Millions of Americans are spending more of their time these days in Azeroth, a land where they don't have to worry about economic crises. There, you can make a living as a tailor, healer or equipment vendor. And if you find yourself falling on hard times, you don't collect welfare. You go out and kill more gold-toting monsters.
Azeroth, the fictional world in which the massively multiplayer online (MMO) game World of Warcraft is set, is bustling with activity. Gearing up for the release of the second expansion pack, World of Warcraft: Wrath of the Lich King, which hits stores today, the game's 11 million players worldwide logged more hours in the virtual world than usual -- a phenomenon seen by developer Blizzard whenever an update is imminent.
Activision Blizzard, the parent company that lost more than $4 billion in market value in just one week last month, is looking for a huge boost from the update to its best-selling title. "Historically, recessions have kind of affected us less -- not that we're unaffected," said Rob Pardo, Blizzard's executive vice president of game design. "But I think gaming, in particular, has a lot of value for the money."
The new version adds a slew of original items and quests for players to complete, as well as upping the maximum level a character can achieve, from 70 to 80.
One might think the U.S. economic snowstorm would cause users tight on money to cut the $15 monthly fee from their budgets faster than ...
EBay Inc. posted a third-quarter profit today that beat analysts' forecasts. The online auction giant reversed a loss from the same period a year earlier, when it took a big charge stemming from its acquisition of telecommunications company Skype.
EBay earned $492 million, or 38 cents a share, compared with a loss of $936 million, or 69 cents a share, a year earlier, when it took a $1.4-billion write-down for Skype. Excluding certain items, EBay said it would have made $592 million, or 46 cents a share, in the quarter. Analysts were expecting 41 cents a share.
Revenue grew 12% to $2.12 billion, a bit lower than anticipated. Analysts were expecting revenue of $2.13 billion.
But EBay warned that its full-year revenue would fall below its previous forecast as the company attempts to revive growth in its online auction business.
Shares fell 14% in regular trading to $15.33 on fears that the deepening recession would hammer EBay's online auction business. Similar concerns hit online retailer Amazon.com Inc., which fell 13% to $48.72.
EBay's stock has sold off sharply in recent months. The San Jose company is in the midst of an overhaul. Last week EBay warned that third-quarter revenue would be at the low end of a previous forecast of $2.1 billion to $2.15 billion and that it planned to cut 10% of its staff.
"We believe that macro weakness will continue to crimp consumer demand," Youssef Squali of Jefferies & Co. wrote in a research note Tuesday.
Chief Executive John Donahoe is trying to shake up the business to catch up with rival Amazon.com, sometimes making moves that have riled online sellers.
He said today that he was overall pleased with EBay's performance in light of the "very challenging external environment" that he expects to continue into the fourth quarter and beyond. "These are turbulent times for which no one has the perfect playbook," he said. He also said turmoil in the markets was having an effect on consumer spending and that EBay was feeling "that impact across all of our platforms."
-- Jessica Guynn
Photo: EBay CEO John Donahoe. Credit: Saul Loeb / AFP/Getty Images
Against the backdrop of an ailing economy, Internet auction house and retailer EBay said today it would lay off 10% of its global workforce, or about 1,000 employees and several hundred temporary workers, in an effort to shore up its businesses. EBay also said it plans to spend about $1.3 billion on acquisitions to pump up its online payment and classified advertising businesses as it tries to brace itself for the spreading financial crisis.
Shares fell as much as 8% in early trading to their lowest level in more than five years. Investors are concerned that EBay's online auction business is vulnerable as consumer spending declines, the U.S. housing market slumps and fuel prices remain high. The auction business has already faced slowing growth over the past few years. Chief Executive John Donahoe warned that economic weakness and the stronger dollar were affecting Ebay.
The San Jose company said the move to cut its 15,000-person work force was unrelated to the potential slowdown in e-commerce. Instead EBay is trying to make its business more competitive in the face of declining profits and stagnant growth.
EBay said it would take a restructuring charge of as much as $80 million in the fourth quarter. It will also eliminate open positions.
It also said it would hit the low end of its revenue forecast of $2.1 billion to $2.15 billion, but exceed the high end of its earnings forecast range of 39 cents to 41 cents per share, before certain items. The company had previously said it would report earnings between 30 cents and 32 cents a share. It will release its earnings on Oct. 15.
EBay had been the subject of layoff rumors for weeks.
The company also announced that it would buy PayPal rival Bill Me Later, an online payments firm based in Timonium, Md., for $945 million in cash and stock. It will combine Bill Me Later with ...
Call it a big win for online auctioneer EBay. The San Jose company announced today that Netscape Communications co-founder and all-around golden geek Marc Andreessen had joined its board of directors.
In a statement, EBay Chief Executive John Donahoe said Andreessen's insights would be invaluable as the company seeks to "drive further innovation on our platform, invest in growth opportunities and develop technology that will further benefit our customers, build powerful communities and enhance e-commerce."
Translation: EBay is counting on Andreessen's mojo to help outmaneuver Amazon and Google, which have been siphoning some of its merchants. Things are only bound to get tougher with the economy preparing for what Andreessen last year predicted would be a financial "nuclear winter."
Andreessen, who through a representative declined to comment, pioneered today's Internet as the co-creator of the first widely used browser. He pulled off another major coup with Opsware (formerly known as Loudcloud), which he sold to Hewlett-Packard for more than $1.6 billion in 2007.
He's currently working on social networking site Ning. He's also a widely followed blogger and investor. He has invested in Digg, Del.icio.us, Twitter, Qik, LinkedIn, Meebo and Scribd, among others. Earlier this year, he joined the board of social networking phenom Facebook.
-- Jessica Guynn
Andreessen photo by Randi Lynn Beach / Special to The Times
If the Wall Street meltdown wasn't depressing enough, Google chairman Eric Schmidt and founder Sergey Brin fielded questions about the state of the Silicon Valley economy Wednesday. Their conclusion: Not so good.
And it's not just that the whole Web 2.0 thing is starting to seem played-out. A malaise has been creeping into the high-tech sector.
Sources of funding for start-ups have been drying up. Major companies, including Google, have seen their once soaring shares decline (even after rising nearly 5% today, the Nasdaq is down 17% in 2008). Hewlett-Packard and others are laying off thousands of employees. Nielsen Online said today that online banners and other display ads, lifeblood for many Web companies, declined 6% in the first half of the year over the same period last year, as financial services companies in particular cut back.
And this week, people are expecting more layoffs at EBay -- as many as 1,500 folks. It all began with an article in Barron's on Monday that cited a report from a Colorado investment research firm, suggesting that EBay would cut 10% of its 15,000 employees. Wedge Partners' Brian Blair and Ryan Hunter wrote that the company's business was "deteriorating."
Of course, EBay doesn't comment on rumors or speculation. And many analysts are bullish on the moves by Chief Executive John Donahoe, who took the reins from Meg Whitman in March, to shore up the San Jose auction company's business. But Wedge Partners is giving EBay a low bid of confidence. A key factor will be the performance of a new search platform the online auction powerhouse is rolling out soon, Wedge said.
There is no question that EBay has had its share of challenges this year. And it may need to trim its workforce, analysts say. Trouble is, they say, EBay is probably not alone.
-- Jessica Guynn
Photo: EBay Chief Executive John Donahoe. Credit: EBay
There are lots of great things about shopping online: You don't have to elbow through crowds during sales, you don't have to try things on in stuffy dressing rooms and, for once, you get snail mail that's not bills or junk.
But there are some downsides as well, especially for the brand-obsessed: It's sometimes easy to get swindled into buying knock-off products.
Anyone who's tried to buy designer bags or jeans online knows that no matter how many times a seller assures you the goods are authentic, they're often not.
Lucky for you, there are people out there like Chris Johnson who troll the Internet looking for the people selling fakes and prosecuting them. Read the full story about these fashion sleuths for more details about how he finds the knock-offs online and in stores, and what he does when he finds them.
-- Alana Semuels
Photo: Chris Johnson with a pair of fake True Religion jeans. Credit: Barbara Davidson / Los Angeles Times
Tonight is Republican vice presidential candidate Sarah Palin's big moment at the GOP convention, when the nation finds out if she's ready for prime time. But the warm-up act includes two powerful women from the technology industry who know how to handle the spotlight (and a wireless microphone) -- Meg Whitman and Carly Fiorina.
As our colleagues Maeve Reston and Noam Levey reported today, Whitman, the former chief executive of EBay, will take the stage in St. Paul, Minn., tonight to speak about the economy and energy. Then Fiorina, the former CEO of Hewlett-Packard, will speak about what the first term of a McCain presidency would look like.
Whitman and Fiorina are strong backers of McCain. Whitman is co-chair of McCain's campaign, while Fiorina is victory chairman for the Republican National Committee. Both have been mentioned as potential Cabinet secretaries in a McCain administration, and their names appeared on lists of potential running mates before Palin was selected.
For Whitman (pictured above getting close to McCain), the 10-minute speech could help launch a political career. She told the San Jose Mercury News that she'll talk about McCain's plan to cut government spending and lower taxes. She'll also discuss what she called "our generation's moon shot" -- ending the nation's dependency on foreign oil. Her decade leading EBay has made her popular at the convention among users of the auction site, she said.
"They recognize me, and come up and say 'I'm an EBay seller,' or tell me 'I bought my car on EBay,' '' Whitman said.
There has been much discussion of the American dream of late. Depending on who you ask, it is "slipping away" or possible to achieve only if you are a wrestler. But if you ask EBay, the American dream is alive and well. Why? Because a seller just reached 1 million feedbacks on the popular auction site.
For those of you who have never tried to earn some quick cash by selling your junk on EBay, feedback is one of the ways you can tell whether sellers are trustworthy. Once you buy something from someone, you can rate that seller. The seller then has a number by his name showing how many people have rated him and what percentage rated him positive.
Now, Jack Sheng, a El Monte business owner, has garnered 1 million feedback ratings with two different accounts on EBay: everydaysource and accstation. They both sell consumer electronics. Sheng started the company, Eforcity, eight years ago out of his garage, selling things mostly on EBay. EBay says Eforcity makes $30 million a year, and Sheng says he has 180 employees with offices in El Monte, China and Hong Kong.
"It's really about the American dream," EBay spokeswoman Wendy Sept said.
If you're not sure how reaching 1 million feedbacks on EBay relates to ...
Google, EBay and Yahoo have gotten a big boost from a weak U.S. dollar. But the greenback comeback could spell trouble for these Internet giants.
So says Sanford C. Bernstein analyst Jeff Lindsay in a research note today. "Currency rates have had a significant positive impact on reported revenues for U.S. Internet companies over the last few quarters," he wrote. But this month the dollar started to gain ground against most other major foreign currencies.
Obviously, any company with significant international exposure could be at risk. Consider Hewlett-Packard: Last week it reported that its fiscal third-quarter revenue rose 10.5% from a year earlier to $28 billion, but without international currency translation, revenue grew at only half that rate. In fact, in a note published earlier this month, Bernstein analyst Toni Sacconaghi said the falling dollar had given a "material boost" to revenue at U.S. technology companies over the last two years. HP, IBM and Sun Microsystems all generate more than 60% of their revenue outside the U.S.
Likewise, Internet companies have benefited from a weak dollar, reducing spending overseas and lowering tax rates. Also, Internet companies have a higher proportion of their costs in dollars and more of their revenue in foreign currencies.
Should the almighty dollar continue to restore its might, say by another 10% by the end of 2009 (Lindsay's most pessimistic scenario -- pessimistic as far as Internet companies go), valuations could slip by 8% at EBay and 13% at Yahoo.
Why does the takeover-battered Yahoo get hit so hard? About 30% of its revenue comes from overseas, which is less than its peers, but Yahoo is the most vulnerable because of its Internet assets in Asia. The good news for Yahoo is that if the dollar starts to slide again, it will be in line for the biggest boost, Lindsay says.
And Teflon-coated Google? It gets more than half of its revenue from overseas but isn't troubled by currency movements because it's just so darn profitable.
The case of the rusty, broken-down Porsche has led to a big court ruling. The 9th Circuit Court of Appeals ruled today that EBay sellers in other states aren't bound by California's consumer protection laws when they sell to customers here.
Carol J. Williams writes that it's the latest "buyer beware" message sent by courts regarding online shopping.
The dispute began three years ago when Paul Boschetto of San Francisco offered the winning $34,106 bid for a 1964 Ford Galaxie 500 XL auctioned by Wisconsin sellers who described the vehicle in their EBay ad as "in awesome condition, not restored, rust free chrome in excellent condition, recently rebuilt and ready to be driven."
When the car arrived, according to Boschetto's testimony to the federal district court, the engine wouldn't start and the car was rusty and dented.
Boschetto contacted EBay and Hansing in a fruitless effort to rescind the purchase, then filed suit in federal district court alleging violation of the California Consumer Protection Act, breach of contract, misrepresentation and fraud.
Terapeak, a Canadian company that sells EBay auction data to online power sellers who want to pick the best times and days to sell their Hummel figurines, has created a nifty widget demonstrating the power of the Dark Knight. According to the widget, which tracks EBay sales for the last 30 days, Batman-related items outsold those of Superman and Spider-Man combined. The widget lets users compare the sales might of other superheroes and supervillains, both in the number of items sold and in the average selling price.
One snafu Terapeak ran into when it created the widget: Not all superheroes could be tabulated. Wolverine, for example, proved especially elusive. Searches for the hero's name also turned up mountains of souvenirs and trinkets from the University of Michigan Wolverines.
There was quite a turnout of high-powered women in technology at Fortune magazine's Most Powerful Women dinner in San Francisco on Thursday night.
Sheryl Sandberg, Facebook's chief operating officer and former Google exec (at right); Gina Bianchini, chief executive of social network Ning; Sukhinder Singh Cassidy, head of Google in the Asia Pacific region and Latin America; EBay Senior Vice President Stephanie Tilenius; Catherine A. Lesjak, Hewlett-Packard's chief financial officer; Dina Kaplan, co-founder and COO of Blip.tv; and Ruth Kirschner, head of West Coast sales for Google and DoubleClick (also married to Fortune senior writer Adam Lashinsky, one of the few men invited).
The evening reaffirmed the presence of powerful women in the echelons of Silicon Valley at a time when there is rising concern that women have lost ground, with the recent ouster of Diane Greene as chief executive of VMware and the absence of any women at the helm of the top companies here. Silicon Valley lays claim to some pretty highly placed women who weren't at the event, such as Yahoo President Sue Decker, Oracle Chief Financial Officer Safra Catz and Hewlett-Packard Executive Vice President Ann Livermore.
Fortune magazine started its ranking of the world's most powerful women a decade ago. Fortune editor-at-large Patricia Sellers says it's now the magazine's second-biggest franchise after the Fortune 500. It began with a list topped by Carly Fiorina in October 1998 before she was crowned chief executive of HP the following July. At the time, Fiorina was "squeamish" about women being segregated in such a list, but "she has come around," Sellers said.
Sellers led a panel of three "rising stars" at San Francisco restaurant Jardiniere (the chef ditched judging "Top Chef" to cook for the occasion). The panel included Google's Cassidy, Lululemon Athletica Chief Executive Christine Day and Tilenius, who former EBay chief and technology trailblazer Meg Whitman had recommended by saying that Tilenius had run just about every part of EBay and could lead the entire company someday.
The trio talked about how they define power, balance their families and career ("The key to marriage is negotiation," Cassidy said); whether there is a narrower acceptable range of behavior for powerful women than for men; and how important their spouses have been to their ability to climb the corporate ladder and treasure important moments -- such as making it home for a daughter being crowned homecoming queen.
The message of the evening: Regardless of gender, great leaders are authentic. Tilenius said she was "in pain" watching the presidential campaign of Hillary Rodham Clinton. Tilenius wished that Clinton had campaigned more as herself than as a tough guy. Tilenius recalled a colleague once telling her during a leadership forum that he imagined her leaving the house every morning and donning a gladiator's suit. She realized she could be herself and still be a great leader.
Former White House (and EBay and Microsoft) cyber-security czar Howard Schmidt has joined what's being billed as the first international organization dedicated to fighting the increasing number of cyber-attacks against government computers.
Seeded with a $13-million grant from the government of Malaysia, the International Multilateral Partnership Against Cyber-Terrorism, or IMPACT (always need a snappy acronym, right?), is establishing rapid-response and training facilities, Schmidt and other leaders of the effort said in a conference call Wednesday.
Blue-chip advisors include Schmidt, Symantec executive David Thompson, Google technology evangelist and Internet architect Vint Cerf, and top researchers at such well-respected cybercrime-fighting firms as F-Secure and Kaspersky Lab.
IMPACT will start recruiting governments and private companies as members next week during a summit in Kuala Lumpur, Malaysia.
Symantec's Thompson said a majority of the computer attacks observed by his company, including espionage attempts and denial-of-service assaults, were against government-owned machines. Many such attacks originate overseas, making international cooperation a key to defense and analysis.
The IMPACT advisors cited past attacks on Estonia's infrastructure as the sort of crisis that the new body could help defend against with shared expertise, computers and software. Since 90% of the Internet's conduits are in private hands, major attacks against companies would also merit assistance, they said.
There are lots of great things about shopping online: You don't have to elbow through crowds during sales, you don't have to try things on in stuffy dressing rooms and, for once, you get snail mail that's not bills or junk.
There has been much discussion of the American dream of late. Depending on who you ask, it is "
The case of the rusty, broken-down Porsche has led to a big court ruling. The 9th Circuit Court of Appeals ruled today that EBay sellers in other states aren't bound by California's consumer protection laws when they sell to customers here.
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