The buy back deal comes after years of back-and-forth between the two Internet giants. It sets the stage for an Alibaba initial public offering, or IPO. 

 

[Jin Yoon, Nomura Securities Analyst]:

"We do think that this is the first path to a possible IPO. Our checks suggested that an IPO for Alibaba Group would not have been possible given the shareholder structure where it was. But certainly this is the first step towards that.”

 

Yahoo reportedly added incentives to the deal that would encourage an Alibaba IPO by the end of 2015.

 

Yahoo will pass most of the sale proceeds to shareholders, miffed over the company losing advertising income to competitors like Google Inc. and Facebook.

 

The cut comes amidst a slowing Chinese economy, with major indexes in April coming in lower than expected. The industrial output growth increased by 9.3% in April from last year, well below the expected 12.2%. Growth of loans and fixed assets investments have also slowed down, along with imports and exports. 

 

Lowering the reserve ratio increases liquidity in the economy and can boost growth. But NTD Senior China Analyst Jason Ma says this will not be enough to stave-off China’s economic problems.

 

[Jason Ma, NTD Senior China Analyst]: 

“China's problem is not a ‘money’ problem. Rather, the problems lie with the production structure, lack of domestic demand and inflation-fuelled social instability. Therefore, this move by the Central Bank’s is more about sending signals than achieving actual results.”

 

Award winning economist Mao Yushi says the Chinese economy is plagued by another problem. 

 

[Mao Yushi, Chinese Economist]:

“The fundamental problem of China’s economy is state monopoly. Bu denying ordinary people access to the market greatly reduced efficiency. China’s GDP per capita in 2011 is less than one fifth of that of the US. There’s a huge potential for China to catch up, but monopoly must be changed to free market competition.”

 

Mao Yushi adds that raising economic growth rates without effectively allocating capital will cause inflation. He says a balance between growth and inflation will only be achieved by breaking up the monopoly of the financial sector.

 

Huawei Technologies—the world’s second biggest telecommunication equipment company—was prevented from tendering for contracts in Australia’s $38 billion National Broadband Network. 

 

Carr, who’s on a state visit to China, said the decision to block Huawei was because of cyber security concerns.

 

[Bob Carr, Australian Foreign Minister]:

"The Chinese raised what they described as restrictions on investment in Australia, and I nominated Huawei as seeming to be the case in point, and explained that this was a decision made on security grounds, reflecting a focus by Australia on the resilience and security of the core infrastructure."

 

Carr hopes to boost ties with China and urges the Chinese regime to ease restrictions on Australian businesses investing in China.

 

While in Beijing, Carr met up with his counterpart Yang Jiechi. Carr is scheduled to meet Chinese Vice Premier Li Keqiang before ending his visit on Wednesday. 

 

 

A 30-year employee of JPMorgan, Drew was the head of JPMorgan’s chief investment office in London. The division had a $2.3 billion trading loss, revealed in a regulatory filing last week. She will be replaced by Matt Zames, the co-chief of the bank’s global fixed income.

 

Chief executive James Dimon shouldered the blame after the report came out, and initially rejected Ina Drew’s resignation.

 

The bank took the trading loss with a risky derivatives trading strategy, involving credit default swap indexes. Recent changes in the bond market forced JPMorgan to sell its assets at a loss.

 

Dimon called the strategy “flawed, complex, poorly reviewed, poorly executed, and poorly monitored,” in a conference call with analysts and investors on Thursday.

 

The loss has analysts wondering whether stricter regulation is required for banks.

 

“This doesn’t violate the Volcker Rule, but it violates the Dimon principle,” the CEO said in a conference call with analysts and investors on Thursday.

 

The Volcker Rule, set to go into effect this summer, is a rule to restrict banks from speculative trades done for the bank’s profit. It is part of the Dodd-Frank Act, with the goal of large-scale financial regulation in response to the recession of 2008.

 

Among its goals, the Volcker Rule seeks to prevent risky trading practices in order to decrease the frequency and impact of bank losses.

 

However, the trading strategy that caused this loss is generally thought to hedge riskier investments, rather than being a speculative investment, and thus would not have fallen under the Volcker Rule.

 

Dimon had been arguing against tighter regulation of banks, but his reputation is likely to suffer from this trading loss. JPMorgan and Dimon are both seen as one of the top banks and executives on Wall Street, and important figures against financial regulation, as the bank had navigated through the recession relatively unscathed. Dimon and other opponents to the Volcker Rule argue that the restriction of trading practices will reduce economic growth.

 

The $2 billion loss will not affect taxpayers or consumers. The $2.3 trillion company will still post $4 billion in profits for the quarter. However, shareholders felt the pains of the loss, as its stock dropped some 9% on Friday, representing a $15 billion drop in market value.

 

Dimon suggested that the trades may end up costing JPMorgan another $1 billion this upcoming quarter, depending on market volatility.

 

The Securities and Exchange Commission has opened an investigation into the trading loss.

 

Now, as more and more Chinese companies list on US stock markets, Chinese political authorities are demanding indirect control over the audit firms' operations in China. All of the Big Four auditors, who dominate auditing work in China, have been ordered to put their Chinese operations under the control of local partners by the end of this year, with the requirement of a Chinese citizen assuming this position within three years.

 

Analysts have speculated that one of the motivations for the striking new move is that, in recent months, Chinese firms listed on US exchanges have been exposed in a wide range of scandals. Indeed, Big 4 member Deloitte was scolded this week by US federal securities officials for failing to comply with an audit investigation into one such Chinese company suspected of accounting fraud.

 

Of the other firms, PricewaterhouseCoopers as well as Ernst & Young have both indicated that the move is in line with their existing plans to transition towards local Chinese control. However, independent analysts are near-unanimous in the assessment that the pace of change just ordered will create great logistical difficulties, and may complicated both the firms' Chinese operations and their overall credibility.

 

France’s new socialist president—Francois Hollande—is not expected to continue the economic policies hashed out between former president Nicholas Sarkozy and German chancellor Angela Merkel.

 

Adding to the upset, Greece’s pro-bailout parties failed to secure a majority in parliamentary elections. These destabilizing factors have weakened investor confidence in a Euro-Zone turnaround. 

 

Investors are looking for policies that will lead to a growth economy in the EU. But this might not be possible. 

 

[Jim Walker, Asianomics Managing Director]: 

“The only thing that can save, or resuscitate countries like Greece and to a certain extent, countries like Spain and Portugal, is basically an exit from the euro zone, a default on debt, a devaluation of the currency, and that would bring a stimulation of economic activity and a return to growth.”

 

Walker predicts a bleak future. 

 

[Jim Walker, Asianomics Managing Director]: 

“The proposals as they stand just now, and the measures that have been put in place over the course of the last year, really won't stack up when it comes to reviving economic growth. This is just going to be, if they follow through, a depression for the years and years ahead.”

 

The Hang Seng Index opened down 2.03 percent at 20,658.41. The China Enterprises Index of top mainland listings in Hong Kong was started down 2.15 percent.

 

The high end of the valuation range represents a sizable jump for the social networking site. A year ago, Facebook was valued at $50 billion when Goldman Sachs made a $450 million investment.

 

Investors will be able to buy shares during the scheduled May 18th IPO. Until then, Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and other company leaders will be participating in their IPO road show, a series of presentations in an attempt to draw in potential investors.

 

The company released a video starring Zuckerberg as part of the road show today. 

 

Facebook is looking to sell 337.4 million shares, according to its filing. The company is expected to raise as much as $13.6 billion, compared to the $5-10 billion range suggested earlier.

 

Of the shares being sold, 30.2 million are owned by Zuckerberg. He can cash in for over a billion dollars. The founder will still hold onto 57.3% of the company.

 

The most valuable US technology IPO thus far was Google Inc’s, a $23 billion valuation in 2004. The United Parcel Service received a $60.2 valuation in 1999, the greatest IPO valuation for a US company.

 

Retail-chain Target will phase the Amazon Kindle off its shelves, according to an internal memo leaked to tech publication Verge.

 

Through May and June, Target Corp. will be removing Amazon hardware from its near 1,800 stores. The internal memo cited a “conflict of interest.”

 

The “conflict” likely refers to its status as an authorized Apple reseller. It is creating 25 in-house Apple stores.

 

Apple’s iPad has remained the top-selling tablet, despite competition from cheaper alternatives such as Amazon’s Kindle Fire. The Kindle Fire was Target’s best-selling tablet on Black Friday.

 

In addition, Target competes directly with Amazon’s online retail store.

 

Brick and mortar retailers, Target included, have faced heavy competition from online competitors. The proliferation of smartphones have allowed potential customers to search the internet for cheaper prices of a physical store’s inventory. In response, retailers are seeking to find a way fight this practice, called “showrooming.”

 

Target is thought to be seeking exclusive deals with vendors to actively match the prices of online rivals.

 

The memo also states that “certain accessories for Amazon products will stay,” suggesting Target will probably continue to sell third-party Kindle accessories.

 

Investors did not respond positively, and shares dropped to $10.81 by 10:06 AM EST, a 19.8% drop. It closed Tuesday at $13.48.

 

RIM showed off its upcoming Blackberry 10 OS on Tuesday at BlackBerry World in Orlando. Many people took note when the presentation displayed a brandless touchscreen phone, something similar to their iPhone and many Android-based competitors.

 

BB10 OS seemed to have an emphasis on three things: camera, flow, and keyboard.

 

Its new camera features do seem novel, with a rewind feature. After taking a photo, you can rewind (and fastforward) a short period in time to look for the best frame available

 

RIM emphasized “flow” as well, which seems to be their description of multi-tasking. Applications, and apparently the use of a few at a time, has been stressed. Research in Motion also announced today that any developer producing an app certified for BlackBerry 10, meeting its terms and conditions, would be guaranteed $10,000.

 

However, the concern over BB10 may be related to its keyboard, or lack-thereof. Even as the iPhone continues to take over much of the mobile phone market share, and people have shown a willingness to adapt to a touchscreen world, the Blackberry line has retained much of its audience thanks to its marketing as a business phone, with the physical keyboard a key part of its corporate-based identity. 

 

The new BB10 OS touted its predictive text abilities on a touchscreen, which looked good, but has been around on most competitor operating systems for a while.

 

Some may assume that the touchscreen OS represents a turn towards consumers, but Heins tried to ease concerns.

 

"We will be extremely strong in enterprise," Heins said.

 

He also noted that RIM will continue to produce phones with physical keyboards.

 

One noticeable missing feature from the BlackBerry World announcements is a phone to match with the new OS, which will arguably be more important for RIM’s future than BlackBerry 10.

 

RIM had a poor earning report released at the end of March, showing a 19% decrease in revenues for the fourth quarter relative to its third quarter. Co-founder Jim Balsillie and other executives resigned around the same time.

 

German judge Holger Kircher awarded Motorola in the injunction, concluding that Microsoft had broken an agreement with the smartphone manufacturer by using certain video codecs in their products.

 

However, a US district court in Seattle has granted an injunction of the German court order, preventing Motorola from enforcing the sales ban until it can be reviewed next week.

 

The ruling is just a smaller part of an ongoing patent war, a series of cases revolving around intellectual properties held by hardware and software manufacturers.

 

Wednesday’s decision is likely to have little impact for Microsoft. The company moved its software distribution center to the Netherlands last month in anticipation of an adverse decision by the courts.

 

Motorola and Microsoft have been engaged in a long running patent war. Last week, a judge of the US International Trade Commission also said that Microsoft infringed two Motorola video codec and playback-related patents.

 

Germany has become host of many such cases, with relatively cheaper and faster trials.

 

Google is in the process of acquiring Motorola Mobility for $12.5 billion. The deal has been approved by both the US Department of Justice and the European Union.

 

The Institute for Supply Management's April index came in at 54.8 - ahead of forecasts- and the strongest showing since June.

 

New orders were up as well. Coming off a disappointing purchasing managers report earlier in the week- the news helped pull stocks out of negative territory and post solid gains.

 

A separate government report showed softness in construction spending in March- it barely rose in March as investment in public projects dropped to a 5 year low.

 

Microsoft will have a 17.6% stake in the new, unnamed subsidiary, calling it a “strategic partnership.” The other 82.4% will be owned by Barnes & Noble, with the new company’s post-money valuation at $1.7 billion.

 

The move allows for Microsoft to jockey for position in the e-book business, currently dominated by Barnes & Noble, Amazon, and Apple. There is now expected to be a Nook application released for the upcoming Windows 8 platform, which is Microsoft’s first major attempt to gain traction in the tablet market.

 

The Nook and Amazon’s Kindle currently run a version of Google’s Android.

 

Microsoft and Barnes & Noble had been engaged in a patent dispute, but a settlement has been negotiated as part of the investment deal, giving Microsoft some patents.

 

The move sent Barnes & Noble’s stock soaring nearly 70% as the market opened, though it dropped throughout the day.

 

E-book commerce, as well as Barnes & Noble’s Nook division, has been growing at some cost to brick and mortar stores. Amazon.com Inc. (NASDAQ: AMZN) recently announced its first quarter income and revenue, far exceeding many analysts’ predictions.

 

Borders closed last year, leaving Barnes & Noble as the last major physical-presence book retail store.

 

US International Trade Commission judge Thomas Pender ruled that Apple had infringed upon a Samsung patent relating to 3G wireless and noise cancellation technology.

 

If the decision is upheld, Apple would have to stop its import of offending devices, like the iPhone and iPad.

 

Only an initial determination, the ruling must be approved by all six members of the Commission. It will then be reviewed by both President Barack Obama and an appeals court specializing in patent law.

 

Samsung had made claims that four patents were infringed, but the Commission ruled  that the other three were not violated.

 

Apple, however, remained confident that the decision would not be upheld.

 

“A court in Germany has already ruled that Apple did not infringe on this patent, so we believe we will have a very strong case on appeal,” Kristin Huguet told Bloomberg.

 

Foss Patents reported last week that Apple CEO Tim Cook and Samsung Chief Executive Geesung Choi were willing to meet and talk about settlements sometime over the next three months in San Francisco.

 

This ITC decision comes as Apple fights over an iPad trademark in China. 

 

Samsung and Apple have sued and countersued each other over their patents in nine countries.

 

 

It's had problems connecting wind farms off the German North Sea coast with the mainland power grid.

 

And Siemen's CEO, Peter Loescher said he couldn't rule out further charges.

 

[Peter Loescher, CEO, Siemens]:

"Due to the fact that there is a long implementation lead time, how you implement this type of highly complex grid access project, we have to anticipate that our P&L (profit and loss statement) will be impacted going forward by these four projects."

 

Siemens core industrial and healthcare businesses performed better than anticipated.

 

But the company has revised its net profit for the year down from 6 billion euros to no more than 5.4 billion - roughly in line with forecasts.

 

Overall net profit fell by two thirds to just over 1 billion euros.

 

Orders were also down 13 percent after the firm received fewer big contracts from Germany, India and China.

 

[Peter Loescher, CEO, Siemens]:

"A third of our business is in the emerging market, so we are broad based, we are really in 190 countries with our own organisation so this will continue to be a growth engine for us going forward and you can see this, revenue growth in emerging markets in the second quarter was double-digit and I anticipate that we will continue to see this dichotomy."

 

Siemens makes a wide range of products from turbines and trains to light bulbs and hearing aids.

 

It's also a bellwether for the euro zone's biggest economy.

 

The company's results come after German manufacturing in April fell at its fastest rate in nearly three years.

 

Exports have declined as the euro zone debt crisis has choked demand from key trading partners.

 

The report, released Saturday, has accused Wal-Mart de Mexico of making over $24 million in bribes. That branch is Wal-Mart’s first and largest foreign subsidiary.

 

Wal-Mart stock closed at $62.45 on Friday and opened Monday at $59.15. Tuesday morning saw the stock open at $59.26. The 5.1% loss since Friday accounts for some $10 billion in lost market value.

 

[Michael Keara, equity analyst, morningstar]:

"I think there's an investor base that owns Wal-Mart strictly for its international growth prospects and anytime you see some of these questionable practices at one international segment then that sort of raises questions on how can these guys grow at other international segments if they relied on those types of business practices to grow that business. It clearly questions some of the growth prospects in some of those other countries, say China or India."

 

In addition, Wal-Mart allegedly quashed an internal investigation into the matters.

 

The New York Times interviewed Sergio Cicero Zapata, a former Wal-Mart de Mexico executive.

 

“In the interviews, Mr. Cicero recounted how he had helped organize years of payoffs. He described personally dispatching two trusted outside lawyers to deliver envelopes of cash to government officials. They targeted mayors and city council members, obscure urban planners, low-level bureaucrats who issued permits - anyone with the power to thwart Wal-Mart’s growth. The bribes, he said, bought zoning approvals, reductions in environmental impact fees and the allegiance of neighborhood leaders,” said the New York Times.

 

However, it has still not been determined whether or not Wal-Mart has indeed violated the Foreign Corrupt Practices Act, the United States federal law covering bribery of foreign officials.

 

The FCPA draws a distinction between bribery and grease payments, in which the latter would only influence the timing of an event that is bound to happen, but not the outcome. 

 

Many of the allegations may be considered such facilitating payments, “where permits were given within weeks or even days of Wal-Mart de Mexico’s payments to the two lawyers,” but said permits were eventually to be procured regardless of any payment.

 

Wal-Mart released a statement Saturday from Wal-Mart Vice President David Tovar.

 

[David Tovar, Vice President, Corporate Communications]: 

“We take compliance with the U.S. Foreign Corrupt Practices Act very seriously and are committed to having a strong and effective global anti-corruption program in every country in which we operate. We will not tolerate noncompliance with FCPA anywhere or at any level of the company.”

 

Corruption is believed to be widespread in Mexico. The Worldwide Corruption Perceptions rankings, published by Transparency International, ranks Mexico 100th out of 182 countries in 2011.

 

Traditional U.S. retailers like Gap, and American Eagle are responding by speeding up product cycles - placing smaller orders with more factories, buying fabrics but then waiting until the last minute to make decisions on styles, and getting apparel out of warehouses faster.

 

Matt Katz of The Boston Consulting Group:

 

[Matt Katz, the Boston consulting group partner]:

"There are plenty of companies who have made great strides and have reduced supply chains from 14 months to 12 months to 10 months to 9 months and I think there are capability of teams to get back into product pretty quick 3 months, 6 weeks."

 

U.S. retailers are also leveraging technology and inventory management tools in new ways, hoping to maximize the speed to which they can get the right product to the right place at the right time.

 

Brian Kinsella of retail consultants Manhattan Associates:

 

[Brian Kinsella, seniro director of product management, Manhattan Associates]:

"We are also seeing a trend and a movement toward holding some of that inventory back one layer away from the customer because rather than taking this big bet and distributing all the product out to the store in the first fell swoop. It makes more sense to say we are going to take our best shot with 70% of the inventory, hold 30% of it back."

 

American Eagle has said they have cut down on large inventories - selling fewer items but selling out.

 

Macy's has said it is also planning to speed up decisions on buying and stocking clothing - especially for the key younger demographic - the millennials.

 

It's an economic group that rivals the baby boomers in spending power:

 

[Matt Katz, the Boston consulting group partner]:

"Many folks are thinking about how do I deal with this millennial customer and how do I compete in an environment where the here and the now is so important."

 

But American retailers still have a tough sell. They may be able to get faster, but industry experts say their sourcing remains too bureaucratic compared to their foreign rivals.

 

 

The suit launched in 2010 by German royalty collections body GEMA which Kerstin Decker represents.

 

 [Kerstin Decker, Gema-Spokesperson]: 

 

"We count this as an important success, now YouTube has been committed to take measures in order to avoid known infringements of musical work from GEMA's repertoire. YouTube has to activate content ID, YouTube has to install a word filter. We count this as a success because YouTube previously said they don't have to take any measures at all and the court clearly rejected that evaluation. I cannot see this as a success for YouTube, it is a success for the GEMA and the holders of rights."

 

Google, however, see things differently. The Hamburg court also ruled that YouTube did not have to proactively trawl through its site in search of possible copyright violations, only to respond to take down requests. Google's Kay Oberbeck says she welcomed the decision..

 

[Kay Oberbeck, Google spokesperson]: 

 

"At the end of the day, we have essentially won the trial, the court made that clear and insofar, it is an important partial success for YouTube, for the users and for the music industry as a whole because now the road has been cleared for them to profit by their work being put on YouTube."

 

The ruling comes less than a month after a U.S. appeals court dealt Google a major setback by reviving lawsuits from Viacom, the English Premier League and various other media companies over the use of copyrighted videos on YouTube without permission.