Yahoo, Japan’s Softbank and the Chinese Internet company Alibaba Group have agreed on a compensation plan involving the Web payment service Alipay.
Yahoo holds a 43 percent stake in Alibaba. In May, Yahoo shocked investors with news that Alibaba had spun off Alipay in March without giving the Internet company anything in return.
Under the new agreement, Yahoo Inc., Softbank Corp. and Alibaba said that Alibaba will continue to participate in Alipay’s future financial performance. Alibaba will get at least $2 billion and up to $6 billion upon a possible IPO or sale of Alipay.
Alipay says it is China’s biggest third-party online payment platform.
Yahoo shares are up almost 7 percent in premarket trading.
Shares of Nintendo Co. shed a fifth of their value Friday after the Japanese video game giant posted a deep loss in the latest quarter, cut its full-year forecasts and slashed prices on its new 3DS handheld device.
The sell-off sent the stock down more than 20 percent to 11,190 yen as investors rushed to unload a company struggling to regain momentum. It opened the trading day ask-only, meaning the market was overwhelmed with investors wanting to sell.
Nintendo on Thursday posted a net loss of 25.5 billion yen ($324 million) in the April-June period, worse than the 25.2 billion yen loss a year earlier. For the fiscal year through March 2012, Nintendo expects net profit of 20 billion yen, down 82 percent from its previous outlook, on sales of 900 billion yen.
The Kyoto-based company blamed its lackluster sales on a dearth of hit titles for the Wii and 3DS, as well as a strong yen.
To fuel momentum, Nintendo decided it needed to dramatically drop prices just five months after it launched the 3-D version of its DS handheld device to high hopes. The move underscores how quickly the company’s fortunes have turned since the Wii revolutionized the industry and flew off store shelves.
The 3DS will cost 15,000 yen in Japan starting Aug. 11, down from 25,000 yen. In the U.S., the price drops to $169.99 from $249.99 on Aug. 12. Nintendo does not set suggested retail prices for Europe but said it would lower wholesale prices by about a third.
“For anyone who was on the fence about buying a Nintendo 3DS, this is a huge motivation to buy now,” Nintendo of America President Reggie Fils-Aime said in a statement.
The 3DS got off to a solid start when it launched but has since lost momentum. Analysts cite a lack of compelling content for the device and say consumers may now be waiting for Sony Corp.’s upcoming release of the new PlayStation Vita handheld, which will sell for $299 in the U.S.
Such a big price cut so soon after a product’s launch is unprecedented for Nintendo, and it’s likely to annoy the loyal fans who have already bought the device, said Eiji Maeda, an analyst at SMBC Nikko Securities in Tokyo.
It took almost three years for the company to lower the price on the Wii for the first time, and that was by $50 savings account payday advance.
“This shows that Nintendo feels it really needs to lift up the 3DS,” Maeda said.
The Kyoto-based company also faces increased competition from smartphones and games on social networks, particularly among the casual gamers it targeted with the Wii. At a recent general shareholders meeting, President Satoru Iwata told investors Nintendo would not compete directly with smartphones by adding extra functions to the 3DS.
A strong yen hasn’t made things any easier. About 80 percent of Nintendo’s sales are from outside of Japan, making it vulnerable to currency fluctuations.
Sales during the quarter slumped more than 50 percent to 93.93 billion yen, leading to an operating loss of 37.71 billion yen.
Investors had already punished Nintendo’s stock price this year, reflecting their anxiety about the company’s health. But with Friday’s tumble, Nintendo’s stock price has fallen more than 50 percent this year compared with a relatively flat performance by the benchmark Nikkei 225 stock average.
Macquarie Capital Securities downgraded its rating on the issue one notch to “Neutral” earlier this month. The 3DS has not lived up to expectations, and Nintendo’s next major launch _ the Wii U _ won’t arrive until mid-2012, analyst David Gibson said in his report.
“We believe the company’s focus on doing both hardware/software, while noble, will ultimately limit their ability to be relevant in a ’smartphone in every pocket’ world,” he said.
Gibson suggests Nintendo needs to take “radical” steps, such as buying U.S. video game publisher TakeTwo Interactive Software and making its hit game “Grand Theft Auto” exclusive to the Wii U, which would attract core gamers to the platform.
For now, Nintendo is banking on the cheaper 3DS and new games to lure shoppers during the critical year-end shopping season. “Super Mario 3D Land” goes on sale in November, and “Mario Kart 7″ hits stores in December.
The company bases its earnings on Japanese accounting standards.
Its new earnings projection is based on a revised exchange rate assumption of 80 yen to the dollar.
Aetna says its second-quarter net income rose 9 percent in part because it benefited from a continued slowdown in the use of health care services by its members.
The health insurer also raised its full-year operating earnings forecast on Wednesday.
Aetna earned $536.7 million, or $1.39 per share, for the three months ended June 30. That’s up from $491 million, or $1.14 per share, in the same period last year.
This beat the $1.07 per share that analysts expected.
Revenue slipped 3 percent to $8.34 billion from $8.55 billion, but still topped Wall Street’s $8.25 billion.
Total medical membership fell 2 percent to 18.2 million members.
Aetna, based in Hartford, Conn., is the third-largest commercial health insurer based on both enrollment and revenue, trailing WellPoint and UnitedHealth.
Last week marked the end of John Haugh’s two-year tenure as president and “chief marketing and merchandising bear” at Build-A-Bear Workshop.
He resigned from his position.
There has been a bit of a revolving door at the No. 2 spot at Build-A-Bear in recent years. Haugh was the Overland-based company’s third president in three years.
The company hasn’t said much about Haugh’s resignation. It noted the fact with two simple sentences in a recent Securities and Exchange Commission filing.
In an email, Jill Saunders, a company spokeswoman, said that Haugh voluntarily resigned his position. It appears he taken a new job since she added that the company would prefer to let Haugh and his new employer announce his new position.
Sean McGowan, an analyst with Needham & Co., said he thinks Haugh left of his own accord.
“I feel strongly that it’s NOT a sign that things are going badly,” he wrote in an email. “Obviously he thought he had a better opportunity somewhere…I think he has changed jobs quite a bit in recent years.”
Haugh joined Build-A-Bear in March 2009. He was previously president of It’s Sugar, a candy and confectionary retailer. He has also held executive positions with Mars Retail Group, Payless ShoeSource and Universal Studios no credit check payday loans.
When he came on board at Build-A-Bear, he replaced Scott Seay, who had been fired in 2008. The company did not disclose a reason for it at the time other than to say the decision was not related to the company’s performance or business operations.
The company’s president before that — Barry Erdos — resigned in January 2007.
But despite the comings and goings of presidents at Build-A-Bear, the leadership at the very top has remained stable. Maxine Clark, the company’s founder, has been the “chief executive bear” throughout the retailer’s history.
Build-A-Bear has begun an external search for president and has temporarily assigned Haugh’s responsibilities to its senior management team.
The turnover comes at a time when the company is working to try to reverse same-store sales declines. In the first quarter, total revenue dipped 6.1 percent. It will report its second quarter earnings later this week.
If the proposed merger of pharmacy benefit titans Express Scripts and Medco goes forward, George Paz will find himself at the helm of one of the nation’s largest companies. He joined St. Louis-based Express Scripts in 1998 after working as a partner at Coopers and Lybrand, an accounting firm, from 1988 to 1993, and also from 1996 to 1998. He worked as executive vice president and chief financial officer for Life Partners Group from 1993 to 1995.
Paz took a few minutes Friday to talk about the blockbuster deal, his company’s lust for acquisitions and his management style. What follows is an edited transcript of that interview.
How would you characterize your management style or philosophy?
I believe that you can run companies in one of two ways: you can either collaborate and get the management team to work together for common goals, or you can dictate. I don’t believe in dictating.
How does that translate into Express Scripts’ mission, personality, or ethic?
I have 14,000 employees and 10 senior leaders. By getting everyone’s consensus views, it lets us build up many diverse inputs and work toward common goals.
What would be examples of a couple of big, pivotal decisions you’ve made at the company?
Our acquisitions. For acquisitions to truly work, it’s a lot of effort and a lot of work to integrate the businesses. To take on something large, you need not just the CEO’s buy-in, but the whole company’s buy-in. Another big decision was our focus on consumerology, behavioral science and helping us understand what drives people’s behavior in managing their health and how we can achieve cost savings.
Were these merger decisions risky? Were these hard decisions to make?
Business textbooks tell you that most acquisitions fail. For us, the acquisition has never been a reaction, but instead a purposeful event in which we see a strategic gain and opportunity.
Is there much debate involving these big decisions?
There’s debate around how to get there, and the strategy to get things done. We don’t do things unless we have 100 percent buy-in by senior staff. We keep debating until all debate is quenched, until we’ve resolved every issue.
How did the Medco acquisition come about?
I’ve known David (Snow, the chief executive of Medco) since 2003. We’ve talked numerous times over the years about the value of putting our two organizations together. We saw a golden opportunity.
Was there internal debate over the Medco decision?
That was unanimous.
How do you relax or spend your time away from work?
I love business. I love St. Louis. I love health care, I love the challenge of driving waste out of health care while producing better outcomes. I like to read, to study, to understand. I also like to play golf, but it’s something I don’t get to play that often.
Already among the top companies in St. Louis, Express Scripts could rocket into the U.S. corporate elite with its proposed blockbuster deal to buy Medco Health Solutions, the nation’s largest pharmacy benefit manager payday loan lenders.
The combined revenue of the two companies
With their former boss under arrest, tabloid reporters are beginning to reveal secrets of what it was like to work in Rebekah Brooks’ newsrooms.
Disguises, bullying, lies dropped into copy _ all were part of the pressure-cooker atmosphere that prevailed, according to former journalists who spoke to The Associated Press.
Michael Taggart, who worked at The Sun in 2003, said the paper under Brooks was marked by “ruthlessness and misogyny.”
“The reporters who were prepared to subject themselves and others to the most ridicule were the ones earmarked for success,” said Taggart, who now works as a consultant for London-based MRM.
Insiders say the whatever-it-takes mantra was common across the tabloid world. But the pressure at News International _ publisher of the Sun and the News of the World, the defunct paper at the center of the phone hacking scandal _ was particularly intense.
Taggart described routinely participating in overnight stakeouts while at the Sun, something he said was rare at other papers he had worked for. The News of the World famously employed Mazhar Mahmood, who dressed as a hidden camera-wielding Middle Eastern potentate dubbed the “Fake Sheik” to trick scores of prominent figures into embarrassing indiscretions.
Taggart said other tabloids were just as hungry for scandal and celebrity, but they tended to rely on “great contacts, rather than covert operations.”
At Rupert Murdoch’s tabloids, refusing to play ball meant being pushed to the sidelines. One reporter who said he went through that was Charles Begley, News of the World’s Harry Potter correspondent in 2001 when Brooks was its editor.
The then 29-year-old reporter said he wore a Harry Potter costume to work and officially changed his name to that of the fictional boy wizard, all part of the paper’s attempt to tap into the Pottermania sweeping both sides of the Atlantic.
On Sept. 11, hours after the fall of the twin towers, Begley was stunned to be chewed out by News of the World management for not wearing his costume. He said he was then ordered to attend the next news meeting in full Potter regalia.
Shaken by the demand, Begley never showed up, and soon afterward parted ways with the paper.
Brooks spokesman David Wilson said the former editor was “not going to answer specific allegations like this at this time,” but described many of the stories being circulated as ridiculous.
Another reporter who spent seven years with the News of The World said the humiliation described by Begley was routine.
“It was very hierarchical,” the former reporter said, speaking on condition of anonymity because he still works in the media industry. “If your immediate boss told you to drive to Norfolk and stand in a field … that’s what you were expected to do.”
Attitudes toward women _ never thought of as particularly enlightened at The Sun, a paper still famous for its topless page 3 models _ did not improve under Brooks, Taggart said.
“We were regularly encouraged to refer to women with misogynistic names like ‘tarts,’ ’slappers’ or ‘hookers’ in our copy if there was conceivably any question mark over their sexual proclivities,” he said.
“We were expected to childishly objectify women. So blonde-haired women were described as ‘beauties’ and generously chested women ‘looked swell’, whether they’d wanted the attention or not.”
Faking facts was also part of tabloid life under Brooks, reporters said.
A third News of The World reporter, who spoke to the AP on condition of anonymity because he too is still working in the media industry, said some editors at the News of the World deliberately inserted bogus details to sensationalize copy.
In 2006, it apologized after an England soccer star was wrongly alleged to have participated in a “gay sex romp.” More recently, the paper was forced to pay damages after wrongly alleging that motor racing boss Max Mosley had participated in a Nazi-themed orgy. Mosley acknowledged the orgy, but denied any Nazi theme.
Protesting was not an option, according to the reporter who worked at the tabloid for seven years. He said the paper “was no place to question what you were being asked to do, the answer was always the same mantra: Do what you have to do to get a result.”
“Anyone mentioning ethics or refusing to be cooperative with dubious practices would have been effectively exiled by the news desk and labeled as ‘flaky.’”
Britain’s competition regulator has affirmed a preliminary ruling that BAA, the owner of Heathrow airport, most dispose of London’s Stansted airport and one Scottish airport.
The Competition Commission said Tuesday that it saw no reason to change its preliminary ruling in March, which it said was the right decision for air travelers. The ruling also requires BAA to sell either its Edinburgh or Glasgow airport in Scotland.
It says the sale process should start within three months.
BAA, owned by a consortium headed by Grupo Ferrovial of Spain, had fought a long regulatory and legal battle against being forced to sell. It says it will consider contesting the latest ruling in court.
QUESTION
The U.N. agency regulating international shipping decided Friday that new cargo and transport vessels must meet energy efficiency standards and cut carbon pollution.
The decision by a powerful committee of the International Maritime Organization attacks a growing source of greenhouse gases and is the first measure on climate change to apply equally to countries regardless of whether they are from the industrial or developing world.
About 50,000 cargo ships carry 90 per cent of world trade, and most ships are powered by heavily polluting oil known as bunker fuels. The IMO says shipping was responsible for 2.7 percent of global carbon emissions in 2007, but that would double or even triple by mid-century if no action is taken.
Concluding a weeklong meeting, the IMO’s Environment Protection Committee resolved that all ships built in the future must reduce pollution from today’s average, according to an efficiency index for ships of varying sizes and types.
The new regulations say it will be up to the ship builders to decide how they would meet the new standards.
“As long as the required energy-efficiency level is attained, ship designers and builders would be free to use the most cost-efficient solutions for the ship to comply with the regulations,” the resolution said.
But in a concession to developing countries, it deferred the measure for at least four years after it takes effect, probably next year or 2013.
In a further step to win support, it included a provision to promote the transfer of clean ship building technology to developing countries.
The committee also approved a new mechanism to monitor fleet performance to ensure compliance.
The IMO has 169 members, but fewer than half were eligible to vote on the pollution measures, which were adopted by 48-5 with several abstentions.
“This is a very positive and important first step for a truly global, binding measure to reduce CO2 emissions,” Connie Hedegaard, the European commissioner on climate action, said from Brussels.
Mark Lutes, who observed the proceedings for the Worldwide Fund for Nature, or WWF, said industrial countries and most developing countries favored the measures, but a hoped-for consensus proved elusive with objections from major countries like Brazil, China and India.
Small island states that lend their flags to merchant ships also were reluctant, since one way toward greater efficiency is to build larger ships that could prove too big for their port facilities.
“This is the first globally applied rule that the international community has come up with that regulates greenhouse gas emissions,” said Lutes. But some countries were concerned that the universal application of the shipping rules undermined a cardinal principle of climate change negotiations that assigns greater responsibility to the wealthy countries whose industries created the global warming problem in the first place.
Under the new rules, ships contracted in the first five years after 2015 would have to improve fuel efficiency by 10 percent, and the standard would be tightened every subsequent five years. By 2030, a 30 percent reduction rate would be set for most types of ships, based on the average of those built between 1999 to 2009.
The committee also debated measures to charge ships for carbon emissions for shipping, but delegations differed on how the tax would be used and whether it would apply to all countries. The problem is compounded by the fact that many ships fly flags of convenience and true ownership often is difficult to trace.
Jo Espinoza-Ferry, the IMO’s policy planning chief, says any financial measure would probably add less than 1 percent to transportation costs. He said on the sidelines of a climate conference in Germany in April that several market-based options were being considered, including a direct tax, an emissions trading scheme or a combination of incentives.
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Max reported from Amsterdam.
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