Charles Seife visits Google's New York, NY office to discuss his book "Proofiness: The Dark Arts of Mathematical Deception."
Charles Seife, a journalist with Science magazine, has also written for New Scientist, Scientific American, The Economist, Wired UK, and The Sciences, among many other publications. His previous titles include Alpha & Omega and Zero.
China Corn Imports Seen Rising Sevenfold as Demand Gains
Feb. 23 (Bloomberg) -- Corn imports by China, the world's second-largest consumer, may surge sevenfold to a record 28 million metric tons by 2015-2016 as local production fails to keep pace with increased demand, according to INTL FCStone Inc.
Imports may gain from 4 million tons in 2011-2012 and reach 13 million tons by 2012-2013, Mike O'Dea, senior risk manager, told a conference in Singapore. The local harvest may reach 187 million tons next year, 6.5 percent less than projected demand, according to a presentation from O'Dea.
The country's looming structural corn deficit may support prices and boost global food costs. China should increase its agricultural imports to help feed its 1.3 billion people and ease pressure on the environment, a state-affiliated researcher said last year. China needed to maintain reserves of 50 million to 60 million tons to guard against disruptions, O'Dea said.
"We're projecting a doubling of imports this year, and doubling again next year because they've got to maintain that reserve stock," said O'Dea, who's been in the grains industry for three decades. The government sold some of its corn stockpiles last year to combat inflation, he said.
Corn for delivery in May was unchanged at $6.4125 per bushel on the Chicago Board of Trade at 12:52 p.m. in Singapore. The price has declined 0.8 percent this year. Global ending stockpiles may be 125.3 million tons this year, the lowest level in five years, according to the U.S. Department of Agriculture.
Soybean Trade
"China's imports of corn will likely grow like the soybean trade, that's almost a certainty," said Tommy Xiao, an analyst at Shanghai JC Intelligence Co. The country is the largest buyer of the oilseed, with imports rising more than fivefold in the past decade as local output dropped, according to USDA data.
Demand for food and livestock feed has increased in China as economic growth has lifted incomes, driving an increase in protein consumption. Corn is used to make animal feed, while soybeans are crushed for oil and also used to fatten livestock. Gross domestic product expanded 9.2 percent in 2011.
FCStone's forecast for an import surge by the most populous nation joins projections from Singapore-based commodity supplier Olam International Ltd. and Cofco Agri-Trading & Logistics Co., a unit of the China's biggest grain trader. Imports may total 20 million tons by 2015, Olam said in October. Shipments by 2020 may be 20 million tons, Cofco Agri-Trading said the same month.
An increase in agricultural imports could cut the impact of grain and livestock farming on soil and water, and is "nothing to be afraid of," Hu Bingchuan, a researcher at the Rural Development Institute of the Chinese Academy of Social Sciences, said in an interview November.
China's imports of corn may be the "biggest wild card" in the global market in the near term as the country may look to rebuild the state stockpiles, O'Dea said.
Global food costs have declined 10 percent since reaching a record in February 2011, according to a 55-item gauge compiled by the Rome-based Food & Agriculture Organization, a United Nations agency.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Google Poised to Overtake Facebook in U.S. Display Ads Next Year
Feb. 22 (Bloomberg) -- Facebook Inc. will lose its lead to Google Inc. in U.S. display-ad revenue next year as the social- networking service's advertising growth slows, according to research firm EMarketer Inc.
Google will grab 19.8 percent of the market in 2013, generating $3.68 billion, while Facebook will attract 17.7 percent, or $3.29 billion, New York-based EMarketer estimates. Facebook had taken the lead from Yahoo! Inc. last year, and it should maintain its edge through 2012 in the market, which includes ads with pictures, videos and other visual elements.
Facebook and Google, both relative latecomers to the display-ad market, have shoved aside other rivals to become the industry's main contenders. Facebook took the lead by peppering its burgeoning social networking with small ads. Google, meanwhile, expanded from its origins in text-based search-engine links. It now sells a variety of graphical advertising on websites, mobile phones and YouTube clips.
Facebook, with 845 million users, needs to do more to persuade big brands to spend money on marketing, rather than just having them set up free company pages on the social network, said Debra Aho Williamson, an analyst with EMarketer.
"It really comes down to brand advertisers," she said. "They just need to do a better job of convincing the big advertisers that ads are effective and that they perform."
IPO Filing
Facebook, which filed for an initial public offering this month, is coping with slowing revenue growth. Sales rose 55 percent to $1.13 billion in the fourth quarter from a year earlier, after more than doubling in the previous three quarters, according to a regulatory filing. EMarketer expects Facebook to reach $6.1 billion in total revenue this year, up from $3.71 billion in 2011.
Facebook filed this month to raise $5 billion in the largest initial public offering of an Internet stock. The Menlo Park, California-based company is considering a valuation of between $75 billion and $100 billion, people familiar with the matter have said.
Facebook and Google will tighten their control over the industry in the coming years, EMarketer said. Yahoo will account for 7.5 percent of the U.S. display market in 2014, down from almost 11 percent last year. AOL Inc. will drop to 3.7 percent from 4.3 percent. Google will have 21.7 percent in 2014, with 17.1 percent going to Facebook.
Google is benefiting from its longstanding leadership in search-based marketing, according to EMarketer. Including that, the company will have 47.4 percent of the total U.S. online ad market in 2014, up from 41 percent last year. Facebook will rise to 7.1 percent from 5.4 percent, EMarketer estimates.
Google also benefits from its ad network, which places marketing messages on sites outside of the Mountain View, California-based company's own properties, said David Hallerman, another analyst with EMarketer.
"Don't underestimate the importance of existing relationships," he said. "Google has relationships with more major brands than Facebook does."
To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net .
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Apple's IPad Trademark Battle Unveils Bank of China as Opponent
Feb. 23 (Bloomberg) -- Apple Inc.'s legal fight for the iPad name in China doesn't just pit the world's most-valuable company against a failed Hong Kong display maker. Some of the nation's biggest banks also are opposing the technology giant.
Apple is appealing a Chinese court ruling that the trademark belongs to a mainland unit of Proview International Holdings Ltd. At the time Apple says it bought those rights, the Shenzhen subsidiary was controlled by creditors including Bank of China Ltd. and China Minsheng Banking Corp., according to Proview founder Rowell Yang.
Losing its Feb. 29 appeal would open Apple to lawsuits seeking damages and enable a nationwide ban on iPad sales in the Cupertino, California-based company's biggest market outside the U.S. The dispute revolves on whether Proview's Taiwan unit, to which Apple paid 35,000 British pounds ($55,163) to use the iPad name in China, had the right to sell it or whether that rested with the Shenzhen unit and its creditors.
"Right now, the most valuable asset of Proview Group is the iPad trademark registration in China," said Eugene Low, a trademark lawyer at Mayer Brown JSM in Hong Kong. "Assuming the creditors have control of the affairs of Proview Shenzhen, it might be in their best interest to get a settlement as quickly as possible to monetize the Proview assets."
'Not True'
After Proview Technology (Shenzhen) Co. defaulted on loans, the Shenzhen Intermediate People's Court in March 2009 appointed Bank of China and Minsheng to lead a reorganization of the company, Yang, who remains chairman of the unit, said in a Feb. 21 interview.
"We can't make any agreements without the creditors," Yang said. "We are under the monitoring and control of the court." Chinese court documents are not publicly available to verify the claim.
No one in Shenzhen, a city neighboring Hong Kong, knew the Taiwan unit signed away the China trademarks, Yang said.
Apple says that's not true. Proview "refuses to honor their agreement with Apple in China," said Carolyn Wu, a Beijing-based Apple spokeswoman. She declined to comment further, as the case is pending before the courts.
Proview's wholly owned Shenzhen subsidiary obtained the iPad trademark in China in 2001, according to a Feb. 3, 2010, regulatory filing with the Hong Kong stock exchange.
The mark was obtained for a desktop terminal with touch- screen display called the Internet Personal Access Device, or iPad, that the company developed starting in 1998, Yang said.
Court Rejects
Apple sued Proview's Shenzhen-based unit in 2010, claiming ownership of the iPad trademark in China on the basis of the December 2009 contract that the U.S. company says gave it global rights to the name, including in China. The Shenzhen Intermediate People's Court rejected Apple's claims on Nov. 17.
"If the plaintiff wants to buy trademarks from the defendant, it should do so according to China's laws and regulations by signing contracts with the defendant," the judgment said.
The court said the purchase agreement was signed in the name of Proview's Taipei-based subsidiary, Proview Electronics Co., which failed to demonstrate that the transfer was approved by the Shenzhen unit that owned the mark.
Apple appealed to the Higher People's Court of Guangdong, said Ma Dongxiao, a lawyer representing Proview at Grandall Law Firm in Beijing. Hearings begin Feb. 29.
London Link
Proview "hasn't yet decided the final claim amount" it will seek from Apple, the company's lawyer, Roger Xie, said last week. A 10 billion-yuan ($1.6 billion) sum cited by China's state-run Xinhua News Agency in December was "preliminary," he said.
Apple bought Proview's trademarks through a U.K.-based unit called IP Application Development Ltd., or IPADL. Haydn Wood, who signed the agreement with Proview Electronics on behalf of IPADL, declined to comment on the agreement or lawsuits when contacted by Bloomberg News.
Sales of iPads reached 32 million worldwide last year, earning revenue of $20.4 billion. At $480 billion, Apple's market capitalization surpasses the $454 billion value of all of Mexico's listed companies, data compiled by Bloomberg show.
Apple has itself to blame for failing to properly secure rights for the China market, said Ray Mai, the Shanghai-based lawyer who represented Proview in the 2009 talks with IPADL.
Apple Rush
"At that time, Proview was not in good condition," said Mai, whose signature is on the sales agreement. "On one side is this nearly bankrupt company, on the other is one of the strongest companies in the world. When we signed, Apple dispatched a lot of famous lawyers in front of me, very big law firms."
Mai was outside counsel for Proview at the time and no longer represents the company, he said in a Feb. 17 phone interview. A copy of a business card from 2009 with Mai's name on it described him as "director and lawyer" of Proview Technology (Shenzhen)'s legal department.
Apple was rushing to obtain trademark rights for the iPad name so it could roll out the product, Yang said. Then-Chief Executive Officer Steve Jobs announced the iPad on Jan. 27, 2010, more than a month after the Proview contract was signed Dec. 23. Apple didn't grasp the nature of the relationship between the Shenzhen trademark holder, its banks and the courts, Yang said.
"The banks controlled Proview Shenzhen from March 2009," Yang said. "We needed bank approval for any sale of assets."
Bank of China is still a Proview creditor, according to the Shenzhen-based press officer of the nation's fourth-largest lender by market value, who declined to be identified citing company policy. An official at Minsheng Bank, who also declined to be identified, confirmed creditors control Proview's Shenzhen assets. The banks declined to comment on the Apple case.
Rise, Fall
The Proview Group was founded by Yang in Taiwan in 1989 as a maker of televisions and computer displays, and went public eight years later in Hong Kong.
By September 1999, it was among the world's 10 biggest makers of computer monitors and planned to reach the top five "in the near future," its annual report for that year shows. Sales expanded 10-fold from HK$1.77 billion ($228 million) in 1997 to HK$17.4 billion in 2008, when the U.S. subprime mortgage crisis expanded into a global slowdown.
Proview's sales plunged 74 percent to HK$4.46 billion in 2009, when it lost HK$2.91 billion. As falling sales eroded cash flow, Proview units defaulted on payments to suppliers and creditors, the company said in its annual report that year.
Delisting Move
"The Shenzhen factory, the group's primary manufacturing base, could only continue its operation with the assistance of the municipal government and the Bank of China and other creditor banks," it said.
The company last published results in March 2010, for the six months ended Dec. 31, 2009. It had a loss of HK$755.8 million and a deficit attributable to equity holders of HK$2.37 billion. Bank borrowings stood at HK$1.8 billion.
Proview's Hong Kong shares have been suspended since Aug. 2, 2010. The Hong Kong stock exchange on Dec. 30 gave Proview a third and final warning that it would be removed from the bourse by June 29 if it failed to publish results and demonstrate sufficient working capital for 12 months.
On Dec. 2, Proview announced it had struck an agreement with investor Rally Praise Ltd. to restructure the company and raise capital. No record of a company with that name could be found using Internet and registry searches.
Export Threat
Meantime, Proview is taking the fight to Apple. The company filed complaints to more than 40 local branches of the Administration for Industry and Commerce, according to Proview lawyer Ma. Court actions have been lodged in Shanghai, Shenzhen and Huizhou, he said.
Pudong District Court in Shanghai yesterday heard Proview's application for an injunction against sales of iPads in the city. No ruling was made, he said.
The decision of the Guangdong Higher People's Court will likely be final, said He Fang, an intellectual property lawyer at Rouse & Co. International in Shanghai. In exceptional cases, litigants who lose a second decision can refer their cases to the Supreme People's Court, the nation's highest, He said.
Proview has also applied to the Customs Bureau to block exports as well as imports of iPads, it said last week.
"China's Customs Bureau has powers not just on imports, but on exports, too, making it different from other countries," He said. "Most of Apple's iPads are manufactured in China, so if the Customs Bureau imposes restrictions on exports, then it becomes a global issue for Apple."
To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net Mark Lee in Hong Kong at wlee37@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Thinking startup? David S. Rose's rapid-fire TED U talk on pitching to a venture capitalist tells you the 10 things you need to know about yourself -- and prove to a VC -- before you fire up your slideshow."The Pitch Coach" David S. Rose is an expert on the business pitch. As an entrepreneur, he has raised millions for his own companies. As an investor, he has funded millions more.
Microsoft Files EU Antitrust Claim Against Motorola Mobility
Feb. 22 (Bloomberg) -- Microsoft Corp. filed a complaint with European Union antitrust regulators saying Motorola Mobility Holdings Inc. is attempting to block sales of personal computers and game consoles that run its software.
Motorola Mobility is violating a pledge to license industry-standard patents on fair terms, and is "demanding that Microsoft take its products off the market," Microsoft said in a blog post. Apple Inc. has also filed a complaint to the EU over Motorola Mobility's licensing terms.
"We have taken this step because Motorola is attempting to block sales of Windows PCs, our Xbox game console and other products," Microsoft said. Legal actions taken by Motorola to enforce its patents may "kill" video-streaming services on the Internet, Microsoft said.
Motorola Mobility, Microsoft, Samsung Electronics Co., and Apple are involved in numerous patent lawsuits in Europe as demand for smartphones and tablets soar. Google Inc., which is buying Libertyville, Illinois-based Motorola Mobility for $12.5 billion, has indicated it will reassure intellectual property standards organizations that it will license Motorola Mobility patents on a fair and reasonable basis.
'Step Back'
"Watching video on the Web is one of the primary uses of computers these days," Microsoft said in its statement. "Imagine what a step back it would be if we could no longer watch videos on our computing devices or connect via Wi-Fi, or if only some products, but not others, had these capabilities," it said.
The European Commission has "received this complaint and we will examine it," Antoine Colombani, a spokesman for EU antitrust chief Joaquin Almunia, said in an e-mail. Samsung is already being investigated by EU antitrust regulators over whether it broke licensing commitments.
Gemma Priscott and Jennifer Erickson, spokeswomen for Motorola Mobility, didn't immediately return calls seeking comment.
Both Microsoft and Apple have said they wouldn't seek any court order to block use of technology covered by industry- standard patents even as they pursue infringement claims over non-essential patents against Motorola Mobility.
Google has said it would seek a royalty fee of no more than 2.25 percent of the net cost of devices using its patents, and would try to resolve any disputes through negotiation before asking courts to block use of the Motorola Mobility technology.
"We are aware of the increasingly strategic use of patents in the sector and are vigilant," Almunia said Feb. 13. "We can avoid a continuation of this patent war."
To contact the reporter on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Samsung Said to Partner SAP to Push Corporate Use of Android
Feb. 22 (Bloomberg) -- SAP AG and Samsung Electronics Co. are teaming up to make mobile devices running Google Inc.'s Android operating system safer to use as corporate tools, according to people familiar with the matter.
SAP, the largest maker of enterprise-management software, and Suwon, Korea-based Samsung will present their plans next week at the Mobile World Congress in Barcelona, said the people, who declined to be named because the details aren't public. The cooperation will include e-mail encryption as well as making handsets compatible with device-management systems that remotely update software and toggle phone functions such as switching the camera on and off, one of the people said.
The partnership is SAP's first deal of this kind with a maker of Android phones and follows agreements with Research in Motion Ltd. for the BlackBerry platform and Apple Inc. for iPhone and iPad devices. Samsung, the second-biggest smartphone manufacturer behind Apple, is aiming to sell more handsets to corporate clients after the Android platform became the most popular operating system for smartphones.
"Companies need more pre-configured tablets and smartphones which comply with their advanced security requirements," said Ulrich Trabert, a software analyst at Bankhaus Metzler in Frankfurt who has a "sell" recommendation on SAP. "Naturally, SAP is looking for a partner who is dominant on the Android platform."
Spokesmen for Walldorf, Germany-based SAP and Samsung declined to comment.
Pick Your Device
Handset manufacturers benefit from the so-called consumerization of information technology, in which people use technology gadgets for both personal and work tasks, and as more companies allow employees to pick their mobile device of choice.
SAP added technology to help bring its software onto smartphones and tablets by acquiring Sybase Inc. in 2010 for $5.8 billion. Growth in revenue from mobile applications is part of the German company's strategy to exceed 20 billion euros ($26.5 billion) in annual revenue in 2015.
Apple passed Samsung to become the world's biggest smartphone vendor in the fourth quarter on surging sales of its iPhone, researcher Gartner Inc. said this month. Google's Android software ran on more than half of all smartphones sold.
Global sales of such handsets that use computerlike processors and can handle business e-mail and streaming video increased 47 percent to 149 million units, according to Gartner.
To contact the reporters on this story: Cornelius Rahn in Frankfurt at crahn2@bloomberg.net Jonathan Browning in London at jbrowning9@bloomberg.net
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/John joined Menlo Ventures in 1985. Over the past 24 years, he has led Menlo's investments in more than 40 portfolio companies, primarily in the communications, storage, semiconductor, Internet and financial technology sectors.Jonathan MacQuitty, Ph.D., Partner, Abingworth LLP
John is a graduate of the Massachusetts Institute of Technology (B.S. and M.S. in Electrical Engineering) and the Stanford University Graduate School of Business (M.B.A.).
Jonathan has more than 15 years of operational experience in life science companies and 12 years of venture capital experience. His directorships have included Adiana, Dicerna, Entelos, Guava, Gynesonics, Iconix, Labcyte, ParAllele BioScience, Personalis, SFJ Pharma and Sunesis Pharmaceuticals.Wade Woodson, Managing Director, Sigma Partners
Jonathan has an MA in Chemistry from Oxford University, a PhD in Chemistry from the University of Sussex and an MBA from Stanford University.
Wade joined Sigma in 1987 and became a general partner in 1990. He has been helping startup technology companies become valuable enterprises for more than twenty years. In that period, he has developed experience with a broad range of technology segments ranging from semiconductors to communications services to enterprise software.The guests for the Nortel Auction panel will be:
Wade holds an undergraduate degree from Stanford University in electrical engineering, a law degree from Harvard Law School and an M.B.A. from the University of California Haas School of Business.
Ron Laurie has worked in Silicon Valley for over forty years, initially as a computer programmer and systems engineer, and then as an intellectual property lawyer. In 2004, he co-founded Inflexion Point Strategy, LLC, an intellectual property investment bank engaged in buying, selling and investing in strategic IP assets and IP-intensive businesses.Richard Waters,West Coast Editor, Financial Times
As a lawyer, Ron advised clients in the semiconductor, computer, software, communications, media and financial services industries on intellectual property strategy -- a subject which he has taught at Stanford and Boalt (UC-Berkeley) law schools.
Based in San Francisco, Richard Waters has been responsible for the West Coast coverage of the Financial Times and FT.com, as well as global coverage of the technology industry, since August 2002. His appointment is a new one for the FT, reflecting the second phase of a national expansion plan in the US that has seen the newspaper’s US edition increase its circulation five-fold since 1997.
Richard's awards include: Accountancy Journalist of the Year, 1989; Reporter of the Year, British Press Awards, 1992 (part of a 5- person FT team that won the top annual reporting award in the UK); Award for best corporate finance submission, Business Journalist of the Year Awards, 2004.
German Offshore Wind-Energy Delays Threaten Energy Overhaul
Feb. 21 (Bloomberg) -- Germany's offshore wind parks, being built to replace most of the nuclear reactors closing in the next decade, are headed to miss construction targets because of delays in connecting turbines to the power grid.
EON AG and RWE AG, the country's biggest utilities, have threatened to halt investment in wind projects unless obstacles are removed, which RWE blames mainly on slow permitting and problems with acquiring cables and transformer stations.
The difficulties undermine the government's aim to have 10 gigawatts of sea-based turbines, or the equivalent of about nine atomic plants, installed by the end of this decade, according to the wind industry's main lobby group. About 0.2 gigawatts were in place at the end of last year.
"We won't reach 10 gigawatts by 2020, and everyone in the industry knows that," Hermann Albers, the head of the BWE wind- energy lobby, said in an interview in Berlin. Grid operators, which are responsible for the connections, and their suppliers have underestimated the challenges of connecting projects that can cost upward of 1 billion euros ($1.3 billion), he said.
The sluggish start to Germany's offshore wind expansion is a setback for Chancellor Angela Merkel's plan to transition to a nuclear-free energy mix based on 80 percent renewable sources by 2050. It signals greater reliance on other energy sources and delays for wind-project suppliers including Siemens AG, Europe's biggest engineering company, and ABB Ltd. of Switzerland, the largest maker of power-distribution equipment.
'Not in Danger'
The German government says the delays won't affect its goal of shutting all nuclear reactors by 2022 and raise the share of renewables to 35 percent of the total installed capacity from about 20 percent last year.
"The energy overhaul is not in danger," as installations of land-based turbines and solar panels exceed expectations and "overcompensate" for the offshore wind delays, Juergen Maass, a spokesman for the German Environment Ministry, said by phone.
The government's longer-term target of 25 gigawatts of offshore wind generators by 2030 "will be met, just the curve to get there may look different," he said.
The utilities say the delays may affect longer-term commitments. Fritz Vahrenholt, chief executive officer of RWE's Innogy unit for renewable energy, predicted a possible "collapse in investment activities" in German offshore wind farms unless the issues are resolved.
Grid Delays
Grid operator TenneT TSO GmbH told RWE that hooking the utility's 1 billion-euro Nordsee Ost wind farm up to the grid will take 12 months longer than expected, Vahrenholt said last month in Essen, Germany, where RWE has its headquarters.
EON's Amrumbank West project in the North Sea will be delayed by about 15 months, said Carsten Thomsen-Bendixen, an EON spokesman. The Dusseldorf-based utility said it can't make an investment decision on two other projects in planning in Germany because of the problems.
The utilities are concerned about who will compensate them for the delays, which in the case of RWE's Nordsee Ost farm may cause damages in the "three-digit million-euro range," Vahrenholt said. They also want to cut red tape in permitting wind farms.
German Developer Windreich AG rejected the utilities' warnings as "doom-mongering." TenneT will connect "nearly on time" Windreich's Global Tech I, MEG 1 and Deutsche Bucht projects with a combined capacity of about 1 gigawatt, Chief Executive Officer Willi Balz said in a statement late yesterday.
'Exceeding Projections'
Germany's environment and economy ministries last month set up a group that will also include grid operators, regulators and industry officials to discuss issues including permitting and liability to speed up grid connection. The group will make recommendations to Environment Minister Norbert Roettgen at the end of next month, said Thorsten Falk of the Offshore Stiftung, a group that promotes offshore wind energy.
"The 10-gigawatts can be reached in principle if a broad solution for the grid connection issue can be brought on its way quickly," Falk said in e-mailed remarks. "Whether this will be a precision landing or delayed by two years doesn't matter for the overhaul of the electricity supply. The actual power output is what matters, not the megawatt figures. Initial experience shows that those are exceeding projections."
TenneT has earmarked 5.5 billion euros for nine grid connection projects, Ulrike Hoerchens, a spokeswoman, said by phone. Two projects, HelWin 1 and BorWin 2, which are each able to connect several wind farms, are delayed by eight months and three months, respectively, she said.
As much as 55 additional wind farms may ask for approval in TenneT's grid in the coming months, Hoerchens said. "That shows the kind of challenges we as a grid operator are facing," she said.
Siemens Setback
The start of construction of the HelWin 1 converter platform will be delayed by about a year to May 2013 as the licensing and permitting process "turned out to be more complex than planned," Torsten Wolf, a spokesman for Siemens, the main contractor for both projects, said by phone.
Siemens, which booked 203 million euros in charges in the first quarter on the delays, is "pulling out all the stops" to start construction for BorWin 2 in September, about three months later than planned, he said.
German authorities should draft a long-term offshore grid development plan and clarify who's legally responsible to compensate for grid connection delays, TenneT said in a statement posted on its website yesterday. It suggested forming a "German direct-current network operator" that would plan, finance, build and run power lines to connect the wind farms and bring their output south, where companies including Daimler AG and BASF AG run factories.
"The current structure is not suitable to accomplish the ambitions of the energy transition," it said.
To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/'PayPal Mafia' Gets Another Boost From Yelp, Facebook
Feb. 21 (Bloomberg) -- The fortunes of the so-called PayPal Mafia are poised to grow.
Jeremy Stoppelman and Max Levchin own about $200 million in Yelp Inc. shares heading into the company's initial public offering, setting up the latest payday for PayPal Inc.'s former executives. Stoppelman, co-founder and chief executive officer of Yelp, owns 11.1 percent of the company, while Levchin, the chairman, has 13.5 percent. The user-generated review site announced plans last week to sell shares for $12 to $14 apiece in an IPO, valuing Yelp at as much as $838 million.
The Yelp executives join Facebook Inc. investors Peter Thiel and Reid Hoffman and Space Exploration Technologies Corp. founder Elon Musk on a short list of ex-PayPal employees poised to generate big-time riches from pending IPOs. PayPal, which developed an online payment system, was purchased by EBay Inc. for $1.5 billion in 2002, making many of its early employees rich and eager to pursue new endeavors.
"PayPal did a great job of producing a very talented class of entrepreneurs," said Eric Jackson, the company's first marketing director and author of "The PayPal Wars." "They've gone on to do amazing things in Silicon Valley and the tech industry."
Stoppelman, 34, co-founded San Francisco-based Yelp in 2004, after serving as PayPal's vice president of engineering from 2000 to 2003. Levchin, 36, has been chairman of Yelp since 2004. After working as PayPal's chief technology officer, he founded Slide Inc., a Web application developer that was purchased by Google Inc. in 2010.
Made Men
Both executives were among a group of colleagues who came to be known in Silicon Valley as the PayPal Mafia. The moniker was codified by an article in 2007 in Fortune magazine.
Vince Sollitto, a Yelp spokesman who also used to work at PayPal, declined to comment.
Yelp, which first filed to go public in November, plans to raise as much as $100 million in the offering. Its revenue rose 74 percent to $83.3 million last year, as the number of monthly unique visitors jumped 67 percent to 66 million.
While Yelp will go public first, it will be dwarfed in size by Facebook. The world's largest social-networking site filed earlier this month to raise $5 billion in the largest Internet IPO on record. The Menlo Park, California-based company is considering a valuation of $75 billion to $100 billion, according to people familiar with the matter.
Facebook Funding
Facebook's seed funding in 2004 came from Thiel and Hoffman, who are now venture capitalists. Thiel, a Facebook board member, owns a stake worth more than $2.5 billion at the high end of the range being considered. While Hoffman's stake isn't disclosed in the prospectus, the website Who Owns Facebook estimates he owns 0.5 percent, or about $500 million based on a valuation of $100 billion. Hoffman is also the founder and biggest shareholder of LinkedIn Corp., with stock valued at about $1.8 billion following its IPO.
Thiel's Founders Fund, which includes other PayPal alumni, is poised to reap additional gains from the IPO of SpaceX, the private rocket-launch business founded by Musk. In an interview this month, Musk said "there's a good chance that SpaceX goes public next year."
Musk, whose main job is Tesla Motors Inc.'s CEO, also is chairman of solar installer SolarCity Corp. That company is preparing to file for an IPO as early as March, a person familiar with the matter said this month.
Early Days
Musk and Thiel were rivals in the early online payment days -- before their companies merged, forming what became PayPal. Before PayPal's IPO in 2002, Musk was the biggest individual shareholder, with 11.7 percent ownership. Thiel owned 4.6 percent, and Levchin controlled 2.9 percent.
PayPal's former operating chief, David Sacks, is now founder and CEO of Yammer Inc., a provider of social-networking software to businesses. Its service is used by more than 100,000 companies. While Sacks isn't talking about an IPO filing, his startup is benefitting from the popularity of Facebook and growth of social media.
"Facebook is the inspiration for a lot of what we've done in a parallel universe," Sacks said in an interview with "Bloomberg West." "They're essentially connecting the whole world. The scale is staggering."
To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Virtual Priest Offers Guidance on Web Browsing at Israeli Museum
Feb. 20 (Bloomberg) -- A virtual priest pops up in a confessional and offers spiritual guidance to computer users who routinely spill their guts through Google searches. A neon sign displays words eavesdropped from mobile-phone conversations.
The Israeli works in the "Decode: Digital Design Sensations" exhibition at the Design Museum Holon comment on digital traces left by everyday communications, and are especially poignant given escalating Mideast cyber-attacks.
"There is some kind of critical thinking, and at least in these installations a need to reveal the mechanism, to say: OK, this technology is great, but let's look at it and how it works," says Mushon Zer Aviv, who designed the priest-inspired browser plug-in "Good Listeners."
The plug-in, which can be downloaded at home, opens up the confessional whenever a site is exposing a visitor's data to a third-party service. The idea is to present a satirical visualization of the vast amount of data passively generated by Web surfers that is collected and mined by Internet forces.
Websites operated by the Tel Aviv Stock Exchange and El Al Israel Airlines Ltd. were attacked by hackers on Jan. 16 after a pro-Palestinian computer group, calling itself "Nightmare," warned of imminent assault.
Hacker Assault
"Nightmare" first signaled its plan to attack the two corporate websites in an e-mail to the Ynet news service, which reported on its own site that the message was sent by a person identifying himself as a Saudi Arabian hacker. The same person had been exposing the numbers of thousands of Israeli credit cards lifted from locally operated sites.
"Much of Israeli design in the past was influenced by the military because of the need to find a solution to solve a problem," says Eran Lederman, who teaches industrial design at Bezalel Academy of Arts and Design in Jerusalem.
"What is influencing Israeli design is the fact that in Israel there are few manufacturing, industrial companies," he says. "Most of the production stems from startup companies where the purpose is to sell ideas. As a result, Israeli design stands out for its ideas." Lederman is also partner and founder of the Tel Aviv-based Leor-Lederman Industrial Design Studio.
Israel, whose population of 7.8 million is similar in size to Switzerland's, has about 60 companies traded on the Nasdaq Composite Index, the most of any country outside the U.S. after China.
Humanized Design
The exhibition, curated by London's Victoria and Albert Museum in collaboration with onedotzero, explores developments in digital and interactive design. The Holon museum added three Israeli installations to the original show.
Electronic flowers light up and make music as they are touched by passersby, and a Fantasia-like electronic display features flower-like designs that open and shut based on trading data from a stock exchange.
"Cubes," by the Interaction Lab at the Holon Institute of Technology, is a hands-on installation of clear cubes that reveal their inner mechanism as they respond to stimuli from the viewer, emitting sounds, traveling across an opaque table or revealing distances.
"The message is that technology design is becoming more and more humanized," says Amnon Silber, director of the museum's education department. "We don't need to write a complicated line of code to operate a device. There are no manuals."
Xbox Kinect
As an example, Silber points to Kinect, the Microsoft Corp. Xbox game that's based on technology developed by Israel's PrimeSense Inc. On Jan. 18, General Motors Co. said it was working with the Bezalel Academy on a project that will turn car windows into interactive displays.
Students have created applications that include an animated character projected on the window that responds to weather and landscape as well as a product that allows finger-drawing.
Israeli designers have a good chance of developing an idea that may be as unique as Apple Inc.'s iPhone, Lederman says.
"The Israeli eye hasn't been made used to detail and design but the ear is sensitive to ideas in material and technology," he says. "As such, Israeli designers have a big advantage in understanding technology and users' needs."
"Decode-Digital Design Sensations" runs through March 10 at Design Museum Holon, 8 Pinhas Eilan St., Holon. Information: http://www.dmh.org.il .
To contact the writer on the story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net
To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net .
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Plastic Surgery Really Does 'Turn Back the Clock,' Study Finds
Feb. 20 (Bloomberg) -- A face lift can make a person look seven years younger, according to a study that asked volunteers to guess the ages of patients who had cosmetic surgery.
Shown photos of 60 people who had the procedures, the volunteers, composed of first-year medical students, estimated the patients to be an average of 8.9 years younger than their actual age, according to the study published online today in the Archives of Facial Plastic Surgery. Before surgery, the medical students perceived the patients to be 1.7 years younger, yielding an age difference of 7.2 years after plastic surgery.
Americans spent almost $10.7 billion on cosmetic procedures in 2010, according to the American Society for Aesthetic Plastic Surgery. The most common surgeries that year were breast augmentation, at 318,123, liposuction, at 289,016, and blepharoplasty, or eyelid surgery, at 152,123. The study offers objective evidence of cosmetic surgery's success and may help doctors when counseling patients, researchers said.
"The goal of aesthetic facial surgery is to improve one's appearance and to 'turn back the clock,'" wrote the study authors, Nitin Chauhan and Peter Adamson of the University of Toronto in Ontario, Canada, and Jeremy Warner of the NorthShore University Health System in Evanston, Illinois. "Our data demonstrate a significant and consistent reduction in perceived age after aesthetic facial surgery."
The study today evaluated only facial cosmetic surgeries, by showing photos to volunteers.
Patients in the study, mostly women, were 45 to 72 years. Those who had the greatest number of procedures -- face- and neck-lift, upper and lower eyelid surgery and forehead-lift -- had the biggest perceived difference from their actual age, the researchers reported.
One of the authors, Adamson, is a medical consultant for Allergan Inc. in Canada. Allergan, based in Irvine, California, sells the wrinkle therapy Botox, which generated $1.42 billion in 2010 revenue.
To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Transistor Made Using a Single Atom May Help Surpass Moore's Law
Feb. 20 (Bloomberg) -- Scientists have taken an early step toward surpassing the limits of a technological principle called Moore's Law by creating a working transistor using a single phosphorus atom.
The atom was etched into a silicon bed with "gates" to control electrical flow and metallic contacts to apply voltage, researchers reported in the journal Nature Nanotechnology. It is the first such device to be precisely positioned using a repeatable technology, they said, and may one day help ease the way toward creation of a so-called quantum computer that would be significantly smaller and faster than existing technology.
Moore's law states that the number of transistors that can be placed on an integrated circuit doubles every 18 months to two years, and it's predicted to reach its limit with existing technology in 2020. Cutting the size of a transistor to a single atom may defeat that concept.
"We really decided 10 years ago to start this program to try and make single-atom devices as fast as we could, and beat that law," said Michelle Simmons, director of ARC Center for Quantum Computation and Communication Technology at the University of New South Wales, Australia. "So here we are in 2012, and we've made a single-atom transistor roughly 8 to 10 years ahead of where the industry is going to be."
Moore's Law is named for Gordon Moore, the co-founder of Santa Clara, California-based Intel Corp., the world's largest chipmaker. He first described the phenomenon in a 1965 report that was later cited by others with his name attached to it.
Finding Limitation
There is a limitation to the latest finding: The atom must be kept at minus-391 degrees Fahrenheit to keep it from migrating out of its channel, the report said. Because of this, the result should be seen as a proof of principle rather than an initial step in a manufacturing process, the researchers said.
"These results demonstrate that single-atom devices can in principle be built and controlled with atomically thin wires, where the active component represents the ultimate physical limit of Moore's Law," the researchers wrote in the report.
Simmons's group, which included scientists from the University of Melbourne and from Purdue University in West Lafayette, Indiana, isn't the first to create a single-atom transistor. Previous efforts, though, came about as the result of chance and carried a significant margin of error, the researchers said.
The New South Wales scientists used a device called a scanning tunneling microscope to manipulate the atoms on the surface of the crystal in a way that allowed them to precisely pair one up with the electrode needed to control it.
'Lots' of Atoms
"If you want to make a practical computer in the long term, you need to be able to put lots of individual atoms in," Simmons said in a video supplied by the university. "And there you find that the separation of the atoms is quite critical."
So-called quantum computers would operate by controlling the movement of electrons in an atom. While the latest finding brings science closer to determining whether quantum computing may be successful at a large-scale level, it remains an open question.
To contact the reporter on this story: Reg Gale in New York at Rgale5@bloomberg.net .
To contact the editors responsible for this story: Reg Gale in New York at Rgale5@bloomberg.net .
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Myriad Genetics' Australian Cancer Gene Patents on Trial
Feb. 20 (Bloomberg) -- Myriad Genetics Inc. and other biotechnology companies can't monopolize disease treatment by patenting human genetic material, an Australian trial was told in the country's first challenge to ownership of DNA molecules.
Cancer Voices Australia, a national organization representing cancer patients, and Yvonne D'Arcy, a Brisbane resident diagnosed with breast cancer, sued Myriad Genetics and Genetic Technologies Ltd. in 2010 over a patent the companies have on a gene mutation associated with an increased risk of breast and ovarian cancers.
"Patents protect inventions, not discoveries," Rebecca Gilsenan, a partner at Maurice Blackburn Lawyers, who represents the plaintiffs, said before the trial. "No Australian court has considered the question of whether isolated human genes are patentable."
Gene-sequencing breakthroughs are spawning a multibillion- dollar market for drugs and medical tests. In the U.S., health regulators are developing rules for bolstering oversight of laboratory-developed tests and the U.S. Supreme Court may decide tomorrow whether to hear two cases involving patents over genetic material, including a review of an appeals court decision that upheld Myriad Genetics' patents.
Screening Process
Myriad Genetics, based in Salt Lake City, contends in the Australian case that its screening process that includes an artificially made gene mutation mimicking the one that makes people more susceptible to breast and ovarian cancers should be eligible for a patent.
"You can't use this to build another human being," David Shavin, Myriad Genetics' lawyer, told Federal Court Justice John Nicholas today in his opening statement at the start of the trial in Sydney, referring to the process and mutation. "All you can use it for is to compare" normal and mutated genes.
Australian law allows for patents on artificially created products with economic benefits, including computer programs and business methods, Shavin said.
"The position in the United States is similar to, but not the same as, in Australia," he said.
The Myriad Genetics process copies gene codes from people, the plaintiffs' lawyer David Catterns told the judge in his opening statement today.
'Occurs in Nature'
If the plaintiffs isolated a mutation in a gene from a person's blood, they would infringe the patent, Catterns said.
"The patent involves precisely the code that occurs in nature," he said. "This is not patentable on traditional principles."
The trial is scheduled to take as long as eight days.
"There is a philosophical and ethical issue about the commercialization of the human body," Gilsenan said. "The patent owner has a right to prevent people from studying and testing for the gene mutation, so gene patents can stifle research."
The case is: Cancer Voices Australia v. Myriad Genetics. NSD643/2010. Federal Court of Australia (Sydney).
To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net
To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net
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Rio Tinto to Invest $518 Million in Driverless Iron Ore Trains
Feb. 20 (Bloomberg) -- Rio Tinto Group, the world's second- biggest iron ore exporter, will invest $518 million for the first driverless long-distance trains to haul the commodity from its Western Australia mines to ports, boosting efficiency.
The first automated train, part of the London-based company's push into remote-controlled mining technology, is scheduled to run in 2014, Rio said in a statement. The company already operates five driverless iron ore haulage trucks at one of its Pilbara operations.
"We have trains sitting waiting for a train driver not because train drivers aren't working, but because it's a logistical nightmare to get people to get around to be in the same place at the same time as a train," Greg Lilleyman, president of the Pilbara iron ore operations, told reporters in Perth.
Rio, which runs a 1,500-kilometer (932-mile) rail network from mines to ports in Western Australia's Pilbara region with 41 train sets and about 500 train drivers, will replace almost all trains with automated services, Lilleyman said.
The company is expanding iron ore production to meet growing demand from China, and the driverless trains add scheduling flexibility for extra capacity. "As we're expanding, we'll need to add fewer trains in the future," Lilleyman said.
Boosting Output Capacity
Rio will spend $2.2 billion to extend the life of its Nammuldi iron ore mine in Pilbara to increase output capacity to 283 million metric tons a year, it said earlier this month. A further $1.2 billion will be invested at Cape Lambert on initial port and rail work needed to boost capacity to 353 million tons, it said. Production capacity of 283 million tons will be reached in the second half of 2013, Rio said.
Mining companies are seeking to boost productivity as mineral grades fall and ore bodies are located in increasingly remote areas, while the industry faces a worker shortage as companies expand operations globally.
Rio is also set to deploy 150 driverless trucks in the future as part of its plans for large-scale automation, Sam Walsh, the company's iron ore and Australia chief executive officer, said in the statement. Rio's share of the investment will be $478 million, it said.
"Automation also helps us address the significant skills shortage facing the industry," Walsh said. "However, as we expand our business, we will see an overall increase in job numbers and this will provide new opportunities in the rail division and elsewhere."
Rio, which last year made more than two-thirds of its profit from iron ore sales, will run the driverless trains from its control center in Perth, about 1,500 kilometers southwest from its Pilbara operations.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net
To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/Gamestop to J.C. Penney Shut Facebook Stores: Retail (Correct)
(Corrects executive's comment about online shopping in sixth paragraph of Feb. 17 story.)
Feb. 17 (Bloomberg) -- Last April, Gamestop Corp. opened a store on Facebook to generate sales among the 3.5 million-plus customers who'd declared themselves "fans" of the video game retailer. Six months later, the store was quietly shuttered.
Gamestop has company. Over the past year, Gap Inc., J.C. Penney Co. and Nordstrom Inc. have all opened and closed storefronts on Facebook Inc.'s social networking site.
Facebook, which this month filed for an initial public offering, has sought to be a top shopping destination for its 845 million members. The stores' quick failure shows that the Menlo Park, California-based social network doesn't drive commerce and casts doubt on its value for retailers, said Sucharita Mulpuru, an analyst at Forrester Research in Cambridge, Massachusetts.
"There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop," Mulpuru said in a telephone interview. "But it was like trying to sell stuff to people while they're hanging out with their friends at the bar."
A year ago, investors hailed so-called F-commerce as the next big thing, speculating that the company had potential to threaten Amazon.com Inc. and PayPal Inc. Facebook is the most- visited website in the world. Some people thought that persuading visitors to shop would be easy, Mulpuru said.
David Fisch, Facebook's director of business development, said in June that the site would make shopping online, previously a solitary experience, more social.
Hanging Out
"This is where people are hanging out," Fisch said at the Internet Retailer Conference & Exhibition in San Diego.
Facebook planned to profit from retailers buying ads to drive traffic to their on-site stores. Business consultant Booz & Co. predicted in January 2011 that physical goods sold through social commerce would balloon to $30 billion from $5 billion by 2015, with Facebook contributing a majority of sales.
Even as some businesses shut storefronts, many companies continue to devote advertising dollars to the social network. Facebook's sales surged 55 percent to $1.13 billion in the fourth quarter. The company aims to use e-commerce more as a way of getting users to stay longer than as a way to boost revenue, said Krista Garcia, an analyst at EMarketer Inc. in New York.
Chris Kraeuter, a Facebook spokesman, declined to comment.
Customers had no incentive to shop at Gamestop's Facebook store rather than the company's regular website because purchasing online is already convenient, said Ashley Sheetz, who is the Grapevine, Texas-based company's vice president of marketing and strategy.
Shut Quickly
"We just didn't get the return on investment we needed from the Facebook market, so we shut it down pretty quickly," Sheetz said in a telephone interview. "For us, it's been a way we communicate with customers on deals, not a place to sell."
Gap, which has 5.6 million Facebook fans from its namesake, Banana Republic and Old Navy pages, opened and discontinued a storefront last year, said Liz Nunan, a company spokeswoman. The San Francisco-based company also discovered customers preferred shopping on its own sites, she said.
"We will continue to evaluate if this is something we want to bring back in the future," Nunan said in an emailed statement.
Nordstrom tested ways to make shopping "seamless through Facebook" and decided on a broader social media focus, Colin Johnson, a spokesman, said.
J.C. Penney featured assortments in a Facebook "shop" tab beginning in 2010, and took it down in December 2011, Kate Coultas, a spokeswoman said in an emailed statement.
Cracks in Model
Wade Gerten, chief executive officer of social media developer 8thBridge, previously known as Alvenda, opened a Facebook store for the florist 1-800-FLOWERS. Minneapolis-based Gerten went on to develop commerce strategies for Delta Air Lines Inc., Diane Von Furstenberg Studio LP and denim-maker Seven for all Mankind.
Cracks in the model showed quickly, Gerten said in a telephone interview. Clients "have taken a different approach," shutting stores or scaling back their offerings.
"It was basically just another place to shop for all the stuff already available on the retailer websites," Gerten said. "I give so-called F-commerce an 'F.'"
To contact the reporter on this story: Ashley Lutz in New York at alutz8@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
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Learn how game theory can provide useful insights into the competitive and cooperative kinds of strategic decisions regularly made by businesses today.
