April 23, 2024

You are here: Home / Archives for chief-executive

Disruptions: Disruptions: Instagram Testimony Doesn’t Add Up

December 16, 2012 by Leave a Comment

Kevin Systrom, Instagram’s chief executive.Eric Piermont/Agence France-Presse — Getty Images Kevin Systrom, Instagram’s chief executive.

On a late August morning, Kevin Systrom, chief executive of Instagram, took an oath before testifying at a hearing of the California Corporations Department, which sought to determine if Facebook’s acquisition of the photo sharing service was in the best interest of Instagram investors. Facebook requested the hearing as a way to speed up the approval of its acquisition.

When asked if his company had received any offers besides Facebook’s at the time of the negotiations, Mr. Systrom said, “No, we never received any offers,” according to transcripts of the hearings. He said Instagram had “talked to other parties, but never received any formal offers from anybody else.”

Ivan V. Griswold, a lawyer for the state regulators, asked again: “Immediately before the %negotiations, did you receive any offers from invest — .“ Before he could finish his question, the transcripts show, Mr. Systrom cut him off.

“We never received any formal offers or term sheets,” Mr. Systrom said. “No.”

Yet the accounts of several people close to Twitter and Facebook, and documents reviewed by The New York Times, contradict the statements he made under oath. Mr. Systrom and Mike Krieger, the other founder of Instagram, held several meetings as late as March with top Twitter executives, according to people on both sides of the talks, who requested anonymity because the talks were private and because they were concerned about legal repercussions. These people said the sides had verbally agreed weeks earlier on a price for Instagram of $525 million in cash and Twitter shares.

Mr. Systrom told Twitter on March 20 that he and Mr. Krieger had thought about the offer and had decided to “remain independent.” Less than three weeks later, Twitter found out, along with the rest of the world, that Instagram had agreed to be acquired by Facebook in a $1 billion deal negotiated personally by Facebook’s chief executive, Mark Zuckerberg. The deal included $300 million in cash and the rest was in Facebook stock. Instagram was privately owned by its founders, Mr. Systrom and Mr. Krieger, who had a majority stake in the company, and several venture capital funds.

The people familiar with the negotiations said Twitter executives were shocked that they had not been given an opportunity to present a counteroffer. They said Twitter was prepared to make higher offers.

Facebook and Mr. Systrom declined to comment about the statements made to regulators or the talks with Twitter. Gabriel Stricker, a Twitter spokesman, also declined to comment.

Although it might seem unimportant whether wealthy investors made a few million dollars less than they could have, those investors often represent funds that include workers’ pensions and mutual funds. The case could also be seen as another example of a large tech company’s sidestepping regulators.

Statements made by other people involved in the Instagram deal don’t add up, either. When Facebook submitted its applications to California regulators, its general counsel, Ted Ullyot, wrote that although the board had considered possible alternatives, there was a “lack of interest in acquiring the company expressed by other potential acquirers of the company.” Through a spokesman, Facebook declined to comment.

Mark Leyes, director of communications for the Corporations Department, said the department — which is to protect consumers and investors from self-dealing in transactions — had “not received any complaints or protests of our original fairness hearing proceedings in the Facebook/Instagram acquisition.”

In general, said Eric Talley, a law professor at the University of California, Berkeley, “if there is sworn testimony, there are perjury risks.” Also, he added, “there are fraud risks in which an inaccurate statement to your investors could violate antifraud laws at both the state or federal level.”

Dr. Talley said there were many reasons people might try to hide information from investors, including “deal sweeteners,” in which someone might be allowed to remain head of a company or be given more cash.

Mr. Systrom, who previously worked on mergers and acquisitions at Google, was careful about his interactions with Twitter from the start. He asked to meet in restaurants around San Francisco, rather than in either company’s office, according to people briefed on the talks. When he was handed the term sheet by a Twitter employee, a nonbinding document outlining the terms of a proposed acquisition, he read it and then handed it back, asking Twitter executives to hold on to it over the weekend as he weighed the details, those people said.

It is possible investors would have been better off selling in an open auction, to Twitter or even to Google or Microsoft.

The deal with Facebook closed at $735 million in early September, after Facebook’s stock plunged because of investors’ fears that its revenue growth prospects were weak. Given that the privately traded Twitter is expected to make $1 billion in revenue next year, which would increase its valuation considerably, Instagram investors might have made millions of more dollars.

It is unclear why Facebook didn’t mention Twitter’s interest. A clue might be found in the company’s amended S-1 filing with the Securities and Exchange Commission, outlining details of the Instagram acquisition: Dr. Talley said it used language often reserved for antitrust cases.

The wording in the updated S-1 filing, which included a termination fee of 20 percent if the deal fell through, “suggests that there really was some concern about antitrust clearance from the F.T.C.,” Dr. Talley said, referring to the Federal Trade Commission. “These antitrust questions would not have been raised if Instagram was selling to Twitter or Google.”

An F.T.C. spokesman, Mitchell J. Katz, declined to comment.

There also is the issue of what Mr. Systrom and regulators consider a “formal offer.” Although lawyers make differing arguments, Mr. Systrom was asked by regulators on several occasions if he had received other offers, formal or otherwise, and each time he said no.

Facebook has tangled with regulators before. What it does with its customers’ data attracted the attention of the F.T.C., which accused it last year of “unfair and deceptive” practices. The agency’s settlement with the company required Facebook to submit to privacy audits for 20 years.

Facebook has also sparred with the S.E.C. over its depiction of its mobile strategy in its filing to go public.

At the end of the hearing, regulators asked Mr. Systrom a third time about other offers: if there had been “any other inquiries from third parties about a possible acquisition of Instagram” after the Facebook deal was announced. Although Twitter executives had since tried to contact Mr. Systrom, he replied, “I and the board have not received any.”

E-mail: bilton@nytimes.com

Article source: http://bits.blogs.nytimes.com/2012/12/16/disruptions-instagram-testimony-doesnt-add-up-2/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Bits: New Apps Recall the Details of Your Online Past

December 15, 2012 by Leave a Comment

I know all of this not because my memory is superhuman, or because I keep a detailed journal. My gift of meticulous recollection comes courtesy of several apps I’ve signed up for, including Timehop and Rewind.me. They tap into my social media history and send daily reminders of my past postings, from pictures uploaded to Instagram, the photo-sharing application, to messages on Facebook and Twitter.

At a basic level, these services serve as a cognitive crutch, excavating details about the past that I might not otherwise remember. They offer historical insight into a digital world that is in many ways ephemeral — full of constantly refreshing newsfeeds.

While social networks tell their users what is happening right now, these newer services document life of a year or more ago. They rely on a proliferation of personal data scattered around the Web and easily retrieved with the help of clever engineering and software algorithms. And they offer a rare backward glance, an anthropological perspective on our own online behavior. For example, I’ve noticed that last year, I was posting many photographs and disclosing personal details of my life on social networks, but that these days, I’ve shifted into a cooler, less intimate mode.

Danielle Morrill, founder and chief executive of Referly, a product-recommendation start-up in San Francisco, found that using Timehop, which pings her iPhone with information about how she spent her day exactly one, two, three or even five years ago, reminded her just how “powerful time can be.”

“Sometimes I’ll realize I was doing the exact same thing I was doing a year ago, and I’ll have to ask myself if I’m cool with that,” Ms. Morrill said. “I was grinding through work last year, and I’m still doing that now. Maybe I should think about taking a break. It makes you reflect.”

Timehop and its peers are byproducts of a time of information overload. Many of us can barely keep up with the nearly nonstop stream of news, updates and details about the world around us, let alone find time to put the past into the context of the present.

“Every social network is based in real time,” said Jonathan Wegener, one of the founders of Timehop, which was released to the public in October. “They tend to push down old information, but they don’t leave space to remember it.”

Mr. Wegener has joined a small cluster of entrepreneurs looking to capitalize on a kind of Internet-era archaeology, excavating the troves of data we’ve left on the Web and repackaging them for our enjoyment. It’s an economy betting that as much as people want to pipe details of their daily lives into the social Web as they happen, they will also want reminders on the anniversaries of those experiences — whether theirs or, in some cases, someone else’s. People who sign up for Timehop, for example, can see the social-media pasts of friends who are also using the service. And if Timehop users choose to do so, they can send their memories to other social networks where friends can comment about them.

EXHUMING the past, of course, is fun only until you stumble onto something unpleasant.

In my case, a recent perusal offered photographs of a pet cat that had died, as well as pictures of an exuberant evening with a friend I no longer spend time with. Such reminders can be almost unbearably painful, or they can provide the extra nudge to send a “hello, again” e-mail.

Mr. Wegener said users often requested features that would let them block a particular person or period from appearing in their digest.

Technologically, building such filters would not be impossible, Mr. Wegener said, but he hasn’t done so yet. He said the notion reminded him of the film “Eternal Sunshine of the Spotless Mind,” a quirky romantic comedy in which the main characters wipe away any traces of their past relationship, and presumably, the trauma inflicted.

Such filters are “something we’re considering carefully,” he said.

It’s not clear whether these applications have long-term business potential. Timehop, for example, says it is focused on attracting people to its app, rather than worrying about how it will make money. The company has raised a little more than $1 million from a list of investors that includes Spark Capital and the founders of Foursquare.

Some researchers who study how people interact online say that these services are a logical evolution for social media and hold the potential for longer-term value.

For one thing, they can remind us exactly how long the “half-life of our digital footprints can be” said S. Shyam Sundar, a director of the Media Effects Research Lab at Pennsylvania State University. “People who never stopped to think that their digital postings would be archived could become more aware of their actions online.”

They could usher in a much-needed dose of reality about the permanence of the digital Web, a truth that is hard to grasp when so much of what we post online feels so ephemeral, visible for only a few seconds.

Behaving as if our digital data is fleeting can cause serious trouble, said Mr. Sundar, especially as our offline and online worlds merge. Our actions, documented through the content we share, can have very real effects on what colleges we get into, what jobs we qualify for and what people we meet.

“We have to start taking seriously the idea of social media as self-representation,” he said. “Social media is no longer just a mirror of the present, but also the past.”

Article source: http://www.nytimes.com/2012/12/16/technology/new-apps-recall-the-details-of-your-online-past.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

State of the Art: Google Maps App for iPhone Goes in the Right Direction

December 13, 2012 by Leave a Comment

As everybody knows by now, Apple got lost along the way. It was like a 22-car pileup. Timothy Cook, Apple’s chief executive, made a quick turn, publicly apologizing, firing the executive responsible and vowing to fix Maps. For a company that prides itself on flawless execution, it was quite a detour.

Rumors swirled that Google would create an iPhone app of its own, one that would use its seven-year-old, far more polished database of the world.

That was true. Today, Google Maps for the iPhone has arrived. It’s free, fast and fantastic.

Now, there are two parts to a great maps app. There’s the app itself — how it looks, how it works, what the features are. In this regard, few people complain about Apple’s Maps app; it’s beautiful, and its navigation mode for drivers is clear, uncluttered and distraction-free.

But then there’s the hard part: the underlying data. Apple and Google have each constructed staggeringly complex databases of the world and its roads.

The recipe for both companies includes map data from TomTom, satellite photography from a different source, real-time traffic data from others, restaurant and store listings from still more sources, and so on. In the end, Apple says that it incorporated data from at least 24 different sources.

Those sources always include errors, if only because the world constantly changes. Worse, those sources sometimes disagree with one another. It takes years to fix the problems and mesh these data sources together.

So the first great thing about Google’s new Maps is the underlying data. Hundreds of Google employees have spent years hand-editing the maps, fixing the thousands of errors that people report every day. (In the new app, you report a mistake just by shaking the phone.) And since 2006, Google’s Street View vehicles have trawled 3,000 cities, photographing and confirming the cartographical accuracy of five million miles of roads.

You can sense the new app’s polish and intelligence the minute you enter your first address; it’s infinitely more understanding. When I type “200 W 79, NYC,” Google Maps drops a pin right where it belongs: on the Upper West Side of Manhattan.

Apple’s Maps app, on the other hand, acts positively drunk. It asks me to clarify: “Did you mean 200 Durham Road, Madison, CT? Or 200 Madison Road, Durham, CT?”

Um, what?

And then there’s the navigation. Lots of iPhone owners report that they’ve had no problem with Apple’s driving instructions, and that’s great. But I’ve been idiotically misdirected a few times — and the trouble is, you never know in advance. You wind up with a deep mistrust of the app that’s hard to shake. Google’s directions weren’t great in the app’s early days either, and they’re still not always perfect. But after years of polishing and corrections, they’re right a lot more often.

The must-have features are all here: spoken driving directions, color-coded real-time traffic conditions, vector-based maps (smooth at any size). But the new app also offers some incredibly powerful, useful features that Apple’s app lacks.

Street View, of course, lets you see a photograph of a place, and even “walk” down the street in any direction. Great for checking out a neighborhood before you go, scoping out the parking situation or playing “you are there” when you read a news article.

Along with driving directions, Google Maps gives equal emphasis to walking directions and public transportation options.

This feature is brilliantly done. Google Maps displays a clean, step-by-step timeline of your entire public transportation adventure. If you ask for a route from Westport, Conn., to the Empire State Building, the timeline says: “4:27 pm, Board New Haven train toward Grand Central Terminal.” Then it shows you the names of the actual train stops you’ll pass. Then, “5:47 pm, Grand Central. Get off and walk 2 min.” Then, “5:57 pm, 33rd St: Board the #6 Lexington Avenue Local towards Brooklyn Bridge.” And so on.

Even if public transportation were all it did, Google Maps would be one of the best apps ever. (Apple kicks you over to other companies’ apps for this information.)

E-mail: pogue@nytimes.com

Article source: http://www.nytimes.com/2012/12/13/technology/personaltech/google-maps-app-for-iphone-goes-in-the-right-direction-review.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Media Decoder Blog: After a Quarterly Gain, Pandora Warns of a Loss to Come

December 5, 2012 by Leave a Comment

Pandora Media, the company behind the Internet radio service Pandora, has enjoyed a meteoric rise in popularity. But investors are concerned about its future.

The company reported $120 million in revenue for its fiscal third quarter, which ended in October, up 60 percent from the same period last year. Pandora also had net income of $2.1 million, or 1 cent a share, matching analysts’ predictions. The company offered 3.6 billion hours of personalized music streams to its users during the quarter, which amounted to 59 million people.

“This quarter exceeded our expectations as we monetized mobile at record levels and grew total mobile revenue 112 percent,” Joe Kennedy, the company’s chairman and chief executive, said in a statement.

But the company also lowered its expectations for the fourth quarter and the fiscal year, warning that it would face a loss of 6 to 9 cents a share, greater than it had earlier expected. In a conference call with analysts, Mr. Kennedy said he anticipated a drop in advertising in January because of concerns about the economy.

Pandora’s stock closed up 5.5 percent on Tuesday, at $9.45, but once its earnings were released the price fell nearly 18 percent in after-hours trading. The stock was down almost 41 percent from its initial offering in June 2011.

The company faces competition from Microsoft, which recently introduced a digital service, Xbox Music; Apple, which is said to be preparing an Internet radio service, although Apple has not commented on those reports; Spotify and others.

Pandora’s licensing costs also weighed on the company. In the third quarter, it paid $65.7 million, or about 55 percent of revenue, in “content acquisition costs,” which include music royalties. The company pays a fraction of a cent in royalties for every stream it serves, which in recent quarters amounted to 50 to 60 percent of its revenue.

Pandora has supported the Internet Radio Fairness Act, a bill that would change how its royalty rates are set (most likely lowering them). But the bill got a cool reception last week from members of a House Judiciary subcommittee.

The bill was expected to expire with the end of the current Congress, but a version of it could be introduced next year. Music groups favored a bill that would also include long-sought changes the royalties paid by terrestrial radio broadcasters.

“It was a huge win to have a hearing on our issue, especially during a lame-duck session,” Harvey Valentine of the Internet Radio Fairness Coalition, which includes Pandora, said late Monday in response to questions about the bill. “The discussion has started in earnest, and that is a big step forward.”

Article source: http://mediadecoder.blogs.nytimes.com/2012/12/04/after-a-quarterly-gain-pandora-warns-of-a-loss-to-come/?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Bits Blog: Apple Settles Patent Suit With HTC

November 11, 2012 by Leave a Comment

Apple and HTC have brought an end to their lawsuits against each other in the first settlement between Apple and a maker of Android smartphones.

In a statement issued Saturday night, the two companies said the settlement includes the dismissal of all current lawsuits and sets up a 10-year license agreement that includes rights to current and future patents held by both parties. Apple and HTC, which is based in Taiwan, said the terms of the deal were confidential.

“We are glad to have reached a settlement with HTC,” Timothy D. Cook, the chief executive of Apple, said in a statement. “We will continue to stay laser-focused on product innovation.”

“HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” Peter Chou, HTC’s chief executive, said in a statement.

Apple’s battle with HTC had a much lower profile than its legal fight with Samsung, a more significant rival in the smartphone market and the biggest maker of handsets based on Google’s Android operating system. In August, a jury awarded Apple more than $1 billion in damages in its lawsuit with Samsung, though Samsung is challenging the ruling.

The HTC suit, however, was the first one Apple filed against an Android phone maker and a harbinger of future Apple legal challenges aimed at the software. Apple filed patent infringement suits against HTC in March 2010 in federal court in Delaware and before the International Trade Commission.

The suit was the start of what is widely viewed as a proxy war between Apple and Google, the creator of the Android operating system. The week Apple filed the suit against HTC, Steven P. Jobs — then Apple’s chief executive, who died late last year — erupted in fury over Android, in a scene depicted in Walter Isaacson’s biography of him.

“I’m going to destroy Android, because it’s a stolen product,” Mr. Jobs said, according to the book.

Apple sued Samsung in 2011. Another Android maker, Motorola Mobility, sued Apple in late 2010, and Apple subsequently countersued. Google now owns Motorola.

Article source: http://bits.blogs.nytimes.com/2012/11/10/apple-settles-patent-suit-with-htc/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Iberia, in ‘Fight for Survival,’ Says It Will Reorganize

November 10, 2012 by Leave a Comment

The planned reductions, equivalent to more than 20 percent of the airline’s work force, came as the company, the International Airlines Group, reported a 24 percent drop in third-quarter net profit and forecast an operating loss of 120 million euros ($152 million) for the full year.

“Iberia is in a fight for survival and we will transform it to reduce its cost base so it can grow profitably in the future,” Willie Walsh, the chief executive of I.A.G., said in a statement. Iberia’s unions were given a deadline of Jan. 31 to reach an agreement on the job cuts or face possibly deeper retrenchments.

Labor unions have been bracing for deep layoffs at Iberia for months as the grip of Spain’s recession tightens and I.A.G. gradually shifts operation of many domestic and European flights to its low-cost subsidiary, Iberia Express. On Thursday, I.A.G., which owns 46 percent of Vueling, a rival Spanish low-cost carrier, made a 113 million euro bid for the rest of the airline. It said, though, that it had no immediate plans to merge it with Iberia Express.

“The company is burning 1.7 million euros every day,” Rafael Sánchez-Lozano, Iberia’s chief executive, said in a statement. “Iberia has to modernize and adapt to the new competitive environment, as its cost base is significantly higher than its main competitors in Spain and Latin America.”

I.A.G. said Iberia’s operating losses of 262 million euros for the first nine months of this year had all but wiped out a 286 million euro profit made by British Airways in the same period. I.A.G. was formed by the merger of Iberia with British Airways last year.

The job cuts were the latest retrenchments for Europe’s biggest airlines as they compete with leaner and nimbler rivals like Ryanair, easyJet and Air Berlin in Europe and with rapidly expanding Middle Eastern carriers like Emirates and Etihad on long-distance routes.

Air France said in June that it would eliminate more than 5,100 jobs, or 10 percent of its work force, by the end of next year as part of a 2 billion euro restructuring. Lufthansa announced the elimination of 3,500 administrative jobs in May as it sought 1.5 billion euros in savings over the next three years.

While airlines globally have managed to trim costs and improve operating margins over the last year, the economic slowdown that has accompanied the sovereign debt crisis continues to weigh heavily on European carriers.

Last month, the International Air Transport Association predicted that European airlines would lose a combined $1.2 billion this year, while it forecast global industry profits of $4.1 billion. European losses are expected to shrink to $200 million in 2013, the I.A.T.A. said, while airline profits worldwide are predicted to rise to $7.5 billion.

This article has been revised to reflect the following correction:

Correction: November 9, 2012

An earlier version of this article stated incorrectly that Iberia would reduce its capacity by 25 percent. The airline’s network capacity will be cut by 15 percent, through a downsizing of its fleet by 25 aircraft.

Article source: http://www.nytimes.com/2012/11/10/business/global/spanish-airline-said-to-be-in-fight-for-survival.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Bits Blog: SAP’s Marketplace Dream

November 3, 2012 by Leave a Comment

Last spring SAP, the big German business software company, agreed to pay $4.3 billion for a company called Ariba, which runs an online marketplace for businesses selling to other businesses. The deal was for a 20 percent premium to Ariba’s stock price, and more than six times the usual multiple of earnings for an enterprise software acquisition. For a deal like that to make sense, SAP must have been thinking about ways Ariba could create new strategic businesses for the company.

The deal became final in early October, and the heads of the two companies are starting to state their aim. Ariba, it is hoped, will turn a business marketplaces into a kind of corporate social network. The equivalent of status updates on Facebook will be awareness of goods that are available, the status of payments or of products in transit.

There are, of course, no guarantees this will come true, but it is an interesting idea.

William McDermott, SAP’s American co-chief executive. William McDermott, SAP’s American co-chief executive.

There will be a lot of headline statistics on the way there. “We are committed to being a triple-digit growth business in the cloud,” said William McDermott, SAP’s American co-chief executive. “We’re up to the challenge.”

In the third quarter of this year SAP’s revenue from cloud computing subscriptions did grow 1,475 percent from a year earlier, to 63 million euros, about $81 million. That was, however, less than 2 percent of SAP’s overall revenue, which still relies mostly on old-fashioned software.

Adding Ariba, which had $474 million in revenue in 2011, will certainly bolt a big number on to SAP’s cloud revenues, which at least for awhile will look like strong growth. In the long run, however the acquisition has to come up with something substantial to meet Mr. McDermott’s commitment.

There is, of course, the benefit to Ariba of being part of a much bigger organization. Purchasing of supplies and services from third parties by the world’s 2,000 largest companies, Mr. McDermott said, amounts to about $12 trillion annually. “That isn’t limited to SAP” with Ariba, he said (it’s not even close), “but we will continue to pursue it.”

In addition, by hooking the knowledge of what supplies are being purchased to mobile devices and real-time analysis software, two other new businesses for SAP, the opportunity exists to create new products.

Robert Calderoni, the former chief of Ariba and now a member of SAP’s managing board who will oversee the business, said the real profit would come from becoming less of a place of mere transactions, and more a global network of vendors and corporate buyers. Both sides will have a high level of awareness about things like product availability and payment status. Ultimately, he said, SAP wants it to be “a community we create,” in which it collects high fees by enabling transactions.

“Our first customer liked our software. Our second customer liked our software, and that it had someone on it,” Mr. Calderoni said. As this builds, he said, Ariba can move from collecting a very modest commission (about 0.06 percent of the transaction) to “hundreds of basis points,” or several percent, by managing awareness and fulfillment, the way Amazon does between consumers and third-party sellers.

The connection to SAP should also help Ariba get to bigger numbers of both buyers and sellers. At present there are about 733,000 vendors on Ariba, and growing by 1,000 companies a week, according to Mr. Calderoni.

If SAP does acquire a truly large volume of cloud transactions, it could even end up in a kind of content business, offering industries, financial traders and government economic insight into buying and logistics. “It becomes a predictive tool,” Mr. McDermott said.

For now, the acquisition may seem like more consolidation in the cloud, which has been lead over the past year by SAP, Oracle, and Salesforce.com. That may be interesting from a financial or evolutionary perspective. The real value is in making something altogether new. That is probably several triple-digit years away.

Article source: http://bits.blogs.nytimes.com/2012/11/02/saps-marketplace-dream/?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,

Ford’s Chief Executive to Remain Through 2014

November 1, 2012 by Leave a Comment

The management changes solidified a closely watched succession race at Ford, the nation’s second-largest automaker, and reassured investors concerned about an earlier departure by Mr. Mulally.

The decision to promote Mr. Fields was made by Ford’s board of directors at its Oct. 19 meeting and was announced Thursday by Mr. Mulally and William C. Ford Jr., the company’s executive chairman.

In addition to naming Mr. Fields as chief operating officer, the company also said its Asia chief, Joe Hinrichs, would take over as president of the Americas division, which has been providing the bulk of Ford’s profit this year.

Mr. Mulally said he would assume a more strategic role at Ford and turn daily operations totally over to Mr. Fields, who he said has excelled during his seven years overseeing the all-important Americas division.

“The really key message today is that Mark is going to take responsibility for leading the business plan reviews of the whole company,” Mr. Mulally said. “I’m going to step back from that.”

By elevating Mr. Fields, the board gave him a running start to ultimately succeed Mr. Mulally. Mr. Ford would not comment on that possibility directly, but he said it was even more likely now that the next chief executive would come from inside the company.

“I’ve said in the past I prefer it comes from inside, and I still see that,” Mr. Ford said.

It was Mr. Ford who reached outside the auto industry in 2006 to hire Mr. Mulally, who was then a senior executive at Boeing. Despite questions about his inexperience in the car business, Mr. Mulally transformed Ford from an unprofitable, regionally divided company into one of the most efficient and profitable automakers in the world.

This week, Ford reported third-quarter net income of $1.63 billion, marking its thirteenth consecutive profitable quarter. The company also recently announced a major restructuring of its European operations and an acceleration of investments in its Asian division.

Mr. Mulally said he expects to focus on new products, technology and strategic initiatives to further globalize Ford’s vehicle development and marketing.

He said he was asked to stay as chief executive for at least two more years by the board and Mr. Ford.

Mr. Ford reiterated earlier statements that he would prefer to keep Mr. Mulally at Ford indefinitely but that promoting other executives was important to the development of the overall management team.

“The strength of our people and stability of our team are competitive advantages for Ford,” Mr. Ford said. “We are fortunate to have Alan’s continued leadership as well as talented senior leaders throughout our company who are developing and working together and delivering our plan.”

Mr. Fields’s promotion to the chief operating officer position, which has been vacant for several years, is effective Dec. 1. Mr. Hinrichs will succeed him in the Americas job, and the Asia position will be filled by David Schoch, who currently heads Ford’s China operations.

Article source: http://www.nytimes.com/2012/11/02/business/fords-chief-executive-to-remain-through-2014.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Economix Blog: A Lift for the Worst Off

October 7, 2012 by Leave a Comment

The American economy may be starting to help some of those who need it the most.

FLOYD NORRIS

FLOYD NORRIS

Notions on high and low finance.

The overall unemployment rate fell in September to 7.8 percent from 8.1 percent a month earlier. But the really impressive figures were in the categories of people who have suffered the most.

The jobless rate among people with college degrees was unchanged at 4.1 percent. But the rate among high school dropouts fell to 11.3 percent, the lowest figure for that group in nearly four years. It has declined by 1.4 percentage points over the last two months.

Similarly, the number of people who have been out of work for more than six months fell below five million for the first time since mid-2009. It peaked at 6.7 million in the spring of 2010.

None of those numbers are good, but they show real improvement, even if we should remember the household survey, on which the unemployment numbers are based, can be volatile. And the establishment report found 114,000 jobs were added during the month, in sharp contrast to the 873,000 additional people with jobs found in the household survey.

How can that be? The Obama haters are already screaming that the unemployment figure must have been manipulated. Jack Welch, the former General Electric chief executive, said on Twitter that “these Chicago guys” can’t debate, “so they change numbers.”

The two surveys often diverge. One is of employers, who are asked how many workers they have. The other is of households, who are asked which members of their households are working. If both surveys were perfect, there would still be differences, as self-employed people get counted in the household survey but not the other one, and people with two jobs get counted twice in the employer survey. Over time, however, they tend to even out.

A year ago, the the establishment numbers were looking better than the household numbers. Now the reverse is true. Over the last 12 months, the household report shows an additional 2.9 million people working. Over the same span, the establishment report says 1.8 million jobs were added, although the Labor Department has already said that figure would be revised upward in due course.

Over the last 24 months, however, the two reports are virtually identical, showing an additional 3.6 million jobs and workers.

You have to wonder why, if the Obama administration were going to fake numbers, it would choose the less-widely watched household survey. And you have to wonder why anyone would think the bureaucrats in the Bureau of Labor Statistics would follow such orders without any leaks from whistle-blowers.

Actually, it should come as no surprise that Mr. Welch would think bureaucrats would willingly change numbers. That evidently used to happen routinely at G.E. As I wrote in a 2009 column quoting James Martin, a Jesuit priest who found his calling after graduating from the Wharton School and working at G.E. in the early 1980s:

“The primary task of my first job was to issue very long, monthly statistical reports,” he wrote in his book, “In Good Company: The Fast Track From the Corporate World to Poverty, Chastity and Obedience.” “The first month,” he recalled, “I informed one executive that our results were coming in low” because of losses in overseas operations.

“So what?” replied the executive. “Just reverse a few journal entries.” Corporate headquarters, he explained, would come down hard on them if they missed the numbers.

Another boss told him he was “taking those accounting courses way too seriously.”

Article source: http://economix.blogs.nytimes.com/2012/10/05/good-news-for-the-worst-off/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Bits Blog: Carol Bartz on the Yahoo Board That Fired Her and Advice for Marissa Mayer

October 5, 2012 by Leave a Comment

If Carol Bartz, the former chief executive of Yahoo, could go back in time, she would have changed one thing about her relationship with the board that fired her by phone last year.

Ms. Bartz would have spent more time understanding the relationships between the board members, she said Tuesday at Fortune’s Most Powerful Women summit in Laguna Niguel, Calif.

Carol Bartz at Fortune’s Most Powerful Women event.Alex Gallardo/Reuters Carol Bartz at Fortune’s Most Powerful Women event.

“I didn’t understand or have the time or take the time — that’s a much better thing to say, take the time — to understand the relationships they had between themselves,” she said.

How could she have done that as chief executive? “Well, you go in the men’s room,” she said. In reality, she added, she should have arranged dinners with two board members at a time.

Ms. Bartz gave Yahoo’s former board some credit — but also a little dig.

“Unfortunately for the board, they had gone through one year of the acquisition battle with Microsoft,” she said. “And in fairness to them, they just wanted it to be simple, like no more press, no more anything. But the business is tougher than that.”

Now Marissa Mayer has taken over as chief executive of Yahoo, with an entirely new board. Ms. Bartz said she and Ms. Mayer have spoken about the job.

Her advice for Ms. Mayer was to understand that change at such a big company is hard. Ms. Mayer is trying to change Yahoo’s culture in ways big and small, like serving free food and acquiring more startups.

“One piece of advice I would give her is changing culture is not a sprint, it’s a marathon,” Ms. Bartz said. “It’s very, very hard to affect culture. And you can get surprised thinking you’re farther down the path of change than you really are because, frankly, most of us like the way things are.”

Employees might nod when an executive suggests changes, she said, “then they go back to their cube and go, ‘I ain’t doing that.’ And so I think that’s important for all of us, is to realize how stuck individuals can be, much less 14,000 people.”

Ms. Bartz did not rule out taking another chief executive role, saying she is an opportunist rather than a planner.

“I grew up in a small town in Wisconsin,” she said. “I never thought I’d be where I am. I never thought I’d have bling,” she said, flashing the rings on her fingers before adding, with perfect comic timing, “that I bought.”

Ms. Bartz is the lead director of Cisco Systems, where she has been on the board for two decades, and she has also served on seven other public company boards during that time.

The difference between a good board and a bad one, she said, is not panicking, which she said the Cisco board achieves, and being genuinely interested in the company rather than prestige or money.

She said she has turned down board positions from banks because “I like banks because they keep my money safe, but I don’t want to talk about banks 12 times a year.”

Directors who are genuinely interested will take the time to get to know one another and the executives, but not be afraid to fire one another, she said.

“When trouble strikes, which it always does — bad economy, bad quarter, activists, takeover — when trouble strikes, those board members who don’t understand or are not committed are not helpful,” she said.

Article source: http://bits.blogs.nytimes.com/2012/10/04/carol-bartz-on-the-yahoo-board-that-fired-her-and-advice-for-marissa-mayer/?partner=rss&emc=rss

Filed Under: Business News Tagged With: , ,
« Previous Page
Next Page »