in the tablet market, with companies like Barnes Noble “maybe falling off the map.”

There is no immediate danger to the book retailer, which has some 677 stores nationwide. The company has said it plans to close about 15 unprofitable stores a year and replace them at a much slower rate. It also still holds roughly one quarter of the digital sales of books and more of magazines.

Still, the threat is large enough that Barnes Noble executives are working hard to determine a strategy that focuses on core strengths like content distribution. Its content is its “crown jewel,” said the person familiar with the company’s strategy, “and where the profitable income stream lies.”

Article source: http://www.nytimes.com/2013/02/25/business/media/barnes-noble-weighs-its-nook-losses.html?partner=rss&emc=rss

With a Focus on Its Future, Financial Times Turns 125

On Wednesday, The F.T. is celebrating its 125th birthday. The newspaper’s London headquarters along the south bank of the Thames will be lit up in pink, the color of the paper on which it has been printed since shortly after it was founded. There will be a few parties — understated, of course, for these are straitened times in the City of London, and challenging ones for the newspaper industry.

Anniversaries are difficult for newspapers. At a time when they are losing subscribers and advertisers, and losing ground to digital media organizations that are still in their adolescence, few publishers want to emphasize their age.

But John Ridding, chief executive of The F.T., has a better digital story to tell than most other newspapers. True, the print editions are fading. But The F.T. has figured out how to make significant money from new outlets, without straying from its original purpose. So Mr. Ridding is not worried about looking back.

“Milestones matter,” he said. “In our industry, which has seen so much upheaval and disruption, it shows amazing continuity. The look and feel of the business was very different but there are some enduring constants that persist.”

In addition to its birthday, The F.T. can point to several other recent or pending milestones.

Last year the number of digital subscribers, now more than 300,000, surpassed the print circulation of the paper, which has slipped below that figure. This year, print and digital subscriptions and sales are set to overtake advertising as a source of revenue. Mobile devices now account for one-quarter of The F.T.’s digital traffic and about 15 percent of new subscriptions.

The F.T. was one of the first newspapers to charge readers for access to its Web site, which it did in 2002. It revamped its digital business model in 2007, moving to a “metered” approach, in which readers get a certain number of articles free before they are asked to subscribe.

Since 2007, The F.T.’s paying digital audience has tripled, and the metered approach has been adopted by other newspapers, including The New York Times.

With print circulation moving in the other direction — last year alone, it fell about 15 percent — The F.T. recently accelerated its move away from paper. In January, Lionel Barber, the paper’s editor, sent a memo to the staff, detailing a plan to “ensure that we are serving a digital platform first and a newspaper second.”

Under the plan, the print operations of The F.T. will be streamlined. While separate regional editions — for the United States, Britain, Continental Europe, Asia, India and the Middle East — will be maintained, there will be fewer nightly updates.

Editorial hierarchies will be simplified, Mr. Barber wrote, with an end to “octopus commissioning” under which reporters answer to multiple editors. Deadlines will be more strictly enforced. The paper is eliminating about three dozen editorial positions, though 10 posts are being created on the digital side.

Mr. Ridding described the new approach as “more of an evolution than a revolution.”

“It’s more of an intensification of an existing digital trend,” he said. “It’s driven by a need to redeploy resources to digital. That’s what readers want.”

It’s not all about cutting. The F.T. also continues to develop new products, like an F.T. Weekend mobile application, to accompany the Saturday/Sunday print edition, which remains an important source of advertising revenue; the app is set to be introduced shortly. Last year, The F.T. began publishing e-books with selected themes, compiling articles from the newspaper and enhancing them with material from journalists’ notebooks; the first one examined the possibility of a Greek exit from the euro zone.

Article source: http://www.nytimes.com/2013/02/11/business/media/ft-looks-back-as-it-moves-into-digital-age.html?partner=rss&emc=rss

DealBook: After a Series of Missteps, Barclays Chief Gives Up His Bonus

Antony Jenkins, chief of Barclays.Lucas Jackson/ReutersAntony Jenkins, chief of Barclays.

6:44 p.m. | Updated

Antony P. Jenkins, the new chief executive of Barclays, said on Friday that he would forgo his bonus as the British bank struggled to rebuild its reputation after recent missteps.

British regulators are investigating new accusations that Barclays failed to properly disclose to shareholders a loan to a group of Qatari investors that gave the British bank a cash infusion during the financial crisis, according to a person with direct knowledge of the matter.

Last year, the bank disclosed that British and American authorities were investigating the legality of the payments related to the $7.1 billion cash injection to Qatar Holding, the sovereign wealth fund.

Mr. Jenkins is dealing with a series of legal headaches.

In June, Barclays agreed to pay a $450 million settlement with United States and British regulators over rate manipulation. The scandal forced a number of the bank’s top executives to resign, including the chief executive at the time, Robert E. Diamond Jr.

The British firm has also set aside $3.2 billion to cover legal costs related to the inappropriate selling of insurance to consumers. British authorities recently told the bank that it must review the sale of certain interest rate hedging products after 90 percent of a sample of the complex instruments were found to have been sold improperly. Analysts say the investigation may lead to millions of dollars of new legal costs.

With the controversy surrounding the bank, Mr. Jenkins said he did not want to be considered for a bonus that could have totaled up to $4.3 million, adding that many of the problems engulfing the bank were of its own making. The Barclays chief’s annual salary is $1.7 million.

“I think it only right that I bear an appropriate degree of accountability for those matters,” Mr. Jenkins said in a statement. “It would be wrong for me to receive a bonus for 2012.”

A spokesman for Barclays declined to comment about the investigation into potential wrongdoing connected to the loan to Qatari investors.

By giving up his bonus, Mr. Jenkins contrasts with his predecessor. Mr. Diamond was in line for a $4.3 million bonus for 2011 despite criticism about the bank’s performance. Faced with mounting opposition, Mr. Diamond and Chris Lucas, the bank’s finance director, eventually agreed to forgo half of the deferred stock payout if the British bank failed to reach a number of its financial targets.

Barclays, which will disclose details of a major overhaul of its operations when it reports earnings on Feb. 12, is expected to cut up to 2,000 jobs in its investment bank in an effort to reduce its exposure to risky trading activity, according to two people with direct knowledge of the matter.

Mr. Jenkins, who previously ran Barclays’ consumer banking business, told employees in January that they should leave the bank if they were not willing to help rebuild the firm’s reputation.

“My message to those people is simple,” Mr. Jenkins wrote in an internal note obtained by The New York Times. “Barclays is not the place for you. The rules have changed.”


This post has been revised to reflect the following correction:

Correction: February 1, 2013

An earlier version of this article indicated that the Barclays chief executive told employees earlier this month that they should leave the bank if they were not willing to help rebuild the firm’s reputation. He told them in January.

Article source: http://dealbook.nytimes.com/2013/02/01/amid-banks-legal-problems-barclays-c-e-o-gives-up-bonus/?partner=rss&emc=rss

You’re the Boss Blog: Introducing Fashioning Change: Wear This, Not That

Fashioning Change

A social entrepreneur tries to change the way people shop.

Adriana HerreraCourtesy of Fashioning Change Adriana Herrera

I’m the founder and chief executive of Fashioning Change, a start-up that helps shoppers purchase stylish, money-saving, safe and sweatshop-free alternatives to top name brands.

We had our “Hello World” beta test on Cyber Monday in November 2011. Every brand we carry is vetted according to our five promises: be fashionable, be well made, protect health, protect the Earth and protect human rights (we call this our “Promise of 5″). We offer more than 18,000 shopping options, including our own line of organic clothing that is made in Los Angeles. Every garment we produce includes a scannable tag that helps connect shoppers to each of the steps in the supply chain. And when people purchase our suggested products, we save them an average of 27 percent over the name-brand options.

So far, along with me, the company consists of Kevin Ball, my technical co-founder; Kestrel Jenkins, who is in charge of product sourcing, and Steve Klebanoff, software engineer. We have an office in San Diego and a house in Santa Monica. Every other week, the two-bedroom house accommodates the four of us. We wake up to live, breathe and sleep Fashioning Change. Can you imagine living and working with your colleagues 24/7?

Our business model is built on the premise that by providing access to alternatives, we can encourage consumers to make purchases of brands that protect peoples’ health, the environment and human rights at every step in the supply chain. We believe that as we grow, we will have an impact on the bottom lines of mainstream corporations, motivating them to adopt similar practices in order to regain market share.

The ideas behind the company were instilled in me by my father. He grew up in Juarez, Mexico, a city that many consumer-goods companies use as an outsourcing location. He had friends and family who worked in many of the factories, and he saw the impact people could have when they chose to purchase one brand over another. With that in mind, he gave my brothers and me three rules we had to abide by when making purchases: One, we couldn’t buy anything made in Asia because he believed the manufacturing practices in many Asian countries were worse than they were in Mexico. Two, we weren’t allowed to buy clothing made of synthetic materials. And three, we weren’t allowed to wear dark clothing because he believed that children were the light of the world and should dress in bright colors.

As a result, when I was growing up in San Diego, I used to run around the children’s department at Nordstrom, flipping tags to find clothing that hadn’t been made in Asia. Then, I would flip all of the tags again to see which pieces were made of “father-approved” materials. Sometimes, when I was particularly frustrated that I couldn’t buy a dress I wanted, I would hide in a clothing rack and pout. But early on, I was taught to think about where products come from, how they were made, who made them and under what conditions. Little did I know that my father’s shopping rules — along with my post-college work experience with nonprofit, public relations and manufacturing organizations would end up inspiring me to create Fashioning Change.

Over the last year and a half, I have navigated my way through a technology accelerator, taught myself to code, recruited a team, raised a first round of financing, opened an office in another city, manufactured a own line of clothing in the United States and managed to avoid about a hundred landmines that could have crushed Fashioning Change. Through this blog, I hope to share my experiences as a Hispanic, single, woman founder building a tech start-up that intends to make money and do good. I plan to share our successes, our mistakes and our frustrations.

In my next post, I’ll tell you more about how the company works.

Lets connect. Email me at adriana@fashioningchange.com. You can also follow me on Twitter at @adriana_herrera

Article source: http://boss.blogs.nytimes.com/2013/01/29/introducing-fashioning-change-wear-this-not-that/?partner=rss&emc=rss

Bucks Blog: Your Finances, Illustrated With Photos

Courtesy Simple

How cool do you want your bank account to look?

That’s what I wondered, as I read about a new feature available to customers of Simple, the new banklike financial service. The service was recently profiled in The New York Times by Jenna Wortham.

Simple, which depends heavily on smartphones for access, set out to be the anti-bank, with a no fee pledge and easy-to-use features. (The start-up has about 20,000 users; you must be invited to participate.) The latest tweak allows users to upload photographs and attach them to transactions. So, for instance, you can see not only that you spent $200 on your anniversary dinner, but also exactly how enticing that lobster looked.

Right now, you must access the account online to attach a photo. But soon, Simple’s mobile app will let you snap the photo and attach it right away. The idea is to make banking more, well, fun. “Attach a movie poster to your ticket purchase, or album art to a music purchase,” says a description of the new feature on Simple’s Web site. “It just looks cool!”

Simple gets credit for trying something new. But do most people really want their bank account to look “cool”? Or do they just want it to be safe, easy to use and relatively inexpensive?

Josh Reich, Simple’s chief executive, explained that the photo feature originally began as a way to add receipts to transactions, making it easier to track business expenses. But it has morphed into a way to keep track of nonexpense items and to “humanize” your finances, he said.

I can see the attraction. Sort of. Viewing a photo of a gift you bought while on vacation, for instance — which Mr. Reich said he recently added to his account — might help make the task of paying the bill for the trip less painful. And perhaps making banking more fun will encourage users to pay more attention to their finances and think about handling them in more creative ways.

And, of course, the addition of photos is entirely optional.

Would you like to add photos to your online bank records? What sort of transactions would you illustrate?

Article source: http://bucks.blogs.nytimes.com/2013/01/23/your-finances-illustrated-with-photos/?partner=rss&emc=rss

DealBook: Despite Improving Profits, Morgan Stanley’s Path Is Uncertain

The headquarters of Morgan Stanley in New York.Shannon Stapleton/ReutersThe headquarters of Morgan Stanley in New York.

8:40 p.m. | Updated

Morgan Stanley has taken aggressive action to bolster profit. Over the last year, the Wall Street bank has cut thousands of employees, sold costly assets and retooled major businesses.

Those efforts worked. In the fourth quarter, Morgan Stanley reported earnings of $481 million, in contrast to a loss of $275 million in 2011. Profit was equally strong for the year.

But the path to future growth is less clear. While the financial firm can find other ways to cut costs, its core operations face significant challenges, from both internal and external forces. Reflecting those issues, revenue was flat last year, excluding charges related to its debt.

“They are doing everything they can to boost returns,” said Glenn Schorr, an analyst at the Japanese bank Nomura. “But given the environment and the state of their franchise, they can only do so much.”

Investors are assessing the progress versus the prospects.

After Morgan Stanley beat analysts’ expectations, the bank’s shares increased nearly 8 percent, to close at $22.38 on Friday. Morgan Stanley’s stock is up nearly 50 percent since early 2012.

“The company has been steadily chipping away at areas of investor concern, and has shown evidence of that progress,” Roger Freeman, a Barclays analyst, wrote in a note to investors.

Still, investors don’t value the investment bank as highly as some of its peers.

Morgan Stanley is trading at approximately 70 percent of its book value, a crucial financial measure that refers to the liquidation value of a company’s assets if it were forced to sell everything. Goldman, in contrast, is trading at book value.

More than four years after the financial crisis, Morgan Stanley has emerged as a much stronger, albeit smaller, bank.

After getting badly bruised during the crisis, Morgan Stanley, under the leadership of James P. Gorman, the chief executive, has moved to remake itself. He has diversified operations, emphasizing less risky businesses like wealth management.

That group was a particular bright spot. In the latest quarter, wealth management, with its 16,780 financial advisers, posted decent revenue growth. Pretax profit margin rose to 17 percent, up from 7 percent a year ago. That trumped the firm’s internal goals of 15 percent.

Investment banking, too, showed signs of strength. The group posted revenue of $1.23 billion in the fourth quarter, up 26 percent from the previous year.

The bank has also cut expenses significantly to help drive profitability. In 2012, Morgan Stanley reduced its head count by 7 percent, to 57,061 employees. It laid off 1,600 people this month.

The firm has also been bringing its pay levels down modestly. The firm’s compensation ratio, excluding certain charges, came in at roughly 51 percent, down from 57 percent a year ago.

Such efforts will most likely continue. On Friday, the bank said it might cut expenses by as much as $1.6 billion over the next two years.

Mr. Gorman called this quarter “pivotal,” on Friday. “I am confident we are on the path to increasing shareholder value that will be evident regardless of the macro environment,” he said in a statement.

Even so, the latest results underscored the growing gap between the bank and its rivals.

Revenue was flat for the quarter at Morgan Stanley, while it increased by 19 percent at Goldman Sachs during the same period. Excluding charges related to its debt, Morgan Stanley’s return on equity, a measure of profitability, was 5 percent. That compares with 10.7 percent at Goldman. To simply cover its debt expenses and other capital costs, Morgan Stanley needs to achieve a return on equity closer to 10 percent.

The firm’s problem child is the fixed income department.

Fourth-quarter revenue from fixed income sales and trading, headed by Ken deRegt, was $811 million, excluding the charges related to the firm’s debt. This was well below analysts’ forecasts. The bank was hurt by poor results in commodities trading, Mr. Gorman said in an interview on CNBC. He said it was a “terrible quarter,” citing factors like Hurricane Sandy, adding that it was one of the worst for the commodities business since 1995.

Despite its successes, Morgan Stanley faces a tough road.

The bank, which has had its credit rating cut deeper than its rivals, is also adjusting to a new regulatory environment. It now has to put up more capital against its operations, forcing the bank to leave certain businesses, reducing profitability.

Morgan Stanley is also trying to build market share in less-capital-intensive businesses like interest rates trading. But it is a highly competitive area, with lower margins.

“They have made some clear progress, but still have their work cut out for them in fixed income,” said Mr. Schorr of Nomura.

Article source: http://dealbook.nytimes.com/2013/01/18/morgan-stanleys-4th-quarter-profit-of-481-million-beats-estimates/?partner=rss&emc=rss

Media Decoder Blog: Barnes & Noble’s Strategy Is Questioned as Holiday Nook Sales Decline

For Barnes Noble, the digital future is not what it used to be.

After a year spent signaling its commitment to build its business through its Nook division, Barnes Noble announced on Thursday that holiday sales were disappointing enough to raise questions about the company’s ability to pull off the transformation from its traditional retail format.

Retail sales from the company’s bookstores and its Web site, BN.com, decreased 10.9 percent from the comparable nine-week holiday period a year earlier, to $1.2 billion, the company reported. More worrisome for the long-term future of the company, sales in the Nook unit that includes e-readers, tablets, digital content and accessories decreased 12.6 percent over the same period, to $311 million.

“They are not selling the devices, they are not selling books and traffic is down,” said Mike Shatzkin, the founder and chief executive of Idea Logical, a consultant to publishers. “I’m looking for an optimistic sign and not seeing one. It is concerning.”

The results, covering a period that ended Dec. 29, are a sobering development for the nation’s largest bookstore chain. The declines occurred during what is supposed to be peak buying season. And the Nook unit’s sagging fortunes came despite a 13 percent increase in sales of digital content, suggesting that it is the tepid demand for Nook devices that is dragging down the unit’s performance. Over all, the numbers underscore the difficult challenge the company faces in an increasingly competitive e-reading market.

Barnes Noble has invested heavily in developing a tablet that can compete with offerings from media giants like Google, Apple and Amazon.com. Last April, in announcing a $300 million investment in Nook by Microsoft, the chief executive of Barnes Noble’s chief executive, William J. Lynch, said the company wanted “to solidify our position as a leader in the exploding market for digital content in the consumer and education segments.”

A few months after that, the bookseller began breaking out the financial results of the Nook division, In October it completed its strategic partnership with Microsoft by creating Nook Media, a subsidiary and a signal that it was ready to ride its digital business into the future.

But while Barnes Noble’s most recent Nooks have won critical praise, they have failed to gain significant traction with consumers.

Other companies do not break out sales of their digital tablets, but Amazon has been saying sales of its Kindle Fire were strong. Analysts say Apple’s iPads also appear to be doing well.

“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”

For an increasing number of consumers, he said, the answer is not Barnes Noble.

Though the company’s stock was down only slightly — falling 2 percent to $14.22 — the reaction in the financial world was unsparing. Analysts stopped short of saying that this was a do-or-die moment for the Nook Media division, but they acknowledged that options for a strong digital future were narrowing.

In a note to clients, SP Capital IQ said, “We think this portends greater market share losses for the Nook over the medium term” and downgraded its recommendation on Barnes Noble stock from hold to sell. Barclays said in a note that the Nook’s precipitous decline was “quite concerning” and “below even our modest expectations.”

The declining retail numbers were also troubling when viewed in the context of a rise in sales among independent booksellers. The American Booksellers Association, which has not yet released official holiday sales, estimated Thursday that its members’ sales would be up about 8 percent over last year.

Barnes Noble executives were not available Thursday to discuss the sales numbers. But a statement from Mr. Lynch indicated that the company was searching for a solution.

“Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday,” Mr. Lynch said. “We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward.”

The most intriguing, and troublesome, question is whether the company can stay in the digital device business at all over the long run. Nook has been expensive to develop and market and the company does not have the hefty financial resources of its competitors.

Other options are strategic partnerships. Microsoft’s investment last spring was seen at the time as a way to promote Nook through a powerful partner. But sales of the Windows 8 operating system have been disappointing and the Nook has been featured as little more than an app among hundreds on the Windows 8 platform.

“It is going to prove to be a missed opportunity,” said Mr. McQuivey of Forrester.

Last month, Barnes Noble announced that Pearson, the British education and publishing conglomerate, was taking a 5 percent stake in Nook for $89.5 million. Analysts said that cash investment was welcome and the partnership with Pearson, a major publisher of educational textbooks, might herald a strategy to move toward dominating an education niche market. Still, that would be a significantly smaller business.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/03/barnes-noble-reports-tepid-holiday-sales/?partner=rss&emc=rss