Twitter looks to start making some money

Twitter Inc.’s co-founders say the rapidly growing online communications company will eventually charge fees for its services, but it’s unclear which ones and what will drive revenue.

“There will be a moment when you can fill out a form or something and give us money,” said Evan Williams, co-founder and chief executive officer.

“We’re working on it right now,” Williams said at The Wall Street Journal’s D: All Things Digital conference.

Williams and Twitter co-founder Biz Stone mentioned possible revenue-generators, including a service that would authenticate the source of information. For example, Dunkin’ Donuts could pay to make sure that impostors don’t send messages under its name.

Still, after nearly one hour of questions from journalists Walt Mossberg and Kara Swisher and from the audience, the co-founders gave no clear picture of Twitter’s business model. Stone demurred when asked what would be the company’s key revenue driver in two years.

Williams said he wasn’t opposed to banner advertising but was unenthusiastic.

“I think it’s probably the least interesting thing we could do,” he said.

Williams said one of his top priorities was hiring more people to help grow the company but he didn’t give a headcount target. San Francisco-based Twitter has 43 employees, he said, double its count in January.

Twitter allows anyone to write about what they’re doing or what’s on their mind in messages sent through the Web or cell phones, also known as “tweets,” which are limited to 140 characters. The unconventional, free service has attracted millions of users.

The co-founders said they know the hype surrounding Twitter won’t last forever.

“If you pay attention to it too much, you can run yourself off the rails,” Stone said. He added, “Pretty soon, everybody’s going to hate us.”

The privately held company has been a subject of buyout speculation by a big technology company, but Williams said he believed Twitter would remain independent.

There are plenty of ways, what about looking into the business models of the other websites that allow free access for its users? like Facebook, Myspace or Shareapic

STOP THE PRESSES!!!

Boston Globe owner threatens to shutdown newspaper

The Boston Globe management warned the newspaper's four unions Sunday that failure to reach a financial concession would force the company to file a notice to shut down, the Guild said in a statement.

The notice would allow The New York Times Co., which owns the Massachusetts newspaper, to close it in 60 days, the Globe reported.

The Times Co. is seeking $10 million from the Boston Newspaper Guild, $5 million from the mailers, $2.5 million from the delivery truck drivers and $2.2 million from the press operators, the Globe said.

The Guild, which is the main union, represents more than 600 editorial, advertising and business office workers, according to the Globe.

"We have provided our unions with a copy of a notice that we are prepared to file if we are unable to reach an agreement by the midnight [Sunday] deadline," Globe spokesman Robert Powers told the newspaper. "This notice is required under the Worker Adjustment and Retraining Notification Act, which requires 60 days advance notice before the closure of a business."

The Guild said the ultimatum was issued after it presented management with a proposal that exceeds the $10 million in cuts demanded.

"This tactic, while expected, is representative of the bullying manner in which the Times Co. has conducted itself during these negotiations," the Guild said in a statement.

"Despite the company's hostile tactics, we continue to negotiate in good faith and work diligently toward an acceptable outcome," it added.

In addition to the about $20 million in givebacks, another key disagreement was over a quest to eliminate job guarantees that affect about 450 union employees, the Globe reported. A Times spokeswoman told the newspaper early Monday that talks were continuing past deadline.

The negotiations follow a gloom outlook for the 137-year-old newspaper, which is expected to lose $85 million in 2009 if it does not make major cuts, according to the Times Co.

The Globe's profits have plummeted as newspaper readers and advertisers have shifted online.

Powers said filing a notice to shut down would be a difficult but necessary option.

"Unfortunately, given the state of the negotiations, it is one we must be prepared to take if negotiations are not successful," he said.

The developments come amid a raft of newspaper closings and cuts that have seen the end of print editions of The Rocky Mountain News in Denver, Colorado; The Seattle Post-Intelligencer; and The Christian Science Monitor.

The Rocky Mountain News shut down completely; both the Seattle paper and the Christian Science Monitor remain in online editions.

The company that owns the Chicago Sun-Times and 58 other newspapers and online sites said in late March that it had filed for Chapter 11 bankruptcy. The Sun-Times Media Group, Inc. said it would continue to operate its newspapers and Web sites as usual while it improves its cost structure and stabilizes operations.

Just how dangerous is online banking?

Sure, the Web makes it really simple to manage your money. But, It also makes your account easier to hack into. Here's a look at the risks and realities -- as well as nine smart tips that can help you protect yourself.

Joe Lopez will never forget the day he checked his Bank of America account online and realized that more than $90,000 had vanished.

Months before, the Miami business owner had stopped making weekly visits to his local branch, opting instead to conduct his financial transactions entirely over the Internet.

"I absolutely thought it was safe," Lopez said. "And it was convenient."

What he didn't realize were the risks. A malicious virus had infected his computer and, in a matter of minutes, captured his user name and password -- allowing a hacker to transfer $90,348 to a rogue overseas account.

Lopez got most of his money back months later, after a U.S. federal investigation and, eventually, a lawsuit. But his experience taught him the hard way, he says, what many experts have concluded: "Online banking is a danger."

Since its debut just a decade ago, online banking has become one of the fastest-growing Internet activities. Roughly 43% of people in the U.S. who use the Internet, or about 63 million Americans, do some banking there, according to a 2006 survey by the Pew Internet & American Life Project -- even more than make travel reservations online.

But that growing popularity has also brought increasing anxiety over whether something as private and personal as a bank account can be fully protected in the relatively unregulated and unpoliced world of the Internet.

"It's pretty hard not to do online banking because it is so convenient, and people want convenience," said Atul Prakash, a University of Michigan researcher who conducted a study on the risks of Internet banking. "Nevertheless, there are reasons to worry."

Mia Jozwick, a student at Wagner College in New York City, was duped by a "phishing" e-mail made to look like a message from her bank. Thinking it was an important financial notification, Jozwick responded by firing off her user name and password; she learned it was a scam only after someone emptied her account.

To make matters worse: Thieves were also able to steal her identity, because her password was her Social Security number. It took her a year and help from Identity Theft 911, a service agency, to unravel the mess she found herself in.

How the scams work
Since the birth of electronic commerce, financial institutions have stepped up online security measures to try to make the process less vulnerable to attacks.

Some have spent millions adding more layers of authentication, toughening encryption schemes and going after and shutting down bogus bank sites.

But that hasn't stopped hackers, who continue to look for ways to exploit security gaps.

Among the most popular attacks are phishing schemes that duplicate bank Web sites and ask customers to log on to their accounts. Others send e-mails, purportedly from bank employees, asking for sensitive financial information. Often the two work in tandem, with an e-mail containing a link that directs recipients to a bogus bank site. Both scams are designed to steal user IDs and passwords as a customer types them in, giving a cyber thief access to the person's financial accounts.

Other cyber thieves embed viruses, spyware or "Trojan horses" -- programs that can give thieves unauthorized access to a computer by recording and sending out a user's keystrokes. These programs allow thieves to look over your virtual shoulder as you type in sensitive financial information. Within seconds, your savings and checking accounts, even your investments, could disappear.

How big a problem are we talking about? The numbers are tough to pin down: Experts say there are no reliable studies showing how much money is lost through online banking alone, primarily because banks themselves can't always pinpoint the source of how a crime occurred, whether on the Web or through an ATM.

But various reports offer hints at the magnitude. For instance, about $3.2 billion was lost to phishing attacks in 2007, according to a survey by Gartner, a technology research firm -- with about 3.6 million people losing money to these attacks over 12 months.

"It's a huge business," said Graham Cluley, a senior technology consultant at Sophos, a spam-fighting security firm. "The scammers are literally making millions, and they can be based anywhere in the world."

And the attacks are increasing.

Take the so-called Sinowal Trojan, a virus that injects what seem like legitimate pages on someone's browser, then steals the user's log-in credentials. In probably one of the largest online banking breaches known to date, the virus has compromised 300,000 online bank accounts and about 250,000 credit and debit card accounts over the past three years, according to a study published in October by California's RSA FraudAction Research Lab -- with more than 100,000 online bank accounts hit in the past six months alone.

There are thousands more Trojans out there, many of them specifically targeting online banking customers.

"There is definitely more risk than there was one or two years ago," said Avivah Litan, a Gartner analyst.

She said her clients have told her they've noticed the assaults have doubled in the past six months: "The attacks are so vociferous and manipulative that even the big banks can't stop them."

What are the banks doing?
That's not to say banks are not trying. For a small fee, Bank of America -- the largest online banker in the United States -- recently introduced the SafePass card, a wallet-sized card embedded with a button that, when pressed, sends the customer a six-digit security code via text message. The customer can then enter the code along with his/her user name and password to access an online account. For business accounts or wealthier clients, some banks also offer SecurID, a token-like device that generates a new six-digit code every minute that users need to log in to their accounts.

Bank of America, along with other financial institutions, also has started an alert system advising customers by e-mail or text every time a transaction occurs. "Protecting the safety and security of our customers' information is our top priority," Bank of America spokeswoman Britney Sheehan said.

But not all banks offer the same level of security. "If you are going to do the bulk of your transactions online, you should really shop around to find a bank that has the best security measures," said Anthony Reyes, the CEO of New York's ARC Enterprises, which investigates computer intrusions. "But you have to also make sure you are doing everything right on your side."

Protect yourself
So should you be avoiding online banking altogether? Not so fast: There are risks associated with traditional banking as well.

More than three-quarters of banking fraud stems from offline factors, such as cheque fraud, mail theft or a lost wallet, according to the 2007 Online Banking Security Report, released by Javelin Strategy & Research, a California firm.

"When you're online, even though you have a lot of risks, you're more in control because you can do something about the risk -- you can monitor your accounts, and you can say no to the malicious junk," Javelin President James Van Dyke said. "In the old-fashioned world, such as the paper and mail world, you can't do much to keep prying eyes from looking at those paper cheques and paper statements."

But others point out that online crooks can target thousands, if not millions, of accounts at once, making Web banking the more lucrative target.

"To compromise half a million accounts, you'd have to raid millions of mailboxes -- probably 20 (million) to 30 million in the mail world. But online it could take a matter of seconds," Gartner analyst Litan said. "So in terms of hit rate, online banking is not as safe."

Experts suggest that anyone using online banking should take these steps:

1. When logging on to a bank Web site, a user should look closely at the site's URL to make sure it matches the bank's name. A more secure URL will begin with "https://" and be followed by the bank name. Make sure the bank's padlock is displayed in a corner of the site before you log on.

2. Log on to banks only from a secure computer. Never log on from a public computer in a hotel or cafe, and be careful when logging on to unknown networks with a laptop.

3. If you get a warning e-mail, call your bank -- don't click on any provided links.

4. If your computer is acting strangely -- for instance, reacting slowly or getting pop-ups -- avoid using it for online banking until you can get it checked out.

5. Keep anti-virus and anti-spyware software up to date.

6. Install and maintain a firewall.

7. Never respond to any e-mail that requests personal information.

8. Be leery of fly-by-night, Internet-only banks with high interest rates on savings or chequing accounts. Make sure the bank is FDIC-certified and is insured.

9. And, most importantly, use a different user name and password for each financial account. The password should be complex, with numbers and symbols, and changed regularly.

Still, there are no guarantees.

"It annoys me when people say these consumers are dumb, (that) they fell for it," Litan said. "They are not dumb. These criminals are really good, and you'd have to be a total security geek to stop everything."

One final precaution: Know the rules. Regulations require that banks return money lost to electronic transactions, but the customer has up to 60 days to detect the fraud and two business days to report it. Meanwhile, different banks have their own rules -- look them up before you shift your banking to the Web.

For Lopez, the lesson was painful. As a business owner, he had to sue his bank to try to recover the money; the case settled last year.

Now Lopez is back to old-fashioned banking methods and following up his transactions with phone calls.

"I don't do any online banking anymore. Nothing, zero," he said. "I'm so paranoid."

He also recommends heavy positions in materials stocks, "tied to the strength of emerging markets where infrastructure developments are driving demand for metals and other resources, and rising income levels and meat consumption are pushing up global agricultural prices."

On the negative side, food processors, retailers and other companies that "rely heavily on grain, oil, or other commodities as inputs face increasing costs and thus weaker profits." And rising interest rates are likely to reduce the attractiveness of utility dividends.

Additionally, "financial sector earnings are expected to fall modestly for the first time since 2002," Rubin said. "That compares with expectations just three months ago for a near-double-digit gain for the sector."

RRSP vs. TFSA

A little math gives a definitive answer in the RRSP vs. TFSA debate

A lot of talk and newspaper column inches get spent on the topic of Tax-Free Savings Accounts (TFSA).

In particular, there are lots of musings about whether TFSAs are better than Registered Retirement Savings Plans (RRSPs) for retirement savings.

Now, as it happens, you needn't rely on musings. It turns out that we can apply les mathématiques to the question, and get a pretty definitive answer. I'll do the math. You just relax, sip your coffee, and prepare yourself to be a good saver.

You'll recall how an RRSP works: Every year, you can contribute the lesser of 18 per cent of your earned income or that year's maximum (currently $20,000 for 2008, and $21,000 for 2009). If you don't maximize your contribution in any one year, the unused portion carries forward and gets added to your maximum for the subsequent year.

When you file your tax return, you get to deduct the amount you contribute to an RRSP from your income, thus saving the marginal taxes you'd have otherwise paid on your contribution amount. You won't pay any tax on the return you earn while your money remains in your RRSP, but when you take money out it will be added to your income in the year of withdrawal. That's a key characteristic: an RRSP gives you a tax deduction for contributions, but you'll pay tax when you take money out later.

A TFSA, on the other hand, allows you to contribute up to $5,000 per year regardless of income, starting in 2009. Any unused contribution amount can be carried forward to future years. You won't pay tax on any return you earn on the money in your TFSA. And although you won't get a tax deduction for the contributions you make, there is no tax payable when you take money out of a TFSA. In that way, it's the opposite of an RRSP. No deduction on the way in, no tax on the way out. It's beautifully simple.

So what's better for retirement savings? The question really boils down to determining when you'd rather avoid taxes - now, or in the future? It's always best to refer to the specifics of your own financial plan (you have one, right?), but most Canadians will spend their working lives in a higher average tax bracket than they'll have in retirement. That makes the structure of an RRSP (and for that matter, a registered pension plan, which works in exactly the same way) the best way for most Canadians to build a retirement nest egg.

Here's a few numbers so you can see what I mean. Let's say you make $45,000 a year. You don't have a pension plan, so if you want to avoid living under a bridge and eating cat food in retirement, you need to save a lot of money. Should you put $5,000 into a TFSA - or more than $7,000 in an RRSP?

That's the question, you see, because that's the apples-to-apples cost comparison between making contributions to either plan. It'll cost you $5,000 of your hard-earned money to put $5,000 into a TFSA. But if you save in an RRSP, the same amount of after-tax dough will buy you a much fatter contribution.

If you make $45,000 a year anywhere in Canada, you're in at least the 29 per cent tax bracket (that's in Nunavut - it's worse in every other province or territory). That means that you can make an RRSP contribution of somewhere between about $7,042 (Nunavut) and $8,112 (Quebec), and the tax savings you'll get will knock your total cost down to $5,000.

Let's assume that you live in Nunavut, since that will give our illustration the least amount of tax savings for the RRSP. Let's also assume that you would buy the same investments in either the TFSA or the RRSP, and that you earn an average return of six per cent (assuming higher returns would increase the relative performance of the RRSP). Finally, let's assume you'll be saving regularly for twenty years. Should your annual savings practice be to put $5,000 in a TFSA, or $7,042 in an RRSP?

Well, if you used the TFSA, those assumptions would mean you'd end up with almost $184,000, tax-free. On the other hand, if you chose the RRSP model, you'd have about $259,000. Yes, you'd still have to pay tax when you pulled money out of the plan. But you'd have more than 41 per cent more capital, and that covers a lot of tax in retirement.

Now, here's the thing about retiring from a job that averaged $45,000 a year: Currently, if you qualified for the maximum benefits, your monthly Canada Pension Plan payment at age 65 would be $908.75, and your monthly Old Age Security cheque would total $516.96. That totals a whopping $17,108.52 per year in government-sponsored pension income.

Do you hear what I'm saying? Most people shouldn't worry about their marginal tax bracket in retirement - they should focus on building the biggest retirement pot possible. A TFSA is perfect for your emergency savings, saving for future expenses, etc. But for people who don't have a registered pension plan, deductible contributions to an RRSP will continue to be the backbone of their retirement savings strategy.

Hertz to eliminate more than 4,000 positions

Rental car company Hertz Global Holdings Inc. is slashing its work force by an additional 4,000 jobs worldwide as it further cuts costs to contend with deteriorating demand and vehicle values.

Hertz expects to save $150 million to $170 million this year and take a related fourth-quarter charge of $20 million to $25 million, the company said Friday.

This is only the latest round of job cuts for the rental car company, which eliminated 1,400 employees this fall. The new reductions will bring staffing to 32 per cent below its levels in August 2006, Hertz said.

According to CapitalIQ, the company currently has about 29,350 workers in total, who operate about 8,100 locations in 144 countries.

The company said this round of cuts, which will take place in its fiscal 2008 fourth quarter and first quarter of 2009, will come in its car and equipment rental operations as well as corporate and support areas. The reductions will occur across all regions.

"Volume, pricing and residual values continued to decline during the most recently completed quarter, and we cannot predict when our markets will improve," said chairman and chief executive Mark P. Frissora in a statement.

He said Hertz is still committed to its global airport and off-airport car rental and equipment rental businesses and will add the "necessary resources" when operating conditions get better.

The rental car industry has a faced a perfect storm of challenges in the past year as airlines have reduced flights, consumers and businesses have cut back on travel spending and vehicle values have dropped.

In November Hertz suspended its financial guidance and said it no longer expects to meet annual earnings targets set in August.

At the time, Hertz projected 2008 adjusted earnings between $340 million and $375 million, or $1.05 to $1.15 per share. It anticipated revenue between $8.7 billion and $8.8 billion.

Analysts surveyed by Thomson Reuters now expect 2008 earnings of 63 cents per share on $8.81 billion in revenue.

Rivals Avis Budget Group Inc. and Dollar Thrifty Automotive also are struggling. Avis has announced a management salary freeze and cut more than 2,200 jobs as part of a drive to reduce annual costs. In October, Dollar Thrifty said it had cut its work force by 6 per cent, or 400 jobs.

Hertz's finances have been considered more stable than its rivals, due to the company's large equipment rental division, which accounts for roughly half its earnings and provides it with more cash flow than pure rental car companies.

Hertz's liquidity was about $4.9 billion as of Dec. 31, 2008. Frissora said Hertz estimates fourth-quarter total net cash flow of about $1.75 billion.

Shares of Hertz fell 12 cents, or 2.2 per cent, to close at $5.27 on Friday. During the past 52 weeks, the stock has fallen from a high of $15.32 last February to bottom at $1.55 in November.

Hertz don' it?

Citigroup posts a US$8.29 billion loss, splits company in two

Citigroup said Friday, That it is splitting up into two businesses as it reported a fourth-quarter net loss of US$8.29 billion - its fifth straight quarterly loss.

In Citigroup's reorganization, one business, Citicorp, will focus on traditional banking, while the other, Citi Holdings, will hold the company's riskier assets.

The move will allow Citigroup to sell or spin off the Citi Holdings assets to raise cash. It also reveals the company's growing focus on back-to-basics lending and deposit-gathering, and dismantles the "financial supermarket" created a decade ago.

Some investors had been calling for a breakup of Citigroup for years, as the bank struggled to keep up with its Wall Street peers. Those calls grew louder as the mortgage crisis caused the company's troubles to mount.

There has been harsh blame for Citigroup's woes directed at the board, too - and the company said Friday it plans to get rid of more board members after the recent departure of long-time director and former Treasury Secretary Robert Rubin.

"There has been one announced departure from the board. Together with other anticipated departures, this gives us the opportunity to reconstitute the board and we will do so as quickly as possible," said Richard Parsons, Citi's lead director, in a statement.

The New York-based bank's fourth-quarter loss amounted to $1.72 per share. Analysts expected a loss of $1.31 per share. While the per-share loss was higher than the consensus estimate, the total loss was smaller than the $10 billion many investors feared. For the year-ago fourth quarter, Citigroup had a net loss of $9.83 billion, or $1.99 per share.

For the latest quarter, Citigroup marked down $7.8 billion in securities and banking revenue, and $5.3 billion on the value of credit derivatives. It also lost $2.5 billion in private equity and equity investments, $2 billion in restructuring costs, and $6 billion to add to reserves.

The company's new structure is a reversal back to 1998, when John Reed's Citicorp merged in 1998 with Sandy Weill's financial services conglomerate Travelers Group.

The new Citicorp will include the retail bank; the corporate and investment bank; the private bank, which serves wealthy individuals; and global transaction services.

Citi Holdings will include Citi's asset management and consumer finance segments, including CitiMortgage and CitiFinancial. It will also be in charge of Citi's 49 per cent stake in the joint brokerage with Morgan Stanley, and the pool of about $300 billion in mortgages and other risky assets that the U.S. government agreed to backstop late last year.

Citigroup said it entered a definitive agreement on that deal with the government on Thursday. The government has already lent the bank $45 billion.

I can't afford to leave you

Divorce rates are dropping.

Not because more couples are finding ways to make it work, but more unhappy couples realize it's cheaper to stay together.

"The reason that the economy has such an enormous impact on divorce is that most people in the middle-income brackets are getting by on whatever income they have. They're just getting by," said Bonnie Booden, a family law and divorce attorney in Phoenix.

A major factor in the divorce downturn, Booden said, is divorced couples have to establish two separate households with current funds -- a prohibitive factor when you're looking at divorce in tough economic times.

Booden said one out of every two clients is seeking consultations because they can't afford to get divorced. They want to know what other options they might have.

"I tell them about the process, about the cost, and what a reasonable outcome might be. And once they hear the cost, and especially how you have to duplicate two households on the same money that currently funds one household, they try to think about some other options," she said.

Some clients have split up bedrooms and continue to live in the same house, she said. Some split child-care duties so they don't have to deal with each other and live that way until they can figure out what to do. "And I've had people who just throw in the towel and get divorces anyway, creating financial ruin for themselves," she said.

Circuit courts across the country report downturns in the number of divorce and separation filings. Cook County's Circuit Court in Chicago saw a 5% decrease in filings -- about 600 cases -- in the first three quarters of 2008 compared to the same period the previous year. Similar drops were reported in other cities across the country.

This domestic situation is also confirmed in a poll by the American Academy of Matrimonial Lawyers. The AAML surveyed its members -- all divorce lawyers -- and found that 37% of them have seen a decrease in the number of couples seeking a divorce, while just 19% saw an increase in divorce cases.

Gary Nickelson, president of the American Academy of Matrimonial Lawyers, said people are just, "toughing it out" and putting off the decision to divorce until the economy gets better.

"We're in a perfect storm as far as the divorce business is concerned," Nickelson said. "It's not a surprise to me. That's been my experience over the last 35 years. When you have an economic downturn people are not so quick to change their situation."

Out of options

Some people who come to Booden's office have come from marriage counselors, she said. By the time these couples get to her, she said, they've pretty much run out of options.

Typically, she said she tries to arrange a deal where both parties continue to own their house. She'll split up the equity and apply an interest rate to it to make it reasonable to the person not living in the house, and then distribute the cash when the house is sold after the kids go to college.

"People have to realize the financial meltdown changed everything," she said. That sentiment is echoed by the AAML's Nickelson. "As long as stocks and financials and major assets are down, you're probably going to see a lot of people wait to file for divorce. There's a lot of fear in filing for divorce," he said. "I think that cuts across all genders, races, and all social economic ranges."

I don't know about you, but to me this seems much more painful than going through a divorce. Of course, if there are kids to consider that's a whole different story , but to simply stay together for money seems bizarre, even to someone as bizarre as I am!.

Anyone ever heard of this before? Anyone doing it or know people doing it? Please leave your comments/thoughts below -- I'd be interested in hearing the thoughts behind such an arrangement.