September 26, 2023

Questions for Microsoft as It Nears a Crossroad

But Mr. Ballmer and Microsoft’s board have been considering the possibility of his retirement for some time. Still, because of Mr. Ballmer’s larger-than-life personality, the board’s reluctance to push back and the company’s recent product and financial problems, finding a new chief executive for Microsoft was never going to resemble a cut-and-dry, business-school case study, according to people with knowledge of the company.

“No one is an obvious candidate,” said Michael A. Cusumano, a professor of business and engineering at the Massachusetts Institute of Technology who studies strategy in the computer software industry. “All the really interesting people who were in the company over the last dozen years who might have been have left. I also find it hard to imagine they could bring an outsider in. Microsoft is known for having quite a lot of powerful groups within the company and they make life very difficult for anyone who tries to oversee them.”

Succession planning is a delicate issue for many companies, particularly one like Microsoft, where Mr. Ballmer has been a senior employee since 1980 and chief executive since 2000, and his longtime friend, Bill Gates, Microsoft’s co-founder, remains chairman.

“Particularly for a person like Ballmer, who really is one of the founders, leaving is almost like death, so it’s extremely difficult to have an orderly process,” said Joseph L. Bower, a professor at the Harvard Business School. “It requires a very grown-up relationship between the chief executive and his board.”

Industry insiders almost immediately began to place bets on which executives inside and outside Microsoft — and even outside the technology industry — could be tapped. The decision will go a long way to determining whether Microsoft will successfully transition to tech’s future of mobile computing and computing in a virtual cloud of data-storage devices.

But at the moment, at least, the betting cards are virtually empty.

Even though Mr. Ballmer had indicated he was going to retire when the youngest of his children went to college, which was in about two more years, “I think people thought Ballmer would maybe die with his boots on in that role,” Mr. Cusumano added.

Developing a succession plan is one of a board’s chief responsibilities, but only half of companies actively groom executives, according to a 2010 study by Stanford University’s Rock Center for Corporate Governance and Heidrick Struggles, the executive search firm that is leading Microsoft’s search. Boards spend only an average two hours a year on succession planning, the study found.

“When you have such strong personalities as Gates and Ballmer, is the board really proactive with them, or is it more of a caretaker board?” said David Larcker, director of corporate governance research at Stanford University’s business school, who worked on the study.

Though it might not be obvious outside the boardroom, Microsoft’s directors have been planning the transition, according to a person briefed on the board’s meetings who was not authorized to speak about them publicly.

Discussions have been happening for a decade, the person said, and intensified in 2010. Several months ago, Mr. Ballmer suggested to the board that it was time to begin a formal succession process, the person said, and told directors on Wednesday that he would announce his retirement.

Mr. Ballmer and the board have discussed the attributes they want in the next chief executive and have been appraising internal and external executives who might be candidates. Over the last 18 to 24 months, Mr. Ballmer has personally met with several outside executives, including people outside the tech industry with experience transforming very large companies, according to the person knowledgeable about the board’s work.

Nick Wingfield contributed reporting.

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Bucks: Aiming to Simplify the Landlord-Tenant Relationship

Apartments for rent in Berkeley, California.Agence France-Presse — Getty Images Apartments for rent in Berkeley, California.

A new Web service called Cozy aims to simplify the relationship between those who own apartments and homes for rent, and those who pay rent to live in them.

The start-up has been in a limited beta testing for the last six months, and is now being made available to the public. About 3,000 landlords were invited to participate in the test, said Gino Zahnd, Cozy’s chief executive and co-founder, and the site currently has participants in more than 300 markets in 46 states.

Cozy, with financial backers like Google Ventures, seeks to benefit both sides of the rental relationship. It courts renters by allowing them to create simple, electronic tenant profiles, which give them more control over who sees their sensitive personal information when applying for a lease. It also offers landlords a way to screen tenants more easily, and helps them collect rental payments.

“We’re trying to improve the tenant-landlord relationship,” said Mr. Zahnd.

The Cozy system allows landlords to accept applications and screen potential tenants online. And it allows tenants to pay their rent electronically, instead of writing a check — which most renters still do, said Mr. Zahnd.

The system also allows multiple roommates to pool payments, which it then combines into a single payment that is made to the landlord. That’s generally attractive to landlords, Mr. Zahnd said, because of the way most leases are structured.

Typically, when applicants seek an apartment, they fill out a multiple-page paper form with all sorts of personal and financial information and hand it over to a stranger, he said. In competitive markets, like San Francisco or New York, apartment seekers are probably filling out multiple applications. If you aren’t selected by the landlord for a specific apartment, you have no idea what the apartment owner does with your (rejected) form — does it just go in the trash? Or are other, unauthorized people looking at your information? “It doesn’t feel good,” he said.

Cozy allows tenants to create a re-useable online application — complete with employment information, rental history and references. If an apartment seeker finds an apartment — say, on Craigslist — and the owner uses Cozy, the prospect can apply with a click of the mouse.

If the renter wants to apply for an apartment for a non-Cozy landlord, he or she can issue a “guest pass” that includes a link to the tenant’s profile. Prospective landlords can access the information and the applicant can see when they view the profile, and how often.

Then, once the potential tenant finds an apartment and their application is accepted, they can revoke access to the profile granted to other landlords.

The beta version of the Cozy site was free; now, it charges landlords $9 per month, per rental unit (generally, a tax-deductible cost for landlords, Mr. Zahnd notes). The site is initially aiming at smaller landlords, who are most in need of services to simplify their operations, Mr. Zahnd said. But Cozy also has had inquiries from large investment funds that have bought foreclosed properties and are looking for efficient ways to rent them, he said.

The service is free for tenants.

To use the system, both tenants and landlords must enter their banking information, including routing numbers and account numbers. (Mr. Zahnd says Cozy uses bank-level security to protect users financial information). Then, once each month on a specified date, the system withdraws funds from the tenant accounts and makes a payment to the landlord.

In order for the payments system to work, both landlord and tenant must be registered with Cozy.

Take a look at Cozy and tell us what you think. Does such a service make sense for apartment hunters? Is the payment system attractive, or would you rather use your own bank’s electronic bill payment option?

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Bucks Blog: Hosting a Dog? Check Your Insurance Coverage

Associated Press

What could be more comforting than heading out of town and leaving your dog not at a cramped kennel, but at the home of a canine-loving friend?

That’s the idea behind DogVacay, an online site that matches dog owners with dog lovers willing to take in pets and care for them temporarily, for a fee that’s often less than commercial boarding. DogVacay takes a 15 percent commission on each booking.

The site started more than a year ago as a sort of canine version of Airbnb, the peer-to-peer lodging site for humans. Aaron Hirschhorn, DogVacay’s chief executive and co-founder, said in an interview that DogVacay now had 10,000 hosts making an average of $1,000 a month.

DogVacay’s appeal to hosts is that it’s a relatively easy way for animal lovers to supplement their income. After all, if you’ve already got one dog, hosting another for a few days isn’t adding too much extra work. Mr. Hirschhorn says it’s also a way for those who love dogs, but don’t have time to own one full time, to spend time with animals.

As with some other peer-to-peer services, however, DogVacay’s model raises some questions for potential dog hosts to consider. For starters, there’s the issue of insurance. Claims for dog bites can be quite costly, as recent data show.

Traditional homeowner’s insurance policies include liability coverage that protects you in the event that your own dog bites someone. But such policies wouldn’t cover you if you are hosting someone else’s dog for a fee and that dog bites someone, says Loretta Worters, a spokeswoman for the Insurance Information Institute, an industry group.

“If you are hosting dogs and accepting fees, then that’s a business,” Ms. Worters said in an e-mail. “And if it’s a business, then you wouldn’t be covered under your homeowner’s policy.”

Rather, you would need to purchase specialty “pet business” insurance, which covers groomers, kennels, dog sitters, dog walkers and dog boarders. (You can also add “animal bailee” coverage, she said, which pays for the direct loss of animals that a client leaves in your care.

Those who rent out their homes or apartments would also need specialty coverage, she said, even if they had renter’s insurance.

DogVacay’s Web site says it includes “complimentary” insurance for hosts and guests with every booking. The free version covers veterinary care for guest dogs and dogs owned by the host, up to $2,000; it doesn’t, however, include liability coverage for the host.

Hosts can pay to upgrade to “premium” insurance that does include liability coverage of up to $4 million, said Mr. Hirschhorn. The coverage is offered through Kennel Pro, an affiliate of the insurer Mourer-Foster.

DogVacay’s site links to Kennel Pro’s site, which says its policies start at $350 a year, which sounds a bit steep for someone hosting a dog only occasionally. But Mr. Hirschhorn said DogVacay was able to offer expanded coverage for $48 a year to its hosts through a special arrangement with the carrier. (The more affordable premium isn’t cited on the Web site.) The fee is deducted from the first booking, so hosts don’t have to pay the premium upfront, he said. He estimated that half of DogVacay’s hosts bought the upgraded coverage.

DogVacay also urges hosts to have a “meet and greet” with potential boarders before accepting them, to make sure they are comfortable with the animal’s temperament and that it is compatible with any pets already in the home.

Local property-use regulations may also come into play (as some Airbnb hosts recently discovered). Every city has a different set of regulations, Mr. Hirschorn said, but, “In general we don’t find it to be an issue.”

Still, knowing what the rules are for your neighborhood seems wise. While neighbors aren’t likely to gripe if you have an extra dog from time to time (if they’re even aware of it), they might complain if the guest dog is especially loud or troublesome, or if you are hosting multiple dogs.

DogVacay advises hosts to do their own research to find out what local regulations say, and Mr. Hirschhorn said the site’s customer service representatives were also available to help. “We want people to call,” he said.

Have you hosted a dog using DogVacay or a similar service? How are you addressing the insurance question?

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Mobile Ads Help Propel Earnings at Facebook

Those concerns were silenced a bit on Wednesday, when Facebook’s earnings report offered early signs that the company was cracking the mobile revenue code.

In the first three months of the year, the company’s mobile advertising generated $375 million in revenue, exceeding what analysts had expected. Mobile revenue accounted for 30 percent of the company’s advertising revenue in the first quarter of this year, compared with 23 percent in the same period last year.

“What we have seen has made us more confident we can do more with advertising over time,” the company’s chief executive and co-founder, Mark Zuckerberg, told analysts on an earnings call on Wednesday. He said one of his top goals was to build “the best mobile product” — and make money from it.

Despite the strong mobile numbers, investors did not extol the company on Wednesday, largely because it continues to spend a lot of money to develop new features. The company’s shares fell about 1 percent, closing at $27.43, before the earnings were reported. Facebook shares swung up and down in after-hours trading but ended at $27.51.

Just last year, Mr. Zuckerberg said that Facebook was late in retooling itself for the mobile era. At Facebook headquarters, morale-raising posters went up on the walls screaming “Our Mobile Future.”

Since then, Facebook has introduced more than a half-dozen advertising products. They include what are called app-install ads, which are meant to help app developers draw new customers and more refined advertising tailored to consumers’ online and offline behavior.

Facebook has recently partnered with third-party data companies that track who buys soda at the supermarket and who is planning to buy a car in the next six months.

Facebook executives said the company planned to hone its targeting even more.

Two-thirds of Facebook’s 1.1 billion users across the world log into the site on their phones, the company said Wednesday, accounting for what executives described as strong growth in populous countries like India and Brazil.

For those mobile users, the changes mean more ads when they log in on their cellphones and eventually more finely targeted ads. And they mean a redesigned News Feed, a feature introduced in March, that offers marketers a chance to show off pictures and bigger and more prominent links.

“We want content in ads that’s as good as content from a friend or somewhere else on the site, as well as to have a higher return for marketers,” said Sheryl Sandberg, the company’s chief operating officer. “Those go hand in hand. What you’ll see from us is better targeting.”

All told, revenue increased 38 percent, to $1.46 billion, exceeding the $1.44 billion estimate of financial analysts surveyed by Bloomberg News. The company had $219 million in net income. It reported a profit of 12 cents a share, missing the average estimate by a penny.

“Over all, they’re on track,” said Aaron Kessler, an analyst with Raymond James. “They’re still rolling out new products for advertisers. They’re definitely more focused on creating shareholder value and driving revenue growth.”

In early April, the company introduced mobile software for Android phones called Facebook Home that is intended to nudge Facebook users to return to their mobile News Feeds even more frequently than they do now.

The new suite of applications effectively turns the News Feed into the screen saver of a smartphone, updating it constantly with Facebook posts and messages. It appears to be only a matter of time until the company introduces ads there.

Last May, Facebook held a widely publicized initial public offering of stock, at a price of $38 a share. Its fairy tale rise took a sharp dive almost immediately, resulting in lawsuits and angry recriminations. Its shares slumped to half the opening price at one point last fall, and they have inched up cautiously since then.

On Wednesday, Facebook filed a motion asking a federal judge to dismiss a lawsuit that accused the company of misleading investors about its financial strategy before the public offering, Reuters reported. The company said in court papers that it was not legally obligated to disclose publicly how mobile adoption would affect its financial performance in the future.

Wall Street analysts have watched closely for signs of Facebook fatigue among users. In the first quarter, they point out, fewer monthly users returned to Facebook on their desktop computers in the United States and Europe, according to comScore figures.

Analysts worried whether that meant that users in more mature and lucrative markets were getting bored with Facebook. But they noted that the figures applied only to desktop users and revealed little about mobile users of Facebook.

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Fashioning Change: One Entrepreneur’s Favorite Start-Up Tools

Fashioning Change

A social entrepreneur tries to change the way people shop.

I recently had a conversation with someone who is starting a social enterprise to connect corporate sponsors with the social networks of activists, athletes, musicians and others. He was asking me for advice on learning to code so that he could start to build his site.

I recommended that he learn the fundamentals of coding so that he could find a great technical co-founder and that he test the idea without building the whole concept. Through the conversation, I ended up sharing a list of tools that I thought might help him get started. With the hope that they may be helpful to others as well, here are my favorite start-up tools. And of course, please share your favorites in the comment section below.


LaunchRock is a free landing-page software tool that allows anyone to create a page that offers something of value and captures the e-mails of those who are interested. It’s easy to run Google Ads to your LaunchRock page and see how many people sign up. For an e-commerce site, a 10 percent conversion rate is generally considered good enough to warrant the build out of a product.

Optimizely is an inexpensive A/B testing tool that connects to LaunchRock and other sites to test copy, feature sets and user experiences. Early on, we learned the value of testing various Web options and the huge impact it can have.


Once you’ve tested an idea and built your minimally viable product, it’s important to get as much feedback as you can from the people in your target market. Early on, my technical co-founder, Kevin, and I would go to Whole Foods during lunch and ask people if they would test-drive what we had built. Getting direct feedback from our target market was instrumental in understanding how to optimize the shopping experience on Fashioning Change. The following tools are also great for early customer feedback.

Fashioning Change was featured on Beta List, a site that introduces select start-ups in Beta to a community of early adopters. As a result, we were able to gain feedback that helped us find bugs and fix our user interface. By analyzing the feedback, we were able to optimize the entire Fashioning Change experience.

I love understanding how people receive and perceive information. I recognize that it’s one thing to think you understand why someone does something and a very different thing to test cause and effect and check your understanding against hard data. And that’s why I love It’s a free tool that helps you create surveys and collect quantitative and qualitative data. Depending on the purpose of the survey, you can check it against site analytics and use it to form assumptions that can be used to set up a battery of tests that help you improve the user experience. gives you lots of information, and it takes less than a minute to create a survey.

Zopim is a real-time customer-support tool that we’ve found to be extremely flexible to use. It has an online dashboard and a plug-in for Gmail so that you can provide support through Google Chat. The plug-in allows you to see where people are coming from to visit your site. Thanks to Zopim, I’ve chatted with Fashioning Change visitors from all over the world. What’s really awesome is that if you have Gchat on your phone, you can even provide customer support when you’re on the go. This can be a little overwhelming at times, but the level of attention we have been able to give people get through Zopim has resulted in lots of word-of-mouth referrals. One time, I was providing normal customer support and discovered that the “person” I was talking with was actually an M.B.A. class at the University of California, San Diego, that had Fashioning Change projected on the wall! The benefits of real-time customer support and feedback can be amazing if approached correctly.

We learned about Inspectlet from our friends at Mogl, a company that helps you earn cash back when you eat out and donates a meal when you use the app. They raved about Inspectlet, and we understand why — the tool allows you to generate heat maps of what people are clicking on and viewing. On our site, we learned that some people wanted to click on things that didn’t link anywhere and that others were not clicking on things we wanted them to click on. The tool is extremely inexpensive but priceless.


Recently acquired by Evernote, Skitch is a free app that helps you capture, edit and mark up your screen captures and images with shapes and comments. Our use of Skitch has made it the unofficial language of Fashioning Change. We use it to support our product-development process. It helps expedite communication and reduce the number of misunderstandings. When we’re on deadline, Skitch becomes as important to us as air. No joke.


MailChimp’s interface is simple to use, and it allows you to segment lists, test e-mails, and analyze analytics. Free for up to 2,000 subscribers, MailChimp is a must for any beginning e-mail list. It’s also a great platform to customize. Rather than spend tens of thousands of dollars on a service like Sailthru, we were able to hack and customize it to our needs.

Unlike MailChimp, SendGrid is a transactional e-mail delivery service that makes it easy to make sure e-mails are delivered. We tell it what to send to whom, and SendGrid makes sure it gets there.


As the brains behind Fashioning Change’s lines of code, Kevin has no problem diving into the server logs to review a user’s or a set of users’ interactions with the site. For me, and for the other nontechnical members of the team, diving into the server logs is not so easy, but KissMetrics allows us to define reports that generate an easy-to-understand graphic on the data funnels of any subset of users we want to learn about — without having to dive into server logs. It’s a great tool to understand the paths people take on your site. And KissMetrics also offers one of my favorite blogs.

Similarly, Crazy Egg allows you to generate easy-to-understand charts that show where people are clicking on your site.

Google Analytics is a free and great tool to begin measuring the success of your advertising and the functionality of your site. It gives you insight to what is working, what is not, and where you should focus your attention.

Understanding search engine optimization is hard, in part because there are so many things to look at. SEOMoz highlights your important S.E.O. attributes and tracks their success over time (and it, too, has a great blog).


Trello is a free and easy-to-use project-management tool that is great for managing nontechnical teams.

Pivotal Tracker is a collaborative tool that helps your engineering team manage project timelines, keep track of project iterations, fix bugs and enhance the accuracy of project timelines.

We have yet to find a great tool to manage product timelines for both our technical team and nontechnical team, which is why we use an internal Google Wiki. The Wiki gives us the free form we need to manage overlapping tasks, and it doesn’t cost anything.


I love meeting with people, and without Skype, there would be a hole in my heart. While there is no replacement for meeting in person, Skype is an awesome tool to use when that is not an option. I find it most fun to use when I am talking to someone who has never used it before. It has allowed me to meet our designers regardless of where they are in the world. I use the screen-share function to get feedback on product that isn’t live to the public yet. I’ve also used Skype to create video interviews that highlight the stories of our designers.

Rapportive is a plug-in for Gmail that gives you information on who is e-mailing you. It provides a list of all of the social networks associated with the person e-mailing you. Used creatively, it can figure out the e-mail of someone you want to reach. Additionally, if you want to learn more about someone copied on an e-mail, you can do so by highlighting the address and Rapportive will populate information linked to the e-mail (I assure you that I am not a stalker — just creatively resourceful).

I highly recommend the tools above to anyone in the very early start-up stages. As we grow, we recognize that there are always new resources we can use. Steve Blank, godfather of the lean start-up movement, has a great list of other resources that we drew from in putting together this post: Startup Tools.

I hope this list is helpful, but I am sure there are many other useful tools out there. Are there any that you have found invaluable to your company? Please share.

Adriana Herrera is chief executive of Fashioning Change. You can e-mail her at, and you can follow her on Twitter at @Adriana_Herrera.

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Global Manager: Starting Up, but There for the Long Haul

Ron Zeghibe is co-founder and chairman of Hailo, a taxi booking phone application.

Q. Before helping to set up Hailo in 2011, you used to fix existing companies. What is the difference between running a start-up and a company that has been in business for some time?

A. Hailo is my first start-up, and the combination of factors you need to be successful are slightly different. At the beginning it is all about developing a product that didn’t exist and then proving that it could work as a concept.

Q. What are the challenges when it comes to leading at a start-up?

A. What you really need to understand is that you’re running a marathon. This isn’t a sprint. It isn’t about getting to the product point and then, boom, you’re done. It isn’t about just getting it launched.

This is a long road. This is a five-year game plan, so you better have the stamina for that.

Q. What else is different at a start-up?

A. It’s a roller-coaster ride. There are going to be moments when we will euphorically say, “Wow, we hit that. We just raised that latest round of financing with an incredible valuation from an amazing name.” But then you realize: “O.K., so now what are you going to do?” You put the money in the bank and you got this plan that you said you were trying to achieve. So pressure is on. And then you have things happening that are completely beyond your control, and it’s gut-wrenching.

Q. How do you deal with that sort of bad surprise?

A. You have to be a little detached. As much as I speak about being passionate and motivated and engaged, there’s a balancing act of getting people tied into a vision, but also to understand that you just can’t push the pedal to the metal all the time — that this is a long haul.

As much as we have great moments when we all celebrate, you have to say, “Hey guys, remember this now,” because there will come a point when we hit the buffers or something will happen or maybe we will screw up. But when that happens we will pick ourselves up and keep going. We’re never as bad as people may say, but we’re never as good as people may say, either. So you have to take the rough with the smooth. You have to understand that all you need to be is about 80 percent as good as you would love to be and you will be fine.

Q. When you started Hailo, what corporate culture were you trying to build?

A. All the founders have agreed that whatever our titles happen to be, we would run this as a partnership. The challenge of the project that we’re taking on, which has to do with new mobile technologies, is that they go very quickly from designing and building a product to actually running and operating a global business. So how on earth do you do that? Where in the rule book of past experiences can you find a company that has done that really successfully?

And I’m not talking about a Facebook, because a lot of these social networking sites are really offered from one place. The answer for us is, it’s all about bandwidth. If you had a very hierarchical culture you could never do that. You would become victim of the qualities — strengths and weaknesses — of whoever the guy at the top is.

Q. When you interview job candidates, how do you find out whether a person fits with the Hailo culture?

A. It’s a seven-day-a-week job. People should be aware of the time and the energy this takes. We want people to get very excited about that and to be proud of what we are producing and what we’re trying to achieve. We want people who can actually see greater value in the product than simply to get someone a taxi.

Q. Can you give an example?

A. The way we are internally talking about it is that we are part of the transport infrastructure. By creating greater efficiency of the infrastructure, you can change the quality of life in a city. So you’re trying to find a person who relates to that. Listening to what I just said, do you think, “Oh, what nonsense,” or do you actually relate to it?

Q. What specific questions do you ask in interviews?

A. What I often let people do is let them sell me their C.V. I say, “You wrote this thing, so now sell it to me!” And I ask them whether they have used Hailo. You’d be surprised by how few people downloaded the application, let alone used it. They just say, “Oh, I heard about it, it’s really good.”

Q. You started your career in finance, and after getting an M.B.A. from Harvard you joined Salomon Brothers. Were there any leadership lessons that help you in your role now?

A. Salomon Brothers hired me but, speaking of poorly managed organizations, that was definitely one. I was 30 years old at the time and I had built a good relationship with the chief financial officer of Royal Bank of Scotland. They had a big financing, a debt financing, and we went in there to do a pitch. I had the chairman of Salomon International with me to help and he sat there and he had done no homework on it. He didn’t know who this guy was, he didn’t even know what the deal was — and this was traditional stuff.

In the end it was just cringingly bad — so much so that the chief financial officer pulled me aside and said, “Look, Ron, he did you no favors. He killed you.” But I said, “How could I not bring him?” and he said, “I understand.” And we lost the business.

Q. What about positive experiences?

A. I was 35 years old when I got the chance to run my own buyout. It was Maiden, the large independent outdoor advertising firm. It was a beaten-up family business and the son didn’t want to take it over from the father.

Q. What happened then? What ideas did you have when you took over?

A. The first thing was to engage the staff. They had been kept in the dark. It was a very hierarchical, traditionally run English company. The name on the billboards was the name of the company and the name of the boss, and everyone called him Mr. Maiden. The first thing I did was I walked in and said, “My name is Ron.” Then I went around to all their offices and sat everyone down and listened to their experiences.

You learn all sorts of things, like that they were so starved of cash they wouldn’t even let them have a copy machine in one of the offices. So I told them to get one. It was a small gesture that made their lives a lot simpler, but also a sign that they said something and it got responded to.

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Bits Blog: A Boost for an App That Replaces Digital Picture Frames

A couple years ago, I gave my mother a digital picture frame so she could look at a rotating series of family photos. The picture frame eventually ended up unplugged and tucked away in a corner because it was so hard for her to update with fresh photos.

Last fall, the company Familiar began rolling out a series of apps for computers and devices like the iPad, iPhone and Kindle that turns the screen of every one of those machines into a digital picture frame. The product is a lot easier to use than the cheap digital frames like the one I bought my mother, that can only be updated with fresh photos by cabling them to a computer. And the Familiar app is a lot cheaper (it’s free) than buying one of the more expensive Internet-connected digital picture frames.

The app has started to catch on. On Tuesday, Familiar announced that it displayed over 20 million photos for its users during August, up from one million in January. The company has raised $1.3 million to expand its service from Greylock Partners, Redpoint Ventures, Index Ventures, Acequia Capital and Allen Company.

The Familiar app acts essentially like a screensaver for your devices, but instead of swirling fractals, the app displays photos that have been pushed to your screen by family members and friends. There are, of course, a countless number of ways to share pictures with your family, ranging from photo-sharing sites to e-mail.

Marcus Womack, the chief executive and co-founder of Familiar, says his company’s approach is a better way to surprise people you know with images without them having to take any action, other than running the app. “We provide a lot more serendipity,” he said.

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Google’s Strong Results Less Than Expected

A year after Google announced that its co-founder, Larry Page, would take over as chief executive, the search giant posted record-breaking quarterly revenue of $10.58 billion, its highest ever for a single quarter. But Wall Street had expected Google to do better, and shares dropped 9 percent in after-hours trading.

Though its core search business is stronger than ever, analysts said 2012 could be a bumpy year for Google as it navigates antitrust investigations, intellectual property litigation over Android, competition from Facebook and the acquisition of Motorola Mobility, the struggling handset maker.

“Google seems to be outperforming online advertising as a whole, which is pretty amazing,” said Jordan Rohan, an analyst at Stifel Nicolaus. “The retailers went nuts on paid search, consumers seemed to exhibit frugality fatigue, and the Internet was one obvious area for them to show that newfound gusto.”

Still, he said, “Google has big-company problems now, or more specifically, huge-company problems.”

Google, based in Mountain View, Calif., reported that net income in the fourth quarter rose 6.4 percent, to $2.71 billion, or $8.22 a share, from $2.54 billion, or $7.81 a share, in the period a year earlier. Excluding the cost of stock options and the related tax benefits, Google’s fourth-quarter profit was $9.50 a share, up from $8.75 a year ago. Analysts had expected $10.49 a share.

The company said revenue climbed 25 percent, to $10.58 billion, from $8.44 billion a year ago. Net revenue, which excludes commissions paid to advertising partners, was $8.13 billion, up from $6.37 billion. Analysts had expected net revenue of $8.4 billion.

Shares of Google rose 1 percent in regular trading, to $639.57, but fell 9 percent shortly after the results were announced.

“Google had a really strong quarter ending a great year,” Larry Page, Google’s chief executive, said in a statement. “I am superexcited about the growth of Android, Gmail and Google Plus, which now has 90 million users globally — well over double what I announced just three months ago.”

Mobile searches also increased and advertisers followed, though they pay a 20 to 50 percent discount for ads on cellphones, according to Goldman Sachs. Google does not break out revenue by source, but Goldman predicted that mobile ads accounted for 9 percent of Google’s revenue last year and could reach 13 percent this year.

Despite Google’s announcement Thursday that its social network, Google Plus, has 90 million users, advertisers are still throwing their money at Facebook instead, in large part because they are not convinced that Google Plus will become popular enough to compete with Facebook and Twitter, analysts said.

“The engagement levels on Google Plus are pathetic compared to the larger platforms on social media,” Mr. Rohan said. “The company will argue with different statistics, but most would discount what they say as an overly optimistic view.”

Motorola Mobility on Jan. 6 announced disappointing fourth-quarter earnings, telling Wall Street that device sales were down and that its financial results missed analysts’ expectations.

Though the acquisition has not yet been approved by regulators, analysts say absorbing the handset maker would be a punch in the gut to Google’s business. “Motorola really is going to be a tough one to swallow,” said Colin Gillis, an analyst at BGC Partners. “It’s going to wreck their income statement.”

Analysts also kept a close eye on Google’s operating expenses, which climbed 35 percent, to $3.38 billion in the fourth quarter, in part because of Google’s aggressive hiring and increased spending on advertising.

“If you ask me to sum up Larry Page’s tenure as C.E.O., it’s one thing: downward margins,” Mr. Gillis said. 

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Home Prices Up in Half of Major U.S. Cities, Survey Shows

The Standard Poor’s/Case-Shiller index showed Tuesday that prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed monthly gains.

The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.

The August data provides a “modest glimmer of hope” that some areas may have bottomed out and could be turning around, said David M. Blitzer, chairman of SP’s index committee.

He noted that cities in the Midwest — Chicago, Detroit and Minneapolis — have shown some strength since May.

In Detroit, the recovering auto industry has helped lead a small rebound in the housing market. Home prices have risen 2.7 percent since August 2010, making it one of only two cities to show a year-over-year gain in that time. The other was Washington.

Detroit was one of the hardest hit after the housing bubble burst more than four years ago. Home prices there are coming off 1995 levels. So the gains are relatively small compared to how far prices have fallen.

In Minneapolis and Chicago, fewer homes are being put up for sale, leading to higher prices and better sales figures. That’s likely due to fewer foreclosures in those cities. September’s drop in homes for sale in the Twin Cities was the largest decline in inventory in more than seven years, according to the Minneapolis Area Association of Realtors.

Still, Robert Shiller, the co-founder of the index and a Yale economics professor, said in an interview on CNBC that overall home prices were “flat” and a recovery in the struggling housing market was not on the horizon.

The index, which covers half of all U.S. homes, measures prices compared with those in January 2000 and creates a three-month moving average. The August data are the latest available.

Prices are certain to fall again once banks resume millions of foreclosures. They have been delayed because of a yearlong government investigation into mortgage lending practices.

“We certainly believe the bulk of the decline in housing is behind us and indeed, one might even say that ‘housing’ is more likely to improve from here,” said Dan Greenhaus, chief global strategist for BTIG. “But given the overwhelming level of inventory that remains on the market … further price declines seem almost assured to help clear the market.”

Home prices have stabilized in coastal cities over the past six months, helped by a rush of spring buyers and investors. But this year, home prices in many cities, including Cleveland, Detroit, Las Vegas, Phoenix and Tampa, have reached their lowest points since the housing bust more than four years ago.

Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven’t been enough to lift sales.

Some can’t qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.

Sales of previously occupied home sales are on pace to match last year’s dismal figures — the worst in 13 years. Sales of new homes fell to a six-month low in August and this year could be the worst since the government began keeping records a half century ago.

Foreclosures and short sales — when a lender accepts less for a home than what is owed on a mortgage — makes up about 30 percent of all home sales last month, up from about 10 percent in past years. The large number of unsold homes and foreclosures are sending prices lower and hurting sales.

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DealBook: Miller Buckfire Is Naming Harvey Golub Its Chairman

Harvey Golub in 2007.Chip East/Bloomberg NewsHarvey Golub in 2007.

One of stalwarts of the restructuring world, the boutique investment bank Miller Buckfire, plans to name Harvey Golub its chairman on Tuesday, bringing in a financial services veteran to help oversee a revamping of its operations.

The appointment of Mr. Golub, the former chief executive of American Express and a former chairman of the American International Group, comes amid major changes for the nine-year-old firm. Earlier this year, Miller Buckfire struck a partnership with Stifel Financial in a bid to gain access to the bigger firm’s financing capabilities, which could help it win new business. (Stifel has also indicated that it is interested in eventually buying Miller Buckfire outright.)

But the alliance also coincided with the retirement of Miller Buckfire’s co-founder, Henry Miller, and the departure of several senior bankers.

By naming Mr. Golub, a member of the firm’s advisory board since 2004, Miller Buckfire is hoping to install a mentor to junior bankers and bring in an experienced hand to advise on client matters. It isn’t clear yet how much time that will involve, however.

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“I had developed a great affection for both Henry and Ken and a respect for the work they do,” Mr. Golub said in an interview, referring to the firm’s co-founder and chief executive, Kenneth Buckfire. “I thought it would be interesting to work with people I admire and like.”

His appointment also coincides with an expected rise in assignments for firms like Miller Buckfire, as well as rivals like Lazard, the Blackstone Group and Moelis Company. As the credit markets again begin to tighten for riskier borrowers, companies suffering from operational issues or a slowing economy will likely again need financial advice.

“I think this cycle will be characterized by an overall rise in stress, but will not result in a giant peak in defaults unless the markets close again,” Mr. Buckfire said in an interview.

Mr. Golub added that such corporate reorganizations may not involve a trip to bankruptcy court, but will still likely involve fixing a company’s capital structure.

Many executives involved in restructurings have questioned about the firm’s fate, especially after the departures of top bankers like Mr. Miller; Durc A. Savini, who went to the Peter J. Solomon Company; and Marc Puntus and Sam Greene, who joined Centerview Partners.

But Mr. Buckfire maintained that the firm had had little trouble hiring new partners.

“What you’ve seen in the cases of the people who’d left, they’d been with us their entire careers,” he said. “When you make a strategic shift, professionals can become uncomfortable.”

Beyond the appointment of Mr. Golub as chairman, Miller Buckfire is also naming William E. Mayer, a former chief executive of First Boston, to its advisory board.

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