Pacific Northwest Microsoft will open three research centers in Europe focusing on development of online search technology, Chief Executive Steve Ballmer said.
Microsoft will open three research centers in Europe focusing on development of online search technology, Chief Executive Steve Ballmer said.
The centers will be in London; Munich, Germany; and outside Paris; it will hire “hundreds” of engineers in coming years, Ballmer said at a news conference Thursday in Paris.
He didn’t say how much the company will invest.
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Google boosted its lead in the U.S. Internet search market to 63 percent in August, taking market share from Yahoo and Microsoft, which accounted for 19.6 percent and 8.3 percent of searches, respectively.
Strike at Boeing affects airline
Virgin Blue Holdings, Australia’s No. 2 airline, said the Machinists strike at Boeing has forced a delay to February of the start of its long-distance international carrier V Australia.
Boeing can’t guarantee the delivery of planes because it doesn’t know how long the strike will last, Brisbane-based Virgin Blue said Wednesday.
Virgin Blue has three Boeing 777-300 ER aircraft on order and had planned to start V Australia services Dec. 15.
The 27,000 Boeing Machinists, striking since Sept. 6, are demanding job security and higher compensation.
Nintendo expects higher U.S. sales
Sales of Nintendo video-games and players in the U.S. will probably rise as financial challenges lead consumers to seek inexpensive entertainment, the head of the company’s North American unit said.
Economic turmoil hasn’t affected sales or operations at Nintendo, Reggie Fils-Aime said Thursday in San Francisco, where the company held a media event.
Consumers see games that can be played for weeks or months as a cheaper option than vacations, movies and restaurants, Fils-Aime said.
Nintendo, with U.S. headquarters in Redmond, has no plans to cut the Wii’s $249 price in the U.S., he said.
Fils-Aime, speaking earlier Thursday, said Nintendo boost Wii shipments to the U.S. by 50 percent for the holiday season.
Nation and World
Fannie Mae drops plan to raise fee
Mortgage-finance company Fannie Mae, seized by the federal government last month, is canceling a fee increase for new mortgages.
Fannie Mae said Thursday that a fee introduced last year will remain at 0.25 percent of the total loan amount. It had been scheduled to rise to 0.5 percent Nov. 1. For a $200,000 loan, that’s a savings of $500.
In recent months, Fannie and Freddie have raised several fees for borrowers without sterling credit. Real-estate agents, mortgage brokers and homebuilders have all complained that the moves were stifling the housing market.
Grocery costs rose 11% in 3rd quarter
Supermarket prices for 16 basic food items surged to a record in the third quarter because of higher commodity costs and increased processing and transportation expenses, the American Farm Bureau Federation reported.
The average cost of typical weekly consumer purchases rose 11 percent to $48.68 in the three months ended Sept. 30, from $44.03 a year earlier, the federation said Thursday in a statement. Costs rose 4.3 percent from the second quarter.
“Sustained high costs for processing, hauling and refrigerating food products are reverberating at the retail level,” said Jim Sartwelle, an economist for the federation.
The share of the food dollar that went to farmers and ranchers fell to 19 percent in the quarter, the lowest in the quarterly survey’s 20-year history and down from about 32 percent in 1980, the federation said.
Retail prices for flour, potatoes, cheddar cheese and apples showed the largest increases in the quarter.
Food-price inflation may run as high as 6 percent this year, the highest since 1980, according to the U.S. Department of Agriculture.
A total of 74 volunteer shoppers in 32 states participated in the survey, conducted in August, the Farm Bureau Federation said.
Commercial paper shows big drop
Outstanding commercial paper, the short-term debt that companies issue to raise cash, dropped by $97.1 billion in the week ended Oct. 1, the Federal Reserve said Thursday, due to the severe seize-up in lending.
Total commercial paper outstanding stood at $1.54 trillion as of Oct. 1, down from $1.64 trillion a week earlier. On a seasonally adjusted basis, total commercial paper outstanding fell to $1.61 trillion from $1.70 trillion.
The credit markets have been barely operational over the past few weeks in the aftermath of the bankruptcy of Lehman Brothers, which chased money-market mutual funds — traditionally the biggest buyers of commercial paper — to the safety of Treasury bills.
Meanwhile, bank-to-bank lending rates have shot higher, suggesting that banks are hoarding cash instead of lending it to one another.
Songwriter royalty rate unchanged
LOS ANGELES — The federal Copyright Royalty Board (CRB) on Thursday left the royalty that songwriters receive on sales of CDs and digital downloads at 9.1 cents per song for the next five years.
Both songwriters and music sellers applauded the ruling — but for different reasons. Apple, which had threatened to shutter its iTunes store if the rate increased, appeared to have scored a clear win.
“We’re pleased with the CRB’s decision to keep royalty rates stable,” said Tom Neumayr, an Apple spokesman.
The Recording Industry Association of America, representing record labels, was pleased that the rate was frozen for the first time since 1977, meaning that if song prices increase royalties will make up a falling percentage of the companies’ costs.
The Digital Media Association, which represents online music stores including Apple, Amazon.com and Best Buy, also praised the ruling.
“Keeping rates where they are will help digital services and retailers continue to innovate and grow for the next several years,” said Jonathan Potter, the digital association’s executive director.
CEO to remain after acquisition
Bank of America said Thursday that Merrill Lynch Chief Executive John Thain will take a new position at Bank of America once the bank completes its acquisition of Merrill.
The new division Thain will oversee includes many of the operations that will be merged from Merrill, including the brokerage and mutual-fund operations as well as Bank of America’s investment banking and management operations already in place.
Bank of America’s current president of global corporate and investment banking Brian Moynihan will remain in the position until the acquisition is completed. Once Thain enters his new role, Moynihan will become president of private equity and global operations.
Bank of America agreed last month to buy the investment bank in an all-stock deal originally valued at about $50 billion.
Marriott profit drops 28 percent
Hotel company Marriott International said Thursday that its third-quarter profit dropped 28 percent, compared with 2007, and it warned investors about deteriorating conditions for 2009 amid the ongoing financial crisis.
Marriott said its revenue per available room declined in North America and time-share sales dried up amid the tight credit market and cutbacks in business and consumer spending.
Revenue per available room, or revpar, is considered a key gauge of a hotelier’s performance.
Compiled from Bloomberg News and The Associated Press