Google still thinks it can change China

After all the posturing of the past few weeks, Google CEO Eric Schmidt apparently still thinks that his company can change China.

In comments at the World Economic Forum in Switzerland, Schmidt continued to soften his rhetoric toward the government of China, which Google all but accused of orchestrating a cyberattack that resulted in the theft of intellectual property. "We like what China is doing in terms of growth...we just don't like censorship. We hope that will change and we can apply some pressure to make things better for the Chinese people," Schmidt said, according to a report in The Wall Street Journal.

Google is trying to determine the future scope of its presence in China. Two weeks ago it declared that unless Google was allowed to offer an uncensored search engine in China, it would shut down its existing censored search engine and would consider pulling out of China entirely. Since then, Google has appeared to try and find middle ground between itself and the Chinese government.

"We like the Chinese people. We like our Chinese employees," Schmidt said last week on Google's fourth-quarter earnings call. "We remain committed to being there." On the same day, however, Secretary of State Hillary Clinton praised Google for standing up against censorship and told Internet companies that they have a "shared responsibility" with the U.S. government in ensuring free access to the Internet for the world.

It seems unlikely that Google's ultimatum really will change Chinese censorship laws, but stranger things have happened. Google is believed to be discussing its options in China, which could involve maintaining a software-development or research presence even if Google.cn disappears.

by Tom Krazit
January 29, 2010 11:03 AM PST

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Microsoft's bottom line gets a Windows 7 boost

With a boost from the release of Windows 7, Microsoft on Thursday said that its quarterly revenue topped $19 billion as the company sold a record number of copies of its operating system.

The software maker said it earned $6.66 billion, or 74 cents per share, on revenue of $19.02 billion for the three-month period that ended December 31. Those results included revenue deferred from the prior quarter, as the company was preparing for Windows 7 and offering free upgrades to those who bought Windows Vista-based computers. Excluding the deferred revenue, Microsoft said it had revenue of $17.31 billion, and diluted earnings per share would have totaled 60 cents per share.

"Exceptional demand for Windows 7 led to the positive top-line growth for the company," chief financial officer Peter Klein said in a statement. "Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth."

Chief Operating Officer Kevin Turner touted the record quarter for Windows unit sales, spurred by the Oct. 22 launch of Windows 7. "We are thrilled by the consumer reception to Windows 7 and by business enthusiasm to adopt Windows 7," he said in a statement.

The company said that through the end of December it had sold more than 60 million Windows 7 licenses, which it said made Windows 7 the fastest selling operating system in history.

In October, Microsoft reported better-than-expected sales, also boosted by stronger demand for Windows.

The company said overall PC sales grew 15 percent to 17 percent in the quarter, although that was led by a 20 percent growth in consumer sales as the business market remained roughly flat. The market for new servers remained weak, down slightly year over year, although Microsoft's server and tools business unit managed to grow revenue 2 percent as compared with a year ago.

Microsoft's online unit saw its revenue dip 5 percent, led by a 2 percent drop in online advertising, although the company noted that its Bing search engine continues to gain market share.

The Microsoft Business Division, which includes Office, saw sales off 3 percent, perhaps as customers await this year's launch of Office 2010.

On the Xbox side, Microsoft said it sold 5.2 million consoles during the quarter, down 13 percent from a year ago, leading the entertainment and devices unit to post a double-digit decline in revenue.

The company didn't give a full forecast for the coming quarter, saying it would have more to say on a 2:30 p.m. PST conference call. It did tell analysts to expect operating expenses for the full fiscal year ending June 30 to total $26.2 billion to $26.5 billion.

Here's a chart of how each of Microsoft's individual business units performed:

Update 2:40 p.m. PT: On its conference call, Microsoft executives said that essentially all of the company's growth came from the consumer side of its business. Business spending stabilized some in the quarter, but is not yet seeing growth, Microsoft said.

Netbooks were about 11 percent of the market, roughly flat with both the prior quarter and a year ago. Microsoft said that 90 percent of those devices were running Windows, with Windows 7 accounting for "well over half of that."

2:45 p.m. PT: Microsoft executives "continue to be hopeful" that the company's Yahoo search deal will be approved by regulators early this year. The software maker said that it cut 800 jobs during the quarter and that its staff levels are down 8 percent from a year ago.

2:50 p.m. PT: Looking forward, Microsoft said that it sees some reasons to be optimistic.

"Heading into 2010, we are encouraged by the possibility of improving market conditions," Klein said, as well as by new products like Project Natal and Office 2010.

The company also says it expects some improvements over the next two quarters in server shipments, which have been declining for several quarters. The company said it also sees a pick-up in online ads. "The outlook for online advertising appears to be improving," Klein said.

by Ina Fried
January 28, 2010 1:11 PM PST

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Apple unveils $499 tablet with AT&T data plans

AP – SAN FRANCISCO – Apple will sell its newly unveiled tablet-style iPad starting at $499.

Apple CEO Steve Jobs shows off the new iPad during an event in San Francisco, Wednesday, Jan. 27, 2010. (AP Photo/Paul Sakuma)

The iPad resembles an iPhone, but larger. Apple will sell some iPad models with data plans from AT&T, with no contract required.

Apple Inc. will have to convince consumers, many of whom already have Internet-connected phones, computers and TVs, that they’ll want to pay that much for such a device, when many small, lightweight “netbooks” cost less than $400.

CEO Steve Jobs says the iPad will be better for reading books, playing games and watching video than either a laptop or a smart phone.

The initial price is likely to drop. Apple sold the first iPhone for $599 but slashed the price to $399 after a few months, upsetting early buyers.

Apple unveils iPad tablet with onscreen keyboard

AP - SAN FRANCISCO – Apple CEO Steve Jobs has unveiled the iPad, a tablet-style computer that resembles the iPhone, but larger.

"It's so much more intimate than a laptop and so much more capable than a smart phone," Jobs said Wednesday at the device's highly anticipated debut in San Francisco.

Apple had kept its "latest creation" under wraps, though many analysts had corrctly speculated that it would be a one-piece tablet computer with a big touch screen, larger than an iPhone but smaller than a laptop.

Jobs demonstrated how the iPad is used for surfing the Web with Apple's Safari browser. He typed an e-mail using an on-screen keyboard and flipped through photo albums by flicking his finger across the screen.

The CEO says the iPad will also be better for reading books, playing games and watching video than either a laptop or a smart phone.

No price or information on availability was immediately announced.

Now Apple will have to convince consumers, many of whom already have Internet-connected phones, computers and TVs, that that's the case. Tablet computers have existed for a decade, with little success.

Shares in Apple fell $4.65, or 2.3 percent, to $201.29 in afternoon trading Wednesday. The Cupertino, Calif.-based company's shares have more than doubled over the past year, partly on anticipation of the tablet computer.

Philadelphia Geeks On Call Owner, Guy Dunn Makes Headlines

Below is an exerpt from "A Cup of Cappuccino for the Entrepreneur's Spirit Volume II"

The Idea Guy - Guy Dunn
When I was a young boy of eleven, my dad worked in New York’s garment district dispatching people for his employers. Although he was a very driven man and was making a lot of money for other people, my dad was bringing home a pittance. He soon realized his situation and didn’t like it one bit, especially since he had five children he wanted to send to college. You see, my dad grew up poor in Brooklyn and never went to college, but he had a dream that he could provide the opportunity of higher education to his children and to his nieces and nephews.

My dad decided he’d rather make money for himself than for his employer, so he quit his job and started his own business, Hour Power. This unskilled labor employment agency lasted about two years until my dad noticed many of the jobs he received were for cleaning offices. At this point, he folded Hour Power into Dunn and Sons Maintenance, a janitorial business owned jointly with one of his brothers and one of his sisters. He always said, “Office cleaning is one business that will never go away.”

Through relationships he developed, he became aware of the federal Small Business Administration 8(a) program. This program sets aside government contracts for companies owned and operated by disadvantaged individuals. SBA 8(a), as it is known, was geared toward minorities in the 1970s and my dad took full advantage of it. He became a star in the program and within a few years was grossing two million dollars annually.

By this time, I was in high school and all my brothers and sisters and many of my cousins worked in the family business. Growing up during this period meant we all worked from a young age. You name it, we cleaned it: offices, factories, stores, and construction sites. I enjoyed working; I liked making my own money and I loved the independence it gave me. Unlike some fathers, my dad didn’t give us an allowance; he allowed us to work and earn our money. I always respected him for that.

During my senior year, I was in a class called “distributive education.” Through this program I got a job working as a teller at a local bank. I worked there for about one year and, although I liked it, I didn’t enjoy having other people control my professional life. It was then I decided I was going to own a business. I knew it meant a lot of hard work, but I also knew the level of independence it provided. It was then I started to plan.

After high school, I decided I was going to Morehouse College. In my youthful arrogance, I applied only to Morehouse and nowhere else—it was risky, but I was confident they would never turn me down! I also knew going in that I would graduate with an accounting degree, work for my dad for a couple of years, and then start my own business. And that is what I did. When I came out of college in four years with my accounting degree from Morehouse, I worked under my brother as Assistant Controller for Dunn and Sons.

By this time the company was making about five million dollars annually and I learned a lot, including how to juggle priorities. In small businesses there are ebbs and flows in the cash flow cycle and they can make or break a business. My job was to monitor the cash flow on a daily basis to determine who to pay. I had to anticipate payroll and payable needs and then coordinate them with receivables and our line of credit. To me it was great and I loved the challenge. I developed spreadsheets to manage the process and enjoyed the science of it. I was enamored with creating formulas and projections that I monitored to help run this million-dollar business.

While working in my dad’s business, I also had my own businesses. I started my first venture, Positive Image Resumes, with a friend. With the invention of desktop computers, I saw an opportunity: people needed resumes, they needed them on the fly, usually in quantity, but they didn’t have the equipment to make it happen. We decided to purchase a couple of computers and provide a resume writing and printing service. We each chipped in from our savings to buy computers and supplies. It was a small venture and while it didn’t make us rich, it allowed us to keep a few dollars in our pockets.

Around this same time I was dabbling in real estate and started another business with some of my father’s friends in Philadelphia. I had more ideas than time. One could say I was already a serial entrepreneur. One of my most successful projects began as a cleaning business in Philadelphia. Marion Scott and his wife wanted to grow their company through government contracting.

Since my dad was so successful in this area, he suggested I go to Philly to work with the Scotts. We wanted to replicate the success my dad achieved in northern New Jersey. Our journey began in the living room of the Scott’s house as we launched Scott and Sons Maintenance.

Like my father before me, I went to the Small Business Administration to apply for the 8(a) program. Through a friend of a friend of my father’s, we were ushered through the process of getting into the program. This connection at the SBA proved to be a great asset to us. He helped us get into agencies and advocated for us. I’m sure if we didn’t have him, or someone like him, on our side we wouldn’t have achieved the success we did. This experience proved to me at an early age that success largely depends on relationships and how you work them to your advantage.

We grew the business from nothing to eight million dollars within nine years. We became one of the fastest growing companies in the Philadelphia region by listening to those who helped us, paying attention to our customers’ needs, and learning from the mistakes of others.

I was the initial Controller because of my accounting background. I had a good handle on the financial aspects of a small operation and I put together proposals and bids for our contracts. I actually enjoyed the work because it was simple and concrete. I enjoyed manipulating the numbers to give various scenarios based on all of our available options and then deciding on winning strategies.

We won contract after contract based on our relationships, our proposal writing, and our reputation. I was proud to be a part of an organization that was considered one of the best. We were very conscious of our customers’ needs and made customer satisfaction our number one concern. If necessary, I believed it was worth taking a small loss on a job if it meant maintaining a relationship or keeping our reputation intact. This did not happen often, but it did happen.

One of the other lessons I learned was the value of diversification. We started in the office cleaning business, but we evolved into a labor management company. We had a janitorial operation, but we also had grounds maintenance and food service divisions. Diversification is another area where our reputation, as well as our contacts, worked to our advantage. We convinced government agencies we had the resources to manage large labor projects, even if it was in an area in which we weren’t experienced. We were always able to attract talent with the background and skills to run these different operations.

I also learned that financing is the key to managing growth and building a business. Here, I was able to utilize my accounting background and personal resources. In a pinch, my father had the ability to lend our company money. When we received our first large contract, I put the loan package together for our company. I shopped our package to twelve banks and was turned down at eleven of them. In spite of the numerous rejections, I always believed we would get the money we needed. Each time I kept going back and asking what I could have done to make our package better. Finally, one of the banks did give us a loan and from then on we were able to get money as we needed it. I was a whiz at making our statements look the way they needed to look to get to that yes answer.

After selling my interest in Scott and Sons Maintenance, I became a management consultant specializing in government contracting, small business management, and business financial consulting. I enjoyed taking small companies with less than $500,000 in sales and growing them to million dollar companies.

As a serial entrepreneur, I have continued to be involved in many business opportunities. I am an entrepreneur first and foremost. I have spent most of my adult life running, managing, or showing people how to run a business. I am thankful to my dad for his example and for my focus and drive to succeed. I have lots of ideas. I just wish I had the time to implement them all!

KEY SUCCESS FACTORS: Hard Work, Drive, Focus, Perseverance, Determination, Reputation, Customer Service, Networking, Ideas

RECOMMENDED BOOK: The Secret by Rhonda Byrne

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