March 25, 2023

Wall Streets Ends With Little Change

The Standard Poor’s 500-stock index managed a small gain, enough for the index to set another record high. It edged up 2.72 points, or 0.2 percent, to 1,692.09. It rose 0.7 percent for the week.

The Dow Jones industrial average slipped 4.80 points on Friday, or 0.03 percent, to 15,543.74, held back by losses in Microsoft, Google and I.B.M.

The technology-heavy Nasdaq composite fell 23.67 points, or 0.7 percent, to 3,587.61. It was the only major index to lose ground for the week.

Microsoft plunged 11 percent after writing off $900 million on its tablet computer.

Slightly more stocks rose than fell on the New York Stock Exchange.

Stocks around the world have had a solid week, especially after the Federal Reserve chairman, Ben S. Bernanke, indicated that the central bank’s monetary stimulus may remain in place for longer than many in the markets had been predicting.

As a result, investors were looking for a reason to book some profits ahead of the weekend and disappointing earnings figures from Google and Microsoft gave them that opportunity, despite a solid report from General Electric.

Microsoft booked a large write-off to its Surface RT business after it slashed prices on the tablets to stimulate demand this week. Its quarterly earnings results also showed that Windows 8, an operating system designed to bridge the divide between PCs and tablets, has been so poorly received that it contributed to a revenue drop in the operating system software unit. Microsoft shares were down 11.4 percent.

Google’s quarterly report showed its average ad rate fell from the previous year for the seventh consecutive quarter. In an unexpected turn, the decline deepened for the first time in a year. Shares were down 1.5 percent.

“Results from technology companies have generally been poor with eBay and Intel also missing expectations,” said Fawad Razaqzada, technical analyst at GFT Markets. “Over all, however, most of the S.P. 500 companies who have reported their results have beaten earnings expectations; though, one has to be wary of jumping to conclusions because it is merely early days still.”

In Europe, the FTSE 100 index of British shares closed Friday barely changed on the day, off 0.04 percent at 6,630 points, while Germany’s DAX fell 0.07 percent to 8,331. The CAC 40 in France was down 0.06 percent at 3,925 points.

Stock markets, particularly in the United States, have had a bumper month following a bout of jitters prompted by uncertainty over when the Fed will start reducing its monetary stimulus.

The Fed has been buying $85 billion of financial assets a month in the hope of reducing long-term borrowing rates and shore up the U.S. economy. Bernanke has said that the so-called tapering will begin when a number of economic indicators point to a clear recovery path. The prospect that it may remain for longer has been greeted positively by investors who have grown used to the stimulus money floating around markets.

“Despite the weakness in stocks this morning, global equities are still on track to post a fourth week of gains, helping to underpin the generally bullish feeling in the market of late,” said David White, a trader at Spreadex.

Earlier in Asia, markets closed mostly lower following the tech reports in the United States and amid worries over the Chinese and Japanese economies, the world’s number 2 and 3.

Japan’s Nikkei 225 shed 1.5 percent to 14,589.91 while Hong Kong’s Hang Seng added just 0.1 percent to 21,362.42. Seoul’s Kospi wavered between gains and losses, finishing 0.2 percent down at 1,871.41. China’s Shanghai Composite index fell 1.5 percent to 1,992.65.

In currency markets, trading was steady with the euro up 0.26 percent at $1.3139 while the dollar was down 0.2 percent at 100.32 yen.

In the oil markets, the price of benchmark New York crude was 56 cents higher at $108.36 a barrel.

This article has been revised to reflect the following correction:

Correction: July 19, 2013

Because of an editing error, a headline on an earlier version of this article misstated the outcome of Friday’s Wall Street trading. The Standard Poor’s 500-stock index, a broad measure of the market, ended with a slight gain; it is not the case that markets closed lower.

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DealBook: China’s Changing Internet Landscape

WELL WIRED The number of Internet users in China is expected to pass 600 million in 2013.Agence France-Presse — Getty ImagesThe number of Internet users in China is expected to pass 600 million in 2013.

China was on vacation much of last week for the May 1 Worker’s Day holiday, but executives at two of China’s most important online companies were busy completing a deal that could reshape the country’s Internet.

Alibaba, China’s largest e-commerce and online payments firm, announced that it had bought an 18 percent stake in Sina’s Weibo subsidiary for $586 million in a deal expected to jump-start Sina’s revenue through social commerce. Weibo, a microblogging service somewhat akin to Twitter, is one of China’s biggest social networks. Think Amazon or eBay investing in Twitter.

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China’s top three Internet companies, known as the BATs, are Baidu, Alibaba and Tencent. Baidu, listed on the Nasdaq market, has a market capitalization of just under $30 billion. Alibaba is private but an eventual initial public offering, likely in either the United States or Hong Kong, could make the company one of the most valuable Internet firms in the world. Tencent is listed in Hong Kong and is worth nearly $65 billion, or almost as much as Facebook.

Mobile Internet usage is growing rapidly in China, in large part because of the proliferation of Google’s Android and cheap smartphones made in China. Sunday’s CCTV Evening News dedicated the first three minutes of the broadcast to a report about surging smartphone use and the benefits to China’s economy from the increasing consumption that the mobile Internet is expected to drive.

Weibo’s several hundred million users now access the service more from mobile devices than from PCs. The deal with Sina is part of Alibaba’s strategy, along with other initiatives like developing a new mobile operating system, Alibaba Mobile OS, to become the leading mobile firm in China. According to a report in Monday’s issue of Caixin, one of China’s top business magazines, Baidu was also negotiating with Sina for a Weibo deal. A Baidu representative declined to comment on that claim.

Tencent has its own Weibo service (weibo is the Chinese word for microblogging) as well as WeChat, a mobile messaging and social networking service that has several hundred million registered users. In December, this column cited WeChat as one of the eight trends to keep an eye on in 2013.

All this activity and wealth creation is happening inside of what the Economist magazine, in an excellent recent report on China’s Internet, termed a “giant cage.” But there are recent signs that the government is concerned the cage may need strengthening.

The previous column noted that the government appears to be reining in the more salacious online exposes of corruption that occurred over the last few months in favor of channeling them into official outlets.

On May 2, China’s State Internet Information Office declared war against online rumors because they “have impaired the credibility of online media, disrupted normal communication order, and aroused great aversion among the public.” One report suggests the regulators have some of the most influential users of Sina Weibo, those with millions or tens of millions of followers, in their sights. Online rumors have been a real problem, but crackdowns against them can be used for broader goals.

Last week’s announcement follows a new rule to tighten media controls, especially in regards to Weibo, issued in April, and an essay titled “How Is the Party to Manage the Media Well in the New Era?” by a propaganda official who in 2010 wrote the influential book “The Art of Guiding Public Opinion.”

There have been campaigns against online rumors before. The most concerted efforts to reign in Weibo began after the sixth plenum of the 17th Party Congress in October 2011 when official media declared that “Internet rumors are like drugs” and propaganda work should focus on “strengthening the channeling and control of social media and real-time communication tools.” That campaign was followed by the December 2011 requirement for real name registration of Weibo users.

Strict implementation does not always follow rule promulgation in China, and the real name registration requirement was largely ignored. Sina admitted as much in its 2011 and 2012 20-F annual filings with the Securities and Exchange Commission. Here is what the company wrote in the recent 2012 filing:

We are required to, but have not, verified the identities of all of our users who post on Weibo, and our noncompliance exposes us to potentially severe penalty by the Chinese government.

The regulators may not always succeed the first time, but it would be a mistake to assume they will not keep pushing the issue, especially when propaganda work and ideology are so core to the party’s control. At the end of March, the State Council released its task list for the next five years, and one of the items is an Internet real name registration system by June 30, 2014.

The Alibaba deal is about strengthening mobile positioning and spurring social commerce. The government would probably be pleased to see Weibo shift from being a hotbed of social and political commentary and critiques to more of an online shopping arcade that, through integrated online payment functionality, has the voluntary real name registrations of many users.

Just as China’s leadership is clear it will pursue economic reform without structural political reform, so it also appears intent on building a commercially vibrant yet managed Internet, an “Internet with Chinese characteristics.” Given the scale of business activity and wealth creation on the Chinese Internet, the cage looks quite gilded and may prove far more robust than many expect.

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Ticketmaster Accuses 21 of Scalping in Federal Lawsuit

In the lawsuit, filed on Tuesday at United States District Court in Los Angeles, Ticketmaster accuses Joseph Shalom, a producer of live entertainment events in New York, of being the central figure in a coordinated series of attempts over the last two years to obtain large numbers of tickets and resell them at a profit.

According to the suit, Mr. Shalom and his associates used “bots,” or specialized computer programs, to bypass online features like Captchas — series of distorted letters or numbers — that test whether a potential ticket buyer is a person. Ticketmaster, a division of Live Nation Entertainment, says Mr. Shalom and others linked to him used these systems to gain access to as many as 200,000 tickets a day before members of the public.

The suit says Mr. Shalom and the others violated Ticketmaster’s terms of use, which prohibit bots and limit the number of tickets a customer may request in a single day. It also accuses them of committing several offenses as part of the ticket-buying process, including copyright infringement and the fraudulent assumption of false identities.

Ticketmaster seeks unspecified damages in the suit and does not say how many tickets were bought by the 21 people. It also says the use of bots damages Ticketmaster’s reputation and harms the public.

As a result of the behavior outlined in the lawsuit, the company says, “the inventory of tickets available to consumers who do not use such devices is substantially diminished, which has led some consumers to question Ticketmaster’s ability to ensure a level playing field for the purchase of tickets.”

Bots have become a major source of consumer and industry complaints over the ticketing market. Consumers grow frustrated when concerts often sell out moments after tickets go on sale, and listings then appear for those tickets at inflated prices through online secondary markets like StubHub, owned by eBay, or TicketsNow, part of Live Nation.

The concert industry has also been frustrated at the difficulty of cracking down on the use of bots. Three years ago, federal authorities charged a group of men with using similar tactics to make $25 million in profit. But the men were sentenced to probation, which music executives say has not served as a deterrent. Concert promoters and others have often said that the use of bots has become increasingly common, particularly for the most popular shows.

In a statement, Ticketmaster said: “We care about protecting fans and the integrity of our business. We are doing exactly what we have repeatedly said we do: stand up for the fans who use our site in the proper manner.”

An e-mail to Mr. Shalom on Wednesday afternoon was not immediately returned.

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Is Skype a Telephone Operator? France to Investigate

The regulator, known by its French acronym Arcep, said that it had, “on several occasions,” asked Skype Communications, which is based in Luxembourg, “to declare itself an electronic communications operator,” and that the company had not acted.

A company acting as a telecommunications operator incurs certain obligations, the French agency said, notably that “of routing emergency calls and putting in place a means for allowing legal wiretapping.”

Skype and other Internet phone services use a system called voice-over-Internet protocol, or VoIP, to enable conversations and video meetings over the Internet. The service, which Microsoft acquired from eBay in 2011 for $8.5 billion, says it has hundreds of millions of users worldwide.

The French action comes at a tricky time for Microsoft, which has come under pressure from digital rights groups over how data about users collected from Skype are shared with advertisers and law enforcement agencies.

Arcep noted that people could make Skype calls from a computer or smartphone. “In effect,” the regulator said, “this service constitutes furnishing a telephone service to the public.”

French law does not require that a telecommunications operator obtain administrative authorization, Arcep said, but “only a prior declaration.” Failure to follow the law is a criminal offense, however, and Arcep said it was turning the matter over to Paris prosecutors.

Microsoft said that it had shared with the French authorities its view “that Skype is not a provider of electronic communications services under French law” and that it would “continue to work with Arcep in a constructive fashion.” Robin Koch, a Microsoft spokesman in Brussels, declined to comment further. The Paris prosecutor’s office did not immediately respond to a request for comment.

The regulator’s announcement was the latest in a series of actions aimed at global communications companies. On Jan. 20, a study commissioned by the government of President François Hollande proposed instituting an Internet tax on the collection of personal data. Also that month, a French court ordered Twitter to identify people who posted racist messages.

French media and telecommunications companies have also argued that they are unfairly subsidizing Internet services that use their content and bandwidth without sharing the revenue. French officials reacted sympathetically earlier this year when one Internet provider, Free, sought to put pressure on Google to pay for the bandwidth it uses by blocking ads.

Current European Union law does not consider Skype and similar Internet-based services to be telecommunications companies. The office of Neelie Kroes, the E.U. commissioner for digital issues, did not immediately respond to a request for comment.

Jean-François Hernandez, a spokesman for Arcep, said that the agency started demanding Skype’s compliance in April 2012, but that it had refused to cooperate.

Mr. Hernandez said that there were questions at the European level about the regulation of these companies, especially on data privacy and taxation, but that the agency’s dispute with Skype had nothing to do with that.

“It’s about the fact that when you act as a French operator you have to register as an operator,” he said.

Mr. Hernandez acknowledged that once a company was registered as a French operator, its French earnings would be subject to local taxes. “But you shouldn’t transform this into a tax story,” he said. “This agency has nothing to do with taxes.”

Stéphane Richard, the chief executive of France Télécom, the former state monopoly, has been critical of what he describes as an unfair advantage enjoyed by Skype and similar companies over the established companies that are required to transport rivals’ data without sharing in the revenue.

France Télécom said Tuesday: “We believe that this represents a positive first step toward a more balanced regulatory environment that encompasses the activity of over-the-top players.”

Kevin J. O’Brien contributed from Berlin.

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Jerry Yang, ‘Chief Yahoo,’ Steps Down From Board

In a statement, Roy Bostock, Yahoo’s chairman, said Mr. Yang would immediately give up his board seat at Yahoo and step down from the boards of the Alibaba Group and Yahoo Japan.

Mr. Yang did not give a reason for his departure, but it occurred as the company undergoes a strategic review under a new chief executive, Scott Thompson, on whether the company should sell off its Asian interests and focus on its media assets. Yahoo owns a 40 percent stake in Alibaba and a 35 percent stake in Yahoo Japan.

Mr. Yang’s departure comes less than two weeks after the board named Mr. Thompson, an eBay executive running its PayPal unit, as chief executive.

Mr. Yang, who co-founded the company in 1995, also had the official title of “chief Yahoo” and was the face of the company’s rise and its decline. He stood in the way of a 2008 takeover attempt by Microsoft that valued the company at $47.5 billion. Shareholder dismay with that decision — and Yahoo’s subsequent inability to find its way — has left the company with a market value of less than half that today.

“Yahoo is losing the last piece of what was viewed by many as a stumbling organization,” says Allen Weiner, a Gartner analyst.

Yahoo analysts and company insiders say that Mr. Yang’s departure has cleared the way for the sale of its assets abroad. The company has been in negotiations with Alibaba and Softbank — a potential acquirer of Yahoo’s share in Yahoo Japan — on a proposed sale of its stakes valued at approximately $17 billion. “Arguably Jerry Yang is the person best known and associated with Yahoo,” says Scott Kessler, an analyst at Standard and Poor’s. “It is fair to say that, whether in terms of reality or perception, he has detracted from the company’s ability to realize shareholder value.”

Mr. Yang played a heavy hand in discussions about Yahoo’s future, according to people close to the matter, who spoke on the condition of anonymity because the talks were private. At times, Mr. Yang’s opinions seemed to diverge from the board’s consensus, these people said, creating a tense — and occasionally confusing — backdrop for negotiations.

Mr. Yang, along with other board members, also faced mounting pressure from activist investors, like Daniel Loeb of Third Point, who has called for the dismissal of both Mr. Yang and Mr. Bostock. Two other people close to board, who requested anonymity in order to maintain business relationships, said that the board was discussing the addition of new directors and several current board members are expected to depart. Yahoo refused to comment.

Shares of Yahoo gained more than 3 percent in after-hours trading after the announcement Tuesday.

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Scott Thompson, PayPal Executive, to Become Chief of Yahoo

After a few months’ search, the struggling Internet media company announced on Wednesday that its new chief executive would be Scott Thompson, the president of PayPal, the online payment service owned by eBay.

The 54-year-old Mr. Thompson, analysts say, has a background mainly in technology rather than digital media or corporate turnarounds. While PayPal is a consumer service, analysts said that was very different from a media company.

Mr. Thompson joins a company that is losing momentum against the ascendant powers in the consumer Internet business — Google and Facebook. Its woes persist even though it has 700 million online visitors a month, one of the largest audiences on the Web; is a leader in online news, sports and finance; and will report net profit of more than $1 billion in 2011 on revenue of nearly $4.44 billion, estimates Jordan Rohan, an analyst at Stifel Nicolaus.

Still, Facebook surged past Yahoo last year in online display advertising in the United States for the first time, according to eMarketer, a research firm. Yahoo has farmed out its search advertising to Microsoft, in a cash payment and revenue-sharing deal.

The overall online ad market increased more than 20 percent to $31.3 billion last year, while Yahoo’s share of that thriving market slipped to 11 percent from 13.3 percent in 2010, eMarketer estimates.

Yahoo’s slippage prompted the ouster last September of Carol Bartz, a respected technology executive recruited to be Yahoo’s chief executive in 2009. But Ms. Bartz proved unable to rejuvenate the company.

Now it is Mr. Thompson’s turn.

“Yahoo seems like the ideal fixer-upper from afar,” Mr. Rohan said. “But Internet assets are hard to fix.”

In a conference call on Wednesday morning, Roy J. Bostock, the chairman of Yahoo’s board, said Mr. Thompson had proved at PayPal that he could take a company with solid assets and build a business. That is the central challenge at Yahoo, Mr. Bostock said, noting its collection of online media offerings and large audience. The problem, he said, was that Yahoo had been floundering — “treading water,” as he put it. “You can call it a turnaround, if you want to,” Mr. Bostock said.

Analysts say Mr. Thompson must first decide how to focus Yahoo’s strategy.

In recent years, the company has spread itself too thin by making sizable investments in technology and also in creating original media content, said Shar VanBoskirk, an analyst at Forrester Research. That, she noted, is in contrast to Google, which aggregates content from around the Web and concentrates its investment in technology, but does not spend money to create media content itself.

Mr. Thompson, analysts say, will probably push to harvest more advertising dollars from all the consumer data it collects from people using its popular e-mail service and visiting its sites, which cover a range of topics including finance, sports and gossip.

“It’s not about putting up pretty content, but about maximizing the value of the eyeballs in front of that content,” said Charlene Li, founder of the Altimeter Group, a technology research firm. “There’s a real opportunity for him at Yahoo, if they can take all this data and use it for advertisers.”

At PayPal, Mr. Thompson demonstrated an ability to take an existing business, redefine it and achieve strong growth. Since he took over PayPal in 2008, and before that when he was chief technology officer, Mr. Thompson helped guide the company’s transition from being a payment method for eBay shoppers alone to an online payment system for all kinds of transactions. Under Mr. Thompson, PayPal expanded its number of users to more than 104 million, from 50 million, and increased its revenue to more than $4 billion, from $1.8 billion.

“That, to me, is a track record of building,” Mr. Bostock said.

In the conference call and an interview later, Mr. Thompson said that it was too soon to discuss any strategic shifts he might make. But he said Yahoo had to innovate and improve its offerings for both consumers and advertisers. “That balancing is what we need at Yahoo,” Mr. Thompson said. “That is how big businesses with network effects are built on the Internet.”

Yet when a company’s momentum wanes, the same snowballing effect can make recovery unusually difficult. Mr. Thompson acknowledged that challenge, but said the trend was reversible at Yahoo, without describing the path to recovery.

“The core business assets are stronger than people believe at this point,” he said. “We can turn the network effects in our favor as opposed to against us.”

Mr. Thompson began meeting with Yahoo board members in November, he said. And the more he looked at the company, whose Silicon Valley offices in Sunnyvale, Calif., are a few miles from PayPal, based in San Jose, Mr. Thompson said, the more he became convinced that Yahoo’s problems were fixable and that he could do it, despite his lack of experience with online media and advertising.

“There is really a lot here, a lot of upside,” he said. “And it’s clear what I need to learn at an accelerated pace.”

The appointment of a new chief executive, Mr. Bostock said, will not slow down Yahoo’s current negotiations to sell off most of its stakes in China’s Alibaba Group and Yahoo Japan to its Asian partners. If a deal is reached, it would involve a complicated asset swap and cash payments from Alibaba and Softbank — and bring Yahoo as much as $10 billion in cash to invest to reinvigorate its main business in the United States, people briefed on the talks said.

But a new chief executive, analysts say, does make it less likely that Yahoo will be sold to private equity investors. When asked during the conference call about that, Mr. Bostock said, “I do not envision us not being a public company going forward.”

Since Ms. Bartz left, Yahoo has been run by Tim Morse. He will now return to his former post as chief financial officer.

Yahoo shares on Wednesday fell 3 percent, to close at $15.78.

Michael J. de la Merced contributed reporting.

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You’re the Boss: Would you consider SecondMarket to Finance Your Business?

Today’s Question

What small-business owners think.

In his column today, Andrew Ross Sorkin writes about how SecondMarket is serving as something of an eBay for shares of private companies.

Mr Sorkin explains what Barry Silbert, chief executive, had in mind when he started SecondMarket:

Mr. Silbert, who looks even younger than his 35 years, set out in 2004 to create a market for secondary shares, allowing private companies that are often too small to go public to have their employees and investors sell their shares on an exchange.

His exchange allows for certain rules that the public market does not: a company selling shares on SecondMarket can choose which investors are allowed to buy — weeding out fast-buck artists — and how frequently they can trade those shares. If a company wants to allow investors to trade their shares only twice a year on specific dates, that’s fine.

The benefits are obvious: employees and investors can cash out some of their stakes without having to go through the formal and rigorous process of an initial public offering. That, in turn, can allow traditionally cash-poor pre-I.P.O. employees, for example, to afford to stay at an emerging company that might not be ready to pursue an I.P.O. until it matures some more.

Would you consider using SecondMarket to finance your company?

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Growing Pains for Burning Man Festival

Their organizer is a for-profit company that has collected millions in revenue over the last decade, largely because of this donated labor. At a distance, it’s easy to wonder: why are these people working so hard — in the blazing heat, no less — for a company they don’t own?

That’s one of the paradoxes of Burning Man, the annual arts festival whose attractions include colossal art installations, all-night dance parties, marathon kite-flying sessions, off-kilter fashion shows, and classes where revelers can learn things that range from Hula Hooping to playing the ukulele to making absinthe.

The short answer is simple: the company behind Burning Man doesn’t act like a traditional business. Although it derives its revenue from ticket sales, festivalgoers don’t see themselves as customers. Rather, they are Burners, part of a cultural movement governed by 10 principles that include communal effort, self-reliance, gift-giving and fostering a social environment that is “unmediated by commercial sponsorships, transactions or advertising.”

Tickets for this year’s festival, from Monday to Sept. 5, have sold out in advance for the first time. In a situation that doesn’t seem to mesh with the principles, some participants have been left at the mercy of scalpers. While many community-minded Burners are selling their spare tickets to one another at face value or even giving them away, eBay vendors have hawked them for more than $800. One prankster asked for a cool $20 million.

How much money has the festival made over the years? Its organizers don’t disclose revenue figures on a year-by-year basis. Burners know little about the finances behind the event they work so hard to create, and that bothers some of them.

The company has made expenditures of $102 million over the last 10 years, according a list posted annually on the festival’s Web site. These annual reports do not include any money retained or invested by the event from year to year, and Burning Man does not take out any loans, according to its organizers. Last year, the company spent $17.5 million.

It’s clear that most of the money collected by the company goes back into financing the festival: paying for land-use fees, fuel, artists’ grants, medical services, infrastructure, insurance, wages for a full-time staff of 37, along with eight part-time employees and several hundred seasonal workers. Whether cash is left over each year, and how much, has always been a matter of speculation.

That speculation has intensified as Burning Man prepares to become a nonprofit, a transition that includes an unspecified payout to the company’s partners.

Burning Man’s origins are decidedly noncommercial. In 1986, a handful of passers-by gathered to watch a landscape gardener named Larry Harvey burn an 8-foot stick figure on San Francisco’s Baker Beach. The event became a summer ritual. In 1990 it outgrew the beach; the following year it moved to the desert. After a freewheeling and anarchic period in the mid-’90s, Burning Man changed direction: It started selling tickets, giving rise to a small company to manage it all. Mr. Harvey, 63, is now the executive director of that company, Black Rock City L.L.C.

The annual festival now takes place in Black Rock City, the temporary encampment of more than 50,000 people, built by and for its citizens in the Black Rock Desert, about 120 miles north of Reno. Tickets this year — the ones that weren’t scalped, anyway — sold for $210 to $360, with the least expensive ones available to the earliest buyers. Unlike most commercial festivals, there’s no hired entertainment here. Rather, Burners partake in the cultural equivalent of a potluck supper: everyone is expected to create the meal.

(Disclosure: In addition to writing a book on Burning Man, I have helped a group called the Flaming Lotus Girls install their art pieces at the festival on several occasions.)

Many Burners pour thousands of dollars into elaborate artworks they have been building all year. Strolling through the dusty metropolis, you might encounter a 124-foot-long fire-belching dragon on wheels, a field of robotic, solar-powered sunflowers, or an elaborately filigreed wooden temple.

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You’re the Boss Blog: This Week in Small Business: Downgrades, Upgrades and Doing Business in Britain


A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

Around The World: Is It Safe to Do Business in Britain?

Well, my family and I just returned from our vacation in England, and here’s what we saw.

The Downgrade: Reviewing the Reviewers

Standard Poor’s downgrades our debt. The S.P. chief says to cut entitlements. Jared Bernstein agrees with him. Michael Moore says to arrest him. Ezra Klein thinks S.P. got it right: “Those of us in Washington who would like to see the government work have long wondered when the business community and other entities who need a functioning political system would begin exerting a countervailing force.” Economics of Contempt thinks S.P. got it wrong: “They are, to put it very bluntly, idiots, and they deserve every bit of opprobrium coming their way.” A blogger says “let’s take a moment to remember that this shift to AA+ from AAA represents a healthy step (however slight) in the direction of reality and away from the fantasy created by the scores of dimwits that have held seat in Washington, D.C., over the past many decades.” S.P. also cuts the ratings on 11,000 municipal bond issues. Anita Campbell explains the impact of the downgrade on small businesses. China puts the United States on eBay. Jeff Miller gives the new deficit super-committee two-to-one odds of success.

The Downgrade 2: How About an Upgrade?

Speaking of downgrades, the Points Guy explains how to upgrade to first class without paying for it.

The Data: Even the Sun’s Issuing Warnings

Stocks went on a frenzied ride last week (if we’re in a bear market, let’s hope it’s this kind of bear). The Fed promises low interest rates and buoys the dollar. Gold soars. The Pulse of Commerce Index remains idle in July. Small-business optimism dips again. Quarterly non-farm productivity falls (pdf). The trade deficit expands. Forecasters predict severe solar storms. Job openings are unchanged. But ADP bets on small businesses to beat the dismal job reports, and unemployment applications hit a four-month low. The education bubble shows signs of bursting. But hold on, Dan Rather’s still betting on the U.S.A. And Larry Kudlow says it’s no time for panic: “It seems to me that the economy can hold up. It’s not the kind of rapid growth I’d like to see. But it’s not the deep and dark recession that seems to be embodied in the stock market plunge.” Hale Stewart sees signs of a rebound. San Antonio businesses are showing higher optimism.

Red Tape Update: Fed Trucking Rules Could Be an Opportunity

The Veterans Administration is cracking down after an internal audit showed it had awarded millions of dollars’ worth of contracts to companies that weren’t actually owned by veterans or were otherwise ineligible. Some feel that new restaurant menu rules are a major headache for small businesses. New federal trucking regulations could increase opportunities for independent truck drivers and the Obama administration says the new standards will save $50 billion. A brave man defends tax breaks for private jets: “A host of measurements show companies using business aviation outperform those without aircraft across every key financial and non-financial measure of success.” Hidden taxes on travelers add up. Barry Fisler, office comedian, introduces you to his work.

Women: Talking the Talk

A female entrepreneur explains why it’s important to hire women for your start-up. One reason: “Women are more detail-oriented and comprehensive. In 2006, Louann Brizendine’s controversial book, “The Female Brain,” claimed that women speak three times the number of words that men do. At a start-up, this is an asset.” A 12-year-old girl lets the music do the talking. Jessica Bennett explains why it’s tougher for women than men: “Sure, we outpace the guys around us in high school, college, and post-graduate degrees. But there’s a crucial shift that we’re leaving out when we talk about the ‘new gender gap’ — that when women reach a certain age, most of these trends reverse themselves.” John Stamos teaches guys how to cuddle.

Success Strategies: Are You Weird and Explosive?

Terry Starbucker offers 10 sticky-note reminders for the busy leader, such as “measure what you manage, and keep raising the bar.” Robert Cringely is upset by people’s online behavior and proposes an Internet civility plan. A guy works out of a 78-square-foot office in Manhattan. Recent studies show that overconfidence is a significant factor in increasing productivity. James Altucheron offers six surefire ways to dominate. An Intuit blogger lists five small-business contests worth entering. If your company is weird and explosive you could be eligible for $500,000. Small-business owners are turning to pawn shops. NASA picks a few small companies to build spaceships.

Retail: Consumers Are Getting Smarter

Retail sales rose the most in four months. First Data’s latest Spend Trend report shows consumers spent less on credit cards in July, started shopping more at value retailers, and purchased fewer discretionary items. A blogger says, “New research shows that consumers are finally making progress in improving their overall financial condition. To put it simply they are getting smarter about money.” PC World reports that instant coupons are changing the way small businesses offer discounts. A daily deal start-up raises $35 million. Groupon’s founders get behind a start-up that negotiates group prices. A new study reveals the nation’s top 10 consumer complaints and another says that American shoppers will spend more on good service. American consumers spend less than 2 percent on goods made in China. A new lid enhances the flavor of coffee.

Around the World Two: How to Riot-Proof Your Business

While British businesses tally the cost of last week’s damage, certain business owners find themselves riot-proof. HP and Intel partner to introduce the “Make IT Happen” campaign for Indian small and mid-sized businesses. The Clinton-Bush Haiti Fund announces a $2 million grant to cultivate small and growing businesses.

Start-up: The Start-up Generation Is Ready!

Anika Anand says the start-up generation is ready to fix the economy. The world’s largest start-up is now in the … Philippines? Neil Barron explains how to develop products that people like: “Observe potential customers as they go about their daily work activities. Keep an eye out for their challenges and difficulties. What is not working well for them could be a great opportunity for you.” G.E. sinks $40 million into solar. A venture capitalist points us to free places to get start-up money from the government. CRN reports that some cloud start-ups are getting big funding infusions. An entrepreneur asks for help in deciding between Harvard and starting a company.

Technology: EC2 Goes Down Again

CRN lists 10 mobile apps you’d want if you were stranded on a desert island. Amazon’s EC2 goes down again. Small Business Computing lists the top six Wi-Fi Android apps for small business. The London rioters prove that Blackberry is still relevant. Forty-five thousand Verizon workers go on strike. Visa announces plans to accelerate the migration to EMV contact and contact-less chip technology. David Valdez offers an update on I.T. legislation being considered in Washington.

The Week Ahead:

Treasury International Capital releases post-downgrade long-term purchase numbers, which show domestic and international demand for United Sates Treasuries, on Monday at 9 a.m. Other numbers coming out this week include producer and consumer prices, leading indicators and housing starts.

This Week’s Bests

Way to Sleep Better With Technology Lifehacker’s Adam Dachis explains how technology helps him sleep better: “There are a few sleep-tracking tools that actually provide you with a pretty good picture of what’s happening while you’re unconscious. While these tools may not be as detailed as a sleep clinic, they can give you a good overview of how restful the night was and you can use this information to figure out what causes sleep problems for you and how you can have a more restful night.”

New Way to Find Happiness Henri Juntilla offers seven steps to improve your happiness, for example: “Embrace Death. What is it that you really want to do with your life? What are some of the excuses, fears, and obstacles that are stopping you from doing that? And how do you think you can overcome those and start moving toward what it is that your heart truly wants? If you answer the above questions seriously, you may just find yourself strangely motivated to start taking action. There’s nothing like following your heart when it comes to feeling happy and joyful.”

See the Silver Lining Pamela Slim says there are upsides to economic constraints: “The global economy just delivered us a handy set of economic constraints. There is less time to dilly-dally on the road to building a business. You need to take action today. There are fewer fat pockets of easy money. You need to identify and dig deeply into the profitable veins of the market. There is less tolerance for poor performance or mediocre employees. You must step up your game or be moved out.”

Question: Do you agree that economic constraints can help you focus on what’s important in your business?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

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This Life: Our Plugged-in Summer

But one thing was missing. So when my time came to occupy the “story rock,” I stood in front of a circle of 13 people and pulled out my secret ingredient: my wife’s iPad.

I didn’t set out to spend my summer vacation online. A few things conspired to give me the idea. The first was the insistent finger wagging one now encounters that the only way to spend quality time with one’s children is to disengage from technology.

Get off the grid! Take a screen vacation! As one well-meaning theologian put it in an e-mail someone forwarded me this June, “Fathers, put down your phones!” Go to any playground, play date or sporting event, he wrote, and dads are glued to their devices. “Am I moralizing,” he asked, “if I say that I think we are lingering longer on these devices than we realize or admit?”

The same day, my brother sent along a link for a new app (leafsnap) that allows users to identify trees by submitting photos of leaves. What a smart way to juice that nature walk, I thought. The next day I saw a Twitter message from Pierre Omidyar (@pierre), the eBay founder, in which he attached a photo and asked, “What is the name of this purple and white flower bush?” Seconds later he had his answer: lilac.

Then my sister wrote to ask how she could identify the bird building a nest on her deck. “Take a picture and put it on Facebook,” I said. “You’ll have an answer within the hour.” She bet me it wouldn’t work, but within 19 minutes two friends had confirmed it was a Carolina wren.

I concocted a scheme. During weekends this summer, I would pursue the opposite of an unplugged vacation: I would check screens whenever I could. Not in the service of work, but in the service of play. I would crowd-source new ideas for car games and YouTube my picnic recipes. I would test the prevailing wisdom that the Internet spoils all the fun. With back-to-school fast approaching, here’s my report.

For starters, the Web supplied an endless font of trivia and historical tidbits to enliven our days. I learned that a great debate still rages over who was the “Benedict” in eggs Benedict; that ancient mythologists believed fish were so afraid of the ospreys that they turned up their bellies in surrender; and that care packages like the one we sent my nephew at camp had their origins feeding starving Europeans in World War II and initially contained liver loaf and steak and kidneys.

Online videos are another boon to summer. When my 6-year-old daughters were upset that we didn’t awaken them at midnight to watch a brief light show on the Eiffel Tower, a quick trip to YouTube did the trick. My brother-in-law watched online videos to learn how to make the perfect crosshatch pattern on grilled fish. And my father used to teach my girls how sea turtles emerge from the Atlantic near our home on Tybee Island, Ga., and lay eggs. Injured turtles are implanted with G.P.S. devices, allowing them to be tracked online.

One surprising way that being plugged in improved our vacations was using newfangled resources to solve oldfangled problems. Bugs, for one. I used the Internet to find a home remedy for the slugs eating my begonias (broken eggshells). My sister-in-law snapped a photo of the alarming bug bite on her 10-month-old and sent it along to our other sister who’s a pediatrician. (No Lyme disease!) Others did the same thing with burns and poison ivy.

The Web proved particularly helpful when we broke the disposal at my in-laws’ weekend house. No problem. I typed the problem into Google and within seconds was looking at the exposed rear end of a Joe the Plumber look-alike who made an extremely helpful video guide to being a weekend D.I.Y.-er.

The Web also helped give us the feeling that we saw people more than we did. While it’s fashionable to complain that we’re overly connected, I still found an occasional, virtual interaction with a friend or family member to be as pleasant as running into them on the beach. I texted with my 12-year-old nephew about geocaching when we get together. My kids Skyped with my parents about learning to swim.

Bruce Feiler’s most recent book, “Generation Freedom: The Middle East Uprisings and the Remaking of the Modern World,” was just published. “This Life” appears monthly.

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