Windows Live Aims to Be Hub for Web

Microsoft's new Windows Live aims to be hub for Web (Reuters) by Reuters: Yahoo! Tech

SEATTLE (Reuters) - Microsoft Corp said on Wednesday its next release of Windows Live online services will integrate e-mail, instant messaging, photos and Web applications from other companies into a single platform.

Microsoft aims to position Windows Live with its widely-used e-mail and messaging services as the hub for a growing number of Internet applications and incorporate new features similar to those found on popular social networks.

The strategy puts Microsoft into competition with social networking sites Facebook and News Corp's MySpace, which started to open their fast-growing websites to outside software developers last year.

The new Windows Live service plans to feature a main profile page that updates users to their friends' activities within Windows Live and on more than 50 outside Web services including Yahoo Inc's Flickr photo site and career-oriented social networking site LinkedIn.

"It's a race to see who will work better and faster with everyone else," said Charlene Li, founder of consulting company Altimeter Group. "It's the recognition that you can't be an island of yourself."

Microsoft said Web users are overrun with accounts at multiple Internet sites, each requiring a password and each with a different set of friends. Its goal is to simplify the Web lives of its users who go to Microsoft's Windows Live e-mail or instant messaging accounts.

The company's Windows Live strategy is also central to its plans to wrestle away online advertising revenue from Google Inc, which has used its dominant search engine to expand into e-mail, online word processing and other businesses that compete directly with Microsoft.

Microsoft plans to roll out the new Windows Live services, which will include a revamped e-mail, calendar and a new photo application, in the United States over the coming weeks and then make it available in 54 countries early next year.  (continue reading)

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2 Out of 3 Ain't Bad, 7 out of 9 Is...

NEW YORK (AP) -- Average interest rates on most types of credit cards rose slightly this week, according to a report from CreditCards.com.

Annual percentage rates on seven out of nine categories of cards -- business, instant approval, airline, balance transfer, low interest, cash back and reward cards -- all rose slightly from the previous week.

Only two categories of cards didn't increase, according to the weekly report issued Thursday. The APR on cards for people with bad credit held steady at 10.82 percent while rates on student cards dropped slightly to 13.9 percent, down from 14.02 percent.

The across the board increases were largely the result of sharp hikes in rates for select American Express cards, said Ben Woolsey, spokesman for CreditCards.com, which tracks about 200 credit cards.

The hikes by American Express overshadowed some lowered APRs by major card issuers such as Citi and Chase, Woolsey said.  American Express Co. is expecting write-offs in its credit card portfolio to continue to mount in the fourth quarter and into next year as consumers struggle with a worsening economy.  Earlier this week, the company said it received government approval to become a bank holding company -- a sign the lender is facing difficulty funding its operations amid the credit crisis.

First Data Reports Third Quarter Results

First Data - First Data Reports Third Quarter 2008 Revenue Growth of 4%

First Data Reports Third Quarter 2008 Revenue Growth of 4%

DENVER, November 14, 2008 – First Data Corp. today reported its financial results for the third quarter of 2008. Consolidated revenues were up 4% to $2.2 billion. The adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 7% to $694 million.

Loss from continuing operations was $164 million, but included $270 million of incremental interest expense, net of tax, and $124 million of incremental depreciation and amortization, net of tax, compared to the third quarter of 2007. Both the incremental interest expense and depreciation and amortization are primarily attributable to the transaction with affiliates of Kohlberg Kravis Roberts & Co. (the "Transaction"). A table describing adjusted EBITDA and reconciling income (loss) from continuing operations to adjusted EBITDA is included in the accompanying schedules.

"Despite a difficult economic climate, we were able to grow revenue and adjusted EBITDA," said Michael Capellas, Chairman and Chief Executive Officer. "Our investments in product innovation are gaining momentum and you will see us announce some significant wins especially in the mobile commerce space."

Segment Results

Merchant Services
For the quarter, Merchant Services generated revenues of $1 billion, a growth rate of 6% or down 3% excluding reimbursable debit network fees. Revenue was positively impacted by 9% transaction growth. This impact was offset by the slowing U.S. economy which reduced transaction growth for smaller merchants and shifted transactions to some nationwide discounters and wholesalers. Operating profit was $106 million, down 60% or down 9% to $248 million excluding purchase accounting adjustments comprised principally of increased amortization expense related to the Transaction. Operating profit margin was 36.0% excluding reimbursable debit network fees and purchase accounting adjustments, compared to 38.6% in the third quarter of 2007. Operating profit was impacted by approximately $19 million of certain costs related to cost reduction initiatives, which accounted for seven percentage points of the 9% decline noted above and also impacted the 36.0% operating profit margin by three percentage points during the quarter. Reported operating profit margin for the quarter was 10.4 %.

Financial Services
For the quarter, Financial Services generated revenue of $700 million, down 5% or down 8% excluding reimbursables and purchase accounting adjustments. Adjusted revenue reflects modest growth in the card issuing business. This growth was offset by lost business and check volume declines in the TeleCheck business. In addition, the third quarter of 2007 included approximately $16 million more in revenues resulting from contract termination fees compared to this quarter. Operating profit was $111 million, down 23% or down 3% to $144 million excluding purchase accounting adjustments comprised principally of increased amortization expense related to the Transaction. Operating profit margin for the quarter was 28.1% excluding reimbursables and purchase accounting adjustments, compared to 26.5% in the third quarter of 2007. Operating profit was impacted by approximately $18 million of costs related to cost reduction initiatives, which negatively impacted the 3% decline noted above by thirteen percentage points and negatively impacted the 28.1% operating profit margin by four percentage points during the quarter. Reported operating margin was 15.9% for the quarter.

International
For the quarter, International generated revenue of $487 million, up 19%. Revenue benefited from 21% transaction growth which was in part driven by acquisitions in prior quarters. Operating profit was $49 million, up 59% or up 79% to $54 million excluding purchase accounting adjustments related to the Transaction. Operating margin was 11.2% excluding purchase accounting adjustments related to the Transaction compared to 7.4% in the third quarter of 2007. Adjusted operating profit included the partial reversal of a loss reserve for the failed airline in one of International's merchant acquiring alliances and lower employee related expenses. These items were offset by approximately $16 million in incremental investments in data center consolidation, platform initiatives and other expenses related to cost reduction initiatives. Reported operating margin was 10.0%.

A slide presentation will be made
available under the "Investor Relations" section of the Web site at A slide presentation to accompany the call will be included in the webcast and will be made
available under the "Investor Relations" section of the Web site at http://ir.firstdatacorp.com/events.cfm.

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Citi Goes To Town, Fires "Little Village" Population 60,000

Citi Firing 60,000, Chairman May Still Lose Job: Tech Ticker, Yahoo! Finance

Citi Firing 60,000, Chairman May Still Lose Job
Posted Nov 14, 2008 11:19am EST by Henry Blodget in Newsmakers, Recession, Banking
From ClusterStock, Nov. 14, 2008:

Citi CEO Vikram Pandit has ordered business unit heads to cut employee compensation costs by 25%, the WSJ says. This could lead to 60,000 firings by next year. The cuts will include the investment banking division. The firm has already fired 23,000 people over the past year, reducing its global workforce to 352,000.

The company vehemently denied the WSJ's report yesterday that Chairman Win Bisschof may soon be sent packing. The WSJ says it stands by its story.

Vik Pandit bought 750,000 of thee 1.2 million shares Citi brass scooped up yesterday. This sounds bold at first, but it's still chicken feed (under $10 million), and its value was likely calculated to be higher than that in getting everyone to talk about how Citi management is buying.

Lastly, Citi is jacking up the interest rates on its credit cards, punishing already overwhelmed consumers: Citigroup is notifying some credit-card customers that their interest rates are being raised by an average of three percentage points.

Citigroup is one of the nation's largest issuers of credit cards, with 54 million active accounts. The unit had a loss of $902 million in the third quarter, compared with $1.4 billion in profit a year earlier, as a growing number of customers fell behind or defaulted on their payments.

A person familiar with the strategy estimated that the rate increases would apply to less than 20% of Citigroup's card portfolio.

"The industry has recently experienced an unprecedented market cycle with severe funding dislocation and significant consumer credit deterioration driven by the mortgage crisis and rising unemployment. In light of these unprecedented developments and others, Citi will be repricing a group of customers in our Citi-branded consumer credit-card business in the U.S. to appropriately manage these risks," said John Carey, chief administrative officer of the credit-card unit.

Citigroup's move follows a similar change by American Express Co., which is raising rates to some customers by two to three percentage points. Raising rates on customers is a delicate dance for credit-card companies. While the firms want to pull in more revenue from customers who carry a balance from month to month, they don't want to tip those customers into default because that hurts the card issuer's bottom line.

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