Zynga Inc. filed for an initial public offering Friday that has the social gaming company seeking to raise as much as $1 billion from investors to continue to build out its booming business.
In a filing with the Securities and Exchange Commission, Zynga didn't spell out a proposed offering-price range or number of shares to be included in the deal. The company also didn't specify on which exchange it intends to list its shares.
If completed, Zynga's IPO would be the latest debut of a high-profile online social-networking company this year. LinkedIn (LNKD: 93.70, 3.04, 3.35%) completed its IPO in late May, and Groupon Inc. has since filed its own papers for a deal expected to be executed later this year.
Facebook games maker Zynga filed to raise as much as $1 billion in an IPO, pulling back the curtain on its financials and showing how fast its profits have grown.
Facebook is widely expected to make its own public offering next year.
Zynga, which makes popular Facebook games such as "FarmVille" and "CityVille," saw revenues surge nearly 400% to $597.5 million in 2010 and reported a net profit of $90.6 million for the year. Earnings for the first quarter of this year were $11.8 million on revenue of $235.4 million putting the company on track to surpass the $1 billion mark in revenue this year.
Monthly active users as of March 31 totaled 236 million flat with the same period the previous year and up 21% from the end of December.
Markets Hub: Can Zynga Thrive Without Facebook?
Fast-growing gaming company Zygna may soon file for an IPO, but there are questions of how much the company can grow outside of Facebook. Heard on the Street's Rolfe Winkler discusses.
Zynga noted that it spreads out the recognition of revenue from the sale of virtual goods. Bookings represents the total value of revenue earned in a period; the company said bookings totaled $286.6 million in the first quarter compared to reported revenue of $235.4 million for the period.
In a letter attached to the filing, CEO Mark Pincus said the San Francisco company would "continue to make big investments in servers, data centers and other infrastructure" to keep building out games.
"We believe we will maximize long-term shareholder value by delivering long-term player value. This means we will make decisions and trade-offs that are different from other companies. We will prioritize innovation and long-term growth over quarterly earnings.
"We will not," he added, "make short-term decisions that sacrifice our core values or veer from our long-term vision."
The company also noted in its filing that it generates "substantially all" of its current revenue through the Facebook platform. Much of this is through the sale of virtual goods using Facebook's credits payment system, of which Facebook retains a 30% cut. The relationship with Facebook was listed as the No. 1 risk factor in Friday's filing.
In the first quarter this year, in-game transactions made up about 95% of total revenues for the period, with the remainder coming from advertising, according to the filing.
Zynga also noted that a majority of its revenue comes from a small percentage of its player base. Zynga games are free to play and only generate revenue through micro-transactions and advertising.
The company also said a majority of its revenue comes from "a small number of games." Zynga's four largest games "CityVille," "Empires & Allies," "FarmVille" and "Texas Hold'Em" accounted for about three-quarters of the company's total monthly active users, according to data from AppData.
Morgan Stanley and Goldman Sachs are named as the lead underwriters of the offering, with B. of A. Merrill Lynch, Barclays Capital, J.P. Morgan and Allen & Co. also participating.
Wednesday, July 6, 2011
The 25 Documents You Need Before You Die!
It isn't enough simply to sign a bunch of papers establishing an estate plan and other end-of-life instructions. You also have to make your heirs aware of them and leave the documents where they can find them.
Consider: At least 10 states have been investigating whether some of the country's largest insurers are failing to pay out unclaimed life policies to beneficiaries. California and Florida have held public hearings on the issue in recent weeks.
Insurers say they are behaving lawfully. Under policy contracts, they aren't required to take steps to determine if a policyholder is still alive, but instead pay a claim when beneficiaries come forward.
You can avoid such problems by securing important documents and telling your family where they are stored.
Jean Parr is grateful that her mother obsessed about the subject. "I really didn't want to think about it," says Ms. Parr, 54 years old, a manager at the American Chemical Society in Washington. But when her mom died in 2005, she knew exactly where to look for the will, the key to a safe-deposit box and documents indicating her mother had paid and arranged for her own funeral.
The financial consequences of failing to keep your documents in order can be significant. According to the National Association of Unclaimed Property Administrators, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets. (You can search for unclaimed assets at MissingMoney.com .)
Most experts recommend creating a comprehensive folder of documents that family members can access in case of an emergency, so they aren't left scrambling to find and organize a hodgepodge of disparate bank accounts, insurance policies and brokerage accounts.
You can store the documents with your attorney, lock them away in a safe-deposit box or keep them at home in a fireproof safe that someone else knows the combination to.
That isn't to say you should keep everything. Sometimes people hold onto so many papers that loved ones can't find the important ones easily.
How to Manage Important Documents
How to Write a Will
How to Choose Beneficiaries
In 2008, Jane Bissler, a counselor in Kent, Ohio, approached her then-87-year-old mother about organizing her documents. Because her mom was a widow with relatively simple finances and two homes, Ms. Bissler, 57, says she figured it would be a relatively simple task.
Instead, it took an entire year for Ms. Bissler and her mother to go through all of her papers, which included documents from eight bank accounts, utility bills from the 1950s and reams of canceled checks.
The two of them pared down the stash from four four-drawer filing cabinets to one two-drawer cabinet, shredding anything extraneous. Ms. Bissler and her mother visited banks and brokerages to ensure she was listed on all of her mother's accounts. Her mother died in May 2009.
"It would have been a total nightmare if we hadn't gone through it all with her," Ms. Bissler says. "It was that Depression-era stuff where you keep everything and hide other things." Ms. Bissler estimates that having the documents organized ahead of time spared them from ordering an additional 15 copies of the death certificate and "years" of time.
Here is a rundown of the most important documents you'll need to have signed, sealed and delivered. You should start collecting these as soon as possible and update them every few years to reflect changes in assets and preferences. Some—such as copies of tax returns or recent child-support payments—need to be updated more often than others.
The Essentials
An original will is the most important document to keep on file.
A will allows you to dictate who inherits your assets and, if your children are underage, their guardians. Dying without a will means losing control of how your assets are distributed. Instead, state law will determine what happens.
Wills are subject to probate—legal proceedings that take inventory, make appraisals of property, settle outstanding debt and distribute remaining assets. Not having an original document means this already-onerous process could be much more of an ordeal, since family members can challenge a copy of a will in court.
Rick Law, founder of estate-planning firm Law ElderLaw LLP in Aurora, Ill., says estate planners increasingly recommend revocable trusts in addition to wills, since they are more private and harder to dispute. "Every will is like a compass that points toward the closest courthouse," he says.
A revocable living trust can be changed anytime during your lifetime. After you transfer ownership of various assets to the trust, you can serve as the trustee on behalf of beneficiaries you designate. Provided you do so, there aren't any ongoing fees.
If your family can't find the original trust documents, you are "basically setting your estate up for litigation," says Duncan Moseley, vice president of Sanders Financial Management in Atlanta.
A "letter of instruction" can be a useful supplement to a will, though it doesn't hold legal weight. It is a good way to make sure your executor has the names and contact information of your attorneys, accountants and financial advisers. While the will should be stored with your attorney or in a courthouse, the letter of instruction should be more readily accessible, particularly if it contains instructions on funeral arrangements.
Also, make sure your heirs have access to a durable financial power-of-attorney form. Without it, no one can make financial decisions on your behalf in the event that you are incapacitated.
Proof of Ownership
You should keep documentation of housing and land ownership, cemetery plots, vehicles, stock certificates and savings bonds; any partnership or corporate operating agreements; and a list of brokerage and escrow mortgage accounts.
If you don't tell your family that you own such assets, there is a chance they never will find out. Mr. Moseley says in such an event, clients must perform their own detective work, watching the mail for real-estate tax bills or combing bank accounts for interest payments, for example.
File any documents that list loans you have made to others, since they could be included as assets in an estate. Similarly, keep a list of any debts you owe to avoid surprising your family. Wills and living trusts generally are drafted to include provisions for how debts should be settled, and creditors have a stipulated period of time in which to file a claim against the estate.
Make the most recent three years of tax returns available, too. "Looking at last year's returns offers a snapshot of what assets we should be looking for this year," says Lesley Moss Mamdouhi, a principal at estate-law firm Oram & Moss in Chevy Chase, Md. This also will help your personal representative file a final income-tax and estate return and, if necessary, a revocable-trust return.
Bank Accounts
Mr. Law recommends sharing a list of all accounts and online log-in information with your family so they can notify the bank of your death. "If nobody ever takes any more out or puts money in, it becomes a dormant account and then becomes the property of the state," he says.
Be sure to list any safe-deposit boxes you own, register your spouse or child's name with the bank and ask them to sign the registration document so they can have access without securing a court order.
Health-Care Confidential
Possibly the most important health-care document to fill out in advance is a durable health-care power-of-attorney form. This allows your designee to make health-care decisions on your behalf if you are incapacitated. The document should be compliant with federal health-information privacy laws, so that doctors, hospitals and insurance companies can speak with your designee. You may also need to fill out an Authorization to Release Protected Healthcare Information form.
If you are incapacitated and your family can't locate a health-care power of attorney, they will have to go to court to get a guardian appointed.
Porter Storey, executive vice president of the American Academy of Hospice and Palliative Medicine in Glenview, Ill., says it isn't enough to establish a health-care power of attorney unless you have explained to your designee how you would like to be treated in case of incapacity. He also recommends writing a living will detailing your wishes.
After Diane Dimond's mother had a series of strokes in 2006, Ms. Dimond knew there was a signed living will tucked away in a safe at home. Ms. Dimond, 58 and living in New York, recalls the Sunday she watched her mother in a coma and was able to fulfill her wishes never to be kept on external life support. "It was gut-wrenching," she says, "but I took the physician aside and said, 'I want to take her home.'" Having her mother's living will enabled Ms. Dimond to do just that.
The living will and the power of attorney constitute what are called "advance directives"; some states consolidate these into a single form. (AARP offers a state-by-state listing of advance-directive forms on its website.) Terminally ill patients may wish to have their doctors sign a do-not-resuscitate order.
Certain companies, such as Advance Choice Inc.'s DocuBank, will keep copies of health-care documents for a fee. Subscribers get a wallet-sized card and, in case of an emergency, a hospital will call DocuBank, which will fax over the information.
Life Insurance and Retirement Accounts
Copies of life-insurance policies are among the most important documents for your family to have. Family members need to know the name of the carrier, the policy number and the agent associated with the policy.
Be especially careful with life-insurance policies granted by an employer upon your retirement, since those are the kind that financial planners most often miss, says David Peterson, CEO of Denver-based Peak Capital Investment Services. New York state alone is holding more than $400 million in life-insurance-related payments that have gone unclaimed since 2000, according to the state comptroller's office.
Estate planners also recommend that you draw up a list of pensions, annuities, individual retirement accounts and 401(k)s for your spouse and children.
An IRA is considered dormant or unclaimed if no withdrawal has been made by age 70½. According to the National Association of Unclaimed Property Administrators, tens of millions of dollars languish in unclaimed IRAs every year.
If your heirs don't know about these accounts, they won't be able to lay claim to them, and the money could languish. The U.S. Department of Labor estimates that each year tens of thousands of workers fail to claim or roll over $850 million in 401(k) assets. You can track unclaimed pensions, 401(k)s and IRAs at Unclaimed.com.
Marriage and Divorce
Ensure your spouse knows where you have stored your marriage license. Mary Cay Corr, now 74 and living in Raleigh-Durham, N.C., couldn't locate hers when her husband died. "I had to write to New York, where we got married, and pay for a new marriage license to prove that I had been married to my husband before I could claim anything," she says.
For divorced people, it is important to leave behind the divorce judgment and decree or, if the case was settled without going to court, the stipulation agreement, says Linda Lea Viken, president of the American Academy of Matrimonial Lawyers in Chicago. These documents lay out child support, alimony and property settlements, and also may list the division of investment and retirement accounts.
Include the distribution sheet listing bank-account numbers that accompanied the settlement to avoid disputes about ownership or payments due. Also include a copy of the most recent child-support payment order. In the majority of states, the obligation to pay child support still exists after death.
Ms. Viken also recommends filing copies of any life-insurance papers. In many states if you have a policy that benefits your children, it can be set off against the ongoing child support.
You also should include a copy of the "qualified domestic-relations order," which can prove your spouse received a share of your retirement accounts.
It isn't enough simply to sign a bunch of papers establishing an estate plan and other end-of-life instructions. You also have to make your heirs aware of them and leave the documents where they can find them.
Consider: At least 10 states have been investigating whether some of the country's largest insurers are failing to pay out unclaimed life policies to beneficiaries. California and Florida have held public hearings on the issue in recent weeks.
Insurers say they are behaving lawfully. Under policy contracts, they aren't required to take steps to determine if a policyholder is still alive, but instead pay a claim when beneficiaries come forward.
You can avoid such problems by securing important documents and telling your family where they are stored.
Jean Parr is grateful that her mother obsessed about the subject. "I really didn't want to think about it," says Ms. Parr, 54 years old, a manager at the American Chemical Society in Washington. But when her mom died in 2005, she knew exactly where to look for the will, the key to a safe-deposit box and documents indicating her mother had paid and arranged for her own funeral.
The financial consequences of failing to keep your documents in order can be significant. According to the National Association of Unclaimed Property Administrators, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets. (You can search for unclaimed assets at MissingMoney.com .)
Most experts recommend creating a comprehensive folder of documents that family members can access in case of an emergency, so they aren't left scrambling to find and organize a hodgepodge of disparate bank accounts, insurance policies and brokerage accounts.
You can store the documents with your attorney, lock them away in a safe-deposit box or keep them at home in a fireproof safe that someone else knows the combination to.
That isn't to say you should keep everything. Sometimes people hold onto so many papers that loved ones can't find the important ones easily.
How to Manage Important Documents
How to Write a Will
How to Choose Beneficiaries
In 2008, Jane Bissler, a counselor in Kent, Ohio, approached her then-87-year-old mother about organizing her documents. Because her mom was a widow with relatively simple finances and two homes, Ms. Bissler, 57, says she figured it would be a relatively simple task.
Instead, it took an entire year for Ms. Bissler and her mother to go through all of her papers, which included documents from eight bank accounts, utility bills from the 1950s and reams of canceled checks.
The two of them pared down the stash from four four-drawer filing cabinets to one two-drawer cabinet, shredding anything extraneous. Ms. Bissler and her mother visited banks and brokerages to ensure she was listed on all of her mother's accounts. Her mother died in May 2009.
"It would have been a total nightmare if we hadn't gone through it all with her," Ms. Bissler says. "It was that Depression-era stuff where you keep everything and hide other things." Ms. Bissler estimates that having the documents organized ahead of time spared them from ordering an additional 15 copies of the death certificate and "years" of time.
Here is a rundown of the most important documents you'll need to have signed, sealed and delivered. You should start collecting these as soon as possible and update them every few years to reflect changes in assets and preferences. Some—such as copies of tax returns or recent child-support payments—need to be updated more often than others.
The Essentials
An original will is the most important document to keep on file.
A will allows you to dictate who inherits your assets and, if your children are underage, their guardians. Dying without a will means losing control of how your assets are distributed. Instead, state law will determine what happens.
Wills are subject to probate—legal proceedings that take inventory, make appraisals of property, settle outstanding debt and distribute remaining assets. Not having an original document means this already-onerous process could be much more of an ordeal, since family members can challenge a copy of a will in court.
Rick Law, founder of estate-planning firm Law ElderLaw LLP in Aurora, Ill., says estate planners increasingly recommend revocable trusts in addition to wills, since they are more private and harder to dispute. "Every will is like a compass that points toward the closest courthouse," he says.
A revocable living trust can be changed anytime during your lifetime. After you transfer ownership of various assets to the trust, you can serve as the trustee on behalf of beneficiaries you designate. Provided you do so, there aren't any ongoing fees.
If your family can't find the original trust documents, you are "basically setting your estate up for litigation," says Duncan Moseley, vice president of Sanders Financial Management in Atlanta.
A "letter of instruction" can be a useful supplement to a will, though it doesn't hold legal weight. It is a good way to make sure your executor has the names and contact information of your attorneys, accountants and financial advisers. While the will should be stored with your attorney or in a courthouse, the letter of instruction should be more readily accessible, particularly if it contains instructions on funeral arrangements.
Also, make sure your heirs have access to a durable financial power-of-attorney form. Without it, no one can make financial decisions on your behalf in the event that you are incapacitated.
Proof of Ownership
You should keep documentation of housing and land ownership, cemetery plots, vehicles, stock certificates and savings bonds; any partnership or corporate operating agreements; and a list of brokerage and escrow mortgage accounts.
If you don't tell your family that you own such assets, there is a chance they never will find out. Mr. Moseley says in such an event, clients must perform their own detective work, watching the mail for real-estate tax bills or combing bank accounts for interest payments, for example.
File any documents that list loans you have made to others, since they could be included as assets in an estate. Similarly, keep a list of any debts you owe to avoid surprising your family. Wills and living trusts generally are drafted to include provisions for how debts should be settled, and creditors have a stipulated period of time in which to file a claim against the estate.
Make the most recent three years of tax returns available, too. "Looking at last year's returns offers a snapshot of what assets we should be looking for this year," says Lesley Moss Mamdouhi, a principal at estate-law firm Oram & Moss in Chevy Chase, Md. This also will help your personal representative file a final income-tax and estate return and, if necessary, a revocable-trust return.
Bank Accounts
Mr. Law recommends sharing a list of all accounts and online log-in information with your family so they can notify the bank of your death. "If nobody ever takes any more out or puts money in, it becomes a dormant account and then becomes the property of the state," he says.
Be sure to list any safe-deposit boxes you own, register your spouse or child's name with the bank and ask them to sign the registration document so they can have access without securing a court order.
Health-Care Confidential
Possibly the most important health-care document to fill out in advance is a durable health-care power-of-attorney form. This allows your designee to make health-care decisions on your behalf if you are incapacitated. The document should be compliant with federal health-information privacy laws, so that doctors, hospitals and insurance companies can speak with your designee. You may also need to fill out an Authorization to Release Protected Healthcare Information form.
If you are incapacitated and your family can't locate a health-care power of attorney, they will have to go to court to get a guardian appointed.
Porter Storey, executive vice president of the American Academy of Hospice and Palliative Medicine in Glenview, Ill., says it isn't enough to establish a health-care power of attorney unless you have explained to your designee how you would like to be treated in case of incapacity. He also recommends writing a living will detailing your wishes.
After Diane Dimond's mother had a series of strokes in 2006, Ms. Dimond knew there was a signed living will tucked away in a safe at home. Ms. Dimond, 58 and living in New York, recalls the Sunday she watched her mother in a coma and was able to fulfill her wishes never to be kept on external life support. "It was gut-wrenching," she says, "but I took the physician aside and said, 'I want to take her home.'" Having her mother's living will enabled Ms. Dimond to do just that.
The living will and the power of attorney constitute what are called "advance directives"; some states consolidate these into a single form. (AARP offers a state-by-state listing of advance-directive forms on its website.) Terminally ill patients may wish to have their doctors sign a do-not-resuscitate order.
Certain companies, such as Advance Choice Inc.'s DocuBank, will keep copies of health-care documents for a fee. Subscribers get a wallet-sized card and, in case of an emergency, a hospital will call DocuBank, which will fax over the information.
Life Insurance and Retirement Accounts
Copies of life-insurance policies are among the most important documents for your family to have. Family members need to know the name of the carrier, the policy number and the agent associated with the policy.
Be especially careful with life-insurance policies granted by an employer upon your retirement, since those are the kind that financial planners most often miss, says David Peterson, CEO of Denver-based Peak Capital Investment Services. New York state alone is holding more than $400 million in life-insurance-related payments that have gone unclaimed since 2000, according to the state comptroller's office.
Estate planners also recommend that you draw up a list of pensions, annuities, individual retirement accounts and 401(k)s for your spouse and children.
An IRA is considered dormant or unclaimed if no withdrawal has been made by age 70½. According to the National Association of Unclaimed Property Administrators, tens of millions of dollars languish in unclaimed IRAs every year.
If your heirs don't know about these accounts, they won't be able to lay claim to them, and the money could languish. The U.S. Department of Labor estimates that each year tens of thousands of workers fail to claim or roll over $850 million in 401(k) assets. You can track unclaimed pensions, 401(k)s and IRAs at Unclaimed.com.
Marriage and Divorce
Ensure your spouse knows where you have stored your marriage license. Mary Cay Corr, now 74 and living in Raleigh-Durham, N.C., couldn't locate hers when her husband died. "I had to write to New York, where we got married, and pay for a new marriage license to prove that I had been married to my husband before I could claim anything," she says.
For divorced people, it is important to leave behind the divorce judgment and decree or, if the case was settled without going to court, the stipulation agreement, says Linda Lea Viken, president of the American Academy of Matrimonial Lawyers in Chicago. These documents lay out child support, alimony and property settlements, and also may list the division of investment and retirement accounts.
Include the distribution sheet listing bank-account numbers that accompanied the settlement to avoid disputes about ownership or payments due. Also include a copy of the most recent child-support payment order. In the majority of states, the obligation to pay child support still exists after death.
Ms. Viken also recommends filing copies of any life-insurance papers. In many states if you have a policy that benefits your children, it can be set off against the ongoing child support.
You also should include a copy of the "qualified domestic-relations order," which can prove your spouse received a share of your retirement accounts.
The Federal Trade Commission is reviewing Internet messaging-service Twitter Inc. and its interactions with at least one other company that builds programs using Twitter data, according to a person familiar with the matter.
The precise focus of the review isn't clear, but representatives of the FTC's antitrust arm have requested information from a company called UberMedia Inc., which owns applications that let people read and send "tweets," or messages, broadcast by Twitter users, this person said.
Antitrust regulators are reviewing messaging-service Twitter and its interactions with a company that builds programs using Twitter data. Jen Valentino reports on digits.
UberMedia's chief marketing officer said in a statement on Thursday that the company was contacted by the agency and "we intend to fully comply with their request for information."
Twitter considers UberMedia to be a potential competitor, people familiar with the matter have said.
The review is "narrow" in scope and won't impact Twitter's fledgling advertising business, said the person familiar with the FTC review.
Spokesmen for Twitter and the FTC declined to comment. The agency's interest in Twitter was reported earlier Thursday by the Business Insider blog.
The FTC routinely examines companies to determine whether they are involved in anticompetitive behavior, often after receiving allegations from rivals. Often the reviews don't result in any legal action or penalty against the companies.
Twitter, which has more than 200 million registered accounts, lets people broadcast tweets of up to 140 characters in length and read tweets from other users. For much of Twitter's history, many users accessed the service through desktop and mobile-device applications developed by other companies rather than through Twitter.com.
Twitter has allowed those companies to access "tweets" generated by Twitter users, and those programs were vital to Twitter's growth because they helped people sort through, organize, and search for "tweets" in a way that Twitter couldn't.
But over the past year or so Twitter has looked to exert greater control over its user base as it has introduced advertising on its site. Twitter acquired some of those application companies, including TweetDeck, and developed its own services that rendered some other third-party companies obsolete.
UberMedia also tried to purchase TweetDeck, people familiar with the matter have said.
In February UberMedia, which owns Twidroyd and other applications that let people access and send tweets, said Twitter shut off its access to tweets because it believed UberMedia had violated "several provisions of their terms of service."
UberMedia said it worked with Twitter to resolve the issues, and service to those applications was restored.
At a recent conference, a Twitter employee noted that "with more people joining Twitter and accessing the service in multiple ways, a consistent user experience is more crucial than ever." The employee asked that app developers create apps that don't mimic Twitter's own mobile-device applications or Twitter.com.
The precise focus of the review isn't clear, but representatives of the FTC's antitrust arm have requested information from a company called UberMedia Inc., which owns applications that let people read and send "tweets," or messages, broadcast by Twitter users, this person said.
Antitrust regulators are reviewing messaging-service Twitter and its interactions with a company that builds programs using Twitter data. Jen Valentino reports on digits.
UberMedia's chief marketing officer said in a statement on Thursday that the company was contacted by the agency and "we intend to fully comply with their request for information."
Twitter considers UberMedia to be a potential competitor, people familiar with the matter have said.
The review is "narrow" in scope and won't impact Twitter's fledgling advertising business, said the person familiar with the FTC review.
Spokesmen for Twitter and the FTC declined to comment. The agency's interest in Twitter was reported earlier Thursday by the Business Insider blog.
The FTC routinely examines companies to determine whether they are involved in anticompetitive behavior, often after receiving allegations from rivals. Often the reviews don't result in any legal action or penalty against the companies.
Twitter, which has more than 200 million registered accounts, lets people broadcast tweets of up to 140 characters in length and read tweets from other users. For much of Twitter's history, many users accessed the service through desktop and mobile-device applications developed by other companies rather than through Twitter.com.
Twitter has allowed those companies to access "tweets" generated by Twitter users, and those programs were vital to Twitter's growth because they helped people sort through, organize, and search for "tweets" in a way that Twitter couldn't.
But over the past year or so Twitter has looked to exert greater control over its user base as it has introduced advertising on its site. Twitter acquired some of those application companies, including TweetDeck, and developed its own services that rendered some other third-party companies obsolete.
UberMedia also tried to purchase TweetDeck, people familiar with the matter have said.
In February UberMedia, which owns Twidroyd and other applications that let people access and send tweets, said Twitter shut off its access to tweets because it believed UberMedia had violated "several provisions of their terms of service."
UberMedia said it worked with Twitter to resolve the issues, and service to those applications was restored.
At a recent conference, a Twitter employee noted that "with more people joining Twitter and accessing the service in multiple ways, a consistent user experience is more crucial than ever." The employee asked that app developers create apps that don't mimic Twitter's own mobile-device applications or Twitter.com.
Twitter Inc., trying to put recent management changes behind it and build its business, is taking steps to broaden the appeal of the well-known messaging service.
Twitter is making a concerted effort to educate its users about what, exactly, it is. WSJ's Amir Efrati explains why to Stacey Delo.
The San Francisco company, which lets users broadcast and view short messages, wants to make it easier for new users to navigate the service and help longtime users find interesting content.
While Twitter has more than 200 million registered accounts, it doesn't say how many are active users. Users discuss a variety of topics, but some people—especially adults—view the service as a vehicle for celebrities to broadcast their thoughts online.
Twitter wants to show how the service works to first-time users by highlighting tweets from people in their geographic regions, such as local politicians and musicians, when they first sign on, people familiar with the matter said.
Jonathan Strauss, chief executive of Awe.sm, which tracks marketing campaigns on Twitter and Facebook Inc., argues that Twitter needs to attract more mainstream Internet users if it wants to justify its multibillion-dollar valuation. "Most people understand Twitter exists, but they don't understand what Twitter is and how they can participate," he said.
For more experienced users, Twitter is developing ways to create a narrower stream of the most relevant tweets rather than requiring users to wade through messages in chronological order.
As it looks to add tools for power users, Twitter is also in advanced talks to purchase a program used by many Twitter users to view and manage tweets, Tweetdeck, for around $50 million, people familiar with the matter said.
Jack Dorsey, a Twitter founder, recently returned as its product chief. He has become more active advising the company.
It is unclear when the changes will be introduced or how Twitter may use Tweetdeck. A spokesman for Twitter, which has made seven small acquisitions to date, declined to comment. TweetDeck Inc.'s chief executive, Iain Dodsworth, couldn't be reached.
The moves come as Jack Dorsey, the founding chief executive of the four-year-old company, formally returned as product chief three weeks ago after being pushed out by the board two-and-a-half years ago.
Mr. Dorsey remained chairman of Twitter's board after his ouster, and also leads a mobile-payments company named Square Inc. Mr. Dorsey has been laying out his vision for Twitter to its executives, said a person familiar with the matter.
Twitter allows users to post messages of up to 140 characters in length, and those messages can be viewed by other users. People log on—often through their mobile phones—to track everything from sporting events to transportation delays to natural disasters. Egyptians, for example, used the service to organize revolutionary protests earlier this year.
The company has been slower to build a business around its popularity than some other Web players, such as Facebook. The research firm eMarketer puts Twitter 2010 ad revenue at $45 million and expects ad revenue to reach $150 million this year.
Yet Twitter investors are buying up shares of the privately held company on secondary exchanges or through individual middlemen. Twitter completed a financing at the end of last year that valued the company at around $4 billion, though it has argued for higher valuations in low-level talks with potential acquirers, including Google Inc., people familiar with the matter have said.
The company this year will try to make the breadth of its content more visible to first-time visitors, helping them quickly discover information about stocks, sports and other organizations and individuals they care about, the people familiar with the matter said.
One possibility is showcasing tweets by well-known people or organizations located in the user's region, or from certain types of users, such as athletes or musicians.
Twitter users already have created thousands of "lists" in which such content on specific topics is grouped together, and Twitter is looking at ways to promote such lists, said a person familiar with the matter.
Twitter is also exploring concepts similar to a Facebook technology called "EdgeRank" that highlights posts by a user's closest friends—an effort that is being aided by Ashish Goel, a Twitter research fellow and Stanford University professor, these people said.
"Most of the time what people want is the most relevant and important information, and without filtering its content for individual users that's difficult for Twitter to satisfy," said Awe.sm's Mr. Strauss.
Twitter is making a concerted effort to educate its users about what, exactly, it is. WSJ's Amir Efrati explains why to Stacey Delo.
The San Francisco company, which lets users broadcast and view short messages, wants to make it easier for new users to navigate the service and help longtime users find interesting content.
While Twitter has more than 200 million registered accounts, it doesn't say how many are active users. Users discuss a variety of topics, but some people—especially adults—view the service as a vehicle for celebrities to broadcast their thoughts online.
Twitter wants to show how the service works to first-time users by highlighting tweets from people in their geographic regions, such as local politicians and musicians, when they first sign on, people familiar with the matter said.
Jonathan Strauss, chief executive of Awe.sm, which tracks marketing campaigns on Twitter and Facebook Inc., argues that Twitter needs to attract more mainstream Internet users if it wants to justify its multibillion-dollar valuation. "Most people understand Twitter exists, but they don't understand what Twitter is and how they can participate," he said.
For more experienced users, Twitter is developing ways to create a narrower stream of the most relevant tweets rather than requiring users to wade through messages in chronological order.
As it looks to add tools for power users, Twitter is also in advanced talks to purchase a program used by many Twitter users to view and manage tweets, Tweetdeck, for around $50 million, people familiar with the matter said.
Jack Dorsey, a Twitter founder, recently returned as its product chief. He has become more active advising the company.
It is unclear when the changes will be introduced or how Twitter may use Tweetdeck. A spokesman for Twitter, which has made seven small acquisitions to date, declined to comment. TweetDeck Inc.'s chief executive, Iain Dodsworth, couldn't be reached.
The moves come as Jack Dorsey, the founding chief executive of the four-year-old company, formally returned as product chief three weeks ago after being pushed out by the board two-and-a-half years ago.
Mr. Dorsey remained chairman of Twitter's board after his ouster, and also leads a mobile-payments company named Square Inc. Mr. Dorsey has been laying out his vision for Twitter to its executives, said a person familiar with the matter.
Twitter allows users to post messages of up to 140 characters in length, and those messages can be viewed by other users. People log on—often through their mobile phones—to track everything from sporting events to transportation delays to natural disasters. Egyptians, for example, used the service to organize revolutionary protests earlier this year.
The company has been slower to build a business around its popularity than some other Web players, such as Facebook. The research firm eMarketer puts Twitter 2010 ad revenue at $45 million and expects ad revenue to reach $150 million this year.
Yet Twitter investors are buying up shares of the privately held company on secondary exchanges or through individual middlemen. Twitter completed a financing at the end of last year that valued the company at around $4 billion, though it has argued for higher valuations in low-level talks with potential acquirers, including Google Inc., people familiar with the matter have said.
The company this year will try to make the breadth of its content more visible to first-time visitors, helping them quickly discover information about stocks, sports and other organizations and individuals they care about, the people familiar with the matter said.
One possibility is showcasing tweets by well-known people or organizations located in the user's region, or from certain types of users, such as athletes or musicians.
Twitter users already have created thousands of "lists" in which such content on specific topics is grouped together, and Twitter is looking at ways to promote such lists, said a person familiar with the matter.
Twitter is also exploring concepts similar to a Facebook technology called "EdgeRank" that highlights posts by a user's closest friends—an effort that is being aided by Ashish Goel, a Twitter research fellow and Stanford University professor, these people said.
"Most of the time what people want is the most relevant and important information, and without filtering its content for individual users that's difficult for Twitter to satisfy," said Awe.sm's Mr. Strauss.
Twitter Seeks $7 Billion Valuation
As Peers Pursue Bigger IPOs, Messaging Service Sticks to Private Backing; Still Searching for the Right Business Model
Even as Internet companies such as Zynga Inc. and Groupon Inc. file to go public, Twitter Inc. is taking a different route: It is continuing to tap private investors.
Twitter, the Internet-messaging service, is privately raising hundreds of millions of dollars in a new financing round that values the company at as high as $7 billion. Emir Afrati has details.
The fast-growing Internet messaging service is currently in discussions to raise a new round of private financing, said people familiar with the matter. The round could yield hundreds of millions of dollars and value Twitter as high as $7 billion, one of these people said. It is unclear which investors are participating in the new round.
The talks come seven months after Twitter, which lets people broadcast and read messages called "tweets," raised $200 million in a financing led by venture-capital firm Kleiner Perkins Caufield & Byers that valued the company at $3.7 billion.
A Twitter spokesman declined to comment on the San Francisco company's finances.
Twitter's new valuation underscores the soaring price tags for some Web companies. Over the last month, daily deals site Groupon and online gaming start-up Zynga have filed for initial public offerings, in moves that some estimate would value those companies at around $20 billion each upon their stock market debuts.
By trying to raise a large slug of money, Twitter buys itself more time to develop an advertising-based business that is relatively immature compared to its peers. Though Twitter has a growing user base, its ad system remains fledgling and it isn't generating as much revenue as Groupon or Zynga.
Twitter is also much smaller than some of its peers, counting just over 500 employees, and until recently its executive ranks were thin. Chief Executive Dick Costolo, who took over last fall, has been working on building out the company's executive team and advertising business.
"Twitter is still evolving its business model," said Tony Florence, a partner with venture capital firm New Enterprise Associates. "Staying private while you are figuring out your model makes a lot of sense."
Twitter, which was created in 2006 and has more than 200 million registered user accounts, is currently on track to produce about $150 million in ad revenue this year, according to research firm eMarketer, up from $45 million last year.
Chief Tweeter: CEO Dick Costolo has revamped Twitter's executive team and slowly built its advertising business.
Mr. Costolo has said that the company has purposely limited the availability of ad space to "make sure we get it right."
In contrast, Zynga reported net income of $91 million on revenue of $597 million last year, according to its filing. Groupon, in its filing, revealed its revenue surged to $644.7 million in this year's first quarter, though it was unprofitable.
Today, Twitter's main advertising unit is called a "promoted tweet," which looks like a regular tweet—a message of 140 characters or less—and shows up in some users' Twitter accounts or when any Twitter user executes a search on Twitter.com. People log on to Twitter to track everything from global conflicts to sporting events and natural disasters.
Twitter is currently working on a plan to regularly incorporate promoted tweets prominently in users' accounts, the company has said. The move could significantly accelerate revenue growth by increasing the number of ads it can sell.
Twitter is also working on ways to create a new ad offering of the sort that made Google Inc. a Web-search advertising powerhouse, said a person familiar with the matter. The new ad type would differ from those that are currently available, this person said.
Much of the push to build out Twitter's business comes from 47-year-old Mr. Costolo. The former management consultant and Google product manager, who has won over many Twitter employees with his self-deprecating humor, has also been busy building out the company's executive bench.
Mr. Costolo has been credited with carefully managing the exits of two of the company's co-founders: Evan Williams, who was Twitter CEO between 2008 and last fall, and Biz Stone, Twitter's evangelist and spokesman on talk-show circuits. Mr. Williams remains on Twitter's board of directors.
In March, Mr. Costolo brought back Jack Dorsey, Twitter's creator and CEO of mobile-payments company Square Inc., to help oversee the company's product initiatives.
Around April, Mr. Costolo also brought on Satya Patel, a former Google product manager, to help lead product initiatives with Mr. Dorsey. The two are now working on ways to make the breadth of Twitter content more visible to first-time visitors, helping them quickly discover information about stocks, sports and other topics and people they care about, people familiar with the matter have said. They are also exploring concepts similar to a Facebook Inc. technology that highlights posts by a user's closest friends, these people said.
Mr. Costolo has made several other key hires, including from Facebook and News Corp., and is close to hiring a chief marketing officer, people familiar with the matter said.
Twitter's Valuation, By the Numbers
The CEO had a coup last month when Apple Inc. said that starting this fall, users of Apple mobile devices such as the iPhone will be able to publish photos, links to websites or broadcast their current location on Twitter with the tap of a button while using the device's camera and Web browser, among other things. Twitter believes the partnership could significantly help it attract new users and increase the amount of information that people contribute to the service, people familiar with the matter said.
Twitter is continuing to grow quickly. According to comScore Inc., Twitter.com in May saw 139 million unique visitors globally, up from 90 million a year earlier. Growth in the U.S. has been slower than internationally, with the site hitting 27 million unique U.S. visitors in May, up from 23.8 million in 2010. "We're growing like a weed," Mr. Costolo said at a conference last month.
On Tuesday, Twitter also said it has acquired a small firm called BackType Labs that helps companies understand their impact on the Web via social media sites, including Twitter.
As Peers Pursue Bigger IPOs, Messaging Service Sticks to Private Backing; Still Searching for the Right Business Model
Even as Internet companies such as Zynga Inc. and Groupon Inc. file to go public, Twitter Inc. is taking a different route: It is continuing to tap private investors.
Twitter, the Internet-messaging service, is privately raising hundreds of millions of dollars in a new financing round that values the company at as high as $7 billion. Emir Afrati has details.
The fast-growing Internet messaging service is currently in discussions to raise a new round of private financing, said people familiar with the matter. The round could yield hundreds of millions of dollars and value Twitter as high as $7 billion, one of these people said. It is unclear which investors are participating in the new round.
The talks come seven months after Twitter, which lets people broadcast and read messages called "tweets," raised $200 million in a financing led by venture-capital firm Kleiner Perkins Caufield & Byers that valued the company at $3.7 billion.
A Twitter spokesman declined to comment on the San Francisco company's finances.
Twitter's new valuation underscores the soaring price tags for some Web companies. Over the last month, daily deals site Groupon and online gaming start-up Zynga have filed for initial public offerings, in moves that some estimate would value those companies at around $20 billion each upon their stock market debuts.
By trying to raise a large slug of money, Twitter buys itself more time to develop an advertising-based business that is relatively immature compared to its peers. Though Twitter has a growing user base, its ad system remains fledgling and it isn't generating as much revenue as Groupon or Zynga.
Twitter is also much smaller than some of its peers, counting just over 500 employees, and until recently its executive ranks were thin. Chief Executive Dick Costolo, who took over last fall, has been working on building out the company's executive team and advertising business.
"Twitter is still evolving its business model," said Tony Florence, a partner with venture capital firm New Enterprise Associates. "Staying private while you are figuring out your model makes a lot of sense."
Twitter, which was created in 2006 and has more than 200 million registered user accounts, is currently on track to produce about $150 million in ad revenue this year, according to research firm eMarketer, up from $45 million last year.
Chief Tweeter: CEO Dick Costolo has revamped Twitter's executive team and slowly built its advertising business.
Mr. Costolo has said that the company has purposely limited the availability of ad space to "make sure we get it right."
In contrast, Zynga reported net income of $91 million on revenue of $597 million last year, according to its filing. Groupon, in its filing, revealed its revenue surged to $644.7 million in this year's first quarter, though it was unprofitable.
Today, Twitter's main advertising unit is called a "promoted tweet," which looks like a regular tweet—a message of 140 characters or less—and shows up in some users' Twitter accounts or when any Twitter user executes a search on Twitter.com. People log on to Twitter to track everything from global conflicts to sporting events and natural disasters.
Twitter is currently working on a plan to regularly incorporate promoted tweets prominently in users' accounts, the company has said. The move could significantly accelerate revenue growth by increasing the number of ads it can sell.
Twitter is also working on ways to create a new ad offering of the sort that made Google Inc. a Web-search advertising powerhouse, said a person familiar with the matter. The new ad type would differ from those that are currently available, this person said.
Much of the push to build out Twitter's business comes from 47-year-old Mr. Costolo. The former management consultant and Google product manager, who has won over many Twitter employees with his self-deprecating humor, has also been busy building out the company's executive bench.
Mr. Costolo has been credited with carefully managing the exits of two of the company's co-founders: Evan Williams, who was Twitter CEO between 2008 and last fall, and Biz Stone, Twitter's evangelist and spokesman on talk-show circuits. Mr. Williams remains on Twitter's board of directors.
In March, Mr. Costolo brought back Jack Dorsey, Twitter's creator and CEO of mobile-payments company Square Inc., to help oversee the company's product initiatives.
Around April, Mr. Costolo also brought on Satya Patel, a former Google product manager, to help lead product initiatives with Mr. Dorsey. The two are now working on ways to make the breadth of Twitter content more visible to first-time visitors, helping them quickly discover information about stocks, sports and other topics and people they care about, people familiar with the matter have said. They are also exploring concepts similar to a Facebook Inc. technology that highlights posts by a user's closest friends, these people said.
Mr. Costolo has made several other key hires, including from Facebook and News Corp., and is close to hiring a chief marketing officer, people familiar with the matter said.
Twitter's Valuation, By the Numbers
The CEO had a coup last month when Apple Inc. said that starting this fall, users of Apple mobile devices such as the iPhone will be able to publish photos, links to websites or broadcast their current location on Twitter with the tap of a button while using the device's camera and Web browser, among other things. Twitter believes the partnership could significantly help it attract new users and increase the amount of information that people contribute to the service, people familiar with the matter said.
Twitter is continuing to grow quickly. According to comScore Inc., Twitter.com in May saw 139 million unique visitors globally, up from 90 million a year earlier. Growth in the U.S. has been slower than internationally, with the site hitting 27 million unique U.S. visitors in May, up from 23.8 million in 2010. "We're growing like a weed," Mr. Costolo said at a conference last month.
On Tuesday, Twitter also said it has acquired a small firm called BackType Labs that helps companies understand their impact on the Web via social media sites, including Twitter.
TAIPEI—Apple Inc. has placed orders for key components used in a next-generation iPhone it is preparing to launch sometime in the third quarter, according to people familiar with the situation.
According to some suppliers of components to Apple, the new version of the iPhone is expected to be thinner and lighter than the iPhone 4 and sport an eight-megapixel camera.
Apple, like many other big personal-computer and consumer-electronics brands, doesn't actually make most of its products. It hires manufacturing specialists—mainly companies from Taiwan that have extensive operations in China—to assemble its gadgets based on Apple's designs. They use parts from other outside suppliers, many of which also are from Taiwan and elsewhere in Asia. The arrangement frees Apple and its fellow vendors from running complicated, labor-intensive production lines, while the ability of Taiwanese companies to slash manufacturing costs helps cut product prices over time.
"Apple's sales estimate of the new iPhone is quite aggressive. It told us to prepare to help the company meet its goal of 25 million units by the end of the year," said another person at one of Apple's suppliers. "The initial production volume will be a few million units... we were told to ship the components to assembler Hon Hai in August."
Carolyn Wu, a spokeswoman for Apple in Beijing, declined to comment. A spokesman for Hon Hai Precision Industry Co. declined to comment on the new iPhone.
Hon Hai, based in Taiwan, is the world's biggest contract manufacturer of electronics by revenue and is the global assembler for Apple products.
Two of the people, however, cautioned that shipments of the new iPhone could be delayed if Hon Hai can't improve its yield rate, as the new iPhone is "complicated and difficult to assemble."
Last month, Hon Hai Chairman Terry Gou said at the company's annual general meeting that the yield rate of Apple's touch-screen devices hasn't been satisfactory, which weighed on Hon Hai's profitability.
"The touch-screen devices are so thin. It's really difficult to install so many components into the iPhones and iPads," Mr. Gou said. "We hope to raise the yield rate and volume in the second half which will help improve our gross margin."
Apple's iPhone has led much of the cellphone industry's innovation since the device was introduced in 2007. Apple said in April that it sold 18.6 million iPhones in its fiscal second quarter ended March 26, more than double the year-earlier tally. That figure was also 15% higher than the December quarter, which is typically Apple's strongest periodsince it is fueled by holiday sales.
According to some suppliers of components to Apple, the new version of the iPhone is expected to be thinner and lighter than the iPhone 4 and sport an eight-megapixel camera.
Apple, like many other big personal-computer and consumer-electronics brands, doesn't actually make most of its products. It hires manufacturing specialists—mainly companies from Taiwan that have extensive operations in China—to assemble its gadgets based on Apple's designs. They use parts from other outside suppliers, many of which also are from Taiwan and elsewhere in Asia. The arrangement frees Apple and its fellow vendors from running complicated, labor-intensive production lines, while the ability of Taiwanese companies to slash manufacturing costs helps cut product prices over time.
"Apple's sales estimate of the new iPhone is quite aggressive. It told us to prepare to help the company meet its goal of 25 million units by the end of the year," said another person at one of Apple's suppliers. "The initial production volume will be a few million units... we were told to ship the components to assembler Hon Hai in August."
Carolyn Wu, a spokeswoman for Apple in Beijing, declined to comment. A spokesman for Hon Hai Precision Industry Co. declined to comment on the new iPhone.
Hon Hai, based in Taiwan, is the world's biggest contract manufacturer of electronics by revenue and is the global assembler for Apple products.
Two of the people, however, cautioned that shipments of the new iPhone could be delayed if Hon Hai can't improve its yield rate, as the new iPhone is "complicated and difficult to assemble."
Last month, Hon Hai Chairman Terry Gou said at the company's annual general meeting that the yield rate of Apple's touch-screen devices hasn't been satisfactory, which weighed on Hon Hai's profitability.
"The touch-screen devices are so thin. It's really difficult to install so many components into the iPhones and iPads," Mr. Gou said. "We hope to raise the yield rate and volume in the second half which will help improve our gross margin."
Apple's iPhone has led much of the cellphone industry's innovation since the device was introduced in 2007. Apple said in April that it sold 18.6 million iPhones in its fiscal second quarter ended March 26, more than double the year-earlier tally. That figure was also 15% higher than the December quarter, which is typically Apple's strongest periodsince it is fueled by holiday sales.
Inside the Disappointing Comeback!
Two years ago, officials said, the worst recession since the Great Depression ended. The stumbling recovery has also proven to be the worst since the economic disaster of the 1930s.
The News Hub covers one of the slowest recoveries from economic recession on record. Also, the National Education Association endorses President Obama. Plus, mules put on a show in Missouri. AP Photo/Paul Sancya
Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy's improvement since the recession's end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.
Related Articles
Profits Thrive in Weak Recovery
Bright Days for the Bottom Line
Keeping a Watch on the Bellwethers
In some ways the recovery is much like the 1991 and 2001 post-recession periods: All three are marked by gradual output growth rather than sharp snap-backs typical of earlier recoveries. But this recovery may remain lackluster for years, many economists say, because of heavy household debt, a financial system still damaged by the mortgage crisis, fragile confidence and a government with few good options for supporting growth.
There are bright spots. Exports, particularly of manufactured and agricultural goods, are improving, in part because of booming developing-country economies and the weaker dollar. They are expected to pick up in the second half of the year as the temporary shock fades from Japan's earthquake and tsunami. In a hint of this, the Institute of Supply Management on Friday reported an uptick in manufacturing for June. Higher corporate profits, stock prices and business investment also are supporting the expansion.
Still, broader problems are holding the economy back.
Disappointing Data
The economy's improvement since the recession's June 2009 end has been the worst, or among the worst, recorded across a wide range of measures since the government started tracking these trends after World War II.
View Interactive
Banks are less able or willing to lend than before the recession. Since the recovery started, banks have reduced money they make available through credit card lines from $3.04 trillion to $2.69 trillion and have reduced home equity credit lines from $1.33 trillion to $1.15 trillion, according to the Federal Reserve Bank of New York.
Policy makers, meanwhile, are reluctant to do more to stimulate economic growth. The Federal Reserve has already pushed short-term interest rates to near zero. Two rounds of quantitative easing that including purchasing $1.425 trillion in mortgage bonds and $900 billion in Treasury debt helped to stabilize the economy but failed to spur a vigorous recovery.
Likewise, fiscal stimulus, either in the form of tax cuts favored by Republicans or spending increases favored by Democrats, looks unlikely given large federal deficits and the disappointing results of earlier efforts, including President Obama's $830 billion stimulus program of 2009.
The biggest problem may be household indebtedness. At the peak of the economic boom in the third quarter of 2007, U.S. households collectively had borrowed the equivalent of 127% of their annual incomes to fund purchases of homes, cars and other goods, up from an average of 84% in the 1990s. The money used to pay off that debt means less available for new spending. Households had worked their debt-to-income levels down to 112% by the first quarter, in part because banks have written off some debt as uncollectible.
View Interactive
Jurgen Schulz, owner of K-5, a San Diego area retailer that sells surfboards, skateboards and lifestyle apparel, sees more people living month-to-month. "Our sales trail way off the further it gets from pay period," he said. Mr. Schulz, in turn, didn't hire this year the six to eight seasonal workers his company usually brings on each summer.
Getting rid of debt could be a long and slow process.To get back to a 1990s debt-to-income ratio of 84%, households would either need to pay down another $3.3 trillion of debt, or see their incomes rise $3.9 trillion. That's equivalent to about nine years' worth of income growth in normal times, estimates Credit Suisse economist Dana Saporta.
Debt constraints are especially hard on consumers who before the crisis relied on credit cards or home equity lines to keep spending when they needed money. Now many of those lines have been limited or cut.
With less access to credit, many families are finding the only way to make ends meet is to cut spending.
"Every single month you're struggling, struggling, struggling," said Javier Toro, 49, a father of three. He makes $13 an hour as a customer service representative at a non-profit that administers a program offering free energy efficiency upgrades to homeowners. The program, funded by the 2009 stimulus law, ends in a few months as government funds dry up. He's paying about $100 a month to keep current on $3,000 in credit card debt, but making no headway paying down principal. To make ends meet, he's cut his cable and Internet service, and the fixed telephone line to his rented home.
He said, "You don't see when this is going to stop."
Debt and a dismal job market have hurt consumers' confidence, which further damps their willingness to spend. The University of Michigan finds that 24% of households expect to be better off financially within a year's time. That's the lowest this measure has been at this point in a recovery since World War II.
Two years ago, officials said, the worst recession since the Great Depression ended. The stumbling recovery has also proven to be the worst since the economic disaster of the 1930s.
The News Hub covers one of the slowest recoveries from economic recession on record. Also, the National Education Association endorses President Obama. Plus, mules put on a show in Missouri. AP Photo/Paul Sancya
Across a wide range of measures—employment growth, unemployment levels, bank lending, economic output, income growth, home prices and household expectations for financial well-being—the economy's improvement since the recession's end in June 2009 has been the worst, or one of the worst, since the government started tracking these trends after World War II.
Related Articles
Profits Thrive in Weak Recovery
Bright Days for the Bottom Line
Keeping a Watch on the Bellwethers
In some ways the recovery is much like the 1991 and 2001 post-recession periods: All three are marked by gradual output growth rather than sharp snap-backs typical of earlier recoveries. But this recovery may remain lackluster for years, many economists say, because of heavy household debt, a financial system still damaged by the mortgage crisis, fragile confidence and a government with few good options for supporting growth.
There are bright spots. Exports, particularly of manufactured and agricultural goods, are improving, in part because of booming developing-country economies and the weaker dollar. They are expected to pick up in the second half of the year as the temporary shock fades from Japan's earthquake and tsunami. In a hint of this, the Institute of Supply Management on Friday reported an uptick in manufacturing for June. Higher corporate profits, stock prices and business investment also are supporting the expansion.
Still, broader problems are holding the economy back.
Disappointing Data
The economy's improvement since the recession's June 2009 end has been the worst, or among the worst, recorded across a wide range of measures since the government started tracking these trends after World War II.
View Interactive
Banks are less able or willing to lend than before the recession. Since the recovery started, banks have reduced money they make available through credit card lines from $3.04 trillion to $2.69 trillion and have reduced home equity credit lines from $1.33 trillion to $1.15 trillion, according to the Federal Reserve Bank of New York.
Policy makers, meanwhile, are reluctant to do more to stimulate economic growth. The Federal Reserve has already pushed short-term interest rates to near zero. Two rounds of quantitative easing that including purchasing $1.425 trillion in mortgage bonds and $900 billion in Treasury debt helped to stabilize the economy but failed to spur a vigorous recovery.
Likewise, fiscal stimulus, either in the form of tax cuts favored by Republicans or spending increases favored by Democrats, looks unlikely given large federal deficits and the disappointing results of earlier efforts, including President Obama's $830 billion stimulus program of 2009.
The biggest problem may be household indebtedness. At the peak of the economic boom in the third quarter of 2007, U.S. households collectively had borrowed the equivalent of 127% of their annual incomes to fund purchases of homes, cars and other goods, up from an average of 84% in the 1990s. The money used to pay off that debt means less available for new spending. Households had worked their debt-to-income levels down to 112% by the first quarter, in part because banks have written off some debt as uncollectible.
View Interactive
Jurgen Schulz, owner of K-5, a San Diego area retailer that sells surfboards, skateboards and lifestyle apparel, sees more people living month-to-month. "Our sales trail way off the further it gets from pay period," he said. Mr. Schulz, in turn, didn't hire this year the six to eight seasonal workers his company usually brings on each summer.
Getting rid of debt could be a long and slow process.To get back to a 1990s debt-to-income ratio of 84%, households would either need to pay down another $3.3 trillion of debt, or see their incomes rise $3.9 trillion. That's equivalent to about nine years' worth of income growth in normal times, estimates Credit Suisse economist Dana Saporta.
Debt constraints are especially hard on consumers who before the crisis relied on credit cards or home equity lines to keep spending when they needed money. Now many of those lines have been limited or cut.
With less access to credit, many families are finding the only way to make ends meet is to cut spending.
"Every single month you're struggling, struggling, struggling," said Javier Toro, 49, a father of three. He makes $13 an hour as a customer service representative at a non-profit that administers a program offering free energy efficiency upgrades to homeowners. The program, funded by the 2009 stimulus law, ends in a few months as government funds dry up. He's paying about $100 a month to keep current on $3,000 in credit card debt, but making no headway paying down principal. To make ends meet, he's cut his cable and Internet service, and the fixed telephone line to his rented home.
He said, "You don't see when this is going to stop."
Debt and a dismal job market have hurt consumers' confidence, which further damps their willingness to spend. The University of Michigan finds that 24% of households expect to be better off financially within a year's time. That's the lowest this measure has been at this point in a recovery since World War II.
Warner Music Shareholders Approve $3.3B Takeover, And Golden Parachutes
Warner Music is a step closer to becoming a division of Access Industries, the privately held chemical, natural resource, and real estate company controlled by Russian-born industrialist Len Blavatnik. Shareholders in the music company this morning overwhelmingly approved Blavatnik's $3.3 billion takeover offer. The deal, which pays investors $8.25 a share, is expected to close in the third quarter. Investors also approved, on an advisory basis, the controversial "golden parachute" package that guarantees about $16.9 million in equity to CEO Edgar Bronfman Jr and $10 million to Lyor Cohen, the CEO of recorded music. Although they're expected to stay at the company, they can cash in even if they leave.
Warner Music is a step closer to becoming a division of Access Industries, the privately held chemical, natural resource, and real estate company controlled by Russian-born industrialist Len Blavatnik. Shareholders in the music company this morning overwhelmingly approved Blavatnik's $3.3 billion takeover offer. The deal, which pays investors $8.25 a share, is expected to close in the third quarter. Investors also approved, on an advisory basis, the controversial "golden parachute" package that guarantees about $16.9 million in equity to CEO Edgar Bronfman Jr and $10 million to Lyor Cohen, the CEO of recorded music. Although they're expected to stay at the company, they can cash in even if they leave.
(Los Angeles, CA – July 6, 2011) -- Paramount Pictures, a unit of Viacom Inc. (NYSE:VIA and VIA.B), will launch an in-house animation division, with its first title slated for release in 2014. In making the announcement, Paramount Chairman & CEO Brad Grey said the initiative was part of the studio’s long-term strategy for growth and that the new division, Paramount Animation, will focus on high quality animation with budgets per picture of up to $100 million.
Paramount Animation’s mandate will be the development of the broadest range of family CGI animated films, with a key piece being titles under the label of Viacom’s Nickelodeon, the number one entertainment brand for kids worldwide. Paramount will also look to build on Viacom’s already thriving global consumer products business by seeking to capitalize on merchandising opportunities tied to all Paramount Animation releases.
The division will be part of the Paramount Motion Picture Group, reporting to the group’s president, Adam Goodman, and will initially target one release per year. Vice Chair Rob Moore, COO Frederick Huntsberry and Goodman are now conducting a search for the leader of the division.
“We’ve come a long way over the last six years," said Grey. "Our team has worked hard to build best in class production, marketing and distribution divisions which have proven they consistently execute at the highest level across all genres and price points. Establishing an in-house animation division was the logical next step for us.”
“The marketplace has never offered as many opportunities to create wonderfully imaginative pictures at very appealing budget levels, so we feel this is a perfect moment to launch this effort. We are now eager to expand in animation with appropriate and prudent overhead and production budgets in a way that will allow us to be nimble, creative and innovative,” added Grey. “Paramount also has the distinct advantage of being part of the Viacom family, giving us the ability to leverage its portfolio of powerful and youthful brands to create and market great films and consumer products.”
While Paramount has released an array of successful animated films in its history, the company’s first fully owned CGI animated property was Rango, released to great acclaim in March 2011. The Western, directed by Gore Verbinski and featuring the voice of Johnny Depp in the title role, has grossed over $240 million worldwide and is the best reviewed animated movie so far this year.
Paramount Animation’s mandate will be the development of the broadest range of family CGI animated films, with a key piece being titles under the label of Viacom’s Nickelodeon, the number one entertainment brand for kids worldwide. Paramount will also look to build on Viacom’s already thriving global consumer products business by seeking to capitalize on merchandising opportunities tied to all Paramount Animation releases.
The division will be part of the Paramount Motion Picture Group, reporting to the group’s president, Adam Goodman, and will initially target one release per year. Vice Chair Rob Moore, COO Frederick Huntsberry and Goodman are now conducting a search for the leader of the division.
“We’ve come a long way over the last six years," said Grey. "Our team has worked hard to build best in class production, marketing and distribution divisions which have proven they consistently execute at the highest level across all genres and price points. Establishing an in-house animation division was the logical next step for us.”
“The marketplace has never offered as many opportunities to create wonderfully imaginative pictures at very appealing budget levels, so we feel this is a perfect moment to launch this effort. We are now eager to expand in animation with appropriate and prudent overhead and production budgets in a way that will allow us to be nimble, creative and innovative,” added Grey. “Paramount also has the distinct advantage of being part of the Viacom family, giving us the ability to leverage its portfolio of powerful and youthful brands to create and market great films and consumer products.”
While Paramount has released an array of successful animated films in its history, the company’s first fully owned CGI animated property was Rango, released to great acclaim in March 2011. The Western, directed by Gore Verbinski and featuring the voice of Johnny Depp in the title role, has grossed over $240 million worldwide and is the best reviewed animated movie so far this year.
In House Animation Division for Paramount!
(Los Angeles, CA – July 6, 2011) -- Paramount Pictures, a unit of Viacom Inc. (NYSE:VIA and VIA.B), will launch an in-house animation division, with its first title slated for release in 2014. In making the announcement, Paramount Chairman & CEO Brad Grey said the initiative was part of the studio’s long-term strategy for growth and that the new division, Paramount Animation, will focus on high quality animation with budgets per picture of up to $100 million.
Paramount Animation’s mandate will be the development of the broadest range of family CGI animated films, with a key piece being titles under the label of Viacom’s Nickelodeon, the number one entertainment brand for kids worldwide. Paramount will also look to build on Viacom’s already thriving global consumer products business by seeking to capitalize on merchandising opportunities tied to all Paramount Animation releases.
The division will be part of the Paramount Motion Picture Group, reporting to the group’s president, Adam Goodman, and will initially target one release per year. Vice Chair Rob Moore, COO Frederick Huntsberry and Goodman are now conducting a search for the leader of the division.
“We’ve come a long way over the last six years," said Grey. "Our team has worked hard to build best in class production, marketing and distribution divisions which have proven they consistently execute at the highest level across all genres and price points. Establishing an in-house animation division was the logical next step for us.”
“The marketplace has never offered as many opportunities to create wonderfully imaginative pictures at very appealing budget levels, so we feel this is a perfect moment to launch this effort. We are now eager to expand in animation with appropriate and prudent overhead and production budgets in a way that will allow us to be nimble, creative and innovative,” added Grey. “Paramount also has the distinct advantage of being part of the Viacom family, giving us the ability to leverage its portfolio of powerful and youthful brands to create and market great films and consumer products.”
While Paramount has released an array of successful animated films in its history, the company’s first fully owned CGI animated property was Rango, released to great acclaim in March 2011. The Western, directed by Gore Verbinski and featuring the voice of Johnny Depp in the title role, has grossed over $240 million worldwide and is the best reviewed animated movie so far this year.
Paramount Animation’s mandate will be the development of the broadest range of family CGI animated films, with a key piece being titles under the label of Viacom’s Nickelodeon, the number one entertainment brand for kids worldwide. Paramount will also look to build on Viacom’s already thriving global consumer products business by seeking to capitalize on merchandising opportunities tied to all Paramount Animation releases.
The division will be part of the Paramount Motion Picture Group, reporting to the group’s president, Adam Goodman, and will initially target one release per year. Vice Chair Rob Moore, COO Frederick Huntsberry and Goodman are now conducting a search for the leader of the division.
“We’ve come a long way over the last six years," said Grey. "Our team has worked hard to build best in class production, marketing and distribution divisions which have proven they consistently execute at the highest level across all genres and price points. Establishing an in-house animation division was the logical next step for us.”
“The marketplace has never offered as many opportunities to create wonderfully imaginative pictures at very appealing budget levels, so we feel this is a perfect moment to launch this effort. We are now eager to expand in animation with appropriate and prudent overhead and production budgets in a way that will allow us to be nimble, creative and innovative,” added Grey. “Paramount also has the distinct advantage of being part of the Viacom family, giving us the ability to leverage its portfolio of powerful and youthful brands to create and market great films and consumer products.”
While Paramount has released an array of successful animated films in its history, the company’s first fully owned CGI animated property was Rango, released to great acclaim in March 2011. The Western, directed by Gore Verbinski and featuring the voice of Johnny Depp in the title role, has grossed over $240 million worldwide and is the best reviewed animated movie so far this year.
Subscribe to:
Posts (Atom)