July 31, 2009

Corruption Arrests Shock American Jewish Community


The arrests of more than 40 prominent politicians and Jewish leaders in New Jersey and New York on corruption and money laundering charges have sent shockwaves through the close-knit Syrian Jewish community there.


Federal investigators in New Jersey announced Thursday they had arrested more than 40 people, including public officials charged with corruption. Charges against others included international money laundering, selling counterfeit goods, and the black-market sale of human organs. In addition to three mayors, officials arrested five influential rabbis from New Jersey and the New York borough of Brooklyn.

"They used purported charities, entities supposedly set up to do good works, as vehicles for laundering millions of dollars in illicit funds. The rings were international in scope, connected to the city of Deal, New Jersey, Brooklyn, New York, Israel and Switzerland," said Acting U.S. Attorney Ralph J. Marra about the money-laundering scheme.


The rabbis are accused of using their congregations' charitable organizations to launder about $3 million by passing money from alleged illicit activity through their charities' bank accounts. The FBI said the rabbis then kept about 10 percent for themselves. All of the rabbis come from the close-knit and wealthy Sephardic Jewish communities of southern New Jersey and Brooklyn - and the arrests have put the spotlight on a usually quiet community.

One of the rabbis arrested, Saul Kassin, is considered the leading cleric of the U.S. Sephardic community, comprised of families that emigrated mostly from the Middle East, Syria in particular, following the formation of the state of Israel in 1948. Rabbi Kassin leads the largest Sephardic synagogue in the United States, Shaare Zion in Brooklyn, and has written books on Jewish law. Members of the community have expressed shock and disbelief over the allegations against Rabbi Kassin. Many have been reluctant to speak publicly. One member of Shaare Zion, Ezra Kassin, told reporters he did not believe the charges.


He's just a very honorable person. I can't believe it, I don't believe it. Whatever they want to say, it's hogwash," he said. Authorities said an FBI "cooperating witness" helped federal investigators gather evidence in the case. Media reports said he was arrested in 2006 for bank fraud. FBI agent Weysan Dun said the probe seeks to root out corruption in New Jersey, wherever it is found.


"This case is not about politics. It is certainly not about religion. It is about crime, corruption, arrogance. It is about a shocking betrayal of the public trust," he said. The FBI said the two-year probe is part of a wider investigation into political corruption and money laundering that started 10 years ago.

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Source:

http://www.voanews.com/english/2009-07-24-voa36.cfm

Tags:

Syrian Jews, American jews, FBI, Rabbi Kassin, Shaare Zion, Ezra Kassin, political corruption, money laundering, Global Development News, U.S. Attorney Ralph J. Marra, 40 prominent politicians, Jewish leaders in New Jersey, New York, Sephardic synagogue,

Posted via email from Global Business News

July 30, 2009

Bill Gates' Name Surfaces On Patent Applications


Microsoft co-founder Bill Gates was one of several names that surfaced last week on five patents filed by Searete, which is associated with a Bellevue, Wash. company called Intellectual Ventures formed by former Microsoft executives as a factory for new inventions.

Critics have complained that Intellectual Ventures will raise patent litigation costs, but the company claims to be working with more than 500 scientists and technicians in addition to universities, research labs and Fortune 500 companies.

Intellectual Ventures co-founder Nathan Myhrvold advised Gates for years as Microsoft's chief technology officer and in 1991 founded Microsoft Research. The idea behind some of these patents is to create equipment that would lower the force of hurricanes by cooling the water, altering its surface tension, and shifting it away from recreational areas.

They're not the only Searete patents attached to Gates. Since he stepped down last year as Microsoft's CEO, he has been freer to focus on the Bill and Melinda Gates Foundation, which aims to improve global health and education and reduce poverty, and pursue a variety of other interests.

Some of these interests are reflected in Searete's patents. Gates' name has been on patents for an electromagnetic engine and a method of delivering medication.

Gates and Myhrvold have also filed a series of patents for a temperature-controlled keg to store medicine -- and, separately, beer and wine -- at optimal temperatures. The keg would come with sensors and an electronic display that would allow people to monitor the liquids without having to open the container.

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Source:

http://www.informationweek.com/news/global-cio/legal/showArticle.jhtml?articleID=218500495&cid=RSSfeed_IWK_News

Tags:

Intellectual Ventures co-founder, Nathan Myhrvold, Microsoft's chief technology officer, Microsoft Research, Bill and Melinda Gates Foundation, Searete, Fortune 500 companies, electromagnetic engine, a method of delivering medication, temperature-controlled keg to store medicine,

Posted via email from Global Business News

July 29, 2009

Abu Dhabi Firm Buys Stake in Tesla Motors


Tesla Motors has yet to turn a profit, but that isn't stopping an Abu Dhabi investment firm from buying a stake in the electric car maker from Daimler, the latest sign of interest in the San Carlos startup.

Daimler sold part of its 10 percent stake in the electric-car manufacturer to Aabar Investments, bringing its largest shareholder into a venture to develop alternative powering systems.

Aabar, which will own almost 4 percent Tesla, bought the stake under an agreement to increase cooperation with Daimler after the investment company acquired stock in the German carmaker in March, the companies said today in a joint statement. They didn't disclose a price.

Daimler, the world's second-largest maker of luxury cars, bought just under 10 percent of Tesla for a "double-digit million-euro" sum in May. The Stuttgart, Germany,-based manufacturer reiterated today that it plans to install Tesla's lithium-ion battery packs and charging equipment in 1,000 electric-powered versions of its Smart car.

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Tags:

Tesla motors, Aabar Investments, Daimler-Benz, Smart car, Stuttgart Germany, Auto industry, Electric cars, electric car makers, Global Development News, Global Best Practice,

Source: http://www.mercurynews.com/businessupdate/ci_12827600?source=email&nclick_check=1

Posted via email from Global Business News

July 28, 2009

China Launches Arabic TV Channel


China has launched a 24-hour Arabic-language television channel aimed at addressing "distorted" views of China in the Middle East and North Africa.


The satellite channel, launched on Saturday, is expected to reach about 300 million people in 22 countries. China Central Television (CCT already broadcasts foreign language channels in English, Spanish and French. Zhang Changming, deputy president of CCTV, said that through the Arabic channel "the world can know China and China can know the rest of the world even better". "Our principle is to be real, to be objective, to be accurate and transparent. CCTV will present the world with the real China," he said at the launch. The channel will mainly broadcast news, but Zhang promised it would also feature entertainment and educational programmes.

'Good journalism'

Ying Chan, the director of Hong Kong University's journalism and media studies centre, told Al Jazeera that China saw the channel as a way to counter "unfair" portrayls of China in the international media. "There's no question that the Middle East is a very strategic area and China wants its voice heard there," she said.

"They want to announce their policies more to the world, and they also felt that the international media, led by the Western media, has not been fair to China." China exerts a great deal of control over its media and often censors the reporting of sensitive topics. "It [CCTV] will face challenges in how much it will allow its own reporters to report news as it is, as it happened," Ying said. "I think CCTV, in order to gain influence, has to deliver good journalism."

Investment plans

CCTV has also said it plans to open more foreign bureaus. The Hong Kong-based South China Morning Post newspaper reported that Beijing was prepared to put 45 billion yuan ($6.6bn) into the development of its media, an amount which could not be confirmed by Chinese sources. China's Arabic language channel joins other foreign government media networks broadcasting in Arabic. The UK's BBC launched its Arabic channel last year and the US set up al-Hurra, an Arabic-language channel based in Virginia, in 2004.

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Source:

http://english.aljazeera.net/news/asia-pacific/2009/07/200972563026919452.html

Tags:

Chinese State, CCTV, China's Arabic language channel, BBC launched its Arabic channel, US set up al-Hurra, Global Development News, South China Morning Post , Hong Kong University, journalism and media studies centre, Al Jazeera,

Posted via email from Global Business News

July 26, 2009

United Future World Currency


Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”

“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.” The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.

The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”

Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.

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Source:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeFVNYQpByU4

http://www.futureworldcurrency.com/

Tags:

United Future World Currency, Dmitry Medvedev, G8, Russian President, Unity in Diversity, Laquila Italy, Supranational currency, G20, Global Economic News, coin, hard currency, Belgian mints, SDR’s,

Posted via email from Global Business News

July 24, 2009

Merger of Middle East Real Estate Giants


The deal is so big and so unprecedented; none of the parties involved knows the estimated value of the transaction at this date. One thing they do know is that the debt load of the combined entities will be huge - about $3.65 billion, U.S. (13.4 billion dirhams)

Emaar Properties, one of the world's largest commercial real estate companies, wants to merge with three real estate units of Dubai Holdings -- Sama, Tatweer and Dubai Properties. Dubai Holdings is a 100 percent state-controlled entity, while the government of Dubai owns a 32 percent stake in Emaar.


The parties expect to complete the deal valuation by August 2009. The Economic Times of Dubai reports the merger is expected to take about four months and could be completed in October 2009, pending the approval of shareholders and regulators.


The entities' total assets will be 194 billion dirhams, Emaar said in a statement to the Dubai Financial Market. The total debt is about 7 cent of the company's total assets. As of March 2009, Emaar's own external debt obligation was 10 billion dirhams, the newspaper reports. The real estate major had about 68 billion dirhams in book value of assets.


"As for Dubai Holdings, we believe the 126 billion dirhams in assets quoted in the press release consists mostly of land, which could be potentially valued much lower given the current market conditions," according to an Emaar spokesperson.


"We currently have no idea as to what Dubai Holdings' cash position is and what is owed to its contractors and suppliers," the Emaar spokesperson told the Dubai Financial Market.

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Tags:

Dubai Holdings, Emaar Properties, world's largest commercial real estate companies, dirhams, Sama, Tatweer, Dubai Financial Market, Global Best Practice,

Source:

http://www.realestatechannel.com/international-markets/residential-real-estate/emaar-properties-dubai-holdings-sama-tatweer-dubai-properties-middle-east-commercial-real-estate-giants-alex-finkelstein-1012.php

Posted via email from Global Business News

July 23, 2009

Budget Deficit Tops $1Trillion For First Time


Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time.

The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There's also concern about trying to reverse the deficit — by reducing government spending or raising taxes — in the midst of a harsh recession.

The Treasury Department said Monday that the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion. The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan also is a major factor.

The country's soaring deficits are making Chinese and other foreign buyers of U.S. debt nervous, which could make them reluctant lenders down the road. It could force the Treasury Department to pay higher interest rates to make U.S. debt attractive longer-term.

"These are mind boggling numbers," said Sung Won Sohn, an economist at the Smith School of Business at California State University. "Our foreign investors from China and elsewhere are starting to have concerns about not only the value of the dollar but how safe their investments will be in the long run."

Government spending is on the rise to address the worst financial crisis since the Great Depression and an unemployment rate that has climbed to 9.5 percent. Congress already approved a $700 billion financial bailout and a $787 billion economic stimulus package to try and jump-start a recovery, and there is growing talk among some Obama administration officials that a second round of stimulus may be necessary.

This has many Republicans and deficit hawks worried that the U.S. could be setting itself up for more financial pain down the road if interest rates and inflation surge. They also are raising alarms about additional spending the administration is proposing, including its plan to reform health care.

President Barack Obama and other administration officials, including Treasury Secretary Timothy Geithner, have said the U.S. is committed to bringing down the deficits once the country has emerged from the current recession and financial crisis.

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Source:

http://www.mercurynews.com/business/ci_12827891?source=email

Tags:

Treasury Department, Great Depression, Barack Obama, Timothy Geithner, Treasury Secretary, Government spending, Smith School of Business, wars in Iraq and Afghanistan, Global Economic News,

Posted via email from Global Business News

July 22, 2009

Big Pharma: Big Lobby, Big Money


The pharmaceutical and health products industry has long been the top dog on K Street. Since 1998, the industry has spent more than $1.6 billion on federal lobbying. Last year alone, it spent more than $234 million — a sum that translates into roughly $125,000 every hour that Congress was actually in session.

Read more:

http://globalbestpractice.blogspot.com/2009/07/big-pharma-big-lobby-big-money.html


July 21, 2009

Corporate Profits a Boost for US Industry


Corporate America took another step along its long road to recovery on Tuesday as companies from the industrial heartland of Peoria to the technology hubs of Silicon Valley reported stronger-than-expected profits and bullish outlooks. The wave of positive second-quarter results from Caterpillar, DuPont and Apple, which came a week after several banks beat analysts’ expectations, fuelled investors’ hopes for a rebound in the US economy.

Shares in Caterpillar rose nearly 8 per cent on Tuesday after the world’s biggest maker of construction equipment un-veiled profits far ahead of Wall Street’s expectations and issued a more optimistic outlook. Its upbeat comments fuelled hopes that the global industrial economy was recovering. The manufacturer is a bellwether of the US economy but also heavily relies on overseas markets.

After the market close, Apple added to investors’ optimism with better-than-expected third-quarter results driven by strong sales of its iPhone. Apple’s results were the best-ever in a quarter not including a holiday. Chemical group DuPont and drugmaker Merck both reported a drop in second-quarter profits, but their earnings exceeded Wall Street’s forecasts. Coca-Cola results were ahead of analysts’ predictions but the world’s largest soft-drinks group warned US consumers remained under pressure – a factor underlined by steep revenue falls at three airlines: United, Continental and Southwest.

The figures from Caterpillar boosted stocks, pushing New York’s S&P500 index to match its intra-day high for the year of 956 set last month. “Everyone is now looking for growth in the economy and people who were under-invested in stocks are being forced back into the market,” said Anthony Conroy, head equity trader for BNY ConvergEx.

After several strong sessions that sent the S&P500 more than 8 per cent higher in the past six days, the benchmark index rose 0.4 per cent to close at 954.58. Credit Suisse on Tuesday raised its year-end target for the S&P500, to 1,020 from 920. The S&P has not traded above 1,000 since November. Technology shares have set the pace for the market, with the Nasdaq Composite up 21.5 per cent this year.

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Source: http://www.ft.com/cms/s/0/4bbd740a-7622-11de-9e59-00144feabdc0.html



China to Deploy Foreign Reserves



Beijing will use its foreign exchange reserves, the largest in the world, to support and accelerate overseas expansion and acquisitions by Chinese companies, Wen Jiabao, the country’s premier, said in comments published on Tuesday.


Read more here:

http://globaleconomicpulse.blogspot.com/2009/07/china-to-deploy-foreign-reserves.html


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Tags: Chinese Monetary Reserves, US Dollar, USD, EURO, Yen, Swiss Franc, Chinese State Firms, Sovereign Wealth Funds, Diageo, PetroChina, Chinalco, China Telecom, Bank of China, China Investment Corp., HSBC, China Development Bank,

Posted via email from Global Business News

July 20, 2009

Dispute Finder: Intel Program Finds Dubious Online Claims


Intel has launched software that sniffs out questionable claims at websites.


A "Dispute Finder" crafted by Intel researchers in Berkeley, California, for Firefox web browsers alerts Internet surfers to contentions that are contradicted by information elsewhere online.

"The reason this is important is that very often you'll read a website and not realize this is only one side of the story," Intel research scientist Robert Ennals said in an online video.

Dispute Finder automatically highlights text containing contested claims and then links to boxes summarizing points and counter-points. The data base is designed to grow and evolve with user input.

Votes regarding the reliability of information are used to filter dubious data. Researchers reportedly envision a version of the software that will scan caption information in television programs for specious claims and a mobile device capable of "listening" for questionable comments in conversations.

The mini-program, which works with Firefox web browsers, became available Thursday online at disputefinder.cs.berkeley.edu.


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Source: http://tech.yahoo.com/news/afp/20090619/tc_afp/usitinternetsoftware

Tags: Intel Labs, DisputeFinder, Firefox, Berkeley, Dubious data, Rober ennals, Global IT News, Global Best Practice, contested claims, competing claims, opinion comparison,

Posted via email from Global Business News

California ills give US a Headache


California’s fiscal crisis is in danger of becoming a serious headache, not just for the state and its feuding politicians in Sacramento, but for the entire nation.

In public, federal government officials talk about California’s problems as if they were ringfenced – a crisis for the state but with few national ramifications. They know the slightest whiff of federal intervention would take away the incentive for California’s politicians to agree on tough spending cuts and tax increases. But they know they cannot ignore a fiscal crisis in the most economically important state in the middle of a global financial crisis. So they are keeping a careful eye on events and it would be surprising if they were not also reviewing the options at their disposal to mitigate the damage.

California has a budget deficit of $26.3bn (€18.85bn, £16.18bn) on revenues of just $113bn, according to Keefe, Bruyette and Woods, a broking firm. It has a balanced budget rule that forces it to eliminate the deficit but no agreement as to how. It has already effectively decided to selectively default – paying vendors with IOUs rather than cash. Worse could follow if the impasse is not resolved soon.

The worst case scenario would be a default by the state which has $59bn in general debt, $8bn in bonds linked to securitised revenues such as tolls and $2bn commercial paper, according to Standard and Poor’s, the rating agency. A California default would be a shock for fragile financial markets. While no other state is in quite as difficult a position, there would be danger of widespread contagion in US markets and beyond.

Default still looks like a so-called “tail risk” – a high cost but low probability event. California’s constitution makes debt service a high priority. Its main constraint is cash flow. The decision to pay bills in IOUs saves cash for debt servicing and that should be enough for now. But it is not sustainable indefinitely. In the absence of a fix for the underlying deficit, vendors and banks will eventually lose faith in the value of the IOUs, forcing California to pay for vital services in cash instead. Moreover, there are institutional reasons why the budget gap is proving difficult to close.

Aside from the absurdity of having to balance the budget in the midst of the worst recession in half a century, California’s fiscal flexibility is diminished by other statutory restrictions, mostly imposed by state referendums known as propositions. These restrictions make it exceptionally difficult for the state to raise property taxes or cut basic education spending. About 25 per cent of revenue is, meanwhile, ringfenced.

If the gridlock continues for months and the risk of default escalates, it would take a brave Treasury secretary not to step in with some kind of guarantee, credit line or outright bail-out for California. The immediate outlays involved would not be vast compared with federal bail-outs for banks and carmakers. Yet, the federal government could not help California without aiding other troubled states, and a de facto or even de jure federal guarantee for all state debt would add a huge fiscal burden. Nor is it clear what the exit strategy would be: if the federal government blinked this year, it presumably would blink again next year if the problems were not resolved.

The most likely scenario is that California’s feuding politicians eventually reach a deal to close the $26bn budget gap. But even then there would be ramifications. The state’s economy is already weak; unemployment is 11.5 per cent and the multiplier effects of $26bn in geographically concentrated spending cuts and tax increases could be high.

Moreover, as KBW highlights in a research note, cutbacks at the state level will put additional pressure on highly stretched counties and municipalities. Like the state, these entities have little latitude to raise revenues. State-level fiscal consolidation could easily lead to a rash of defaults at the local level, which could roil the market for municipal debt nationally. If this happened, the federal government might have to support the municipal bond market, possibly through a guarantee scheme with risk-based pricing. Alternatively, it could decide the best antidote to state fiscal contraction is further federal stimulus.

Related Articles:

http://globalblognetwork.blogspot.com/2009/07/california-paying-bills-with-ious.html

http://globalblognetwork.blogspot.com/2009/06/in-hot-pursuit-of-fusion-or-folly.html

http://globalblognetwork.blogspot.com/2009/06/san-francisco-links-311-call-center-to.html

http://globalblognetwork.blogspot.com/2009/06/microlending-taking-off-in-us.html

http://globalblognetwork.blogspot.com/2009/05/future-of-us-capitalism.html

http://globalblognetwork.blogspot.com/2009/05/will-economy-change-buying-habits.html


Source: http://www.ft.com/cms/s/0/82185bf0-6f01-11de-9109-00144feabdc0.html?nclick_check=1

Tags: California’s fiscal crisis, KBW, Public Finance, Government finance, California has a budget deficit of $26.3bn, on revenues of just $113bn, Keefe Bruyette Woods, Global Economic News, Global Economic Pulse, IOU’s, Standard and Poor’s,

Posted via email from Global Business News

July 19, 2009

Google's 300 Year Plan


In the blissed-out California sunshine, the glistening glass-and-steel curves of the Googleplex seem to sweep you up off the pavement with the promise of a glimpse into the future – and a good time. It is 8am on a Monday morning and battalions of high-tech foot soldiers arrive at the gilded palace of the online revolution. Laptops and lattes in hand, they step off conga lines of biodiesel-powered buses, chatting loud and fast about the latest skyrocketing Silicon Valley start-ups, which have names that sound like Teletubbies: Jajah, Orgoo, Ningo. Geek by geek, they head inside to begin surfing and controlling the quadrillions of bytes of information that surge through Google’s giant servers, and which crash on to our desktops and mobile phones every minute of every day.

The sidewalk outside Google’s corporate headquarters in Mountain View, 40 minutes’ drive south of San Francisco, is about as close as most people get to a company that has cornered the market in internet searching and become the killer app of the modern information economy. For all its success, Google is a closed system, as impenetrable as its complex search algorithms.

Its multibillionaire founders, Sergey Brin, 34, and Larry Page, 34, scarcely do interviews, and reporters rarely make it through the company’s doors to talk to top executives. But the dome-headed maths nerds are facing their first big setback. Suddenly, they need to talk. So, a few weeks ago they invited The Sunday Times into the heart of the search industrial complex.

Google likes to think of itself as “crunchy” – wholesome and worthy – and, walking into the Googleplex, it looks, at first sight, a pretty crunchy kind of place. There’s free coffee and muesli in the No Name breakfast cafe. Everyone gets around the campus on free bicycles. In the car park, the canopies that protect the neat ranks of hybrid Toyota Priuses from the sun are made from solar panels that power each building in the 1.5-million-sq-ft complex. There are swimming pools, massage chairs and free medical checkups. A model of Sir Richard Branson’s SpaceShipTwo prototype commercial spacecraft hangs from the rafters in the lobby. This is rocket science, after all.

Marissa Mayer is waiting in an anonymous-looking whitewashed conference room in Building 43, the engine room of the search engine. Like all Google key executives, she is annoyingly young –32 – and, even more annoyingly, wealthy – worth hundreds of millions of pounds, thanks to the generous stock options granted to the firm’s founding staff. She does her best to deflect the wealth issue by wearing flats, a studiously plain grey-black dress, and a $50 plastic watch – a combination that shrieks: “I know you know I’m a zillionaire, but please treat me as just one of the girls.”

The young, fast-talking blonde is the firm’s poster girl. It’s her job to sell Google’s vision of a connected future. “We’ve only achieved 2% of what we can do,” she smiles. “The world of search will get much, much bigger.”

Her task used to be really, really easy. Google made cool stuff – the best search engine and some whizzy online services, such as Gmail, Google’s e-mail system – and handed it out free. We grabbed it and told all our friends about it, so they grabbed it too. Google became the most popular internet service in the world. Thanks to its keyword online advertising system that matches ads with search queries, it generated billions – £8 billion last year alone.

But as it prepares to celebrate its 10th birthday, Google has developed serious engine trouble. A series of missteps have left it facing claims that it has gone from a benign project – creating the first free, open-all-hours global library – to the information society’s most determined Big Brother. It stands accused of plotting some sinister link between its computers and us: that it wants, somehow, to plug us into its giant mainframe – as imagined in The Matrix or Terminator.

The crisis began a few months ago when Google’s chief executive, Eric Schmidt, popped up in London and made some extravagant remarks about the firm’s ambitions. He declared that the company’s goal was to collect as much personal data as it could on individual users so that it could improve the quality of its search results and even start making recommendations, like a trusted friend. “We are very early in the total information we have,” he said. “We cannot even answer the most basic question about you because we don’t know enough about you. The goal is to enable Google users to be able to ask questions such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’ ”

His comments provoked a firestorm. Right-to-privacy campaigners howled that a machine that knows so much about us that it can tell us what to do would be the biggest-ever threat to personal privacy. No totalitarian regime, no Bond villain had dreamt up anything so creepy. “At what stage,” one critic asked, “did the company whose motto is ‘Don’t be evil’ evolve into the Evil Empire?”

What’s going on? Is Google trying to take over the world’s information and worm its way into our consciousness? When he said he could implant a Google chip in our brain, was Brin not joking, after all? Or have we all got the wrong end of the memory stick?

You only have to spend a few hours in the Googleplex, talking to Mayer and fellow Googleytes, to realise that, if anything, Schmidt was being conservative. Instead of worrying that they are going too far, Google’s top team talk, with poker faces, about a “300-year mission” that will eventually see almost everything – including, perhaps, one day you and me – linked to the web and searchable online.

Google’s techno-dream comes in three bytes. The first is loosely referred to as “universal search”. Scribbling frantically on a whiteboard, Mayer, Google’s head of search products and user experience, says the web is currently “very limited and primitive”. It consists mainly of words, images and some music, mostly created in the last few years. There is much, much more that could – and should – be online. At its simplest level, this includes every film, TV show, video or radio broadcast ever made; every book, academic paper, pamphlet, government document, map, chart and blog ever published in any language anywhere; and any piece of music ever recorded. Google is currently developing new software that will scan millions of new sources of information to give richer search results.

Mayer illustrates the idea by googling her hero, Apple’s founder, Steve Jobs, on her PC, which already uses an experimental version of universal search. The results include video news archives, the latest news on the iPhone, highlights of Jobs’s career, and up-do-date news stories. “You get six searches for the price of one,” she says in her curiously giggly voice.

So far, so uncontroversial – but there’s much more. Mayer and co argue that to be true to its mission statement of “organising all the world’s information and making it universally accessible and useful”, Google should be about more than searching for words, images and music; it should be about finding objects and, eventually, people. Any item that can be fitted with a radio-frequency identifier – an electronic tag called an RFID – can be linked to the internet over local or national WiFi networks.

Retailers already use this technology for stocktaking, and fleet managers track buses and taxis this way. Why not, asks Mayer, “take the things you care about – your watch, your phone – stick little tags on them and watch for their receiving signals”? This is not a joke. “It would have been really useful to me yesterday when I lost my cellphone while it was out of power. It took me half an hour to find it had fallen behind a dresser.” And why not go one step further and tag your partner or your children, so that you can find out where they are whenever you want? Googleytes point out that we already do this with newborn babies and pets.

The second part of Google’s techno-dream is “personalised search”. Google has just launched iGoogle, a new turbocharged version of its regular search service. It allows Google to monitor our search and web-surfing history, so that it can find out who we are, how old we are, what job we do, whether we are married and have children, where we go on holiday, what we do in our spare time – anything, in fact, that it can glean from our web-surfing, which, since we do so much online these days, means pretty much everything.

Google wants us to sign up for iGoogle on our PC, and also to install it, along with Gmail, Google Maps and Google Earth software, on our mobile phone, so that it knows not just who we are but where we are in the world, 24 hours a day, thanks to the satellite-positioning chips starting to be included in mobile phones. “Our goal is that you can, if you want, search for anything, anywhere, any time,” says Douglas Merrill, 37, Google’s chief information officer.

The final piece of the Google future is called “cloud computing”. Instead of using the internet to search for information that we then copy and use to work on documents stored on the hard drives of our computers, using the software on those computers, Google wants us to create all our documents online, to work on them online using Google’s web-based software, and to store them online on Google’s vast global network of servers.

Google has recently launched its own web-based software programs – called Google Apps – that enable us to create password-protected word files and spreadsheets, edit them and store them online. These applications – along with Gmail, Calendar, Google’s online diary, Picasa, its picture-management and storage system, and Presentations, its online version of PowerPoint – mean Google will provide all our computing and storage needs, not on our PCs but, as Mayer puts it, “in the computational cloud”.

Google’s overall goal is to have a record of every e-mail we have ever written, every contact whose details we have recorded, every file we have created, every picture we have taken and saved, every appointment we have made, every website we have visited, every search query we have typed into its home page, every ad we have clicked on, and everything we have bought online. It wants to know and record where we have been and, thanks to our search history of airlines, car-hire firms and MapQuest, where we are going in the future and when.

This would not just make Google the largest, most powerful super-computer ever; it would make it the most powerful institution in history. Small wonder that the London-based human-rights group Privacy International has condemned its plans as “hostile to privacy”, and EU ministers called Google’s vision “Orwellian”. Even John Battelle, one of the net’s leading evangelists, who co-founded the technology bible Wired magazine, and wrote The Search, the definitive study of Google’s rise, now says: “I’ve found myself more and more wary of Google, out of some primal, lizard-brain fear of giving too much control of my data to one source.”

It all begs one key question: why? What makes a bunch of California geeks who are relaxed enough to spend their lives creating extraordinary products – and then give them away for nothing – suddenly want to take over the world, or at least its information? To Googleytes, the most surprising thing about the row over its plans for the future is that anyone is surprised at all. Its founders have always envisaged a vast super-computer that connects everything and everyone.

Ask Craig Silverstein. He knows because he was there at the beginning, when Brin and Page were graduate students messing about with algorithms at Stanford University, California, when they should have been out getting laid. Silverstein is a man for whom the word “geek” could have been invented. He is young – 34 – thin, has a beard and speaks softly. He does not like to travel more than once a year. He was Google’s first employee and, even though he is now worth £250m, he still turns up to work every day because he “likes solving complex software-engineering problems”.

We meet in another anonymous meeting room with no windows. For a firm that expects us to tell it everything about ourselves, Google is remarkably coy about revealing the simplest information about itself – such as what its executives’ offices look like. Interviews in the executive suite are banned for fear that journalists might uncover its software secrets.

Over coffee, Silverstein, now director of technology, explains that, from the earliest days, Brin and Page envisaged a super-connected computer. “The vision of search has always been broader than has been portrayed in the press,” he says. “We would explain it every chance we got. I don’t think the press misunderstood it. It was just that they were focused on what the users were into at the time.”

He recalls one example that shows that Brin and Page imagined that one day even the smallest “stuff” would be online. “When we were doing the first research, we used to eat in Whole Foods [an organic supermarket chain]. We talked about using search to find out what aisle the salt is on. Instead of having to look at the big signs at the top of each aisle, you could use a search engine to tell you where in the store everything is, and maybe graph it out for you.”

Brin and Page were obsessed with recording, categorising and indexing anything and everything, and then making it available to anyone with internet access because they genuinely believed – and still do – that it is a morally good thing to do. It may sound hopelessly hippie-ish and wildly hypocritical coming from a couple of guys worth £10 billion each, but Brin and Page insist they are not, and never have been, in it for the money. They see themselves as latter-day explorers, mapping human knowledge so that others can find trade routes in the new information economy.

“Google has been trying to democratise information to make it possible for everyone in the world to access the information they need to do the things they need to do,” Silverstein says. Belief in the value of information for its own sake was behind the firm’s highly controversial decision to cave in to demands from the Chinese government for censorship so as to break into the giant local market. Some information, Google reckoned, is better than none.

In spite of the growing public paranoia over its omnivorous intentions, Google is convinced that the more we find out about what it is up to, the more we will agree with it. The man whose job it is to persuade us to live on planet Google is Sep Kamvar, the firm’s head of personalisation. He’s a good choice. The 30-year-old shaggy, flip-flop-wearing, softly spoken surfer dude could not look less Big Brotherish if he tried.

We meet – shock! – in yet another whitewashed conference room. He makes his pitch by first appealing to my wallet. Cloud computing and data storage are free for personal users. If I sign up, I will never again need to spend hundreds of pounds buying software and zip drives to back up my data. Google will do it all for me. The vision of a paperless future – where all documents reside online – sounds tempting. Being tied to a physical PC box is old-school.

Personalisation, Kamvar concedes, sounds “scary” but is in fact designed to help Google to help me. The more he and his fellow Google engineers know about me, the better they can tailor search results to my needs and interests. They can also start making recommendations I might find useful. Kamvar illustrates his point with a simple example: “Say you are in Britain and you’re interested in new restaurants in your area. You search for ‘new restaurants’.

Google, now, will give you information about new restaurants in Britain. If you want new local pizza or pasta restaurants, you have to work through the list searching for the Italian restaurants in your area. It’s inefficient. If, however, you share your web history with Google, it will know that you like Italian food best because you search for it the most, and it will know the area you live. It will move the Italian restaurants in your area up in your search results.”

Putting Google on my mobile phone and tracking my movements is also designed to deliver the best search results. When I search for “new restaurants” on my phone, he tells me, it will automatically put new Italian restaurants at the top in whatever location I find myself – whether it is London or Silicon Valley.

It won’t be long, he adds, before Google will tell me when hot new Italian restaurants open in London without my even asking it to. An early version of Google’s Recommendations service is currently available in the US and Europe. It will soon be extended to cover new jobs, activities and even social networking – so that it can fulfil Schmidt’s dream of telling me what to do tomorrow or which new job to apply for.

Put this way, Google’s vision sounds a little less threatening – but how long will my data be stored for? How do I know that it will not be misused? What’s to stop Google “mining” my search history and files and folders to create a detailed personal profile that it can sell to advertisers who will bombard me with targeted ads? The man who claims to have the answers is Elliot Schrage. The former member of the US Council on Foreign Relations wears the chinos on privacy as Google’s head of global communications and public affairs.

We meet in Charlie’s Cafe. Forget everything you’ve heard about hippies and food. Google has the best canteen in the world. Oyster shuckers shuck Washington State’s finest to order. There are freshly grilled prawns and lobster, and the only lentils are in the Moroccan mezze. Schrage points out that Google has legally binding privacy-protection agreements with its users. If I sign up for iGoogle personalised search, Google formally agrees to safeguard my privacy. To prevent others – rogue or negligent Google employees or hackers – misusing my profile, it is not directly linked to my name.

Only a handful of very senior Google engineers can access my data. Not a single byte will ever be made available – far less flogged – to advertisers. Schrage adds that handing over my personal data is optional.

“We are not forcing you to give us access.” I have to opt in to iGoogle. And even then, I can control how my web use is monitored. I can, if I want, restrict it simply to web searches, rather than all web history. I can delete certain search queries or web pages that I have visited from my search history. If I decide I don’t like the idea of personalised search, I can permanently delete my search history and go back to using Google’s regular search service, where I can be sure none of my personal search or web history will be recorded. Google stores all general search queries for 18 months, but the information is aggregated and not linked to individual users. “We are only the 300lb gorilla in the corner of the room if you want us to be your 300lb pet,” Schrage jokes.

Critics dismiss the measures as ineffective. They point out it is up to me to permanently delete my iGoogle personalised data. Many users will forget, and their personal data will be “out there” for ever. Google, they claim, is experimenting with sending targeted ads to mobile phones. However strict its privacy policies may be, some fear the firm may be forced one day to make public my private data whether it wants to or not and regardless of whether I want it to or not. Competition authorities on both sides of the Atlantic have forced Microsoft to share some of its Windows software with rivals because, regulators argued, Microsoft tried to use its market-dominant system to stifle competition. If Google uses our data to create its own monopoly, regulators might take similar action.

Back in the lobby, the blissed-out California sun is dipping below the horizon, turning the glass-and-steel curves of the Googleplex the colour of burnt sugar. The foot soldiers of the online revolution are heading home, laptops and lattes in hand. I have spent two days inside the black box and Google’s aims are, at last, a little clearer. Google thinks that creating a free-to-use global library and global computer is “a good thing”. But it can only become a really useful library and computer if it knows more about the people that use it: you and me. If we trust it, it can do things for us we could never have imagined, things that Googleytes call “the magic stuff”.

Want every computer in the world to be “our” computer? Sign up for cloud computing. Lost our keys? Google will find them. Want to have an alfresco lunch? Use our Google-enabled phone to view images of our nearest Italian restaurant, check it has a terrace and book a table. Want to know how far our bus is from the bus stop or where the nearest taxi is? Look online. Worried that our child has safely reached school? Google him or her. Search and ye shall find.

The £100 billion question, therefore, is: will we feel comfortable putting our privacy on the line online? Or will fears that we will become slaves to the machine outweigh the desire for a connected future? In spite of the growing furore over privacy, the signs are that we might sign up. iGoogle personalised search is Google’s fastest-growing new product. It already accounts for one in five searches in America. The service has just been launched in Europe, and Google claims the take-up is strong.

Apple’s wildly popular iPhone already uses location-aware Google Maps, and online queues are forming for Google’s soon-to-be-launched suite of mobile-phone applications that will work on any handset. Some of America’s largest firms, including Procter & Gamble and L’OrĂ©al, are already using cloud computing, in the first serious challenge to the dominance of Microsoft Office.

Polls show that, in spite of the recent furore, many web-users here and in the US do not care about privacy. According to a recent study by the Ponemon Institute, a US-based privacy think-tank, 68% of Americans believe that online privacy is important, but only 8% care enough about it to change their online behaviour. Above the din of chattering classes railing against “Googlezilla” can be heard the tip-tap of hundreds of millions of ordinary users willingly signing up to what they consider to be Google’s benign digital dictatorship. What’s another hunk of privacy lost if it makes life easier?

As I walk out of the Googleplex, I notice a new feature by the exit. It’s a giant 3-D computer-generated image of the globe which has giant red lasers shooting up into the sky. Each laser represents the number of Google search queries made at that point on the Earth’s surface. The higher the spikes, the greater the number of queries.

It is supposed to be a celebration of what Google has achieved so far. But it also highlights how much of the world it has already conquered and reveals how much it soon hopes to colonise. It is the perfect metaphor for where that simple little search box we use every day has come from and what its vaulting ambitions are. It does not simply want to be a good search engine on the web: it wants to be the web.

Will it get there? In the end, it’s up to us. Google has only gone from being the most famous misspelling since “potatoe” to a verb recognised by the Oxford English Dictionary because you, me – in fact, almost all of us – use it. If we carry on logging on, it will carry on growing. And growing. If we don’t, it won’t. The choice – the click – is ours.

From a garage to the globe

1997 - Larry Page and Sergey Brin, two 24-year-old Stanford University computer- science graduate students, register the domain name ‘google.com’. The word ‘google’ is an accidental misspelling of ‘googol’, which refers to the number 10 to the power of 100 (or 1 followed by 100 zeros)

1998 - Google becomes a private company and ‘launches’ on the worldwide web. Its headquarters are based in a garage in Menlo Park, northern California

2000 - Google begins to sell ads linked to key search words

2001- 2 Advertising revenue and deep-pocketed venture capitalists help Google to ride out the dotcom crash

2003 - Google expands rapidly, driving internet use and threatening industries as varied as music, newspapers, television, advertising, telephones, travel and pornography

2004 - Google floats on the Nasdaq. Its shares initially sell for £40. Today they fetch more than £300, valuing the company at almost £100 billion

2006 - Google buys YouTube, the largest and most popular video-exchange website

2007 - Google announces its £1.5 billion plan to buy DoubleClick, the leading display-advertising business that also tracks web-users’ search behaviour

What makes google go?

- Two factors explain Google’s extraordinary success – its search-related services and its advertising business. Search brings in the crowds. Advertising brings in the money

- Google dominates the market for search because in 1998 its founders, Sergey Brin and Larry Page, invented a better way to index and rank web pages

- Before Google, search engines simply looked for keywords and their position on web pages to determine their content and importance. Unscrupulous publishers manipulated the system by filling their pages with popular keywords, usually hidden from view, to earn high rankings in search results

- Instead of analysing the content of each page, Brin and Page devised PageRank, a complex mathematical algorithm that tallied how many other influential sites linked to that page

- The partners reckoned that sites that were ‘well connected’ would be of higher quality. They were right. Google delivered more useful search results than its rivals

- Thanks to PageRank – and dozens of other constantly evolving filtering, classifying and indexing systems – Google is now the most popular internet-search engine. In the US, the world’s biggest online market, Google’s share of queries is around 60%, Yahoo’s 23%, Microsoft’s 12%, Time Warner’s 4.5%. In the UK and much of Europe, Asia and Latin America, Google handles three out of every four search queries

- Google’s second big breakthrough came with its advertising system, called AdWords. When you search for a topic on Google, small paid-for text ads show up next to search results

- While it didn’t invent search-triggered ads, Google figured out a far more efficient way of turning web-users into buyers. Rather than doling out premium space to the highest bidder, as its competitors did, Google used another algorithm to work out how relevant the ad text was to a given query and the odds someone would actually click on it. This meant ads were targeted at the users most likely to respond to them. The result was that Google’s ‘click through’ rate (the number of times users click on ads) was twice as high as its nearest competitor’s. It has captured more than half the search-engine advertising market.

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Source: http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article2688404.ece?token=null&offset=0&page=1

Tags: PageRank, Global IT News, Global IT and Business News, AdWords, Sergey Brin, Larry Page, Eric Schmidt, Marissa Mayer, Craig Silverstein, Stanford, Elliot Schrage, Googleplex, Googleytes, YouTube, Search algorithm,

Posted via email from Global Business News