Politics this week: 10th - 16th February 2007

After tense talks in Beijing, North Korea,which in October tested a nuclear weapon, promised to shut down its main nuclear reactor in return for fuel aid. The talks, involving America, China, Japan, Russia and South Korea, also led to an agreement to resume ministerial talks between the two Koreas, and to take steps towards normalizing America's relations with North Korea. But the agreement makes no explicit mention of nuclear weapons, dismantling nuclear facilities or disposing of nuclear materials. See article

The foreign ministers of India, China and Russia met in Delhi to discuss the state of the world. It was the first such high-level meeting between China and India since China alarmed potential adversaries by testing an anti-satellite missile last month.

In a surprising presidential election in Turkmenistan, Kurbanguly Berdymukhamedov won only 89% of the vote. Mr Berdymukhamedov had been acting-president since the death in December of Saparmurat Niyazov, who had ruled the country for more than two decades. The opposition was not allowed to field any candidates.

Malaysia's prime minister, Abdullah Badawi, held talks with the Thai junta and offered to mediate to help end the Muslim separatist insurgency in southern Thailand. See article

Ma Ying-jeou, chairman of the Kuomintang, Taiwan's main opposition party, resigned after being formally charged with corruption offences. But he also announced his intention to stand in next year's presidential election. See article

A house divided

The two main Palestinian factions, the Islamists of Hamas and the secular Fatah, agreed in Mecca to form a unity government in the hope of stopping bloodshed between the groups' militias and of ending a year-long international boycott of the Hamas-run Palestinian government. Hamas refused to recognize Israel but said it would “respect” (not precisely accept) past Palestinian agreements with it. See article

Just as Iraq's prime minister, Nuri al-Maliki, was making a speech to mark the anniversary of the bombing of one of the Iraqi Shias' holiest shrines, in Samarra, a huge bomb went off in Baghdad, killing at least 80 people. Other bombs continued to make sectarian mayhem, as America's promised “surge” of thousands of extra troops into Baghdad was set to begin. See article

Seven simultaneous bombings killed six people near Algeria's capital, Algiers. A group calling itself the al-Qaeda Organization in the Islamic Maghreb, perhaps a new version of the previously better-known Salafist Group for Call and Combat, said it was responsible, raising fears that al-Qaeda has activated a north African front.

Guinea's president, Lansana Conté, who has been facing growing demonstrations against his 25-year-old dictatorship, declared martial law amid increasing violence. Most businesses have shut down; some embassies have told their citizens to leave.

Ugandan MPs approved the contribution of 1,500 troops as part of an African Union peacekeeping force in Somalia. They are due to replace the Ethiopian troops that helped to overthrow Somali Islamist militias last year. Burundi, Ghana and Nigeria have also promised troops.

The default option

Ecuador's Congress voted to approve a proposal by the country's new leftist president, Rafael Correa, for a Constituent Assembly to write a new constitution. Meanwhile the government, which has talked of defaulting on its debt, said it would make a payment that falls due this week. See article

Bolivia's socialist president, Evo Morales, led troops into a tin smelter and declared its nationalization. The smelter's owners, Glencore, a Swiss mining firm, said they would claim compensation. The government claims the smelter's privatization in 1999 was fraudulent. See article

In need of sum ideas

The Socialist candidate for the French presidential election, Ségolène Royal, revealed a decidedly left-wing presidential platform. It included many promises of more public spending, but little on how to pay for it all. See article

French police arrested 11 suspected terrorists. Nine of them were allegedly al-Qaeda members thought to have been recruiting fighters to join the insurgency in Iraq. In Spain, the trial began of 29 people suspected of involvement in the 2004 Madrid train-bombings.

George Bush said Russia and America could still co-operate over many things despite an angry speech by Vladimir Putin, who denounced American militarism at a conference in Munich. See article

The European Parliament endorsed a report criticizing several European governments for complicity in secret CIA flights used for extraordinary renditions. These included the kidnap and transport of suspected Islamist terrorists to third countries, in some of which they were tortured.

Portugal is to legalize abortion during the first ten weeks of pregnancy, after 59% of voters backed the change in a referendum. The turnout was below 50%, so the result was not legally binding, but the government pledged to act on the result in any case.

No more rubber stamps

The House of Representatives held a debate on Iraq. If, as was expected, a non-binding resolution opposing the deployment of extra troops is passed (the Democratic majority was expecting the support of some Republicans as well), it would represent the first time Congress has repudiated George Bush's policy on the war.

Mitt Romney announced he was entering the race for president. The former one-term Republican governor of Massachusetts, who is a Mormon, has been steadily polishing his credentials with social conservatives, especially over the issue of gay marriage. See article

Meanwhile, Barack Obama officially launched his campaign from the steps of the Old State Capitol in Springfield, Illinois, the place where Abraham Lincoln forged his political career.

A year after Larry Summers said he was quitting the job amid a furore over his comments on differences between the sexes, Harvard University picked a new president. Drew Gilpin Faust is the first woman to hold the post.

Click here to read the original news capsules and more features from The Economist.com

Business this week: 10th - 16th February 2007

A cost-cutting program at Chrysler was unveiled. The troubled carmaker made an operating loss of $1.4 billion last year and now more than 13,000 jobs are to go. Chrysler's parent company, DaimlerChrysler, said it could find partners for its North American division, but a sale was not ruled out either. See article

The European Court of Justice's advocate-general rejected the German law protecting Volkswagen from takeovers. This was seen as boosting the potential of a bid for VW from its biggest shareholder, Porsche. It also solidifies the role of Ferdinand Piëch, who is a member of the Porsche family, as VW's chairman. The premier of Lower Saxony, which is VW's second-biggest shareholder, acknowledged this by changing tack and ending his opposition to Porsche having a third representative on VW's board.

FirstGroup, a British bus and train operator, expanded its American business by agreeing to pay $3.6 billion for Laidlaw, which specializes in school and inter-city bus services. If successful, the deal will give FirstGroup a sizable chunk of America's school-bus market, but there was speculation it may sell Laidlaw's other concern, the iconic Greyhound bus line.

It makes the world go round

A plan to boost the use of mobile money was unveiled at a telecoms conference. The project, set up between a group of mobile-phone operators and MasterCard, is targeted at migrant workers and enables funds to be securely transferred from one phone to another back home, where the credit can be spent. See article

Vodafone won the bidding to take control of Hutchison Essar, a mobile-phone operator in India, agreeing to pay $11.1 billion for the 67% stake held by a subsidiary of Hong Kong's Hutchison Whampoa. Arun Sarin, Vodafone's chief executive, said the deal would be “transformational” for his company, which thinks it can increase profits by acquiring phone operators in high-growth developing markets. But some of Mr Sarin's critics said he had paid too much.

A court in Brussels ruled that Google had infringed the copyright of Belgian newspapers by publishing links to their stories on Google News. The case, in which the newspapers argued that the internet company was giving away articles they were charging for, was closely watched by other press proprietors. Google is to appeal.

Delta Air Lines made a fourth-quarter net loss of $2 billion as it booked charges related to its bankruptcy- restructuring plans.

Better to have loved and lost

NASDAQ's $5.3 billion hostile bid for the London Stock Exchange was spurned by shareholders (fewer than 0.5% accepted the offer). It was the second time in less than a year that NASDAQ's advances had been rebuffed and it joins a long line of suitors seen off by the LSE because, it says, they have not valued it properly. Speculation turned to the possibility of future partners for both bourses.

Deutsche Börse agreed to take a 5% strategic stake in the Bombay Stock Exchange, underlining the fashion for consolidation among global exchanges.

EMI's share price hit a low note after it issued its second profits warning of the year. The music company has been particularly hit by poor sales in North America, where, it said, the market for CDs had declined by 20% this year.

With the share prices of big aluminum companies rising amid rumors of takeovers, India's Hindalco Industries said it would pay nearly $6 billion for Novelis, a Canadian maker of rolled aluminum used to make beverage cans. The deal is the second-biggest foreign acquisition by an Indian company and comes two weeks after Tata Steel won the battle for Corus.

SXR Uranium One and UrAsia Energy agreed to merge, creating the world's second-biggest uranium miner. The price of the raw material for reactor fuel has more than tripled over the past three years, in line with the increased enthusiasm for nuclear power.

Gazprom said its third-quarter net profit rose by more than half, to $4.6 billion. The Russian gas monopoly is benefiting from rising exports and the higher prices it charges to former Soviet republics.

Time for another row

America's trade deficit in goods reached $836 in 2006. Congressional Democrats seized on the figure to lambaste the Bush administration and called for “actions to stand up for America” by ending the “unfair trade practices” of the countries and regions that account for most of the deficit: China ($233 billion), the European Union ($117 billion) and Japan ($88 billion).

Click here to read the original article and more features from The Economist.com

The Ad-Free Cellphone May Soon Be Extinct

Advertising on your cellphone?

Yes, and soon.

Already, ads are creeping onto cellphones around the globe. At this rate, experts say, it will not be long before the 2.2 billion mobile phone users around the world consider it natural to tune into a 15-second spot before watching a video, sending a message or listening to a downloaded song between phone conversations.

Or so they hope.

“This is the year that advertising breaks out worldwide,” said Laura Marriott, executive director of the Mobile Marketing Association, based in Boulder, Colo., which represents more than 400 advertisers, phone makers, wireless operators and market research companies. “Previously, there were not enough of the right phones and fast networks to support good advertising.”

Ms. Marriott spoke yesterday in Barcelona, Spain, where 60,000 people are gathered this week for the 3GSM World Congress, the cellphone industry’s main event of the year. Several companies at the exposition are promising to meld advertising with the mobile phone in a way that respects people’s privacy while bringing in new revenue to offset sagging growth in voice services for phone carriers.

Yahoo, for instance, began displaying ads Sunday on sites accessible to subscribers with advanced cellphones in 19 countries. Mobile phone users with data as well as voice subscriptions would see the ads when going to Yahoo’s home Web page on their phones. They could then click on an ad to dial a company directly or to get more information and special offers.

The advertisers that Yahoo has signed up include Pepsi, Procter & Gamble, Hilton, Nissan, Singapore Airlines and Intel, and the 19 countries include the United States, Brazil, Britain, France, Germany, Italy and India.

By the time such advertising becomes a mass-market phenomenon, most people in countries with developed economies will have advanced phones that can browse the Internet and play video, according to Nick Lane, an analyst with Informa Telecoms and Media, based in London.

The very nature of the mobile phone gives operators information about their customers that Internet and television advertisers can only dream of having.

Carriers know not just where their clients live, but where they are at the moment the ad is seen, how much they spend on phone services, whom they call and when, their age and sex, what games and music they play on their phones — and how to bill them.

People in the industry say they know that the personalized nature of cellphones is a double-edged sword: it is what makes the medium appealing to advertisers, but many people consider the medium too personal to be invaded by outside interests.

Some executives warned that success was not guaranteed, especially because the industry lacks common technical standards that would make it easy for advertisers to sell to many operators at once.

“The mobile phone can reach everybody and it’s always on, but we need to rapidly define our industry standards to be able to benefit from this opportunity,” Arun Sarin, chief executive of Vodafone, said in a speech yesterday in Barcelona. Vodafone is the largest mobile phone operator by revenue.

“If we don’t work together, our suppliers will see a fragmented medium and a fragmented user base, as opposed to a single, valuable medium,” Mr. Sarin said. “We need to seize the moment and work together to help ads move to mobile. It won’t happen well if Vodafone does it differently than Orange and T-Mobile.”

The United States members of the Mobile Marketing Association — which include Verizon Wireless, Sprint Nextel, T-Mobile USA and others — have agreed to guidelines that would limit advertising to those phone customers who “opt in,” or choose to receive the ads, usually in return for cheaper or free services. The organization is completing guidelines for the European market.

“Privacy is a big issue, and that has to be solved for mobile advertising to be successful,” Ms. Marriott said. “I don’t think people will opt in 24/7, but maybe they will opt in for certain times of day and for certain types of advertising.”

A recent report from Informa forecast that the market for mobile advertising will rise to $11.3 billion in 2011 from almost nothing just two years ago. It is too early to tell whether one type of advertising will be dominant in developed countries because the market is still in its nascent phase, though banner ads and short video spots are sure to be big, Mr. Lane said. Text-message ads will dominate in developing countries, he said.

Lowering the costs to consumers is especially appealing to the companies that produce media content for mobile phones.

“If you can get something for half-price or for free if there is a bit of advertising, and that can be done in a noninvasive manner, that’s compelling,” said Chadd Knowlton, general manager of the content access and protection division of Microsoft. “We’ll continue to see richer and better mobile advertising across all kinds of content.”

Patrick Parodi, chief marketing officer of Amobee Media Systems, which helps carriers bring advertising to their clients and showcased a new service at the Barcelona event, said reducing consumer media costs was an important outcome.

“Mobile is the last remaining medium where the user has to bear the entire cost of the content,” he said, “and that risks stunting the growth of many new and innovative mobile services that clients might be willing to access if the costs were lower.”

While the Mobile Marketing Association and other industry groups are laying down some ground rules, other basics are still being ironed out, including how best to deliver the ads. Analysts said to expect companies to introduce various styles of advertising, with possible methods including banners, text messages and multimedia messages, as well as video spots before, during or after a clip.

“The mobile phone is a pristine media,” Mr. Parodi said, “and we have to be sure not to ruin that.”

Click here to read article by Eric Sylvers of the New York Times

Times' Sulzberger: Newspaper Will Be Around For a Long Time

Arthur Sulzberger Jr., the publisher of the New York Times, has taken some flack for sounding a bit glum about the prospects for print journalism at the World Economic Conference, held last month in Davos.

On Feb. 8, the newspaper Ha'aretz quoted Mr. Sulzberger thusly, responding to a question about whether the Times will still be printed on paper in five years:

"I really don't know whether we'll be printing the Times in five years, and you know what? I don't care either."

On Wednesday, in a speech to Times employees, Mr. Sulzberger plans to clarify the message attributed to him in Ha'aretz. The Times supplied the Observer with a portion of his text in advance:

"We are continuing to invest in our newspapers, for we believe that they will be around for a very long time. This point of view is not about nostalgia or a love of newsprint. Instead, it is rooted in fundamental business realities: Our powerful and trusted print brands continue to draw educated and affluent audiences.

"Traditional print newspaper audiences are still significantly larger than their Web counterparts. Print continues to command high levels of reader engagement. And, of course, we still make most of our money from print advertising and circulation revenue. And yes, I remember what I said here last year and what I was supposed to have said last month at Davos about not having a printed product in five years time.

"So let me clear the air on this issue. It is my heartfelt view that newspapers will be around - in print - for a long time. But I also believe that we must be prepared for that judgment to be wrong. My five-year timeframe is about being ready to support our news, advertising and other critical operations on digital revenue alone...whenever that time comes."

Click here to read the original piece by Michael Calderone, from The Media Mob section of the New York Observer

Broadcast Diversity: It’s Good Business

There is a saying that gauges how well our nation is providing equal rights and opportunities to all citizens: You can’t just talk the talk; you must walk the walk.

Often, the “walks” that make major improvements happen far from the spotlight. These are true examples for success in our democratic experiment.

Recently, the Minority Media and Telecommunications Council (MMTC), Clear Channel Communications and the National Association of Broadcasters Education Foundation hosted a conference to ensure that minorities and women have information and resources to buy the significant number of media assets Clear Channel is selling.

Other broadcasters, like CBS Radio and Emmis, also have sought diversity when selling broadcast assets.

This is a welcome development. The nation can’t walk the walk when groups representing a third of its people — minorities — and over half of its population — women — can’t unlock their full entrepreneurial and management potential in influential industries.

Minority ownership still accounts for only 1.5% of broadcast-industry asset value; for women-owned stations, it’s about the same. In the midst of the current media-ownership debate, we can agree these statistics are unacceptable.

Recruiting minority and female station buyers is not just right, it’s smart business. More bidders mean more money, which means higher multiples paid by all bidders, including non-minorities. It’s not charity, nor is it supposed to be. It’s a great opportunity for all parties involved.

Seven years ago, in 2000, MMTC helped Clear Channel market 110 stations to minorities. Private-equity firms and banks were eager to help. Financial institutions regarded Clear Channel’s willingness to offer high-quality assets to minority broadcasters as a powerful endorsement of their potential, helping them raise capital and present competitive offers

Ultimately, Clear Channel sold 40 stations to eight minority-owned or -controlled companies for over $1.6 billion. That deal increased minority broadcasters’ asset value by 26%.

There’s a domino effect. A diverse bidding pool helps sellers find buyers for diverse markets at optimum prices. It lifts broadcasters’ stock price, because diverse industries respond better to demographic and cultural trends—a necessity in a business reliant on demographics and culture. A diverse industry will develop personalities and programming that every broadcaster can leverage. And diversity is the best defense against Internet radio and Webcasting.

For free, over-the-air broadcasting to thrive, it must play its best hand: its tradition of openness, of a fair chance for everyone to participate and win. All broadcasters must walk the walk to pick up the pace of minority broadcast ownership.

Click here to read the original piece from David Honig of Broadcasting and Cable