Hearing Rumors of a Plot, Cities Make Security Presence Known

New York was already on alert for this weekend’s memorial of the Sept. 11 attacks, but amid reports of a bomb plot, security efforts were escalated around the city, including on Wall Street near the New York Stock Exchange, as well as in Washington.

Two senior American law enforcement officials said an informer in the Afghanistan-Pakistan region passed word of the plot, intended to coincide with the 10th anniversary of the Sept. 11 attacks, to American intelligence officers on Wednesday. The informer said two American citizens of Arab ancestry had left Afghanistan, traveled through one or more other countries and reached the United States as recently as last week.

But the informer’s information on the plot was second- or third-hand, another official said. It included only a vague physical description of the two men — one described as 5 feet tall, the other 5-foot-8 — and a first name for one, Suliman, that is common in the Middle East. The tipster also described a third conspirator, but he appeared to have traveled to Europe. “All this information is very, very sketchy,” one of the law enforcement officials said.

While the informer was not specific about targets, officials in both New York and Washington increased scrutiny of bridges and tunnels, long considered potential targets for vehicle bombs.

The increased security came as Secretary of State Hillary Rodham Clinton and Vice President Joseph R. Biden Jr. publicly discussed the threat, trying to strike a balance between urging vigilance and preventing panic. “There are specifics — in that sense it was credible,” Mr. Biden said on the ABC News program “Good Morning America,” “but there’s no certitude.”

The increased police presence forced drivers heading toward Manhattan on the Brooklyn Bridge to squeeze into a single lane and through a gantlet of police officers, who walked around and between the cars, singling out some for a closer look. In Lower Manhattan, just a few blocks from ground zero, police vehicles with flashing lights were positioned in front of the former American Stock Exchange building.

“It’s good,” said Wolfgang Klebe, who runs a shipping business in Lower Manhattan, as he watched the officers on Friday morning. “They have to do this.”

More bomb sweeps of parking garages were planned; ferries were to be given extra police coverage; and cars parked illegally were to be towed quickly, not just ticketed.

Officials briefed on the threat offered varying views of how serious it was, and some suggested that the strong reaction from federal and local agencies reflected heightened wariness around the anniversary. The two senior law enforcement officials, who were not authorized to speak publicly about the investigation, were in the skeptical camp.

“It’s 9/11, baby,” one official said.  “We have to have something to get spun up about.” The second official said the reported plot “could all be one big fabrication, but no one wants to take any chances.”

Another official acknowledged that the tip could turn out to be wrong. But the imminent anniversary did not allow much of a window to study its veracity.

“There was no time to sit around and think it over,” the official said. “The appropriate thing to do it is to share the information and provide proper warning.”

In a notebook found in the compound of Osama bin Laden after he was killed in May, the Qaeda leader mused about the possibility of mounting an attack on the 9/11 anniversary, and the police in New York and Washington were already on alert for trouble.

American intelligence analysts said they were examining the possibility that the suspected plot was ordered by Ayman al-Zawahri, who succeeded Bin Laden as Al Qaeda’s leader, and that it was accelerated after an American drone strike last month killed Atiyah Abd al-Rahman, a Libyan who had taken over as Al Qaeda’s top operational planner.  In their haste to speed up the attack, which may also have been planned to commemorate Mr. Rahman’s death, the plotters may have inadvertently allowed word of the scheme to leak out.

H.P. Weighs Spinning Off Its PC Unit

HP launches its TouchPad Tablet in June, but the company said it would stop making the device.

With the acquisition of autonomy, based in Britain, would Mr. Apotheker strong focus of the company's business services and products. He has tried to grow the business, which has stood in the middle slip internal economy of agriculture and the changing tastes of consumers faster.

Mr. Apotheker plans to kill the tablet under the touchpad, introduced in stores a few weeks ago, smartphones and other Pre WebOS products purchased last year, when Palm bought it for $ 1.2 billion. A spin-off of the PC group could also reverse the $ 25 billion HP acquisition of Compaq in 2002.

"And" Day 1 of the transformation, "said Apotheker said in an interview.He spoke of "difficult decisions" needed to be done, but said it was looking for the best performance of the company.

PC unit spin-off would be the resistance of a slumping to eliminate low-margin business of HP, however, Mr. Pharmacist, who joined HP in the past year trying to move in order to ensure enterprise customers with more services and cloud computing – an term used to describe products and services online – what he says is more "high value".

The strategy challenges, IBM and Oracle, two giants of the market. Downloading his computer business, would follow in the footsteps of HP from IBM that its PC unit to Lenovo, a Chinese company sold in 2005.

HP said it would take 12 to 18 months to decide what to do with the drive of your PC. In the meantime, continue to operate business as usual. Mr. Apotheker said the company does not sell its printing.

"Enterprise is where the growth is, that's where the margins," said Brian Marshall, an analyst at Gleacher & Company.

Wall Street has taken place since Mr. pharmacist about HP's growth in the company was concerned, and the weakened economy has added to uncertainty. A string of disappointing quarters and forecasts, the shares had sent nearly 22 percent since the beginning of the year Thursday.

Shares of HP fell $ 1.88, or 6 percent to close at $ 29.51.

Acquire Autonomy, the software that search and track business and government data would greatly improve HP makes the transition to software and business services. The company has become one of the largest technology companies in the UK and is one of BP, Ford Motor and the U.S. Department of Defense among its customers.

Autonomy would be HP'S third-largest acquisition ever, after Compaq and Electronic Data Systems. The $ 10000000000 offer of autonomy, a wealthy 64 percent higher than market value. It is produced almost $ 1 billion in sales for 12 months until 30 June.

Mr. Apotheker said that autonomy, access to large customer base to get from HP. The products were sold in the HP business, he said.

It was HP's strategy to buy Compaq. It gave the company the scale to reduce costs and secure good prices on parts cut. It would give effect to the company also looking for printers, servers, storage and data management.

As recently as February, insisted Todd Bradley, executive vice president of HP's computer business, in an interview that the computer is still a valuable part of HP's business. He dismissed speculation that the company would dump device."The PC business is strategically important for HP," he said. "The strategic importance has not changed in the leadership change."

HP has dominated the PC business, but in recent months the industry has gone through a downward turn with the shift from desktops and laptops with tablets. 

That Remake of AOL? It’s Still Being Written

Tim Armstrong, chief executive of AOL, with Arianna Huffington, co-founder of The Huffington Post, in Washington last month.

Last week it reported another loss and told Wall Street analysts it was not going to get much better: operating income for the year could be down as much as 20 percent because of weaker ad sales. The performance raised new doubts about whether AOL’s big bet on editorial content, including the acquisition of The Huffington Post news site, co-founded by Arianna Huffington, would reverse a decade-long decline.

The investor response to these disappointments was emphatic. The company’s shares lost a third of their value over two days.

“Frankly, AOL hasn’t delivered on its promise yet,” said Sameet Sinha, an analyst with B. Riley & Company. “It’s just been a series of stumbles.”

Tim Armstrong, AOL’s chief executive, is confident that his company can regain some of its former glory. Despite the recent setback, he says he remains committed to rebuilding AOL and using The Huffington Post as the foundation.

“We believe that The Huffington Post acquisition is one of the best things we’ve done,” Mr. Armstrong said in an interview.

Mr. Armstrong, 40, is trying to remake AOL into a media powerhouse to offset the lost revenue from a steadily dwindling Internet access business. It’s a big site. More than 105 million unique visitors dropped in during July to use e-mail, catch up on celebrity gossip and check the weather. The strategy is just the latest formulated by a string of leaders at AOL, which merged with Time Warner during the Internet boom and then almost immediately started to struggle.

Mr. Armstrong, a former top ad executive at Google, joined AOL two years ago just before it regained its independence.

Fixing the company will take until 2013, he acknowledged. Meanwhile, he said he was spending up to $250 million of the $459 million the company had on hand to buy back its devalued stock. The gesture helped the shares regain some of their losses for the week. He has been spending heavily in the core products too. Since buying The Huffington Post in March for $315 million, Mr. Armstrong has added 17 new sections, like divorce, parenting and Latino issues. AOL is introducing international editions for Canada and Britain.

AOL also added 300 journalists to The Huffington Post as it shifted from its roots in aggregating coverage from others to writing more original news.

As leader of AOL’s content operations, Ms. Huffington is a crucial player at the company and the face of its content arm. She oversees established AOL sites like Stylelist, Moviefone and MapQuest along with more recent additions like the technology blog TechCrunch, acquired six months before The Huffington Post deal, for $25 million.

Ms. Huffington, 61, cited a number of journalistic high points since joining AOL, including a scoop that Gov. Chris Christie of New Jersey used a state helicopter to attend his son’s baseball game and a series on college students prostituting themselves to pay for tuition.

In terms of low points, The Huffington Post briefly suspended a writer last month who “over-aggregated” an article from Advertising Age by summarizing its contents too thoroughly. It underscored a frequent complaint that The Huffington Post steals traffic from publishers by rewriting articles to the point that it is unnecessary for readers to click on a link to the original source.

AOL lost $11.8 million in the second quarter compared with $1.06 billion during the same period a year ago, on $542 million in revenue compared with $584 million a year ago. Global advertising revenue grew 5 percent, the first gain by the company in overall advertising since it split from Time Warner.

Still, AOL executives conceded that they could have done a better job with search and domestic display ads. AOL’s display ad gains of 14 percent in the quarter were less than the 24.5 percent expected growth for the overall industry this year, according to eMarketer.

Last month, Mr. Armstrong also replaced his top ad executive.

AOL’s decline in value is so great that analysts point out that the company may be worth more now broken into pieces and sold. The Internet access business, in particular, would be good to unload, they say.

Other ideas include closing Patch, AOL’s local news initiative that has reporters in 850 towns. Eliminating the money-losing service would free $160 million and lift AOL into profitability.

Mr. Armstrong responded to such suggestions by saying that the long-term benefits of his strategy outweighed any short-term gains promoted by Wall Street analysts. High-quality content, he said, is the Internet’s future growth engine.

Meanwhile, AOL struggles to attract more visitors because of an eroding base of dial-up subscribers. The number of subscribers fell 21 percent in the last quarter to 3.4 million, for example.

Maintaining existing traffic numbers to its sites should therefore be considered a victory, Mr. Armstrong said. In July, all of AOL’s sites attracted 105 million unique visitors, 2 percent fewer than in the same month last year, according to comScore.

In contrast to the overall flat growth, traffic in The Huffington Post sites has grown around 12 percent since it was acquired, to nearly 35 million. But some of that gain is from shifting traffic from established AOL sites that were closed.

Ms. Huffington, who has a multiyear contract, said that she was as encouraged as ever by AOL, and that there remained more work ahead to integrate The Huffington Post with the rest of the company’s sites.

“I’m not going anywhere,” Ms. Huffington said. “I’m having a great time.”

Dell shares slump on weak outlook

Shares of Dell fell 10.4% after the PC maker cut its growth forecasts for sale late Tuesday, blaming a "more uncertain demand environment."

Competitors division of Hewlett Packard fell by 3.7% by mid-afternoon in New York in what was still a market optimist.

Dell said it now expects revenue to rise only 1% -5%, down from 5% -9% before.

This is despite the company posting a net profit for the second quarter of $ 890 (£ 537), with net income rising faster than expected by 60%.

The increased revenue in part due to the expansion of Dell's higher margin businesses, such as servers, data storage and computer services.

1% of revenues were higher, lifted by strong spending by businesses and the government of the United States.

However, Dell should come under pressure in the rest of the year, governments, businesses and consumers are required to moderate their expenses.

Shares in Dell fell by around 6% in after-hours trading on weakening sales prospects, after the results were released after the closing bell on Wall Street.

The bad news from Dell failed to affect the overall market, which has been encouraged by strong financial results for retailers.

Target stores have reported net profit for the second quarter of $ 704m for the second quarter of the year, comfortably beating expectations.

The shares gave up early gains on Wall Street, Wednesday to end 2.4% higher.

It is also impressive figures Tuesday at Wal-Mart, the largest retailer in the world, and DIY chain Home Depot.

Amazon revenue, spending surges; stock jumps (Reuters)

A box from Amazon.com is pictured on the porch of a house in Golden

SAN FRANCISCO (Reuters) – Amazon.com Inc will use its surging revenue to boost growth and drive expansion into areas such as Web content and cloud computing rather than boost its margins.

The largest Internet retailer reported a jump in quarterly revenue on sales of its Kindle electronic reader and other electronics and forecast better-than-expected revenue for the current quarter, sending its shares up more than 6 percent late on Tuesday.

Amazon benefited from growth in e-commerce, though margins continued to be pressured by heavy spending on distribution, technology and digital content.

The company is investing to build warehouses and distribution to support rapidly growing e-commerce, its main business.

It's also spending heavily on servers and data centers for its cloud computing business Amazon Web Services, while buying more digital content to bolster media offerings, such as streaming video.

This spending has dented profit margins in recent quarters. Analysts and investors are mostly happy to see such investment by the company — as long as it winds down at some point and lays the foundation for future profit increases.

"They're sacrificing near-term profitability for longer-term revenue growth," said Michael Souers, specialty retail analyst at S&P Equity Research. "As long as they are able to transform growth into profits in the future, investors will be satisfied. The chances are strong."

Amazon on Tuesday reported a 51 percent rise in second-quarter revenue to $9.91 billion, surpassing Wall Street's expectations for $9.4 billion.

The company forecast third-quarter sales of $10.3 billion to $11.1 billion, compared with the average forecast for $10.35 billion, according to Thomson Reuters I/B/E/S.

Second-quarter net income fell to $191 million, or 41 cents per share, from $207 million, or 45 cents per share, in the same period a year earlier. Analysts expected 35 cents per share for the latest second quarter, according to Thomson Reuters I/B/E/S.

The operating profit margin fell to 2.0 percent from 4.1 percent a year earlier.

Operating income is expected to be between $20 million and $170 million in the third quarter, the company estimated. The guidance includes about $180 million of stock-based compensation expense and amortization of intangible assets. It also assumes no other acquisitions or investments will close in the quarter.

That forecast suggests Amazon's third-quarter pro-forma operating margin will be 1.8 percent to 3.2 percent, according to Aaron Kessler, an analyst at ThinkEquity. That's below his previous estimate.

"Amazon's willing to give up short-term profits for long-term growth and more market share," Kessler told Reuters. "But ultimately they are managing the business for shareholders. We're expecting modest margin expansion next year. Investors would like to see some return on these investments starting next year."

The company is expected to introduce a tablet computer later this year that would compete with Apple Inc's iPad.

Souers reckons thin third-quarter margins suggest Amazon is spending heavily on this new tablet.

"Longer term this is the best move they can make. The world is shifting toward digital from physical media and a tablet will help them cement a position in streaming content like movies and music," the analyst said.

Amazon Chief Financial Officer Tom Szkutak declined to comment on whether the company was working on a new tablet computer. However, he pledged to keep spending and investing to support growth and new businesses.

Amazon said it spent $941 million on so-called "fulfillment centers" — warehouses or logistics centers — in the second quarter, compared to $582 million a year earlier. Technology and content costs totaled $698 million in the latest period, versus $408 million in the same period of 2010.

"We're investing in the conversion from physical to digital and we feel very good about the traction we're getting there," he said.

Szkutak also stressed that the company is focused on cash flow and high returns on investment, rather than profit margins.

Amazon's main online retail business is growing so fast that the company needs to spend on a lot of new distribution capacity, he explained during a conference call with analysts.

Amazon has announced 15 new fulfillment centers so far in 2011 and the company will unveil more before the end of this year, he noted.

Amazon Web Services — which hosts computing for corporate clients over the Internet — accounts for a "big piece" of Amazon's current and future spending, because it's growing so fast, the CFO added.

Amazon shares, which have risen about 18 percent since the start of 2011, gained 6.1 percent to $227.35 in after-hours trade.

The company said sales in Worldwide Electronics and Other General Merchandise, which includes the Kindle e-reader, computers, cameras and other consumer electronics, jumped 69 percent to $5.89 billion in the second quarter.

Excluding currency fluctuations, sales rose 62 percent.

"That's very strong," said Scot Wingo, chief executive of ChannelAdvisor, a software provider that helps retailers sell more online through channels including Amazon and eBay Inc.

"E-commerce in general is growing at 10 percent to 14 percent, so Amazon continues to gobble up market share." Wingo owns Amazon shares, and eBay is an investor in ChannelAdvisor.

At some point, such growth will taper off and this is when Amazon will be able to cut back on spending and increase profitability, S&P's Souers said. He's expecting margins to increase "significantly" in coming years.

(Writing by Brad Dorfman; Additional reporting by Eunju Lie in Chicago and Noel Randewich in San Francisco; Editing by Bernard Orr, Phil Berlowitz)

Google Results Show Growing Strength

Larry Page, chief executive, explained his vision for Google in a conference call.

Although Google, as usual, did not break out the numbers from different strands of its business, over all its results were so robust, easily blowing past Wall Street expectations, that analysts said they indicated growing strength in more areas than just search. In after-hours trading, Google’s stock price climbed 12.64 percent. It had been down 9 percent for the year.

Part of what also gave Wall Street heart was that Larry Page, Google’s co-founder and new chief executive, participated in the conference call with analysts, and made lengthy remarks about his vision for the company’s future for the first time since he took over in April.

“They’re firing on all six cylinders now,” said Jordan Rohan, an Internet analyst at Stifel Nicolaus, pointing to Google’s six businesses — search, display advertising, YouTube, the Chrome browser, the Android mobile operating system and now Google+, its new social network. “Google’s now officially a V6.”

But other analysts said that while the results proved that Google’s core search business was even stronger than they thought, new businesses like Google+ and Android were far from generating revenue, yet the company continued to spend heavily on them.

“There are some pretty sizable opportunities,” said Colin W. Gillis, a technology analyst at BGC Financial. “But you want to own the stock a little closer to the harvesting of the fruit that the expenses bring, and right now they’re still being planted.”

Mr. Page’s participation surprised analysts, who had grumbled after last quarter’s earnings call when he made brief and curt comments and declined to speak at length about his long-term vision. He is widely known to dislike the public aspects of the chief executive job. But on Thursday, it seemed as if he had attended corporate charm school, as he repeatedly said how excited he was to be on the call.

Google still earns the vast majority of its revenue from text ads on its search engine, but it has been trying to branch into mobile phones and social networking. Mr. Page said he became chief executive partly to speed up Google’s evolution. “We have substantially increased our velocity and execution this quarter, which was a key goal of mine in taking over as C.E.O.,” he said.

Google reported that in the second quarter revenue increased 32 percent and net income climbed 36 percent.

Google’s high-flying spending, which Mr. Page has made clear he intends to maintain, has concerned investors. Its operating expenses in the second quarter were $2.97 billion, up 49 percent from the year-ago quarter. Google spent more on advertising, including its first major television ad campaign, and hired 2,452 employees, bringing the total to 28,768.

It also spent money on professional services, including lawyers and lobbyists to fight the Federal Trade Commission’s broad antitrust investigation and other regulatory challenges that have worried Wall Street.

Mr. Page addressed spending concerns and others while outlining his plans for the company. He explained that he saw Google’s search and ad businesses as the core driver of its revenue, and YouTube, Android and Chrome as products that consumers liked but that needed more investment to become profitable long term. The social networking businesses, like Google+, and the local and commerce businesses, like Google’s new Groupon competitor, Offers, are in the earliest stages.

“People rightly ask how will we monetize these businesses, and of course I understand the need to balance the short term with the longer-term needs,” he said. “But our emerging products can generate huge new businesses for Google in the long run, just like search, and we have tons of experience monetizing successful products over time.”

“We want to make products that everyone uses twice a day, like their toothbrush,” he said.

He also spoke to investors’ concerns that Google throws money at wacky experiments, like cars that drive themselves. Those types of projects are small and few, he said.

Mr. Page said he was also trying to prioritize, putting “more wood behind fewer arrows.” For instance, last month Google shut the underperforming Google Health and PowerMeter. And he is emphasizing simpler, more intuitive designs, he said. He highlighted Google+’s clean interface as well as recent redesigns of the Google search page, Gmail and Google Calendar.

Google offered statistics for the first time about Google+, the first major release under Mr. Page’s leadership, saying that more than 10 million people had joined and were sharing a billion items a day, even though the social network has been open for just over two weeks and is still available only by invitation.

Without directly addressing Facebook, but implicitly speaking to investors’ concerns that Google was falling behind in the important realm of social networking, Mr. Page took a swipe at its competitor. He said Google+ was different from other products on the market because it mimicked real-life relationships by allowing people to share with limited groups of friends and serendipitously join video chats.

Google said that 550,000 Android phones were activated each day, and that 135 million Android devices had been activated over all; it also said 160 million people used the Chrome browser. Google reported second-quarter revenue of $9.03 billion, up from $6.82 billion in the year-ago quarter. Net revenue, which excludes payments to ad partners, was $6.92 billion, up from $5.09 billion. The company said its net income rose to $2.51 billion, or $7.68 a share, from $1.84 billion, or $5.71. Excluding the cost of stock options, Google’s second-quarter profit was $8.74 a share, compared to $6.45 last year.

Google 2Q results show company thriving under Page (AP)

FILE – In this May 11, 2011 file photo, attendees await the morning keynote address at the Google IO Developers Conference in San Francisco. Google In

SAN FRANCISCO – Google Inc. CEO Larry Page’s traditionally frosty relationship with Wall Street turned into a warm embrace Thursday after the Internet search leader released strong financial results for its latest quarter.

The results represented Page’s first report card since he became CEO at the start of the second quarter in April, ending the decade-long reign of his mentor, Eric Schmidt.

Although he established himself as engineering and entrepreneurial genius as Google’s co-founder, Page has made it clear since the company went public in 2004 that he is more interested in innovation than focusing on the short-term earnings targets set by stock market analysts.

Page’s standoffish attitude had raised concerns that Google might not exceed expectations as consistently as it did under Schmidt. The concern had been weighing on Google’s stock, causing it to lag well behind the technology-driven Nasdaq composite index.

But the second-quarter results at least temporarily erased the doubts about whether Google can thrive under Page’s unorthodox leadership.

Investors signaled their approval by boosting Google’s stock by more than 12 percent. That restored the stock price to where it stood before Page became CEO on April 4.

Page made analysts even happier by sticking around for the company’s hour-long conference call with analysts. That was a contrast to a cursory appearance he made at Google’s first-quarter call three months ago, which had fed perceptions that Page considered investor relations to be a waste of his time.

In his remarks, Page stressed that he intends to be a “careful steward of shareholders’ money,” while reiterating his intention to invest heavily in hiring more employees and expanding into other markets in pursuit of even bigger profits in the future.

“I see more opportunities for Google today than ever before because, believe it or not, we are still in the very early stages of what we want to do,” Page, 38, said.

Page’s demeanor and commentary “hit all the right notes,” said BGC Financial analyst Colin Gillis. “It made people feel like maybe things are going to be OK and that (Page) isn’t going to be so hostile toward shareholders after all.”

Google earned $2.5 billion, or $7.68 per share, in the April-June period. That’s a 36 percent increase from $1.84 billion, or $5.71 per share, a year ago.

If not for costs covering employee stock compensation, Google says it would have earned $8.74 per share. That figured easily topped the average estimate of $7.84 per share among analysts surveyed by FactSet.

Revenue increased 32 percent to $9 billion, the first time in Google’s 13-year history that it has brought in that much money in a quarter.

After subtracting Google’s advertising commissions, revenue stood at $6.9 billion — nearly $400 million above analyst projections.

Google shares soared $66.36, or 12.6 percent, to $595.30 in extended trading after finishing the regular session at $528.94. The stock price stood at $591.80 when Page became CEO.

The results are the latest indication that the Internet remains a bright spot in an otherwise lackluster economy.

The contrasts between online and offline commerce during the last few years is like what happened in the Great Depression of the 1930s when “people sold horses and bought cars, so car companies did great,” Patrick Pichette, Google’s chief financial officer, said in a Thursday interview. “There is a fundamental shift in how the economy runs and we are living that through the digital economy today.”

Google fared so well because advertisers were willing to pay higher prices to promote their products on the Internet’s largest marketing network. The average price paid per advertising click on Google’s network rose 12 percent from last year. Web surfers also found the ads more enticing, clicking on them 18 percent more than they did at the same time last year.

Page delivered the impressive results even while standing by his vow to invest in projects that may take several years to pay off.

Google’s newest venture, a Facebook-like social network called Plus, debuted two weeks ago and has grown quickly amid positive reviews.

Page said Thursday that more than 10 million people already have joined Plus even though it still requires an invitation to get into it. By comparison, Facebook has more than 750 million users.

Google is hoping Plus can become as big a hit as its Android software for mobile phones and tablet computers. Although Google gives away the software, it has enabled Google to expand its advertising dominance into the mobile market as more people increasingly connect to the Web away from their home and office computers.

Page said more than 550,000 devices relying on Android are being activated each day. Google estimates there about 135 million devices that rely on Android.

“All of us at Google want to create services that people in the world use twice a day, just like a toothbrush,” Page said.

To help carry out its ambitious agenda, Google increased its payroll by 9 percent, or 2,452 employees, in the quarter to bring its workforce to nearly 28,800 people. The additions included 450 workers inherited as part of the company’s $700 million acquisition of airline fare tracker ITA Software.

Through the first half of the year, Google added nearly 4,400 workers. That’s well ahead of its pledge to hire at least 6,200 employees this year. Even Page indicated the hiring is occurring a little faster than he anticipated.

Apple investors brush off China blast impact (Reuters)

SAN FRANCISCO/TAIPEI (Reuters) – Shares of Apple Inc regrouped on Monday after Wall Street brushed off the impact of an explosion last week that shut a Foxconn factory in China producing its popular iPad.

Production at the plant in the southwestern city of Chengdu was suspended by Foxconn Technology Group, Apple's biggest manufacturing partner, after three workers died in a Friday blast blamed on combustible dust in a duct.

The incident stoked fears that production of the seminal tablet — already constrained by shortages of components and rabid demand — would again be disrupted.

But the impact should be minimal because of Foxconn's ability to rapidly shift output elsewhere in its sprawling network, coupled with Apple's relying mainly on other locations, investors and analysts said.

Shares in the world's largest technology company by market value closed down 0.24 percent at $334.40, after slipping as much as 1.7 percent in morning trading.

"This seems to be a manageable situation," said Channing Smith, Managing Director at Capital Advisors Growth Fund, which owns Apple shares.

"The evidence of that is in the share price today."

Foxconn — whose main listed flagship is Hon Hai Precision Industry — plans to resume operation at the plant after it completes an investigation. No timeframe was given.

Market research firm IHS iSuppli forecast that production of half a million iPads could be at risk if the shutdown continues until the end of June.

Foxconn's plant in Shenzhen, which is seen as the main assembly plant for the iPad 2, may not be able to make up for the production loss at Chengdu, iSuppli said, which expects 7.4 million iPad 2s to be shipped in the second quarter.

The Shenzhen plant has the capacity to produce 7.5 million units during the quarter and so tablet shipments could fall short of expected levels — which are slightly higher than forecast to account for damages and higher demand — by between 300,000 and 600,000 units, the research firm said.

Apple sold 4.69 million iPads last quarter and is scrambling to meet staggering demand, coping with what company executives have called "the mother of all backlogs." Some analysts predict more than 6 million could ship this quarter.

There remains a 1- to 2-week waiting period for iPads in most major regions. Production had been expected to ramp up during the present quarter to meet demand with the Chengdu plant seen as a newer base for the assembly.

Stern Agee analyst Shaw Wu played down the impact on Apple. saying even at the Chengdu location itself, production was spread out among assembly lines in several unaffected buildings.

"This is definitely a setback," Wu said. "At the same time, it's not that big a deal."

HON HAI SHARES FALL

While the impact on Apple is deemed minimal, investors in Hon Hai were worried about the fallout of the blast on the electronics supplier.

The incident marked the latest worker deaths at Foxconn, which last year grappled with a barrage of criticism after a spate of suicides tore the lid off what some called dismal conditions for its mostly migrant labor population.

A potential loss of orders from Apple could amp up the pressure on Hon Hai, which is already facing rising costs.

Shares of Hon Hai in Taipei closed nearly 3 percent lower on fears Apple may shift orders to its rivals. They had dived as much as 5.2 percent following the news of the blast, to their lowest since late August.

"Foxconn Group makes 70-80 percent of Apple's parts, and Apple may reconsider concentrating production with one contract maker," said Hua Nan Securities Chairman David Chu. "This could hurt Hon Hai in the long run."

But the brokerage said the explosion happened in a machinery room for cutting metal and, given that no assembly line or inventory was involved, the blast was unlikely to cause any meaningful production disruption.

Hon Hai said Monday the company was assessing the damage and local authorities were investigating the explosion. The plant would resume operation once the investigation finished, it added in a stock exchange filing.

"A majority of iPad2 production is still done in Shenzhen, and that even if the whole Chengdu iPad2 production line is damaged, the impact should be less than 20 percent of iPad total production," UBS said in a research report.

The Chengdu facility was set up late last year in an effort to lower labor costs which are cheaper in the inland areas.

Chengdu city government has said last October that Foxconn Technology Group would invest $2 billion on a new plant in Chengdu.

Many manufacturers, including PC contract maker Quanta Computer Inc and Compal Electronics Inc, have also been moving operations in China away from coastal regions such as Guangdong and Fujian to inland areas.

(Additional reporting by Faith Hung and Argin Chang; Editing by Edwin Chan, Lincoln Feast, Bernard Orr and Sofina Mirza-Reid)

Yahoo! shares sink on Alibaba tensions (AFP)

Yahoo! shares sink on Alibaba tensions

NEW YORK (AFP) – Yahoo! shares extended their slide on Friday amid tensions with Alibaba Group, the Chinese e-commerce giant in which the California Internet company holds a large stake.

Shares in Yahoo! lost 3.61 percent to close at $16.55 on Wall Street on Friday.

Yahoo! stock began sinking on Wednesday on news that Alibaba had spun its online payment business, Alipay, out of the reach of the US-based Internet giant.

Yahoo! filed paperwork on Tuesday notifying the US Securities and Exchange Commission that ownership of Alipay had been shifted to a Chinese company owned mostly by Alibaba chief executive Jack Ma.

In the filing, Yahoo! said the transfer of ownership of Alipay was done without the knowledge or the approval of Alibaba's board of directors or shareholders.

Yahoo! said the move was made in August although Yahoo! and another major Alibaba stakeholder, Japan's Softbank, were only informed of it in March.

Alibaba rejected Yahoo!'s claims in a statement on Friday and said that the Chinese legal requirements that necessitated the change in ownership had been discussed at numerous board meetings.

Alibaba said the move was made to "comply with Chinese law governing payment companies in order to secure a license to continue operating Alipay."

"The Alibaba Group board discussed at numerous board meetings over the past three years the impending imposition of new regulatory requirements on the online payment industry, including ownership structures," Alibaba said.

It said the Alibaba board was told in July 2009 that a majority shareholding in Alipay had been transferred to Chinese ownership. The remaining stake was apparently transferred in August.

"The actions taken by Alibaba Group management to comply with the licensing regulations and to ensure continuation of operations are in the best interests of the company and its shareholders," Alibaba said.

Yahoo! owns a 43 percent stake in Alibaba and an estimated 40 percent share of Alipay.

Yahoo! co-founder Jerry Yang, who stepped down as chief executive two years ago and was replaced by Autodesk CEO Carol Bartz, sits on the Alibaba board.

Relations between Yahoo! and Alibaba have been rocky for some time but Bartz gave Alibaba's Ma a vote of confidence in September saying Yahoo! is "very supportive of the operational direction Jack Ma and his team are taking the group."

Microsoft net profit up but surpassed by Apple (AFP)

Microsoft net profit up but surpassed by Apple

NEW YORK (AFP) – US software giant Microsoft posted a more than 30 percent rise in quarterly net profit on Thursday but pocketed less than gadget-maker Apple for the first time in two decades.

Microsoft said net profit increased 31 percent to $5.23 billion in the third quarter of its fiscal year while revenue rose 13 percent to $16.43 billion in what the company called a "mixed" market for personal computers.

Earnings per share of 61 cents were better than the 56 cents forecast by Wall Street analysts.

Apple reported quarterly net profit of $5.99 billion last week on revenue of $24.67 billion — the first time it has posted a higher net profit than the Redmond, Washington-based Microsoft since March 1991.

In May of last year, Apple, maker of the Macintosh computer, the iPod, iPhone and iPad, dethroned Microsoft as the largest US technology company in terms of market capitalization.

Microsoft said Windows 7 was the fastest selling operating system in history with 350 million licenses sold although revenue for the segment was down four percent in the quarter to $4.4 billion, in line with PC trends.

"We delivered strong financial results despite a mixed PC environment, which demonstrates the strength and breadth of our businesses," Peter Klein, Microsoft's chief financial officer, said in a statement.

"Consumers are purchasing Office 2010, Xbox and Kinect at tremendous rates, and businesses of all sizes are purchasing Microsoft platforms and applications," Klein said.

Bill Koefoed, Microsoft's general manager for investor relations, said in a conference call with financial analysts that business PC growth was nine percent in the quarter.

"The business PC refresh cycle continues and is still in the early stages," Koefoed said, adding that emerging markets now represent nearly half of all worldwide PC shipments.

He said the consumer PC market declined eight percent in the quarter and cited several factors, "including a 40 percent decline in netbooks, broader consumer macroeconomics, increased competition for consumer spending and the strength of Windows 7 consumer PCs in the prior year."

"In total, we estimate the PC market declined one to three percent," Koefoed said.

A number of industry analysts have attributed part of the weakness in PC sales to new touchscreen tablet computers, particularly Apple's iPad, and a growing market segment where Microsoft is yet to make a mark.

Koefoed and Klein also cited problems with monetization of the Internet search partnership Microsoft has entered into with Yahoo! in a bid to take on market leader Google.

"We are partnering closely with Yahoo! to improve monetization as quickly and efficiently as possible," Klein said.

Koefoed said "the expected monetization of the combined Yahoo! and Bing search marketplace in the US and Canada is taking longer than planned and revenue per share remains below our expectations."

Consequently, he said, "we have delayed international integration efforts to focus on improvements in the US and Canada."

While Microsoft's online services division saw revenue grow 14 percent to $648 million it suffered an operating loss of $726 million.

Microsoft said revenue at its business division grew 21 percent in the quarter and Office 2010 has become the fastest selling version of the productivity suite ever.

Revenue grew 60 percent in the entertainment and devices division, Microsoft said, primarily from the popularity of the Kinect motion-controller for the Xbox 360 game console.

Computer server and tools revenue was up 11 percent, Microsoft said.

Microsoft shares were down 1.27 percent at $26.37 in after-hours trading.