Ready, Fire, Aim! - Mihail's Public Blog

A combination of the economic downturn and the growing realization that it is not just nice but useful to have one's extended family close by is creating a new trend according to sociologists in this Wall Street Journal story (subscription required):

All the togetherness represents a major change in American family life. For almost a century and a half, the pattern has been for generations to move farther apart -- often for job-related reasons. (In the 1850s, one in five families contained three generations under one roof; now, only one in 25 live that way.)

During past economic downturns, families also pulled together, says Claude Fischer, a sociologist at the University of California at Berkeley. The difference this time: It's baby boomers in their 40s and 50s doing the moving -- some to help take care of their parents, others looking ahead to retirement and moving from high-cost urban areas to cheaper ones. There's even been a kind of "rural rebound," with nonmetropolitan areas growing four times as fast in the last decades as they did during the '80s -- often because people are moving back to their hometowns.

...And maybe a place for the in-laws or children to live, an increasingly common add-on for the nation's big home builders. A recent survey by Pulte Homes of Dallas found that more than half of empty-nest home buyers could foresee their children or grandchildren living with them during their retirement, more than double the number two years ago. It's started offering casitas and granny flats wherever zoning allows. KB homes, a big California builder, says generally a third of its new home buyers want a granny flat. But in one development, Sycamore Villas, in Hercules, Calif., a full 70% of buyers ask for them. Cost: as much as $100,000 in some places (especially if you spring for granite countertops and travertine floors for Mom and Dad).

Barry Diller's USA Interactive (which owns Ticketmaster, Citysearch, Match.com, Expedia, and Hotels.com) has agreed to acquire British online-personals site uDate.com in a $150 million stock deal according to this Wall Street Journal story (subscription required):

In late November, Match.com announced it would launch 25 international sites by the end of year, utilizing local languages and currency. Among countries included are France, Spain, Italy Japan, Australia, Brazil, Mexico and the United Kingdom, where uDate has a leading position with 670,000 registered members in September. UDate also has members in more than 100 countries, with principal markets in the U.S., U.K. and Europe.

...Revenue at uDate jumped 61% to $10.6 million from the year-earlier period, as paid subscriptions to its sites grew to 237,000....Revenue at Match.com, meanwhile, more than doubled to $33.4 million in the third quarter, as paid subscriptions hit 653,000.

Online dating continues to take off in popularity and social acceptance. In fact,

A poll conducted recently by Harris Interactive for The Wall Street Journal Online found that about 6% of American Internet users who are in a long-term relationship met online. About one-third of them met through a formal online-dating service, like Match.com or uDate.

Can we be that surprised that Lebanon and other Muslim countries feel this is blatant and inaccurate propaganda by the US when Arab and other Muslims (including Pakistanis and Saudis most recently) are being asked to register but when they're showing up hundreds are being arrested. Maybe the money being spent on this advertising campaign can be better spent providing economic aid to countries that need it, making it obvious where that aid come from so that the beneficiaries become ambassadors for the US unlike any slick Madison Ave copy. According to this Dow Jones newswire story in the Wall Street Journal:

Lebanon has banned the broadcasting of U.S. government TV spots aimed at improving America's image in Arab and Muslim countries, Information Minister Ghazi Aridi said Thursday.

"The TV spots were banned because they contained words contrary to truth. The spots say that America is treating the Arabs and Muslims well. This is not true," Aridi told The Associated Press.

...The minister said the advertisements were themselves proof of the discrimination against Muslims in the U.S. "They (Americans) talk about Muslims as if they are guests in America. They are citizens holding the U.S. citizenship," he said.

From a Wall Street Journal story (subscription required) on investing in one's fitness:

Age is certainly no excuse. It turns out that 50-year-olds can win back the aerobic capacity they had in their 20s with six months of exercise, a new study has found. Even in your 70s and 80s, "you can gain muscle," says Carol Krucoff, a yoga instructor and author in Chapel Hill, N.C. "And every pound of muscle you gain raises your metabolic rate by 30 to 50 calories a day."

Have you been dashing thru the Web to find a Christmas tree this year? This Associated Press story on the Wall Street Journal site was surprising even to me, especially the fact that a discount behemoth like Walmart would be in on the action (the chain began selling Fraser firs online last year...consistent with its decision to sell certain bigger items online):

Hal Gimlin, 58, owns Omni Farms (www.omnifarm.com), which helped pioneer the mail-order Christmas tree industry in North Carolina, shipping trees through the mail for 15 years.

...He now sells about 30,000 trees a year on the wholesale market. Mr. Gimlin also fills about 2,000 online orders from people who log onto Omni Farm's Web site. This year he sold every tree he could find that met his strict requirements for the online venture.

What is it with our obsession with staying busy all the time? Have we forgotten that life is short and that nothing will matter if we get hit by a truck tomorrow? Even retirees have been struck by this 'disease" of the "busy ethic" according to this Wall Street Journal article (subscription required):

Part of the answer lies, I think, in what I call the Tyranny of Aging Well. We may no longer have bosses or clients to impress, but if you listen to Madison Avenue, AARP and a host of well-meaning advocates for the aging, there can be no rest for the weary. Longevity, we are told, is correlated with busyness, physical activity and social engagement. Geezerdom, which was supposed to be rest and relaxation free of social pressures, is marked by a new anxiety: Am I active enough?

...All such work is best accomplished at rest and in solitude. Yet the "busy ethic," as sociologist David Ekerdt calls it, permits neither isolation nor languor. So we drift, as rudderless as Benjamin [Dustin Hoffman in the Graduate] in his pool, making up the rules for this new life stage as we go along.

eBay CEO Meg Whitman has resigned from the Goldman Sachs board amidst the controversy surrounding the legal yet seemingly inappropriate assigning of hot IPO stocks to private banking clients of the Bank that also did investment banking work for those clients' companies. Whitman received stock in over 100 IPOs which she flipped mostly, and eBay in turn has paid over $8M in fees since 1996 to Goldman according to this Wall Street Journal story (subscription required):

Ms. Whitman wasn't alone in receiving favored treatment on Goldman-managed IPOs: Other recipients included Tyco International Ltd.'s former CEO Dennis Kozlowski, Global Crossing Ltd.'s former CEO Leo Hindery and others, according to congressional investigators. EBay co-founders Pierre Omidyar and Jeffrey Skoll also received shares in Goldman deals. But Ms. Whitman, along with Yahoo Inc. founder Jerry Yang, received shares in dozens more deals than most other executives.

..."While reasonable people can debate whether giving private banking clients preferred access to IPO shares is fair or whether policies regarding such transactions should be reformed, there is no question about the legality of this practice today," Ms. Whitman wrote in a memo to eBay employees in October. "Let me be absolutely clear about this -- the practice of private banking clients participating in the opportunity to buy shares of new public companies is perfectly legal and quite common during thriving IPO markets. When I bought and then sold my shares, I followed the law as well as Goldman Sachs' policies regarding these transactions."

What is it with multi-millionaires, even billionaires, feeling the need to augment their fortune by a piddly 0.2% thru a practice that may be legal but so, so unnecessary -- look at Martha Stewart and her troubles over a few hundred thousand dollars worth of stock...and now millions, if not billions, in losses for her shareholders and her as this controversy has caused her company's stock price to plummet.

The proceeds of Ms. Whitman's sales of shares from the IPOs totaled $1.78 million, a relatively small fraction of a fortune that was once estimated at more than $1 billion. Her wealth is now estimated at between $750 million and $800 million....

The global mega-brand, with 30,000 restaurants and 46 million customers a day, just reported its first ever loss in 47 years according to this Knowledge at Wharton article.

McDonald’s has tried to expand its brand with new menu items, including pancakes, ham and cheese sandwiches and mango shakes. But the new items slowed McDonald’s hallmark speedy service and created quality problems. “They have gone down the road of trying to expand their sales through broadening their menu and I think have recognized – correctly – that this is a slippery slope,” Hoch adds. They end up hurting operations “when they veer too far away from a core set of items.”

 

Wharton marketing professor David Reibstein is worried that the same underlying issues currently bedeviling McDonald’s will take a toll on Starbucks, which is also trying to grow sales by expanding the kinds of products it sells. “It used to be you could say Starbucks is coffee. You could envision Starbucks selling coffee-related items such as mugs, beans or coffee pots,” says Reibstein. “But now they sell greeting cards, music, sandwiches and mango juice. My concern is that Starbucks is losing what Starbucks is … That’s a risky thing to do.”

Coke and several automobile manufacturers have successfully added additional brands but McDonald's has struggled except for where it bought complementary existing companies such as Boston Market, Donatos Pizzerias, Chipotle Mexican Grill and Aroma Cafe, a London-based coffeehouse chain.

Still, non-burger sales are tiny, amounting to only $1.2 billion of the company’s annual sales of $40 billion, according to Carl Sibilski, who follows McDonald’s for Morningstar Inc. in Chicago. He says the new acquisitions will be less important for sales than as a source of new ideas for products and business operations.

No wonder more of us are overweight when the most ubiquitous, and probably the cheapest food is fast food...although thankfully sales are stalling although it isn't clear to me if people are necessarily eating any healthier. The #2 burger chain Miami-based Burger King with 11,450 restaurants (compared to McDonald's 30,000!) was finally acquired by the San Francisco-based buyout firm Texas Pacific Group for a much reduced price of $1.5 billion from Diageo PLC according to this Wall Street Journal story (subscription required):

A week after buying Burger King Corp., the owners of the nation's No. 2 burger chain named former Olive Garden President Bradley Blum as its chief executive.

...Mr. Blum's appointment is unusual in that he has no fast-food experience. But Lehman Brothers analyst Mitchell Speiser said Mr. Blum is credited with turning around Olive Garden, a unit of Darden Restaurants Inc. During his tenure at Olive Garden, Mr. Blum turned eating at the restaurant into a more authentic Italian dining experience, sending chefs to train in the Tuscany region of Italy and creating an extensive wine program. Average annual sales at each restaurant in the 507-unit Olive Garden chain rose to $4 million so far this year from $2.5 million in 1996. Mr. Blum left his post as president in March to become vice chairman of Darden.

Discounters like Target and Wal-Mart are becoming major players in the low-end of the PC business according to this New York Times story (registration required):

Wal-Mart's interest in the electronics sector began to intensify about four years ago, when the giant retailer realized the potential of sticking mass prices on high-tech items. It has made runs at other specialty retail sectors, like toys, in the past, though consumer electronics are considered more lucrative.

..."Big-screen televisions were very small last year at Wal-Mart," Mr. Ciccarelli said. "This year, they're in 1,500 stores." How about flat-screen TV's, which were emerging on consumers' Christmas lists at this time last year? Ms. Eberts estimates that this year, 60 percent of all the televisions stocked at Wal-Mart are flat screens. And about 150 stores are selling plasma TV's, which offer high clarity, at just under $3,000, according to Ms. Driscoll.

According to a Wall Street Journal story (subscription required) on finding a multipurpose remote for all of one's devices:

The race to produce the perfect remote has accelerated this year, as the number of gadgets in American living rooms has increased, especially with the rise of the DVD player, now in 30% of American homes. This year, the average U.S. home has an estimated five to seven remotes piled on the coffee table, up from fewer than three in 2000.

UK-based LastMinute.com CEO Martha Lane Fox answers some questions in this Wall Street Journal piece (subscription required) on a new economy business that is still standing. They have some 6.5 million subscribers of their email newsletter in England and another 1 million in Germany...and get many of their new customers from these subscriber lists:

That's the first stage: capturing those people and then converting them into customers. That's a lot cheaper way of building your customer base than going out there and trying to buy TV advertising, buying offline media space, all this kind of stuff. A year ago, 12% of those subscribers were customers. Now, it's 20%. In another year, we hope it will be 30%. So those are huge changes in the levels of people becoming customers from that e-mail.

This season more people are waiting until the last minute to make New Year's Eve plans -- thus even prime spots like the Rainbow Room are still available according to this Wall Street Journal story (subscription required):

The last-minute rush is hardly surprising, given the state of the economy and percolating talk of war. But for the big-ticket hospitality industry, the stakes couldn't be higher. In the $70 billion-a-year wedding business, for instance, venues and caterers say they're seeing more 11th-hour planners, and they're cutting more deals. Places accustomed to hosting lavish year-end corporate parties may also come up short: U.S. businesses are expected to spend about $2.5 billion this year for holiday parties in hotels, restaurants and clubs -- about 15% less than in 2000, PricewaterhouseCoopers' hospitality group estimates.

According to this Wall Street Journal story (subscription required):

Shopping for holiday gifts this season, we were reminded of a universal truth in gift buying: What goes around comes around.

Train sets, it seems, are hot again. Sales of model railroads have increased 29% during the past decade, to $289 million a year, according to the World's Greatest Hobby, a model-train industry group based in New York. Throw in all those Lilliputian villages, landscaping and paraphernalia, and by one estimate it's a $500 million annual business.

According to this Wall Street Journal story (subscription required) concrete is back in homes...in a big way. I grew up in the house that was exposed concrete and brick designed in 1972 by my mother (and inspired by Wright and Corbusier) and so I'm hardly surprised to hear this news!

The latest hot look in home design? Take a look at the garage floor. In a trend that started in downtown Manhattan lofts and the houses of Los Angeles hipsters, once-humble concrete is challenging granite and marble as the material of choice for everything from kitchen counters to fireplace mantels -- and even chairs. Sales of cement (the major ingredient in concrete) are expected to rise 27% this year for use in homes, according to the Portland Cement Association. "You're really looking at a concrete revival," says Ward Malisch of the American Concrete Institute.

...Designers have been using decorative concrete since the early part of the 20th century. Legendary architect Frank Lloyd Wright was a big fan, using the material in landmark houses like Fallingwater in western Pennsylvania. But after falling out of favor during the 1960s, concrete was pretty much relegated to basement walls and garage floors. Then, during the '80s, a handful of cutting-edge designers began using it in raw loft spaces and minimalist houses, polishing it to a high sheen and adding color. But even hipster homeowners rebelled when they realized that it was actually pretty hard to keep up -- and had a nasty tendency to crack.

Lee Gomes writes in Boomtown about how valid/severe the threat of a digital jihad is today in the Wall Street Journal (subscription require):

"A terrorist wants to go after a visual target, something that puts fear into people's minds," he said. "It's easiest just to blow something up. If you take a computer down, people will just say, 'Oh, those damn computers.' "

One can't help but notice that we seem to be spending ever-larger sums on esoteric technologies designed to foil terrorist attacks, while making only the most cursory efforts to dissuade terrorists in the first place. A just peace in the Middle East, for example, would do more to curb terrorism than all the homeland security offices in the world.

This holiday season companies pushing perfumes etc. are having a tough time according to this Wall Street Journal story (subscription required):

Fragrance sales in U.S. department stores this year are expected to slip by as much as 3%, to about $2.8 billion, following a similar decline in 2001, according to NPD Group, a market-information company. Sales of women's fragrances are expected to do even worse, falling a projected 5%. The holiday season still produces nearly 40% of department-store fragrance sales annually. But there's clearly something wrong with this premium-priced chunk of the business known as "prestige" fragrances. Perhaps they simply aren't prestigious anymore.

Few young women wear the same fragrance every day, as their mothers did. They wear it rarely, if at all, and when they do, they are increasingly more likely to favor the inexpensive fragrances available at specialty-store chains such as Victoria's Secret or Gap.

Steven Levy in a Newsweek story on the phenomenon of Google and Googling and what the future holds for the company that is now #4 in terms of traffic, and launching new ways to organize and find information each month, it seems:

Since it’s free to users, how does Google rake in bucks? License fees from places like Yahoo or AOL. Corporate sales—big operations pay as much as a half-million dollars to use Google technology to search their own information. And for as little as $20,000, moderate enterprises can buy Google in a Box, a pizza-size server. But the bulk of the company’s revenues (estimated at $100 million this year, and growing at a 100 percent rate) come from the much-maligned category of advertising.

Wired's HotBot will allow users to effortlessly switch between four search engines including Google according to this Wall Street Journal story (subscription required):

Terra Lycos hopes HotBot can use the power of its brand to recapture the niche among techies it once held, via a number of advanced but easy-to-use features. Users can customize their preferences for searching and the display of results. The layout is uncluttered and can be customized.

"We've deployed technology that gives very fine control," said Tom Wilde, the general manager of Lycos Search.

A New York Times story (registration required) on how various people at all levels of the corporate world have been affected by the downturn...a good example of why eBay continues to do well even as most people aren't:

Then the bubble burst. Mr. Shedden, now 22, lost his job in November 2001, when the Internet company, Digital Club Network, laid off much of its staff. "I don't have a job; I have no money," Mr. Shedden, who graduates next spring, said with an air of resignation. "I'm just treading water until I finish."

He has been able to land sporadic work through school, he said, putting together and dismantling art exhibits. Yet that has not been enough to pay the bills, so Mr. Shedden has resorted to becoming a seller on eBay. His 90-year-old grandfather, who is clearing out his house for sale, has allowed Mr. Shedden to auction some of his possessions, from old liquor bottles to eight-track stereo equipment. His best sale to date: a 1914 Singer sewing machine that fetched $196. "If you get rid of enough stuff," he said, "you can at least eat for a week."