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Ford boosts CEO pay 11% to $23.2 million

Written By limadu on Sabtu, 29 Maret 2014 | 14.45

alan mulally pay raise

Ford CEO Alan Mulally is credited with turning the company around.

NEW YORK (CNNMoney)

Mulally was paid $23.2 million in 2013, up from about $21 million the previous year, Ford (F, Fortune 500) said in a regulatory filing.

For 2013, the automaker's earnings rose 26% to $7.2 billion. The company also shared its strong performance with its hourly factory workers with a record profit-sharing bonus of about $8,800 each.

Mulally became Ford's CEO in 2006 and is credited with turning the automaker around, allowing it to avoid the bankruptcy and federal bailout that rivals General Motors and Chrysler Group required during the recession.

Mulally is also highly regarded in the corporate world and rumors circulated earlier this year that he would be tapped by Microsoft (MSFT, Fortune 500) to replace retiring CEO Steve Balmer. But Mulally put those rumors to bed in January and said he would stay with Ford at least through 2014.

Ford is paying Mulally more than what GM (GM, Fortune 500) paid former CEO Dan Akerson in 2013. Akerson retired in January and was replaced by Mary Barra, whose pay package totals $14.4 million.

Mulally's base salary remains the same at $2 million. His raise comes from a bigger bonus and increase in stock awards. To top of page

First Published: March 28, 2014: 4:45 PM ET


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S&P downgrades Target for data breach

target downgrade

Last year's data breach keeps hurting Target. S&P downgraded it one notch.

NEW YORK (CNNMoney)

The breach compromised credit card numbers and personal information of tens of millions of customers during the 2013 holiday season. Target (TGT, Fortune 500) has said the hack cost the company as much as $61 million in the final months of 2013.

S&P expects the breach to have a "somewhat lingering effect" on traffic at the retailer's stores through at least August of this year. Sales slowed in the most recent quarter, which ended Feb. 1.

Target recently said its ongoing investigation of the breach could turn up "additional information that was accessed or stolen."

But the agency also said Target's outlook is stable. Although the retailer lost $723 million in Canada last year, S&P expects those losses to narrow in 2014. The agency also considers costs due to the data breach to be "significant but manageable." To top of page

First Published: March 28, 2014: 5:22 PM ET


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GM adds 824,000 vehicles to recall

NEW YORK (CNNMoney)

Until today the recall included the Chevrolet Cobalt and HHR, the Pontiac G5 and Solstice, and Saturn Ion and Sky through model year 2007. Now the company is including all model years of those vehicles because faulty switches could have been installed as a repair after owners purchased one of the newer models.

About 95,000 faulty switches were sold to dealers and wholesalers and about 90,000 of those were used to make repairs, the company said.

The new recall adds to the 1.4 million vehicles already recalled in the United States.

In affected vehicles, the ignition can switch the car off while it is running, disabling the power steering and air bags. At least 12 deaths have been attributed to the issue. Although GM has recalled the vehicles, it has said they are still safe to drive if owners remove any extra weight from key rings.

Related: GM's steps to a recall nightmare

"Trying to locate several thousand switches in a population of 2.2 million vehicles and distributed to thousands of retailers isn't practical," said CEO Mary Barra in statement. "Out of an abundance of caution, we are recalling the rest of the model years," she said.

GM has been criticized for how it has handled the recall because it has admitted that some employees were aware of problems with the ignition switch in small cars at least as early as 2004. Barra will testify before a U.S. congressional subcommittee on April 1 as part of an investigation into the automaker's handling of the flawed ignition switch.

Owners who may have had a suspect part installed in their cars will receive a letter the week of April 21, according to the company. GM (GM, Fortune 500) dealers will replace the ignition switch for free and customers who had paid to have the switch replaced previously will be eligible for a reimbursement.

The National Highway Traffic Safety Commission urges impacted drivers to have their vehicles repaired promptly after receiving the notification from GM. In the meantime, the group advises them to follow GM's recommendation to use only the ignition key with nothing else on the key ring when driving the vehicle. To top of page

First Published: March 28, 2014: 6:16 PM ET


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Candy Crush maker prices IPO

Written By limadu on Rabu, 26 Maret 2014 | 14.45

NEW YORK (CNNMoney)

King Digital Entertainment will begin trading Wednesday under the ticker KING on the New York Stock Exchange at $22.50 a share the company said on Tuesday night.

The Dublin, Ireland-based game maker sold 22.2 million shares raising nearly $500 million from the offering. Based on that, King would be worth about $7.6 billion.

Related: Candy Crush company founder left $1 billion on the table

By comparison, rivals Zynga (ZNGA) and Activision (ATVI) sport valuations of $4 billion and $14.6 billion, respectively.

Among the underwriters are JPMorgan Chase (JPM, Fortune 500), Credit Suisse and Bank of America Merrill Lynch (BAC, Fortune 500), the company said in its federal filing.

Candy Crush averages about 93 million daily users, who play the game more than a billion times a day, according to the company.

King reported annual revenue of $1.9 billion and a profit of about $568 million, despite offering games such as Candy Crush, Pet Rescue and Farm Heroes to players for free.

But its growth has soared. Sales in 2012 were $164 million with a profit of just $8 million. King makes money by selling virtual items to a small fraction of its players who wish to enhance their playing experience.

Despite its rapid gains, King's dependence on Candy Crush has some market strategists questioning its long-term strategy. There are concerns that this could be a repeat of Zynga, which has been unable to the match the success of former hit Farmville.

"Since only a a small group of players generate most of King's revenue, a loss of even a small number of these players would materially affect King's gross bookings," said financial data firm PrivCo in a recent report.

Other red flags include slowing growth for Candy Crush, as well as the way King "double counts" its players, according to PrivCo, which has advised investors to pass on the stock.

"An individual playing Candy Crush on his cell phone while commuting to work and then later plays Candy Crush on his computer during their lunch break would be counted as two users," PrivCo said. "If the person then played on a tablet during the same period, he would be counted as three users."

Still, King's profits are impressive and plenty of investors are hungry for a taste of what they view as a sweet IPO.

King's stock may be "fairly valued," said Tim Keating, chief executive of Keating Capital, a fund that specializes in making pre-IPO investments but does not own a stake in King. He added that King's profit margins are strong and its revenue growth over the past year has been an "eye popping" 1000%.

But using history as a guide, some analysts are harboring a healthy dose of skepticism. Zynga, for example, currently trades at around 50% less than its 2011 IPO price. Still, Zynga has regained some lost ground and is up almost 30% this year.

Related: How does King Digital compare to Zynga?

King's public debut comes amidst a busy year for new offerings. There have been 53 new listings in the United States so far this year, according to IPO research and investment firm Renaissance Capital. In the same period last year, there were just 30 companies that went public. At that rate, the number of IPOs this year could rival last year's total of 222, which was the highest number since 2000.

While the overall market has been volatile due to geopolitical concerns and the Fed's scaling back of stimulus, the average IPO has returned 28.3% from its offering price, according to Renaissance.

-- CNN's Ben Rooney contributed to this report To top of page

First Published: March 25, 2014: 7:00 PM ET


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First legal steps taken against Malaysia Airlines, Boeing

NEW YORK (CNNMoney)

Monica Kelly, a lawyer at Ribbeck Law, asked an Illinois state judge on Tuesday to order Malaysia Airlines and Boeing, which manufactured the missing airplane, to provide documents and other information.

Kelly is seeking specific information about the airline's batteries, details on the fire and oxygen systems and records related to the fuselage.

The filing appears to be the first move toward U.S.-based litigation stemming from the March 8 incident. The firm said it plans to build a multi-million dollar suit against the airline and Boeing.

Related: How will families be compensated

Boeing (BA, Fortune 500) declined to comment late Tuesday, and Malaysia Airlines officials were not immediately available.

Kelly's client, Januari Siregar, is the father of a Flight 370 passenger. It was not immediately clear when a judge would consider the filing.

International law dictates where suits against an airline may be brought. The families of victims are allowed to pursue legal action in countries including where tickets were purchased and where the airline is based. Suits can also be filed in the passenger's final destination.

That means most suits against Malaysia Airlines would be filed in China or Malaysia.

Related: Malaysia Airlines' $5,000 payment is just the beginning

International law does not, however, dictate where lawsuits against other parties, including Chicago-based Boeing, may be brought. Legal experts say crafting a case against the airplane's manufacturer is more difficult than against the airline.

Malaysia Airlines said it believes the plane crashed in the Indian Ocean and that all 239 people aboard the aircraft died. No physical evidence of the plane or passengers has been found. To top of page

First Published: March 25, 2014: 11:21 PM ET


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Pew: Online news organizations have created 5,000 jobs

pew media

A select few news organization, including Al Jazeera America, have greatly expanded their operations.

NEW YORK (CNNMoney)

Pew Research Center has tried to put a number on it: 5,000.

The center's annual State of the News Media report, released on Wednesday, includes a first-of-its-kind tally of jobs at 30 big websites, like Buzzfeed and The Huffington Post, and 438 smaller startups.

"In a significant shift in the editorial ecosystem, most of these jobs have been created in the past half dozen years, and many have materialized within the last year alone," write the authors of the 2014 report, who credit the startups with bringing "a level of energy to the news industry not seen for a long time."

The Pew report cites hiring sprees at digitally-oriented companies like Gawker, Business Insider, First Look Media, Vox Media, and Vice Media. But it emphasizes that "the growth in new digital full-time journalism jobs seems to have compensated for only a modest percentage of the lost legacy jobs in newspaper newsrooms alone in the past decade."

"The vast majority of bodies producing original reporting still lie within the newspaper industry," the authors write. "But those newspaper jobs are far from secure." While reliable data for 2013 is not yet available, the report says that full-time newsroom employment dipped by 6.4% in 2012, "with more losses expected for 2013."

Related: Narrow ratings win for 'Today' shows how much trouble it's in

The State of the News Media report is an annual assessment of American journalism, financed by the nonpartisan Pew Research Center. This time last year, Pew focused on what it called signs of "shrinking reporting power" due to cutbacks at newspapers and television networks. That report warned of "a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands."

This year's edition relays what it calls "a new sense of optimism," partly due to recent investments at a wide variety of online news organizations, some for-profit and others not-for-profit. It cites "a new breed of entrepreneurs" like Jeff Bezos, who acquired The Washington Post last year, and an increase in philanthropic support for news producers.

Related: China playing rough with big media

Pew arrived at the number of 5,000 new digital news gathering jobs by compiling the number of staffers at 30 big websites and estimating the head count at many smaller ones. The authors acknowledge that "while that does not represent a complete census of a digital news world, it is a robust a sample as may be possible from a variety of credible sources."

They say that "many digital outlets are working to fill reporting gaps created by the strain on resources at traditional outlets -- from niche topic areas like education to international coverage to local community news to investigative journalism." Others are experimenting with new ways to tell stories, whether through videos or lists or data visualization techniques.

"But the question of whether digital news outlets can ultimately replenish the loss of legacy jobs and reporting resources hinges on creating the kind of successful business model or models that have proved elusive," the authors say. To top of page

First Published: March 26, 2014: 12:24 AM ET


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Taxpayers hit with fewer audits

Written By limadu on Minggu, 23 Maret 2014 | 14.44

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question." To top of page

First Published: March 21, 2014: 4:58 PM ET


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Are Netflix users ripping off the rest of us?

reed hastings net neutrality

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says. To top of page

First Published: March 21, 2014: 5:34 PM ET


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No winners for $1 billion NCAA challenge

NEW YORK (CNNMoney)

The $1 billion prize for a perfect NCAA bracket that his Berkshire Hathaway (BRKA, Fortune 500) was backing will go unclaimed.

None of the fans who signed up for the perfect bracket challenge sponsored by Quicken Loans and Yahoo Sports made it out of the first round of 32 games played without at least one mistake. The two firms would not say how many fans entered the free contest.

Buffett sold an insurance policy to Quicken Loans and Yahoo (YHOO, Fortune 500) which would have compensated them if they had to pay out the 10-figure sum.

One estimate puts the odds of picking a perfect bracket at 9.2 quintillion to one -- an awkward, rarely-used number that can also be thought of as 9.2 billion-billion. Those odds are longer than the likelihood of winning Powerball and Mega Millions in the same weekend.

Related: College basketball's real billion dollar winner

But the 9.2 quintillion estimate assumes each team has a 50% chance of winning every game, which is probably not the case. Others have put the odds at a marginally better 7.4 billion to 1. That's 42 times worse than your chance of winning Powerball.

"There is no perfect math...There are no true odds, no one really knows," Buffett told CNN in January when the challenge was announced.

The odds became even longer with upsets this week. In Thursday's opener, 84% of fans picked Ohio State to win, only to see the University of Dayton upset its rival. Then on Friday upstart Mercer University knocked off perennial powerhouse Duke, which was the choice of 98% of fans with Yahoo brackets.

The tournament is so popular partly because of the history of first-round upsets that play havoc with fans' brackets.

Related: More billionaires pledge to give away fortunes

CBS Sports, which runs one of the bigger bracket challenges, says that in the past two years its final perfect brackets were eliminated in the 22nd and 23rd games of the tournament, or about two-thirds of the way through the first round.

ESPN reports that of the roughly 30 million entrants it's had over the 13 years, no one has come close to a perfect bracket, and that only one person has had a perfect first round in the last seven years.

"I don't want to say it's impossible, but it's basically impossible," said John Diver, director of product development for ESPN Fantasy. To top of page

First Published: March 22, 2014: 9:51 AM ET


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Taxpayers hit with fewer audits

Written By limadu on Sabtu, 22 Maret 2014 | 14.44

NEW YORK (CNNMoney)

The agency audited 1.4 million people last year, down 5% from 2012 and the lowest number of audits conducted since 2008, according to IRS statistics released Friday.

The IRS blamed its shrinking budget for the drop-off, saying "an ongoing decline in appropriate funding presented challenges."

Related: 10 tax audit red flags

Since 2010, the agency's budget has been reduced by almost $1 billion and around 10,000 employees have been cut. Under the 2014 budget, the IRS will receive $11.3 billion -- nearly $2 billion less than the White House had requested for the agency and a $526 million drop from 2013.

Meanwhile, government spending cuts last year forced the IRS to furlough workers without pay for three days, making it even harder for the agency to keep up with its workload.

To cut costs, the IRS has been conducting more audits by mail than in person. Last year, more than three-quarters of examinations were correspondence audits, and the rest were field audits -- meaning they were conducted at an IRS office or a taxpayer's home.

Related: Quiz - 7 surprising 2014 tax facts

And while the overall number of audits was low, at around 1% of all taxpayers, there are still certain groups that aren't getting a break.

One of those groups is the rich: About 9% of taxpayers with income between $1 million and $5 million were audited last year, and that rate rose to 16% for those with income between $5 million and $10 million. For the nation's top earners, with income over $10 million, the audit rate was 24%.

Business owners are also more likely to be audited, and so are taxpayers who claim a home office deduction or the Earned Income Tax Credit. Reporting -- or failing to report -- a foreign bank account could also lead to additional scrutiny, as the IRS continues to crackdown on people hiding offshore income.

Related: Tax season unleashes cyberscams

In addition to being unable to conduct as many audits, the agency's taxpayer assistance has been deteriorating, the National Treasury Employees Union said in a statement Friday.

"We are seeing the results of these reductions in staffing, particularly in customer service, all across the country," NTEU president Colleen Kelley said. "Both taxpayers and employees are frustrated by the lengthy lines at Taxpayer Assistance Centers and the long telephone hold times for those who call the IRS with a question." To top of page

First Published: March 21, 2014: 4:58 PM ET


14.44 | 0 komentar | Read More

Are Netflix users ripping off the rest of us?

reed hastings net neutrality

Reed Hastings says Netflix is "reluctantly" paying for faster connections to broadband networks.

NEW YORK (CNNMoney)

Hastings sounded off Thursday on the likes of Verizon (VZ, Fortune 500), Comcast (CMCSA, Fortune 500) and others, accusing them of "sacrific[ing] the interests of their own customers" in demanding fees to ensure quick delivery of content from Netflix (NFLX) and other data-intensive services.

The dispute flared up earlier this year following news that Netflix streaming speeds for customers of major ISPs were slowing, as these firms attempted to extract a fee from Netflix in exchange for connecting directly to their networks and resolving the issue.

Netflix announced an agreement with Comcast last month under which it will indeed pay for a connection, and has been in talks with Verizon as well.

Hastings said his company was engaging in these talks "reluctantly." He accused the ISPs of abusing their market power and short-changing customers.

Related: New chapter begins in net neutrality fight

But the ISPs tell a very different story. They point to the fact that Netflix generates a massive amount of data consumption -- around a third of traffic online during peak hours -- while sticking them with the ever-increasing delivery costs.

The National Cable and Telecommunications Association says just one percent of broadband subscribers -- primarily heavy streaming-video users -- consume nearly 40% of bandwidth going into homes.

Other big tech companies, including Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Facebook (FB, Fortune 500), already have paid-connection deals with big ISPs. Comcast vice president David Cohen said in response to Hastings that these arrangements "have been an essential part of the growth of the Internet for two decades."

Dan Rayburn, an industry analyst at Frost & Sullivan, says it's not clear that the ISPs are to blame for customers' lagging Netflix speeds. In a blog post Friday, he noted that Netflix has the option of rerouting the traffic it sends to ISPs when congestion occurs at one connection point.

The heart of the problem is that high-speed Internet networks are extremely expensive to deploy. There aren't many companies with the resources to do it, and there isn't enough competition in most regions to push ISPs to quickly upgrade their infrastructure.

Paid-connection deals like the one between Comcast and Netflix are part of the way the broadband industry wants to address this issue. But Hastings says this cost-sharing doesn't make sense if the ISPs aren't also willing to share subscription revenue.

"When an ISP sells a consumer a 10 or 50 megabits-per-second Internet package, the consumer should get that rate, no matter where the data is coming from," Hastings wrote in his blog post.

Related: Court strikes down net neutrality rules

ISPs have accused Netflix of "dumping" data onto their networks, a characterization that Hastings rejected.

"Netflix isn't 'dumping' data; it's satisfying requests made by ISP customers who pay a lot of money for high speed Internet," Hastings wrote. "If this kind of leverage is effective against Netflix, which is pretty large, imagine the plight of smaller services today and in the future."

Going forward, broadband providers would like to move to a tiered pricing structure for customers depending on how much data they consume, similar to those offered by mobile carriers.

"[I]t's unfair to ask lighter users to subsidize super-user activity," the NCTA says.

But part of that formula will likely involve letting content providers subsidize consumer data consumption that goes toward their services. AT&T announced this kind of "sponsored data" program earlier this year for the mobile Web. The worry with this system is that it favors established companies that can pay up for speedy delivery of their content, putting smaller firms at a disadvantage and potentially stifling innovation.

"On a tiered Internet controlled by the phone and cable companies, only their own content and services -- or those offered by corporate partners that pony up enough 'protection money' -- will enjoy life in the fast lane," the advocacy group Free Press says. To top of page

First Published: March 21, 2014: 5:34 PM ET


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Obamacare: Some may have more time to finish applications

healthcare dot gov 032114

The administration may let some people finish their Obamacare applications after March 31

NEW YORK (CNNMoney)

Administration officials have repeatedly said they are not extending the open enrollment deadline. But they are now considering giving those who start applying for health insurance by month's end additional time if they run into technical trouble during the application process. A similar grace period was put in place in December to allow applicants to sign up in time to obtain coverage by Jan 1.

"As was the case for the December deadline, we're going to want to make sure that people who are already in line can finish their enrollment," Press Secretary Jay Carney said Friday.

Back in December, some people who missed the deadline on the 23rd were given an extra day if they had started their applications but couldn't pick a plan because of technical issues. The federal exchange saw record-high traffic on Dec. 23.

Eligible applicants were directed to the federal exchange call center for instructions on how to obtain coverage in the new year. The 14 states running their own exchanges instituted their own extensions, some beyond the 24th.

"We are preparing for a surge in enrollment, and if consumers are in line on the 31st and can't finish, we won't shut the door on them," said Dept of Health and Human Services spokeswoman Joanne Peters.

"To be clear, if you don't have health insurance and do not start to sign up by the deadline, you can't get coverage again until next year," she said.

Administration officials have said they expect a similar last-minute crush to exchange websites as the March 31 deadline approaches.

Some states running their own exchanges are already giving applicants more leeway. The Nevada Health Link board decided Thursday to create a special enrollment period for people who are not able to complete the process by month's end. Those who apply online, by phone or through paper forms but run into technical issues have until May 30 to finish signing up.

Americans who don't have insurance this year will face a penalty of $95, or 1% of income, whichever is greater.

More than 5 million people have picked plans, with more than 800,000 signing up in the first half of March alone. The administration and consumer advocates are doing a final outreach push before the final deadline.

-- Additional reporting by CNN Senior White House correspondent Jim Acosta To top of page

First Published: March 21, 2014: 4:37 PM ET


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10 things about the Moto 360 smartwatch

Written By limadu on Kamis, 20 Maret 2014 | 14.44

NEW YORK (CNNMoney)

Motorola chief designer Jim Wicks sat down to discuss some of the Moto 360's guiding design principles and offer up a few new bits of info on the forthcoming product. Here are 10 things from that talk we found particularly interesting.

It's big. Judging from the appearance of the watch on the wrists of the two hosts, you can pick any statement piece from your favorite luxury watch brand and you'll have the right idea of how big this thing will be.

The round face is for your comfort. According to Wicks, Motorola picked the round watch face design to avoid having corners that jab into your wrist. Moto also welcomes the conventional watch metaphor for its tradition, history and familiarity. (And probably because it's easier to build.)

Moto 360 will be one size fits all for now. There are no plans to make a smaller watch for smaller wrists, but the bands will be customizable as a consolation.

It can be worn on your left or right wrist. No matter how you flip the watch, the screen will orient itself to be readable.

It will work with all phones running Android 4.3. Unlike Samsung's Galaxy Gear, the Moto 360 will work with any Android phone whose software has been updated in the last 6 months.

Price is TBD. So is battery life. If we had to guess, this thing won't be cheap. If we had to guess again, we'd expect that Motorola would like to get a full day's use from a single charge.

Many of the same ideas and technologies used in the Moto X are implemented in the Moto 360. Many of the things that made the Moto X special - the contextual awareness, the excellent battery life, the ability to always listen for a voice command - will be present in the Moto 360. One particularly nice example is being greeted by the time, or whatever information is most pertinent, everytime you lift your wrist and not having to push or tap anything.

The charging technology is a secret. The Moto 360 has no usb ports or openings of any kind. It says it very much looks like a watch in every way. Motorola won't reveal how the watch charges, but we're betting it will use some combination of solar, magnetic induction, and kinetic charging technologies.

It's water resistant. Again, Motorola wouldn't divulge how water resistant the Moto 360 was, but it promised to discuss this more in the future.

Global rollout will happen eventually. We know Motorola plans to launch the Moto 360 in the US this summer. If you don't live in the US, Motorola also plans to offer the Moto 360 in your region...someday.

To top of page

First Published: March 19, 2014: 5:15 PM ET


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Starbucks CEO backs minimum wage raise

starbucks howard schultz

Howard Schultz applauds Obama for taking stance on minimum wage.

NEW YORK (CNNMoney)

"I applaud the President for taking a stance on raising the minimum wage," he told CNN's Poppy Harlow in an interview.

But Schultz, known to donate to Democratic candidates, stopped short of saying whether or not President Obama's push to raise it to $10.10 is the right number. And he warned of "unintended consequences" of a hike.

"Would we have to raise prices? I don't think so," Schultz said. He also wouldn't say whether or not Starbucks (SBUX, Fortune 500) would cut jobs if the federal minimum wage was raised significantly. "I would hope not," he said.

All of Starbucks' 200,000 employees make more than $7.25, the current federal minimum wage. Many receive health care and retirement benefits.

Related: Oprah Chai Tea comes to Starbucks

"We may not be able to afford to provide all the benefits if we had to go to $10 an hour," he said.

Obama has signed an order mandating that any businesses with federal contracts pay workers at least $10.10 an hour starting in 2015 and has urged Congress to do the same for all workers. Many states and cities have taken matters into their own hands and increased minimum wage at the local level.

About 1.6 million workers earn $7.25 today, according to the Congressional Research Service. Advocates say a minimum wage hike could reduce income inequality but critics say it could raise prices and lead to job losses.

"I do think there ... is a larger gap between the haves and have-nots in America," Schultz said. To top of page

First Published: March 19, 2014: 8:29 PM ET


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Sony orders first original TV series for PlayStation

NEW YORK (CNNMoney)

The company said Wednesday that it had ordered 10 one-hour episodes of "Powers," a drama based on the comic book series of the same name. It will be produced by one of Sony PlayStation's corporate sisters, the Sony Pictures Television studio.

Sony (SNE) first signaled last summer that it would pursue original TV programming for the PlayStation Network. The strategy mirrors that of its biggest video game console rival, Microsoft (MSFT, Fortune 500), which started to experiment with TV-style programming for Xbox Live subscribers years ago and has increased its investment in the space lately. One of the shows that Microsoft is developing is based on the Xbox game franchise "Halo."

Both Sony and Microsoft want their consoles to be known for delivering video as well as games. Apart from a project like "Powers," Sony is exploring the creation of a cablelike television service that would be distributed via the PlayStation Network and could challenge existing TV providers like Comcast (CMCSA, Fortune 500) and DirecTV (DTV, Fortune 500). A number of other companies are also pursuing so-called "over the top TV" ideas.

Related: Get ready for 'over-the-top' TV

With "Powers," Sony is hoping to differentiate PlayStation Network from its rivals and make it more valuable to subscribers.

The series title is a reference to the supernatural abilities possessed by some of the characters. "It overlays extremely well with the demographics of the PlayStation," Michael Lynton, the chief executive of Sony Entertainment, told the Wall Street Journal, which broke the news about the series order.

A Sony spokeswoman confirmed the order but was not able to provide any information about a premiere date.

Sony Pictures Television, which produces shows for networks like NBC, is also working on a 13-episode drama for Netflix. The Journal said that the PlayStation Network would only have the U.S. rights to "Powers," and the international rights could be sold to other distributors, including traditional television networks. To top of page

First Published: March 20, 2014: 2:57 AM ET


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Billionaire buys $201 million life insurance policy

Written By limadu on Senin, 17 Maret 2014 | 14.45

NEW YORK (CNNMoney)

Guinness World Records, which announced the policy, said it is the largest ever issued.

Neither the record keeper nor the issuer would say who is covered by the massive policy.

Dovi Frances, the adviser who arranged the policy, would only say it went to a well-known technology billionaire from California.

Related: How to choose a life insurance policy

The wealthiest of the wealthy buy life insurance for several reasons.

Primary among them are tax purposes, Frances explained.

A wealthy estate is hit with a hefty tax bill, and there may not be enough cash to cover it, since many millionaires and billionaires hold their wealth in investments, he said.

Related: The ultimate guide to retirement

The $201 million policy is more complicated than most. It's underwritten by 19 different insurance companies, each with a slice of less than $20 million, he said. If a single lender took the whole policy, Frances said, "they would go into bankruptcy if the insurance policy is called."

And a big plan comes with a big cost. Frances said the price is "in the low single-digit millions."

To top of page

First Published: March 16, 2014: 5:21 PM ET


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Guinness pulls out of St. Patrick's Day parade

st patricks day guinness

Revelers watch the St. Patrick's Day parade last year.

NEW YORK (CNNMoney)

The beer maker late Sunday announced its decision to drop its sponsorship of Monday's parade in New York City.

Over the weekend, gay rights icon Stonewall Inn had threatened to stop selling Guinness beer if the company continued to sponsor the parade. And LGBT advocacy group GLAAD had planned an anti-Guinness event on Monday.

"We were hopeful that the policy of exclusion would be reversed for this year's parade," Guinness said in a statement. "As this has not come to pass, Guinness has withdrawn its participation."

Parade organizers could not be reached for comment.

Related: Obamacare will cover same-sex spouses

The announcement by Guinness comes days after rival Heineken (HEINY) also pulled out of the New York City parade, and Sam Adams (SAM) announced that it would no longer sponsor the Boston parade for the same reason.

Both parades have policies under which sexual orientation is not allowed to be displayed, meaning marchers are not able to hold signs or wear shirts identifying themselves as LGBT (lesbian, gay, bisexual or transgender).

"Today, Guinness sent a strong message to its customers and employees; discrimination should never be celebrated," GLAAD president Sarah Kate Ellis said in a statement.

The speaker of the New York City Council also congratulated the three beer companies on their decisions.

"I want to commend Guinness, Sam Adams and Heineken for taking a stand on behalf of the LGBT community who should be able to march openly and proudly in the St. Patrick's Day Parade," Speaker Melissa Mark-Viverito said in a statement.

--CNN's Elizabeth Landers contributed to this report. To top of page

First Published: March 16, 2014: 9:03 PM ET


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Alibaba snub puts Hong Kong exchange on the defensive

jack ma

Alibaba founder Jack Ma has decided to list his company in the U.S. after negotiations failed with Hong Kong.

HONG KONG (CNNMoney)

Hong Kong clocked three consecutive years as the global IPO leader between 2009 and 2011, attracting major companies such as Prada, Glencore and Samsonite to the city's exchange.

But in recent years, mega IPOs have been few and far between due to a sluggish global economic recovery and slowing growth in mainland China.

Landing Alibaba would have been a move in the right direction, but the Hong Kong exchange refused to allow the e-commerce giant to list with a corporate structure that would give management unprecedented powers.

Related story: China's Alibaba picks U.S. for IPO

Alibaba's partners, including founder Jack Ma, were worried about losing control of the company and had lobbied furiously for a rule change. To maintain their grip, Alibaba's partners wanted the right to appoint board members.

When the Hong Kong Stock Exchange refused, Alibaba decided to take its business to a U.S. exchange, where the company's management structure will be accepted.

Hong Kong has now lost its chance at hosting what's expected to be one of the world's largest market debuts, and sentiment remains divided over whether a rule change is necessary.

Some say greater flexibility is needed to attract firms to Hong Kong, while others say the rules must remain in place to protect the interests of investors and shareholders.

Whether Hong Kong decides to make substantial changes remains to be seen, but there are indications the city could be considering amendments to its listing regulations.

Related story: Turning Alibaba away has risks for Hong Kong

Hong Kong needs "to find ways to make our market more responsive and competitive, particularly with respect to new economy or technology companies," Hong Kong Stock Exchange CEO Charles Li said in a statement.

"We have to consider possible changes where they might be necessary...to ensure our markets continue to be relevant in the new era of economic development," he said.

Li has previously voiced support for a debate around alternative governance structures similar to what Alibaba proposed -- something he suggested might be needed to attract tech firms.

But other experts say it remains unlikely that Hong Kong regulators will revise rules anytime soon.

Related story: Meet Alibaba, Yahoo's Chinese secret weapon

"The reason you would have changed them is for commercial reasons -- to get one of the world's biggest IPOs in history, and now that's slipped between their fingers," said Mizuho analyst Jim Antos. "I think they missed an opportunity, and it doesn't show the greatest business judgment in the world."

Alibaba is estimated to raise $15 billion -- that's just shy of Facebook (FB, Fortune 500), whose $16 billion 2012 market debut was the third-largest IPO ever. To top of page

First Published: March 17, 2014: 1:41 AM ET


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Weibo: China's Twitter files to go public

Written By limadu on Minggu, 16 Maret 2014 | 14.45

weibo ipo

Weibo, a Chinese microblogging site, filed for an IPO in the U.S. on Friday.

NEW YORK (CNNMoney)

The Beijing-based social media company intends to list on the New York Stock Exchange and is looking to raise $500 million.

Weibo, owned by Sina Corp. (SINA), was profitable for the first time in the last three months of 2013, raking in $3 million. The results were boosted by a 163% surge in ad revenues to $56 million.

Most of the company's revenue comes from ads since it does not charge users, except for VIP memberships.

Weibo has been growing -- active daily users numbered 61.4 million at the end of December, up from 58.9 million in September.

Related: Weibo IPO should be turning points for Sina

It had about 129 million monthly users in December. Weibo has some catching up to do -- by comparison, Twitter (TWTR) averages 241 million monthly users and went public last November.

Friday's regulatory filing did not disclose the number of shares to be sold or the price range for those shares. To top of page

First Published: March 14, 2014: 7:06 PM ET


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Crimea: Economic fallout of a 'yes' vote

ukraine crimea map

Crimea is voting on Sunday in a referendum to decide if the region should break from Ukraine and join Russia.

LONDON (CNNMoney)

The West has called the vote illegal, saying Russian military activity in Crimea violates Ukraine's sovereignty and will influence the outcome of the referendum.

U.S. and European leaders say Russia will pay a price for annexing Crimea, and German Chancellor Angela Merkel has warned of a potential "catastrophe."

Related: Live coverage of the crisis in Ukraine

If, as expected, Crimeans choose Russia over Ukraine, the fallout could ultimately affect economic growth, trade, investment and energy supplies.

Sanctions: Western powers may move as early as Monday to impose sanctions against leading Russians.

Europe and the U.S. would probably limit restrictions initially to travel bans and asset freezes on select individuals close to Russian President Vladimir Putin. Russia has said it will retaliate in kind.

The focus on individuals, rather than Russian companies or trade, reflects concern that a new Cold War could hurt the region's fragile economic recovery.

Russia's economy: While sanctions would hurt both sides, Russia would suffer much more than the West, analysts say. The European Union's exports to Russia account for 1% of EU gross domestic product. Russian exports to the EU are worth nearly 15% of Russian GDP.

Former Russian Finance Minister Alexei Kudrin, now an economic adviser to Putin, said even limited sanctions would hit foreign and domestic investment in Russia. Western banks are already shutting off credit lines. Kudrin was quoted by Russian media saying the economy may not grow at all this year as a consequence of the current tension.

Russian markets are reeling. The main stock market index has fallen by roughly 20% this year, and the ruble has plunged to record lows against the dollar. Investors pulled $33 billion out of the country in January and February, and that figure could hit $55 billion by the end of March, according to Russian investment bank Renaissance Capital.

Russia will also face a hefty bill for supporting Crimea. The region currently depends on Ukraine for roughly 70% of its budget, 90% of its water, and most of its energy and food supplies.

"It will be a great problem for [Russia] to supply ... all these necessary daily products for the population," said Yaroslav Pylynskyi, a director at the Woodrow Wilson Center.

Helena Yakovlev Golani from the University of Toronto estimates Russia will want to commit roughly $10 billion annually over the next five years to build infrastructure, support pensions and pay social benefits to the region's 2 million people.

Energy supplies: As long as the crisis doesn't spill over into other parts of Ukraine, analysts believe a full scale trade war should be averted and Russia will keep pumping critical supplies of energy to Europe.

In its weakened economic state, Russia can't afford to lose export revenues. And the threat of a suspension of gas supplies is less potent than the last time it happened -- in 2009 -- because European gas stockpiles are higher and the weather is getting warmer.

Related: 4 reasons Russia will keep gas flowing

Europe's economy: European markets could suffer modest and short-lived losses from the chill in relations with Russia, given close business and trading ties. Germany would be most exposed -- it has more than 6,000 companies active in Russia.

Still, economists expect the fallout to be contained. Berenberg's Holger Schmieding said the hit to Germany's economic growth would be at most 0.1% to 0.2% over the next 12 months, assuming the crisis is limited to Crimea. That would leave the European recovery intact.

Ukraine: With or without Crimea, Ukraine will need billions in financial support over the next few months to get back on its feet.

The EU has offered Ukraine $15 billion over the next two years, in the form of loans, grants, investments and trade concessions. The U.S. has promised $1 billion in loan guarantees, and the World Bank is talking about backing infrastructure and social security projects worth $3 billion.

A team from the International Monetary Fund has been on a fact-finding mission in Kiev since March 4. The IMF said Thursday the team would stay until March 21 to begin negotiations on a program of support and economic reform.

-- CNN's Isa Soares contributed to this report. To top of page

First Published: March 15, 2014: 7:54 AM ET


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China loosens grip on its currency

HONG KONG (CNNMoney)

The People's Bank of China announced Saturday that it would double the allowable trading range for the yuan against the dollar to 2% from a midpoint rate it sets every day.

The change, which is effective Monday, means the yuan will go up and down in value more than it has in the past.

Related: China to fight pollution with drones

While the move had been largely expected, as the yuan was already trading in the last month at a wider range than usual, the announcement remains significant for a government that has always tightly controlled the exchange rate to keep it at favorable terms.

In fact, it's been nearly two years since the government broadened the yuan's trading range.

Related: Why ex-pats are ditching their passports

China has touted a goal of opening up its economy since President Xi Jinping took his post a year ago, including unwinding tight currency controls and allowing greater foreign investment. And experts say, so far, so good.

"From a macro perspective, today's band widening shows Beijing's determination to speed up financial reforms," HSBC analysts Paul Mackel and Qu Hongbin wrote in a research note. "A wider trading band should pave the way for a more flexible exchange rate and capital account convertibility."

Many investors have always viewed the yuan, also called the renminbi, as a safe bet -- a one-way appreciation game.

But the Chinese government is now trying to show that its currency markets are just as susceptible to outside factors. Doing so may boost outside confidence in the yuan and help promote offshore hubs for the currency -- an endeavor the government is eager to promote.

The central bank said in a statement that it would continue to promote two-way flexibility, while keeping the yuan "fundamentally stable within reasonable and balanced levels."

"As financial reforms pick up pace, there will be more two-way cross-border capital flows," according to HSBC. "Increasing two-way capital flows, greater RMB flexibility and wider usage of the RMB in trade and investment are likely to be the new normal in the next few years."

Given that, the volatility of the yuan will continue, experts say. HSBC expects $1 to eventually equal 5.98 yuan at the end of the year. To top of page

First Published: March 15, 2014: 2:01 PM ET


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GM raising Corvette prices

Written By limadu on Minggu, 09 Maret 2014 | 14.45

NEW YORK (CNNMoney)

The base price of the sports car just went up by $2,000, going from $51,000 to $53,000. General Motors (GM, Fortune 500) also increased prices for the Stingray convertible by $2,000. It now costs $58,000.

In addition, the price of the Z51 performance option package went up by $1,200. It now costs $4,000. The Z51 package adds larger wheels, performance tires and special aerodynamic features, among other things.

Gallery - Driving the new Corvette Stingray

"The consumer demand for Stingray has far exceeded our expectations, particularly for the Z51 package," GM spokesman Monte Doran said.

Days-to-turn, an industry term for the average amount of time a car sits on a dealer lot before going to a customer, is seven days for the Corvette, Doran said. The industry average is about 60 days.

The Corvette was completely redesigned for the 2014 model year and has won a number of awards, including Automobile Magazine's Automobile of the Year. The two-seat sports car is powered by a 455-horsepower V8 engine. To top of page

First Published: March 7, 2014: 5:40 PM ET


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Boeing reports wing cracks on Dreamliners

dreamliner wing crack

'Hairline cracks' were found on the wings of some Dreamliner jets still in production.

NEW YORK (CNNMoney)

"Hairline cracks" were found on the wings of some jets still in production, the company said Friday.

The aerospace company is inspecting the 40 planes it says may be affected. It will take between one and two weeks to address the issue, wrote spokesman Marc Birtel in an email. He said the company is confident that the problem does not exist for any planes currently in service.

Boeing (BA, Fortune 500) was notified by its supplier Mitsubishi Heavy Industries that a change in its manufacturing process may have led to the cracks. Mitsubishi did not immediately return a call for comment.

Related: Boeing to end pensions for non-union workers

The wing cracks are only the most recent problem Boeing has faced with its 787 Dreamliner, a lightweight wide-body jet that uses composite materials instead of aluminum to be more fuel efficient than other similar planes.

The Dreamliners were grounded by the Federal Aviation Administration in January 2013 due to a fire risk associated with the plane's batteries. The problem was fixed, but an empty Dreamliner jet caught fire last July at Heathrow's airport due to a problem with an emergency beacon.

Despite those problems, there is still consumer demand for the jet and Boeing ramped up production throughout last year.

The company said there may be some immediate delays in deliveries, but it does not expect the recently discovered wing cracks to impact deliveries planned to be made throughout the rest of 2014. To top of page

First Published: March 7, 2014: 6:41 PM ET


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How a marijuana ad went up in smoke

NEW YORK (CNNMoney)

The press release in question was published Monday on behalf of MarijuanaDoctors.com, a company that says it helps connect patients with doctors who prescribe medical marijuana.

The release stated that MarijuanaDoctors.com was buying television ads through a division of Comcast (CMCSA, Fortune 500), marking -- its words here -- "the first time that any 'major' U.S. network has ever allowed the advertising of a medical marijuana service."

Turns out that was a false claim -- the ads never actually aired.

But reporters for news organizations, including ABC News, Time magazine and The Chicago Tribune, all published stories as if the press release was fact. A CNN newscast included a mention of the alleged pot ads, too. Even "NBC Nightly News with Brian Williams" covered the story, despite the fact that NBC is owned by Comcast, which explicitly denies that the ads ever ran on any of its cable systems.

Related: Colorado stash: $184 million in marijuana taxes

Here's what happened, as best I can tell. The company commissioned a very creative ad that showed a shady-looking actor peddling sushi and asking the question, "You wouldn't buy your sushi from this guy, so why would you buy your marijuana from him?" The ad pitched its service as a better, safer way.

Once the ad was uploaded to YouTube, the company distributed a press release that proved hard for journalists to resist. It claimed a "first" — "first marijuana television commercial," even though other ads have aired in the past — and told a reporter-friendly tale of perseverance: Jason Draizin, the chief executive of MarijuanaDoctors.com, was quoted as saying that "securing the airtime for our commercial on a major network was extremely difficult and at the same time, extremely satisfying."

Comcast's Comcast Spotlight unit sells ad time on cable channels in local communities. (Cable channels like CNN typically reserve a portion of every hour for these kinds of ads.) The press release said the ad would run in New Jersey on A&E, AMC, CNN, ESPN, and a number of other channels. But Comcast Spotlight never gave the pot ads a final thumbs-up, so it never aired.

Unfortunately, though, the Comcast representative who initially fielded questions about the attempted ad buy didn't know that. "Comcast spokeswoman Melissa Kennedy today said the Monday night ad was the first of others that will only air in states where medical marijuana is legal," ABC's story about the ads said. "The ads will air between 10 p.m. and 5 a.m., she added, but exclude children's and family programming."

Other reporters were given similar information, and stories started popping up all over the Web with variations of this very confident-sounding headline in the New York Daily News: "First medical marijuana commercial airs in New Jersey."

On Tuesday, I started to ask Comcast representatives about the ads. While I waited for answers, more inaccurate stories were published by more Web sites, hungry for the web traffic that a topic like marijuana provides.

But Wednesday, spokeswoman Jennifer Khoury confirmed what I'd suspected: "The ad has not appeared on Comcast Spotlight and media reports and press releases to the contrary are incorrect."

What happened here? It seems that MarijuanaDoctors.com jumped the gun, publishing its press release before it was sure the ad was going to air. "All commercials are subject to final review by Comcast Spotlight prior to airing and during that process it was determined that the spot did not meet our guidelines," Khoury said.

When I told Draizin this on Thursday, he disputed it. He told me that "the ads continue to be aired," adding "We are receiving phone calls from patients and doctors in New Jersey who have seen the ads." (My guess is the phone calls were from people who had seen the video on YouTube or in the media coverage that ensued.)

Related: Feds working on new pot banking rules

The media coverage, of course, put the Web site in front of far more eyeballs than the attempted ad buy ever would have. Thursday evening, the ad was even highlighted on "NBC Nightly News" with Brian Williams playing a clip from it and noting that "so far it's airing just in New Jersey."

On Friday, one of Draizin's representatives called and said what Comcast had said Wednesday — that the ads hadn't aired at all. That prompted MarijuanaDoctors.com to write a new press release. In it, the company acknowledged that "the campaign had not, in fact, launched," and said it would be speaking with Comcast executives Monday "in order to get to the bottom of this situation."

"For now, the campaign in New Jersey has ended," Draizin said Saturday in a statement. He went on to say that "we are very satisfied to have achieved our objective" — that is, informing people about its service. Presumably he meant through the news media, not through its ad. To top of page

First Published: March 8, 2014: 2:33 PM ET


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Albertsons to buy Safeway

Written By limadu on Jumat, 07 Maret 2014 | 14.44

albertsons

Albertsons and Safeway, two grocery store chains, will merge.

NEW YORK (CNNMoney)

The move will create a network of 2,400 stores, 27 distribution facilities and 20 manufacturing plants with more than 250,000 employees.

No stores will close because of the merger, which is expected to be finalized later this year.

Still, the combined company will be be slightly smaller than Kroger, the largest grocery retailer in the U.S., which has 2,600 stores.

"Working together will enable us to create cost savings that translate into price reductions for our customers," said Albertsons CEO Bob Miller in the release.

Those cost savings could come if the two companies are combined and run efficiently, said Ken Perkins, an analyst at Morningstar.

"If they're buying more, they may have pull to get more favorable terms when negotiating with suppliers," Perkins said.

Albertsons, which is privately owned by Cerberus Capital Management, Kimco Realty Corporation, Klaff Realty, Lubert-Adler Partners, and Schottenstein Stores Corporation, will acquire all Safeway shares.

Safeway (SWY, Fortune 500) shareholders are expected to receive $40 per share. That values the deal at more than $9 billion. Shares of Safeway fell more than 3% in after-hours trading.

Bob Miller will become the executive chairman, while Robert Edwards, Safeway's current president and CEO, will become president and CEO of the combined company.

The merger comes at a time when traditional supermarkets have been struggling to compete with the larger chains like Costco (COST, Fortune 500) and Wal-Mart (WMT, Fortune 500). Those rivals are willing to take lower profit margins because they know food drives people into their stores, Perkins said. To top of page

First Published: March 6, 2014: 6:13 PM ET


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Alleged Bitcoin creator pursued in L.A. car chase

NEW YORK (CNNMoney)

On Thursday, news reporters in cars sped after 64-year-old retired engineer Dorian Satoshi Nakamoto. The reason: a story in Newsweek fingered him as the probable genius behind the digital currency.

Nakamoto had agreed to hop into a Prius and give an Associated Press reporter an interview over sushi. But when he left his suburban home in Temple City, Calif., he was met with a throng of reporters who proceeded to chase him across town.

On Twitter, Los Angeles Times deputy business editor Joe Bel Bruno, who was also part of the chase, described how reporters barged into the restaurant.

"This is the OJ Simpson-esque chase of #Nakamoto! YOU CANNOT MAKE THIS UP," Bel Bruno posted.

Various reporters' tweets detailed the chase: They pulled over. They took off again. They hopped on Interstate 10 and sped west. It ended 14 miles away from Nakamoto's home at the Associated Press' local bureau.

Related: What is Bitcoin?

Bel Bruno followed up with this: "Do you people realize there will now be a REVERSE #bitcoinchase with #nakamoto when he heads back home?? Hilarious."

Nakamoto said he is not the founder of Bitcoin, telling the AP he hadn't heard of Bitcoin until reporters started reaching out to him three weeks ago.

Calls to Nakamoto were not immediately returned. To top of page

First Published: March 6, 2014: 7:24 PM ET


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Few uninsured gaining Obamacare coverage

uninsured enrolling

Americans only have until March 31 to sign up for Obamacare coverage or they'll remain uninsured in 2014.

NEW YORK (CNNMoney)

Some 27% of respondents who picked new individual plans were previously uninsured, according to a survey conducted in February by McKinsey & Co. This compares to 11% in the consulting firm's January study.

The February survey, released Thursday, provides a glimpse into how successful Obamacare has been in meeting one of its prime directives: reducing the number of uninsured Americans. The Obama administration has been unable to say how many of the 4 million people who have signed up on the state and federal exchanges previously lacked insurance, in part because few exchanges ask about coverage status in 2013.

But McKinsey experts cautioned against drawing larger conclusions about exchanges' effectiveness since the survey looks at people signing up for Obamacare-compliant plans both through exchanges and directly from insurers.

Also, it does not include people eligible for Medicaid.

Share your story: Have you begun using your Obamacare benefits?

Still, the numbers are telling. Despite months of marketing campaigns, few of the uninsured have secured coverage. And there's not much time left, since open enrollment ends on March 31.

McKinsey surveyed 2,100 people, about half of whom were previously uninsured. Of that group, only 10% said they have selected a plan, up from 3% in January. However, 56% of the uninsured have not even shopped for coverage yet.

Many respondents believe they can't afford health insurance. Of those shopping for plans, half said they didn't enroll because they didn't think they could afford the premium. But most also were not aware of whether they qualify for federal subsidies or how much assistance they might receive.

The subsidies can greatly lower the amount people have to pay for premiums and out-of-pocket costs. And the administration and Obamacare advocates still have a small window to reach the uninsured, said Erica Hutchins Coe, associate principal at the McKinsey Center for U.S. Health System Reform.

"There's still an opportunity to educate the previously uninsured who are subsidy eligible and get them to enroll," she said.

The Obama administration said it is targeting the uninsured in the final weeks of open enrollment.

"Outreach is occurring in every state with a particular emphasis on areas with the highest population of the uninsured using a mix of grassroots activities and advertising," said a spokesperson for the Centers for Medicare & Medicaid Services. To top of page

First Published: March 6, 2014: 8:24 PM ET


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Ukraine crisis: Why it matters to the world economy

Written By limadu on Senin, 03 Maret 2014 | 14.44

NEW YORK (CNNMoney)

The political turmoil is rooted in the country's strategic economic position. It is an important conduit between Russia and major European markets, as well as a significant exporter of grain.

But in the post-Soviet era, it's a weakened economy. Now, the government is in need of an economic rescue -- and torn between whether Russia or the Western economies (including the European Union) is the savior it needs.

Here are five reasons the world's largest economies are watching what happens in Ukraine.

1. Ukraine is an important tie between Russia and the rest of Europe: Ukraine doesn't hold the economic power it once did, but it does retain its geography. Russia supplies about 25% of Europe's gas needs, and half of that is pumped via pipelines running through Ukraine. Moscow has cut off that flow in past disputes with Kiev and a disruption could push up energy prices for businesses and households.

The critical Crimean peninsula juts into the Black Sea, and the Russians base their Black Sea navy there.

Related: G20 pledges to add $2 trillion to economy

2. Sanctions on Russia: One prospect on the table would be the unusual circumstance of a top-10 global economy placing sanctions on another. But Secretary of State John Kerry said Sunday the U.S. is "absolutely" willing to consider sanctions against Russia. President Obama, he added, "is currently considering all options."

That possibility must be on the mind of Russia's government, which is certainly "looking very seriously at the economic component of" its military and diplomatic moves, said John Beyrle, a former U.S. ambassador to Russia.

"The reality is that Russia is dependent on the international economy in a way that wasn't true 10 years ago," Beyrle said Sunday on CNN's "State of the Union." "Fully one -half of Russia's foreign trade now ... is with European Union countries. Russia depends on European imports to keep its stores filled, to keep the standard of living that Russians have gotten accustomed to."

Even if sanctions aren't leveled, the political relationship between Russia and the West will likely chill. Although President Obama spent an hour and a half on the phone with Russian President Vladimir Putin on Saturday, the U.S. is expected to skip an upcoming G8 preparatory meeting in Sochi, Russia. On Sunday, U.S. officials also canceled upcoming energy and trade talks with their Russian counterparts.

3. European and world trade could be impacted: The impact could be felt beyond Europe if the world's supply of grain is impacted. Ukraine is one of the world's top exporters of corn and wheat, and prices could rise even on concern those exports could halt.

And the current political uprising was fueled by the government's handling of a trade agreement that would have brought Ukraine closer to the European Union. The government cut off negotiations in November amid pressure from Russia, which offered discounts on natural gas if Ukraine signed a pact with Moscow's Customs Union.

4. Ukraine's government is in debt and needs assistance: The situation arguably would not be so volatile if Ukranian government coffers were more stable or the economy stronger. The country owes $13 billion in debt this year and $16 billion comes due before the end of 2015. Without help, the country appears to be headed for default.

"In order to avoid a complete collapse in the coming weeks, Ukraine needs money now," Lubomir Mitov, emerging Europe chief economist at the Institute of International Finance, said. "Ukraine cannot survive without reforms in the next few months."

It's not clear who would supply the needed economic assistance, especially after the ouster of key Russian-aligned officials prompted Moscow to freeze a $15 billion bailout and there is no comparable alternative in sight. The most likely source of support would be the International Monetary Fund. Managing Director Christine Lagarde said the IMF is consulting with other bodies that could help raise the $35 billion Ukraine says it needs. But for negotiations to move forward, a stable Ukranian government would need to be in place.

Treasury Secretary Jack Lew said Sunday the U.S. is "prepared to work (with) partners to provide as much support as Ukraine needs" for economic growth and stability.

5. Ukraine isn't the only fragile emerging market: Ukraine's instability comes at a difficult time for emerging markets worldwide, which are seeing growth slow as the Federal Reserve eases its economic stimulus. The situation in Ukraine could lead investors to reassess the risks of other emerging markets slowing economic growth. Troubles in Ukraine will also hurt Russian banks, which have leant heavily to Ukraine. The Russian ruble is down about 10% since the start of 2014.

--CNNMoney's Alanna Petroff contributed to this report To top of page

First Published: March 2, 2014: 4:57 PM ET


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Ukraine unrest sends Asian stocks lower

HONG KONG (CNNMoney)

The slump in the markets was led by Japan's benchmark Nikkei, tumbling 1.8%. Korea's Kospi index dropped 0.9%, while Hong Kong's Hang Seng fell 0.7%, and Australia's ASX All Ordinaries shed 0.6%.

Until now, building political tensions in Ukraine have mostly had a muted impact on global markets, except for a tumble last Thursday as investors sought refuge in traditional "safe haven" assets.

But investors are growing more concerned over the region's political and economic stability. The Ukrainian government owes $13 billion in debt this year, and another $16 billion is due before the end of 2015. Without help, the country appears to be headed for default.

Related story: Ukraine crisis: Why it matters to the world economy

"The threat of war, the central government in Kiev losing control over eastern regions, fear of imminent default -- these are all unnerving messages for markets," said IHS Global Insight's Lilit Gevorgyan. "Many investors do not have much faith that the country is going to quickly turn around from the double political and economic crisis."

Gevorgyan said stocks of Ukrainian companies and foreign firms with exposure to the country have already taken a hit.

Energy markets are also on tenterhooks as the political crisis fuels fears of a gas disruption. And global grain prices could rise if corn and wheat exports were halted from Ukraine -- one of the world's top grain producers.

Related story: What's next for Ukraine's economy?

The political catastrophe comes at a time when investors are already wary of emerging markets worldwide, which are seeing growth slow as the U.S. Federal Reserve eases its economic stimulus.

Ukraine has been in chaos since the country's president, Viktor Yanukovych, was ousted in February, following months of anti-government protests. Political unrest was originally sparked after Yanukovych spurned a deal with the EU, instead favoring closer ties with neighboring Russia. Russia has now moved forward with military intervention, even after threats of serious sanctions from the U.S. and Europe.

Ukraine's interim prime minister Arseniy Yatsenyuk said on Sunday the country is "on the brink of disaster."

--Alanna Petroff contributed reporting To top of page

First Published: March 3, 2014: 12:14 AM ET


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Free checking disappearing at the big banks

free checking credit unions

The majority of credit unions still offer free checking, but it's much harder to find at a bank.

NEW YORK (CNNMoney)

About 72% of credit unions offer free checking accounts with no strings attached, like required minimum account balances or direct deposits, according to a Bankrate.com survey of the 50 largest credit unions.

That's unchanged from last year and down only slightly from 78% in 2010. Another 24% of these institutions have accounts that are free if customers meet certain requirements like making direct deposits.

"Free checking remains well within reach of most Americans, and often means looking no further than their credit union," said Greg McBride, Bankrate.com's chief financial analyst.

Related: Savings account lotteries - win up to $25,000

It's a very different story at the big banks, though. Only 38% of banks now offer free checking accounts, which is down slightly from 39% last year and a big drop from 65% in 2010, based on responses from 10 major banks.

Even if you have a free checking account, you can still incur other fees for overdrawing your account or using an ATM. But fees at credit unions are a lot lower than those at banks. The average credit union overdraft fee is $26.96 versus $32.20 at banks.

The most common fee that credit unions charge customers for is using an out-of-network ATM. Credit unions typically charge $1 or $1.50, versus $2 at banks. To top of page

First Published: March 3, 2014: 12:50 AM ET


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Ex-employee says Madoff "told me what to do"

Written By limadu on Minggu, 02 Maret 2014 | 14.44

annette bongiorno madoff

Accused fraudster Annette Bongiorno said in federal court that she was merely a well-paid typist for Bernard Madoff, and that she didn't know he was running a Ponzi scheme.

NEW YORK (CNNMoney)

She also testified that she would go back and alter trading records at Madoff's request when market conditions changed.

Bongiorno and four other ex-employees of Madoff's firm are currently on trial for fraud in federal court in Manhattan.

Under cross examination on Thursday, Bongiorno insisted that she didn't know that she was doing anything wrong.

"We did it all the time, these changes," she said. "I didn't think of it."

Bongiorno also claimed that she didn't know what the S&P 500 Index was, even though she admittedly spent years staring at a Bloomberg terminal as she backdated months or years worth of fictional trades.

She testified that after Lehman Brothers went bankrupt in September of 2008, she rewrote Madoff's records to make it look like he shrewdly sold 5,600 shares of the firm two months before its collapse. But she insisted that she didn't understand the significance of what she was doing, because she didn't read The Wall Street Journal.

"Everything was backdated," said Bongiorno. "It didn't raise a red flag."

Related: Five things you didn't know about Madoff's scam

She said that she spent so much of her career backdating trades that she did it without thinking, like "brushing my teeth," she told the court.

Bongiorno insisted that she was only entering data on orders from Madoff, whom she said was like a big brother to her.

"He told me what to do," she said. "I typed."

She said that she was paid a "good salary" for her typing. She also acknowledged that she owned a Bentley and two Mercedes, along with a house on Long Island, NY, and another home in Florida. She said that she had been looking forward to retirement and planned to sell her two homes and buy a $6.5 million condominium in Boca Raton.

But then in 2008 Madoff's scheme fell apart and the feds "seized everything," she said.

Bongiorno is on trial along with colleagues Dan Bonventre, Joann Crupi, Jerome O'Hara and George Perez. All are accused of helping Madoff orchestrate his $20 billion pyramid-style scam, and all have pleaded not guilty.

Related: JPMorgan's $2.6 billion Madoff reckoning

Madoff, who pleaded guilty in 2009 and is serving a 150-year sentence in a federal prison in North Carolina, hired underlings with limited experience and education. Bongiorno started working at the firm when she was 19 and fresh out of high school. She introduced Madoff to Frank DiPascali, Jr., who was driving a delivery truck for a dry cleaning service when Madoff hired him 1975. He eventually became a portfolio manager and is now acting as a witness for the government.

DiPascali admitted to cooking the books for his former boss by recording fake trades that actually didn't exist in testimony earlier this year. "We were lying," he said at the time.

Bonventre was an accountant when he went to work for Madoff, and was therefore one of the most experienced new hires on Madoff's staff. He also got an Associate's degree over the course of six years while working at the firm.

Related: SAC Capital's Martoma found guilty

Despite his college education and accounting experience, Bonventre said that the bulk of his Wall Street knowledge came from his former boss.

"[Madoff] often boasted that he wrote the rules," Bonventre said in testimony earlier this month. "He always told me 'this is how things work' and 'this is how we do it,' and I always believed him."

The trial, which has dragged on for five months, could go to the jury next week. To top of page

First Published: February 28, 2014: 1:01 PM ET


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The dysfunctional debate on debt

washington capitol debt debate

When it comes to long-term U.S. debt, Washington lawmakers and the White House aren't debating how to handle it, but rather who is ignoring the issue more.

NEW YORK (CNNMoney)

And both are projected to resume a northward trek in a few years.

But lawmakers are not talking seriously about how to put the federal budget on sounder footing for the long run.

In some ways, that's not surprising. Lawmakers and President Obama have been at war over the budget and debt ceiling since the 2008 financial crisis.

Those fights yielded the Budget Control Act of 2011 and the fiscal cliff deal of 2013, among other measures, which together have reduced projected deficits by a few trillion bucks over the next decade.

That's not nothing. But those measures don't do much to address the long-term debt problem that will come as the bulk of Baby Boomers retire, health care costs per person rise and interest on the growing debt builds.

What lawmakers have done is buy themselves a little time to plan for that future budget crunch.

The Congressional Budget Office projects that federal spending in coming decades will continually outpace revenue, and that the country's accumulated debt will keep growing faster than the economy.

End result: The vast majority of federal dollars will go to paying entitlement benefits and interest on the debt, leaving less money to pay for everything else Americans expect their government to do.

Related: Deficits continue to drop sharply - CBO

What lawmakers have now is a "quiet" period -- an improved economy and stabilized deficits. If they don't take advantage of it to start talking about these issues in earnest, it will be harder in the future to align spending pressures with incoming revenue. The longer lawmakers wait, the more abrupt the changes they may need to make.

"This is the time," said Douglas Holtz-Eakin, former CBO director and now president of the American Action Forum, a center-right think tank. "Fixing it in the middle of [the crunch] is not the time."

So what is Washington doing? Pointing fingers at who is ignoring the issue more and worrying about the next election.

Take the recent news that President Obama won't include a controversial Social Security proposal in his 2015 budget proposal due out on Tuesday.

The proposal, known as chained CPI, was included in his budget last year and would help reduce deficits by changing how federal benefits are adjusted for cost of living.

Those annual COLA increases, including growth in Social Security benefits, would be smaller under chained CPI than they are under more widely used inflation measures. Hence, why it's so controversial.

Related: 2013 deficit drops to $680 billion

The White House said the proposal is still good if Republicans are willing to close some tax loopholes to raise revenue for deficit reduction.

"That offer has been on the table for more than a year, and we've not seen any constructive engagement from the other side," White House spokesman Josh Earnest told reporters.

Republicans characterized the White House decision to drop the proposal from the budget as a clear sign Obama is done dealing with debt reduction.

"With three years left in office, it seems the president is already throwing in the towel," said Brendan Buck, the spokesman for House Speaker John Boehner.

So there we are. "You won't deal," Democrats say. "No, you won't deal," Republicans say.

Regardless of who you think is right, the fact remains no one's dealing. To top of page

First Published: February 28, 2014: 3:45 PM ET


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Online poker players get $76 million back

NEW YORK (CNNMoney)

A court-appointed administrator announced the distribution Friday of $76 million to roughly 27,500 U.S. customers of the defunct poker site. Their accounts have been frozen since 2011 due to a criminal case.

The Poker Players Alliance, a nonprofit advocacy group, applauded the action, but said there are still "several thousand" ex-Full Tilt players in the U.S. who have yet to receive their money. John Pappas, executive director of the PPA, estimated that there are between $50 million and $60 million in unclaimed or disputed funds that have yet to be distributed.

Prosecutors accused Full Tilt and two other sites -- PokerStars and Absolute Poker -- of circumventing federal laws against Internet gambling by deceiving banks and credit card issuers into processing payments for U.S. players.

In July 2012, the Justice Department announced a $731 million settlement with PokerStars and Full Tilt to resolve the allegations. Full Tilt also settled allegations that it had operated a Ponzi scheme, failing to maintain sufficient funds on deposit for players to withdraw.

Under the settlement, Full Tilt agreed to forfeit virtually of all its assets to the government, with PokerStars acquiring them.

Former Full Tilt CEO Raymond Bitar pleaded guilty last year to multiple gambling and fraud charges. He faced a substantial prison sentence but was released because of health problems. To top of page

First Published: February 28, 2014: 5:57 PM ET


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