Columns of Heracles

Fortune: The Wal Mart back on top

2010-04-21T03:48:00.000-07:00

Rank: 1 (Previous rank: 2)

CEO: Michael T. Duke

Compare tool: Wal-Mart vs. Top 10

The mega-retailer knocked Exxon Mobil out of the top slot to rule the Fortune 500 again this year. Wal-Mart managed to lift revenues, on top of a big increase in 2008, by attracting bargain-hungry customers from competitors with remodeled stores and inexpensive private-label goods, offering everything from frozen pizza to patio furniture in one stop. A single trip also meant less spending on gas. Result: Profits surged a whopping 7% to $14.3 billion.

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Apple unveils $499 iPad tablet

2010-01-27T19:22:00.000-08:00

After months of speculation, Apple has finally lifted the veil on the iPad, its long-rumored tablet computer. The device will be available in late March starting at $499 for the 16GB version.

USA TODAY attended the unveiling at the Yerba Buena Center for the Arts in San Francisco. Below are our live updates from the event.

2:35 p.m.: Jobs concludes the event by saying the iPad "is our most advanced technology in a magical and revolutionary device at an unbelievable price. The reason that Apple is able to create products like iPad is because we always try to be at the intersection of technology and liberal arts, to be able to get the best of both."

2:24 p.m.: Jobs says prices for the iPad will start at $499 for the 16GB, $599 for the 32GB and $699 for the 64GB. Prices for iPad with 3G technology will go for $629, $729 and $829 respectively. "When we set out, we not only had ambitious technical goals, but we had a very aggressive price (in mind)," Jobs says. "We wanted to put this in the hands of lots of people." Accessories will also be available for the device, including cases and a keyboard dock.

2:20 p.m.: Jobs returns with more details on the iPad. It can sync over USB with iTunes running on your Mac or PC, exactly like the iPhone or iPod Touch. So when you sync, you sync everything, and backups are synced back if you ever lose it.

Every iPad has WiFi built in, but there will also be models with 3G cellular wireless data. The iPad will feature two plans: up to 250MB of data per month for $14.99, or $29.99 per month for unlimited data through AT&T. The carrier is also throwing in free use of WiFi hotspots throughout the U.S., and will not require a wireless contract.

2:16 p.m.: Phil Schiller, Apple's senior vice president of marketing, comes up on stage to talk iWork, the suite of business apps for the Mac (spreadsheet and presentations, word processing). The iPad version will include a completely new version of Keynote (presenter), a new version of the Pages word processor, and a new version of the Numbers spreadsheet program.

Schiller demonstrates Keynote, which runs in landscape orientation. You can move slides around by holding and dragging it to wherever you want. Using multi-touch gestures, you can move a bunch of slides around. It has spendid looking animation transitions.

Moving onto Pages, users can turn it horizontal for a larger virtual keyboard. The sofware will have automatic text wrap around graphics. Schiller drags a picture of a giraffe to demonstrate how text wraps around the image. Neat stuff. With one tap, users can change from a one-column format to two columns.

The Numbers spreadsheet will add a host of templates, such as text, photos and tables. It can also bring up diff keyboards, such as text or a time-and-date keyboard. Over 250 functions and formulas are built into Numbers.

Schiller says each app will be available on the App Store for $9.99.

2:05 p.m.: Users can flip pages forward or back by tapping the screen, or drag pages with your finger. The app can display photos in color or black-and-white, as well as display video. Like Amazon's Kindle, you can change the font size. Users can also change the font itself.

1:59 p.m.: Jobs is now demonstrating the iPad's e-reader, perusing a book on the iPad using a new app called iBooks. You can go into portrait view to see both pages if you like. The app will also include access to a store, where users can download e-books right on the iPad. Books are sorted by Apple's top charts list or The New York Times best seller list. Five of the world's publishers in the world, including Penguin and HarperCollins, will sell their books through the app. Navigating iBooks works similarly to iTunes and the App Store.

1:55 p.m.: Steve Sprang appears next to show off the painting app Brushes. He's showing a gallery of New Yorker covers and other pantings. It looks cool. You can drag your finger across the screen to paint, and tap a play button to see a replay of your actions.

Next up is another rumored iPad partner, Electronic Arts, one of the top worldwide publisher of mobile games. Travis Boatman of EA shows off the Need For Speed racing game. Users can tap on a mirror to see what's behind you. Boatman is really cranking up the speeds on the game to show off the impressive technical capabilities.

Chad Evans of MLB.com, the official website of Major League Baseball, arrives on stage next to demonstrate their popular sports app. On the field, there's a game day pitch tracker to show the trajectory of every pitch thrown. Users can summon a baseball card for the player who is up at bat, and there's video from real games. Users can also view the box score, field, summary, field dimensions and lineup. You can watch games live with your choice of home or away announcers.

1:45 p.m.: Mark Hickey of Gameloft appears on stage to demonstrate the iPad's gameplay mechanics with shooter Nova. Next up is Martin Nisenholtz of The New York Times, a long rumored partner), who says the device is the best of print with the best of digital all rolled into one. From the front page (with condensed story views), you can click on stories - all in color - and sections, and save articles for reading lists that sync to the iPhone. Users can also tap to change the number of columns and resize text with a pinch, and there's video too.
In my opinion, it dominates the experience of reading a newspaper on a Kindle by a country mile. Still waiting on a price though.

1:40 p.m.: The apps will automatically scale up full screen when you tap "2x". Forstall is launching ESPN X Games SnoCross, an arcade racing game. Looks good. Users steer with the accelerometer. It looks surprinslgy smooth during the demonstration.

Users can hook the iPad up to iTunes and download apps they already have and they're good to go. Forstall says a developer that spends time modfiying applications can take full advantage of the touch screen display. Apple has also enhanced the iPhone SDK (developers' kit), so developers can go to apple.com today to download. The SDK includes an iPod simulator, so developers can run iPad apps right on Mac during development. Every iPad will have access to the App Store built in.

1:37 p.m.: Scott Forstall, senior vice president of iPhone software takes the stage to talk about the App Store. He says there are currently 140,000 apps on the store. "We built iPad to run virtually every one of these apps right out of the box," Forstall says.

1:33 p.m.: "Watching it is nothing like getting one in your hands," Jobs says, before moving on to the iPad's technical specs. The device is 0.5 inches thin and weights 1.5 pounds, thinner and lighter than any netbook. It has a 9.7-inch IPS (high quality) display and full capacity multi-touch screen. The device is powered by Apple's own custom silicon chip.

The iPad will be available with 16 GB, 32 GB or 64 GB of Flash storage. It will also include Wi-Fi, Bluetooth, a speaker, microphone, compass and 30-pin connector to plug into iPod accessories. As for battery life, Jobs says it last up to 10 hours. You always have to take battery claims with a grain of salt, but if that is close to being true, that is a big deal.

1:28 p.m.: Jobs moves on to the calendar. Users can drag their finger over events to get a weekly or daily view. The Contacts application looks sharp. Jobs transitions to the Maps app. Viewing the Eiffel Tower, Jobs taps a corner to go to satellite view. Users can pinch the image to move in close. Jobs moves from the Eiffel Tower to the event's current location in San Francisco. He types in sushi using the iPad's virtual keyboard and finds nearby sushi places, including up-close pictures of a local sushi restaunt called Sushi Boat. Jobs now shows off YouTube video, playing an HD video of a surfing dog. Looks surprisingly nice.

1:23 p.m.: Jobs is showing a slideshow of Paris on the iPad. Nice effects. As for managing your music, you can scroll through albums, tap on something you like to play a song. The device will include the iTunes store built in. No word on storage for the device or if Jobs is playing music from the "cloud" or the device itself.

1:20 p.m.: Jobs offers a quick view of e-mail before moving onto photos. Photos looks a lot like the iPhoto app on the Mac. You can switch the device from portrait to landscape view. Users can also look at photo as albums. If on a Mac, users can get events, places and faces, as well as flick left or right through photos.

1:16 p.m.: Jobs is demonstrating the iPad, visiting the home pages of The New York Times, Time Magazine and Fandango.
1:14 p.m.: The device will include e-mail, photos, maps, built-in iTunes store and YouTube functionality.

1:12 p.m. ET: It's official. Jobs unveils the very thin iPad tablet computer. Jobs claims it will offer the best browsing experience you can have, like "holding the Internet in your hands."

1:06 p.m. ET: Apple CEO Steve Jobs has just taken the stage wearing his customary black turtleneck and blue jeans. Jobs says the company just sold its 250 millionth iPod, while Apple stores have welcomed 50 million visitors in the last quarter.

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No deal in Belgian beer dispute

2010-01-22T17:03:00.000-08:00

A second round of talks to end almost two weeks of blockades at the Belgian breweries of the world's largest beer-maker have ended without agreement.

Staff at Anheuser-Busch (AB) InBev's plants in Leuven and Liege have now been blocking the entrances for 13 days in a row over 263 job cuts.

The dispute has started to hit supplies of some of the firm's brands, such as Stella Artois, to Belgian shops.

AB InBev said it intended to hold fresh union talks on Wednesday.

The company employs 2,700 in Belgium in total.

Possible intensification

A Belgian union official said it was calling on the company to withdraw its restructuring plan.

"We will continue with the blockades and will discuss whether to intensify our action," he said.

AB InBev is planning to cut 10% of its 8,000 workforce across Europe.

The company has a major UK brewery outside Newport, in south Wales, which makes Stella Artois for the British market.
AB InBev was formed in 2008 when Belgium-based InBev bought Anheuser-Busch, the owner of Budweiser, and the largest brewer in the US.

InBev itself was formed in 2004 when Belgian Interbrew merged with Brazil's AmBev.

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Pao De Acucar Agrees to Buy Casas Bahia

2009-12-15T16:53:00.000-08:00

Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, agreed to buy Casas Bahia in its second acquisition in six months to strengthen its home-appliance business. The shares jumped the most in a year.

Sao Paulo-based Pao de Acucar and Casas Bahia will transfer their home-appliance retail units to Globex Utilidades SA, according to a regulatory filling today. Pao de Acucar, a supermarket operator that purchased Globex’s Ponto Frio electronics chain in June, will own 50 percent plus one common share of the retailer after the deal.

The purchase will make Pao de Acucar Brazil’s biggest home- appliance seller as the company seeks to diversify its business from food retailing to take advantage of growth in Latin America’s largest economy. Pao de Acucar estimates the purchase will boost annual sales to about 40 billion reais ($23.3 billion) and result in yearly savings of 2 billion reais.

“This is two giants getting together,” said Kevin Shacknofsky, who manages about $2 billion, including 700,000 shares of Pao de Acucar, for Alpine Mutual Funds in Purchase, New York. “It’s very bullish. A consistent trend in Brazilian stocks has been the consolidation trade, where the major players are buying family-owned businesses and building out scale. This is a continuation of that story.”

Pao de Acucar Chief Executive Officer Claudio Galeazzi, speaking to reporters today in Sao Paulo, declined to place a value on the deal.

Share Rally

Pao de Acucar rose 9.7 percent, the most since November 2008, to a record 62.49 reais in Sao Paulo trading. Rio de Janeiro-based Globex surged 28 percent to 18.60 reais after rallying 35 percent yesterday.

Abilio Diniz, the chairman of Pao de Acucar and son of founder Valentino Diniz, said the company moved up the announcement from next week after the stock exchange inquired about Globex’s gain yesterday.
The trading before the announcement appears “suspect,” said Shacknofsky.
“It’s something that the local regulators should take a look at,” he said. “If this happened in the U.S., the SEC would be interviewing people right now.”
Brazil’s securities regulator declined to comment on whether it is investigating the trading with Globex shares, said a spokeswoman who can’t be identified because internal rules.

‘Surprising and Positive’

“It was a surprising and positive announcement,” said Eduardo Roche, who helps manage 1.3 billion reais at Modal Asset Management in Rio de Janeiro. “The deal strengthens Pao de Acucar’s presence in the non-food segment, which has been growing faster than the food segment.”

Pao de Acucar paid 824.5 million reais for a 70 percent stake in Globex in June to overtake France’s Carrefour SA as Brazil’s biggest retailer. The Casas Bahia deal will consolidate the company’s lead over multinationals such as Carrefour and U.S.-based Wal-Mart Stores Inc., which have been investing in the country to tap into an expected surge in economic growth.
“This is an opportunity because of the growth in Brazil,” Galeazzi told reporters. “The country was the last to enter the crisis and the first to come out of it. We want to take advantage of that demand.”
Brazil’s $1.6 trillion economy will expand 0.2 percent this year and 5 percent in 2010, according to a central bank survey of 100 economists published Nov. 30. Retail sales jumped 5 percent in September from a year earlier, the fifth straight advance, the national statistics agency said last month.

Rating Cut

Raymond James & Associates Inc. cut Pao de Acucar to “market perform” from “outperform” on the announcement.

“We are not comfortable with its decision to increase exposure to the lower-margin home appliance segment,” Daniela Bretthauer, a Sao Paulo-based analyst, wrote in a note to clients. “We question the long-term implications of the move. How much value is there to be created?”

The Casas Bahia acquisition hasn’t created competition concerns “so far,” Mariana Tavares, chief of the antitrust arm of the Justice Ministry, said. Brazil competition authorities will review the merger as soon as the companies send detailed data to the ministry, Tavares told reporters in Brasilia today.

The combined Ponto Frio and Casas Bahia stores will have less than 20 percent of Brazil’s home-appliance retail market, Diniz said. He said he expects regulators to approve the deal.

B2W Drop

B2W Cia. Global do Varejo, Brazil’s biggest Internet retailer, sank 4.8 percent to 48.95 reais in Sao Paulo trading on concern the merger will heighten competition. Pao de Acucar and Casas Bahia will integrate their online businesses, with Pao de Acucar controlling 83 percent of the new Internet retailer, according to a regulatory filing today.

“It’s a very strong group entering this segment,” said Roche. “It will be a much more prepared and much stronger competitor.”
Pao de Acucar shareholders are scheduled to vote on the plan Jan. 11. The company expects to conclude the deal in four months, Diniz said. Casas Bahia Chief Financial Officer Michael Klein will become Globex Chairman. Casas Bahia’s marketing director Raphael Klein will be the company’s CEO.

Valentino Diniz founded Pao de Acucar as a bakery shop in 1948. Samuel Klein, a Polish immigrant who escaped from Auschwitz concentration camp, created the Sao Caetano do Sul- based Casas Bahia in 1952. Samuel is Michael Klein’s father and Raphael’s grandfather.

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Brazil’s Sugar Rush

2009-12-10T15:10:00.000-08:00

About this programme by Peter Day

Many people have been puzzled by "B" in BRICs; they have wondered why Brazil was included with Russia, India and China in the BRICs club of nations which the investment bank Goldman Sachs thinks will thrust their way to the global economic top table over the next few decades.

After all Brazil has been an up and coming country for the past 100 years and yet something always seems to stop it from actually getting to the top.

As I explained in a recent Global Business there are signs that this time the predictions may come true; there's certainly an extraordinary spirit of optimism abroad in Brazil at the moment.

One of the things that may have happened is that decades of Brazilian economic isolationism have actually paid off.

For years importing foreign goods was regulated and taxed, to the extent that Brazil built up a manufacturing industries to supply its own (considerable) home market because bringing things inform abroad was impossible ... even for the huge international automobile companies, for example.

And that's one of the reason why Brazil is now well ahead in the alternative energy stakes. Figures from BP show that last year one third of Brazil's energy was produced renewably... hydropower, wind power and ethanol largely produced from sugar cane.

Homegrown

This is a remarkable record when you compare Brazil with the other developed countries included in the club of 30 nations in the Organisation for Economic Cooperation and Development. Totalled up, OECD energy production is still only five percent renewable ... 95percent non renewable. If this is a race to sustainability, Brazil is very much in the lead.

In fact sugar cane has been used to create alcohol for fuel in Brazil for some 90 years. But the use of ethanol took off in the 1970's when the Arab oil producers in OPEC flexed their muscles and the world oil price jumped.

Brazil had its own homegrown fuel. The two 1970's oil shocks encouraged Brazilian sugar growers to expand their acreage, refiners to build ethanol plants and those domesticated car manufacturers to producer engines which could burn both alcohol and gasoline.

When I first went to Brazil 20 years ago the distinctive smell of ethanol exhaust hung around the streets, but that now seems to have been overcome. So (I'm told) has the tendency for alcohol to induce rust in auto engines, a problem in the past.

Brazil's car makers seem to have mastered the art of making flex fuel cars that can adapt to what they are being filled up with, and they are getting a lot of experience of a technology that may have global potential eventually.

Ethanol is obviously attractive from the diversity point of view, but some big questions remain. In a hungry world is it right to use food for fuel, or food growing land for fuel?

Reserves

What is the carbon footprint of ethanol production when you factor in things such as fertiliser, and transportation? There are plans for ethanol pipelines across the country from the main production areas in the state of Sao Paulo, but most ethanol at the moment is moved in trucks which still guzzle carbon fuel.

And (though this is comprehensively denied by Brazilian agriculturalists I've met) conservation campaigners in other parts of the world have big fears that the remaining Amazon forest is being devoured by demand for new land for crops such as sugar cane. Renewables are not necessarily a completely benign idea.Meanwhile this year the Brazil energy picture has got very complicated indeed. Exploration companies have just discovered absolutely huge new reserves of oil in the Atlantic off the Brazilian coast.

And Brazil's green campaigners are fearful that the effort of exploiting the new tricky-to-extract oil deposits will divert resources and attention from renewables such as ethanol, and then tempt governments into courting popularity with subsidised fossil fuel from the giant new oilfields.

This could be the familiar "oil curse" with a renewable twist to it. Just thinking about these things takes, well, a lot of energy.

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How much to tour Bill Gates’ house? About $35k

2009-11-23T17:55:00.000-08:00

Microsoft (and particularly Bill Gates) is well known for it’s philanthropic work, including a charity auction conducted each fall. One of the most popular items donated is a tour of the Bill’s famous Lake Washington home. Last year, the highest bid was $8,600. This year, the bidding skyrocketed up to $35,000!

These amazing numbers were mentioned to the Seattle blog Techflash during a presentation from Microsoft’s CIO Tony Scott. I have to say, while the house is amazing, $35k seems a bit steep for a tour, but remember this is for charity. Also part of the same auction, the “world’s best bologna sandwich” topped out at $500 this year. No word if you would be allowed to eat the sandwich while touring the house though.

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Can anyone be a success in business?

2009-11-23T17:00:00.000-08:00

This week is Global Entrepreneurship Week - one of the highlights of my year.

Last year more than three million people attended over 25,000 events across the UK, and I am confident that 2009 will see those numbers exceeded.

There is a huge variety of events, ranging from glossy launches in London, and an international convention in Harrogate, to business advice sessions, and local awards events, taking place, I'm sure, at a location near you.

And during the week there are special days on themes such as women's enterprise, social enterprise, and for the first time this year, home-based businesses.

But remember it's a bit like an iceberg.

One week of high profile awareness masks a year of activity and hard work, not only amongst those of us who help new enterprises get started, but also amongst the almost half a million people who become entrepreneurs each year.

Vital planning

All this raises some questions - can initiatives like Global Entrepreneurship Week really make a difference? Are entrepreneurs born or made? Can anyone do it?

There will always be the Sir Richard Bransons and Lord Sugars of this world, but I believe they are the exception rather than the rule.

And you can be a successful entrepreneur without achieving, or even wanting, multi-millionaire status.

If you're considering the entrepreneurial route, I'd suggest that you need to do some thinking beforehand and if possible take some independent advice.

Remember, however enthusiastic and knowledgeable you may be about your proposed product or service, it's the business issues that are going to create hurdles for you.

You need to think through clearly who is going to buy your product, how you are going to get your products to the customer, what are the resources you require and why you are doing it - be clear about your motives and ambitions.

Organisation, communication and interpersonal skills are all key when running a business too.

That's why I always recommend people go through a business planning process.

This doesn't necessarily mean a thick file, but it does mean working your way methodically through the issues.

It's important to have done the thinking and research - and it does help if you write it all down. And a business plan needs to be reviewed regularly too.

Seek advice

There are lots of organisations out there which can help you with the business planning.

Enterprise support organisations, such as those in the National Federation of Enterprise Agencies network, can not only review and advise on business plans, but also provide ongoing support or training on specific skills, such as credit control, negotiating, marketing and selling too.

They can also advise clients with strained cash flows how to raise, or indeed manage without, new funding.

People often ask me if these are the right conditions in which to start a business. My answer is emphatically yes.

After all, such great businesses as Microsoft and the John Lewis Partnership started in a recession.

With a bit of focus and a realistic and practical approach, there is no reason why any small business owner can't handle the current situation and come out of it at the other side with a better managed and stronger business.

And if a business can work in today's conditions, it will be flying once the economy improves.

What you need is a good idea, a good plan, good advice and certainly a fair dollop of hard work.

And having real belief in your business can play a huge part in its development and ultimate success. Oh - and a supportive family helps too

To be your own boss and to create and grow your own business can be enormously satisfying and rewarding.

It's a huge adventure, a roller-coaster ride at times.

Remember, you are not alone: there is support, advice and guidance available to help you. Go for it.

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Company History: Casas Bahia Comercial Ltda.

2009-10-31T17:03:00.000-07:00

Casas Bahia Comercial Ltda. is the largest nonfood retailer in Brazil. A mass marketer, it achieves very high turnover by selling furniture, appliances, and other household goods at low prices, chiefly on credit, to some of the poorest people in the urban parts of the Western Hemisphere. Conceived, created, and presided over by Samuel Klein, a rags-to-riches immigrant sometimes called the Sam Walton of Brazil, the retail chain remains privately held.

One of nine children of a Polish-Jewish carpenter, Samuel Klein was sent to a German labor camp at the age of 19 during World War II. He escaped two years later as Soviet troops advanced westward, but his mother and five younger siblings did not survive deportation to a death camp. After the war he worked on his own--chiefly selling cigarettes and vodka to Soviet soldiers--in Germany for five years before immigrating to Bolivia with his wife and eldest son. Settling in the Sao Paulo industrial suburb of Sao Caetano do Sul in 1952, he became a backpack peddler armed with a list of 200 customers for bed linens, blankets, and towels obtained from another Jewish immigrant. After a while he was able to make his rounds in a horse-drawn cart. His clients were working-class people, many of them natives of impoverished northeastern Brazil who had migrated to the Sao Paulo metropolitan area looking for comparatively well-paid factory work. By 1957 he had 5,000 customers buying a large variety of merchandise.

Klein, in 1957, purchased a store in Sao Caetano with about 800 customers. It was named Casa Bahia because many of the customers came from the state of Bahia. He sold furniture and clothing, chiefly on installment payments (including 3 to 5 percent monthly interest) that he calculated on the spot to people who otherwise did not qualify for credit. "The poorer the customer, the more punctual his payments," Klein told Miriam Jordan for an article published in the Wall Street Journal in 2002. "The poor know they need to guard their reputations. ... My talent is trusting the poor and giving the poor good service." When he opened a second store, restricted to clothing and tended by his wife, the two units became "Casas Bahia." In 1964 he opened a much larger store, specializing in furniture and appliances.

The growth of the business required more capital than Klein had been able to assemble, even though he was borrowing money from three lenders. The turning point in his career, as he saw it, came in 1970, when he purchased a half-share in a consumer-loan company named Financeira Intervest. Before the year was out, the capital from this company had enabled him to do so much more business that he was able to buy out his partner and, in effect, self-finance Casas Bahia. Klein then bought stores in neighboring cities and had 15 units in 1972. Before the year was out he had acquired a five-store chain in the port of Santos, about 60 miles southeast of Sao Paulo. He also secured a steady source of merchandise by purchasing a major furniture manufacturer, Bartira, in 1981. Casas Bahia continued to sell goods door to door until 1984, but all installment buyers had to make monthly payments at the nearest store, where other goods might catch the customer's eye. About two-thirds then made more purchases.

Klein practically doubled his chain in 1981, when he bought about 20 Lojas Colúmbia stores in the greater Sao Paulo metropolitan area. There were 43 Casas Bahia stores in early 1983. Although the Brazilian economy was sunk in recession and other chains cut back on credit to their customers, Klein forged ahead, stepping up spending freely to advertise his wares in newspapers and on radio and television and hiring the legendary soccer star Pelé as a pitchman. By 1990 Casas Bahia was the second largest advertiser in Brazil, spending $50 million a year but producing its ads in-house to save money.

By the end of 1988 the Casas Bahia chain had grown to 56 stores and had penetrated the interior of the state of Sao Paulo. Its number of registered customers had reached two million, and the number of sales transactions 100,000 monthly, of which 75 percent involved installment purchases, financed by Intervest. The chain kept in stock 2,000 different items, with enough merchandise on hand in a 40,000-square-meter warehouse for its fleet of 150 trucks to supply the stores for two months.

By 1990 Brazilian journalists were describing Klein as the Sam Walton of Brazil. His chain now came to 100 stores, which in that year brought in $874 million in sales, 60 percent more than in 1989. His personal empire also included two Volkswagen auto dealerships; Bartira, the furniture manufacturer; Intervest; a brokerage named Interbens; and the house advertising agency, Interjob. Casas Bahia was now Brazil's fifth largest nonfood retailer. Yet Klein looked anything like a tycoon, receiving journalists in the modest headquarters of his enterprise, still located in Sao Caetano, clad in a cheap open-neck sports shirt and slacks, with sandals on his feet.

Because Klein hated to pay rent, almost half of Casas Bahia's stores were the company's own property. In buying merchandise from about 300 suppliers, Klein preferred to pay immediately in cash, if possible. In dealing with them he had powerful leverage, since the chain was buying more than 10 percent of the production of the principal national manufacturers of home appliances. Even so, the suppliers liked dealing with him because he came to a decision immediately and paid on the spot. Much of this work was being conducted by his younger son, Saúl, while the older one, Michael, concentrated on finance. But Klein was not averse to micromanaging his enterprise by such means as personally determining the price of sale for any of the thousands of items that the chain was selling, using as a guide the newspaper ads of competing chains.

All Klein's efforts could not, however, keep Casas Bahia's sales from sinking during the economic crisis of the early 1990s. Sales dropped to $618 million in 1991 and nosedived to $353 million in 1992, almost, but not quite, putting the company in the red. Klein closed 15 stores, citing high rents, and slashed employment from 9,500 to 6,000. However, the units closed were in places where Casas Bahia already had a presence, and he opened in five more cities in the interior of the state of Sao Paulo while contemplating entering the neighboring state of Minais Gerais.

The year 1993 saw little improvement, but in 1994, when a reform program ended the hyperinflation that had eroded purchasing power, sales of $841 million came close to matching the 1990 peak. The following year Casas Bahia entered Rio de Janeiro by paying almost $60 million for the 33-unit Casas Garson chain. By the end of 1996 there were some 250 Casas Bahia stores in six states, with sales that year reaching an amazing $2.83 billion, making the chain the largest nonfood retailer in Brazil. One of the units was said to be the biggest in Latin America, with almost 150,000 square meters of space. But this headlong expansion did not come without problems. The expenses needed to field so many more units and extend credit to so many more customers had stretched the chain's finances to the point that ten banks refused to loan it more money without auditing the books. Greater transparency was also needed so that the firm could issue $250 million in debentures, since even Klein conceded that his firm's debt of $800 million was almost as large as its assets.

Buffeted by the fluctuating fortunes of the Brazilian economy, Casas Bahia sustained a 17 percent drop in sales in 1997 and its first recorded loss, about $7 million. "They had problems, but they adopted an intelligent strategy," an executive of a rival chain told José Roberto Caetano for an article in Exame. "They kept their prices high, at least 15 percent higher than ours. They relied on the loyalty of their clients. A majority of their customers ... continued buying from Bahia because they were afraid of losing credit and not being able to get it from another store." After opening its books to outsiders for the first time, Casas Bahia successfully floated its debentures and a six-month promissary note. The firm made a comfortable profit in 1998 and, according to Klein, reduced its debt to only 15 percent of its assets. He continued to operate by his own rules, determined not to take on shareholders or deal with banks any more than absolutely necessary. Only he, his wife, and his sons had the authority to sign checks. Rejecting widespread just-in-time practices, he stocked his warehouse (at 230,000 square meters, the biggest in South America) with 60 days of merchandise and transported it to the stores solely in the company's own trucks.

Casas Bahia had over 340 stores in seven states and the federal district of Brasilia in 2002, when its sales came to BRL 4.2 billion ($1.44 billion, based on the average currency rate for the year), and its profit to BRL 53 million ($18.15 million). The company had 20,000 employees, 500 suppliers, and 10,000 merchandise items, of which 4,500 were available online. A fleet of 1,040 trucks delivered the goods to the stores. The company had ten million registered customers, seven million of them active. Seventy percent of its sales were of home appliances, and the chain was buying and selling 30 percent of all home appliances manufactured in Brazil. Furniture accounted for another 25 percent of sales, and miscellaneous goods such as clothing and bicycles for the remaining 5 percent.

The Casas Bahia customer had an income ranging from virtually nothing to ten times the monthly minimum wage of BRL 200 (about $70), a range that comprised 84 percent of Brazil's population. The typical customer was only earning twice the minimum salary, and half were not formally employed at all. Ninety percent of all sales were on credit, with the rest in cash or by credit card, an option that Casas Bahia had only recently (and reluctantly) introduced, the last major Brazilian retailer to do so. Using information technology, the chain had transformed its assessment of customer creditworthiness to a near science. If a new customer applied for credit to buy merchandise costing less than BRL 600 (about $200), no proof of income was required, only a permanent address. Those applying for more credit were quickly evaluated, using a computerized system, and offered a credit limit based on occupation, income, and presumed expenses. Those rejected were directed to a credit analyst for further evaluation.

The company's 900 credit analysts had been trained to formulate questions and interpret responses carefully and with subtlety. If an applicant presented himself as a manual laborer, the analyst checked his hands for calluses and his clothing for stains. A stonemason might, for example, be asked to explain why he wanted to buy a computer. Perhaps he wanted it for his children, but perhaps he really intended to purchase it for another person, a practice that accounted for about half of all the chain's defaulted debts. In the end, an estimated 16 percent of applicants were being denied credit. The company's default ratio of 8 to 8.5 percent was only about half that of its competitors. A team of "reminders" made phone calls and wrote letters to customers whose payments were past due but also made it clear that the company would support them in difficulties and might allow them to renegotiate their debts. A 200l "amnesty" canceled the debts of a million customers blacklisted since 1997. Those customers who paid promptly received a yellow preferred-client card, sometimes proudly displayed, as in the case of the hot-dog vendor who Jordan visited in a two-room shack that she described as "a veritable Casas Bahia showroom, with a bed, bookcase, sofa and kitchen cabinet from the chain."

Installment payments were made over a period of one to 15 months, with the average term being six months and the average interest rate 4.13 percent a month. Furniture accounted for 31 percent of the goods purchased, with television sets accounting for 14 percent and audio equipment for 10 percent. The interest portion of consumer loans was sold to banks and consumer-loan companies, since Casas Bahia had sold Intervest by this time.

Casas Bahia retained its reputation for frugality and simplicity, operating with only three levels between store manager and top executive. Managers enjoyed significant freedom as long as they met predetermined revenue and profit targets. A store manager had the right to cut prices by as much as 10 percent, and a regional manager by up to 25 percent, without calling Michael Klein. Salespeople were guaranteed a salary of BRL 500 (about $165) a month, in conformity with the law, but expected, and were expected, to make their living instead by a 2 percent commission on sales. The average salesperson was earning about BRL 1,500 (about $500) a month. Deliverymen, as well as sales clerks, were held to a company standard of deportment and dress and expected to make all deliveries within 48 hours, carrying away old appliances or furniture if requested.

All Casas Bahia stores were linked electronically so that headquarters could monitor sales by product and store. Store and distribution-center inventories were monitored the same way. If a store did not meet sales or profit targets, a team was assembled at headquarters to address the problem. About 30 stores were closed in 2003, but about the same amount were opened, based on a standard of attracting at least 100,000 customers to any given store. A few Casas Bahia stores were in neighborhoods that catered to customers with incomes above the chain's target level, but these were not considered attractive because high rents and the tendency of buyers to pay in cash rather than seek credit resulted in lower profits.

Casas Bahia's sales rose to almost BRL 6 billion (about $2.11 billion) in 2003 and to an estimated BRL 9 billion (about $3.08 billion) in 2004, when its profit nearly doubled to about BRL 150 million (about $50 million). Its sales exceeded those of its next four competitors combined. There were about 400 stores. Furniture from the group's own Bartira unit provided a profit margin twice as high as from the appliances sold by Casas Bahia but made by others. A second, $25-million, furniture production facility opened in 2003. There were three distribution centers: the largest in Sao Paulo, the others in Rio de Janeiro and Ribeirao Preto. The company was planning to build four more in the biggest northern cities: Belém, Fortaleza, Recife, and Salvador.

Casas Bahia's amazing growth put the chain's finances under strain and led to a contract with Banco Bradesco S.A., the nation's largest bank, whereby the bank assumed the direct financing of part of the chain's customer purchases, freeing funds for further expansion. Michael Klein said that Casas Bahia wanted to have 1,000 stores and annual sales of BRL 20 billion by the end of 2010. But to do so the chain would have to expand into unexploited terrain, that of Brazil's tropical north and northeast, a task one competitor compared to Napoleon invading Russia. The chain's growth was also having an effect on the Brazilian economy at large. An article in Exame by Tiago Lethbridge quoted Michael Klein in these words; "Today, in Brazil, whoever wants to have relevant participation in his market has to sell to us. If a large company doesn't approve our conditions, others will form a line to seek a place on our shelves." One of these suppliers told Lethbridge: "Negotiations always take place at the end of the month, when the industry seeks to meet its sales goals and empty its stock. Therefore, hard-pressed, the suppliers offer big discounts." Some firms were willing to take a loss simply to maintain their share of the market. Casas Bahia was accounting for 36 percent of all the washing machines, 25 percent of the refrigerators, and 20 percent of the television sets and DVDs made in Brazil.

With Casas Bahia having little to fear from its traditional competitors, the company was looking over the horizon to do battle with a perhaps more dangerous rival than it had ever faced, the hypermarkets. One of the great unknowns was the capability of such hypermarket chains as Carrefour, Extra, and Big to meet the needs of lower income Brazilians. Another potential problem was the rapid spread of credit card use, which by 2005 had grown to account for one-fifth of Casas Bahia's sales and thus threatened both its considerable income from interest and new purchases by customers reentering the stores to make installment payments. Finally, there was the question of succession, since the chain's founder had passed the age of 80. Michael, who cited Jewish tradition favoring the eldest son, was in day-to-day-charge of finance, stores, distribution, fleet, technology, and employees. Saúl was in charge of supplies, customer sales, and marketing.

Principal Competitors

Globex Utilidades S.A.; Lojas Cem S.A.; Lojas Colombo S.A. Comércio de Utilidades Domésticos; Magazine Luíza.

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Bye, bye Big Mac! Iceland closing all McDonald's

2009-10-31T16:30:00.000-07:00

The Big Mac, long a symbol of globalization, has become the latest victim of this tiny island nation's overexposure to the world financial crisis.

Iceland's three McDonald's restaurants - all in the capital Reykjavik - will close next weekend, as the franchise owner gives in to falling profits caused by the collapse in the Icelandic krona.

"The economic situation has just made it too expensive for us," Magnus Ogmundsson, the managing director of Lyst Hr., McDonald's franchise holder in Iceland, told the Associated Press by telephone on Monday.

Lyst was bound by McDonald's requirement that it import all the goods required for its restaurants - from packaging to meat and cheeses - from Germany.

had doubled over the past year because of the fall in the krona and high import tariffs on imported goods, Ogmundsson said, making it impossible for the company to raise prices further and remain competitive with competitors that use locally sourced produce.

A Big Mac in Reykjavik already retails for 650 krona ($5.29). But the 20 percent increase needed to make a decent profit would have pushed that to 780 krona ($6.36), he said.

That would have made the Icelandic version of the burger the most expensive in the world, a title currently held jointly by Switzerland and Norway where it costs $5.75, according to The Economist magazine's 2009 Big Mac index.

The decision to shutter the Icelandic franchise was taken in agreement with McDonald's Inc., Ogmundsson said, after a review of several months.

McDonald's, the world's largest chain of hamburger fast food restaurants, arrived in Reykjavik in 1993 when the country was on an upward trajectory of wealth and expansion.

The first person to take a bite out of a Big Mac on the island was then Prime Minister David Oddsson. Oddsson went on to become governor of the country's central bank, Sedlabanki, a position that he was forced out of by lawmakers earlier this year after a public outcry about his inability to prevent the financial crisis.

Lyst plans to reopen the stores under a new brand name, Metro, using locally sourced materials and produce and retaining the franchise's current 90-strong staff.

Ogmundsson said it was unlikely that Lyst would ever seek to regain the McDonald's franchise with Iceland still struggling to get back on its feet after the credit crisis crippled its overweight banking system, damaging the rest of its economy, last October.

"I don't think anything will happen that will change the situation in any significant way in the next few years," Ogmundsson said.

It is not the first time that McDonald's, which currently operates in more than 119 countries on six continents, has exited a country. Its one and only restaurant in Barbados closed after just six months in 1996 because of slow sales. In 2002, the company pulled out of seven countries, including Bolivia, that had poor profit margins as part of an international cost-cutting exercise.

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by:

The Early Mac Clones

2009-10-20T22:00:00.000-07:00

Unitron Mac512

A Contraband Mac 512K

Since Brazil didn't allow import of microcomputer until 1993, anything users wanted had to be made in and for the local market. For those who wanted a Macintosh, Unitron created the Mac512.

Rainer Brockerhoff from Brazil writes, "It's a long story, but here are the highlights. Facts are as they were told to me at the time, but I've no way of verifying the political parts.

"The clone was made around 1985 by Unitron, a Brazilian company that had a very successful line of Apple II clones. Initially the plan was to make a Brazilian Mac under license from Apple; however, Apple would not accept less than a 51% share of the operation, which at that time was specifically prohibited by Brazilian law.

"Unitron went ahead anyway, getting a $10M loan from a government bank, and, with help from university laboratories and National Semiconductor, they succeeded in reverse-engineering the 'custom' Mac chips: the diskette controller (which was simply a one-chip version of the Apple II controller board), the real-time clock, and the PAL chips.

"At the same time, a software team reverse-engineered the ROM, based on the 'Inside Mac' specifications. I was a consultant for that team and eventually did most of the Toolbox managers . . . everything was coded in C, except for some critical device drivers and the QuickDraw emulator which were done in Assembly language. As a result, the resulting ROM was originally double the size of Apple's . . . in fact, in the final shipping version it was substituted by static RAM, which was loaded from a special pre-boot floppy.

"Meanwhile Apple had somehow obtained an early hardware prototype which still contained an actual Mac ROM, used for compatibility testing of the chips. They promptly cried foul and pressured the Brazilian government through the State Department. Faced with threats of import barriers for Brazilian shoes and oranges (so they tell me) the government quickly backed down. At the time, a special license was required to manufacture computers in Brazil. The Unitron seems to be the only case where two contradicting reports were filed by the official appraisers: a technical report which lauded the project as a sterling example of reverse-engineering and technical ingenuity and a political report which denounced the project as a contemptible theft of trade secrets.

"Needless to say the project was canceled - over 500 machines had already been made and were ready to ship - and Unitron took a serious financial hit (they're still paying off interest on that loan).

"The chip designs were later sold to a Taiwanese company which also made noises about producing a Mac clone. There was a write-up in Byte magazine at the time, but I can't find their name right now. The lawyers descended on that company, too, and they weren't heard from again.

Unitron was subsequently downsized. Today they make industrial electronic equipment and still produce small numbers of Apple II clones, which apparently are still used as stage lighting controllers and similar stuff."

There are claims that Unitron did not reverse engineer Apple's ROMs, but instead cloned the ROMs with a few minor changes. These claims are probably based on the prototype the contained Mac ROMs and was used for compatibility testing. The Mac512 had 128 KB of ROM, twice as much as the Fat Mac.

Rainer notes that the ROM code was written in a mix of C and assembly language.

Details

•introduced 1985; discontinued

•works with any system through 4.1
•CPU: 8 MHz 68000
•performance: 0.8 (relative to SE); 0.7 MIPS
•ROM: 128 KB
•RAM: 512 KB
•9" b&w screen, 512 x 342 pixels
•keyboard attached via coiled telephone-like cable
•mouse attached via DB-9 connector
•DB-9 serial ports
•floppy: 800 KB single sided Chinon driver with eject button
•floppy connector on back of computer
•size (HxWxD): 13.6" x 9.6" x 10.9"
•weight: about 18 lbs.
•PRAM battery: 3 AA
•Gestalt ID: unknown, probably 1
•addressing: 24-bit only

Send your Comments !

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Yahoo! profits! soar! on! falling! revenues!

2009-10-20T21:19:00.000-07:00

Google says the worst of the economic meltdown is behind us. But Yahoo!'s take on the matter is a bit more guarded. After its revenues took another dip during the third quarter, dropping 12 per cent year-on-year, the best Carol Bartz and company can say is that the economy is "loosening-up a bit."

Controlling more than 60 per cent of the search market, Google endured only the smallest of revenue hiccups over the last twelve months of worldwide economic crisis, and in Q3, Mountain View's revenues lept a healthy 7 per cent year-on-year. But at Yahoo! - where display ads are far more important to the bottom line - the meltdown's darkest days were far darker. You could argue they're still lingering. Revenues topped out at $1.575 in Q3, compared to $1.786bn last year.

The good news is that after some considerable belt-tightening in the wake of its 2008 third quarter, Yahoo!'s profits more than tripled in Q3 2009, from $54m to $186m.

The company also points out that revenues decreased only one percent from the second quarter, after much greater sequential shrinkage in previous quarters. "With revenue coming in above our guidance and flat sequentially, we had a solid third quarter that signals our major businesses have stabilized," CEO Carol Bartz said in a Yahoo! press release.

According to CFO Tim Morse, Bartz fell ill this morning, and she was not on the company's quarterly earnings call with reporters and analysts. So Morse has to spin that the quarter all on his own. "Overall the theme for third quarter was stabilization, as we saw strength in key areas of our business are two straight quarters of deceleration," Morse said. "I'm gonna refer to sequential trends on this call, much more than we have in the past, because they tell us much more about what's currently happening in our markets."

The company's all-important display-ads revenue was down 8 per cent from last year, but it was up from Q2, giving Yahoo! its second straight quarter of sequential growth. Search revenue was down 19 per cent year-on-year. Whereas queries were up, revenue per search was down. But as you might expect, Morse argued that search is stabilizing as well. After sharper sequential declines in the first half, he said, third quarter results declined just one per cent compared to Q2.

Of course, Yahoo! hopes to juice its search biz through a pact with Microsoft, and Morse said the company still expects the deal to close in early 2010.

"We didn't hire as quickly as we'd planned," he said, "and that contributed to about a third of the under-run. Though we would have preferred to ramp headcount at the originally forecasted past, we're taking the time to ensure we're hiring the right people in the right places." Thus, the bigger-than-expected profit spike.

Morse avoided any Schmidtian proclamations, but he said that better display ad yields in Q3 were "a sign...of the economy starting to loosen-up a little bit and brand advertising starting to happen again."

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its Q2 earnings call, Yahoo! said it would feed $75m into new hires, new tech, and its very own Yahoo!-trumpeting ad campaigns - despite its continued revenue slide. But Morse said the company didn't spend quite as much as it anticipated. The spending increase was closer to $50m.

BuscaPé: students’ dream sold for US$ 342 million

2009-10-11T17:57:00.000-07:00

They did it! The Brazilian price comparison site, created 10 years ago by 4 colleagues, was sold almost in its entirety to a foreign group. The media company Naspers announced today that it bought 91% of the Brazilian e-commerce business BuscaPé for US$ 342 million. I am in contact with them to get more information, especially the perspective of the entrepreneurs.

In a communication, Naspers announced that the acquisition was financed with available resources and the current team at BuscaPé will continue working with the business. “BuscaPé has had rapid growth, and is in line with our focus on e-commerce. It is a diversified internet platform: a full spectrum of business models within the e-commerce value chain, in the most important markets in Latin America,” said the internet director at Naspers, Antonie Roux.

The Naspers group has receivables of billions of dollars a year. It was created as a media company, but today covers diverse sectors, from TV to cable to internet. It’s newest ventures are in mobile applications. Besides Brazil and South Africa, Naspers also has investments in China, India and other countries. In February, Naspers purchased 49% of ComperanTime, from the VC fund Rio Bravo, and before that they also invested in Editora Abril.

From: Dow Jones via Agência Estado.

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Rio de Janeiro - Brazil, to stage 2016 Olympic Games

2009-10-02T13:57:00.000-07:00

Brazil will become the first South American country to host the Olympics after the city of Rio de Janeiro was chosen to stage the 2016 Games.

Rio won a majority of the 95 votes at the meeting in Copenhagen, eliminating Madrid in the final round. Tokyo and Chicago had already been knocked out.

"The world has recognised that the time has come for Brazil," said President Luiz Inacio Lula da Silva.

Chicago's early exit was a surprise, after bookmakers made them favourites.

US President Barack Obama had flown to Denmark on Friday morning to join his wife, Michelle, and make an emotional address to the International Olympic Committee delegates.

But the gesture - the first time a current US president had addressed the IOC in an attempt to win the Games - failed to persuade the voters as Chicago became the first city to see its dream of hosting the biggest sporting event in the world fall by the wayside.

Speaking to reporters at the White House on his return, Mr Obama said he wished he had come back with better news, but congratulated Brazil for a "truly historic" win.

"As friends to the Brazilian people, we welcome this extraordinary sign of progress," he said.

The president said he had no doubt that Chicago's bid had been the strongest possible, could not be prouder of the city, and insisted that he had no regrets about travelling to Denmark.

"I believe it is always a worthwhile endeavour to promote and boost the United States of America," he added.

'Heart and soul'

Chicago received only 18 of the 94 votes available in the first round poll of IOC delegates at the Bella Convention Centre on Friday afternoon. Madrid came out top with 28, followed by Rio on 26.

Crowds on Copacabana beach in Rio were jubilant after the result

In the second round, however, Rio almost secured the absolute majority needed to win outright, with 46 of the 95 votes cast. Madrid came a distant second with 29, while Tokyo was eliminated after receiving 20.

The final ballot saw Rio win by a comprehensive margin of 66 votes to 32.

More than an hour later, IOC president Jacques Rogge finally revealed the result to the world: "Like in every competition there can only be one winner.

"Tonight, I have the honour to announce that the Games of the 31st Olympiad are awarded to the city of Rio de Janeiro."

The Brazilian bid team leapt to their feet in celebration, began singing their "Marvellous City" song, waving flags and hugging each other.

A tearful President Lula told reporters afterwards: "The other countries made proposals. We presented a heart and a soul.

"I confess to you if I die right now my life would have been worth it."

The BBC's Gary Duffy in Rio said there was "absolute, unrestrained joy" on the city's famous Copacabana beach after the result was announced, with silver glitter flying through the air and tens of thousands of people singing.

The golden sand disappeared under a sea of green and yellow, the colours of Brazil, our correspondent said.

There have been questions about Rio's bid not the least the high level of violence which so often scars the city's image, but in one glorious moment that was all set to one side for a truly Brazilian party, he added.

A promotional video which aims to boost Rio's bid - copyright IOC 2009

In his speech to the IOC earlier, President Lula had promised: "Rio will deliver an unforgettable Games. You will see for yourselves the passion, the energy and the creativity of the Brazilian people.

"It will not be just Brazil's Games but South America's. It will serve to inspire the 180 million young people on the continent. It is time to redress the balance. It is time to light the Olympic flame in a tropical country."

Rogge said Rio had presented the IOC "with a very strong technical bid, built upon a vision of the Games being a celebration of the athletes and sport, as well as providing the opportunity for the city, region and country to deliver their broader long-term aspirations for the future".

This call to 'live your passion' clearly struck a chord with my fellow members, and we now look forward to seeing Rio de Janeiro staging the first Olympic Games on the continent of South America," he said.

Rio plans to stage all the competitions inside the city, bringing "dynamics to the Games and facilitating the athletes' interaction", according to the bid website.

There will be seven competition centres in four Olympic regions - Barra, Copacabana, Deodoro, and Maracana - with football matches held in the cities of Belo Horizonte, Brasilia, Salvador and Sao Paulo.

Its bid is divided into a $2.8bn (£1.92bn) budget for operating costs, and $14.4bn (£9.90bn) for construction and security.

'Nearly there'

Madrid's surprising success in reaching the final round came after former IOC president Juan Antonio Samaranch made an emotional appeal.

Shock in Madrid as it fails in its bid to host the 2016 Olympics

"I know that I am very near the end of my time. I am, as you know 89 years old. May I ask you to consider granting my country the honour and also the duty to organise the games in 2016," he said.

However, a win for Madrid would have made it three European-based Olympics in a row, with London 2012 and Sochi 2014 preceding it.

After the result, Prime Minister Jose Luis Rodriguez Zapatero said Madrid could leave Copenhagen with "dignity" and did not rule out another bid.

"We were nearly there, but Rio won," he told Spanish reporters. "Now is not the moment to talk about 2020. Madrid is always a strong candidate, but it depends on the city, not me."

The BBC's Steve Kingstone in the Spanish capital said Madrilenos were leaving the square in front of the royal palace, where they watched events in Copenhagen, with a sense of pride.

In the lead-up to the decision, King Juan Carlos had called the Olympics "Madrid's unfulfilled dream of hope", and for now at least that is what the games remain.

Tokyo's bid team were said to have been shocked and stunned after their elimination in the second round, as they had felt their focus on the environment and youth would impress IOC delegates.

"It was really disappointing for us and for the children but this is not the end. We want to carry this on to the next chance," said marathon runner Yuko Arimori.

In Chicago, which had also believed it would be a finalist, thousands stood in silence in the city centre after it became the first to be eliminated.

"We fought a good fight and I am very proud of the team and the campaign. I have no idea why we went out so early. The IOC members will have to ask themselves that question," said Chicago bid chief Pat Ryan.

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Did you know that the media has changed?

2009-09-20T19:54:00.000-07:00

This is a very important change to the world of marketing.

Entrepreneurs need to make the most of this new medium that reaches millions of people every second.

Through the Internet, phone, TV, There are paths that lead you to your customer.

This is a official update to the original "Shift Happens" video. This completely new Fall 2009 version includes facts and stats focusing on the changing media landscape, including convergence and technology, and was developed in partnership with The Economist. For more information, or to join the conversation, please visit

Content by XPLANE, The Economist, Karl Fisch, Scott McLeod and Laura Bestler.

Design and development by XPLANE

Watch the video and do not forget to comment:

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Starbucks: It is a different company

2009-09-19T15:44:00.000-07:00

The book "The Starbucks Experience" is not a simple book about the history of this great company, is not only about business, it is a book that will help you to be a better person and succeed in any way in your life. It is what I call of "the self-help entrepreneurial" because it is about business, but also gives you tips on how to have an entrepreneurial profile. It is a must read if you want to know the secrets of success of this great company and, especially, if you want to become an entrepreneur or good professional team, and reach the top of the world.

Prior to highlight the 5 most important principles in the book contains, I will present the company who does not know it.

In my contry, Brazil, there is only a few stores, 18 in total, and all located in the Rio de Janeiro and Sao Paulo.

Starbucks is a multinational company with the largest chain of coffee shops around the world, is headquartered in Seattle, Washington, USA. The company's name was partly inspired by the character Starbuck in Moby Dick, and its logo is a drawing of a mermaid.

In addition to coffee and espresso, Starbucks also offers other types of beverages such as teas, and foods such as cakes and sandwiches. Starbucks stores may be in other venues, like bookstores and supermarkets.

Starbucks has more than 15 thousand stores around the world and only in 2007 opened 2571 stores, an average of seven stores a day.

The company's operations in Brazil is the result of a partnership between the American main office - with 49% ownership stake - and 51% of the company "Cafés Sereia do Brazil Participacoes SA Rodenbeck family, responsibility - in 80 years - for the coming McDonald's and, in the 1990's, Outback Steakhouse network in Brazil.

There is no denying that Starbucks is a rare company that despite its overall size can be adapted to each region as if it were local. The philosophy of Starbucks proves that theories as Ontopsychology, which advocates the emotional detachment is the way to increase job performance, are pure nonsense. If you have a company that values human life and emotion, it is Starbucks. As I said its founder:

"We're not in the coffee business serving people, we are in the people business serving coffee."

What company gives you a new drink if your shed? Or prepare your favorite, no charge if you do not like one you just try? Or accept your resume in person, every day, in any store? It may even be other companies out there as well, but they are rare.

Some think the Starbucks coffee dull, consider a face or a company that could harm the lives of smaller competitors. The truth is that a local newspaper article from Virginia, USA, showed that no matter how many Starbucks open, independent coffee shops always keep at least 51% market share. Unfortunately, flavor and price are not as measurable as well, but know that besides testing approval of all new products (like any other business), Starbucks is part of Fair Trade, which undertakes not to exploit farmers, and to negotiate only with those concerned with the lives of their workers, the environment and, of course, with the excellent quality of their crops. Not using means paying a fair price, Starbucks pays more than other companies for the coffee, about $ 3.6 U.S. dollars more per kilo. Moreover, it was the first cafeteria to provide health insurance to any employee who works 20 or more hours. This is all the result of a philosophy and tied and felt by everyone in the corporation, the barista to the President, this is the only way to follow the principles work as well.

1. Act as the owns

"Actually the leaders want their employees are fully committed to the work and not pretend to work. This happens when employees do not feel the fundamental growth. Starbucks has struggled means to employ their partners, with intensity, your passion and talents in their daily work. At the same time ensuring that individual differences are harmonized in a great experience for customers. "

To combine the characteristics of each employee to the expectations of the company so that would not become a mess, the top of the company created The Five Ways of To be, which are:

• To be friendly

• To be authentic

• To be considerate

• To be well-informed

• To be involved

2 - Everything Matters

"If you think that the customer does not realize when something is out of place, think again. In retail are all details, in fact, businesses are details. When they are overlooked or not perceived, even the most patient customers can get frustrated, and costly mistakes can occur. "

This principle is perhaps one of the most visible to people who know the Starbucks. The music is always nice, the coffee made systematically each time or lack of concern about saving furnished or organization stores, even in deposits. This principle also extends to people. Not only all matter, but all matter. To prove this, top management at Starbucks has developed a game for internal training, where baristas learn to interpret clients based on nonverbal communication, and so try to surprise them, avoiding to leave the store frustrated.

3. Surprise and delight

"The idea behind this principle is not new, the Cracker Jack did it in 1912 when it entered a surprise in each package. Unfortunately, many companies focus too much on basic ingredients and add that little extra something that distinguishes them from the competition and build brand loyalty. "

Starbucks is a master of surprise and delight people. Throughout the book, you can read some stories of people who did not like the cafeteria or were indifferent to the brand, but who have become clients or have come to admire. Starbucks realized that two things are essential to generate this pra: predictability and increase the free value, ie, I want to make sure that I will be well attended again and that my coffee is so good as the last, but it would be good to experience something new occasionally.

Once Starbucks has set up a kiosk in a subway station and has given coffee to all users who wanted to frantic. Note that I said to give, not sell. Imagine you do not need to spend time stopping at the cafeteria or coffee shop before work, to take that coffee smart. She is right there on your way.

- About 80% of drinks sold in the U.S. are to travel.

- Facts: In China, it is the opposite.

4. Embrace resistance

"This requires that leaders differentiate customers who want to have their concerns addressed, those who never stop complaining and are never satisfied (...) only benefits the praise, when it appreciates the criticism."

Basically, this principle teaches us two things: 1) do not try to convince someone who disagrees with you, instead, listen to and see if you can take something positive from what he has to say, 2) do not try to force someone to accept you , show what your company can do for him and the community.

5. Leave your mark

"All we have left a mark on the world. What varies is whether the mark is positive or negative. Reciprocate more than we get or receive more than we contribute? This is especially important in business. Some leaders are content to achieve the goals of the company's profits. Others believe that an important part of the company's success is linked to the positive and very effective they have on the community. "

The book's author, consultant Joseph Michelli suggests that Starbucks could be just another company that uses social responsibility to increase profits, however, he claims that all their study and conversation left no doubt that the company is truly authentic. The definition of this principle is simple: do something good for the people around you, customers, employees and community. Small businesses can complain of lack of resources, but independent of the size of the shares when they are made so true. If your company has 3 employees start leaving their mark on 3 lives.

Thank you all, and don't forget to comment, because your comments are very important to the Blog

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History of Google Inc.

2009-09-19T14:04:00.000-07:00

Google Inc. is an American public corporation, earning revenue from advertising related to its Internet search, e-mail, online mapping, office productivity, social networking, and video sharing services as well as selling advertising-free versions of the same technologies. Google has also developed an open source web browser and a mobile operating system. The Google headquarters, the Googleplex, is located in Mountain View, California. As of March 31, 2009 (2009 -03-31)[update], the company has 19,786 full-time employees. The company is running millions of servers worldwide, which process hundreds of millions of search requests each day and about 1 petabyte of user-generated data every hour.

Google was founded by Larry Page and Sergey Brin while they were students at Stanford University and the company was first incorporated as a privately held company on September 4, 1998. The initial public offering took place on August 19, 2004, raising $1.67 billion, implying a value for the entire corporation of $23 billion. Google has continued its growth through a series of new product developments, acquisitions, and partnerships. Environmentalism, philanthropy and positive employee relations have been important tenets during the growth of Google. The company has been identified multiple times as Fortune Magazine's #1 Best Place to Work, and as the most powerful brand in the world.Alexa ranks Google as the most visited website on the Internet

Google's mission is "to organize the world's information and make it universally accessible and useful".The unofficial company slogan, coined by former employee and Gmail's first engineer Paul Buchheit, is "Don't be evil".Criticism of Google includes concerns regarding the privacy of personal information, copyright, and censorship.

Google began in January 1996, as a research project by Larry Page, who was soon joined by Sergey Brin, when they were both PhD students at Stanford University in California. They hypothesized that a search engine that analyzed the relationships between websites would produce better ranking of results than existing techniques, which ranked results according to the number of times the search term appeared on a page.Their search engine was originally nicknamed "BackRub" because the system checked backlinks to estimate the importance of a site. A small search engine called Rankdex was already exploring a similar strategy.

Convinced that the pages with the most links to them from other highly relevant web pages must be the most relevant pages associated with the search, Page and Brin tested their thesis as part of their studies, and laid the foundation for their search engine. Originally, the search engine used the Stanford University website with the domain google.stanford.edu. The domain google.com was registered on 15 September 1997,and the company was incorporated as Google Inc. on 4 September 1998 at a friend's garage in Menlo Park, California. The total initial investment raised for the new company amounted to almost $1.1 million, including a $100,000 check by Andy Bechtolsheim, one of the founders of Sun Microsystems.

In March 1999, the company moved into offices in Palo Alto, home to several other noted Silicon Valley technology startups. After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in 2003. The company has remained at this location ever since, and the complex has since come to be known as the Googleplex (a play on the word googolplex). In 2006, Google bought the property from SGI for $319 million.

The Google search engine attracted a loyal following among a growing number of Internet users, who liked its simple design and useful results. In 2000, Google began selling advertisements associated with search keywords.The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at 5 cents per click. This model of selling keyword advertising was pioneered by Goto.com (later renamed Overture Services, before being acquired by Yahoo! and rebranded as Yahoo! Search Marketing). Goto.com was an Idealab spin off created by Bill Gross, and was the first company to successfully provide a pay-for-placement search service. Overture Services later sued Google over alleged infringements of Overture's pay-per-click and bidding patents by Google's AdWords service. The case was settled out of court, with Google agreeing to issue shares of common stock to Yahoo! in exchange for a perpetual license. Thus, while many of its dot-com rivals failed in the new Internet marketplace, Google quietly rose in stature while generating revenue.

A patent describing part of the Google ranking mechanism (PageRank) was granted on 4 September 2001. The patent was officially assigned to Stanford University and lists Lawrence Page as the inventor.

The Name

The name "Google" originated from a misspelling of the word "googol",[30][31] which refers to 10100, the number represented by a 1 followed by one hundred zeros. Having found its way increasingly into everyday language, the verb "google" was added to the Merriam Webster Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning "to use the Google search engine to obtain information on the Internet."

Financing and initial public offering

The first funding for Google as a company was secured in August 1998, in the form of a $100,000 contribution from Andy Bechtolsheim, co-founder of Sun Microsystems, given to a corporation which did not yet exist.

On June 7, 1999 a round of funding of $25 million was announced, with the major investors being rival venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital.

The Google IPO took place on 19 August 2004. 19,605,052 shares were offered at a price of $85 per share. Of that, 14,142,135 (another mathematical reference as √2 ≈ 1.4142135) were floated by Google, and the remaining 5,462,917 were offered by existing stockholders. The sale of $1.67 billion gave Google a market capitalization of more than $23 billion. The vast majority of the 271 million shares remained under the control of Google. Many Google employees became instant paper millionaires. Yahoo!, a competitor of Google, also benefited from the IPO because it owned 8.4 million shares of Google as of 9 August 2004, ten days before the IPO.

The stock performance of Google after its first IPO launch has gone well, with shares hitting $700 for the first time on 31 October 2007, due to strong sales and earnings in the advertising market, as well as the release of new features such as the desktop search function and its iGoogle personalized home page.The surge in stock price is fueled primarily by individual investors, as opposed to large institutional investors and mutual funds.[

The company is listed on the NASDAQ stock exchange under the ticker symbol GOOG and under the London Stock Exchange under the ticker symbol GGEA.

Growth

While the primary business interest is in the web content arena, Google has begun experimenting with other markets, such as radio and print publications. On 17 January 2006, Google announced the purchase of a radio advertising company "dMarc", which provides an automated system that allows companies to advertise on the radio.This will allow Google to combine two niche advertising media—the Internet and radio—with Google's ability to laser-focus on the tastes of consumers. Google has also begun an experiment in selling advertisements from its advertisers in offline newspapers and magazines, with select advertisements in the Chicago Sun-Times.They have been filling unsold space in the newspaper that would have normally been used for in-house advertisements.

Acquisitions

See also: List of acquisitions by Google

Since 2001, Google has acquired several small start-up companies.

In 2004, Google acquired a company called Keyhole, Inc., which developed a product called Earth Viewer, renamed in 2005 to Google Earth.

In February 2006, software company Adaptive Path sold Measure Map, a weblog statistics application, to Google. Registration to the service has since been temporarily disabled. The last update regarding the future of Measure Map was made on 6 April 2006 and outlined many of the known issues of the service.

In late 2006, Google bought the online video site YouTube for $1.65 billion in stock. Shortly after, on 31 October 2006, Google announced that it had also acquired JotSpot, a developer of wiki technology for collaborative Web sites.

On 13 April 2007, Google reached an agreement to acquire DoubleClick. Google agreed to buy the company for $3.1 billion.

On 2 July 2007, Google purchased GrandCentral. Google agreed to buy the company for $50 million.

On 9 July 2007, Google announced that it had signed a definitive agreement to acquire enterprise messaging security and compliance company Postini.

Partnerships

In 2005, Google entered into partnerships with other companies and government agencies to improve production and services. Google announced a partnership with NASA Ames Research Center to build up 1,000,000 square feet (93,000 m2) of offices and work on research projects involving large-scale data management, nanotechnology, distributed computing, and the entrepreneurial space industry. Google also entered into a partnership with Sun Microsystems in October to help share and distribute each other's technologies. The company entered into a partnership with AOL of Time Warner, to enhance each other's video search services.

The same year, the company became a major financial investor of the new .mobi top-level domain for mobile devices, in conjunction with several other companies, including Microsoft, Nokia, and Ericsson among others. In September 2007, Google launched, "Adsense for Mobile", a service for its publishing partners which provides the ability to monetize their mobile websites through the targeted placement of mobile text ads, and acquired the mobile social networking site, Zingku.mobi, to "provide people worldwide with direct access to Google applications, and ultimately the information they want and need, right from their mobile devices."

In 2006, Google and Fox Interactive Media of News Corp. entered into a $900 million agreement to provide search and advertising on the popular social networking site, MySpace.

Google has developed a partnership with GeoEye to launch a satellite providing Google with high-resolution (0.41 m monochrome, 1.65 m color) imagery for Google Earth. The satellite was launched from Vandenberg Air Force Base on 6 September 2008.

In 2008, Google announced that it was hosting an archive of Life magazine's photographs, as part of a joint effort. Some of the images in the archive were never published in the magazine. The photos are watermarked and originally had copyright notices posted on all photos, regardless of public domain status

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History of Coca-Cola

2009-09-19T13:56:00.000-07:00

Type Soft drink (Cola)
Manufacturer The Coca-Cola Company
Country of origin USA
Introduced 1886
Related products:
Pepsi
Irn Bru
RC Cola
Cola Turka
Zam Zam Cola
Mecca Cola
Virgin Cola
Parsi Cola
Qibla Cola
Evoca Cola
Corsica Cola
Breizh Cola
Afri Cola

Coca-Cola is a carbonated soft drink sold in stores, restaurants and vending machines internationally. The Coca-Cola Company claims that the beverage is sold in more than 200 countries. It is produced by The Coca-Cola Company in Atlanta, Georgia, and is often referred to simply as Coke (a now genericized trademark) or (in European and American countries) as cola, pop, or in some parts of the U.S., soda. Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century.

The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. Such bottlers include Coca-Cola Enterprises, which is the largest single Coca-Cola bottler in North America and western Europe. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors.

The first Coca-Cola recipe was invented in a drugstore in Columbus, Georgia by John Pemberton, originally as a cocawine called Pemberton's French Wine Coca in 1885.He may have been inspired by the formidable success of Vin Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton responded by developing Coca-Cola, essentially a non-alcoholic version of French Wine Cola. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8, 1886.[8] It was initially sold as a patent medicine for five cents[9] a glass at soda fountains, which were popular in the United States at the time due to the belief that carbonated water was good for the health. Pemberton claimed Coca-Cola cured many diseases, including morphine addiction, dyspepsia, neurasthenia, headache, and impotence. Pemberton ran the first advertisement for the beverage on May 29 of the same year in the Atlanta Journal.

By 1888, three versions of Coca-Cola—sold by three separate businesses—were on the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and incorporated it as the Coca Cola Company in 1888.[The same year, while suffering from an ongoing addiction to morphine,[citation needed] Pemberton sold the rights a second time to four more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H. Bloodworth. Meanwhile, Pemberton's alcoholic[citation needed] son Charley Pemberton began selling his own version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other two manufacturers could continue to use the formula. So, in the summer of 1888, Candler sold his beverage under the names Yum Yum and Koke. After both failed to catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888, in order to force his two competitors out of the business. Candler purchased exclusive rights to the formula from John Pemberton, Margaret Dozier and Woolfolk Walker. However, in 1914, Dozier came forward to claim her signature on the bill of sale had been forged, and subsequent analysis has indicated John Pemberton's signature was most likely a forgery as well.

Old German Coca-Cola bottle opener

In 1892 Candler incorporated a second company, The Coca-Cola Company (the current corporation), and in 1910 Candler had the earliest records of the company burned, further obscuring its legal origins. By the time of its 50th anniversary, the drink had reached the status of a national icon in the USA. In 1935, it was certified kosher by Rabbi Tobias Geffen, after the company made minor changes in the sourcing of some ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans of Coke first appeared in 1955.[17] The first bottling of Coca-Cola occurred in Vicksburg, Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A. Biedenharn. The original bottles were Biedenharn bottles, very different from the much later hobble-skirt design that is now so familiar. Asa Candler was tentative about bottling the drink, but two entrepreneurs from Chattanooga, Tennessee, Benjamin F. Thomas and Joseph B. Whitehead, proposed the idea and were so persuasive that Candler signed a contract giving them control of the procedure for only one dollar. Candler never collected his dollar, but in 1899 Chattanooga became the site of the first Coca-Cola bottling company. The loosely termed contract proved to be problematic for the company for decades to come. Legal matters were not helped by the decision of the bottlers to subcontract to other companies, effectively becoming parent bottlers.

Coke concentrate, or Coke syrup, was and is sold separately at pharmacies in small quantities, as an over-the-counter remedy for nausea or mildly upset stomach.

New Coke

Main article: New Coke

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of the drink with "New Coke". Follow-up taste tests revealed that most consumers preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management was unprepared for the public's nostalgia for the old drink, leading to a backlash. The company gave in to protests and returned to the old formula under the name Coca-Cola Classic on July 10, 1985.

21st century

On February 7, 2005, the Coca-Cola Company announced that in the second quarter of 2005 they planned to launch a Diet Coke product sweetened with the artificial sweetener sucralose ("Splenda"), the same sweetener currently used in Pepsi One. On March 21, 2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a blend of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a new "healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc, marketed as "Diet Coke Plus."

On July 5, 2005, it was revealed that Coca-Cola would resume operations in Iraq for the first time since the Arab League boycotted the company in 1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-Cola." The word "Classic" was truncated because "New Coke" was no longer in production, eliminating the need to differentiate between the two.The formula remained unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-ounce bottles sold in parts of the southeastern United States. The change is part of a larger strategy to rejuvenate the product's image.

The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special editions with lemon, lime or coffee.

In response to consumer insistence on a more natural product, the company is in the process of phasing out E211, or sodium benzoate, the controversial additive used in Diet Coke and linked to DNA damage to yeast cells and hyperactivity in children. The company has stated that it plans to remove E211 from its other products, including Sprite and Oasis, as soon as a satisfactory alternative is found.

According to Coca-Cola authorities, the best Coca-Cola is made in Skopje, Macedonia, where the company has granted the Skopje Brewery its "Best Bottling Company" award.

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Histoy of Mc Donalds

2009-09-19T13:46:00.000-07:00

McDonald's Corporation (NYSE: MCD) is the world's largest chain of hamburger fast food restaurants, serving nearly 47 million customers daily.[3] At one time it was the largest global restaurant chain, it has since been surpassed by multi-brand operator Yum! (KFC, Taco Bell and others) and sandwich chain Subway.

In addition to its signature restaurant chain, McDonald’s Corporation held a minority interest in Pret A Manger until 2008, and owned the Chipotle Mexican Grill until 2006 and the restaurant chain Boston Market until 2007.[4] The company has also expanded the McDonald's menu in recent decades to include alternative meal options, such as salads and snack wraps, in order to capitalize on growing consumer interest in health and wellness.

Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.

McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts. In response to obesity trends in western nations and in the face of criticism over the healthiness of its products, the company has modified its menu to include such healthier alternatives as salads, wraps and fruit.

The business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald McDonald in 1963.

The first McDonald's restaurants opened in the United States, Canada, Costa Rica, Japan, the Netherlands, Germany, Australia, France, El Salvador and Sweden in order of openings.

The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955 , the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion and the company became listed on the public stock markets in 1965.Kroc was also noted for aggressive business practices, compelling the McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. The site of the McDonald brothers' original restaurant is now a monument.

With the expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.

Facts and figures

McDonald's restaurants are found in 119 countries and territories around the world and serve nearly 47 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people. The company also operates other restaurant brands, such as Piles Café.

Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006 when it sold off its controlling through an IPO. Other outstanding shares the company had were traded in a stock-swap, but the company still remains as a majority stakeholder in the company. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.

Types of restaurants

Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fast-food chains. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts, that offer Walk-Thru service in place of Drive-Thru.

Specially themed restaurants also exist, such as the "Solid Gold McDonald's," a 1950s rock-and-roll themed restaurant.[12] In Victoria, British Columbia, there is also a McDonald's with a 24 carat (100%) gold chandelier and similar light fixtures.

To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafé. The McCafé concept is a café-style accompaniment to McDonald's restaurants in the style of Starbucks. McCafé is a concept of McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania there are McCafés in every store, with the rest of the states quickly following suit. After upgrading to the new McCafe look and feel, some Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there were over 600 McCafés worldwide.

Some locations are connected to gas stations/convenience stores, while others called McExpress have limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location targeted at truckers and travelers which may have services found at truck stops.

Playgrounds

Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland" (outdoors)[citation needed]. The first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the USA, with many more being constructed soon after. Some PlayPlace playgrounds have been renovated into "R Gym" areas.

"R Gyms" are in-restaurant play area that features interactive game zones designed for children aged 4 to 11. They are equipped with stationary bicycles attached to video games, dance pads, basketball hoops, monkey bars, an obstacle course, and other games which emphasize physical activity.

The "R Gym" features the Toddler Zone, an active play environment with age appropriate games that develop physical coordination and social skills; the Active Zone, designed for children aged four-to-eight that promotes physical fitness through fun play; the Sports Zone which features a series of sport oriented activities to promote aerobic exercise for children aged 9-to-11; the Parent Zone which features seating and provides a monitoring area for their children; and the Dining Area which allows families to eat.

Redesign

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first major redesign since the 1970s.

The new design will include the traditional McDonald's yellow and red colors, but the red will be muted to terra cotta, the yellow will turn golden for a more "sunny" look, and olive and sage green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls.

The exterior will have golden awnings and a "swish brow" instead of the traditional double-slanted mansard roof.

The new restaurants will feature areas:

The "linger" zone will offer armchairs, sofas, and Wi-Fi connections.
The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will offer them news and weather reports.
The "flexible" zone will be targeted toward families and will have booths featuring fabric cushions with colorful patterns and flexible seating.
Different music targeted to each zone.
Branches in the United Kingdom have an even more contemporary look and feel to the stores, replacing the red with a deep British racing green and overall making the stores look more casual, similar to a Starbucks branch.

Business model

McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others through a variety of franchise agreements and joint ventures. The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.

The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments.

As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators.

According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to a news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country.

Controversies

As a prominent example of the rapid globalization of American fast food industry, McDonald's is often the target of criticism for its menu, its expansion, and its business practices.

The McLibel Trial, also known as McDonald's Restaurants v Morris & Steel, is an example of this criticism. In 1990, activists from a small group known as London Greenpeace (no connection to the international pressure group Greenpeace) distributed leaflets entitled What's wrong with McDonald's?, criticizing its environmental, health, and labor record. The corporation wrote to the group demanding they desist and apologize, and, when two of the activists refused to back down, sued them for libel in one of the longest cases in British civil law. A documentary film of the McLibel Trial has been shown in several countries.

In 1999, French anti-globalisation activist José Bové vandalized a half-built McDonald's to protest against the introduction of fast food in the region.

In 2001, Eric Schlosser's book Fast Food Nation included criticism of the business practices of McDonald's. Among the critiques were allegations that McDonald's (along with other companies within the fast food industry) uses its political influence to increase its profits at the expense of people's health and the social conditions of its workers. The book also brought into question McDonald's advertisement techniques in which it targets children. While the book did mention other fast-food chains, it focused primarily on McDonald's.

In 2002, vegetarian groups, largely Hindu, successfully sued McDonald's for misrepresenting their French fries as vegetarian.

Morgan Spurlock's 2004 documentary film Super Size Me said that McDonald's food was contributing to the epidemic of obesity in society, and that the company was failing to provide nutritional information about its food for its customers. Six weeks after the film premiered, McDonald's announced that it was eliminating the super size option, and was creating the adult happy meal.

Anthony Bourdain on his show, No Reservations, has criticized McDonald's among other fast-food restaurants for its culinary blandness.

The soya that is fed to McDonald’s chickens is supplied by agricultural giant Cargill and comes directly from Brazil. Greenpeace alleges that not only is soya destroying the Amazon rain forest in Brazil, but soya farmers are guilty of further crimes including slavery and the invasion of indigenous peoples’ lands. The allegation is that McDonald's, as a client of Cargill's, is complicit in these activities.

Arguments in defense of McDonald's

In response to public pressure, McDonald's has sought to include more healthy choices in its menu and has introduced a new slogan to its recruitment posters: "Not bad for a McJob". (The word McJob, first attested in the mid-1980s and later popularized by Canadian novelist Douglas Coupland in his book Generation X, has become a buzz word for low-paid, unskilled work with few prospects or benefits and little security.) McDonald's disputes the idea that its restaurant jobs have no prospects, noting that its CEO, Jim Skinner, started working at the company as a regular restaurant employee, and that 20 of its top 50 managers began work as regular crew members.[In 2007, the company launched an advertising campaign with the slogan "Would you like a career with that?" on Irish television, outlining that their jobs have many prospects.

In a bid to tap into growing consumer interest in the provenance of food, the fast-food chain recently switched its supplier of both coffee beans and milk. UK chief executive Steve Easterbrook said: "British consumers are increasingly interested in the quality, sourcing and ethics of the food and drink they buy". McDonald's coffee is now brewed from beans taken from stocks that have been certified by the Rainforest Alliance, a conservation group. Similarly, milk supplies used for its hot drinks and milkshakes have been switched to organic sources which could account for 5% of the UK's organic milk output.

McDonald's announced on May 22, 2008 that, in the U.S. and Canada, it will be introducing cooking oil for its french fries that contains no trans fats. The company will use canola-based oil with corn and soy oils by year's end for its baked items, pies and cookies.

Environmental record

Discarded fast food packaging contributes to the urban litter problem in cities worldwideIn April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste from the restaurants were collected by Veolia Environmental Services and used to produce energy at a power plant. McDonald's plans to expand this project, although the lack of biomass power plants in the U.S. will prevent this plan from becoming a national standard anytime soon. In addition, in Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks.

Furthermore, McDonald's has been using a corn-based bioplastic to produce containers for some of their products. Although industries who use this product claim a carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic does not break down in landfills as efficiently as other conventional plastics. The extra energy it takes to recycle this plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams, causing other recycled plastics to become unsaleable.

The U.S. Environmental Protection Agency has recognized McDonald's continuous effort to reduce solid waste by designing more efficient packaging and by promoting the use of recycled-content materials.McDonald's reports that they are committed towards environmental leadership by effectively managing electric energy, by conserving natural resources through recycling and reusing materials, and by addressing water management issues within the restaurant.

In an effort to reduce energy usage by 25% in its restaurants, McDonald's opened a prototype restaurant in Chicago in 2009 with the intention of using the model in its other restaurants throughout the world. Building on past efforts, specifically a restaurant it opened in Sweden in 2000 that was the first to intentionally incorporate green ideas, McDonald's designed the Chicago site to save energy by incorporating old and new ideas such as managing storm water, using skylights for more natural lighting and installing some partitions and tabletops made from recycled goods.

When McDonald’s received criticism for its environmental policies in the 1970s, it began to make substantial progress towards source reductions efforts.For instance, an “average meal” in the 1970s—a Big Mac, fries, and a drink—required 46 grams of packaging; today, it requires only 25 grams, allowing a 46% reduction.In addition, McDonald’s eliminated the need for intermediate containers for cola by having a delivery system that pumps syrup directly from the delivery truck into storage containers, saving two million pounds of packaging annually. Overall, weight reductions in packaging and products, as well as the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.

Legal cases

McDonald's has been involved in a number of lawsuits and other legal cases, most of which involved trademark disputes. The company has threatened many food businesses with legal action unless they drop the Mc or Mac from their trading name. In one noteworthy case, McDonald's sued a Scottish café owner called McDonald, even though the business in question dated back over a century (Sheriff Court Glasgow and Strathkelvin, November 21, 1952).

It has also filed numerous defamation suits. For example, in the McLibel case, McDonald's sued two activists for distributing pamphlets attacking its environmental, labor and health records. After the longest trial in UK legal history, McDonald's won a technical victory for showing that some allegations were untrue. But it was a massive public relations disaster, since the judge also found that more than half of what was on the pamphlet was truthful, or were simply the opinions of the activists and therefore non-prosecutable.

McDonald's has defended itself in several cases involving workers' rights. In 2001 the company was fined £12,400 by British magistrates for illegally employing and over-working child labor in one of its London restaurants. This is thought to be one of the largest fines imposed on a company for breaking laws relating to child working conditions (R v 2002 EWCA Crim 1094). In April 2007 in Perth, Western Australia, McDonald's pleaded guilty to five charges relating to the employment of children under 15 in one of its outlets and was fined AU$8,000.

Possibly the most infamous legal case involving McDonald's was the 1994 decision in The McDonald's Coffee Case.

In a McDonald's American Idol figurine promotion, the figurine that represents "New Wave Nigel" wears something that closely resembles Devo’s Energy Dome, which was featured on the band's album cover, Freedom of Choice. In addition to the figurine's image, it also plays a tune that appears to be an altered version of Devo's song "Doctor Detroit." Devo copyrighted and trademarked the Energy Dome and is taking legal action against McDonald's.

Products

A McDonald's Big Mac combo meal served with French fries and Coca-Cola.

McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. Portugal is the only country with McDonald's restaurants serving soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia).

Headquarters

McDonald's Plaza, the headquarters of McDonald'sThe McDonald's headquarters complex, McDonald's Plaza, is located in Oak Brook, Illinois. It sits on the site of the former headquarters and stabling area of Paul Butler, the founder of Oak Brook. McDonald's moved into the Oak Brook facility from an office within the Chicago Loop in 1971.

Advertising

McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.

To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.

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Facebook Grows and Makes Money

2009-09-17T18:35:00.000-07:00

The world's largest social networking site just got bigger with the announcement it has 300 million active monthly users from around the globe.

Facebook also revealed that it had started making money ahead of schedule.

The company had not expected to start turning a profit until sometime in 2010.

"This is important to us because it sets Facebook up to be a strong independent service for the long term," said Facebook founder Mark Zuckerberg.

"We are succeeding at building Facebook in a sustainable way. We are just getting started on our goal of connecting everyone.

"We face a lot of fun and important challenges that require rethinking the current systems for enabling information flow across the web," Mr Zuckerberg said in a blog post.

Milestones

The news that Facebook had passed these two benchmarks was made at TechCrunch 50 in San Francisco, a conference for start ups.

Facebook hit the 250 million user mark back in July. It is estimated that the site is gaining about five million new users a week, or 50 million in the last 75 days.

More than 70% of users are outside the United States
"Passing these milestones to me means we can continue to fund our development and our innovation and be self sustaining as we grow this network," Mike Schroepfer, Facebook's vice-president of engineering, told BBC News.

"We think 300 million is a just a step on the way to get as much of the entire world on the social network communicating with the friends and family and the people they want to communicate with."

"That Facebook is able to continue this growth and build a "cash-flow positive" business is an impressive feat," said Nick O'Neill of AllFacebook.com.

"If the company can cover the cost of scaling to one billion users and still manage to break even, there's no doubt that the company will have a great opportunity to rake in billions," added Mr O'Neill.

Facebook's Mr Schroepfer said the company had worked hard to get more money flowing in than out.

"The growth of the network has certainly helped us go cash-positive and the engineering team has done a lot of innovation on our ad products, as our business is primarily advertising-funded.

"As more and more of the world gets on the network, people and advertisers realise the power of sharing information, whether it's about a movie preview or a car," said Mr Schroepfer.

Look out Twitter, said Ben Parr, who is associate editor at the social media blog Mashable.com.

"If Facebook continues to open up its platform and adopt Twitter's best features, it could spell trouble for the Twitterverse. The world's largest social network is on the warpath," warned Mr Parr.

Burger King staff sand castle to sell ice creams

2009-09-17T18:34:00.000-07:00

Sun, sea, sand and … sand restaurants? Visitors to Westonsuper-Mare are having the lot this August bank holiday.
Fast food chain Burger King opened its first outlet made out of sand yesterday, next to the Sea Life Centre, to coincide with the resort's sand sculpture festival.

Proceeds from the sale of the chain's Fusion Mint Choc Swirl ice creams are being donated to Weston Hospicecare.
The 'sand castle' restaurant took three days to build and was made of about 100 tonnes of sand.
It was 12ft high, 23ft long and had an area of about 80 square feet with tables and 15 seats inside.

The sand castle had no roof and customers were able to walk in and out and be served at a sand counter.
Burger King aimed to sell 1,000 of its ice creams to customers, for £1 each. The sand restaurant, constructed by Mark Anderson, owner of Sculptures in Sand, was to be demolished at the end of the day.
Martin Ayres from Burger King said that they had already sold more than 400 ice creams by early afternoon.
He said: "The weather has held up for us today and we have never stopped serving, people have been laughing and taking pictures, it's all a bit of fun."

Giving Brazil a taste of Arabia

2009-09-17T18:32:00.000-07:00

It speaks volumes for Brazil's diverse blend of cultural influences that one of its biggest home-grown fast-food chains is an Middle East food franchise called Habib's.

Although people of Arab descent make up a mere 7% of the Brazilian population, a business offering such delicacies as hummus, stuffed vine leaves and tabouleh as part of its menu now serves 120 million meals a year.

From a modest start 17 years ago with one restaurant in Sao Paulo, Habib's has grown to 260 outlets in 15 of Brazil's 26 states, plus the Federal District that contains the capital, Brasilia.

That is small in comparison with US hamburger chain McDonald's, which has more than 1,100 outlets in Brazil.

But Habib's is still far more successful on its own turf than many better-known international brands.

Even more surprisingly, the man who founded and still runs Habib's, Alberto Saraiva, was born in Portugal and has no family ties to the Arab world.

Mr Saraiva, now 53, came to Brazil with his family when he was still very young.

In 1973, he was studying medicine in Sao Paulo when his father Antonio, who had recently taken over one of the city's Portuguese-style bakeries known as "padarias", was attacked and killed by a robber.

As the eldest of three sons, Mr Saraiva had to support the family and took over the bakery, during what he describes as "the most difficult time of my life".

"In that padaria, I learned to be a businessman," he said, in an interview with the BBC News website.

"After that, I had other businesses that I built up and sold in order to continue studying. In one of those businesses, I got to know an Arab cook - an old man of 70, retired - who came to me to ask for work.

"So I learned Arabic cuisine from him. Then I realised that Arabic restaurants in Brazil were very traditional places, not aimed at the majority of the population, and I saw there was a niche there ready to be discovered.

"So I gathered up all the experience that I had gained in the other businesses, took the main dishes from Arab cuisine and founded Habib's.

"It was aimed not at the Arab community but at the wider population, the middle classes and at people who like not just Arabic food but good food, served fast."

The result was an immediate success. The first Habib's in Rua Cerro Cora, in the west of the city, attracted huge queues of customers from the start.

Mr Saraiva built up a chain of 16 outlets before starting to offer franchise opportunities in 1992. Today, he owns 45% of the chain's restaurants, while the rest are run on a franchise basis.

Low prices

The most popular products at Habib's are the esfiha - a small, round flatbread topped with minced beef or cheese - and the kibe - a croquette of beef shaped like a rugby ball.

These are deliberately priced as low as possible. Esfihas sell for 69 Brazilian centavos (31 cents; 18p) each, with the price falling to 39 centavos in some special offers.

Habib's aims to be affordable for the majority of Brazilians
Last year, Habib's sold a record 600 million esfihas - more than three for every man, woman and child in Brazil - and 60 million kibes.

But the menu contains about 50 other options, including pizzas and burgers.

Various set menus are available, ranging from a full Arabic meal to a combination of esfihas, kibe, French fries and freshly-squeezed tropical fruit juice.

Unusually for fast-food restaurants, a waiter takes your order at the table, while knives and forks are always provided.

Competition

The low prices and wide range of options are key ways to stay ahead in Brazil's highly competitive food market.

Mr Saraiva and his franchisees are up against padarias, "por kilo" restaurants where you serve yourself and pay according to the weight of your plate, street vendors and many other low-cost outlets.

But Habib's has successfully seen off the challenge from most of the international fast-food chains that once saw Brazil as a target.

Even this street vendor is a player in Brazil's competitive food market
Apart from McDonald's, which has been in Brazil since 1979, most US companies entered the market in the 1990s, after the end of high inflation brought stability to the Brazilian economy.

However, many of them have since withdrawn, unable to compete on price and unwilling to acknowledge Brazilian culture.

"They didn't study the market, they just came with the intention of doing what they did abroad," says Mr Saraiva. "They didn't adapt to the country.

"Suddenly KFC wanted Brazilians to pick up pieces of chicken with their fingers, when it's not the Brazilian habit to eat with your hands.

"Also, the pieces of chicken were served in cardboard buckets. Brazilians are not used to being served like that. These are basic mistakes which customers will not accept."

Profitability

Other innovations brought in by Habib's include their 28 Minutes home delivery service - if it takes longer, you pay nothing - and a sponsorship deal with Sao Paulo Football Club that has put the firm's distinctive logo on the sleeve of the team strip.

Mr Saraiva has even written a book, The Commandments of Profitability, in which he outlines the principles of his business philosophy.

The chain remains Brazilian-only for the time being
But one dream has eluded him - the desire for international expansion of the chain.

Plans to open Habib's restaurants in the US state of Florida were put on hold indefinitely after the 11 September 2001 attacks on the World Trade Center and the Pentagon.

"There is no tradition of Brazil exporting fast-food, which makes it difficult. We would also need to develop local partners who would be prepared to take Habib's to their countries," says Mr Saraiva.

"It's also not our priority, because we still have a lot of potential for growth inside Brazil.

"Sometimes growth can bring disadvantages, but in our case, we are growing in an extremely controlled way, which allows us to maintain the level of service and quality of our products."

Virtual world, real money.

2009-09-17T18:31:00.001-07:00

The MMORPG create a mixture of falsehood with real dollars - and it now move an economy valued at $ 1 billion.

One of the favorite places for AX Marcelo (17 years old), is a square near his house. That's where he usually spent afternoons with friends after school, talking about football and girls, or purchasing things like hats, bracelets, necklaces and tennis. It would be a typical routine for any teenager, if there weren't two details. The first is that place, friends and hats do not exist. Marcelo owns an avatar, or virtual character, created to inhabit the world of Ragnarok, a leading online gaming crowds (MMORPGs, massively multiplayer online role-playing games). They are games in which participants simulate a normal life on the Internet, with the right to be born, dating and fun.

The second detail makes his routine even more unusual.He learned to make real money in game. Playing so much Ragnarok, Marcelo accumulated zenys, the virtual currency of the game, Its possible winning a WOE (War of Emperium) or killing a monster. With a pocket full of zenys (virtual money),he increased his chars with accessories which increased the power, Hp and SP. He realized that four hours a day dedicated to Ragnarök could turn into real profits.

Last week, he put his avatar for sale on the "Mercado Livre Website", one of the largest e-commerce sites in Brazil, for $ 1,000. "My avatar is a High Wizz on maximum power. It took me a year to ride it," said Marcelo.
And that goes for $ 1,000? The market seems to say yes. The offer received 30 requests from stakeholders. "Sooner or later, I will sell. It's a bargain."

The case of Marcelo is an early example, in Brazil, a phenomenon that has assumed gigantic proportions in the U.S.A..
Just last year, the players of online games spent U$ 1 billion to buy virtual objects, according to the U.S. company Internet Gaming Entertainment.

Recently, a single player the game Entropia Project, paid U.S.$ 100 thousand for a train station - and hopes to recover the investment by charging passages avatars.

"The generation that was playing these games really don't know which is the limit between the virtual world and real life," said Pierre Omidyar, founder of site eBay.

This phenomenon originated in 2003 when the company Linden Lab created Second Life, a game similar to the traditional game The Sims. The major innovation of Linden Lab was to give players of Second Life the right to exclusive property of their avatars (called "residents") and the virtual objects.

The game turned into a fever. And created an economy of its own, with market rules. Soon, the virtual currency of Second Life, the Linden dollar, would be quoted in real U.S. dollars, with daily variations and parallel market.

On Thursday 27, a real dollar was worth about 300 Linden dollars. Already on eBay, a lot 10 billion virtual coins, worth about $ 33 was sold for $ 42.50.

Of course, all this movement has already caught the attention of companies. With millions of young people spending long hours in the online world, companies like Coca-Cola, Intel and Nestlé began to advertise in the most successful games.
The Level Up!, a Filipino company that brought the Ragnarok to Brazil, attracted the network Blockbuster video rentals and brand cereal Crunch, Nestle, into the game. "Who plays see advertising these companies," says Andrea Bedricovetchi, chief executive of Level Up!. "It is a powerful medium. In the last New Year's Eve there were 10 thousand people connected."

Andrea doesn't say what was its advertising revenue, but the Korean game,Rakion, for example, has stopped charging users for subscriptions to live only for advertising. "Just put a kiosk in the Coca-Cola into the game to reach millions of people," said Diogo Silva, director of the game Priston Tale.

There's another dimension in which the game's world and the world of real money starting to blur. In the United States, the game World of Warcraft has been considered a kind of "new golf generation": an activity that meet colleagues and business partners. But, instead of a ball to swing, they kill some orcs.