These Are the Most Popular College Degrees Earned by Millionaires

 

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This piece originally appeared on John A. Byrne‘s LinkedIn Influencers page.
Having a net worth of one million dollars may not be what it used to be. But it’s still a mark of success for those who are able to achieve it. Which college degrees helped to produce the most millionaires?

The answer to that question came out in a new survey and the MBA degree held up surprisingly well in the millionaire sweepstakes. The survey reveals that engineering degrees produce the most millionaires, followed by MBA, economics and law degrees.

The review, conducted by wealth management magazine SPEAR’s and consultancy company WealthInsight, assesses some 70,000 millionaires worldwide (individuals with over U.S. $1 million in assets–excluding primary residences), to reveal their most popular degrees and top-attended universities.

However, the results are slightly misleading: Many of those engineering majors made their millions in entrepreneurship, points out WealthInsight’s Oliver Williams in a statement. “…Interestingly, few of these degrees turn out to be outright vocational; Most engineering graduates, for example, are not engineers but entrepreneurs,” he says. “The same goes for most law and politics graduates, who owe their fortunes not to practicing their professions but climbing the ranks of the financial services sector.”

Predictably, business degrees dominate the list. “You would expect to see a high number of scientific or financial degrees in the top 10, like engineering, commerce and accounting. Numerical degrees are a notable advantage when it comes to amassing a personal fortune,” Williams points out.

The survey results also dispel the myth that college dropouts, such as Steve Jobs and Mark Zuckerberg, regularly make it to millionaire status. Roughly 1% of millionaires in the survey did not obtain a degree, meaning the other 99% clearly depended–at least in part–on a diploma.

Not surprisingly, Harvard University and Stanford University top the table for millionaires’ most-attended universities. University of California, Columbia University and University of Oxford round out the top five.

The U.S. claims nearly half of the millionaires’ 500 most-attended universities with 216 institutions on the list. The UK comes in a distant second with 42, followed by Canada and France with 27 universities, each.

SPEAR’s editor Josh Sepro explained in a statement that top schools equip their millionaires with more than academics: “The universities which dominate are exactly the ones you’d expect, not just because of the quality of the education but because of the self-confidence they instill in their students.

They also have strong alumni networks which give their students a leg up when they move into the world of work.”
For the full top 100 list of global universities visit SPEAR’s story.

Read more: The Most Popular College Degrees Earned By Millionaires | TIME.com http://time100.time.com/2013/11/11/these-are-the-most-popular-college-degrees-earned-by-millionaires/#ixzz2r8dRqmUf

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JPMorgan Agrees to Pay $410 Million in Power Market Manipulation Case

Andrew Burton/ReutersThe headquarters of JPMorgan Chase in New York.

JPMorgan Chase has agreed to pay $410 million to the nation’s energy regulator, a move that will allow the bank to settle accusations that traders in its Houston offices manipulated electricity markets in California and Michigan.

The agreement announced on Tuesday is a record settlement for the regulator, theFederal Energy Regulatory Commission, which has ramped up its policing of Wall Street trading in recent months.

“We are pleased to put this matter behind us,” said Brian Marchiony, a spokesman for JPMorgan. “Due to reserves previously set aside, this settlement will not have a material impact on earnings.”

While the commission fined the bank, it stopped short of penalizing individual JPMorgan executives. That decision is a reversal from earlier this year, when the agency warned JPMorgan that it might seek to sanction Blythe Masters, the influential leader of the bank’s commodities business. Initially, investigators also planned to recommend that the agency hold three of her employees “individually liable.”

The accusations of market manipulation initially surfaced this spring in a confidential commission document, reviewed by The New York Times. The document, a warning that investigators would recommend that the agency pursue civil charges, had originally concluded that Ms. Masters gave “false and misleading statements” under oath.

From the outset, JPMorgan argued that Ms. Masters never made false statements.

The accusations against JPMorgan originated from its rights to sell electricity from power plants that it acquired after the bank took over Bear Stearns in an emergency rescue in 2008.

The plants that the bank inherited were outdated and inefficient. Still, the regulator said, traders in Houston found a work around. To transform the power plants into profit generators, the agency said, JPMorgan’s traders adopted eight different “schemes” from September 2010 to June 2011.

The trading strategies offered electricity at prices that appeared falsely attractive to state energy authorities. The effort prompted authorities in California and Michigan to make excessive payments that helped drive up energy prices, the regulator said.

As part of the settlement on Tuesday, JPMorgan will pay a civil penalty of $285 million to the Treasury Department. JPMorgan will also pay $125 million in “unjust profits,” the energy commission said on Tuesday. That money will go to ratepayers in both California and the Midwest, where the agency said JPMorgan’s trading practices drove up prices for electricity.

Under the deal, the bank must also make annual reports to the commission for three years detailing its power business in the United States. While JPMorgan admitted to the facts of the trading strategies, outlined in the settlement, the bank did not admit or deny wrongdoing.

The case is the regulator’s latest crackdown on a big bank. In January, the commission reached a $1.6 million settlement with Deutsche Bank involving accusations of improper trading in California.

The commission also recently ordered Barclays to pay a $470 million penalty for suspected manipulation of energy markets in California and other Western states. Unlike JPMorgan and Deutsche Bank, however, Barclays is fighting the charges.

Original sources: http://dealbook.nytimes.com/2013/07/30/jpmorgan-to-pay-410-million-in-power-market-manipulation-case/?ref=business

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How Google Is Quietly Taking Over

Earlier this month, Google GOOG +0.94% announceddisappointing earnings, and its stock immediately dropped 5% (Disclosure: I own Google stock through a fund).  Most disturbingly, the company’s core revenue driver, the revenue it gets for each click on an ad, decreased 6% while traffic acquisition costs increased.

Ordinarily, rising costs amid lower revenues is no recipe for success, but Google keeps plowing forward and last week launched Chromecast, a $35 device that does essentially the same job as the $99 Apple AAPL +1.9% TV and allows you to control your TV screen from a smartphone or tablet (including iPhones and iPads).

It sold out almost immediately.

The company also recently announced that it has activated 900 million Android devices and has 750 million users on its Chrome browser.  Taken altogether, the message should be clear.  While earnings might zig and zag, Google is taking over the digital experience.  Here’s a quick overview:

Mobile phones:  I’ve written before about how my iPhone is slowly becoming a Google phone.  While the hardware comes from Cupertino, most of the core functionality comes from Mountain View.

I use Chrome rather than Safari, Google Maps rather than Apple Maps, Google Now and voice search rather than Siri.  If I watch a video, it’s most likely on YouTube.  While others’ behavior may differ than my own, it’s clear that Google owns at least some part of the experience of the vast majority of smartphone users.

TV:  Although Google’s earlier efforts in TV weren’t particularly impressive, Chromecast looks like a winner.  For only $35 (and with the promotional offer of 3 months of Netflix NFLX +0.01% for free, the actual cost is $11), I can make my TV do what I want it to, stream video from online services made for the small screen and transfer it to a big screen.

Again, while my mobile devices are made by Apple and my TV by Samsung, Google has somehow managed to insert itself and early reviews are very positive.  Forbes’ Jeff Bercovici called it a Trojan horse for television.

Productivity:  Despite what critics say, Microsoft MSFT +1.54% maintains its stranglehold on productivity. For any business executive, Microsoft’s Office suite is a must.  Operating without PowerPoint and Excel would be a serious professional liability.

However, I still find myself using Google Docs a lot and my younger friends tell me they use Google for simple spreadsheets too.  The reason:  Sometimes, portability and the ability to collaborate on the cloud trumps functionality.  Microsoft’s Office 365, despite improvements, still feels clunky.

Google X:  Google’s super secret innovation lab is helping the company insert itself even more thoroughly into our lives.  From autonomous cars to Google Glasses to who knows what else they’re cooking up, it’s getting hard to think of any facet of our lives which the guys at Mountain View don’t plan to insert themselves in.

Put it all together and it becomes clear that there is now a Google layer lying just beneath the Internet.  But what’s most exciting (or creepy, depending on your perspective), is what the company is using that layer to do.

A New Strategic Paradigm

The common explanation for the extraordinary breadth of Google services is that it helps the company target ads and that’s certainly part of the equation, advertising provides the revenue engine that drives the business.  However, even more important are the thousands of experiments Google runs.

The massive breadth of Google services allows it to collect information on just about every human activity you can think of, from how we surf the Web to how we travel through a city and now, how we watch TV.  It can then use the data to build simulations that help it determine how consumers are likely to act in the future, which allows Google to create better and better products.

Google has shown that it is not  afraid to fail.  However, in the new world of big data, failing fast and cheap is becoming too slow and expensive.  Running thousands of simulations means that it can fail in the virtual world before if fails in the real one.  With no marketing, inventory, or  retooling costs, bits are vastly cheaper than atoms.

While Google is not the only one exploiting big data in this way (Facebook and Amazon have impressive efforts as well), no one can match its vast reach into our digital lives and that’s gives them a serious advantage.  Chances are, next time you go online, you’ll be helping to test Google’s next breakthrough product without even knowing it.

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5 Ways to Build a Resilient Organization

Dorie Clark, Forbes Contributor



Andrew Zolli says organizations can increase
their resiliency

Disruption seems to be everywhere these days – industries collapsing, storm surges shutting down major urban centers, financial markets imploding, and more. Preventing these calamities would be everyone’s first choice, of course. But in an increasingly complex world, it’s very difficult. “There’s a deepening appreciation that we’re living in a time of increased, intrinsic volatility,” says Andrew Zolli, the Executive Director and curator of PopTech and the co-author (with Ann Marie Healy) of Resilience: Why Things Bounce Back.

Today, says Zolli, it’s become essential for companies (and individuals) “to become more agile – not just in the face of the risks we know, but in the face of the ones we won’t see coming.” He recently shared his thoughts with me about how companies can improve their ability to withstand disruption.

Work on more than one time cycle. If resources are limited, it may seem like the right move to go “all in” on a new product or strategy. But as Karen Firestone recently discussed in the Harvard Business Review, a company without a Plan B puts itself at grave risk of failure. Instead, says Zolli, “work on more than one time cycle at a time – creating value for both the very short-term and long-term.”

Embrace cognitive diversity. The best companies, says Zolli, “have a lot of cognitive diversity – people with the same values, but with different thinking styles.” The goal is for employees to aim toward the same goal, but bring unique insights and ways of looking at problems.

Don’t forget middle management. In our culture, middle managers get a bad rap (indeed, it’s the entire premise of the Dilbert cartoons). But Zolli says to think twice about piling on. “We’ve gutted most institutional middle management,” he says, “but when things go wrong, it’s often people in the middle who determine an organization’s resilience. It’s rarely the square-jawed, visionary CEO, or the street activist that makes things work together– the middle gets things done. These folks are not at the top, they’re usually 2 or 3 levels down, but they make a huge difference.”

Build a small bet culture. Want to succeed? Often, companies are advised to double down, bet big, and try to become the next Apple. But Zolli says, alluding to a concept popularized by Peter Sims’ book Little Bets, it’s far wiser to have a “small bet” culture. “Many wins are not on homeruns like the iPod,” he says. “Instead, companies win on singles, and incrementally improving.” 

Don’t maximize efficiency. Recent management theory has emphasized greater efficiency and “just in time delivery.” But Zolli says that may put us in an untenably risky position. Alluding to the Japanese tsunami and nuclear disaster, he asks, “Why would Toyota allow their manufacturing to have a single point of failure?”
The very success of their lean manufacturing techniques meant they were vulnerable to disruption in a way that their competitor, General Motors, was not.

“There is a correlation between efficiency and fragility,” says Zolli. “We love efficient systems, but for many systems, peak efficiency brings with it peak fragility. Things like carrying insurance, and having redundant systems impose carrying costs on an organization. They make the system less than perfectly efficient, but safer when things go wrong. The tradeoffs are inevitable – it’s just a matter of making the right ones.”

It can be harder, more expensive, and sometimes even counterintuitive to build redundancy into a system – but in the event of disaster or disruption, it can make all the difference. How are you making your company more resilient?

Dorie Clark is CEO of Clark Strategic Communications and the author of the forthcoming Reinventing You: Define Your Brand, Imagine Your Future (Harvard Business Review Press, 2013). She is a strategy consultant who has worked with clients including Google, Yale University, and the Ford Foundation, and is an Adjunct Professor of Business Administration at Duke University’s Fuqua School of Business. Listen to her podcasts or follow her on Twitter.

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How To Build a Facebook Fanbase By Monday

by Haydn Shaughnessy, Forbes contributor

How can you quick start your own Facebook presence? The problem with social media, often, is it works for other people but not for you. Is there a way for you to become one of the great community builders?
Take Sandi Krakowski as an example of someone who is well on their way to social media stardom.
I’ve been writing about social media for five years and have nearly 7,000 Twitter followers. That’s poor for someone in the business. On Facebook I fare much worse – 650.

Sandi, who does not come from a social media writing background has over 1o0,000 on both. Here’s her Facebook business page. It is all about Sandi.
I asked her over email how she does it and here is a critical insight I learned from talking to her. Social networks truly reflect the broad diversity of cultures out there in society. When someone tells you how to do good Facebook or good Twitter you have to stop and ask – who am I doing this for? Who is my audience? And who do I really want to connect with? What types of people?
Because only when you think that way does this new democracy empower you. Anything else and you are living in old media land.
This tribal effect also means that social media gurus will crop up in every hue and form – because every community or tribe will have its leaders.
In terms of techniques for growth Sandi takes a simple route. In a nutshell, she posts regularly on Facebook – every hour. And she speaks in what she calls the voice of her ideal customers.
She also makes it personal, adding her religious experiences to her personal enthusiasm. Although she has a team, the social media presence is really about Sandi and how much she cares about her customers. It’s about love in a way that would have pleased John Lennon.
I said a few weeks back that there is a trend towards therapy in 140 characters. Social media is becoming online hugging, as more and more social media influencers use personal messages of hope, support, and good will to keep their connections going strong. That’s what you get with Sandi.
I find that a little off-key, at least for me. But it works because of what Sandi says – she speaks in the voice her ideal customers want to hear, a little like those of us who write about tech trends tend to focus on the stories that people are reading.
So here is Sandi’s story. I interviewed her as part of a series I am doing while I compile the social media power influencers list with Peek You. See more on that here. I edited the interview for readability.
Sandi:
Initially my FB page was a way to connect with clients and talk to them about our  blog posts and products, as most businesses ‘were’ doing. It was a sales  channel.
(Sandi now sells social media services) What was her background in online media?
Sandi:
I’ve run 11 successful businesses online. My first company being an online  newsletter using the old school Major Domo email which led to an ecommerce business in 1997. It was a kitchenware business, that was built in the same way of communication as I’m doing social media today-good ole fashioned customer  service and caring about my ideal clients, and speaking their ideal language.
I’ve run ecommerce businesses in kitchenware, vitamins, bread making forums,  went onto becoming a copywriter, online marketer and pay per click specialist.  My first pay per click campaign was in 1998.
On social media she says: “Social media is a process of good relationships, copy that speaks to your idea clients and truly caring about your audience.”

I asked if she had good personal Twitter and Facebook reach before she began building it out for her business?

Sandi:
We went from 10,000 on Twitter to 114,000 because everything we do works synergistically together. My personal FB reach was at 5000 (FB limit) but only  1118 of my friends are connected to my FB business page. (We shouldn’t spam  our personal pages with business) This shows that the clients we’ve attracted to  my Facebook page are there for business and not just friends ‘hanging out’. Our  model teaches, “Loving Your Customers” just as the merchants of old used to do when everyone came on horse and buggy. Giving personal touch on all of our  platforms built substantial growth overall.

What kind of plan did she come up with?

Sandi:
The ‘typical engagement’ of 4-8% on a Facebook Page that so many experts said was great didn’t resonate with me. In my mind, these were pathetic  engagement rates for email, a blog or any other communication. How could it be  acceptable on social media?
The biggest step towards increasing our engagement and growing our  community we made was by being very intentional in not being a ‘typical’ social  media marketer. We didn’t want to just speak to people when we had something to sell, only post when we wanted them to ‘opt in’ or give us feedback.
Relationship, which has been the golden thread through all of my successful online businesses, was the motivating and directing compass here as well.  We made a commitment to post every hour, something motivating, encouraging  and speaking to our clients directly, about things that would benefit them. Our greatest marketing campaign was and still is, “How can I help someone get a result today?” Some of these results may be tangible, others intangible. But  either way the main purpose, for which we are driven, is to help people to create a real change thru their business, is accomplished.
How did you launch the plan?
Sandi:
To be very honest with you, we just began to do more of what we were already doing on my very successful blog and email messages every hour on Facebook. The effect was nearly instant! I had just gotten back from a family vacation to Hawaii. That trip created some serious engagement and I began to think, “WHOA… they are very interested in the personal side of business, as well as  really having a relationship with us. Let’s bring them ‘all in’ to our culture and see what happens.” The rest is history! And what a rewarding fun time it is every single day!
I must note that the clients we have who do the exact same thing: posting regularly, getting involved, motivating, answering questions, posting pictures and building a community as opposed to a ‘sales’ page also see amazing results
nearly instantly.
What were the distinct phases in your success?
Sandi:
When we saw people asking for more help, bringing us results that their once  ‘unseen’ business was now on the first page of Google. Results that came in from people who said they were writing more, speaking, blogging, and stepping  into things they never thought they could learn like PPC. Ironically we get some very personal stories that inspired us and caused us to continue on this path.
We’ve had a few people who told us our daily posts on Facebook kept them going through a job loss or a serious challenge in their life. A few people have even told us our regular posts gave them hope when they were struggling with depression after so many disappointments in the recent economic struggle.
Our audience even includes some young people who want to build a business in their future and along with their parents find our material great educational content in that growth. As a mom who has homescooled for 24 years, all of my children work with my husband and me… our FB culture is about EVERYTHING it takes to really have a successful business AND a successful life.
The big distinction that I have seen recently is that our audience is populated with just as many men as women. This means we’re helping everyone and that is a personal mission and purpose of mine! Not just attracting people who are ‘just like me’ that so many marketers seem to focus on. We have companies and clients who follow and work with us.
What are the major lessons you would pass on to others?
My biggest Facebook Marketing tip would be – Be yourself. Be true to you. You’ll  attract clients who are the same. Even if you’re a big brand, get to know your clients more than you do your products and have relationship with them. Have your client care team become a ‘Facebook Team” that supports, encourages and engages daily.
Be unique, be intentional and have fun. It doesn’t matter if you’re a small mom and pop type business or a huge corporation. Social media has CHANGED the way people do business. They want to have relationships with us. More than 1 billion people are active daily on Facebook. As business owners it’s our honor to serve them, live, daily.
So that’s Sandi’s perspective. How can you spend a fruitful weekend boosting your own Facebook presence? I’m tempted to do this myself:
1. Ask, between spoons of cornflakes, who are your ideal clients. Who are the ones you really connect with and feel on the same wavelength as?
2. On the morning stroll open up about your shared culture? Is it driven by zeal or skepticism, passion for what your are doing, pragmatism? How that culture shapes up in your mind will shape your messaging.
3. Come home and plan out those hourly posts. Information about you are who you are, advice and support for the people you rare reaching out to, messages about your journey together in business, short form on Twitter and on Facebook.
4. Transfer that messaging to a small 2 x $10 pay per click ad campaign on Facebook. 2 x $50 if you really want to push the weekend.
5. Engage for 48 hours (no forgetting sleep), messaging your day to the people you want to work with
6. Get ready to test reaction. Who answers, comments, tweets, what you are saying? How do the PPC stats look?
7. It’s Monday morning – how’s it going?

“One thing I teach,” says Sandi “is check-in for 5 minutes, every hour.  Then if you’re posting 8 x per day, that’s less than an hour per day. 5 hours per week on social media. We won’t lose our life or our focus that way.  It also keeps us very connected.  As my following grew I made it a priority to spend 2-3 hours per day interacting.

Follow me on Twitter @haydn1701 or join me on Facebook (I need you!). I am here on Google.

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New Netflix Facebook app lets users share viewing history

 

Netflix's new Facebook app was years in the making

NEW YORK (CNNMoney)

Finally, your Facebook friends can see when you've spent a lazy Sunday binge-watching "Keeping Up With the Kardashians" on Netflix.

The video streaming service on Tuesday launched its first Facebook app. Users who choose to link their Netflix and Facebook accounts can share with their friends the titles of every movie and television show they watch.

On Netflix's site, users will be able to see which shows their Facebook friends have rated highly and what those friends have watched recently. On Facebook (FB), Netflix customers will also have the option to share their viewing history on their News Feed.

Netflix users will be able to opt out of sharing titles they don't want others to see, including anything starring the Kardashians or other guilty pleasures. They'll also have the option to disable the Netflix-Facebook connection at any time.

All U.S. Netflix (NFLX) members will have access to the Facebook connection features by the end of this week, Netflix said.

The partnership was hard won. Netflix spent over a year lobbying Congress to amend a 1988 law called the Video Privacy Protection Act that previously made such an app illegal in the United States. The VPPA had prohibited "a video tape service provider" from revealing customer information without the customer's written consent.

The vague pre-Internet language left open questions: Does Netflix count as "a video tape service provider"? Can written consent be obtained via the Internet?

Congress modernized the act in an amendment that was signed into law in January, paving the way for U.S.

Netflix customers to share their viewing history on Facebook. Overseas Netflix users have had access to those features for quite some time.

VPPA has a quirky history: It rose from strange circumstances surrounding the failed Supreme Court nomination of Robert Bork. While Bork's nomination hearings were taking place in 1987, a freelance writer for the Washington City Paper talked a video store clerk into giving him Bork's rental history.

The writer, Michael Dolan, later wrote that he was proving a point: "Bork said Americans enjoy only those privacy protections conferred by legislation."

Bork's rentals were unremarkable, but the City Paper published the list anyway. Lawmakers freaked, and Congress passed VPPA soon after.

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Dell in $24 Billion Deal to Go Private



Michael S. Dell, 47, has amassed a
fortune estimated at $16 billion
since starting the computer firm in his
dormitory room at the
 University of Texas in 1984

 For Dell, a $24.4 billion deal to take itself private is a bold move out of Wall Street’s harsh spotlight as it tries to remake itself in a world where personal computers are no longer the big business in technology.

Yet the buyout — which was announced on Tuesday and would be the biggest by far since the days of the recession — is a huge gamble. It will saddle Dell with $15 billion of new debt, and it does nothing to divert the forces reshaping the technology industry and undercutting the company’s business.

Fifteen years ago, Dell made enormous profits from selling customized PCs directly to customers. Six years ago, it was the world’s leading maker of personal computers. Today, it is in third place, behind Hewlett-Packard and Lenovo, and falling.

Dell’s share of an already contracting market for PCs slipped to just 10.7 percent last year, from 16.6 percent six years earlier.

No-name rivals from Taiwan and China grind earnings to razor-thin margins. Android smartphones and iPads, not Windows laptops and desktops, are the best-selling and most moneymaking devices.

And while a shift to cloud computing has increased demand for data centers — an opportunity for Dell to sell servers — big customers like Google and Facebook build their own equipment cheaply. The rise of cloud services has also prompted many companies to forgo buying additional machines, instead relying on rented time and applications running on faraway computer networks.

Dell’s share of the market for servers, slipped about one percentage point, to 22.2 percent of 9.5 million servers sold in 2011. The greater problem in this segment is the pressure on profit margins. Shaw Wu, an analyst with Sterne Agee, estimates operating margins on servers, once about 15 percent, are now “in the high single digits, compared with the mid-single digits for PCs.” It is likely that servers will soon have PC-like margins, he said.

Michael S. Dell is betting his stake in the company and some $700 million of his fortune that he can meet those challenges and turn around a business he started in 1984 in his dormitory room at the University of Texas.

“Dell’s transformation is well under way, but we recognize it will still take more time, investment and patience,” Mr. Dell wrote in a memo to employees on Tuesday. “I believe that we are better served with partners who will provide long-term support to help Dell innovate and accelerate the company’s transformation strategy.”

Mr. Dell’s investment means he will maintain control of the company if its shareholders approve the deal.

The private equity firm Silver Lake, one of the most prominent investors in technology companies, is
contributing about $1 billion in cash.

And Microsoft, seeking to shore up one of its most important business partners, has agreed to lend Dell $2 billion. Microsoft itself is under pressure, with longtime suppliers flirting with rivals to its Windows operating system.

“Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future,” the software giant said in a statement.

Despite taking on an additional $15 billion in debt, Mr. Dell and Silver Lake argue that the company will survive, thanks to the cash that the PC business still generates.

A. M. Sacconaghi, an analyst with Bernstein Research, estimated that the amount of debt Dell will pay is less than what it has spent in stock dividends and share repurchases. “This debt load is manageable,” he said, “as long as the cash flow from PCs holds up.”

People involved in the transaction said that the buyers had prepared for potential further declines in the PC business, but intend on at least maintaining the company’s position. Dell’s cash from operations has held steady for four of the last five years, coming in at $5.5 billion for the most recent fiscal year.

The size of the transaction evoked the frothy deal-making days before the financial crisis. Dell would be the biggest buyout since the Blackstone Group’s $26 billion takeover of Hilton Hotels in the summer of 2007.

Yet few expect a resurgence in giant leveraged buyouts. While the continued availability of cheap financing makes such deals possible, financiers caution that Dell represents a special case because of the founder’s big equity stake.

The deal is the biggest test yet for Mr. Dell, 47, who has a fortune estimated at $16 billion. After a three-year absence, he returned as chief executive of the company in 2007, vowing to restore his creation. His strategy has focused on moving into the business of data centers and corporate software services, marked by numerous acquisitions that have cost billions of dollars.

So far, that has yielded little. Dell’s shares have fallen 31 percent over the last five years, closing on Tuesday at $13.42 — below the buyout’s offer price of $13.65.
But that strategy will largely remain in place if the management buyout is completed. The company will cut its
PC offerings further and buy more companies involved in corporate computing for small and medium-size businesses, said Brian T. Gladden, Dell’s chief financial officer.

Though Mr. Dell has bemoaned his company’s dismal stock performance for years, his plan to take it private began in earnest only last year. The billionaire maintains a home in Hawaii near the residences of two prominent private equity executives, Egon Durban of Silver Lake and George R. Roberts of Kohlberg Kravis Roberts, and began floating the idea of a deal with them, people briefed on the matter said.

By August, Mr. Dell formally approached the board with a proposal to take the company private, prompting directors to form a special committee to study alternatives to a deal, these people said. One priority was keeping the process devoid of conflicts of interest to head off potential legal challenges, including the hiring of JPMorgan Chase to provide advice and Evercore Partners to solicit other suitors.

The committee considered ways to keep the company public, including borrowing money to buy back shares, but concluded that the management buyout was the most attractive option.

Mr. Dell had aligned himself with Silver Lake, which he let handle virtually all of the board negotiations, these people said. Mr. Durban used his close ties with Steven Ballmer, the chief executive of Microsoft and to whom he had sold the video chatting service Skype for $8.5 billion, to bring in Microsoft as a partner.

Microsoft was wary of getting involved, fearing fracturing relationships with other partners, according to a person briefed on its deliberations. The software company insisted on providing a loan instead of taking equity in the newly private Dell. Silver Lake also hired four banks to arrange the $15 billion in financing.

By the time word of the deal talks leaked last month, the two sides had the outline of a final proposal. But Dell’s special board committee, led by Alex J. Mandl, battled with the buyers on price until Monday night, pressing for the highest possible bid.

Hamstringing them was a lack of other potential buyers. The committee’s advisers had unsuccessfully approached both K.K.R. and TPG Capital, another big investment firm, hoping to flush out another offer.

And despite the talk last month, no strategic buyer emerged as a rival.
Secrecy was important. Mr. Dell was known in talks as “Mr. Denali” — a nickname he liked so much he referred to himself by it regularly — while the PC maker was “Osprey” and Silver Lake was “Salamander.”
Nick Wingfield and Andrew Ross Sorkin contributed reporting.

A version of this article appeared in print on 02/06/2013, on page B1 of the NewYork edition with the headline: Taking Dell Private Is the Biggest Challenge Yet for Its Founder.

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Why Facebook may want to track your location

Facebook is developing an app that would run in the background of smartphones even when not opened, a report says

By Doug Gross, CNN

(CNN) -- Facebook may be working on an app that will let your friends, or even complete strangers, know where you are at all times.

If that sounds unpleasant, even creepy, you're not alone. But it sounds an awful lot like a small but growing mobile sector in which users knowingly sacrifice some privacy in exchange for "social discovery."

And, as Facebook works to make money off its constantly growing list of mobile users, such a feature raises questions about how the company will use the personal info it would collect.

On Tuesday, Bloomberg reported that Facebook is developing a smartphone app that would track the location of users. The app would run in the background of smartphones even when not opened and is designed to help users find nearby friends, according to one of two unnamed sources cited in the article.

A Facebook spokeswoman told CNN that the company has no comment about the report.

Social discovery, or stalking?

Some observers have expected such a move by Facebook since last year when the social networking giant bought Glancee, a mobile app designed to help users find nearby friends.

That's similar to a handful of other mobile apps, such as Highlight, Banjo and Sonar. These services seem pitched mostly to a young, outgoing user base seeking existing or new pals for drinks, dancing, sipping coffee or sexual hookups. But, when applied to Facebook's purported 1 billion-strong membership, which includes everyone from teens to grandparents, it gives some privacy advocates pause.

"We've already seen some of the mishaps that can occur when location is used in unexpected ways," said Jules Polonetsky, director of the Future of Privacy Forum, a Washington-based think tank. "I think the challenge is that aggregating by location clearly might provide some really useful information. But there are a whole lot of social norms that can be stressed, by even public information."

Polonetsky cited Girls Around Me, an app that rounded up check-ins by women on Foursquare and Facebook to let users, presumably guys on the prowl, know which bars, clubs or other spots currently had lots of women in them. Girls Around Me raised concerns about stalking and eventually got booted from Apple's App Store.

"It didn't clearly violate any of the specific rules that the App Store lays out, other than extreme creepiness," Polonetsky said. "But creepy is sometimes in the eye of the beholder. One person's creepy is another tech enthusiast's tool."

The key, he said, would be whether Facebook clearly sets out guidelines for how such an app would be used. He said members should be allowed to opt in to the service, not automatically be enrolled in it unless they opt out.

"You don't want people ever sharing information without knowing, and I don't think Facebook is going to be in a position to do that," he said.

The future of social sharing

Heralded briefly as the next wave of social sharing, a handful of these location-based "social discovery" apps launched last year amid some degree of hoopla. But a year later, none have gained much traction among mainstream audiences in the way Twitter, Foursquare and some other apps did before them.

Paul Davison, CEO of discovery app Highlight, acknowledges it's been a slow burn for a service such as his. A year after launching, Highlight still won't release how many active users it has (though he said membership has tripled in six months).

Privacy concerns, he said, are part of the challenge.

"That's not surprising," Davison said. "I think that any time a technology comes out that allows us to share in a way we haven't been able to share before, you see this really familiar pattern.

"Most of us look at it and think, 'That's weird. That's creepy and I don't like it.' What you normally see is a subset of people saying 'That is kind of crazy, but I'll try it out.' And they see it's pretty rewarding and fun."

Davison considers apps such as his no less than the future of social sharing.

"If you look at what's happened on the Web over the last 5 to 10 years with Facebook and other services, we love to share," he said. "We love to talk about ourselves ... and we're obsessed with learning about other people."

But for some, he said, the real world can be like "some bizarre social network where every profile is a single photo." On Highlight and similar apps, profiles are meant to let users know if someone around them shares their interests and might be a fun person to meet.

"It's a big change in how the world works," he said. "It's hard for me to think of a bigger shift in how the world works, but it's not going to happen overnight."

How Facebook might use app

Facebook-owned Glancee was somewhat more limited, pinging users when people already in their other social networks, such as Facebook, Twitter or LinkedIn, are around.

But for the folks from Mark Zuckerberg's company, such an app could have another payoff. Literally.

It would provide Facebook with reams of new data about not just where its users frequently go, but where they are right now.

Facebook said it doesn't sell its data to advertisers. But it definitely leverages the data to help those advertisers target potential customers. It's not hard to envision ads showing up letting users know that there's a 2-for-1 drink special right around the corner, or that the restaurant next door has the best burger in town.

"They need to make money on mobile, and that's what they've been pushing for since the IPO," said Justin Lafferty, co-editor of AllFacebook, an unofficial Facebook blog. "They're trying to build the technology first, then maybe find out how to build ads into it, too."

Lafferty, who wrote about this week's Bloomberg report, said Facebook could launch a social discovery app separate from its main mobile app -- at least at first.

"That's sort of how Facebook usually works," he said. "They'll test features, then they'll implement them all in the native app."

How will users react to such an app, were Facebook to launch one? Privacy advocate Polonetsky said that remains to be seen.

"The reality is that, for most people, even if things are broadcast to all their friends and the public, they still have some expectation about the way that it's used," he said. "I totally get that my neighbor knows when I come and go and may even say, 'We haven't seen you in a while -- is everything OK?'

"But if someone else seemed to know about my comings and goings and offered me a product or service based on it? I don't know."

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Is China Running Out Of Workers?

by Gordon G. Chang, @GordonGChang

On Friday, Beijing’s National Bureau of Statistics announced that China’s “working age” population—the 15 to 59 segment—totaled 937.27 million last year.  That number, as large as it is, represents a decline of 3.45 million from 2011.  Moreover, the workforce in 2012 comprised 69.2% of the population, 0.6% less than in 2011.

“In 2012 for the first time we saw a drop in the population of people of working age,” said Ma Jiantang, the NBS chief.  “We should pay great attention to this.”

We certainly should.  Cai Fang, the widely followed Chinese demographer, thinks the workforce actually peaked in 2010, and he is probably correct.  Yet whoever is right, the NBS announcement highlights the acceleration of Chinese population changes.  Beijing’s official demographers were saying, as recently as 2009, that the workforce would continue growing until 2016.

“There are different opinions on whether this means that the demographic dividend that has driven growth in China for many years is now coming to an end,” said Mr. Ma, trying to put the best face on the news. 

Actually, it’s hard to see how the so-called dividend, an extraordinary bulge in the working population, can continue, especially because he also predicted that the number of workers in China will get smaller each and every year until about 2030.

Chinese technocrats have more than just a shrinking workforce to worry about.  As late as 2008, the U.N.’s figures, Beijing’s numbers with minor adjustments, showed China’s total population falling off only after 2030.  That date is, well, so out-of-date.  Now, senior Communist Party officials, like Liu Mingkang, are talking about 2020, which means the peak will undoubtedly occur before then.

There are both good and bad—mostly bad—effects of a slowing population on a nation’s economy, but the point observers are missing is that China’s trends are occurring faster than almost all demographers predicted just a few years ago.  The pace of change, therefore, means economic adjustments could very well be more painful than most analysts now believe.

Perhaps the most pernicious economic effect of a declining population will be on urbanization.  The decades-old migration from farm to city is one of China’s “four new modernizations,” announced in mid-November by Li Keqiang.  The man slated to become the next premier is placing a big bet that this trend will drive growth for the next two decades.  After all, the Chinese government in 2011 announced it will be building 20 cities a year in each of the next 20 years.

Figures from the National Bureau of Statistics indicate that the government’s city-building plan is feasible.  Last year, according to the agency, China’s urban population increased 21.03 million, hitting 711.82 million, or 52.57% of the country’s population.  That was up 1.3 percentage points from 2011.

Even if these figures are correct—and there is growing doubt that NBS’s urbanization numbers are accurate—it’s not clear where Beijing officials are going to get the people to continue to power the farm-to-city process.  Not only are the major demographic trends working against them, but there is also a growing concern that rural areas have already been emptied out.

Some Chinese scholars believe the supply of workers in the under-35 cohort—the so-called “golden age group”—has already been exhausted in rural areas.  Others disagree, but even those who think there is still a pool of workers on the farm acknowledge that not many of them want to move to the cities, where conditions can be bad and pay low.  And in the middle-aged portion of the rural workforce, again, not many more of them want to leave home.

I know about these trends first-hand.  In the village where my father’s family comes from—near the Yangtze River in coastal Jiangsu province—you can see many children and old women, but not many adults of working age.  Those who have left for nearby Shanghai and the other great cities of China have already done so.  My hometown suggests that urbanization is a spent force.

Beijing can build urban areas, but the country already has its famous “ghost cities.”  Urbanization is not sustainable unless there are people willing to move to the new cities—and more important—to work in them.  Just because urbanization has contributed to China’s growth in the past does not necessarily mean it will continue at the same pace during the next two decades.  Urbanization will undoubtedly continue, but it can no longer drive the Chinese economy like it has for the last 30 years.

Demography may not be destiny, but it will create high barriers for Chinese growth.  If Beijing’s leaders are to succeed, they will have to do so in spite of population trends, not because of them.

Unfortunately, they are not even trying to reverse China’s adverse demographic trajectory.  Although just about everyone believes that Beijing should drop the one-child policy, which has depressed population growth since 1979, there have been no substantial moves to do so.  Yes, officials talk about liberalization of birth restrictions, but they never get around to implementing needed change.  Yet even if they repealed the policy today, the beneficial economic effect would not be felt for years.

China, which has had one of the best demographic profiles of any nation, will soon have one of the worst.  The economic effect of population decline will, in all probability, be severe, long-lasting, and evident soon.

http://www.forbes.com/sites/gordonchang/2013/01/20/is-china-running-out-of-workers/

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Jack Ma steps down as Alibaba CEO

At 48, Ma says he is too old to lead the Internet company

HONG KONG (CNNMoney)

Jack Ma is stepping down as chief executive of Chinese e-commerce group Alibaba, saying in a letter to employees Tuesday that he was making way for younger leaders with better ideas.

The billionaire will remain as the company's executive chairman. A new CEO will be chosen by May 10, and Ma will stay in the post until that date.

"At 48, I am no longer young for the Internet business," Ma wrote in the letter, obtained by CNNMoney.

"I see that Alibaba's young people have better, more brilliant, dreams than mine, and they are more capable of building a future that belongs to them."

Alibaba did not issue a statement about Ma's decision to resign.

Ma and 18 partners launched Alibaba.com from his Hangzhou apartment in March 1999, with a dream of making business easier for small- and medium-sized enterprises.

With Ma at the helm, Alibaba grew to become China's dominant e-commerce site through its Taobao Marketplace, which lets consumers trade goods online.

To tap into China's fast growing business-to-consumer e-market, Alibaba also runs Taobao Mall, a service that lets consumers buy goods directly from retailers online.

Alibaba collects additional revenue through an online payment company called Alipay, which functions like PayPal.
The letter suggests that Ma's role change is part of a larger shakeup at the company.

"This year, most of the Alibaba leaders who were born in the 1960s will retreat from management and execution roles as we hand over leadership responsibility to colleagues from the 70s and 80s generations," Ma said.

Alibaba said last week that it was dividing operations into 25 divisions, in order to improve flexibility.
Ma's tenure has not been without difficulties.

At one point, U.S. Internet giant Yahoo held a 40% stake in the company. But as disputes between the two companies escalated, Alibaba sought to repurchase shares, with Yahoo finally consenting in September to sell back about half its stake for $7.1 billion.

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Smartphones Become Life’s Remote Control

The Delphi Connected Car system sends data about a car’s location and speed to a tablet

By BRIAN X. CHEN, New York Times

 

LAS VEGAS — The smartphone is no longer just a portable computer in your pocket. It has become the remote control for your life.

Want to flip off the living room lights, unlock your front door or get a reading of your blood pressure? All of this can be done through mobile apps that work with accessories embedded with sensors or an Internet connection.

For several years, technology companies have promised the dream of the connected home, the connected body and the connected car. Those connections have proved illusory. But in the last year app-powered accessories have provided the mechanism to actually make the connections. That is partly because smartphones have become the device people never put down. But it is also because wireless sensors have become smaller, cheaper and ubiquitous.

Big companies with strong brands have been heavily promoting the new uses for these gadgets. General Motors advertises its Chevy Malibu Eco with a man showing his parents how he starts the car with a smartphone. A major selling point of the popular Nest thermostat is its ability to turn up the furnace from miles away with a cellphone.

“Now that, increasingly, consumers have a device with them to monitor virtually anything they do with the Internet, why not offer that capability to monitor and remote control?” said Ross Rubin, an analyst at Reticle Research.

The idea of turning off the lights with a smartphone may seem gimmicky, but consumers are warming to applications, said Bill Scheffler, director of business development for the Z-Wave Alliance, a consortium of companies that make connected appliances. The situation resembles the time when power windows started catching on for automobiles, or when television makers started offering remote controls, Mr. Scheffler said.

“It used to be that people would say, ‘Why does anybody want a remote control for a TV if you can get up and change the channel?’ ” he said. “It’s just progress.” Companies like AT&T, Black & Decker and Honeywell have started selling app-linked products, he said.

At the International Consumer Electronics Show, which has attracted more than 150,000 people here this week, dozens of companies are showing off connected accessories they can hook up to their home appliances to make them work with smartphones, and many are also displaying wearable devices that can help people monitor their health on their phones. Some of these products are being provided by large companies. AT&T, the wireless carrier, said that in March it would begin selling a wireless security system called Digital Life that will allow people to use tablets or phones to monitor cameras, alarms and even coffee pots.

If a burglar trips a motion sensor in the house, for example, a user can receive a text message, then call the police. Customers can choose to expand AT&T’s wireless service to appliances like lights, door locks, thermostats and security cameras, which can be controlled and monitored through the AT&T mobile app.

Ralph de la Vega, chief executive of AT&T Mobility, said in an interview that home security was a big opportunity to increase revenue. Only 20 percent of homes have security systems, he said, leaving millions of homeowners as potential buyers.

“I think it dramatically changes how people feel about their home and how secure they feel about being outside the home,” Mr. de la Vega said. “I think it’s an easy sell.” The company has not announced prices for the service.

Ingersoll Rand, which makes industrial products, offers a $300 starter kit and software for people to connect their homes. It includes a lock, a light and a wireless “bridge,” or base station, to connect the devices to the Internet. They can be controlled with a smartphone or tablet app called Nexia Home Intelligence. Customers also must pay at least $9 a month for a subscription; they can choose to buy the appliances and the bridge separately.

Products by several other companies take advantage of a smartphone’s sensors and connection to the Internet to monitor consumers’ health. IHealth sells monitors for people to track their blood pressure with an app. At the electronics show, it introduced a wireless glucose meter, called the Smart Glucometer, that lets people with diabetes determine their blood sugar. A user puts a blood sample on a test strip, pops it into an accessory attached to a smartphone, and an app gives a reading of the blood sugar level.

Adam Lin, general manager of iHealth, declined to say how many products the company had sold, but he said it was in the “six-figure” area. IHealth products have appeared at Apple, Target and Best Buy.

In addition to people who are interested in their health, health insurance providers might embrace monitoring products. Mr. Lin said iHealth was discussing with two insurers whether to provide its products to patients, which would help reduce their doctor visits.

A small start-up, AliveCor, has created an iPhone case that, when grasped, records an accurate electrocardiogram on the iPhone screen via its app. The company has attracted financing from Khosla Ventures, a prominent Silicon Valley venture capital firm.

Nike, Jawbone and Fitbit sell wearable electronic devices for people to track their movements with smartphones. Fitbit, based in San Francisco, sells a pocket pedometer called the Fitbit One, which can track a user’s steps and floors climbed, and also monitors sleep patterns. Its newest product is due in spring, the Fitbit Flex, a step counter and sleep tracker that is worn around the wrist. It synchronizes with a smartphone app to give users updates.

Woody Scal, chief revenue officer of Fitbit, said the company sold its devices in 10,000 retail stores in the United States. Its Fitbit One is the best-selling sports device on Amazon.com. He said one reason that wearable fitness gadgets had become popular was that the sensors had shrunk and battery life had improved. 

That helps make the products slimmer, more stylish and easier to use.

Mr. Scal said wireless fitness devices were becoming popular because they addressed basic needs for consumers, unlike another trend seen at the show, enormous televisions.

“In the end, I don’t wake up in the morning, look myself in the mirror and ask whether my TV has enough pixels,” he said. “But I do wonder how I’m going to get enough exercise, eat better, sleep well or manage my weight despite all the other things going on in my life.” 

ADT’s Pulse app can be used to control home security systems

Isaac Brekken for The New York Times

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