Having spent nearly a decade convincing 8,500 restaurants to let people book tables online, OpenTable.com now aims to make doing that easier for those who leave home without making plans.
On Monday, Open Table Inc, a San Francisco-based company backed by venture capital money, plans to announce that people will be able to make quick online restaurant reservations over their BlackBerries and other mobile devices.
Chief Executive Jeff Jordan expects Open Table’s mobile site to be a hit among its target audience of “affluent, professional, time-constrained” diners who want to book a table while on the road, or away from their desktop computers.
“The company’s been around for 10 years, and for most of that time, has been maniacally focused on building out its restaurant network,” Jordan said in a recent interview.
That focus has paid off, with Open Table seating 3 million diners in May, Jordan said. That translated into $150 million in revenue for participating restaurants, the company said. A year ago, 2 million diners used Open Table in a month.
But the website, where people can check if their favorite eatery has a table free without calling, had only been improved cosmetically as Open Table has focused on selling computers fitted with its reservation software to restaurants, he said.
“We made a strategic decision to increase significantly our investment in the consumer-slash-website side of the business,” Jordan said.
The mobile feature is just one of many initiatives as Open Table tries to make choosing restaurants and booking tables at them more fun, useful and informative for people, Jordan said.
Steve Ballmer has been CEO at Microsoft Corp for eight years, but he will finally get to move into the corner office vacated by Bill Gates, the college friend who brought him to the company nearly three decades ago.
The pressure of leading the world’s largest software maker will only escalate in the wake of a bungled attempt to acquire Yahoo Inc, a move that forced the Web pioneer into the waiting arms of Microsoft’s archrival, Google Inc.
Adding fuel to the fire has been a lukewarm reception by customers for the company’s flagship product, Windows Vista.
“The pressure is certainly on,” said Alan Davis, analyst at investment firm D.A. Davidson.
For the first time in his career, the 52-year-old Ballmer, whose public histrionics often overshadow a sharp intellect and a gift for numbers, must shoulder the weight of Microsoft’s future without Gates, who stepped down on Friday from the company he co-founded to focus on philanthropy.
Their partnership was forged at Harvard University, where the pair formed an unlikely friendship: Gates, the middle child of a prominent Seattle family, and Ballmer, a Detroit native whose parents never went to college.
They both lived in a dormitory full of “anti-social math types,” according to Gates. Ballmer, outgoing and involved in many social clubs on campus, seemed to be a study in contrast to the aloof Gates, who preferred all-night programming sessions and poker games.
However, the pair shared a love of math and bonded over their reputations as energetic guys. To this day, they still engage each other in numbers games, calling it “math camp.”
American Express said Wednesday MasterCard will pay it as much as $1.8 billion to settle an antitrust lawsuit, as it warned credit losses may increase as business conditions deteriorate.
American Express (AXP, Fortune 500) had accused the Purchase, N.Y.-based credit and debit card processor of conspiring to stifle some banks from issuing its credit cards. Last year, the company reached a $2.7 billion settlement with Visa Inc (V). in a similar suit.
MasterCard (MA) confirmed that it agreed to make 12 quarterly payments of $150 million to American Express. The company plans to book a $1 billion charge related to the settlement in the current fiscal quarter.
"We are pleased to have reached a settlement that will enable us to keep our strong balance sheet intact," MasterCard Chief Executive Robert Selander said in a statement. He said the settlement was in the best interest of shareholders because it removed "the uncertainty, time commitment and expense of a prolonged court case."
American Express said it will receive about $800 million a year for three years from the two settlements, which total more than $4 billion.
Meanwhile, the lender warned that consumer credit is worsening faster than it had expected in June as the U.S. economy continues to weaken.
On Tuesday, the Conference Board reported that consumer confidence had fallen to its lowest level since 1992, as high energy prices and a worsening job market begin changing attitudes toward discretionary spending.
There are also indicators that more people are falling behind on credit card payments, even as the number of mortgages in some stage of foreclosure reach record levels.
"While it is too early to assess the impact of these indicators, the antitrust settlement we’ve reached with MasterCard provides us with a multiyear source of funds that should, among other things, help to lessen the impact of this weakening economic cycle," AmEx Chief Executive Kenneth Chenault said in a statement.
American Express shares fell 1.4% to $41.51 in premarket trading, while MasterCard shares rose 3.8% to $290.95.
BART announced Wednesday it will provide longer trains to accommodate large crowds expected to attend major weekend events in the Bay Area, including the Bay Bridge Series between the Oakland A's and the San Francisco Giants, and the Lesbian, Gay, Bisexual, Transgender Pride Parade and Celebration.
For baseball fans, longer trains and additional trains will be provided for games on both Saturday and Sunday being played at McAfee Coliseum in Oakland. Those attending the games can walk to the stadium from the Coliseum/Oakland Airport BART station.
Though trains will operate on a normal Sunday schedule June 29, additional trains will be provided before and after the Pride Parade and Celebration in San Francisco to help handle the large crowds who attend that annual event. The parade will begin at 10:30 a.m. at the corner of Market and Beale streets and at Eighth and Hyde streets. An attendant celebration from noon to 7 p.m. will be staged at San Francisco Civic Center.
BARTMobile, a miniature version of a BART train, will "march" in the parade for the fifth consecutive year.
"Both festivities are literally steps away from BART stations," BART Board President Gail Murray said in a statement. "You can access the parade from any of our
downtown San Francisco stations and the celebration is one short block from our Civic Center Station."
To help ease lines at ticket machines, BART personnel will sell flash passes and tickets at tables set up periodically on Sunday at the Coliseum/Oakland Airport station, Dublin/Pleasanton station and Civic Center station in San Francisco. BART officials suggest that riders buy round-trip tickets to also avoid lines on the way home.
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India's central bank raised interest rates for the second time this month and asked lenders to set aside more money as reserves to cool inflation running at a 13- year high.
The repurchase rate was lifted to 8.5 percent from 8 percent, and the cash reserve ratio to 8.75 percent from 8.25 percent, the Reserve Bank of India said in a statement issued in Mumbai today. The increase was the biggest since 2000 and followed a quarter-point rise on June 11.
Governor Yaga Venugopal Reddy is under pressure from the finance ministry to tighten monetary policy after record oil prices drove inflation to 11.05 percent in the week ended June 7. That may further hurt consumer demand and threatens to derail India's record 8.8 percent annual economic growth since 2003, the fastest after China among the world's major economies.
“The latest inflation reading was a shocker because of the nature of the oil prices pass-through,'' said S. Ananthanarayan, chief bond trader at Kotak Mahindra Bank Ltd., a Mumbai-based primary dealer that underwrites government debt sales. “They probably felt all the measures they've taken so far have been inadequate, and now they're playing catch-up.''
The central bank signaled it is prepared to keep raising interest rates if necessary to tame inflation.
Inflation Expectations
“In view of the criticality of anchoring inflation expectation, a continuous heightened vigil over ensuing monetary and macroeconomic developments is warranted to enable swift responses with appropriate measures as necessary, consistent with the monetary policy stance,'' the bank said in the statement.
India's 10-year bond yields climbed yesterday as high as 8.64 percent, the highest since 2001, before declining to 8.56 percent in Mumbai today. The rupee was little changed today at 42.965 per dollar.
Traders expect the rupee to rise from near a 14-month low to reduce the import cost of fuel, food and other products.
Finance Secretary D. Subbarao said on June 21 that monetary policy is the “first line of defense'' as the government tries to rein in prices before elections by May.
“High prices will most definitely result in aggressive monetary tightening, even at the cost of lower growth, making things all the more unenviable for the government,'' said Rohini Malkani, a Mumbai-based economist at Citigroup Inc. “With inflation likely to remain at elevated levels for the rest of the year, political parties have started positioning themselves for the next elections.''
Election Issue
India's inflation rate has almost tripled this year, eroding the popularity of Singh's ruling Congress party, which lost ground in nine of 11 state elections since January 2007. More than half of India's 1.1 billion people live on less than $2 a day.
Before today, Reddy had raised the repurchase rate eight times in the past 2 1/2 years and increased the cash reserve ratio seven times since December 2006 to slow money supply and cool inflation.
“A tight monetary stance will have to continue for another year to slow inflation to the desired level,'' said Rajiv Kumar, a former policy adviser in the finance ministry between 1992 and 1995 who is now the director of the Indian Council for Research on International Economic Relations. “Growth could come down to as low as 6.5 percent by 2010.''
Soaring Costs
Inflation is accelerating across Asia as crude oil and raw material costs climb, forcing governments from Indonesia to Sri Lanka to cut subsidies and let regulated fuel prices increase.
Singh increased retail prices of gasoline and diesel this month, joining China, Indonesia, Malaysia and Sri Lanka, as a near doubling of oil prices pushed up costs and eroded profits of refiners such as Indian Oil Corp.
“The Manmohan Singh government is squarely responsible for this dismal situation,'' the Communist Party of India (Marxist), the biggest ally of the government, said on June 20. “It cannot escape by blaming global inflation.''
Inflation is “a major political issue,'' said Tushar Poddar, an economist at Goldman Sachs Group Inc. in Mumbai, before the rate announcement. “There needs to be significant further tightening to arrest inflationary expectations, second- round effects and demand pressures.''
Strong Enough
China told lenders to set aside more money for a fifth time this year on June 7 to cool inflation that is close to a 12-year high. Banks must put aside a record 17.5 percent of deposits as reserves from June 25.
India has supported monetary policy steps with tax cuts to ease prices. On June 4 the government scrapped taxes on imports of crude oil and reduced duties on other fuel products, foregoing $5.3 billion of revenue to cushion consumers from high fuel costs.
“The RBI is essentially saying the economic fundamentals are looking strong and can bear higher interest rates,'' said Prasanna Ananthasubramaniam, a fixed-income analyst at Mumbai- based primary dealer, ICICI Securities Ltd. “Its main priority and concern is now to cool inflation.''
Japan's government may signal it will consider cutting corporate taxes in an effort to encourage more foreign investment into an economy expected to grow at the slowest pace in five years this year.
The government will review corporate taxes to help cut business costs, according to a draft of its economic and fiscal policy released last week. The final 2008 policy will probably be submitted to Prime Minister Yasuo Fukuda's Cabinet this month.
“The government recognizes the need to cut corporate tax to help improve Japan's competitiveness,'' said Mamoru Yamazaki, chief Japan economist at RBS Securities in Tokyo. “It will be tough to get public support because a company tax cut would reduce revenue and require increasing sales or income tax.''
Fukuda's first economic policy statement as prime minister comes as foreign investors urge Japan allow more foreign investment. European Union Trade Commissioner Peter Mandelson said in April that Japan is the developed world's “most closed'' market and needs to allow more investment from abroad.
The draft said the government will maintain its goal of balancing the budget by 2011, so that it can start reducing the public debt, which the Organization for Economic Cooperation and Development estimates stands at 182 percent of gross domestic product. To achieve this, the government needs to cut spending or find a way to increase revenue to fund social welfare costs.
Heizo Takenaka, economy minister under former Prime Minister Junichiro Koizumi, said in May that the government should lower corporate taxes by 10 to 15 percentage points to revitalize growth.
Tax Rate
Japan's effective corporate tax rate, which includes national and regional corporate taxes, is 40.7 percent, compared with 29.8 percent in Germany, 28 percent in the U.K., and 25 percent in China, according to the Finance Ministry.
A 5 percentage-point cut in Japan's corporate taxes would increase foreign direct investment by 12.7 percent in a year and add about 3.8 trillion yen to the economy over six years, according to Dai-Ichi Life Research Institute.
“Keeping the tax at this high level may prompt Japanese companies to go abroad while also making foreign companies stay away from Japan,'' said Toshihiro Nagahama, chief economist at Dai-Ichi Life in Tokyo.
The government will review the tax burden of companies and examine ways to broaden the tax base, the draft said. Only a third of companies pay corporate taxes in Japan, according to the OECD.
Broader Base
“There is considerable scope of base broadening,'' the OECD wrote in its April report on Japan. It said the drop in revenue from lower company tax would be limited by positive effects from increased investment and a larger corporate sector.
Foreign direct investment in Japan was about 3 percent of gross domestic product at the end of 2007, according to the Cabinet Office. The figure compared with 44.6 percent in England, 13.5 percent in the U.S. and 8.8 percent in South Korea.
Any policy concerning changes to taxation needs the approval of the ruling Liberal Democratic Party's tax panel. Members of the ruling LDP may block a tax cut, concerned it would be unpopular with voters after last July's Upper House election loss.
The government will also have to deal with opposition parties' objections to lowering corporate taxes because they control the upper chamber, said Naoki Minegishi, an economist at Shinkin Central Bank Research Institute in Tokyo.
“Even within the LDP, some legislators are advocating that the government try to boost economic growth first to boost tax revenue,'' Minegishi said on Bloomberg Television.
Lower Tax Revenue
Japan's tax revenue probably fell short of the government's 52.6 trillion yen ($488 billion) estimate last fiscal year as lower corporate profits reduced receipts, the Finance Ministry said this month.
“It's difficult to cut corporate taxes politically and economically when tax revenue is declining,'' said Susumu Kato, chief economist at Calyon Securities in Tokyo. “It will lead to criticism that the tax burden is unfair if the government cuts corporate taxes and raises the sales tax instead.''
The government will also study ways of encouraging companies to bring home profit earned abroad and review rules restricting foreign investment on the grounds of national security, according to the draft of the policy.
South Korea's government said this month that it will cut corporate taxes and expand tax breaks for companies investing in research and development to spur economic growth. The U.K. and Germany also cut corporate taxes this year.
“People need to understand that if corporate taxes aren't cut, Japan will sink,'' said Takehiro Sato, chief Japan economist at Morgan Stanley in Tokyo. “Japan should cut the taxes to the lower end of the 30 percent level.''
Rates on 30-year fixed mortgages have surged a tenth of a percentage point to a 9-month high on growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.42% with an average of 0.7 point in the week ending Thursday, up from 6.32% last week. Last year at this time, the 30-year loan averaged 6.69%.
The last time the 30-year fixed rate mortgage was higher was the week ended Sept. 6, when it averaged 6.46%, according to Eileen B. Fitzpatrick, a Freddie Mac spokeswoman.
"Fixed-rate mortgage rates continued to climb this week to the highest point in nearly nine months following the release of May’s consumer and producer price indexes, both of which showed stronger levels of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"Additionally, consumer prices rose 0.6% last month, the most since November 2007, and traders began to fully price in a Federal Reserve rate hike by the end of September, based on the federal funds futures market," he added.
For rates to stop climbing and start to ease, "we would have to see some settling of inflation pressures - notably a leveling, if not outright decline, of food and energy costs," said Keith Gumbinger, vice president of HSHAssociates.com, an online publisher of consumer loan information.
While inflationary pressure is pushing interest rates higher, it’s also pushing buyers out of the market and home prices down, said Gumbinger.
"Interest rates were about this level - give or take - last year, but home prices were considerably higher," he said. "Rates may not be lower, but your home prices may be lower."
The 15-year fixed-rate mortgage this week averaged 6.02% with an average 0.7 point, up from last week when it averaged 5.93%. A year ago at this time, the 15-year FRM averaged 6.37%. The last time the 15-year FRM was higher was the week ending Oct. 18, when it averaged 6.08%.
Five-year adjustable-rate mortgages (ARMs) averaged 5.89% this week, with an average 0.6 point, up from last week when it averaged 5.70%. A year ago, the 5-year ARM averaged 6.31%. This is the highest the 5-year ARM has been since the week ending Dec. 27, when it averaged 5.90%.
One-year Treasury-indexed ARMs averaged 5.19% this week with an average 0.6 point, up from last week when it was 5.09%. At this time last year, the 1-year ARM averaged 5.66%.
"The housing market still struggles. New construction of single family (1-unit) homes fell in May to the weakest pace since January 1991 and April’s starts had a downward revision," added Nothaft.
Brazilian central bank President Henrique Meirelles said policy makers are on the lookout for increases in consumer prices and are ready to raise interest rates further if their inflation target is threatened.
“The central bank is alert and ready to act,'' Meirelles, 62, said today in a Bloomberg Television interview in Sao Paulo.
Meirelles said he sees the need to cool consumer spending in Brazil after the annual inflation rate climbed to 5.58 percent in May, the fastest since January 2006, fueled by rising food costs. Policy makers raised the so-called Selic rate twice this year to 12.25 percent, saying an expanding economy may stoke more inflation.
Brazilian stocks fell for the first time in three days, led by banks and retailers, after Meirelles highlighted the threat of inflation. The Bovespa index of most-traded shares on the Sao Paulo exchange slid 949.17, or 1.4 percent, to 67,488.33 at 10:41 a.m. New York time.
Brazil's currency extended losses and was down 0.5 percent to 1.6157 per dollar. Meirelles said he's “concerned'' the real's appreciation will hurt the nation's competitiveness. The real has gained 11 percent this year against the dollar, the biggest advance among the 16 most-traded currencies.
The central bank ended two straight years of rate cuts last October as faster economic growth coupled with rising food prices started to fuel inflation. Brazil's economy grew 5.8 percent in the first quarter of this year after a 6.2 percent gain in the last quarter of 2007, the fastest pace in more than three years.
`As Long as Necessary'
“We took action, and basically we are saying that if it is necessary we will take action for as long as it is necessary,'' Meirelles said. “There's no doubt the moment requires attention and also action.''
The bank targets inflation of 4.5 percent, plus or minus two percentage points.
The eight-member board led by Meirelles will probably deliver a third half-a-percentage-point increase next month to cool demand and rein in inflation. Analysts covering the Brazilian economy expect the bank to increase the interest rate to 12.75 percent from 12.25 percent, according to a central bank survey of economists.
“Interest rate increases start to have an effect immediately,'' Meirelles said, adding the full effects of the increases will be felt at the end of this year or early in 2009.
Meirelles, a former FleetBoston Financial Corp. executive, is the only economic cabinet member to have stayed on the job since President Luiz Inacio Lula da Silva took office in 2003. Since then, Lula, 62, has replaced the Finance, the Budget, and the Foreign Trade ministers at least once.
Lula
The Brazilian central bank isn't independent by law and the president has authority to fire the central bank president.
“The head of Brazil's central bank hasn't changed because he is doing his job,'' Alexandre Lintz, chief-strategist with BNP Paribas in Sao Paulo, said in a telephone interview. “He has delivered low inflation rates and that's why he has so much support from Lula.''
Lula said on June 16 fighting inflation is a “priority.''
The real is up 120 percent against the U.S. dollar since January 2003 as exports almost tripled in the same period on higher commodity prices.
Bank of England Governor Mervyn King may be forced to explain to the government why he no longer has the scope to cut interest rates to stave off a recession.
Inflation probably reached 3.2 percent in May, the most since the measure's inception in 1997, the median of 39 forecasts in a Bloomberg News survey show. A rate that high requires King by law to write a letter of explanation to the Treasury. The statistics office will publish the data tomorrow at 9:30 a.m. in London.
King's challenge is to protect the bank's inflation-fighting credentials as oil and food costs rise at a record pace and economic growth stumbles. The economy is heading for its worst performance since 1992, according to forecasts released today by the Confederation of British Industry.
“People are losing faith in the Bank of England's ability to keep inflation low,'' said Michael Saunders, chief Western European economist at Citigroup Inc. in London. “That's why the idea of cutting rates is off the agenda. Central banks have this problem in common, but in the U.K. it seems particularly large.''
At 5 percent, Britain's interest rate is the highest in the Group of Seven industrialized nations. U.K. inflation is also lower, at 3 percent in April, compared with 3.9 percent in the U.S. and 3.6 percent in May for the euro region.
European Central Bank President Jean-Claude Trichet said this month that policy makers may raise the benchmark interest rate in July from the current 4 percent.
Inflation `Nervousness'
“There's quite a lot of nervousness that the Bank of England will `do an ECB' to establish credibility,'' said Citigroup's Saunders. “You can't rule out that they will accept more economic downside to control prices.''
The U.K. economy will grow 1.3 percent next year, the least since 1992, compared with a previous prediction of 1.7 percent, according to the CBI, Britain's biggest business lobby. King has said that there may be a “quarter or two of negative growth.''
“The main reason'' for lowering the forecast “is that the oil price has continued to rise strongly,'' said Richard Lambert, the CBI's director general.
Crude oil prices surged to a record above $139 a barrel on June 6 and consumer group Energywatch says gas prices for U.K. households more than doubled since 2003. With the cost of living rising, Royal Dutch Shell Plc tanker drivers went on strike on June 13 for a 13.2 percent pay increase.
Support for Prime Minister Gordon Brown's Labour Party sank to the lowest level since polling began in 1943, YouGov Plc said May 30. Seventy-three percent of people surveyed predicted their financial situation will worsen in the next year, the poll showed.
`Feeling the Pinch'
“People are feeling the pinch,'' said Peter Kellner, YouGov's president. “The government's drop has coincided precisely with the collapse in consumer confidence.''
Consumers anticipate inflation will reach 4.3 percent in the next year, the highest reading since at least 1999, the central bank reported last week, citing a May survey by GfK NOP.
“I feel angry about bills going up when I know it affects the children, when we can't afford things they want,'' Wendy Game, a 45-year-old housewife from Wales, said in an interview. “What we get doesn't cover it.''
Inflation may persist above the 2 percent target if increases in price expectations get built into higher wages, the central bank's quarterly bulletin said today. It said that higher perceptions of prices were “more than can be explained by movements in the official headline inflation measures alone.''
Bean's View
While Chief Economist Charles Bean wrote that investors' perceptions of longer-term U.K. inflation “have not increased much,'' bond yields show they are the highest in the G-7.
The U.K. 10-year breakeven rate, or the difference between yields on inflation-linked bonds and nominal bonds, surged to 4.05 percentage points June 13 from as low as 3.2 points at the beginning of March. The U.S. rate was 2.53 points last week.
King has cited higher price expectations as a constraint to lowering rates. The bank will publish minutes on June 18 showing how policy makers voted this month, when they left the benchmark interest rate unchanged.
Brown, as finance minister in 1997, designed the law requiring the bank's governor to write a letter if inflation strays more than a percentage point away from the target. That has happened only once, after it touched 3.1 percent in March 2007.
If inflation exceeds 3 percent, the bank will publish King's letter an hour after the data release. He will have to send one every three months if the rate continues to stay above that level. King predicts that will happen for “several quarters.''
“This little piece of theater draws more attention to inflation,'' said Ross Walker, an economist at Royal Bank of Scotland Group Plc in London. “If we get a rate move this year it will be a hike.''
Great Gulf Group Ltd. of Canada has sold the land for its cancelled, 51-story 1401 Lawrence condo project in downtown Denver for $8.4 million, according to Denver County real estate records.
The Toronto developer sold the property, as Great Gulf Colorado LLC, to Renshan LP.
The property is located at 1401 Lawrence St., across from the Colorado Convention Center.
Great Gulf decided not to build the $165 million, 145-unit 1401 Lawrence high rise on June 5 because of poor pre-sales. Had the building gone forward, it would have been the developer’s first U.S. project, and one of downtown Denver’s tallest residential buildings.
"Great Gulf has not achieved the requisite presales to go forward with the 1401 Lawrence project and, regrettably, is cancelling the project," the company said in a statement.
Great Gulf hoped to sell 30 percent to 50 percent of the project’s units before the start of construction. The developer hoped to break ground this year, and complete the project in 2010.
When serious marketing of the project started in June 2007, starting prices for the 1401 Lawrence units were in the mid-$500,000s. Units were going to range from 1,200 to 1,700 square feet in size.
The developer opened its 5,000-square-foot marketing center at the corner of 15th and Lawrence streets in fall 2007.
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