A House committee killed HB 1163 on Tuesday.
The bill, sponsored by Rep. Jerry Sonnenberg, R-Sterling, would have authorized special districts and metropolitan districts that provide emergency services to keep property and sales tax revenue that would have been diverted to urban renewal authorities from tax increment financing (TIF). Such emergency services include ambulance and fire protection.
The bill would have affected TIF revenue that would have been used to service debt on urban renewal projects.
TIF is a popular financing mechanism used by urban renewal authorities and downtown development authorities to fund improvements to blighted areas. Such financing uses future gains in taxes to finance current improvements.
HB 1163 was introduced in the House on Jan. 16, and assigned to the Finance Committee. On Feb. 5, the committee postponed the bill indefinitely.
bizjournals.com
2008-02-05
East Bay Community Foundation adds new board members
The East Bay Community Foundation, which gave out $36.7 million in grants during its 2006-2007 fiscal year, announced Feb. 5 that it has added two new members to its board of directors.
Asian Health Services CEO Sherry Hirota and Robert Davenport, an investor and adviser to technology companies, joined the 15-member panel effective Jan 1.
Davenport is the former CEO of Covad International, a subsidiary of the broadband provider Covad Communications in San Jose.
Hirota takes the place of Marcia Barinaga, a science writer and member of the board since 2003.
Davenport takes the place of Stephen Hicks, chief administrative and financial officer of Clark Sustainable Resource Developments Inc. and an East Bay Community Foundation board member since 2000.
A spokesman for the Oakland-based foundation said both Barinaga and Hicks resigned late last year to spend to spend more time on their work; the new members will serve out their terms and begin three-year terms starting July 1, 2008.
credited by: bizjournals.com
Asian Health Services CEO Sherry Hirota and Robert Davenport, an investor and adviser to technology companies, joined the 15-member panel effective Jan 1.
Davenport is the former CEO of Covad International, a subsidiary of the broadband provider Covad Communications in San Jose.
Hirota takes the place of Marcia Barinaga, a science writer and member of the board since 2003.
Davenport takes the place of Stephen Hicks, chief administrative and financial officer of Clark Sustainable Resource Developments Inc. and an East Bay Community Foundation board member since 2000.
A spokesman for the Oakland-based foundation said both Barinaga and Hicks resigned late last year to spend to spend more time on their work; the new members will serve out their terms and begin three-year terms starting July 1, 2008.
credited by: bizjournals.com
The Greening of the U.S. Consumer
Lisa Goodson, a 38-year-old mother of three children 5 and under, reuses printer paper by flipping every sheet over when she's done using one side. She wears a sweatshirt to keep warm during the day when she dials down the heat in her house in Greenville, S.C. These small gestures are part of Goodson's personal crusade to reduce her carbon footprint. "I think twice before buying anything for the kids, and I've even talked to my parents about holding back on gifts," says Goodson, who thinks her house is already loaded up with too much stuff and has lately been cleaning out toy boxes and donating toys to charity.
Goodson is part of a small, but growing, tide of consumers who have started shifting their spending patterns because of their concern about global warming. They want to contribute in any way they can to help reduce greenhouse gases. This kind of consumer behavior is starting to pick up steam nationwide. Consumers are choosing to drink tap water over bottled water, carrying reusable bags into supermarkets and eschewing plastic grocery bags, and buying locally produced, in-season foods, rather than purchasing fruits and vegetables that have traveled thousands of miles on carbon-emitting trucks.
"You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says Faith Popcorn, founder and chief executive of trend forecasting firm.
End of the Sub-Zero Fridge?
All this runs counter to the spending patterns of the last few years. And some economists and retail experts say the trend could exacerbate an already slowing consumer spending outlook. The days of easy credit [the U.S. Federal Reserve cut a key short-term interest ratefrom 6% to 1% in a two-year period after 2001] that freed up cash and engendered high-speed consumption are over for now [BusinessWeek.com, 1/10/08].
And so apparently is the kind of freewheeling spending that saw Americans replace kitchen stoves, refrigerators, and washers and dryers because they wanted to acquire the Viking stove which cost between $3,000 and $10,000, or a brushed-steel Sub-Zero refrigerator for $2,000, though similar appliances were available from mainstream brands like Kenmore or Maytag for a fourth of the price. Kitchen and Bath Business magazine reported the number of home renovations tripled in the last five years to over $100 billion.
Newspapers and magazines reported people were installing walk-in closets that were larger than their bedrooms. And to fill those fancy closets, middle America chose to shop at higher-end stores such as Nordstrom (JWN) and Saks (SKS) and started buying luxury items such as Coach (COH) handbags. "It was a time of laddering up, and people were buying the more expensive car or the extravagant vacation, but now they are doing the reverse of that," says Brian Bethune, retail economist at financial analytics firm Global Insight.
Pressures on Consumers Mounting
From the recent swoon of retailers as varied as J.C. Penney (JCP) and Saks, Kohl's (KSS) and Coach, all of whom reported negative or slowing sales, there is no doubt people are pulling back on all fronts. The U.S. Commerce Dept. reported on Jan. 31 that consumer spending, which accounts for two-thirds of the economy, rose by just 0.2% in December, down from a 1% gain in November. It was especially worrisome because December is generally one of the best consumer spending months, with people buying gifts during the peak holiday season.
There are many pressures on consumers -- not only is there no additional free money, since the home equity loan market has dried up, but mortgage payments are on the rise, even as home prices continue to fall across the nation. On top of that, there's no letting up of high gas and heating oil prices. "Consumers have adopted more cautious spending plans," says Richard Curtin, director of the Reuters/University of Michigan consumer sentiment survey, which said on Feb. 1 that consumer confidence had dropped by one-fifth in the last 12 months.
It could be difficult to rely on consumer spending to maintain the kind of growth the U.S. has enjoyed in recent years, especially if you add to all the pressures a fundamental change in consumer behavior. Bridal and children's magazines have been writing about an increasingly popular trend of no-gift wedding and birthday parties, where the hosts identify philanthropic causes or nonprofit groups to which guests can send a check instead.
A Vacation in Your Own Backyard
"People are saying they don't need more shoes, more clothes, or more bags; it's all about using less, consuming less," says Patricia Pao, founder of retail consultant The Pao Principle. Indeed, people are even giving away their stuff. A survey of How America Shops, by retail consultant WSL Strategic, of 1,600 consumers in the fourth quarter of 2007, found that 84% said they try to give old clothes to charity rather than throw them away. Thirty-eight percent say they used to care about wearing a designer brand, but not anymore.
It's not uncommon to see discussions on travel Web sites about whether it hurts the environment to get on an airplane and one site, responsibletravel.com, even poses the question, "to fly or not to fly?" There's evidence from conversations on these sites that some folks are even opting to take vacations with their children close to home and are discovering county and state parks.
Saving for Hard Times
No wonder airlines are working harder to retain eco-minded customers -- Continental (CAL), Delta (DAL), and Virgin have all launched carbon-offset programs. And people are starting to buy carbon-offsets or energy credits from companies that promise to identify ways to make up for carbon emissions or energy use by planting trees or investing in wind or solar energy. One such provider, TerraPass sold about 100,000 such carbon offsets by the end of 2007, a threefold increase since the beginning of the year.
The growing environmental awareness, and tougher economic times, could even influence the effectiveness of economic stimulus plans now being weighed by the Bush Administration and Congress. The kind of free spending the government hopes consumers will revert to might be difficult in this new mood. South Carolina's Goodson says her family of five will probably get a check of $2,100. Will she spend it? "No way," she says. "Spending got us to where we are today, and the last thing that the country needs is for people to hit the mall. I'll put my check in the bank and save it for hard times."
See the BusinessWeek.com slide show for more easy ways to reduce your own carbon footprint.
credited by: BusinessWeek.com
Goodson is part of a small, but growing, tide of consumers who have started shifting their spending patterns because of their concern about global warming. They want to contribute in any way they can to help reduce greenhouse gases. This kind of consumer behavior is starting to pick up steam nationwide. Consumers are choosing to drink tap water over bottled water, carrying reusable bags into supermarkets and eschewing plastic grocery bags, and buying locally produced, in-season foods, rather than purchasing fruits and vegetables that have traveled thousands of miles on carbon-emitting trucks.
"You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says Faith Popcorn, founder and chief executive of trend forecasting firm.
End of the Sub-Zero Fridge?
All this runs counter to the spending patterns of the last few years. And some economists and retail experts say the trend could exacerbate an already slowing consumer spending outlook. The days of easy credit [the U.S. Federal Reserve cut a key short-term interest ratefrom 6% to 1% in a two-year period after 2001] that freed up cash and engendered high-speed consumption are over for now [BusinessWeek.com, 1/10/08].
And so apparently is the kind of freewheeling spending that saw Americans replace kitchen stoves, refrigerators, and washers and dryers because they wanted to acquire the Viking stove which cost between $3,000 and $10,000, or a brushed-steel Sub-Zero refrigerator for $2,000, though similar appliances were available from mainstream brands like Kenmore or Maytag for a fourth of the price. Kitchen and Bath Business magazine reported the number of home renovations tripled in the last five years to over $100 billion.
Newspapers and magazines reported people were installing walk-in closets that were larger than their bedrooms. And to fill those fancy closets, middle America chose to shop at higher-end stores such as Nordstrom (JWN) and Saks (SKS) and started buying luxury items such as Coach (COH) handbags. "It was a time of laddering up, and people were buying the more expensive car or the extravagant vacation, but now they are doing the reverse of that," says Brian Bethune, retail economist at financial analytics firm Global Insight.
Pressures on Consumers Mounting
From the recent swoon of retailers as varied as J.C. Penney (JCP) and Saks, Kohl's (KSS) and Coach, all of whom reported negative or slowing sales, there is no doubt people are pulling back on all fronts. The U.S. Commerce Dept. reported on Jan. 31 that consumer spending, which accounts for two-thirds of the economy, rose by just 0.2% in December, down from a 1% gain in November. It was especially worrisome because December is generally one of the best consumer spending months, with people buying gifts during the peak holiday season.
There are many pressures on consumers -- not only is there no additional free money, since the home equity loan market has dried up, but mortgage payments are on the rise, even as home prices continue to fall across the nation. On top of that, there's no letting up of high gas and heating oil prices. "Consumers have adopted more cautious spending plans," says Richard Curtin, director of the Reuters/University of Michigan consumer sentiment survey, which said on Feb. 1 that consumer confidence had dropped by one-fifth in the last 12 months.
It could be difficult to rely on consumer spending to maintain the kind of growth the U.S. has enjoyed in recent years, especially if you add to all the pressures a fundamental change in consumer behavior. Bridal and children's magazines have been writing about an increasingly popular trend of no-gift wedding and birthday parties, where the hosts identify philanthropic causes or nonprofit groups to which guests can send a check instead.
A Vacation in Your Own Backyard
"People are saying they don't need more shoes, more clothes, or more bags; it's all about using less, consuming less," says Patricia Pao, founder of retail consultant The Pao Principle. Indeed, people are even giving away their stuff. A survey of How America Shops, by retail consultant WSL Strategic, of 1,600 consumers in the fourth quarter of 2007, found that 84% said they try to give old clothes to charity rather than throw them away. Thirty-eight percent say they used to care about wearing a designer brand, but not anymore.
It's not uncommon to see discussions on travel Web sites about whether it hurts the environment to get on an airplane and one site, responsibletravel.com, even poses the question, "to fly or not to fly?" There's evidence from conversations on these sites that some folks are even opting to take vacations with their children close to home and are discovering county and state parks.
Saving for Hard Times
No wonder airlines are working harder to retain eco-minded customers -- Continental (CAL), Delta (DAL), and Virgin have all launched carbon-offset programs. And people are starting to buy carbon-offsets or energy credits from companies that promise to identify ways to make up for carbon emissions or energy use by planting trees or investing in wind or solar energy. One such provider, TerraPass sold about 100,000 such carbon offsets by the end of 2007, a threefold increase since the beginning of the year.
The growing environmental awareness, and tougher economic times, could even influence the effectiveness of economic stimulus plans now being weighed by the Bush Administration and Congress. The kind of free spending the government hopes consumers will revert to might be difficult in this new mood. South Carolina's Goodson says her family of five will probably get a check of $2,100. Will she spend it? "No way," she says. "Spending got us to where we are today, and the last thing that the country needs is for people to hit the mall. I'll put my check in the bank and save it for hard times."
See the BusinessWeek.com slide show for more easy ways to reduce your own carbon footprint.
credited by: BusinessWeek.com
It's Down to Two: Microsoft and Google
If Microsoft's $44 billion acquisition of Yahoo! looks like a big business story, it is -- but not necessarily for the reasons you've been reading about these past few days. Yes, it's a Big Gulp of a deal that will pay a 60%-plus premium on the share price. And yes, it's a transaction that marries two high-profile brands of the technology world.
That's only the beginning.
If the Microsoft-Yahoo deal is consummated, what seemed increasingly to be Google vs. Everyone Else on the Web will become simply Google (GOOG) vs. Microsoft (MSFT). As a standalone brand, AOL won't be around for long, and the list of major online players drops off sharply after that. Without consolidation of massive proportions among the remaining giants of the online world, no one company has a chance at catching Google in the race for online ad dollars -- unless Google were to develop a bad case of "Big Company Disease" and derail its own momentum.
Scale, Features, and Analytics
The new online reality is that scale and features attract online users and the advertisers who want to reach them, and analytics -- the tools that help sites target ads to users more effectively -- build ad-pricing power and therefore margin. Scale is simply the traffic or number of unique visitors a site attracts. Features are the applications and services a particular Web site can deliver. In both cases, more is usually better. But analytics is an area that looks like art but is rapidly becoming science. It's the way sites parse users' profiles and click streams using behavioral targeting, predictive intelligence, and other database manipulations to boost ROI metrics for marketers spending advertising dollars online.
Google has it all: scale [more unique users than any other online site], an endlessly expanding array of features [tools and applications released continuously in beta versions on its site], and clearly superior analytics [which started with search-based advertising and is now expanding into extensive data mining of millions of search patterns and user profiles].
That's why Google has proven pre-eminent when it comes to turning its huge online audiences into its very own cash machine. In the last quarter, Google reported revenues of $4.8 billion, compared with $1.8 billion for Yahoo (YHOO) and $863 million for Microsoft, even though unique visitors for Google and Microsoft are roughly equivalent. [In December, Google registered 125 million unique visitors, and Microsoft 123 million.]
An Unattractive Choice
The fight for scale became clear when four companies -- Google, Yahoo, Time Warner's (TWX) AOL, and Microsoft's MSN -- emerged as the overwhelming winners in the competition for advertising on the Web. Even as the online ad market accelerated at growth rates of 25% to 35% a year, the Big Four search portals and aggregators increased market share, establishing a veritable oligopoly in the online world. Each of these companies could claim more than 100 million unique visitors a month, making them the most-trafficked sites online and paving the way for dramatic growth in online advertising.
By our estimates at Marketspace [an affiliate of Monitor Group], in 2006, the Big Four captured 85% of the U.S. online advertising market as measured in overall ad dollars. The top 10 online sites, including the Big Four and others operated by companies such as News Corp. (NWS) and InterActiveCorp (IACI), captured 99% of overall ad dollars in 2006. That means the remaining 100 million or so sites on the Web outside the top 10, and whose businesses are predicated on online ad revenues, must choose between giving up pricing power by selling through the Big Four [and other major players like them] or selling directly but competing with everyone else for their sliver of the last percentage point of online ad market share. [In the U.S. market, that last percentage was worth about $220 million in 2007.] This unattractive choice applies to just about every major media, content, or entertainment brand doing business online.
Consolidating Traffic
Online advertising is a big business and rapidly getting bigger. Last year, the average major corporation spent 7% of its marketing budget online, while U.S. consumers spent over 30% of their total media consumption time with digital media, according to our analysis. As marketers close this gap between brand budgets and consumer behavior, it's no wonder that the U.S. online ad market in 2007 hit $22 billion, that it will top nearly $30 billion in 2008, and that it's projected to reach $60 billion [and $80 billion worldwide] by 2011. It's also why Steve Ballmer, CEO of Microsoft, observed not long ago that "the future will be ad-funded," at least as far as digital business is concerned.
Which brings us to the question of how Microsoft and Yahoo combined could expect to compete for position with Google's rapidly expanding scale, features, and analytics. By acquiring Yahoo, Microsoft doubles its unique visitors to nearly 240 million, roughly twice Google's [not counting the reach of DoubleClick, its recently acquired ad network]. Even discounting for duplication of visitors, Microsoft gets to mark up its online traffic easily by 50%, to 180 million visitors, which vaults it to the top traffic position on the Web. Combined online revenues last quarter would amount to $2.6 billion, still only half Google's, but nonetheless establishing a powerful No. 2 position. While the aQuantive acquisition helped Microsoft close the competitive gap in online analytics, Yahoo brings traffic and features with the kind of sex appeal Microsoft itself could never achieve.
All that still makes this a long bet. With the acquisition, Microsoft has finally cried 'Uncle,' admitting to the world it cannot not build its way into online dominance, despite billions of dollars spent on online content, search technology, and analytics. Meanwhile, Yahoo has fallen far from its perch as the world's dot-com darling, and, at $31 a share, the acquisition price is only a quarter of its all-time high during the Internet boom.
By Consolidating Players
Now get ready for more consolidation -- from the Big Four to the Big Two. Time Warner has been looking to shed AOL for years, so consolidation of AOL is pretty much a sure thing. Yes, Microsoft needs the Justice Dept. and its European counterparts to sign off on the deal. And, yes, it needs to avoid a bidding war with News Corp. for Yahoo. And if AOL goes to Google [Google has flirted with AOL ever since the former went public], we'll soon see the online world divided between two iconic technology titans. If this really is a scale game, then it's a game only the supersized can play.
Sure, the "creative disruption" for which Silicon Valley is known will undoubtedly change the game at some future date. But, for now, there is an immediate need: More than $400 billion in global advertising is looking to make sense of online media, and no garage-based startup, no matter how visionary, can meet such high-volume needs. For the foreseeable future, it will be the reigning behemoth of the PC operating system vs. the emergent giant of the online world, competing for online consumers with resources of gargantuan proportions.
Who wins? Even with Microsoft's dramatic move, the answer is clear. It's a face-off, for sure, but it's still advantage, Google.
credited by: BusinessWeek.com
That's only the beginning.
If the Microsoft-Yahoo deal is consummated, what seemed increasingly to be Google vs. Everyone Else on the Web will become simply Google (GOOG) vs. Microsoft (MSFT). As a standalone brand, AOL won't be around for long, and the list of major online players drops off sharply after that. Without consolidation of massive proportions among the remaining giants of the online world, no one company has a chance at catching Google in the race for online ad dollars -- unless Google were to develop a bad case of "Big Company Disease" and derail its own momentum.
Scale, Features, and Analytics
The new online reality is that scale and features attract online users and the advertisers who want to reach them, and analytics -- the tools that help sites target ads to users more effectively -- build ad-pricing power and therefore margin. Scale is simply the traffic or number of unique visitors a site attracts. Features are the applications and services a particular Web site can deliver. In both cases, more is usually better. But analytics is an area that looks like art but is rapidly becoming science. It's the way sites parse users' profiles and click streams using behavioral targeting, predictive intelligence, and other database manipulations to boost ROI metrics for marketers spending advertising dollars online.
Google has it all: scale [more unique users than any other online site], an endlessly expanding array of features [tools and applications released continuously in beta versions on its site], and clearly superior analytics [which started with search-based advertising and is now expanding into extensive data mining of millions of search patterns and user profiles].
That's why Google has proven pre-eminent when it comes to turning its huge online audiences into its very own cash machine. In the last quarter, Google reported revenues of $4.8 billion, compared with $1.8 billion for Yahoo (YHOO) and $863 million for Microsoft, even though unique visitors for Google and Microsoft are roughly equivalent. [In December, Google registered 125 million unique visitors, and Microsoft 123 million.]
An Unattractive Choice
The fight for scale became clear when four companies -- Google, Yahoo, Time Warner's (TWX) AOL, and Microsoft's MSN -- emerged as the overwhelming winners in the competition for advertising on the Web. Even as the online ad market accelerated at growth rates of 25% to 35% a year, the Big Four search portals and aggregators increased market share, establishing a veritable oligopoly in the online world. Each of these companies could claim more than 100 million unique visitors a month, making them the most-trafficked sites online and paving the way for dramatic growth in online advertising.
By our estimates at Marketspace [an affiliate of Monitor Group], in 2006, the Big Four captured 85% of the U.S. online advertising market as measured in overall ad dollars. The top 10 online sites, including the Big Four and others operated by companies such as News Corp. (NWS) and InterActiveCorp (IACI), captured 99% of overall ad dollars in 2006. That means the remaining 100 million or so sites on the Web outside the top 10, and whose businesses are predicated on online ad revenues, must choose between giving up pricing power by selling through the Big Four [and other major players like them] or selling directly but competing with everyone else for their sliver of the last percentage point of online ad market share. [In the U.S. market, that last percentage was worth about $220 million in 2007.] This unattractive choice applies to just about every major media, content, or entertainment brand doing business online.
Consolidating Traffic
Online advertising is a big business and rapidly getting bigger. Last year, the average major corporation spent 7% of its marketing budget online, while U.S. consumers spent over 30% of their total media consumption time with digital media, according to our analysis. As marketers close this gap between brand budgets and consumer behavior, it's no wonder that the U.S. online ad market in 2007 hit $22 billion, that it will top nearly $30 billion in 2008, and that it's projected to reach $60 billion [and $80 billion worldwide] by 2011. It's also why Steve Ballmer, CEO of Microsoft, observed not long ago that "the future will be ad-funded," at least as far as digital business is concerned.
Which brings us to the question of how Microsoft and Yahoo combined could expect to compete for position with Google's rapidly expanding scale, features, and analytics. By acquiring Yahoo, Microsoft doubles its unique visitors to nearly 240 million, roughly twice Google's [not counting the reach of DoubleClick, its recently acquired ad network]. Even discounting for duplication of visitors, Microsoft gets to mark up its online traffic easily by 50%, to 180 million visitors, which vaults it to the top traffic position on the Web. Combined online revenues last quarter would amount to $2.6 billion, still only half Google's, but nonetheless establishing a powerful No. 2 position. While the aQuantive acquisition helped Microsoft close the competitive gap in online analytics, Yahoo brings traffic and features with the kind of sex appeal Microsoft itself could never achieve.
All that still makes this a long bet. With the acquisition, Microsoft has finally cried 'Uncle,' admitting to the world it cannot not build its way into online dominance, despite billions of dollars spent on online content, search technology, and analytics. Meanwhile, Yahoo has fallen far from its perch as the world's dot-com darling, and, at $31 a share, the acquisition price is only a quarter of its all-time high during the Internet boom.
By Consolidating Players
Now get ready for more consolidation -- from the Big Four to the Big Two. Time Warner has been looking to shed AOL for years, so consolidation of AOL is pretty much a sure thing. Yes, Microsoft needs the Justice Dept. and its European counterparts to sign off on the deal. And, yes, it needs to avoid a bidding war with News Corp. for Yahoo. And if AOL goes to Google [Google has flirted with AOL ever since the former went public], we'll soon see the online world divided between two iconic technology titans. If this really is a scale game, then it's a game only the supersized can play.
Sure, the "creative disruption" for which Silicon Valley is known will undoubtedly change the game at some future date. But, for now, there is an immediate need: More than $400 billion in global advertising is looking to make sense of online media, and no garage-based startup, no matter how visionary, can meet such high-volume needs. For the foreseeable future, it will be the reigning behemoth of the PC operating system vs. the emergent giant of the online world, competing for online consumers with resources of gargantuan proportions.
Who wins? Even with Microsoft's dramatic move, the answer is clear. It's a face-off, for sure, but it's still advantage, Google.
credited by: BusinessWeek.com
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