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URL: http://www.nytimes.com SUBJECT: OLYMPICS (90%); SPORTS (90%); BLOGS & MESSAGE BOARDS (71%); SEPARATISM & SECESSION (70%); GROCERY STORES & SUPERMARKETS (62%); TEXT MESSAGING (60%) COMPANY: CNINSURE INC (91%) TICKER: CISG (NASDAQ) (91%) PERSON: DALAI LAMA (52%) GEOGRAPHIC: SHANGHAI, CHINA (93%); BEIJING, CHINA (93%); PARIS, FRANCE (88%) NORTH CENTRAL CHINA (93%); EAST CHINA (93%); XIZANG, CHINA (89%) CHINA (94%); FRANCE (90%); ARGENTINA (79%); PAKISTAN (79%); INDIA (79%); TIBET (94%) LOAD-DATE: April 18, 2008 LANGUAGE: ENGLISH GRAPHIC: PHOTOS: Jin Jing, a one-legged fencer, clutched the Olympic torch in Paris on April 7 as the French police tried to fend off protesters.(PHOTOGRAPH BY CHRISTOPHE MORIN/EUROPEAN PRESSPHOTO AGENCY) Ms. Jin at a news conference in Shanghai on Thursday. The Chinese news media accorded her hero status upon her return.(PHOTOGRAPH BY EUGENE HOSHIKO/ASSOCIATED PRESS) PUBLICATION-TYPE: Newspaper Copyright 2008 The New York Times Company 858 of 1231 DOCUMENTS The New York Times
Late Edition - Final Patience Wears Thin BYLINE: By NELSON D. SCHWARTZ and CLAUDIA H. DEUTSCH SECTION: Section C; Column 0; Business/Financial Desk; Pg. 1 LENGTH: 1389 words For seven lean years, Wall Street has given General Electric and its chief executive, Jeffrey R. Immelt, the benefit of the doubt. Even as shares of this quintessential blue chip languished, analysts and investors acknowledged the challenge of running a company that sells everything from jet engines to Hollywood blockbusters to light bulbs and patiently waited for Mr. Immelt's restructuring efforts to pay off. Now, in the wake of a surprise earnings shortfall last week, Wall Street's patience has run out as the stock has plunged to its lowest level in four years. While Mr. Immelt's job seems secure for now, stock analysts who have long supported both him and the company's sprawling structure now say a rethinking is in order. ''There is no doubt that this is a historic event,'' said Steve Tusa, an analyst with JPMorgan Chase. ''The company has to convince investors that something is going to change.'' Once-isolated calls for at least a partial breakup of the conglomerate have become a chorus, with NBC Universal, appliances and GE Money, the consumer finance unit, emerging as prime candidates for a sale or spinoff. Unloading these divisions would return billions to shareholders, advocates say, while allowing G.E. to focus on its booming infrastructure business, which sells big-iron items like locomotives, jet engines and power turbines. ''There's a point in time when you say this is a big old monster, and parts could be better off on their own,'' said Scott Lawson, a portfolio manager at Westwood Capital Management, which owns G.E. shares. ''A breakup is looking more viable.'' Shares of G.E. closed at $32.23 on Wednesday, down from about $37 a week ago, and off sharply from where they were before Mr. Immelt took over on Sept. 7, 2001. For Mr. Immelt, the problem now is not just the earnings disappointment -- the consensus estimate for the first quarter was 51 cents and G.E. reported 44 cents -- but a looming credibility gap. On March 13, he assured investors the company was on track to meet its profit targets. And in December, he told analysts that G.E.'s goal of earnings growth of at least 10 percent in 2008 was ''in the bag.'' To make matters worse, under Mr. Immelt and his predecessor, John F. Welch Jr., G.E. was the kind of business that did not surprise investors and delivered what it had promised, no matter how severe the economic headwinds. ''I've been covering the company since 1996, and I've never seen a miss this big,'' said Nicole Parent of Credit Suisse, who had rated G.E. as her top pick but downgraded it to neutral after the earnings report. ''You have to ask what is the driving force behind the miss? Is the company too big to manage?'' When the news broke shortly after 6 a.m. last Friday, Mr. Tusa said: ''I was on the train, and I almost fell out of my seat. It was a shock -- people thought it was a misprint.'' The company blamed much of the shortfall on the widespread credit crisis, especially the rapid deterioration in conditions over the last two weeks of the quarter after Bear Stearns's near-collapse in mid-March. Though G.E.'s huge finance business was its weakest performer, other segments like appliances and health care also fell short of expectations. Until nearly the last minute, G.E. thought it could pull the quarter out. It knew health care was lagging behind, GE Money was suffering, sales of appliances were weak, and advertising on local NBC stations had slipped. But G.E. managers were confident that real estate sales and other financial transactions would make up for unexpected shortfalls elsewhere. Then came the Bear Stearns implosion, and credit markets, already tight, locked up. ''We had risks, but we had opportunities and plans that we thought would have enabled us to meet our guidance,'' said Keith S. Sherin, G.E.'s chief financial officer. ''The risks came to be realized, but the opportunities didn't materialize.'' Even defenders of Mr. Immelt admit that the juxtaposition of the rosy predictions and the ensuing shortfall have shaken the reputation of G.E., which is the sixth-largest American company by revenue as well as a barometer of the broader economy. ''What happened is he got caught and created a credibility issue,'' said Mr. Welch, who ran the company for 20 years before handing the reins over to Mr. Immelt in 2001. ''He had all kinds of credibility a week ago, and he will get it back by delivering, but it will take some time.'' The clock is ticking, though. ''He can't have any more surprises if he wants to get his credibility back,'' said Noel M. Tichy, a professor at the University of Michigan Business School who once ran G.E.'s management school at Crotonville, N.Y. ''This is Strike 1. If there's a Strike 3, it could take him out.'' Until recently, Mr. Immelt had largely drawn accolades from Wall Street, both for his easygoing style and his effort to burnish G.E.'s image with investments in environmentally friendly technology like wind energy. Mr. Welch, on the other hand, was something of a lightning rod, earning the nickname Neutron Jack when he cut thousands of jobs in the 1980s, as well as the fear of any lieutenant who let him down. This is Mr. Immelt's first major brush with investor anger, and indeed, in an interview, he said he understood Wall Street's ire and that he needs to restore credibility. ''I'm not making excuses for the quarter,'' he said. ''It wasn't what we expect from ourselves or what people expect from us. And we will see what we can do better on forecasting and communicating. But you don't rebuild credibility by talking about it. The execution of the balance of 2008 will be strong.'' Mr. Immelt remains adamant that it would be foolish to break up G.E. ''I'm not going to panic over one bad quarter and do something that is not in the strategic best interest of the company,'' he said. ''If I didn't think that a big portfolio move was right before the first quarter, I don't think it is now.'' Analysts have talked for years about spinning off divisions like NBC Universal, questioning the entertainment giant's synergies with G.E.'s more traditional industrial and financial businesses. But institutional investors are now joining in the call for big structural changes. Robert Spremulli, an analyst at TIAA-CREF, which owns G.E. shares, praised Mr. Immelt's move into green businesses, but he wants G.E. to be ''more aggressive about getting rid of appliances and lighting, and getting out of GE Money.'' Big retailers like Wal-Mart have driven prices down so low that the margins on consumer goods are no longer attractive, he said. Mr. Spremulli thinks G.E. should still have branded appliances in the market, but would be better off simply letting another company manufacture under the G.E. name. ''G.E. should just get out of the consumer business,'' he said. Even investors who like the portfolio as it is now are anticipating a shake-up within G.E.'s executive suite. ''I believe there will be discussions of accountability behind closed doors at G.E., and I believe someone's head will roll,'' said Richard D. Steinberg, the president of Steinberg Global Asset Management, another institutional shareholder. Although investors were reluctant to name names, many seemed particularly irked with management at G.E. Healthcare, the business run by Joseph M. Hogan. ''If anyone loses their job, it should be in Healthcare,'' said Daniel J. Rosenblatt, an analyst at Marble Harbor Investment Counsel, which holds G.E. shares. In response, a spokesman for G.E. pointed out that the health care business has averaged double-digits earnings growth over the past five years. Despite their very different styles, Mr. Welch was quick to praise his successor as ''a hell of a manager.'' And while Mr. Immelt has been apologizing for the shortfall, Mr. Welch was as quick as ever to defend the conglomerate he helped build, while firing back at critics. He noted that with financial giants like Lehman Brothers, Merrill Lynch and Citigroup writing off billions, G.E. is projected to earn over $20 billion in 2008. Indeed, despite the turmoil in the financial sector, G.E is still likely to grow this year, Mr. Welch says. ''This shows the strength of the G.E. model,'' he insisted. ''This is a massive overreaction and it will pass.''
A turbine generator is assembled at General Electric's plant in Veresegyhaz, Hungary. It is one of the company's many businesses. (PHOTOGRAPH BY ZSOLT SZIGETVARY/EUROPEAN PRESSPHOTO AGENCY) (pg.C11) PUBLICATION-TYPE: Newspaper Copyright 2008 The New York Times Company 859 of 1231 DOCUMENTS The New York Times
Late Edition - Final Capital Available for the Right Ideas BYLINE: By JAMES FLANIGAN SECTION: Section C; Column 0; Business/Financial Desk; ENTREPRENEURIAL EDGE; Pg. 5 LENGTH: 1170 words WITH all the grim earnings news from corporations and banks lately, not to mention the continuing credit squeeze and widespread talk of recession, it would seem that most small companies, too, would be having a hard time finding financing. But that was not the case at a recent conference in Southern California, where 1,000 investment professionals came from all parts of the United States to hear and talk to 330 aspiring companies -- 50 of them from China. Many of the companies sought by investors were developing environmental, clean energy, cellphone, water treatment and biomedical technologies. The economic gloom actually encouraged the crowd, said Byron Roth, chairman of Roth Capital Partners, the Newport Beach, Calif., investment bank that was the host of the conference. These days, Mr. Roth said, ''established large companies may not offer earnings growth but we can show investment managers fast-growing small companies that few people in broader markets know about.'' In addition, he said, investors with capital have less competition for choice properties ''because large investment banks and hedge funds are affected by the financial crisis and forced to hold back.'' Most companies at the Roth conference, in February, are publicly traded on Nasdaq and related over-the-counter markets. ''What I like about these conferences is that I find small, growing companies before everybody else does,'' said Joseph C. McNay, who attended the Roth conference. Mr. McNay is chief investment officer and managing principal of Essex Investment Management, a firm based in Boston that handles $2.4 billion in investments for institutional and private family funds. The crowds and enthusiasm were similar at the Montgomery & Company Technology Conference in March in Santa Monica, Calif., which attracted more than 500 investors and 160 companies. Most companies at the Montgomery conference were privately held and worked mainly in the fields of social networking games and communications services for mobile communications devices. ''The sentiment was very optimistic,'' said James W. Montgomery, the chairman of the firm, which has been raising money for small companies in media, communications and health care for 20 years. ''There is plenty of capital around because venture capital hasn't been in a bubble mode in recent years like real estate and debt markets.'' It is also a good time for mobile phone companies ''because the infrastructure of the Internet has been built out,'' Mr. Montgomery added. ''So companies selling entertainment and services for phones can innovate on the Internet.'' To be sure, financing for small companies is less generous and flamboyant than it was a few years ago, said Kenneth Kalb, a serial entrepreneur who has just started Analog Analytics, a company that he presented at the Montgomery conference. In recent years, the venture investment climate became overheated, Mr. Kalb said. ''Private equity firms and venture capitalists would pour money into Internet solutions, investing more than $100 million and looking to earn 5 to 10 times their money in three to five years,'' he said. ''Now, it has returned to a business with more reasonable valuations. Small amounts of capital are invested but capable of earning a return in two to three years.'' Fortunately, Internet services do not need a lot of capital to get going, he added. ''My investor group and I started the company for $1 million,'' said Mr. Kalb, who has founded and led two other companies in the last decade, selling the latest one last year. Analog Analytics uses database software to pinpoint for advertisers specifically who is seeing and reacting to their ads in newspapers, television and billboards. Thomas Unterman, managing partner of Rustic Canyon Partners, a venture capital investment firm, agrees that the days are ''long gone when investors looked for returns of 10 times their money in three years.'' But there are hotly favored fields today. ''Anything clean or green technology, like solar energy, will attract funding immediately,'' Mr. Unterman said. Twenty-five ''green track'' companies presented at the Roth conference, including Basin Water Inc., a company that converts contaminated groundwater to drinking water and maintains water systems for municipalities and private companies. Based in Rancho Cucamonga, Calif., the company, which had $18 million in revenue last year, is expanding operations across the United States, said Michael Stark, president and chief executive. ''I presented at the Roth conference to keep up awareness of our company in the investment community, not to raise capital,'' Mr. Stark said. California has no monopoly on entrepreneurial companies, Mr. McNay of Essex Investment said. ''These days, good small companies crop up in Boston and Chicago, Austin, Tex., and many other places,'' he said. ''But California does have more of them.'' Mr. McNay particularly liked the array of Chinese companies that Roth Capital brought to the conference. Those companies included China BAK Battery, a firm from Shenzhen, China, that makes lithium-ion batteries, and Sutor Technology Group, a Changshu company that makes steel finishing products for use in electrical appliances. ''Today's China companies are just like the small entrepreneurial outfits with a lot of promise that we helped bring along in the early 1990s,'' Mr. Roth said. He reported that at least 10 acquisition or special financing transactions were initiated during the four-day conference. And possibly more long-term business was initiated because several ''blank check'' special purpose acquisition companies attended, Mr. Roth said. Those companies, known as SPACs, raise money for the purpose of acquiring and then operating an existing company. One example is the Heckmann Corporation of Palm Desert, Calif., which was formed last November with $450 million of capital raised by two underwriters, Credit Suisse and Roth Capital. Richard Heckmann is chief executive of the new company, which will spend $1.7 million organizing itself and researching which companies to acquire and operate. His board includes former Vice President Dan Quayle; Alfred E. Osborne Jr., senior associate dean at the Anderson School of Management at the University of California, Los Angeles; and Lou Holtz, a former football coach and television analyst. Mr. Heckmann founded, built up and sold four companies over the last four decades, including U.S. Filter, a water treatment firm now owned by Siemens, and K2, a sporting goods company he sold last year to the Jarden Corporation. ''I saw this bubble bursting years ago,'' Mr. Heckmann said in an interview. ''Private equity funds, swelled by debt, were buying companies in sporting goods and every other field, bidding up prices for no good reason.'' But now, in the downturn, he sees a new picture. ''Companies can't raise debt so there are opportunities for equity investment,'' Mr. Heckmann said.
Copyright 2008 The New York Times Company 860 of 1231 DOCUMENTS The New York Times
Late Edition - Final Bridging the Gap, the Sequel BYLINE: By LAURA M. HOLSON SECTION: Section C; Column 0; Business/Financial Desk; Pg. 1 LENGTH: 1190 words A story that Daniel Scheinman, a senior vice president at Cisco Systems in San Jose, Calif., likes to tell illustrates the cultural divide between Hollywood and his Silicon Valley. Last year he met with an affluent film producer who marveled at the extraordinary riches afforded to Google executives. Mr. Scheinman told him that most got wealthy accepting stock options instead of million-dollar salaries. When Mr. Scheinman asked whether the producer would ever accept equity instead of cash if they worked together, the moviemaker sniffed. ''I fly a G4,'' he told Mr. Scheinman, referring to the Gulfstream jet he owned. ''How far do you think my G4 will go on stock options? I need cash.'' Only 350 miles separate the two California business cultures, and technology and entertainment executives are worlds apart. But they are circling each other once again, trying to figure how best to combine forces to get movies, videos and other programming to homes and cellphones. Of course, media moguls and Silicon Valley entrepreneurs working together again has all the familiarity of a late-night rerun. In the 1990s, venture capitalists saw a parade of celebrities make their way to Sand Hill Road seeking backing for their online ventures. Many investors eagerly had their photographs taken with a starlet or two. But as deals cratered or never got off the ground, the relationship between the camps ended up less a marriage than friends with benefits. Veterans from both camps say the cultures are so different that barriers remain. And they are approaching each other with a new soberness -- amid the hype, of course -- as those who were burned in the past hope not to repeat the same mistakes. ''One of the misconceptions is there was a pot of gold out there,'' said Kevin Tsujihara, president of Warner Home Entertainment who, among other things, negotiates digital rights issues with technology companies on behalf of the Time Warner unit. ''For every big deal you read about, there are a million guys who tried to get a deal done who couldn't,'' he said. These days, he said, ''it's about resetting the bar on expectations.'' Even with the benefit of perspective, the gulf is stark. Mark D. Kvamme, a venture capitalist at Sequoia Capital, financed the comedian Will Ferrell's funnyordie.com last year, which has had only one runaway hit, ''The Landlord'' video. When Mr. Kvamme approached Mr. Ferrell and his agents at Creative Artists Agency about creating the site, he said he was struck by what he perceived as the short-term view then taken by his new Hollywood partners. ''They talked about the transaction -- 'What am I getting paid today?' '' he said of Mr. Ferrell and his agents. ''The big thing with Funny or Die was, we said, 'Let's build a company. We are not just going to write you a check.' '' Those perceptions can largely be attributed to the nature of their conflicting interests. Adam McKay, who started the Web site with Mr. Ferrell, said they had to get used to the notion that they were owners, not just talent for hire. ''There the security guard can make $100 million because everyone is given stock,'' Mr. McKay said. ''But here it is a no-no. The deal is a cherished ritual.'' Suggesting that talent agents do more than negotiate is something of a misguided mission; that is what they do all day. And film actors, writers, directors and crew members are hired for short bursts, then leave and work for someone else. Besides, Hollywood executives are not the only ones worrying about their paydays. ''People in Silicon Valley too want their pound of flesh,'' said Sean Bailey, a Hollywood producer who joined with the actors Ben Affleck and Matt Damon and the producer Chris Moore in 2000 to create LivePlanet, a Silicon Valley-backed multimedia company, which has had its ambitions scaled back. ''The difference is, they will wait five years instead of five minutes.'' Unlike the last go-round, though, content is only part of the conversation with studios, said Michael Lynton, chief executive of Sony Pictures Entertainment, who previously served as former chief executive of AOL Europe. He said Silicon Valley venture capitalists whom he has talked to lately are grappling with new ways to distribute Sony's movies and television shows that compete with iTunes from Apple. ''I don't know if they feel they don't need us or are going directly to the talent,'' he said. ''There are always going to be huge cultural differences between us because the interests are different. On their side they are fundamentally interested in technology and, on our side, we are interested in the content.'' He makes a good point. It is with rare exception that the two camps have harmoniously co-existed. In 2004, Yahoo made a splash when it hired Lloyd Braun, the former chairman of the ABC Entertainment Group, to help make it a powerhouse in media and entertainment. The relationship soured, and Mr. Braun was chided for Hollywood extravagances like having his own parking space. Two years later, Mr. Braun left the company and much of what he created has since been dismantled. Even Steven P. Jobs, the chief executive of Apple and a board member at the Walt Disney Company, has had a wary reception from Hollywood. While studio executives acknowledge his cleverness, they, too, dragged their feet on allowing Apple to offer movies and television shows on iTunes unless they were afforded proper copyright protection for their content. That did little to burnish the relationship with Silicon Valley. ''We realize there is a problem, but there's not an easy solution,'' said David Siminoff, a venture capitalist at Venrock, who has an interest in both media and technology. ''If there was one, we would've found that already.'' A particularly salient difference, of course, is how each culture approaches failure. Silicon Valley, to a point, celebrates it, while entertainment creators in Southern California cannot distance themselves fast enough from anything that might be a bomb. And Hollywood talent likes a success story; but only if it is their own. ''If a successful director has a flop, his peers and colleagues question whether he has lost his touch,'' Mr. Kvamme said. ''By contrast, in the Valley, if you have a failure, that usually means that you have learned something. There are very few successful serial entrepreneurs. Failure is almost a rite of passage.'' Which, of course, leads to the ultimate measure of might in any corporate culture and one easiest to calculate: who has the fatter wallet. The highest-ranking media chief can earn $20 million in salaries and stock options, too. But that looks like lunch money compared with what a 22-year-old Stanford graduate can earn if the right idea strikes. Google's founders, Sergey Brin and Larry Page, each have a net worth estimated at around $13 billion. The two are ferried around on a private 50-passenger Boeing 767-200 jet, which they pay $1.3 million a year to park at a military base near Google's office. With numbers like that, perhaps the producer who met with Mr. Scheinman should reconsider the cash. Download 5,58 Mb. Do'stlaringiz bilan baham:
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