Wednesday, May 09, 2007

Writings on Starbucks Cup Upsets Customer

Controversy is brewing around a religious quote printed on a Starbucks cup, which has turned at least one customer off from the brand.

An Ohio woman was offended by one of hundreds of comments submitted by customers and celebrities that appear on the cups as part of Starbuck’s The Way I See It program. The program is meant to spark discussion and get people thinking about a variety of topics, including religion, the company said.

The offending quote reads, "Why in moments of crisis do we ask God for strength and help? As cognitive beings, why would we ask something that may well be a figment of our imaginations for guidance? Why not search inside ourselves for the power to overcome? After all, we are strong enough to cause most of the catastrophes we need to endure."

The comment was made by Bill Scheel, a Starbucks customer from London, Ontario, who describes himself as a "modern day nobody."

The Ohio woman, Michelle Incanno, told news outlets that she would not return to Starbucks.

Starbucks has been printing comments from celebrities, notable figures and customers on its cups since 2005. It has collected more than 250 writings since the initiative launched. By yearend, the company expects to feature about 300 different comments.

"Our goal with The Way I See It is to promote a free and open exchange of ideas and thoughts on a wide variety of topics," Starbucks spokesperson Tricia Moriarty said. "We think this tradition of dialogue and discussion is an important facet of the coffeehouse experience."

The fact that Scheel's comments are sparking dialogue "is the original intent of the program," she added.

A disclaimer on Starbucks.com/WayISeeIt says the authors' opinions do not necessary reflect those of the company.

"Starbucks frequently receives feedback on many of the quotes as people express their thoughts and views on the different quotes and contributors," Moriarty said. "We highly value all of our customers and never wish to offend anyone. The objective of the program is to encourage open and thoughtful discussion."

This particular quote may have gained a head of steam because numerous media outlets picked up on it.

Despite the negative feedback, Starbucks has no plans to remove any of the writings from its cups, Moriarty said.

Only a few comments cover religion. But those that do have different points of view, Moriarty said.

For instance, musician Mike Doughty, wrote, "It's tragic that extremists co-opt the notion of God, and that hipsters and artists reject spirituality out of hand. I don't have a fixed idea of God. But I feel that it's us—the messed-up, the half-crazy, the burning, the questing—that need God, a lot more than the goody-two-shoes do."

Others have a humorous tone. A quote from Joseph Palm, a Starbucks customer from Oshkosh, Wisconsin, said, "Scientists tell us we only use 5% of our brains. But if they only used 5% of their brains to reach that conclusion, then why should we believe them?"

Customers can share their thoughts about the cups or submit a quote of their own to Starbucks.com/Retail/TheWayISeeIt_Comments.asp. Starbucks said its posts responses on its letters to the editors section on the Web site.

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High school students capture assault on video

David Pescovitz: Cyclistpunch A group of Toronto high school students on a field trip captured footage of an auto driver attacking a bicyclist who reportedly stopped in front of him at a yellow light. The interesting thing is that the students were out with videocameras investigating the notion of "public and private space" in their city. Toronto CityNews has the video online. Link (Thanks, Jess Hemerly!) (notice the amateur footage taken by video cameras, to be captured by videocameraphones soon)

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Hollywood is burning (yet again) - UPDATED, video.

5:06pm: Helicopters are circling overhead where I am right now, not too far from an ongoing 200+ acre fire in Griffith Park, a little bit east of the Hollywood Sign in Los Angeles. Flames are still live, and there's talk of arson

an arson suspect in custody.

Image courtesy of Flickr user Swingsha. Bear in mind that this was shot from a number of miles away, over the hill, in Burbank. You can see the fire/smoke plumes from just about anywhere in LA right now.

LATIMES blog has good updates.

It started as a small brush fire in the park, at about 120pm. I could see the smoke plume all the way from the NPR studios in Culver City a few hours ago. Driving from there towards this site, north on Western through Koreatown (a few miles away), I could see very large flames and clumps of black and brown smoke above the chaparral hills. It's huge. And it's crazy hot (100 F), gusty-windy, and dry out today, unseasonably so.

Humans have been evacuated from the LA Zoo and the Autry Museum (both inside the park), but I understand the more fragile critters inside the zoo (about 1,000 of 'em!) are instead staying put, under protection. No word on the ponies and the carousel, and the teeny tiny steam engine ride.

The guys at blogging.la have a number of related items up. 1, 2, 3, 4, 5.

BoingBoing pal Michael P. points to more photos on Flickr, and says,

We must go free the animals at the zoo NOW.

(Thanks also, Ape Lad and others)

UPDATE: Sean Bonner just called, out riding around the area on his bicycle -- he's roaming near the fire site, phonecamming what he encounters: Flickr stream, and one of the shots is below.

And eecue just uploaded this HDR shot...

UPDATE, 745pm: OK, there are a hell of a lot more helicopters, flying even lower and more frequently now. I guess some of these are news choppers, but some may be first responders, too? All I can hear are sirens and roaring helicopters overhead. I think we're about a quarter mile or less from the center of the burn area (though not in any immediate path of harm). They're saying it's 20-25% under control now. The numbers don't feel too comforting at the moment.

The power is out in much of our neighborhood now. Our DSL has been down for a while, and I'm using my EVDO card to blog this.

7:53: Someone just called me from a few blocks away via mobile, even closer to the burn site, and says the fire is coming closer to where we are, moving down the hill, towards houses, spreading out and covering an even larger area. The hills are glowing red, much ash in the air, heavy smoke smell. Lots of people in the streets looking up at the burn. Small planes circling. We're packing up a few essentials now, just in case the wind gets super hinky and we receive an evacuation order.

Local TV news is reporting the fire was started by a golfer who tossed a cigarette aside while playing golf in the course nearby.

8:30pm: Friend shot this photo a few blocks away, an hour ago. The air is extremely thick with smoke and ash. More homes now without power, increasingly. Officers going door to door instructing people of mandatory evacuation orders a few blocks way. All the newscasts I'm watching are covering the immediate area outside our house, which is weird. Windows and doors all closed here, neighbors doing the same. Sky overhead at night now is dark orange-red, hills look like lava flowing down. Hot Santa Ana winds, gusty, fast, from the northwest. I've lived here for years, through many fires, never seen anything this big.

8:50pm: Cops shutting down Los Feliz boulevard (big street here) now, to minimize incoming traffic from gawkers. Unclear if the shutdown order will make it more difficult to get out. Police on bullhorns giving mandatory evacuation orders about 5 blocks from here. They're closing more streets by the minute, and placing evacuees in a nearby high school shelter.

9:01pm: They're describing the fire's movement as having "exploded" over the past hour. No homes burned yet, but lots in imminent danger, and evacuations under way. 250 acres burned now. Landmark "Dante's View" destroyed, bird refuge in immediate danger. "Deer and coyotes here are running for their lives," a councilman at the burn site is saying on local news right now. Some animals who live in the park are running into the street now.

9:08pm: Cops going door to door evacuating people nearby now. Fire appears to be spreading via embers? New spots of burn now, burn area obviously growing, even from our distance. Guy on TV: "How did the firefighters not see this coming and plan for contingency? It's moved all over the place now."

9:19pm: 300 acres estimated burned now. Here's a cameraphone video shot a few blocks away, at 7:55pm, by M.D. Video Link.

Winds close to the fire are very hot and very strong now, which may be Venturi effect.

Outside my window, it looks like a giant SRL show on the hill. Big flame tornado shapes reaching up into the sky.

We're packing stuff up now. Homes close to us are being given evacuation orders and we might need to get out if things change once again for the worse. Ash and live embers are floating in the air, eyes burn, throat itchy when you step outside.

Policeman on TV saying lots of homeless people who live inside the park, up in the chaparral hills, are evacuating onto the street.

Electricity outages and mobile phone problems are resulting from the destruction of (or damage to) towers inside the park.

Lots more videos now at Blogging.la, and more updates: 1, 2, 3, 4, 5.

Reader comment: David says,

Hey, I live a mile under the fire. We've been watching the new flare up for the past few hours. Thought I'd share photos from it: Link. This is also where the Greek Theatre is as well -- and we think its gone!

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Tuesday, May 08, 2007

Microsoft-Yahoo? Don't Bet On It

Though the combination would be a formidable opponent to Google, company sources say merger reports are based on talks a few months ago

On paper, a merger of Microsoft and Yahoo! looks like the perfect foil to the seemingly unstoppable momentum of Google. Combined, the software giant and the online media titan would have easily the largest audience on the Web, a far more potent advertising engine, and finally, a credible position in the all-important Internet search market.

For those reasons, reports on May 4 that Microsoft (MSFT) and Yahoo (YHOO) are discussing a merger or wide-ranging deal made some sense, especially to the investors who swarmed over Yahoo's shares early in the day. But as was the case with repeated rumors of a Microsoft-Yahoo merger over the past few years, the prospects of a deal look unlikely. It now appears that the reports in the New York Post and The Wall Street Journal were based on talks that happened months ago.

Both Microsoft and Yahoo declined to comment publicly. But a Microsoft source in a position to know about talks told BusinessWeek that there are no current discussions of any significance. Another source close to the situation also indicates that talks are not current.

A Real Alternative

So why all the new excitement about a potential deal? Mainly because a merger or even an extensive partnership would touch off an epic battle for the top position on the Internet. Microsoft and Yahoo together would present the only real alternative to Google in an online world that increasingly resembles the Microsoft-dominated computer software business.

For the past couple of years, Google has romped across the Internet. It has used an increasingly dominant position in search, and the diminutive text ads that appear with search results, to rocket to $10.6 billion in sales last year, up 73% from 2005. And with an estimated quarter of all online advertising already in its pocket, Google has begun experimenting with ads in print, radio, and television.

All that has left many people from media moguls to big advertisers fearful that the company, with a market value of $147 billion, would usurp their businesses and exert outsize control of the rapidly evolving advertising world. Especially with last October's $1.7 billion acquisition of the video-sharing site YouTube and last month's $3.1 billion DoubleClick purchase, advertisers, agencies, and rival Internet outfits have worried that Google would become all powerful online (see BusinessWeek.com, 4/9/07, "Is Google Too Powerful?").

Appealing Ad Alternative

So no small number of players in the industry are rooting for the counterbalance that a Microsoft-Yahoo alliance would create. "It would create a new gorilla in the advertising arena, a super-portal," says Jim Lanzone, CEO of Ask, the search unit of IAC/InterActiveCorp (IACI).

Some Microsoft businesses would benefit from a combination with Yahoo. Neither Microsoft's MSN Web portal, which commands only 10% of online display ad impressions to Yahoo's 48%, nor its AdCenter search ad system, has caught fire. Yahoo's dominance in online display ads, as well as its well-received Panama search advertising system, introduced in February, would give Microsoft's ad efforts a leg up.

For its part, Yahoo has also been struggling to contend with the Google juggernaut. Despite its dominance in display ads, Yahoo now has only 22% of the search market to Google's 54%. And search ads count for nearly all the growth in the online ad business in recent years. The combined entities' search service might attract both more consumers and more advertisers. "Microsoft and Yahoo combined would be a more formidable force against Google," says Ryan Jacob, portfolio manager with Jacob Internet Fund, which counts Yahoo shares as 4.3% of its portfolio.

Fearsome Management Challenge

The biggest prize for the combined companies might be just the thing that sets Google apart: more data on customer intentions. Much of Google's success with search ads stems from its ability to divine customers' buying intentions, so it can show them the most relevant ads and then charge advertisers more for the service. Combining customer data from both Microsoft and Yahoo potentially could close some of the gap with Google.

For all that, the reasons not to do a deal remain stronger than the reasons to do it, according to some observers. For one, combining the companies would be a fearsome management challenge. They're in different states, they have many overlapping services bound to spur turf battles, and Yahoo's Silicon Valley culture retains some enmity toward Microsoft.

Consolidating those operations could take two years or more, by several accounts. "It will cause them to fall behind 18 to 24 months," says Samir Patel, CEO of SearchForce, a search marketing software firm in San Mateo, Calif. "I don't see a compelling reason for Yahoo to do it," adds Charlene Li, an analyst with Forrester Research (FORR). "It would be a nightmare. The memories of Time Warner-AOL (TWX) come to mind."

Slight Savings and Synergy

What's more, the imperative of a deal doesn't appear quite as urgent for Yahoo in particular. Company officials and some others in the company, in fact, have been more optimistic of late, thanks to Panama and some recent wins, such as a deal last month to provide ads for Viacom's (VIA) Web sites and the Apr. 30 purchase of online ad exchange Right Media. "You wouldn't have done that if you were going to sell the company in three or four days," notes Ellen Siminoff, CEO of search marketing firm Efficient Frontier and a former Yahoo executive.

Even for Microsoft, the reasons for a deal look iffy on a closer inspection. To keep Yahoo users, Microsoft wouldn't want to change the branding, but that means savings and synergy could be slight. What's more, there's "almost 100% overlap" in their respective online services, says Charles Di Bona II, senior research analyst at Sanford C. Bernstein, from search services and search ad systems to e-mail and news. "The Googleplex visitor parking lot would be full the day after this deal closes," Di Bona says. "There are all sorts of ways these guys don't fit together."

That said, a less sweeping deal, combining search or advertising efforts, might benefit both companies without unduly burdening them with massive integration issues. "I see partnerships happening more than a merger," says Li.

For what it's worth, Yahoo executives also have indicated they prefer to set their own course. "We're not going to compete with Google by trying to be Google," Jeff Weiner, executive vice-president of Yahoo's Network Div., which comprises its consumer Web properties, told BusinessWeek in mid-April. "We'll compete by being Yahoo." The right price might change those intentions, of course. But for the time being, Yahoo apparently will remain just Yahoo.

Hof is BusinessWeek's Silicon Valley bureau chief. Greene is BusinessWeek's Seattle bureau chief.

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Let the Phone Pick Up the Tab

Imagine having your very own mobile ATM—otherwise known as your cell phone—in the palm of your hand

Cheryl Bussani's son was grown up enough to move out of their Daly City (Calif.) home into his own place. But he still needed the occasional quick infusion of cash, and his new home in Pacifica, Calif., was far enough away that it wasn't convenient for Bussani to just drive over and drop off a few dollars. "It wasn't worth the gas," she explains.

So Bussani makes loans to her son via cell phone. She uses a service provided by Obopay, in Redwood City, Calif., that lets her transfer funds by dialing a few numbers on her wireless handset. The professional housecleaner also collects her own payments and pays bills with the service.

Bussani is part of the vanguard of U.S. mobile-phone subscribers who are doing their banking with wireless handsets. The practice is expected to gain traction in a matter of months when the likes of bigger, more established companies including banking powerhouse Citigroup (C) and wireless behemoth AT&T (T) kick off ad campaigns extolling the low cost and high convenience of paying over a mobile phone.

Following the Money

They may have a point on price. EBay's (EBAY) PayPal Mobile, which lets people wire funds and donate to charity through a phone, is free for many transactions. Obopay charges 10¢ to send money (see BusinessWeek.com, 5/14/07, "Souping Up Your Cell Phone"); contrast that with Western Union (WU), which charges 11% for transfers within the U.S.

And there's reason to expect mobile-phone payments will become easier. While some early versions require a software download onto a phone, AT&T will begin including software on devices in the fourth quarter. Cell-phone makers like Nokia (NOK) and Kyocera, along with Visa and MasterCard (MA), are trialing phones with embedded chips that allow for contactless payments. Simply wave your phone in front of a reader to pay for purchases. That should cut checkout time by 50% to 70%, studies have found.

By 2012, 292 million phones sold worldwide will contain these so-called near-field communications chips, according to consultancy ABI Research. "Consumers tell us they are ready," says Pam Zuercher, vice-president of product innovation and coordination for Visa USA. The credit card association's March survey of 800 U.S. consumers showed that 57% would be interested in buying such a phone. And among 18- to 42-year-olds, 64% said they'd switch wireless carriers for it. "We believe mobile banking will be one of the bigger applications," says Greg Latour, senior vice-president of technology development at wireless carrier Cellular South, which, like carriers Amp'd Mobile and Helio, already offers Obopay.

Fee-for-All

If optimists like Latour are right—and considering the success of contactless payments in places such as Korea, there's reason to think they will be—the increased reliance on mobile payments is likely to have a ripple effect on financial services. Wireless service providers will demand their cut of financial transaction fees. Mobile payments are also expected to crimp demand for cash and checks, which still account for more than half of all consumer purchases.

At stake is $1.4 trillion in small payments of under $25 made in the U.S. each year. By 2010, about 10%, or $140 billion, of all payments under $25 will be made with contactless cards, estimates Dan Schatt, an analyst with consultancy Celent. Of those, 10% could be paid with mobile phones, he estimates.

Established players such as Visa, MasterCard, and First Data (FDC) will continue to angle for the business of processing payments and the right to collect the fees that amount to as much as 2% of purchases. But use of checks, printed by companies such as John H. Harland, could be affected. So could demand for ATMs, run by companies like First Data, recently purchased by an affiliate of private equity firm Kohlberg Kravis Roberts for $29 billion, Schatt says.

Plenty of Players

A number of upstarts stand to benefit. Schatt lists companies like Gemalto, which makes Smart Cards for contactless payments. Companies such as Atlanta-based Firethorn and Sausalito (Calif.)-based mFoundry, which power mobile banking and payments applications could profit from this move. So could outfits like ViVOtech, which sell related hardware such as in-store scanners. "We can get a bank up and running [on mobile phones] in six weeks," says Drew Sievers, co-founder and CEO of mFoundry.

Wireless service providers tend to keep tight reins on the applications they give users access to, and they will want a share of the transaction fees. Yet, unlike such carriers as Japan's NTT DoCoMo, U.S. wireless service providers are expected to stop short of offering financial services on their own. "We don't see any operators we deal with even considering this strategy," says Tripp Rackley, CEO of Firethorn.

And, of course, the service providers themselves could gain handsomely. Obopay is making a push with funding from investors like wireless powerhouse Qualcomm (QCOM). Web giants like Google (GOOG), already offering payment services online through Google Checkout, could potentially enter the fray. Cell-phone makers like Nokia could step into the market as well.

Spend-shifters

To prevent any business disruptions, processors have been among the first to jump into mobile payments. First Data doesn't see mobile payments as a threat: "We see it more as an extension of consumer choice," says Brian Friedman, vice-president of innovation for First Data financial institution services. It's not taking chances, though, and is ramping up mobile efforts. On May 2, First Data invested in ViVOtech and has committed to using the startup's hardware in offering contactless payments.

Visa and MasterCard are conducting near-field communications trials. Visa, for one, has developed its own mobile payments software. "Today, $17 of every $100 of spend is spent on a Visa card," says Visa USA's Zuercher. "We are looking at mobile as a way to shift [even more of this] spend." To that end, the company will be adding more capabilities, such as person-to-person money transfers and ticket purchases, later this year. Visa is also trying to address issues such as ease-of-use and security, which plague contactless payments in other countries (see BusinessWeek.com, 11/21/06, "Contactless Payment Comes to Cell Phones").

And banks aren't sitting still. Citibank, for instance, is piloting Obopay with select customers. It's also trialing near-field communications in New York with Nokia and Cingular/AT&T. And then there's Citi Mobile, launched in April in California and expected to roll out nationwide by the end of May. Based on software from mFoundry, the service lets users search for ATM and branch locations, reach customer service, and check balances. "The uptake is within our expectations," says Steve Keitz, Citi Mobile Director. "We think this is the next step."

Kharif is a reporter for BusinessWeek.com in Portland, Ore.

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