Tiny, cheap laptops known as netbooks have been a big success.  But not everyone likes their small screens and keyboards, and their processors aren’t powerful enough for some common tasks, like playing high-quality internet video.

Now, Intel is pushing slightly more powerful chips for slightly larger computers that still have key netbook qualities such as a light weight and long battery life. Could this be a Goldilocks moment for laptops - when we get machines that are just right?

I tested two new models with the new processors, Acer’s Timeline 3810T and MSI’s X-Slim X340. Acer’s model achieves a great balance of weight, features and power. The second. . . well, Goldilocks would have moved on after trying that bowl of porridge.

The disappointing thing about both models is that they list at US$900, twice the price of a netbook, and 50 per cent more than a low-end laptop. The good news is that just a few years ago, capable laptops in same weight class - around 3 pounds - cost at least twice as much.

Both computers have 13.3-inch screens that match the proportions of an HDTV screen and run Windows Vista Home Premium. Neither has a DVD drive. Otherwise, they’re quite different.

The X-Slim is an eye-catching, sleek design that, to be blunt, copies a lot from Apple’s ultra-slim MacBook Air. The X-Slim is just as thick as the thickest point on the Air, though the Air tapers off from a bulge under the hinge while the X-Slim keeps an even thickness. At 2.9 pounds, it’s a hair lighter than the Air and lighter than some netbooks.

How does MSI do it? Plastic. The Air’s chassis is machined out of a big piece of aluminum, giving it rigidity. The X-Slim is all plastic, and its wrist rest and keyboard flex under your fingers in a way that doesn’t inspire confidence.

Acer’s Timeline has a more conventional design that wouldn’t look out of place in a boardroom. It has a brushed-metal cover that resists fingerprints and has a pleasant keyboard. It weighs 3.5 pounds - heavier than the X-Slim but about 2 pounds lighter than a typical 14-inch laptop.

Inside, these computers sport Intel’s ultra-low voltage processors, or ULVs. Similar processors have been on the market for some time at high prices, but Intel is now bringing them down so they could go into a US$600-US$700 laptop, positioning them as a step up from the Atom processors that run netbooks.

Atoms are adequate for web surfing and e-mail, the primary uses for a small laptop. It doesn’t matter so much that the Atom chokes on video editing or 3-D gaming, and most netbook owners are happy with them.

But there are two things I’d like to do with a small laptop that the Atom does not do well. One is to watch high-resolution internet video in the Flash format, used by YouTube, Hulu and several other sites. This is very taxing on the processor and will make an Atom-powered netbook stutter badly.

The other challenge for the Atom is videoconferencing. Laptops today come with built-in webcams, but the Atom has a hard time producing and decoding high-quality video.

So how do the ULVs handle this? The Timeline does it with aplomb, smoothly playing high-resolution video from Hulu and producing images with Google Video Chat.

The X-Slim, meanwhile, was only slightly better than a late-model Atom-powered netbook. Action scenes in “Prison Break” on Hulu were jittery, and videoconferencing suffered too.

The difference, I believe, is mainly in the specific processors they use. The Timeline has a dual-core ULV, meaning there are two computing engines, while the X-Slim has a single core.

The single-core ULV appears to be only a slight step up from the Atom - something to keep in mind when looking at other models that are sure to come out with these processors.

(There’s a confounding factor here: The Timeline runs the 64-bit version of Windows Vista, which processes data in larger chunks, while the X-Slim runs the somewhat slower 32-bit. But the differences I observed were too large to be attributed to the software.)

The Timeline slays the X-Slim in battery life too. I made each computer play high-definition video from the hard drive while running a Twitter application that accessed the internet over Wi-Fi.

That ran the X-Slim down in one hour and 42 minutes, while the Timeline lasted three hours and 40 minutes. That lends credence to Acer’s claim that under a typical workload, the Timeline will last more than eight hours.

For comparison, the Asus Eee PC 1000HE, an outstanding netbook, lasted four hours and 45 minutes. (All screens were set to the same midlevel brightness, measured with a light meter.)

So I have a mixed verdict on ULVs. The Timeline at least shows that the processors can be used in laptops that are reasonably powerful.

Advanced Micro Devices, Intel’s main competitor, has launched a set of chips it calls “Neo” this year, for computers in a similar price range and size.

The first computer with these chips, the Hewlett-Packard dv2, is heavier than the ones I tested and has a battery life more in line with the X-Slim than the Timeline. But AMD plans better processors soon, and they could provide an interesting alternative.

The Timeline has a couple of knocks against it: Its cooling fan is quite loud, and the screen doesn’t bend back very far, which can be a problem if you like to use it while curled up on the couch.

Also, it’s still a bit expensive at US$900. But overall, it’s a light, long-lasting computer that avoids the unnecessary design flourishes that compromise the X-Slim.

–-

• Coming soon: the ‘nettop’ PC
• Review: MacBook Pro 15-inch
• Apple’s new MacBook and MacBook Pro

OMAHA: Billionaire Warren Buffett says the economy has “fallen off a cliff” over the past six months and consumers have changed their habits in
Buffett said on Monday during a live appearance on a news channel that current economic turmoil has basically followed the worst-case scenario he envisioned.

“It’s fallen off a cliff,” Buffett said. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.”

Buffett said he’s seen the changes showing up in the results of Berkshire Hathaway Inc.’s subsidiaries. He said Berkshire’s jewelry companies have suffered, but more people have been willing to switch to Geico to save money on car insurance.

Buffett predicted that unemployment will likely climb a lot higher before the recession is done, but he also reiterated his optimistic long-term view.

“Everything will be alright. We do have the greatest economic machine that’s ever been created,” Buffett said.

Buffett said the nation needs a clear message from the government about what the problem is in the economy and what will be done. He said all 535 members of Congress should set aside partisan bickering to deal with what Buffett has called an economic Pearl Harbor.

“What is required is a commander in chief that’s looked at like a commander in chief in a time of war,” Buffett said.
Fear and confusion has been driving much of consumer and investor behavior in recent months, Buffett said. The nation’s leaders need to clear up the confusion about the economy before anyone will become more confident, he said.

A little over a week ago, Buffett released his annual letter to shareholders describing the worst of his 44 years at the helm of Berkshire. The Omaha, Neb.-based company reported sharply lower profit because of its largely unrealized $7.5 billion investment and derivative losses.

Overall, Berkshire’s 2008 profit of $4.99 billion, or $3,224 per Class A share, was down 62 percent from $13.21 billion, or $8,548 per share, in 2007.

Berkshire’s fourth-quarter numbers were even worse. Buffett’s company reported net income of $117 million, or $76 per share, down 96 percent from $2.95 billion, or $1,904 per share, a year earlier.

Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility businesses. And it has major investments in such companies as Wells Fargo & Co. and Coca-Cola Co.

• After Germany, Italy & Hong Kong fall into recession
• Nortel sinks deeper, 1300 job cuts announced
• VODAFONE LOOKS TO LIST INDIAN ARM

Falsely inflated profits at outsourcing firm shakes confidence in India

India - The head of Indian outsourcing firm Satyam Computer Services resigned on Wednesday, disclosing that profits had been falsely inflated for years.

Satyam’s shares plunged almost 80 percent. India’s biggest corporate scandal in memory threatened future foreign investment flows into Asia’s third-largest economy and cast a cloud over growth in its once-booming outsourcing sector.

Bombay’s main benchmark index tumbled 7.3 percent and the Indian rupee fell.

Ramalinga Raju, founder and chairman of India’s fourth-largest software services exporter, said in a statement that Satyam’s profits had been massively inflated over recent years but no other board member was aware of the financial irregularities.

“If a company’s chairman himself says they built fictitious assets, who do you believe here? This has put a question mark on the entire corporate governance system in India,” said R.K. Gupta, managing director at Taurus Asset Management in New Delhi.

Raju, who founded Satyam more than two decades ago and who took it public in 1991, said about $1 billion, or 94 percent of the cash on the company’s books, was fictitious.

The 54-year-old Satyam chairman came under close scrutiny last month after the company’s botched attempt to buy two construction firms partly owned by its founders. Raju said on Wednesday that was a final attempt to resolve the problem of the fictitious assets.

“It was like riding a tiger, not knowing how to get off without being eaten,” Raju said in his letter, adding he was prepared to face up to the legal consequences.

Satyam said its managing director and co-founder B. Rama Raju, Raju’s brother, had also resigned. It did not give any reason for the resignation.

The company’s difficulties multiplied when the World Bank, a major customer, barred Satyam from new business, citing “improper benefits” given to World Bank officials.

“In a bull market people forgot about it (corporate governance),” said Singapore-based Ashish Goyal, chief investment officer at Prudential Asset Management. “In a bear market chickens are coming home to roost, so it gets highlighted at a time like this.”

Just three months ago, Satyam received an award from a group of Indian directors for excellence in corporate governance.

By close of trade, Satyam’s share value slumped to about $550 million from around $7 billion as recently as last June.

New York-listed Satyam specializes in business software and back-office services for clients such as General Electric and Nestle.

“I think there is no future for this stock. This case for India is similar to what happened to Enron in the U.S.,” said Jigar Shah, senior vice-president at Kim Eng Securities.

“It will not stop at Satyam. Many more companies will come into scrutiny like that. There is a strong possibility investments in India will be affected.”

The scandal set off a wave of condemnation from Indian market regulators and government officials, and prompted banker Merrill Lynch to terminate its engagement with Satyam.

“It’s going to impact the Indian outsourcing industry. Customers are going to be concerned about offshoring firms in India,” said Sudin Apte, country head of Forrester in the western city of Pune.

Satyam said it would go ahead with a planned board meeting on Saturday to consider a share buyback following a rash of broker downgrades even after its acquisitions were called off last month.

• Is Hewlett-Packard eyeing stake in Satyam?
• ADAG eyes AIG’s Asian life insurance business
• US facing an economic Pearl Harbor: Warren Buffett

With slumping home prices and the worsening economic crisis taking an increasing toll on financial institutions, as many as 22 American banks have collapsed so far this year.

Collapse of such a large number of US banks, despite a $700-billion bailout package, reflects the deep turmoil of the US economy.

From 2003 to 2007, only 10 US banks were reported to have collapsed. In 2008, the figure has already touched 22, with still more than a month to go…

Downey Savings and Loan

Newport Beach-based Downey Savings and Loan Association has become the latest victim to the acute distress in the housing market in the US.

The Treasury Department agency recently boosted the minimum capital requirements for the parent, Downey Financial Corp, as the company struggled with the slumping mortgage market.

Downey was hit hard by rising mortgage defaults, especially in its option adjustable-rate mortgage holdings. Option ARMs allow customers to choose a different payment option each month — including a payment that is smaller than the interest due on the loan.

Defaults on these loans contributed to the forced sale or collapse of mortgage lenders Washington Mutual Inc., Wachovia Corp., IndyMac Bancorp and Countrywide Financial Corp. That led many investors to bet that Downey may be next, and they proved right.

Following the bank’s failure, US Bank National Association, Minneapolis, has acquired the banking operations of Downey Savings, Newport Beach, CA, in a transaction facilitated by the Federal Deposit Insurance Corporation.

As of September 30, 2008, Downey Savings had total assets of $12.8 billion and total deposits of $9.7 billion.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Downey Savings will be $1.4 bn.

PFF Bank and Trust

Along with Downey Savings, US Bank National Association has also acquired the banking operations of PFF Bank & Trust, Pomona, CA, in a transaction facilitated by the Federal Deposit Insurance Corporation.

As of September 30, 2008, PFF Bank had total assets of $3.7 billion and total deposits of $2.4 billion.

Security Pacific Bank

The Federal Deposit Insurance Corp and state regulators seized Los Angeles-based Security Pacific Bank in the first week of November.

Following that move, Pacific Western Bank, also based in Los Angeles, was slated to assume all of the deposits of Security Pacific. Security Pacific had total assets of $561.1 million and total deposits of $450.1 million. Pacific Western agreed to assume all the deposits for a 2% premium, according to the FDIC.

In addition to assuming all of the failed bank’s deposits, Pacific Western will purchase approximately $51.8 million of assets. The FDIC will retain the remaining assets for later disposition.

Franklin Bank SSB

US bank regulators closed Franklin Bank SSB, a Houston-based community bank, on November 8, making it the third-largest and 18th US bank failure this year as slumping home prices and the worsening economic crisis take an increasing toll.

Prosperity Bank of El Campo, Texas, would acquire all the deposits of Franklin Bank SSB, the Federal Deposit Insurance Corp said.

As of September 30, Franklin Bank SSB had total assets of $5.1 billion and total deposits of $3.7 billion. The failure is expected to cost the FDIC’s insurance fund between $1.4 billion and $1.8 billion, the regulator said.

The insurance fund stood at about $45 billion at the end of June, the last time it was publicly disclosed.

Community Bank

The Community Bank, Loganville, Georgia, was closed recently by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of Essex, to assume all of the deposits of the Community Bank.

As of October 17, 2008, the Community Bank had total assets of $681.0 million and total deposits of $611.4 million. Bank of Essex purchased about $84.4 million of the Community Bank’s assets.

Freedom Bank

US bank regulators on October 31 closed Freedom Bank in Florida, the 17th bank to fail this year as the weakening economy and falling home prices take their toll on financial institutions.

Fifth Third Bank will assume the Florida bank’s insured deposits, the FDIC said. Freedom Bank had total assets of $287 million and total deposits of $254 million as of October 17.

The failure is expected to cost the FDIC’s insurance fund between $80 million and $104 million. The insurance fund stood at about $45 billion at the end of June, which is the most updated figure publicly available.

Fifth Third’s acquisition of Freedom Bank’s deposits was the ‘least costly’ alternative for the FDIC’s insurance fund, the regulator said.

Silver State Bank

Silver State Bank of Henderson, Nevada, was closed by US regulators some time back, the 11th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Depression.

Silver State, with $2 billion in assets and $1.7 billion in deposits, was shut by the Nevada Financial Institutions Division and the Federal Deposit Insurance Corp, the FDIC said.

Nevada State Bank in Las Vegas will assume the deposits from Silver State, which was run by Silver State Bancorp.

Columbian Bank and Trust

Columbian Bank and Trust Co of Topeka, Kansas, was closed by US regulators in August, the nation’s ninth bank to collapse this year amid bad real-estate loans and writedowns stemming from a drop in home prices.

The bank, with $752 million in assets and $622 million in total deposits, was shuttered by the Kansas state bank commissioner’s office and the Federal Deposit Insurance Corp, the FDIC said. Citizens Bank and Trust will assume the failed bank’s insured deposits.

First Priority Bank

Florida’s six-branch First Priority Bank was shuttered August 1, in what was the eighth US bank failure of the year.

SunTrust Banks agreed to take on the deposits of First Priority, the Federal Deposit Insurance Corporation said. At the end of June, First Priority had $259 million in assets and total deposits of $227 million.

There were roughly $13 million in uninsured deposits held in about 840 accounts that potentially exceeded insurance limits, the FDIC estimated. SunTrust also bought about $42 million of the failed bank’s assets.

The FDIC sold another $14 million of First Priority’s assets to LNV Corporation, a unit of Beal Bank Nevada.

First National Bank

On July 25, 2008, First National Bank of Nevada, Reno, NV, was closed by the Office of the Comptroller of the Currency (OCC).

Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named receiver.

As of June 30, 2008, the former First National Bank of Arizona, Scottsdale, AZ, merged with First National Bank of Nevada and was included in this action.

ANB Financial

The failure of ANB Financial marked the third bank failure of the year, following the closure of Hume Bank in early March.

ANB Financial had $2.1 billion in assets and $1.8 billion in total deposits as of January 31.

Pulaski Bank was slated to assume $212.9 million of ANB’s insured non-brokered deposits for a premium of 1.011% and would purchase $235.9 million of assets.

IndyMac Bank

Troubled mortgage lender IndyMac Bancorp Inc was taken over by federal regulators in July 2008.

About 95% of the $19 billion in deposits in the bank were insured, but that leaved $1 billion that was not covered by FDIC guarantees.

Agency said10,000 IndyMac customers could lose as much as half of that amount, or $500 million.

The failure was expected to cost the Deposit Insurance Fund between $4 billion and $8 billion, based on preliminary estimates.

Washington Mutual

Washington Mutual Inc was closed by the US government in September in one of the largest failures of a US bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion. The rescue marked a historic step to clean up a US financial system littered with toxic mortgage debt.

Washington Mutual, the largest US savings and loan, was closed by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver.

The bailout came after the thrift suffered deposit outflows of $16.7 billion since September 15, the OTS said. Seattle-based Washington Mutual had about $307 billion of assets and $188 billion of deposits.

Alpha Bank and Trust

Alpha Bank and Trust of Alpharetta became the 16th bank failure of the year.

FDIC was named receiver and entered into a purchase and assumption agreement with Stearns Bank of St. Cloud, Minn., to assume the insured deposits.

As of September 30, Alpha Bank & Trust had total assets of $354.1 million and total deposits of $346.2 million.

Meridian Bank

Meridian Bank of Eldred was closed in October by the Illinois Department of Financial Professional Regulation-Division of Banking, and the Federal Deposit Insurance Corporation, marking the 15th bank failure of the year. FDIC approved the assumption of all the deposits of Meridian Bank by National Bank, Hillsboro, Ill.

Meridian Bank had total assets of $39.2 million in total assets and $36.9 million in total deposits as of September 25.

Main Street Bank

Main Street Bank, Northville, Michigan, was in October by the Michigan Office of Financial and Insurance Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

To protect the depositors, the FDIC approved the assumption of all the deposits of Main Street Bank, by Monroe Bank & Trust, Monroe, Michigan. Main Street Bank had total assets of $98 million in total assets and $86 million in total deposits as of October 7, 2008.

Ameribank

Ameribank Inc was shut down in September by the Office of the Thrift Supervision, making it the 12th bank this year to go under. The Northfork, West Virginia bank had total assets of $115 million and total deposits of $102 million, according to a statement on the Federal Deposit Insurance Corporation.

The FDIC was named receiver and announced that it entered into purchase and assumption agreements with Pioneer Community Bank, Inc., Iaeger, West Virginia, and the Citizens Savings Bank, Martins Ferry, Ohio, to take over all of Ameribank’s deposits. Ameribank had five branches located in West Virginia and three branches located in Ohio.

Integrity Bank

Integrity Bank, Alpharetta, Georgia, with $1.1 billion in total assets and $974.0 million in total deposits as of June 30, 2008, was closed by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver.

The FDIC Board of Directors approved the assumption of all the deposits of Integrity Bank by Regions Bank, Birmingham, Alabama.

First Integrity Bank

On May 30, 2008, First Integrity Bank NA, Staples, MN was closed by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.

The FDIC Board of Directors approved the assumption of all the deposits of First Integrity by First International Bank and Trust, Watford City, North Dakota. In addition to assuming all of the deposits of the failed bank, First International was slated to purchase approximately $35.8 million of First Integrity’s assets for a total premium of $2.03 million. The FDIC will retain approximately $18.9 million in assets for later disposition.

First Heritage Bank

On July 25 2008, First Heritage Bank N.A., Newport Beach, CA, was closed by the Office of the Comptroller of the Currency.

Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named receiver. As of June 30, 2008, First Heritage Bank had total assets of $254 million and total deposits of $233 million.

Hume Bank

Hume Bank, Hume, Missouri, was closed in March this year by the Commissioner of Missouri’s Division of Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect depositors, the FDIC Board of Directors approved the assumption of Hume Bank’s insured deposits by Security Bank, Rich Hill, Missouri.

As of December 31, 2007, Hume Bank had total assets of $18.7 million and total deposits of $13.6 million. Security Bank has agreed to assume $12.5 million of the failed bank’s insured deposits for a premium of 4.26 percent. At the time of closing, Hume Bank had approximately $1.1 million in 33 deposit accounts that exceeded the federal deposit insurance limit.

Douglass National Bank

in what was the first US bank failure this year, Federal regulators in January shuttered Douglass National Bank, an African-American-owned bank with $59 million in assets that was named in honour of the 19th-century abolitionist Frederick Douglass.

The bank, which has roots stretching back to the 1940s, had struggled of late, losing $1.3 million in 2007 and $4.3 million in 2006.

• ADAG eyes AIG’s Asian life insurance business
• Satyam scandal could be ‘India’s Enron’
• Debt-Ridden Tribune Co. Considers Bankruptcy

Nortel announced its worst quarterly financial results which saw it sink further into losses as compared to year ago profit figures and shares tumble to anew low since 2001.

The Q3 figures stood at $3.41 billion loss or $6.85 slide per share as compared to year ago profit of $27 million, or 5 cents per share. Revenues too witnessed a drop of 14 percent at $2.32 billion.

The results however include a payment of $3.21 billion write down goodwill and deferred tax assets.

“In September, we signaled our view that a slowdown in the market was taking place,” said Mike Zafirovski, Nortel’’s chief executive, in a statement. Since then, he added, “we have seen worsening economic conditions, together with extreme volatility in the financial, foreign exchange and credit markets globally, further impacting the industry, Nortel and its customers.”

The company admitted that cutting costs and preserving cash are its top priorities now. While job cuts are inevitable, the company would also freeze salaries and hiring, re-evaluating its real estate holdings and cutting discretionary spending. For records it announced 1300 job cuts. This is in addition to the already announced 1200 job cuts. The down sizing will start immediately and will be completed by 2009. The company expects $ 400 million as savings from job cuts in 2009.

It has also suspended any dividends on preferred shares to maintain cash reserve.

To add to its misery top executives including chief marketing officer, its chief technology officer and its global services president announced departure from the company.

Shares of the company fell 22 cents, or 18.8 percent, to 95 cents on Monday. Earlier in the session, the stock fell to 90 cents, its lowest level since the early 1980s. The company has witnessed a 93 percent drop in valuation since beginning of the year.

• Yahoo to cut at least 1400 jobs globally
• eBay to cut 10pc of staff
• UK takes stakes in banks

AUSTRALIA’S jobless rate will more than double between now and 2010, when over one million people are expected to be out of work, as the global economic slowdown weighs on China, a leading international bank says.
JPMorgan Australia’s chief economist Stephen Walters said a slowdown in China’s economic growth will be detrimental to the creation of jobs in Australia in the next two years.

“We now expect the jobless rate to more than double to 9 per cent in late 2010, from the current 4.3 per cent,” Mr Walters said.

“Softer growth in one of Australia’s leading export destinations means Australia’s export volumes will be lower, as will be the terms of trade.

“That said, on our forecasts, there will be one million unemployed Australians by the second half of 2010.”

September 1994 was the last time the nation’s jobless rate started with a 9, when it registered 9.1 per cent.

Meanwhile, Australia’s gross domestic product (GDP) growth is expected to fall to 1.4 per cent in 2009, based on reduced expectations for expansion in China, Mr Walters said.

An expected slowing in export volumes, lower business investment and reduced household spending, which constitutes 60 per cent of the economy, also prompted the growth outlook downgrade.

The Chinese government said on Monday its economic growth was 9.9 per cent for the first three quarters of this year, down from 11.9 per cent last year.

• World economies to decline in 2009: IMF
• China’s growth slowing
• Xerox to cut 3,000 jobs in next six months

YAHOO reported its third-quarter net income tumbled 64 per cent as the company lowered its year revenue guidance and said it would reduce its global work force by at least 10 per cent.

Yahoo said it plans to implement further cost-cutting actions to reduce its current annualised cost run rate of about $US3.9 billion ($5.8 billion) by more than $US400 million by the end of the year.

The job cuts translate into at least 1400 layoffs from a workforce of 14,300 employees.

It will be Yahoo’s second round of mass cutbacks this year as management tries to end a three-year slump that has hammered the company’s stock price.

Shares rose 5.5 per cent to $US12.74 in after-hours trading.

The internet company reported net income of $US54.3 million, or US4c a share, down from $US151.3 million, or US11c a share, a year ago. Excluding items, earnings fell to US9c a share.

Total revenue increased 1.1 per cent to $US1.79 billion. Revenue excluding traffic-acquisition costs climbed 3 per cent to $US1.33 million.

“An increasingly challenging economic climate and softening advertising demand contributed to revenues this quarter coming in at the low end of our outlook range,” said chief financial officer Blake Jorgensen, adding the company was “disappointed” with the results.

In July, Yahoo predicted revenue of $US1.78 billion to $US1.98 billion. Analysts polled by Thomson Reuters were expecting per-share earnings of US9c on revenue of $US1.37 billion, excluding traffic-acquisition costs.

Yahoo’s gross margin slipped to 56.8 per cent from 58.1 per cent.

International revenue fell 12 per cent, while US revenue grew 7 per cent.

Yahoo lowered its outlook for 2008 revenue to a range of $US7.18 billion to $US7.38 billion from previous projections of $US7.35 billion to $US7.85 billion. In July, the company narrowed its guidance but kept the midpoint the same.

The company also projected fourth-quarter revenue of $US1.77 billion to $US1.97 billion, while analysts estimated $US1.51 billion, excluding traffic-acquisition costs.

Amid the current economic woes, Yahoo has struggled more than rival Google because it is heavily exposed to the slumping internet display advertising market and it hasn’t been as effective in making money from search ads.

Yahoo had hoped to compensate by striking an agreement that would allow Google to broker some ads that appear alongside Yahoo search results in the US and Canada, but advertisers and US regulators have voiced concerns the deal would concentrate too much power.

Yahoo has said the pact could boost its revenue by as much as $US800 million a year. There has also been speculation that Yahoo might try to strike a deal for Time Warner’s struggling AOL unit, a move that would create an online advertising behemoth.

Yahoo, with about 20 per cent of the US search market, remains a popular internet property, which is why software giant Microsoft earlier this year attempted to acquire the struggling company.

Yahoo fended off the deal and dodged a proxy battle with activist investor Carl Icahn.

Dow Jones Newswires

• Nortel sinks deeper, 1300 job cuts announced
• Secure IT companies in India
• ADAG eyes AIG’s Asian life insurance business

The global recessionary trends have affected the young employees of the Indian software industry in Hyderabad in more than one way.
While on one hand it is has spelt job loss fear, on the other hand, the parents of brides-to-be are no longer in search of IT grooms for their daughters.

The global recessionary trends have certainly scared the parents of would be brides who have apprehensions about the fluctuating signs in the information technology sector.

• Five years until super web - Google
• CAN’T DO WITHOUT YOUR CELL PHONE? IT MAY BE NOMOPHOBIA
• Top most firing IT companies in India

Sources told ET that the asking price for American International Assurance Company (AIA), AIG’s wholly-owned arm, has been pegged at around $10 billion. Sources said Citibank, acting on behalf of AIA, has approached ADAG to buy out AIA. AIA is AIG’s flagship life insurance company for South-East Asia and is the largest life insurer in the region with businesses across South East Asia.

Last month, the US nationalised AIG which was on the brink of collapse with an $85-billion loan and restructured its top management. This was followed by another $38 billion last week. Now, the insurance giant is 80%-owned by the US government.

Last year, Tata Steel had acquired Anglo-Dutch steel major Corus for $12 billion and Hindalco had acquired Novelis for around $7 billion. In comparison, Indian financial services firms have been rather conservative in their international acquisitions.

In most geographies, AIG operates as AIA while in some markets like Australia and New Zealand, it functions as AIG.

When contacted, the R-ADAG spokesperson declined to comment. Sources, however, told ET that the group is interested in the deal, given AIA’s dominance in the region.
The Indian group has been spreading its financial services businesses overseas through Reliance Money, the retail brokerage and distribution arm of Reliance Capital. The company recently acquired 15% stake in Hong Kong Mercantile Exchange, which came on the back of a partnership with local firm Goldride Securities, for distributing financial products and services.

Reliance Money, which is looking to generate half of its revenue from abroad by 2013, is actively expanding operations in the Middle East.

Top group executives are currently evaluating options and likely to take a decision soon. “Chances of a deal are 50:50. R-ADAG could be looking at a modest valuation, in the $5-6 billion range. The deal is still at a nascent stage, and there’s no certainty that it will go through,” said a source.

R-ADAG already has a life insurance venture in India — Reliance Life Insurance — which is an associate company of Reliance Capital, the flagship financial services firm of the group, which has interests in asset management, stock broking, insurance, proprietary investments, private equity and other activities in financial services.

In India, AIG has a 24:76 life insurance joint venture with the Tatas. This business is unlikely to be part of the proposed deal with Reliance-ADAG, as the Tatas may have a right of first refusal in any sale by AIG.

AIG, which had assets in excess of $1 trillion in 2007, has been looking to sell parts of its businesses and assets and focus on the core general insurance business. AIG’s move to sell AIA is at variance with its earlier statement to retain a continuing ownership interest in its foreign life insurance operations.

Life insurance and retirement services business is the largest revenue generator for AIG. Out of the total revenues of $110 billion in 2007, life insurance generated $53.6 billion and general insurance $51.7 billion. Asset management and other financial services are comparatively smaller business areas of AIG globally.

In 2007, AIG generated $92.7 billion worth of aggregate business, which includes premium, deposits and other considerations from life insurance and retirement services businesses. Out of this, $67.5 billion came from operations outside the US. Besides AIA, this also represents businesses from other units of AIG spreading across Europe, Latin America and Japan.

• US govt to buy stake in insurance companies
• AIG to claw back executive payments, reform ways
• India’s Videocon eyes Motorola’s handset business

The US economic downturn deepened in September and October as the credit crisis intensified, reports showed.

Industrial output fell 6% in the third quarter, the most since 1991, and a factory index for the Philadelphia region hit an 18-year low this month, Federal Reserve figures showed. The Labor Department reported that for the first time in two years consumer prices didn’t increase for two straight months.

Today’s numbers give the Fed scope to lower interest rates again this month. Interest-rate futures showed rising expectations of a half-point cut in the Fed’s benchmark to 1% by policy makers’ next meeting on October 29.

”The credit crunch is intensifying, and enough damage has been done to ensure the next couple of quarters will be much weaker,” said James O’Sullivan, a senior economist at UBS Securities. ”The pendulum has swung sharply to the downside risks to growth rather than inflation.”

Shutdowns caused by hurricanes and a Boeing Co. strike caused production at US factories, mines and utilities last month to decline 2.8%, the most since 1974, after a 1% drop. The median forecast of 73 economists surveyed by Bloomberg News was for a 0.8% fall

The Standard & Poor’s 500 Stock Index recouped earlier losses to close up 4.2% at 946.43. The gauge is down 18% so far this month. Treasuries pared losses and benchmark 10-year note yields were little changed at 3.96% in New York.

Philadelphia Plunges

The Fed Bank of Philadelphia’s general economic index plunged to minus 37.5 this month, worse than forecast and the lowest reading since October 1990, from 3.8 in September, the bank said today. Negative readings signal contraction. The index averaged 5.1 last year.

Homebuilder confidence slid this month to the lowest level since record-keeping began in 1985, a sign the crisis in credit markets may deepen the worst housing recession in a generation. The National Association of Home Builders/Wells Fargo index of builder sentiment decreased to 14, less than forecast, from 17 in September, the Washington-based association said today.

Separately, the Labor Department said initial jobless claims fell last week as job losses related to the Gulf Coast hurricanes subsided, while total benefit rolls rose to the highest level in five years. First-time applications declined by 16,000 to 461,000 in the week that ended October 11.

Read more

• US industrial output posts biggest fall in 34 years
• Banks to cut 62,000 jobs
• Citigroup Posts Fourth Straight Loss