Overnight Newspapers Online. 01-31-2014 | Po

Google had paid $12.5bn for the company less than two years ago.

Lenovo plans to build up its smartphone unit through the Motorola purchase, which may help offset its slowing personal computer business.

However, Google will keep the majority of Motorola's lucrative patents, which include one for Android software.

In a statement, Google said the smartphone market was "super competitive" and that Motorola would "be better served by Lenovo". The purchase is set to make Lenovo the world's third-largest smartphone maker behind Samsung and Apple.

Market research firm Strategy Analytics said in a blog post that Lenovo had made "a good move" and would benefit from economies of scale.

"The Chinese vendor gets access to the valuable US smartphone market and the fast-growing Latin America region. This complements its existing global PC business.

"For Motorola, it gains access to an ambitious sugar daddy that has a strong presence in the huge China market. For Google, it divests a loss-making hardware division," it said.

Chinese deal-maker This is the second major acquisition for Lenovo in the same number of weeks.

Last Thursday, the Thinkpad-maker announced it had acquired IBM's low-end server business for $2.3bn, in what was then China's biggest technology deal.

Shares of Lenovo being traded in Hong Kong fell by more than 8% following the announcement, which came after the US market had closed.

"Whether Lenovo can turn around the long-struggling Motorola business, and what happens to the Motorola brand long-term, remain key questions that will need to be answered in the coming months," Strategy Analytics said.

On a conference call following the deal's announcement, Lenovo chief financial officer Wong Waiming said they were not concerned that they may have overpaid for Motorola."Market prices go up and down and I would not take a one-day or half-day performance as a reflection of the market viewing it negatively," he said.

Mr Wong also said there was "no urgent need" for the company to tap the capital markets for money to fund the Motorola purchase given it had more than $3bn in cash available.

Acquisition spree The purchase of Motorola was Google's largest acquisition and it signalled a growing effort by the search giant to enter the hardware business.

On Wednesday, Lenovo said it would buy Google Inc's Motorola Mobility handset unit for $2.91 billion in the fourth-largest U.S. acquisition by a Chinese or Hong Kong company ever.

"We are not only the number one PC company in the world but with this agreement we will become a much stronger number three smartphone company," said Wong Waiming, Lenovo's chief financial officer, on a conference call on Thursday.

Investors, however, took a dim view of the deal, which came less than a week after the company announced it was buying IBM Corp's low-end server unit for $2.3 billion. The stock fell 8.2 percent on concerns Lenovo might have overpaid for a loss-making business and would dilute the value of shares by issuing new ones to help pay for the purchases.

Together with the IBM agreement, Lenovo has agreed in the last week to fork over as many as 800 million shares, representing about 7.7 percent of its outstanding stock.

With its acquisition of Motorola, Lenovo is emerging as the most viable contender to global smartphone leaders Apple and Samsung - albeit still a distant third-place player.

The deal will allow Lenovo to step outside its China comfort zone and firmly into other regions, including the United States, where Chinese smartphone makers have struggled, and Latin America, where Motorola remains a strong brand.

Google has the opposite problem. China is one place its presence is barely felt since it left the market in 2010 because of network security concerns.

Its search engine, which dominates in most of the world, recorded China market share by usage of just 1.6 percent in December, according to Beijing-based data firm CNZZ. Before 2010, its share reached 29 percent, according to Analysys Mason.

Even Google's Android operating system, which Samsung also uses, has struggled in China. Only 3.5 percent of Android devices in China have its Google Play app store installed, limiting its profit potential.

Whether the Lenovo partnership might reopen the door to China remains to be seen. Programs such as Google Maps and Google Plus, which is blocked by censors, would still be unavailable to most mobile users.

NEW CHALLENGER

JD.com, which said in December it expected to top 100 billion yuan ($16.51 billion) in annual sales for the first time, is riding on China's booming e-commerce industry as internet penetration surges in the world's most populous nation.

Business-to-consumer online sales in China are expected to surpass $180 billion this year, according to market research firm eMarketer.

JD.com has managed in the past six years to secure $2.23 billion from foreign investors, including the Ontario Teachers' Pension Plan and Saudi billionaire Prince Alwaleed bin Talal's Kingdom Holding Co.

Alibaba, which controls nearly 80 percent of China's internet shopping market, has been planning to list its shares but has struggled to reach an agreement with Hong Kong regulators over its proposed IPO, expected to be worth around $15 billion.

JD.Com's filing with the U.S. Securities and Exchange Commission did not reveal how many American Depositary Shares the company planned to sell, their expected price or the exchange on which it would list them.

Putin repeated a promise to honor the lifeline agreement with Ukraine in full, but left open the timing of the next aid installment as Kiev struggles to calm more than two months of turmoil since President Victor Yanukovich walked away from a treaty with the European Union.

A day after Prime Minister Mykola Azarov resigned on Tuesday, hoping to appease the opposition and street protesters, Russia tightened border checks on imports from Ukraine in what looked like a reminder to Yanukovich not to install a government that tilts policy back towards the West.

Ukraine's new interim prime minister promised to try to limit the economic damage inflicted by the sometimes violent street protests, and said he expected Russia to disburse a further $2 billion aid installment "very soon".

Putin had less of a sense of urgency. "I would ask the (Russian) government to fulfill all our financial agreements in full," he said, repeating a promise made on Tuesday after the government resigned in Kiev.

However, he signaled that the latest installment was on hold in remarks he made during a meeting with senior government officials, extracts of which were broadcast later on Russian TV.

"Let's wait for the formation of a Ukrainian government," he said, before telling the meeting, "But I ask you, even in the current situation, not to lose contact with our (Ukrainian) colleagues," adding that discussions should continue before a new government is formed.

Putin agreed to the aid package with Ukraine in December, throwing the ex-Soviet state a lifeline in what the opposition and the West regard as a reward for scrapping plans to sign political and trade deals with the EU and promising to improve ties with Russia.

WESTERN ALARM

Alarm about Ukraine is growing in the West. German Chancellor Angela Merkel telephoned Putin and Yanukovich on Wednesday, urging a constructive dialogue between the government and opposition in Kiev. "The situation must not be allowed to spiral again into violence," a German government spokesman quoted her as saying.

At an industry conference in San Francisco, an audience member asked the Oracle co-founder what to tell potential Oracle cloud-computing clients who worry that the National Security Agency could access their information.

"To the best of our knowledge, an Oracle database hasn't been broken into for a couple of decades by anybody," Ellison replied. "It's so secure, there are people that complain," he added.

Oracle, Salesforce.com and other major Silicon Valley companies are increasingly offering Internet-based business services for things like human resources, accounting and sales management, in a trend known as cloud computing.

Entrusting software and data management to cloud services can save companies the expense of maintaining their own servers and other IT infrastructure.

Former NSA contractor Edward Snowden's revelations about U.S. government surveillance have increased companies' concerns about privacy and may cost U.S. technology vendors billions of dollars in lost sales, analysts say.

David Litchfield, an established security expert and frequent speaker at top hacking conferences, disagreed with Ellison's comments and said he regularly sees Oracle systems being compromised.

"Of all of the commercial databases, Oracle is the least secure," he told Reuters by email.

The roots of Ellison's software company go back to 1977, when the Central Intelligence Agency contracted him and two co-workers to design a database, codenamed Oracle. The same year, Ellison and his colleagues founded the database company that would eventually be renamed Oracle.

Diego Moraiz, who has been with the bank since 2004 and has specialized in trading the Mexican peso, was told by the bank on December 18 that he was suspended, the source said.

Moraiz's suspension came after an external consulting firm hired by Deutsche Bank examined emails and communications in chatrooms going back seven years, the source said.

The specific reason for the suspension is unclear. Reuters couldn't determine which consulting firm had been retained.

The source did not know whether Moraiz was still being paid or when the investigation will be completed. Moraiz, who is from Argentina, remains in the United States, the source said.

The source spoke on condition of anonymity because the investigation is an internal bank matter and is continuing.

Moraiz did not respond to several phone calls from Reuters.

Deutsche Bank spokesman Sebastian Howell said the bank does not comment on individual staff.

Global financial regulators are looking into allegations that traders at some of the world's biggest banks, including Deutsche Bank, colluded to manipulate benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, or the so-called WM/Reuters "fix".

Previously, a separate source had told Reuters that several Deutsche Bank currency traders had been suspended at the bank's New York office.

The investigation by the consulting firm is ongoing, the source said, and it is still sending questions to the bank's traders around the world.

Last year, Britain's Financial Conduct Authority began a formal probe into possible manipulation in the global foreign exchange market. The U.S. Justice Department is also engaged in an active investigation of possible manipulation of the market, the world's largest.

Earlier this month, U.S. banking regulators from the Federal Reserve and Office of the Comptroller of the Currency visited Citigroup Inc's (C.N) London offices in connection with the investigation.

A spokesperson for the Fed declined comment. While market manipulation isn't the Fed's remit, it does have enforcement powers in safety and soundness matters, an issue raised by this investigation.

The Office of the Controller of the Currency and the U.S. Department of Justice both declined to comment.

In the fourth quarter, the U.S. cable operator added 39,000 net residential Internet subscribers, a turnaround from a weak third quarter when it lost 24,000 subscribers.

The company said residential subscriber activity improved sequentially each month in the quarter and continued to improve in January.

Cable operators in the United States are increasingly depending on Internet customers for growth as they face rising programming costs and continue to lose cable TV subscribers to telecom and satellite companies.

Time Warner Cable, which ranks second to Comcast Corp in the U.S. cable market, has attracted takeover interest from John Malone's Liberty Media Corp, the largest investor in Charter.

Net income attributable to Time Warner Cable rose 5 percent to $540 million, or $1.89 per share, in the fourth quarter, from $513 million, or $1.68 per share, a year earlier.

Revenue rose about 2 percent to $5.58 billion. The company said it lost 217,000 residential video customers in the quarter.

Analysts on average expected earnings of $1.73 per share on revenue of $5.56 billion, according to Thomson Reuters I/B/E/S.

The changes will involve Shell stopping its exploration programme in Alaska.

On Thursday, Shell posted 'clean' profits - which strip out the impact of oil price movements - of $2.9bn (£1.7bn) for the last quarter of 2013, down from $5.6bn on the period in 2012.

It comes a week after Shell issued a "significant" profits warning.

New chief executive Ben van Beurden, a month into the job, said on Thursday that "the landscape the company had expected has changed".

On 17 January, Shell, the world's third-largest publicly-quoted oil company, surprised investors with a warning about profits for the quarter to the end of December, blaming high exploration costs, pressures across the oil industry and disruption in Nigeria.

Thursday's quarterly profits were broadly in line with expectations following the profits warning, and took full-year 'clean' profits to $19.5bn, against $25.3bn in 2012.

Mr van Beurden took over as chief executive on 1 January, replacing Peter Voser.

The new boss said in a statement on Thursday: "Our overall strategy remains robust, but 2014 will be a year where we are changing emphasis, to improve our returns and cash flow performance."

Capital spending will fall to $37bn this year from $46bn in 2013, Shell said, adding that, for the time being, it was also scrapping a controversial exploration programme in Alaska.

'Hard choices'

Last week, a US court ruled that a full assessment of the environmental risk associated with the Alaska exploration had not been carried out by the US government.

Shell had spent around $4.5bn exploring for oil off the coast of Alaska since 2005, but has faced strong environmental opposition.

"We are making hard choices in our world-wide portfolio to improve Shell's capital efficiency", Mr van Beurden said.

The Anglo-Dutch company said it would increase the pace of asset sales, targeting disposals of $15bn this year.

Mr van Beurden said: "The landscape the company had expected has changed. Factors such as the worsening security situation in Nigeria in 2013, and delays to non-operated projects in several other countries, have altered the outlook.

Standing in the House of Representatives chamber before lawmakers, Supreme Court justices and VIP guests, Obama declared his independence from Congress by unveiling a series of executive orders and decisions - moves likely to inflame already tense relations between the Democratic president and Republicans.

While his rhetoric was high flying, Obama's actions were relatively modest, collectively amounting to an outpouring of frustration at the pace of legislative action with Republicans in control of the House of Representatives and able to slow the president's agenda.

"I'm eager to work with all of you," Obama told the lawmakers gathered for the annual speech. "But America does not stand still - and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that's what I'm going to do."

Obama's orders included a wage hike for federal contract workers, creation of a "starter savings account" to help millions of people save for retirement, and plans to establish new fuel efficiency standards for trucks.

He said he was driven to act by the widening gap between rich and poor and the fact that while the stock market has soared, average wages have barely budged.

"Inequality has deepened," Obama said. "Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by, let alone get ahead. And too many still aren't working at all."

SALUTE TO WOUNDED SOLDIER

In an emotional, flag-waving finish to his speech, Obama drew a standing ovation from people of all political stripes by saluting the heroism of Sergeant First Class Cory Remsburg. The Army Ranger survived a roadside blast in Afghanistan and has recovered to the point where he attended the speech, seated next to first lady Michelle Obama.

"Like the America he serves, Sergeant First Class Cory Remsburg never gives up, and he does not quit," Obama said.

In a nod to bipartisanship, Obama drew applause with a brief tribute to John Boehner, "the son of a barkeeper" who rose to become speaker of the House of Representatives and the top Republican in Congress. Boehner gave Obama a thumbs-up.

The Japanese video games maker said its operating profit fell 6.9 percent in October to December to 21.7 billion yen ($211 million), compared to its most recent target for a 35 billion yen ($340 million) loss for the full year.

The company said domestic sales of hardware and software were strong but that overseas sales sagged in the holiday season. Revenue fell 11.5 percent on the year to 302.6 billion yen in the October to December quarter.

It cut its full-year sales forecast for the Wii U gaming console to 2.8 million from 9 million on January 17.

The Kyoto-based company also said it would buy back up to 125 billion yen, or 7.82 percent, of its outstanding shares.

Nintendo is due to unveil a new management strategy on Thursday, as it comes under pressure from investors to return to profit after warning it would post a third straight year of operating losses.

Apple is ceding the ecosystem battle to Google >> Forbes

Tero Kuittinen (he's busy):

the long-term threat for the company is that Google may be able to leverage hot growth in Latin America, Africa, Middle East and Asia Pacific to undermine Apple's once so absolute dominance of the global app revenue generation. Strength in China alone cannot keep Apple in control.

Unless Apple finds a way to fight Google's budget models in emerging markets, the app industry will start favouring Google Play, perhaps sooner than most people realize. Many developers are already starting to rethink the old "First iOS, then Google Play after 6-12 months" playbook. Apple's tepid, 5%, revenue growth in Europe reflects the strong gains Android vendors are making particularly in Mediterranean markets like Spain, Italy and France.

Amazon Appstore now allows developers to charge for HTML5 web apps, promote them through "Free App Of The Day" >> TechCrunch

For consumers, it can be difficult to tell the difference between the native and HTML5 apps – they aren't listed separately in the Appstore, making them hard to spot at a glance. Had a significant number of developers participated here by submitting their web creations, that could lead to the perception that the developer community is turning to Android in greater numbers.

However, Amazon didn't share in its announcement how many HTML5 apps are available today – something that could indicate it doesn't have numbers it wishes to tout just yet. (We've asked the company to clarify by offering us some figures, though, and will update when we have them. Update: Amazon declined to provide any numbers.)

iPhone sales: the failure of traditional forecasting methods >> Tech-Thoughts

Sameer Singh:

In the premium smartphone market, the basis of competition among "lower-end" consumers has shifted to pricing and customization to individual preferences (e.g.: screen size). This, combined with carrier moves towards transparent pricing (driven by a basis of competition shift in the US telecom industry), increased competition to "unexpected" levels. Therefore, even as the sales performance of the flagship iPhone 5S remained strong, Apple was losing potential buyers of its "cheaper" iPhones to "good enough" competitors.