Wednesday, 31 October 2007

Quick News - Google shares broke through $700 barrier

Google shares broke through the $700 (£350) barrier for the first time today, fuelled by speculation that the company will soon launch its own mobile phone. The shares reached $701.40 (£350.07) in early trading on Wall Street, valuing Google at just under $219 billion (£106 billion), before falling back to $699.50 (£349.75).

Shares in Google have risen 725% since it floated just over three years ago. Rumours have circulated for months that the search giant is planning to launch its own mobile phone. Earlier today, the Wall Street Journal reported that it was in advanced talks with two mobile phone companies, Verizon and Sprint, about selling handsets that would run an operating system designed by Google. (source: CNN Money)

Sports Direct to block Nike takeover

Nike's takeover of Umbro has been thrown into doubt by Sports Direct chief executive Mike Ashley, after building a 29.9% blocking stake in the maker of England's national football team kit. The share raid, conducted yesterday through the Icelandic bank Kaupthing, nearly doubled the 15% stake Sports Direct had built up in the business to bring its holding to just shy of the 30% threshold at which a full takeover would be triggered.

Sports Direct declined to comment on its motivations yesterday, leaving analysts to guess at what Mr Ashley's next move would be, which might be that, by building a blocking stake, Mr Ashley could force Nike into paying a higher price. JJB Sports, Sports Direct's main rival and the UK's No 2 sports retailer, holds another 10% of Umbro, which it bought after the company revealed this month that it was in takeover talks.

The acquisition of Umbro would make Nike the global leader in football apparel, a sector in which 10 years ago it had a minute presence. For Umbro, the deal would bring the support of Nike's global marketing and distribution muscle, providing an antidote to its struggles as a niche player subsisting on the sale of replica football shirts.

If Mr Ashley does launch an offer, he would head off a possible toughening of supply terms for England shirts, but he would also anger the world's largest sports apparel maker. Ms Tipnis said: "Nike, Adidas, and other brands are not entirely happy with Sports Direct using their brands to attract footfall to then sell its own brands at higher margins." (source: Google News)

American aviation authorities have threatened to veto any increase of air traffic into the chronically congested John F. Kennedy airport throwing plans by British Airways to launch a new airline between Europe and New York into disarray.

The US Federal Aviation Administration (FAA) is about to start talks with foreign airlines, including British Airways, to reduce congestion at JFK, the main New York airport. The FAA wants airlines to reduce voluntarily the number of takeoffs and landings at JFK or to move flights to less hectic times. British Airways is already planning to increase the number of services between Heathrow and JFK from 51 flights a week to 55 next year, and is also planning to launch a new airline that will offer direct flights between Europe and the East Coast of the US next year to take advantage of the open-skies agreement that will take effect next Easter. One British Airways executive has said “we have not specified the destination for the new airline, but New York is the obvious destination. There would be an impact on BA if restrictions were enforced, and we watch developments with interest. We would like this issue to be resolved as soon as possible. We have tickets to sell.”

It said that between 3pm and 7.59pm no more than 81 flights an hour would be permitted. According to the International Air Transport Association (IATA), the airline industry body, on some days JFK is handling at least 100 flights an hour. An FAA spokesman told The Times: “We will get some kind of result on this by mid-December. If carriers aren’t shaping up, we will impose restrictions. The concern is the level of traffic in and out of JFK. We do not want a repeat of this summer.”

IATA said that “because the US has failed to grow its infrastructure, it is trying to penalise airlines and passengers. But, quite clearly, the status quo is not working.” (source: Timesonline)

The battle for supremacy between the UK's top two fitness chains, Fitness First and Virgin Active, are set for Spain. Both companies are believed to be sizing up offers for Holmes Place gyms in Spain and Portugal, where they are being auctioned for up to 200 million euro (£140 million).

A year ago Virgin Active bought Holmes Place in the UK to take the No 2 position, behind Fitness First. Holmes Place has been put up for sale by its owners – the Spanish private equity firms Mercapital and N+1, and Portuguese group Explorer, which have hired Atlas Capital, a Madrid advisory boutique that is part-owned by Close Brothers.

Holmes Place's Iberian business was sold in 2005 by Permira and Bridgepoint after the private equity firms took over the entire business. After selling it to Sir Richard Branson's Virgin Active group for £650 million last year the buyout firms retained minority stakes in the group. It is understood that Holmes Place's owners hired Atlas after receiving several unsolicited bids. They are not desperate to sell and will only do so if they can achieve the hoped for price, sources said. The company operates a network of 22 gyms in Spain and Portugal.

Fitness First has 25 gyms in Spain, and is looking to expand in the country. Virgin Active is also looking outside the UK. Sir Richard's fitness empire is about to launch it latest venture in Australia, where it has unveiled plans to open several locations over the next year. He is also looking to expand his Virgin Money business through a bid for struggling mortgage lender Northern Rock. (source: Independent)

Tuesday, 30 October 2007

The Richest

Microsoft's Bill Gates & Mexico's Carlos Slim Helu are no longer the worlds richest people. Indian industrialist Mukesh Ambani (pictured) has been named at the top of the list of the world's richest people and is valued at £30.6 billion ($61.2 billion). His wealth has been buoyed by activity on the Mumbai Sensex stock index which topped 20,000 for the first time yesterday, having almost doubled in value over the last two years. Founded by Ambani's father, Dhirubhai, the company portfolio includes oil, textiles and biochemicals, with annual revenues at more than £13 billion ($26 billion).

On the richest - the 10 richest companies in the world?

1. Exxon Mobil - US - $525 billion

2. Petrochina - China - $429 billion

3. General Electric - US - $418 billion

4. China Mobile - China - $370 billion

5. Ind & Comm Bank/China - China - $336 billion

6. Microsoft - US - $285 billion

7. Royal Dutch Shell - Netherlands - $271 billion

8. China Petroleum - China - $269 billion

9. Gazprom - Russia - $266 billion

10. AT&T - US - $255 billion

Heathrow voted worst airport

England’s main airport, Heathrow, took a further knock yesterday when it was voted the world's least favourite airport. It came joint top with Chicago in a survey of 2,500 travellers by the travel organisation TripAdvisor. The poll asked respondents to rate 36 airports in terms of how easy they were to navigate, cleanliness of their lavatories and the quality of their parking facilitiesTripAdvisor's findings echoed the criticisms of Heathrow voiced by political and business leaders, especially London Mayor Ken Livingstone who said “the airport shamed London.” Passengers have frequently faced delays of up to an hour to negotiate security and check-in queues before reaching their planes. Getting into the country has often been just as bad with new scanning equipment doubling the time needed to process passports.

British Airways has earmarked a number of continental airports for potential transatlantic flights, including Paris, Amsterdam, Brussels, Frankfurt, Milan and Madrid. A spokesman for British Airways said the move was not a vote of no confidence in Heathrow, but a desire to take advantage of the business opportunities offered by open skies, which comes into force next March.

American Airlines' arrival is an indication that some mainstream carriers are looking to cash in on Heathrow's unpopularity by offering alternative services. Next April, American will double its frequency with two daily flights from Stansted to JFK.

The 20 worst performers
London, Heathrow Airport / Chicago, O'Hare International
New York,
JFK Atlanta,
Hartsfield Int
Los Angeles Int
Miami Int
New York, La Guardia
Paris, Charles de Gaulle
Dallas Fort Worth
Neward Liberty Int
London Gatwick
Cancun Int
Toronto Pearson Int
Las Vegas, McCarran
Frankfurt Int
London Stansted
Orlando Int
Denver San
Franscisco Int
Amsterdam Schipol (source: Google News)

Rupert Murdochs BSkyB has offered to give up 3% of its voting rights in ITV in a bid to be allowed to keep its holding in the terrestrial broadcaster. In November 2006 BSkyB bought a 17.9% stake in ITV but the Competition Commission has ruled that it makes the firm too dominant. This means that BSkyB could be forced to sell some or all of its ITV holding. BSkyB argues that by only having control of 14.9% of voting rights, it would be "clearly insufficient, on any reasonable basis of calculation, to block a special resolution".

However, analysts are unconvinced that the offer would be enough to appease the commission. The watchdog had earlier said that a behavioural remedy, such as reducing voting rights, was unlikely to be an effective solution even though it would consider all suggestions. Earlier this month, the Competition Commission said BSkyB's stake in ITV, bought for £940m, would allow BSkyB to influence the broadcaster's strategy.

The commission is now consulting on what could be done, including possibly forcing the sale of the stake. A final decision on what action should be taken will be made by the secretary of state for business, John Hutton. (source: BBC News)

Google’s headline advertising revenues surpassed ITV1’s in the third quarter. Google generated £327 million in advertising between July and September, compared with an estimated £317 million for all of ITV1 across the UK during the same three-month period. That is the first quarter in which Google has overtaken Britain’s top commercial channel and came despite ITV1 reaping an advertising boost from the Rugby World Cup.

Google racked up £925 million in advertising revenue in the UK in the first nine months and is set to come in at about £1.25 billion for the year as it continues to expand. A year ago it generated £871 million, overtaking Channel 4, meaning that its UK annual growth is about 43.5%.

ITV as a whole can still claim to be Britain’s biggest recipient of advertising because revenues will be about £1.45 billion this year with digital channels factored in. The search engine does not receive all the money it generates, passing on about 29% to partners, meaning that on a net basis it will take nearly £1 billion for itself.

A spokesman said: “Google operates in a highly competitive market. Online advertising faces stiff competition from television, radio, outdoor, newspaper and magazine advertising as well as direct marketing. Online ad spend accounts for only 11% of overall advertising spend in the UK.”
Advertising in the UK grew by 3.1% to £9.1 billion in the first six months of this year, according to the Internet Advertising Bureau, using figures calculated by PricewaterhouseCoopers. Without a 41% increase in the value of online advertising, to £1.3 billion, total advertising would have fallen by 19%. (source: Timesonline)

Monday, 29 October 2007

Global News (source: Wall Street Journal)

It appears that the global credit market turmoil has not affected British Airways ability to secure funding to buy planes. Mr George Stinnes commented in a conference on Friday regarding a £1.7 billion ($3.49 billion) debt British Airways has secured for aircraft to be delivered over the next five years. The airline said it has concluded arrangements for the financing and Mr George Stinnes said the cost of funding for the planes was very consistent with what the company had done in the past. The arrangement which allows British Airways to draw down money in any currency that is suitable, will satisfy the company’s aircraft purchasing until the end of 2011.

Scandinavian airline, SAS AB, said it would stop using Dash 8 Q400 aircraft after a series of crash landings, the latest on Saturday in Copenhagen. The airline, which has 27 of the planes, had only recently resumed flights of the Q400 turboprops after it had been forced to ground its fleet following two crash landings last month in Lithuania and in Denmark. No one was seriously injured in any of the three crash landings, which all involved problems with landing gear.

Kia Motors Corporation, reported a wider third-quarter net loss because of lower production levels amid holidays and strikes, and said it is unlikely to meet its full-year operating profit target. The South Korean auto maker, 38.6% owned by Hyundai Motor Company, posted a net loss of 55.1 billion won ($60.6 billion), compared with £43.9 billion won a year earlier. Operating losses widened to 116.5 billion won from 88.6 billion won, while sales fell 6.7% to 3.268 trillion won.

Tata Steel Ltd., the worlds sixth largest steelmaker by capacity, said its fiscal second quarter unconsolidated net profit rose 8.2% from a year earlier. Gains on foreign-exchange transactions offset higher interest costs. Unconsolidated net in the quarter ended September 30, rose to 11.91 billion rupees ($303 million) from 11.01 billion rupees a year earlier. Net sale rose 14% to 47.85 billion rupees.

Emirates Airlines founded by Dubai’s rulers in 1985, is considering an initial public offering (IPO) that could value the Gulf carrier at up to $20 billion (£9.7 billion). Emirates, which are a state-owned carrier, would likely seek a primary listing of up to a quarter of its stock in Dubai. DP World (the company that bought P&O last year) and Emirates could then seek secondary listings in London to gain access to a larger international market.

Sheikh Ahmed, CEO of Emirates said: “I think more and more Dubai companies will see that this is important in the near future. The DP World IPO is a very positive thing. I think for sure Emirates will also, in the future, do something like that. Our vision is that Dubai’s GDP will grow from $38 billion to $108 billion by 2015. This is something that we ought to do but to do so we need to develop new businesses here, like our financial market.”

The airline will not use the money to buy European airlines, as some analysts have predicted. Sheikh Ahmed ruled out a bid for a rival such as British Airways, saying Emirates would focus on its own growth strategy.

Friday, 26 October 2007

BP fined for a record amount

Oil giant BP has been fined a total of $373 million (£182 million) by the US Department of Justice for environmental crimes and committing fraud. The fine is the highest fine of its kind levied under the Clean Air Act, which include $50 million (£25 million) relating to a Texas refinery explosion in 2005 that killed 15 people and injured 170 more.

Acting Attorney General, Peter Keisler said "The tragic explosion at the Texas city refinery, and the pipeline leaks in Alaska, were sad reminders that our environmental laws exist both to protect the lives and safety of the public, and also to preserve our natural resources. Businesses that ignore those laws and endanger their workers and communities must be held accountable. Today's announcement shows that they will be."

A fine for $303 million (£150 million) relates to price-fixing charges for manipulating the propane market in 2004. It marks a record fine imposed by the Commodity Futures Trading Commission (CFTC) for market manipulation.

The four former BP workers accused of "conspiring to manipulate and corner" the US propane markets were named as Mark David Radley, James Warren Summers, Cody Dean Claborn and Carrie Kienenberger. BP polluted a lake and land in Alaska after two oil leaks from the pipeline in March and August 2006.

Prior to Thursday's announcement, BP had already spent $1.6 billion in compensation to victims of the Texas disaster, and has settled more than 1,600 personal injury claims.
Earlier in the week the oil giant announced that quarterly profits slumped by 45% after problems at its production and refinery businesses. Profits at BP fell to $3.88 billion (£1.89 billion) for the three months to the end of September from $6.98 billion (£3.5 billion) a year earlier. (source: BBC News)

Revenues at Boeing were cut for 2008 by an estimate $2.5 billion (£1.2 billion) because of delays to the first deliveries of its 787 Dreamliner. Boeing said yesterday that it would deliver more aircraft in 2009 than in 2008. The first airline scheduled to receive the new aircraft is All Nippon Airways, of Japan.

The world’s second-biggest aircraft-maker has experienced several challenges associated with production of the plane, including out-of-sequence work, problems with integrating software and a shortage of bolts. Despite all the problems experienced with the production, the Dreamliner has become the bestselling aircraft ever, with 710 firm orders to date from 50 customers. Boeing expects to sell between 480 and 490 of the aircraft in 2008, down from its previous estimate of 515 to 520.

Jim McNerney, Boeing’s chief executive, said “I have every confidence that the revised delivery timetable could be achieved. The company is concentrating on a supply chain coordination, which had been one of the big problems behind the 787 delays.”

Commercial aircraft revenues in 2008 will be up to $4 billion (£2 billion) down on expectations, at $35 billion (£17.5 billion) to $36 billion (£18 billion). Revenue guidance for the whole company is expected to be $67.5 billion (£33.7 billion) to $68.5 billion (£34.2 billion), down from previous estimates of $71 billion (£35.5 billion) to $72 billion (£36 billion). However, Boeing said that almost all anticipated 2008 revenues will be taken in 2009. (source: Timesonline)

Arcadia, owned by Sir Philip Green, reported a modest improvement in annual profits yesterday following one of the worst 'non-summers' in many years. Sir Phillip (for the second year) opted against taking a dividend. Arcadia with more than 2000 outlets, whose high-street chains include Topshop, Burton, Miss Selfridges, Dorothy Perkins, Wallis, Evans and Outfit, saw operating profits edge up by 1.6% to £293.3 million in the year to 1 September, with like-for-like sales across the group increased by 2.1% as total sales grew by just over 5% to £1.86 billion.

The figures were released as the supermodel Kate Moss's latest collection for Topshop went on sale. Sir Philip said the previous collection had been selling very well, but added: "You can't just put someone's name on something, the product has got to be right. We are still learning about it." Sir Philip furthermore said he has chosen to put the money back into the business rather than take a dividend, and said "Without being rude, I don't really need any money," The billionaire banked a £1.2 billion windfall from Arcadia in 2005.

The group will open more than 300 000 square feet of retailing space in the UK over the coming year, and open 70 more stores with international franchise partners. The retailer also owns the Bhs department store chain, which this month announced a 3% rise in operating profits to £50 million in the year to 31 March. (source: Independent)

Thursday, 25 October 2007

Facebook valued at $15 billion

Yesterday, after losing many battles to search giant, Google, Microsoft finally won one in its bid for a stake in the social network Facebook. Microsoft agreed to buy a 1.6% stake worth $240 million (£120 million) of the company in a transaction that values Facebook at $15 billion (£7.5 billion).

The arrangement with Facebook will give Microsoft control over the placement of banner ads on Facebook outside the U.S. Outside the U.S. Facebook have about 60% (49 million) active users. Microsoft had already reached agreements to sell U.S. banner ads for Facebook through 2011. Facebook, run by CEO Mark Zuckerberg, is among the hottest on the block site, growing by 200 000 registered users every day. Facebook received nearly 1% of all internet visits in the week that ended the 20th October 2007. Over the last year, Facebook’s traffic has more than doubled and with the valuation for Facebook at $15 billion (£7.5 billion) it makes the $580 million (£290 million) News Corporation paid for MySpace look like an outright bargain.

Google already has a lock on placing ads on the top social networking site MySpace. In a transaction outlined in 2006, Google is in charge of placing search-related ads on MySpace. Google also serves as the main MySpace search engine. Among social networking sites, MySpace received 76% of U.S. traffic in the week ended 20th October 2007, compared to 15% for Facebook.

According to press reports, Facebook is expecting to earn a profit of $30 million (£15 million) on $150 million (£75 million) in sales this year. So if it were a publicly traded company, it would be valued at a whopping 500 times earnings. Google, no slouch when it comes to market value, is currently trading at about 53 times earnings. CEO of Facebook, Mark Zuckerberg, 23, said that he wants to take Facebook public at some point. (source: Google News)

In the search to expand further, low cost airline Easyjet, has finally expanded by buying UK carrier GB Airways for £103.5 million ($212 million). GB Airways currently operates services under the British Airways brand to Southern Europe and North Africa under a franchise agreement (coming to an end March 2008) with British Airways, with services flying from Gatwick, Heathrow and Manchester. The purchase will however not include the Heathrow take-off and landing slots.

GB Airways operates a total of 39 routes - 28 from Gatwick, six from Manchester and five from Heathrow - and has a fleet of 15 Airbus aircraft. Easyjet said the deal was consistent with its expansion strategy and would improve its position at Gatwick. "This is an acquisition which both strengthens our customer offering at London Gatwick, our biggest base with an attractive catchment area, and allows us to fully capitalise on the potential of the airport through a larger number of slots," said Easyjet chief executive Andy Harrison.

GB's chief executive Kevin Hatton said the deal brought "an end to a period of uncertainty" about the future direction of the airline. We will fulfil our outstanding obligation as a franchise partner to British Airways and then look forward to a smooth operational merger with Easyjet" (source: BBC News)

Carphone Warehouse will partner with Vodafone and launch a new mobile phone service, which will run through Vodafone's network. This new service will be called, Talkmobile, and will run alongside Carphone Warehouse’s existing services, Fresh and TalkTalk Mobile, which operate through T-Mobile's network.

The deal with Vodafone comes as a surprise, as a year ago Vodafone said Carphone Warehouse would no longer be able to sell its mobile phone contracts. Carphone Warehouse shares rose 3.6% after Vodafone said that Carephone Warehouse will no longer be able to sell contracts in a year’s time.

Talkmobile will be a pay monthly service based around a nine-month contract. It will operate by renting excess network capacity from Vodafone, the same as Fresh and TalkTalk Mobile do through T-Mobile. Virgin Mobile has a similar arrangement with T-Mobile, and such services are known as mobile virtual network operators or MVNOs. Carphone is the UK's largest mobile phone retailer. (source: BBC News)

Wednesday, 24 October 2007

Amazon on target for record profits

Spending on books, music and electronics helped produce an $80 million (£39 million) profit for the three months to September 30, up from $19 million (£9.5 million) for the same period the year before at online retail giant, Amazon. The final book in the boy wizard series, Harry Potter and the Deathly Hallows, became the fastest selling book ever upon its release in July with the online retailer selling 2.5 million copies during the period. However, Amazon has said it will not make a profit on the title because it offered steep discounts and free shipping. "In our view, putting customers first is the only reliable way to create lasting value for shareowners," said Jeff Bezos, founder and chief executive of Amazon.

Revenue rose 41% to $3.26bn from the same quarter last year, with shares down 10% hours after trading, following a sharp rally on the stock ahead of the results. Since January, the shares have risen from $40 (£20) to as high as $100 (£50) during Wall Street trading hours yesterday. Amazon said it anticipated a record holiday season, with expected sales of between $5.1 billion (£2.55 billion) and $5.45 billion (£2.7 billion). Its international trading division, which includes sales in the UK, Japan and China, saw sales jump 42% over the period, with sales of electronics and general merchandise gained more than those of CDs and DVDs.

The retailer also saw an increase in more profitable sales by third-party sellers, who advertise their wares on the site. The company increased its revenue forecast for the current full year to between $14.26 billion (£7.13 billion) and $14.61 billion (£7.3 billion), from earlier guidance of $13.80 billion (£6.9 billion) to $14.30 billion (£7.15 billion). (source: BBC News & Timesonline)

With a try at the growing “silver surfer” market, The Post Office has set itself ambitious growth targets as it tries to enter the broadband sector. The Post Office wants to provide a service for subscribers who want to pay for a high-speed internet connection with cash.

With very ambitious targets and a relatively late entry, the company aims to sign up more than one million broadband customers by 2010. It hopes to sign up 600,000 users over the next six months and has set aside a £9 million promotional budget. The service will launch next week with the boy band Westlife appearing in its advertisements.

The Post Office have 14,000 branches and will use their branches to make its mark in the sector. They will initially target its 400,000 telephony customers, a large number of whom have expressed interest in sourcing more communications products from the Post Office. The company has already signed up 1,000 broadband customers after a month-long trial in 124 stores. It is targeting late broadband adopters, as well as customers who are fed up with other suppliers, most notably Carphone Warehouse.

At £15.95 a month, Post Office broadband will not be the cheapest but there will be no "rural surcharges" fees which vary according to where a user is based. BT will provide the Post Office network. The Post Office believes its target broadband market – the over-50s, who already account for about 25 per cent of internet users, and people who want to pay in cash – is worth nearly £500 million. (source: Independent)

Tuesday, 23 October 2007

Umbro to be sold to Nike

The makers of England football team’s kit, Umbro, has agreed to be bought by US sportswear giant Nike in a deal worth £285 million ($580 million). Nike said the deal would allow it to "significantly expand" its presence in "a key growth category" for the firm. As well as providing kit for the England team, Umbro also supplies the kit for six Premier League clubs.

The sale will put Umbro’s chairman, Nigel Doughty in line for a £7 million payoff for his 2.53% stake. Nike has offered 195p per share whiles shares closed last night at 165p. Umbro soared 23.5p to 188.50p in early trading this morning. Steve Makin, chief executive of Umbro, insisted Umbro would retain separate headquarters and said he did not expect any management changes. He said: "Nike clearly have a wealth of resources and we would like to strengthen the team, but we expect the management team to stay in place."

The Football Association said Nike had assured it that the FA's relationship with Umbro would be protected. Manchester-based Umbro said last month that sales of England tops had been "disappointing", and analysts are concerned that sales could suffer if England fail to qualify for next year's European Championship.

JJB Sports, which announced on Friday that it had taken a 10 per cent stake in Umbro, and Sports Direct, Mike Ashley’s retail business that holds 15 per cent of shares, have indicated that they want to protect supplies of England football team shirts to their stores. Analysts warned that JJB Sports and Sports Direct could still disrupt the takeover. Andrew Wade, of Seymour Pierce, said: "The price of 193p looks a good price for the business - it would certainly not be worth this in the absence of any bid. However, with Sports Direct and JJB owning over 25% of the business and concerned about the future of the England kit deal, this is not necessarily over."

The acquisition of Umbro will help Nike to achieve its aim of becoming the world’s leading football brand by the time of the 2010 World Cup. Nike has been expanding aggressively into the football market over the past few years, raising sales to $1.5 billion. A formal offer was likely to be announced today. (source: BBC News)

Low-cost airline Fly Monarch is to allow passengers to pay for flights using online payments system Paypal, popular with eBay shoppers. The charter airline said the service will be offered in addition to online credit and debit card transactions. Fly Monarch says it is the first European airline to sign a deal with Paypal, though a number of US carriers already offer this service. There are more than 15 million account holders with Paypal in the UK. (source: BBC News)

Monday, 22 October 2007

The Battle for the Best Seat

Virgin Atlantic is understood to have started legal proceedings towards Contour, a Wales-based seat manufacturer for breach of patents in order to protect the design of its Upper Class product after competitors started to roll out suspiciously similar seats. This is the latest in the cutthroat battle for business-class airlines. Contour built Virgin’s seats, but the company has also supplied herring-bone-shaped seats to Delta, Cathay Pacific, Air Canada and Jet Air.

Virgin spent £50 million developing the herringbone shape and layout for its Upper Class and introduced it with great fanfare in 2003. The largest airlines develop their own seats in order to have a unique sales proposition. Virgin has two patents covering the shape and configuration of the seats and the technology used to lower the seat into a bed.

Virgin is thought to be seeking damages from Contour and is also thought to be demanding that these other airlines remove their seats, which could cost them millions of dollars in lost revenue. Contour declined to comment and a spokesman for Virgin Atlantic said “the airline did not talk about active legal proceedings.”

Virgin has always sought to differentiate itself from larger competitors by developing innovative service ideas. Upper Class passengers have a bar area onboard and can get massages at their seat. Ticket prices for an Upper Class seat from London to New York are about £4,000 return and the airline is jealously protective of this market. (source: Timesonline)

Earlier this year some shareholders at Berkshire Hathaway, urged Warren Buffett’s (pictured) company to sell its 11% public shares it bought for $500 million (£250 million) in 2006 because of the Sudan issue.

The master at investments and the ability to know when to sell at the right time has finally sold the public shares and made a $3.5bn (£1.7bn) profit in the oil firm PetroChina. Mr Buffett said the sale was based solely on price, rebuffing suggestions he was reacting to criticism of PetroChina's links with Sudan.

In May, at Berkshire's annual general meeting rebel shareholders argued that PetroChina through its government-owned parent China National Petroleum was too closely linked with the Sudanese government. The rebel proposal to sell the PetroChina stake, which Mr Buffett opposed, was successfully defeated.

Nicknamed the "sage of Omaha" because of his success with investments, Mr Buffett is worth an estimated $52.4bn. (source: BBC News)

After a survey to establish which nation is the nation most likely to take risks with their investments, the survey revealed that South Africans are most willing to take risks with their investments. UK, US and Canadian investors are the most cautious, according to research from Barclays Wealth. The company’s latest wealth survey found 84% of investors questioned in South Africa believed a high appetite for risk had helped achieve their riches.

In the UK, only 25% of those surveyed put their wealth down to a willingness to take investment risk, with people more likely to achieve wealth through inheritance, marriage or a good salary in the UK, US and Canada. (source: Telegraph)

Interested in starting a small company? Read the article on a beginners guide at starting a small business by Elizabeth Colman’s -

Sunday, 21 October 2007

Creating "my own" TV shows - Mr Peter Jones

Mr Peter Jones founded Phones International Group in 1998, providing mobile cellular solutions to a broad range of clients. The core of the business was a distribution model he created called Single Brand Distribution. These days, the business operates under the brand name of Data Select. The company is a major factor in the growth, accounting for £14 million ($28 million) of sales in the first year of trading and £44 million ($88 million) by the end of the second. Other related companies have also grown within the group, including Generation Telecom, which was sold to one of the world's largest companies for millions of pounds within two years of starting up.

In recent years, Phones International Group has been recognised as one of the most successful UK businesses. The Times/Ernst & Young recognized Mr Jones as Emerging Entrepreneur of the Year in 2002. The group was identified as the 13th fastest growing business in The Sunday Times/Virgin Atlantic UK Fast Track League Table in 2003.

Today, Phones International Group counts every leading brand in the mobile industry among its business partners, whether as a supplier, customer or collaborator on a number of initiatives and activities geared to driving growth. Group turnover is around the £150 million ($300 million) mark.

His business interests now span many other areas than just telecommunications, including incentives and gifts, entertainment, publishing, property and television. In 2005, he was invited to join the panel of the hit ground-breaking BBC Two show, Dragons' Den. In 2006, he worked with Simon Cowell to create a new business reality format show for America's largest network, ABC - The American Inventor. It first went on air in early 2006 and has since been recommissioned and sold elsewhere in the world. Mr Peter Jones has now signed a major two-year deal with the UK broadcaster ITV, and developed his own show, named Tycoon. (I have shares in this company, and this company will become a major success). At the end of 2006, The Daily Telegraph listed Mr Jones as one of the top ten entrepreneurs in the UK aged under 40. In the summer of 2005, Jones teamed up with another Dragons' Den star, Theo Paphitis to buy the gift experience company Red Letter Days from fellow panellist Rachel Elnaugh. The company, which collapsed under Elnaugh's ownership, has been turned around and is now trading profitably again.

Peter also created, an online retailer specialising in the sale of wine and champagne to corporate clients, as well as, a specialist recruitment business. He has many investments from the BBC show Dragons’ Den including Wonderland Magazine, a new luxury lifestyle magazine, The Generating Company, a contemporary circus company, i-Teddy and Reggae Reggae Sauce among others.

Through his appearance on "Dragons' Den", Mr Jones has invested in several start-up ventures including style magazine Wonderland and Square Mile International, which provides data services for marinas. He owns a TV production company, called Peter Jones TV, and his business portfolio also includes a range of property investments.

Friday, 19 October 2007

Google surpass Wall Street expectations

After the long awaited forecasts on Wall Street for Google’s shares - after-hours of trading on Wall Street last night, the internet search giant unveiled a 46% surge in profits for the third quarter of the year. The performance surpassed ambitious Wall Street forecasts that had helped to lift Google’s shares by 19% over the previous four weeks.

Google’s chairman, Eric Schmidt, said “the group made $1.07 billion (£520 million) in profits after tax during the three months to the end of September, compared with $733.4 million (£366 million) for the same period the year before. Revenue jumped 57% to $4.23 billion (£2.1 billion), with the company beating Wall Street estimates in almost every quarterly period since it floated in August 2004 and has seen its shares increase sevenfold. “ Google gets paid every time someone clicks on an advert on its pages or one of its partners’ sites. It fields about 1.2 billion searches a day, four times as many as Yahoo!, its nearest rival. Google’s rely on the UK for 16% of its revenue during the quarter, about $661 million (£330 million). (source: Timesonline)

Flyglobespan, the Regional Airline, has had its ‘ETPOS’ flying licences suspended as a concern about its operations, with several of the Edinburgh services to North America been affected.

The 'ETOPS' licence, is the licence, which lets it fly over large expanses of water with two engines. The Civil Aviation Authority (CAA) said it is the first time in 15 years a UK operator has lost ETOPS approval, but the CAA refuse to specify the reasons as to why the licence had been suspended. A spokesman for Flyglobespan said that ETOPS approval has only been suspended on a temporary basis, and that this was because of an isolated problem with subcontractors. (source: BBC)

Thursday, 18 October 2007

Google valued at $195 billion

Google risks hurting itself and the internet sector by not splitting its stock, it was confirmed by technology analyst Mark May at Needham & Co. This was the conclusion by Mr May who has become alarmed at the headlines surrounding the Google share price's surge through $600 (£300) barely three years after they were floated at $85 (£42.5).

Google’s quarterly results are due this evening and are attracting more than their usual amount of excitement and nervousness. Mr May says “Google should consider to split its shares into 10, with new shares valued in the $60 (£30) -$70 (£35) range. Unfortunately, retail investors and the mass media are often confusing a high stock price with a high valuation," Mr May continued to say that "Some, and possibly many, are interpreting 'Google $700' as a sign that the internet bubble has returned. We believe this misperception is bad for Google shareholders and for the internet sector at large."

There is no doubt that Google's valuation is optimistic as the company is worth $195billion (£97.5 billion). It is trading on about 40 times this year's likely earnings per share and that multiple falls to a still-high 30 times next year. The company is valued at nine times next year's revenues.

Google makes its money selling adverts alongside search results on its own and on other people's websites, and in the third quarter it raked in about $3billion (£1.5 billion) of revenue, more than 60% up on last year. (source: Independent)

A while ago, EBay reported that they have paid too much for internet phone firm Skype and that proved right as they reported a quarterly loss of $936 million (£459 million). The online auction site confirmed that this month they would have to take a $900 million (£450 million) charge due to overvaluing Skype, which it bought for $2.6 billion (£1.3 billion) in 2005.

Putting that aside, eBay's results still beat market targets as its revenues for the three months to 30 September soared, with third quarter revenues up 30% from a year earlier to $1.89billion (£945 million). EBay president and chief executive Meg Whitman said “it was the first time the company had reported a loss since the second quarter of 1999. However, the steps we took and moving to new management was completely the right thing to do," (source: BBC News)

A few months after budget airline came under scrutiny for not displaying the actual cost of flights and misleading people, budget airline Ryanair has again been accused of misleading claims by the Advertising Standards Authority (ASA). The claim came as a national advert by the airline read "Robbed by", stating that people buying tickets via an online agent were being "ripped off".

The ASA said the advert, which implied online agents overcharged people 100%, could not run "in its current form". The airline has been forced to withdraw other adverts for breaching ASA rules, including claims over emission levels. The latter mentioned case came after website indicated that Ryanair's advert, depicting a burglar described as an "online agent", denigrated and discredited their business.

The ASA upheld's objection that the comparison was misleading, because it quoted prices that were only available to people in the Irish Republic. The ASA also upheld another complaint against Ryanair by Lastminute after the airline said “the site did not supply terms and conditions and failed to notify customers of changes, neither of which were true”. In August, Ryanair was banned from saying its flight from London to Brussels was quicker and cheaper than the same trip by Eurostar. It emerged that the airline had not included the time or cost it took to travel to Stansted in the figure. (source: BBC News)

In measures to create a shake up in this lucrative market (as shown by Delta and Air France), British Airways (BA) is looking at merger opportunities that could create a transatlantic super-carrier. Aviation sources believe that BA is in talks with Sir Michael Bishop, controlling shareholder of bmi, to buy the British carrier. There are also talks that BA is considering a renewed attempt to merge with American Airlines, despite two previous approaches being struck down by competition regulators.

Delta, which is based in Atlanta, and Air France-KLM announced yesterday that they would merge their transatlantic operations to cut costs, due to the liberalisation of air travel between the United States and Europe next March. Under the new rules any airline will be allowed to fly anywhere, ending decades of bilateral restrictions that limited access to favoured carriers.

As part of the deal, Delta will get three of Air France’s Heathrow slots to offer new services to New York and Atlanta. The Delta-Air France deal will initially cover 19 flights a day from the US to London and France and will then be extended to all European destinations. In response, BA is thought to want to strengthen its already dominant position at Heathrow and is looking at bmi and American Airlines as partners.

Sir Michael Bishop has said “I am considering options for my 51% stake in bmi and is widely expected to sell within the next year.” BA would have to convince competition authorities that the takeover posed no threat, as the combined company would control more than half of all Heathrow flights. If BA were then to merge with American Airlines it would control about 66% of the Heathrow to US trade with the opportunity to offer many more flights. It would also have access to an extensive regional network in North America.

Steve Ridgway, chief executive of Virgin Atlantic, yesterday vowed to fight any attempt by BA to increase its dominance at Heathrow by creating a super-carrier. He said that such a deal would be bad for competition, bad for consumers and bad for the British economy. (source: Timesonline)

Wednesday, 17 October 2007

Battle for Digital Downloads

In the battle for music downloads, that is currently dominated by Apple iTunes, Universal has hit back with a stimulating digital music consumption by offering users all-you-can-eat music subscriptions. In solving the problem of online piracy and the decline in CD sales, the music industry has spent the past few years searching for the best way to get consumers to pay for digitally downloaded music as a way of offsetting this decline in sales. There is still a dependency on iTunes that controls 80% of the download market, however it is expected that digital music sales will grow this year by nearly 50%.

In a cry for more competition to take on iTunes, major companies like Universal, Warner Music and Sony BMG have moved to support new services from the likes of Microsoft and Nokia with an all-you-can-eat subscription deal called "Total Music" that is expected to go live in 2008. At this stage it is very early days and the music majors not willing to comment on their plans, however reports suggest the cost of subscribing could be set at $5 (£2.46) a month.

Universal Music is leading the charge against iTunes, balking at the one-third cut Apple takes on every song it sells through its music store. Previous attempts to launch digital music services failed by Napster. Universal still sells songs from artists on its roster including Amy Winehouse and 50 Cent through iTunes, but is keen to develop new ways to sell music digitally, including recent moves to retail singles via USB sticks. (source: Independent)

A jump in Yahoo! shares by 10 % occurred yesterday after-market trading, as Wall Street breathed a sigh of relief that the long-awaited turnaround in the internet company’s online advertising business appeared to be gaining steam.

Chief Executive, Jerry Yang said “while we have a lot more to do, we have taken some important steps and made a lot of progress” Yahoo!’s shares have fallen over the past six months on concerns about a widening gap compared with Google’s more efficient search advertising system, as well as the impact of new lower-priced forms of display advertising that were eating into Yahoo’s traditional “premium” advertising business.

Yahoo!’s revenues, grew by 14% during the quarter, to $1.28 billion (£640 million). This is 11% faster than Wall Street predictions. Revenues generated by its in-house websites and services had risen strongly, by 22% from a year before. In the latest quarter, revenue growth from display advertising jumped back to almost 20%, as a result of recent acquisitions and other adjustments to react to structural changes in the online ad market. (source: Financial Times)

Following on from the first article (above in the battle for downloads), Slicethepie, a stock exchanged website launched this year, allows artists to raise £15,000 from fans to record an album, in return for which the backers get shares in the bands. Shares in Miranda Barber, a 33 year old singer/songwriter from London, and her as-yet unrecorded album has risen to £1.47, giving her an overall market value of £22,050 as she approached the stock market to break into the music industry.

Slicethepie was set up by David Courtier-Dutton, who spent three years with Infobank, the shortlived dot-com darling, during the boom years before coming up with the idea to mix music and high finance in one website. It has 25,000 registered users.

Mr Courtier-Dutton said “it seemed like a great opportunity. The music industry is on its knees and there are only one in three albums in Tesco that you want to buy, but there’s far better music out than what you can get off the shelf.” The website trades off the notion that it is possible to break a band without a record company. Artists retain their copyright, with Slicethepie taking a distribution fee of £2 per album. It uses the money to buy out shares in bands two years after floating, implying that they must sell more than 7,500 albums for the original investors to turn a profit.

The idea is to sell albums for £7.90 on iTunes. After the retailer and Slicethepie take their cuts of £3 and £2 respectively, a band receives £2.90. Mr Courtier-Dutton owns about 60% of the shares in the company behind the site, having raised £800,000 and £600,000 from private individuals on values of £2.5 million and £10 million respectively. (source: Timesonline)

Tuesday, 16 October 2007

Family Mortgage from Virgin Money

Virgin Money, has yesterday launched the next stage of its US expansion, with a novel new service enabling friends and families to lend to each other.

After acquiring CircleLending, a specialist financial service, Virgin Money USA has been able to launch this Family Mortgage business. It has pioneered a business model through which family members or friends can lend money to one another at agreed rates of interest on commercial terms.

The company administers and manages the loans, arranging collateral, interest deductions and repayments, with the rate charged typically 2 to 3 percentage points below what the borrower could find in the commercial sector. In return, Virgin Money USA earns an up-front fee plus ongoing charges, with fees starting from $100 (£50) for a personal loan and rising to $699 (£350) for a mortgage.

Asheesh Advani, chief executive of Virgin Money USA, said “the launch was well timed as American borrowers were finding it increasingly difficult to source loans and mortgages. Banks in general are tightening up, so this is a wonderful alternative for people who are looking to seek a loan," Sir Richard said the CircleLending model had appealed to him because his own business empire had been founded on the basis of borrowing from his family. "One of the first things I did was to build a recording studio, and one of the things I did was to get an aunt to give me second mortgage," he said. "That one gesture by her resulted in the Virgin Group becoming a $20bn business."

The idea has no direct UK counterpart, so Virgin Money would be able to import the concept. The most obvious comparison is with Zopa, a money exchange launched three years ago by the founders of the online bank Egg, which gained market share by undercutting banks and building societies on lending rates. Zopa puts individuals with savings cash to deposit in touch with borrowers seeking loans, cutting out commercial lenders. (source: The Independent)

Monday, 15 October 2007

Airbus Delivered

Airbus finally delivered its first A380 superjumbo jet today (Monday, 15th October 2007) as the European planemaker tries to rebound from a string of legal and technical troubles. Singapore Airlines took delivery of the double-decker jet, the world's largest passenger plane, almost two years late.

Today is seen as the coming of age as everyone celebrate the delivery of thie beautiful mature aircraft. Acknowledging the planemaker's difficulties, Airbus President Thomas Enders told Airbus employees: "I realize how unsettling these last times, particularly the last 18 months, have been."

He thanked customers for sticking with the aircraft and said that increasing production to meet demand for the A380 "remains our greatest challenge for the next few years." Singapore Airlines Chief Executive Chew Choon Seng said it was "well worth the wait." Airbus has gone though five CEOs as multiple delays in the A380 program resulted in massive write-offs and a restructuring plan that foresees 10,000 job cuts over four years not to mention billions of dollars in lost profit.

Such delays have hurt more than just profits: Airbus' reputation has suffered, and U.S. rival Boeing Co. grabbed the top sales spot in 2006. Boeing last week announced a six-month delay to its hot-selling 787 Dreamliner. Morale has also fallen at Airbus on accusations, and an investigation, into the possible sale of company share options by senior managers who knew about serious problems with the A380 before the public was made aware. A preliminary report by the French Financial Markets Authority pointed to "massive insider trading" at European Aeronautic Defence & Space Co, Airbus' parent company.

The celebration were attended by around 500 guests, was low key compared with the triumphal 2005 ceremony when the A380 was unveiled. The 10,000-strong audience then included leaders from France, Germany and Britain who were not allowed inside the plane where problems lurked.

The A380 represents Airbus' bet on future demand for long-haul travel between congested hub airports worldwide. Rival Boeing believes passengers want point-to-point trips between smaller airports and is targeting that market with midsized jets. The A380's inaugural commercial flight has been set for Oct. 25 from Singapore to Sydney.

Chew said Singapore was inconvenienced by the late delivery, but added, "We are glad that Airbus took the time to make sure that the plane is fully tested and developed before it enters commercial service." John Leahy, Airbus' chief salesman, suggested that the A380's problems will be over once the plane gets into commercial service.

Airbus has logged 189 orders or firm commitments for the plane, and Leahy says that number may exceed 200 by year's end. The A380 features cocktail bar complete with a water fountain and a duty-free lounge. Some airlines will offer passengers in-flight showers. (source: Chicago Tribune)

Virgin pushes forward in takeover

Sir Richard Branson, chairman of Virgin Group has put together a consortium to put forward plans to take control of Northern Rock, which under plans, would keep its stock market listing but would be rebranded as Virgin Money.

Sir Richard has put together a consortium of US and Asian investors, including insurance firm AIG, to take a majority stake in the troubled bank. Its plan would inject substantial funds into the bank and "guarantee" the jobs of most of its 6,000 staff, Sir Richard said. Despite talks of a takeover, shares in Northern Rock have continued to plummet in value in the past six weeks, and closed at 5.9% (273.25p) following Virgin's announcement.

Virgin said its consortium was not looking to buy Northern Rock but that it would inject "hundreds of millions of pounds" in return for a substantial stake. Virgin said Northern Rock needed a "complete rebranding" and that it believed the business could prosper from an association with the Virgin brand. A complete change will occur internally once Virgin has taken over this high street bank, with a Virgin touch to every branch. He wouldn't say how much money Virgin was putting into the deal. "I have pulled together a heavy-hitting consortium that we believe has not only the knowledge and expertise but the financial clout to make a once great British institution great again," Sir Richard said. (source: BBC News)

It is already very difficult to catch the fast growing internet search engine Google and with a share price that last week broke through the $600 (£300) ceiling and looks set to rise even higher, it will be even more difficult to catch.

Not content with dominating the internet, the search giant is now believed to be planning to take the mobile communications market by storm. Lehman analyst Douglas Anmuth believes that Google will launch a mobile phone in February next year that will be similar to the recently launched Apple iPhone in that it will have "an oversized screen perhaps around 3in diagonal and with touch display" plus WiFi capability. Google's main differentiator will be on price – its phone is expected to sell at a fraction of the $400 iPhone.

Mr Anmuth said "We believe a Google phone could be marketed at a price point below $100, and potentially even be free." The incentive for Google to offer a free phone is the online advertising revenue the company could generate with an internet-enabled mobile device. Lehman Brothers also thinks it probable that Google will follow in Apple's steps by adopting a revenue-sharing model with the carriers, and predicts that Orange will be the most likely mobile operator partner for Google in Europe. (source: Independent)

With the already full estate agency list, Tesco is considering a push into Britain’s property market by launching a fully fledged online estate agency. The news comes a fortnight after Tesco suspended an online property marketplace on the advice of the Office of Fair Trading (OFT).

Under the service, customers paid Tesco a flat fee of £199 to advertise their home as being “for sale” on a website run by the supermarket. Tesco claimed that more than 250,000 visitors had visited the website in its first two weeks after it was launched at the end of June. Tesco offered a full refund of the £199 fee to customers when it suspended the service last month.

However, a Tesco spokeswoman said yesterday that rather than turning its back on the property market, the supermarket was reviewing its options “with a view to launching a new and exciting online estate agency service”. Asda became the first supermarket to take on estate agents when it launched an instore homeselling scheme in the North East last year. Under the scheme, Homes@Supermarkets, a separate Northumberland-based company, featured touchscreen terminals in 20 Asda stores. Asda set the commission at 1% and offered to provide customers with home information packs free-of-charge. It is understood that Asda is reviewing whether to roll the pilot scheme out to other areas of England and Wales. (source: Timesonline)

Top tips for new budding entrepreneurs by James Caan. Caan has been creating, building and selling businesses for over 20 years. In 1985, he set up the Alexander Mann Group, one of the UK’s leading HR outsourcing companies, and achieved a turnover of £130 million before selling it to a private equity firm in 2002. He also co-founded an executive headhunting firm with partner Doug Bougie, which they successfulle expanded globally through its Humana International brand, growing to over 147 offices across 30 countries before it was bought by a New York-listed company.

1. Observe the masses and do the opposite
It is much easier to be part of the crowd than not, but an entrepreneur may need to swim against the tide.

2. Ambition is nothing without passion
Anyone can be enthusiastic. Passion is having the character to continue with an idea once that initial emotion has gone. You have got to have that conviction and unquestioning belief in what you are doing in order to be successful.

3. Presentation and preparation matter
If you do not make the best of yourself and present your idea in a clear manner, how can anyone believe that you will do the best for your business?

4. Prove your product
Have you got a good product with verified market acceptability? Market acceptability means that it has been demonstrated to a number of people who have come back and said yes, this is something I would like to buy. I certainly wouldn't invest in something that is no more than a plan on a piece of paper. Showing that you are able to execute your plans effectively is paramount.

5. Do your sums
Make sure that the figures stack up. Nobody is going to be interested in doing business with you if they can't see a return.

6. You can and must learn from failure
Entrepreneurs need to be prepared for things not working out as planned. They have to be prepared to make sacrifices for the business and be prepared for taking risks. Persistence is essential - who dares wins!

7. If you win, somebody else doesn't have to lose
Adopt a win-win formula. A lot of businesspeople walk around with an attitude of "I must win", which in practice often means "winning" at the expense of someone else. To really succeed in the long term, you need to make sure that the people around you win too.

8. Your people are your business
How are your leadership skills? Successful entrepreneurs are rarely one-man bands and exceptional communication skills are vital.

9. Complacency is your enemy
No matter how successful you are, you should never rest on your laurels. Every year you should be wondering how to replicate or build on the success of the year before. It's an ongoing thing - you're never home and dry.

10. Don't work too hard
There are times in business when you have to put everything on one side and really go for it, but there's no point working seven days a week if you don't take time to enjoy life.

Friday, 12 October 2007

West Cornwall Pasty sold

The Cocking family has proved that it is possible to start a business with only £2000 and turn it into a profitable business. Just how profitable you are asking, well read on to see.

Ever heard about the name West Cornwall Pasty – the business has been started in 1998 by Ken Cocking and his sons Gavin and Aaron. They are the pasty kings from Mylor near Falmouth, Cornwall. Their empire has spread across the country and with the offices based nearby Porthleven, they run 55 sites including 34 shops and 18 station kiosks, with most of the latter in London.

Now nearly anybody can get their hands on one of their hot pasties which are handmade in Falmouth and shipped around the country. However, things have not always been easy for the Cocking Family who lost 4 of their 5 shops due to a property crash in the early days. This did not cause them to give up and they have grown from strength to strength and managed to sell their Pasty business yesterday for a whopping £40 million. Not bad at all for a venture started with only £2000 9 years ago.

It is all about Virgin

A quick update for those who are not familiar with Northern Rock. It is a UK based bank that has experienced problems in the last couple of weeks and has already borrowed an estimate of £13 billion in emergency funds from the bank of England. Shares have fallen at this Plc Bank and it appears that it (Northern Rock) is in serious problems if no solution can be found.

Sir Richard Branson’s Virgin Group is in talks to take over Northern Rock, the stricken mortgage bank. It is understood that the mobile phones and flights Tycoon is in discussions with a group of Middle East and US investors about forming a consortium that will inject cash into the bank in exchange for a controlling stake.

One source close to the talks said: "Virgin is looking at Northern Rock and considering its next move." If successful, Virgin would take over the day-to-day management of the business and bring it under its Virgin Money brand, which offers mortgages, credit cards and insurance services. The group has met Northern Rock’s management and could make a statement about its intentions as early as today. “Virgin are taking it very seriously and they are credible,” one person with knowledge of the negotiations said.

Virgin is the latest suitor to emerge for Northern Rock, which went into financial meltdown after it was forced to seek emergency funds from the Bank of England last month. It prompted the first big run on a British bank in more than 100 years. Other bidders, including two American investment groups, JC Flowers and Cerberus, are also understood to be circling the Newcastle-based bank. A fourth, as yet unnamed, suitor has also met Northern Rock’s management, and several US private equity firms, including The Blackstone Group, Lonestar and Apollo are also believed to be circling.

No formal proposal has been tabled and sources say that any deal is weeks or months away. Virgin is believed to be putting together a financing package that could also include debt from Citigroup, the US bank that has agreed to be on standby to lend as much as £10 billion to Northern Rock or bidders for the company. Earlier this week it emerged that other banks were also in talks about a funding package that could top £25 billion. Virgin will not formally bid for the bank. The plan is to take control of Northern Rock through the issuance of new shares that will be given to the investor group. The news of Virgin’s approach came as it emerged that Northern Rock had borrowed a further £2.3 billion from the Bank of England, bringing the total borrowed so far to £13 billion.

In a move to halt the run on Northern Rock, the Bank of England has promised to guarantee all depositors including new joiners since the crisis took hold. The guarantee and the line of credit are designed to smooth the sale or give Northern Rock time to rebuild itself as an independent business. (source: The Times)

After trying to raise enough money, Virgin Mobile USA, the mobile carrier part-owned by Sir Richard Branson has finally raised $412.5 million (£203 million) in an initial public offering that was priced at the bottom end of the forecast range. On the debut morning of this joint-venture between Sir Richard’s Virgin Group and Sprint, the US mobile operator, shares rose to $16.63, which is up 10.8% on their float price. The joint-group is valued at about $1.3 billion (£650 million). A total of 27.5 million shares were sold for $15 each, compared with a forecast range of $15 to $17 a share.

Virgin Mobile USA will use the deal proceeds to pay down debt. Since its launch in 2002, the carrier has established itself as one of the country’s fastest-growing mobile operations, winning nearly five million customers. Virgin Mobile USA pioneered the “virtual” operator model, under which a company avoids the expense of building its own network by using an existing player’s network. Operating revenue in the first six months of 2007 rose 23% to $666.9 million (£333 million), compared with the same period a year ago, while its net income doubled to $26.5 million. (source: Timesonline)

Thursday, 11 October 2007

The Dream of becoming a millionaire

Mr Jones, as a young boy, used to sit for hours in his father's office leather chair, dreaming of running a multi-million pound business. Dreaming can be in some way a powerful tool, and if you dream big, I cannot see why that cannot become a reality. It was a big dream for a school-boy, but one which came true for Mr Jones. He’s first sense of his business acumen and strong head for figures was while he was still at school, aged 16. After completing the Lawn Tennis Association's coaching exams, he set up his own tennis coaching school. This allowed him to combine the two subjects he loved the most: sport and economics.

During his twenties, he ran a thriving computer business which allowed him to own a nice house, a BMW, a Porsche, and plenty of money to spend. However, through a combination of circumstances, personal mistakes and learning the hard way when a few major customers went out of business themselves, and he lost the business. Later on he set up a computer support business and then a restaurant, the latter of which ended up being a fun and costly mistake. At 28, he decided to join a large corporate because he was broke and without a car or a house - a tough position to be in. Within 12 months, he ended up running the business in the UK.

Further delays for 787 Dreamliner

Yesterday Boeing admitted that the 787 Dreamliner will be delayed by a further six months as it struggles to assemble the revolutionary new aircraft. This came as a shock as the 787 Dreamliner is the largest industrial project in the world with orders worth more than $120 billion (£59 billion). The delay is likely to cost Boeing heavy compensation payments to customers. Boeing said first deliveries of the aircraft will now be in late November or December 2008 rather than May 2008 as expected. This caused Boeing shares to fall nearly 3% to $98.43 yesterday afternoon.

All Nippon Airways, which was due to receive the first aircraft will now have to wait a further six months for their deliveries. The Japanese carrier was hoping to have the 787 in its fleet in time for the Beijing Olympics, which would have given it maximum exposure.

The effects of the delay will be felt by dozens of airlines, possibly including British Airways, which has announced it is buying 24 of the 787s. BA (British Airways) expected to start receiving the aircraft in 2010, but may have to wait until 2011. If there are more delays, BA may even struggle to receive its aircraft before the London Olympics in 2012, which would be a blow to the airline’s marketing and operational plans.

The 787 announcement comes just a week before Airbus finally delivers the first of its A380 superjumbos. (source: Timesonline)

Pre-TAX profits at WH Smith before exceptional items was £61 million for the year to August 31 as it reported full-year profits ahead of market forecasts on Thursday and said it expected the key Christmas trading season to be very competitive. The pre-tax profits are up 29% from last year’s £51 million, on revenue down 3% at £1.3 billion.

According to Reuters Estimates, the group had been expected by analysts to report profit of around £62.6 million, within a range of £59.0 million to £64.2 million, with revenue seen about £1.28 billion.

Chief Executive Kate Swann said in the results statement that "we have delivered another year of strong profit performance. Our Travel business grew strongly, and our High Street business made further progress in line with its plan. In an uncertain consumer environment, we expect the key Christmas season to be very competitive, however we have planned accordingly"

WH Smith shares, which have outperformed the retail sector by more than 22 percent so far this year, closed at 420 pence on Wednesday, valuing the company at around £768.4 million. (source: Reuters)

Figures from comScore indicates that Britons are the 'social networking' champions of Europe, displaying a far greater appetite for websites such as Facebook, MySpace and Bebo than fellow citizens on the continent as British internet users spent an average of 5.8 hours a month - about a 11 minutes a day - on such sites. Their nearest rivals the Germans, spent 3.1 hours a month (6 minutes a day), according to research.

The French, Spanish, and Italians all spend less than four minutes a day making 'friend requests' and 'poking' one another . More than three in four regular internet users in Britain - just under 25 million people - are now a member of a social networking site, and make an average of 23.3 visits to their 'profile page' a month.

According to comScore, Bebo - a site for younger users - is now the most popular social network in Britain, with 10.7 million visitors, followed by MySpace, with 10.2 million and despite Facebook who has trebled its reach in the past 6 months from 2.7 million to 9 million, is in third place. (source: Timesonline)

Wednesday, 10 October 2007

Oprah to cash in on TV Channel

The well-known TV host and one of the (if not the richest) woman in the world, Oprah Winfrey, has cashed in after selling a TV channel she co-founded to NBC Universal for about $925 million, (£454 million). Oprah Winfrey is by far the world’s best-paid television entertainer, earning an estimated $295 million in the year to June 2007.

NBC, home to hit shows such as ER and the US version of The Office, is buying Oxygen Media, a cable television channel aimed at women, to increase their foothold in the advertiser-coveted young, upscale, female demographic. NBC is currently lead by chief executive and film director/producer, Jerry Zucker.

“Oxygen Media will perfectly complement our current roster of cable channels and plays to our strength of running and operating cable networks,” said Mr Zucker. Oxygen was set up in 2000 and reaches about 74 million homes. Oprah Winfrey set up the group with Geraldine Laybourne, its present chairman and chief executive, and the television producers Marcy Carsey, Tom Werner and Caryn Mandabach, best know for their work on The Cosby Show. Simon Cowell, a creator and judge of American Idol, the US version of Pop Idol, came third with $51 million, in a poll to establish the highest earning entertainment celebrity. He fell short to Oprah Winfrey in first place and Jerry Seinfeld in second with $69 million. (source: Timesonline)

ABN Amro confirmed that its bid had been supported by 86% of the Dutch bank’s shareholders. Royal Bank of Scotland (RBS), Santander and Fortis are likely to declare victory in the long-running takeover battle with Barclays today. Shareholders tendered almost 1.6 billion shares under the terms of the €71.1 billion (£49 billion) offer. The consortium is thought to be holding off announcing its win until Fortis has closed its €13 billion rights offer. The group of three has until Friday to declare its offer unconditional.

Shares in Barclays rose in mid-morning trading yesterday, before closing flat at 662p, after analysts gave a positive reaction to it losing the bid battle. Shares in RBS yesterday closed down more than 1.5% at 560½p after analysts emphasised the difficulties the consortium faces in assimilating the pieces of ABN. (source: Timesonline)

A survey found that four in ten would-be entrepreneurs are too scared of failure to do anything about their business idea. This survey for mobile phone and broadband firm Orange, found that nearly half of them had contemplated setting up a venture, but a lack of confidence stopped many from developing their idea, whilst a third of those who wanted to set up a firm worried about the impact of the venture on their love life.

Other concerns among those who had considered starting a business included the fear of becoming more aggressive (33%), of adding pressure to family life (25%) and of getting less sleep (32%).

About 14% of the people questioned claimed they were exploring a definite idea for a business, with another 8% saying they were on the road to making it a reality. While younger people were found to be more optimistic about setting up their own business, they also had a greater fear of failure.

Director of small business at Orange Business Services, Martin Lyne, said the survey showed that British people viewed enterprise in a positive light and were enthusiastic to give it a go. He said that because young people were particularly fearful of entrepreneurial failure that there was "strong case to cultivate an appetite for rational risk in the education system". (source: BBC News)

Tuesday, 9 October 2007

Battle for the Jets

Mike Ashley, the Sports Direct boss, has stolen bragging rights from Sir Philip Green, owner of Topshop and BHS, with a £20 million private jet. Mr Ashley, who has come in for stinging criticism since Sports Direct’s disastrous performance after floating on the Stock Exchange in March, has bought a Bombardier Global Express, one of the most luxurious models on the market. For £20 million, the reclusive 43-year old gets an ultra-long range private jet that can fly intercontinental distances - such as New York to Tokyo – without the need for refueling.

The surprise purchase comes as demand for private jets has taken off. For the first time, manufacturers are poised to deliver more than 1,000 aircraft in 12 months to wealthy customers around the world this year. Honeywell, the US conglomerate, last month predicted that global deliveries would hit 12,000 over the next decade, representing nearly $200 billion (£98 billion) of business far higher than its forecasts just two years ago. It is understood that more and more Chief Executives at companies across Britain are also making more use of private jets.

David Savile, Air Partner chief executive, said: “If I told you the names you wouldn’t recognise them. None of the seven feature on the Sunday Times Rich List. It is the next level down. Growth in this market at the moment is simply phenomenal. As customers get more used to hiring private jets from firms such as Air Partner or NetJets, the natural step is for them to buy one. One of the cheapest on the market, the six-seater Cessna Citation Mustang, costs £1.3 million.”

Yet both billionaires are trumped by Roman Abramovich, the Chelsea Football Club owner, who counts a modified Boeing 767, complete with two gyms, in his personal collection. Last month it was reported that he his upgraded by buying a $300 million (£150 million) Airbus A380 Superjumbo, a claim that his spokesman denied. (source: Timesonline)

A pivotal role in Nasa’s multibillion-dollar mission to build a lunar base and send a man to Mars has been won by a sorftware company based in Barrow-in-Fumess. 3SL has beaten giants such as IBM and Siemens to provide the software that will direct the design of the most ambitious space project yet – America’s Constellation programme.

The privately owned British company’s Cradle system will not venture beyond the Earth’s surface, but it will coordinate the design and manufacture of Orion, a new spacecraft that will replace the Space Shuttle and is charged with carrying a crew to the Moon by 2020. Cradle will also oversee the development of systems ranging from space suits to, eventually, “Mars habitation units”.

Mark Walker, the founder of 3SL, which has just 40 engineers, said. “This is a hugely significant win for a small company. It is important news, also, for Barrow-in-Furness, an area that desperately needs to have its profile raised as a centre for industry.”

The Constellation project, was given the green light three years ago by President Bush. It has been handed responsibility by Congress for maintaining “US preeminence in space” against a rivals such as Russia, China and India. It aims to make its first manned flight by 2015.

The British group, whose engineers are carrying out work for Nasa from a new office in Huntsville, Texas, is hoping to win further work beyond its current $7 million contract as Constellation moves forward. (source: Timesonline)

Monday, 8 October 2007

Vodafone snaps up Broadband services in Spain & Italy

The giant mobile phone firm, Vodafone, has expanded its interest in the European broadband market by spending £537 million on businesses in Spain and Italy. The UK-based telecoms firm is buying the divisions, which provide fixed-line telephone and broadband services from Sweden's Tele2.

The combined Spanish and Italian units have about three million customers and Vodafone said “it would benefit from "attractive high growth" in broadband use in the two countries.” The deal meant it immediately had the infrastructure it needed in place, the company said. (source: BBC)

In an effort to try and keep up with the pace in innovation in the fast growing global online market, Yahoo! is using India as a test-bed for new ideas. The internet search engine group is also targeting fast-growing Asian economies for user and advertising sales growth in an effort to narrow the financial gap with Google.

Terry Semel as chief executive left Yahoo! after a disappointing share price and a feeling that its management was losing ground to Google. He was succeeded by Jerry Yang, the company’s co-founder. Yahoo! has refocused on its core display advertising and search businesses. David Filo, co-founded Yahoo! with Mr Yang at Stanford University in 1994, and said: “We all agree we were trying too many things before. We are taking a fresh look, questioning everything. It’s good to step back after 13 years and see where we want to go in the next ten.”

Yahoo! claims about 500 million users worldwide, but nearly two thirds of its revenue comes from America. With a population of 1.1 billion (India), it has only 40 million internet users, most of whom access it through cybercafés, but the number is rising quickly, particularly through mobile phones, Yahoo! says that it has 24 million active users in India, its largest operation outside America. (source: Timesonline)

Personally, I think that Yahoo will have to do more than this to try and close the gap with rival Google. Google has something that is unique and no other internet search engine will be able to catch them in the growing global online market.

Friday, 5 October 2007

Topshop will go at it alone

He is desperately trying to break into the US market with his Topshop chain, but it appears as if Sir Philip Green will have go at it alone after being unable to find a suitable partner. The billionaire entrepreneur (wealth of £8 billion) has been looking for sites in New York for his flagship fashion chain for several years. Sir Philip said “I had yet to sign up locations for stores but would definitely work directly without a franchise or licensee after a series of discussions with potential partners.” The latest detail on Sir Philip’s widely trailed ambitions for America, a notoriously difficult market to crack, comes as the entrepreneur revealed plans to open at least six Bhs stores abroad over the next year and ten standalone Tammy stores – the teen label he bought from the French company Etam. The expansion will include Bhs’s first store in India, which is due to open in Bombay in December, as well as stores in the Middle East and Romania. All 75 of Bhs’s international stores are run via franchisees.

Bhs revealed that underlying sales were down 1.5% in the year to March 31 and remained level with the previous year over the summer. Last year Bhs bounced back from an horrendous 2005 to lift operating profits by 3% in the year to March 2007. Total sales rose 1.4% and operating margins rose 0.1 percentage points. In the previous year Bhs had been forced to cut prices in an attempt to stabilise the business after operating profits dived 54% to £52.4 million, and underlying sales slumped by 7.1%.

Since the end of March Sir Philip has spent more than £20 million on refurbishing 13 stores. A further six will be completed by the end of this month and a further 20 to 25 by the end of March. Sales at refurbished stores have increased by 12% ahead of the rest of the chain. (source: Timesonline)

For Disney resort fans, a big surprise is coming especially if you have seen enough of other resorts and want to explore the world some more. Disney plans to build a family resort in Hawaii, but it will not be a Pacific island Disneyland. The company is planning to turn 21 acres of oceanfront property on the island of Oahu into an 800-room luxury hotel complex.

Disney has several resorts near its theme parks in Florida and California but has never built a resort that will stand on its own. Disney spent $144 million (£72 million) to buy the land and the resort is expected to open in 2011. Chairman of Walt Disney Parks & Resorts said "this resort hotel will give our guests another way to visit an exciting part of the world with a brand they trust,”

Disney Resorts operates 38 resort hotels with more than 35,000 hotel rooms worldwide. (source: BBC News)

Today Barclays will accept defeat in the battle to buy ABN Amro. After battling for six months to complete the world's biggest banking takeover, it is finally over for them.

The bank has since May been locked in combat with a consortium led by Royal Bank of Scotland to buy the Dutch bank, but Barclays' share-based offer has lagged RBS's largely cash bid all summer and stands about 10 billion euro short of the consortium's 71 billion euro (£49bn) offer. It is understood Barclays will therefore formally concede today.

Barclays' bid lapsed yesterday and the consortium's will end today. With the offers closed, it is up to the banks to tot up the number of acceptances from ABN's shareholders. RBS is unlikely to put out a full statement until Monday at the earliest. (source: Independent)

Thursday, 4 October 2007

Tony Ryan dies age 71

Everybody has heard the name Ryanair before. Most people I assume always wonder, where did the name Ryanair come from? They always hear the name Michael O'Leary, CEO of Ryanair but don't know who actually founded Ryanair. The next few paragraphs will tell you exactly who founded Ryanair and who Tony Ryan was.

Tony Ryan was a founder of Guinness Peat Aviation (GPA) and co-founder of Ryanair with Christy Ryan and Liam Lonergan. Ryanair was believed to be the main source of his wealth in later life. The company is now one of the biggest airlines in Europe and is valued at several billion euro. Tony Ryan was believed to have a personal fortune ranging between €800million and €1billion. He held honorary doctorates from several universities, including Trinity College, Dublin, the National University of Ireland, Galway and the University of Limerick.During his time at the University of Limerick he competed in the 1956 Olympic Games, finishing 7th in the 10,000 metres. (Tony Ryan did not go to University and the University of Limerick did not exist in 1956). Born in Thurles, County Tipperary, Ryan's initial fortune came from GPA, the Commercial Aircraft Sales and Leasing company which he set up in 1975 with $50,000. The company grew to be worth $4billion (£2 billion) at its peak but its value dramatically collapsed in 1992 after the cancellation of its planned IPO. Ryan made €55million from the sale of AerFi (the successor to GPA) in 2000. Ryan was a tax exile who lived in Monte Carlo, but also owned a stud farm near his home in Newmarket, Co. Tipperary. He was the 7th wealthiest individual from Ireland in the Sunday Times Rich List 2007 with €1,5billion (£1,1billion).Ryan over the years helped nurture two successful business protégés - Denis O'Brien and Michael O'Leary - both of whom became multi-millionaires. Dr Ryan was a generous and innovative founder of University education in Ireland. He donated a marine science institute to NUI Galway in 1993 which was named the Martin Ryan Marine Science Institute in honour of his father, Martin, and showed a great interest in marine science and aquaculture development in the west of Ireland. He also funded The Ryan Academy for Entrepreneurship at Dublin City University.In 2001, Ryan acquired Castleton Farm from the Van Lennep Family Trust. Ryan renamed it Castleton Lyons and undertook renovations to the property while returning to its original roots as a thoroughbred operation.At the time of his death he owned 16% of Tiger Airways, a discount carrier based in Singapore which was founded in December 2003.

Ryan died on 3 October 2007 after an 18-month battle with pancreatic cancer.

Wednesday, 3 October 2007

How to be Rich - By: Stefan Enslin

The world's most successful investor once said that the secret of becoming rich was to be greedy when others are fearful and very fearful when others are greedy. Who is this guy that said this, and is he really so successful that he can give advise? In my mind he is the right person to give advise and the right person to listen to. He is the second richest guy in the world with a wealth of $40 billion and his name is Mr. Warren Buffett.

This man can be judged by his deeds and not just by his words. His record as an investor is one of spectacular success, often with investments in quite hum-drum businesses that have grown tremendously over time. Interestingly Warren Buffet ignored the Tech stock boom of the late 1990s, and also missed the crash. But he has been far more active in accumulating energy assets in recent years. Indeed, he has virtually ignored the US stock market and has concentrated on large energy sector assets, such as pipelines and a stake in PetroChina, US private equity and anti-dollar currency and precious metal investments. There is no sign of Warren Buffett bailing out of any of these investments. In fact when the US dollar rallied earlier this year, he made a statement refusing to change his dollar-negative position. Gold's rally to a 17-year high of almost $460 an ounce must therefore be music to his ears. Warren Buffett has never been much of a real estate investor but his appreciation of the mentality of the investment crowd is probably the best of the best. It is very hard not to be impressed by the third Middle East oil boom. Stock markets have surged to new heights, massive new projects are announced daily and real estate prices have mushroomed alongside rents. Of course, this can be bad news for those struggling to make ends meet on lower incomes with inflation on the climb. But for business, there has seldom been a better time, certainly not since the 1970s. On the other hand, for investors - whose good times come early in any economic cycle - Warren Buffett's words of wisdom do come to mind. On Warren Buffett's logic this is the time to stay out of the market rather than become sucked into the maelstrom of greed, and a time to be very fearful of making commitments.

The question that jumps to mind is, what do we mean by being rich? How do we interpret being rich, is it just financial riches or does this include being rich in every sense of the word. After all, Mr Buffett gave away almost his whole fortune to the Bill & Melinda Gates Organization, who is helping charities. It is a proof to me that money is not everything, although we should not be naïve to think we can survive without it. He is rich in knowledge and knows when to invest and when to sit back and relax. Knowledge is a very powerful tool in feeling rich.

To me rich means, financially rich as well as rich in attitude, happiness, communication, knowledge etc. If you have all the wealth in the world but you are not happy then you are only about 30% rich. Mr Buffett, accepted that he has all the money in the world but that it is not the sole source of happiness. He still lives in a traditional home, drives his own car etc, and he is happy. To me he is rich in every aspect.

Rich is also the ability to live in financial freedom. So what does this mean? The ability to know how to handle money, to work with money, to know when something is bringing in money and not. Mr Buffett makes his money work for him, he does not work for his money. If we need something and cannot afford it, we should not say “I can’t afford this” we should ask “what can I do to afford this”. Become rich not just financially because money cannot always buy happiness, but be rich in every aspect, financially, attitude towards life, in your communication skills, negotiation skills, health etc.