Census

Shows Ever-changing Face of Texas Houston

By Jeannie Kever Houston Chronicle, May 26, 2011 Texas remains a strikingly youthful state, offering the potential of a considerable future workforce powered by a surging Latino population and a continued tide of Asian immigration, though also presenting challenges for the future. The set of Asian Indians practically doubled over the past 10 years, outstripping the Vietnamese population to end up being the biggest several Asians in the state. New Texas information from the 2010 Census will be released this day, offering several surprises and in addition corroborating what demographers have foresaw for long time. Texas is the second-youngest state in the nation, somewhat that proffers benefits and caveats for the future. Only Utah has a lower median age. Though even Texans are evolving older, a wonder most starkly illustrated in the Panhandle, the Hill Country and West Texas. The states median age meaning fifty percent of residents are older, and fifty percent younger is 33.6, significantly lower compared to the nationwide median of 37.2. It is even lower in Harris County, at 32.2, and drops to 28.3 in a number of counties down the Mexican border. It Is indeed a 2-part state, said Rice Academy demographer Steve Murdock, a preceding principal of the U.S. Census Bureau. More than fifty percent of Texas counties have higher median ages compared to the nationwide figure, he noted. The major urban regions are younger, thanks to their Latino populations. Were seen as a state of youth and vigor, said Jeff Moseley, president and Chief Executive Officer of the Greater Houston Partnership. Weve families with young youngsters, young singles. Persons are voting with their feet. Not Like parts of the Midwest and New Great Britain, Texas will have a lot of persons to substitute aging child boomers. The massive set of young youngsters there were practically Two million youngsters younger than Five, more than any other age bracket denotes more request for education, from preschool through educational institution. Intends to cut state community education financing by bucks Four billion over the next 2 years raise more questions. We Are in trouble, said Luis Salinas, a sociologist at the Academy of Houston. Persons are not (more expectedly) to be in school if their lecture rooms are larger. They Are not going to finish educational institution quicker if there are less courses and less economical aid. We are going to have the numbers, though those numbers are not going to be employable. Coming for occasion That is not a new issue, even though the states declining profits add urgency to the chorus.

Nor is the boosting variety a surprise. Though the most recent Census information, which supplies more info on the age, race and ethnic subgroups of Texans, proffer added info to help state leaders prepare for the future. When persons tell Texas is different, historically they meant we had some African-People In The USA and a considerable Hispanic population, Murdock said. Though progressively more, weve a considerable Asian population, a considerable Hispanic population, a considerable African-American population. Were different in virtually all ways. The Asian population, while just 3.8 Percent of the state total, has practically doubled, to 964,596 persons. The set of Asian Indians has outstripped that of Vietnamese, whove included the biggest share of Asians in Texas since the end of the Vietnam war. You have a wave of persons who come for economic occasion, and then they draw different persons, said Mini Timmaraju, a lawful professional and president of the Indo American Political Action Committee of Greater Houston. Persons of Vietnamese descent are still the major part Asian population in Harris County, over and above Tarrant County. Though resettlement programs for Vietnamese refugees are mostly finished. A pure fit This Days Asian immigrants, incorporating those from India and China, typically come for education or maybe work, or maybe both. As far as there are employment visas, Asians will come here for those occupations, said Michael Olivas, an immigration specialist at the Academy of Houston Law Center. Mustafa Tameez, co-chair of the South Asian Chamber of Commerce, said immigration from South Asia started boosting in the Nineteen Nineties. Lots of them, they come for the tech industries, or maybe engineering, he said. Scores of the energy occupations need a high degree of education, so it is a pure fit for South Asians. Other Ones are enterprisers. They Are running a mommy-and-pop operation, said Hasu Patel, vice president of the Little and Autonomous Motel Possessors Association. They do work pretty tough, and if theyve to work for Around the clock, they do that. Patel, Fifty Six, reached the destination in 1981, lured by a brother who was already here. After working at a little motel, he started acquiring property and now has a diversity of business interests.

Murdock said the Asian Indian population is evolving nationwide, not just in Texas. Though Timmaraju said Texas, and particularly the Houston area, takes benefit of the welcome mat created by earlier arrivals, from Hindu temples to theaters showing Bollywood films. Individuals indeed love that, she said. I have companions who come here for marriage shopping, as the boutiques are much better here (than different U.S. urban areas). All those things make persons wish to stay. An unsure future Census forms permit Asians to make an option from 6 nationalities: Indian, Chinese, Filipino, Japanese, Korean and Vietnamese, or maybe Different Asian, so persons from Pakistan, Bangladesh and different states are not counted separately. Equally, Latinos could selfdistinguish as Mexican, Puerto Rican, Cuban or maybe different. Even those restricted options could illustrate change. Immigrants from Central and South America swept in Texas in the Nineteen Nineties, and by the 2000 Census, just Seventy Six Percent of Latinos in the state distinguished themselves as being of Mexican origin. That was up to Eighty Four Percent by the 2010 Census. Murdock noted that comparable shifts took place in almost all of Texas large urban areas, even though it was hardly perceptible in Houston, from 72.2 Percent in 2000 to 73.3 Percent last year. Future alters remain to be seen, though Karl Eschbach, a preceding state demographer whos now at the Academy of Texas Medical Branch in Galveston, said it is clear the population will carry on to grow, as will the request for services. Future alters remain to be seen, though Karl Eschbach, a preceding state demographer whos now at the Academy of Texas Medical Branch in Galveston, said it is clear the population will carry on to grow, as will the request for services. It Is a circle a younger population has a higher birth rate, he said. Population evolution assists drive economic evolution. Contrariwise, that puts a trouble on the state to educate the younger population and that younger labor force. That will produce a pretty serious challenge for the state.

Nanoshells appear to kill cancer at root

Houston invention may decrease stem cells that drive tumor growth
By TODD ACKERMAN HOUSTON CHRONICLE
Oct. 28, 2010, 12:44PM

Heated gold nanoshells, the touted Houston invention now in cancer trials, appear to help kill diseased cells at a previously unreachable root level, according to new research. In a mouse study published Wednesday, Houston researchers showed that the use of tiny gold-coated particles to deliver heat to breast cancer tumors already treated with radiation not only shrank the tumor but also dramatically decreased the population of cancer stem cells. Cancer stem cells self-renew and drive the growth of tumors. "This is a study of extraordinary significance," said Dr. Wendy Woodward, a radiation oncologist at the University of Texas M.D. Anderson Cancer Center who participated in the research. "We have worked with every imaginable drug and genetic therapy to make cancer stem cells sensitive to radiation without success until this." Cancer stem cells, only discovered in the 1990s, are the subject of much debate. Some researchers think they cause cancer to recur in patients who respond favorably to standard therapy. The combination of radiation and nanoshells heated with a near-infrared laser already is being tested in patients with head and neck cancers in trials in Houston and Dallas. The trial wasn't designed to check the effect on cancer stem cells, but Woodward said it's possible the technique is working at that level, too. She said that a trial measuring the effect in human patients could be started in as soon as six months. The technique, known as hyperthermia, can only currently be used on superficial cancers (such as head and neck cancers and inflammatory breast cancer) because the technology can't reach that deep into the body yet. A lucky find The mouse study, which appears in the journal Science Translational Medicine, was triggered by the serendipitous discovery of a Baylor College of Medicine graduate student working with radiation and cancer stem cells. Returning to her lab one Monday, she was disappointed to find the cancer stem cells dead and the normal cells fine. "But when I opened the incubator and my glasses fogged, I realized the temperature had gone up over the weekend," said Rachel Atkinson, the student and first author of

the paper. "That was my clue that heat plus radiation seemed to be effective against the cancer stem cells." Atkinson began working with the M.D. Anderson scientists whose research already had showed hyperthermia delivered through nanoshells disrupts the blood supply to the tumor and enhances radiation's effectiveness. They decided to target one of the most aggressive and resistant breast tumor types triple negative breast cancer. Radiation alone shrank the tumors but left behind a large percentage of cancer stem cells capable of regrowing the tumor. But using the nanoshells to send nearly 9 additional degrees Fahrenheit of heat to the tumors reduced the population of stem cells twenty-fold. No harm to healthy tissue Researchers worked with both mice tumors and transplanted human tumors. The advantage of nanoshells, a specially designed core of material with a thin metal shell a little larger than a molecule, is that the whole body isn't heated, said Jeffrey Rosen, a Baylor professor of biology and senior author of the paper, who noted that previous mouse studies showed whole-body heating had serious side effects. Nanoshells literally burn away tumor cells without harming nearby skin. Rosen called the new study "a proof of principle of hyperthermia's promise" and a lesson that "just shrinking tumors isn't enough." The nanoshells, heated for about 20 minutes, invade the tumor through the leaky blood vessels that feed it. The study found the additional heat prevented the cancer stem cells from repairing DNA damage caused by chemotherapy and radiation, usually the cells' great skill. The study thrilled the nanoshell's creator, Rice University scientist Naomi Halas. "This illustrates the potential of nanotechnology," Halas said. "It's even surprising to me - this accomplished something not done with conventional therapy."

Investing: Is there sunshine ahead for cloud computing?

Cloud computing's potential is reflected in highflying stocks of companies actively involved. Stumbling blocks include security concerns and confusion about what the cloud really is.
July 31, 2011|By Andrew Leckey

Technology investors have their heads in the cloud these days. Cloud computing, which supplies on-demand hosted services over the Internet, requires only that its clients have a computer and Internet access. It handles the functions traditionally performed by a firm's in-house hardware and software. The global cloud-computing market is expected to reach $241 billion in 2020, up from $41 billion in 2010, according to Forrester Research. That long-term potential is reflected in the highflying stocks of companies actively involved in the concept. A stumbling block, however, is concern over the security of data when a client firm can no longer control it on its own premises. Hackers and crashed systems are, after all, among a company's worst nightmares. And while the cloud is a definite boon to smaller firms, more established companies have already made significant investments in equipment and staffing. There is also confusion over what cloud computing really is and who provides it. The field's successful pioneer is Salesforce.com Inc., a well-managed company that over the last decade effectively introduced this cost-saving business model. It offered a monthly subscription service that allowed firms to simply go to their Web browsers, point to salesforce.com and begin using it. That turned out to be a good financial deal for its clients as well as for its shareholders. Continuing to add applications as it also improves its existing service to nearly 100,000 clients, Salesforce.com has potential to significantly increase international revenues. Although its early start and brand recognition have made it the vendor of choice for firms looking to cut IT costs, future competition is expected to intensify. "Cloud computing lets a company build scale very quickly without a lot of capital investment and maintenance costs, because you don't need an entire information technology department," said Ryan Issakainen, exchange-traded fund strategist with First Trust Advisors in Wheaton, Ill. "It makes it possible to build a more 'a la carte' data solution for a business."

His firm's new First Trust ISE Cloud Computing ETF has a stock portfolio of 40 companies, some of which might be considered risky as individual stock purchases. More than half of its holdings are "pure play" cloud computing firms, with the remainder being large technology conglomerates or cloud "enabler" firms providing support and software. Examples of strong-performing pure plays in the portfolio include: Aruba Networks Inc., a provider of wireless networking equipment for large, sprawling organizations that permits secure access for employees wherever they work or roam. Its 14,000 customers include government, industry and universities. With its high profit margins and growth prospects, it could become a takeover target. TIBCO Software Inc., a software company focused on service-oriented tools such as business process management, is noted for strong technology, innovative new products and customer relationships. It has made key acquisitions and could be attractive as a candidate for an acquisition. Teradata C, which provides data warehousing and analytics for global organizations through bundled software and hardware, was spun off from NCR Corp. in 2007. Its clients tend to have high IT budgets. It should benefit from growth in data volume and continued expansion of its sales territories, though it does face rivals with deeper financial pockets. "While the topic of cloud computing is not new, there still is a lot of confusion in the market because so many things called cloud computing really are not cloud computing at all," cautioned Holger Kisker, principal analyst with Forrester Research in Boston. "A number of vendors call everything 'cloud,' and we would call this 'cloud washing.' " Old-line, cash-rich technology giants that effectively incorporate the cloud concept will play a significant role and profit from it as well. While the cloud threatens the desktop-based Office franchise of Microsoft Corp., the company's Azure cloud computing platform should help customers easily make the transition into this new technology, he said. Microsoft made an early and earnest move that is expected to provide high returns on invested capital while it still profits from current products. Kisker expects Google Inc. and Amazon.com Inc., among other tech mainstays, to be strong players in the cloud. Issakainen would add Apple Inc. and expects there will be others as well. Experts say it is important to differentiate between the two distinct types of cloud. "The 'private' cloud is the new term now being used for existing enterprise data centers," said Sunit Gogia, senior equity analyst with Morningstar Inc. in Chicago. "But what most people are really thinking of is the 'public' cloud, which is when a company uses a

third-party provider for cloud computing's shared resources, such as infrastructure and shared management." Issakainen, Kisker and Gogia all admire the success and stock potential of Salesforce.com because it provides applications to small businesses that were unable to afford them before. It turned total "non-consumers" of a service into consumers. "It takes some time to get used to having data being outside of a company's control," Gogia said. "But I do think that this model will gain more traction with larger enterprises over time." In the long run, the money-saving aspect of cloud computing will spur its growth and provide profits for investors so long as security issues can be addressed. Andrew Leckey answers questions only through the column. Write to him at yourmoney@tribune.com.

More Green From Green Beans

By G. Pascal Zachary August 1, 2004 By packaging ready-to-eat veggies at the airport--and overnighting them to Europe-Kenya's farmers are reaping healthy profits. Every day, dozens of flights touch down at Kenya's Nairobi Airport, unloading scads of tourists with their bulging bags. But when some of those same KLM and Kenya Airways aircraft line up on the runway for the late-night trip home, they're carrying far more than weary travelers returning from African safaris. Their bellies are crammed with an average 25 tons apiece of fresh beans, bok choy, okra, and other produce that was harvested and packaged just the day before. It's all bound for eager--and growing-markets in Brussels, London, Paris, and other European cities. Those flights are integral parts of an innovative supply chain that might make Michael Dell envious. Vegpro Kenya, one of the nation's top produce exporters, operates seven farms within a two-hour drive of the airport. Every morning, trucks full of just-picked veggies--30 varieties in all--dash to the airport. There, inside Vegpro's 27,000-squarefoot air-conditioned cargo bay, more than 1,000 workers wash and sort the vegetables before they are rushed onto planes, ensuring that there's no break in the "cool chain" before the produce arrives in European stores the next day. Aside from its obvious efficiency, this frenzied homage to freshness is helping Vegpro break some fertile ground in the retail grocery business. It and several other Kenyan firms are cashing in on the burgeoning consumer demand for ready-to-eat fresh produce. That's why its airport workers don't just wash, sort, and box; they also slice and dice some of the goods, then seal them in cellophane-wrapped assortment packs. Sales of Vegpro's "stir fries," for example--10-ounce variety packs of baby carrots, sugar snap peas, baby corn, and spring onions that go for $3.50 or more in high-end London markets--are growing at 35 percent annually. The 25-year-old company's revenue topped $40 million in 2003. "Everything we do goes out already packed, labeled, barcoded, and priced," says Vegpro's produce director, James Cartwright, who regularly visits European supermarkets to brainstorm about new ready-to-eat products. Europe's grocers love the stir fries because they don't have to sort or stack the produce and the prepackaged ingredients last longer. Health-conscious consumers fancy them for their fresh-from-Kenya novelty and ready-to-cook convenience. "Shoppers don't want to chop and dice; they don't have time," says Steven Jaffee, a World Bank economist who studies agriculture in developing countries. Vegpro "adds value by preparing fresh produce so shoppers thousands of miles away can just take it out of the bag and cook." Of course, because European stores promise that the veggies can be eaten right out of the bag, Kenyan packers must master the latest hygiene standards, including laborious

washing of the produce. In Europe that kind of handling would eat into profits, but not in Africa, where wages are $2 a day and, consequently, producers' margins are high. Says Jaffee, "The growth potential for Kenya on the mainland of Europe is enormous." While farmers' markets have sprouted up in most major U.S. cities, bringing higher incomes to producers of specialty fruits and vegetables, mainstream grocers haven't fully learned the lesson from Nairobi--that they can find new profits by working with foreign farmers to package fresh foods close to the fields and slap them with storebrand labels. Most U.S. grocers rely on the traditional model of selling produce brought to them in bulk from major distributors. The only similar American products are fresh-cut salad blends like those marketed by Dole and Ready Pac. Those prewashed mixes, sold in plastic bags, are among the fastest-growing grocery categories. But Cartwright says they're just the beginning. "The U.S. is miles ahead of the world in most types of retailing," he says. "But fresh produce is one area where Americans can profitably play catch-up." For U.S. grocers, the likeliest future partners are growers in the Dominican Republic and Latin America. "I don't think the Africans can overcome the air-cost disadvantage unless labor costs go wild in Latin America," says Steven Haggblade, an agricultural economist based in Zambia, another African country trying to export produce. Nonetheless, Vegpro is confident enough in its model that it's begun a trial with a Texas supermarket chain to sell fresh-cut roses. Already the company air-ships flowers to Europe, where it's reaping another benefit of the "cool chain"--an unusual guaranteed vase life of seven days.

Smartphones and Tablets to Take Over in 2011, Researchers Say

By STEVE LOHR, Dec 2010 The research firm IDC predicts that in 2011, computings third major technology wave will become mainstream, when computers held in ones hand smartphones and tablets really take over and start putting personal computers in the rearview mirror. Next year, the research firm says in a report published Thursday, there will be 330 million smartphones sold worldwide and 42 million media tablets. Tablet sales are expected to more than double next year, and to keep climbing, breezing by netbooks, the phenomenon of two years ago, said Frank Gens, chief analyst for IDC. The PC-centric era is over, the IDC report says. Within 18 months, it forecasts, non-PC devices capable of running software applications will outsell PCs. In tablets, IDC adds, Apples iPad will remain the leader, but lower-cost tablets will begin making inroads, especially as demand for tablets really takes off in emerging markets. IDC uses a hardware-centered definition of technology eras devices that open up computing to large new groups of users. So, by its definition, the first era began in the 1960s, when many people got access to computers, seated at mainframe terminals. Next came personal computers in the 1980s, and mobile devices that are full-fledged computers were next. Mainstream adoption, according to IDC, is when a technology moves well beyond 15 percent or so of the market. In 2011, for example, IDC predicts half of the 2.1 billion people who regularly use the Internet will do so using non-PC devices. Other technologies, IDC says, are going mainstream as well, notably the business use of cloud computing applications and services accessed remotely over the Internet. The trend is already under way, and all the major technology companies are marketing their cloud-computing offerings relentlessly even though crisply defined cloud strategies seem scarce. But 2011, Mr. Gens said, is a crucial year for technology companies to get their cloud strategies in place. So-called public clouds shared by a wide range of users, whether consumers or companies will be the dominant technology platform for the next 20 years, Mr. Gens said. In the corporate market, Microsoft, salesforce.com, Google, I.B.M., Oracle and others are vying to supply cloud applications to businesses. These public cloud marketplaces will be the next generation of enterprise software, Mr. Gens said. Indeed, 80 percent of new software offerings will be available as cloud services in 2011, according to IDC.

At Checkout, More Ways to Avoid Cash or Plastic

By CLAIRE CAIN MILLER Published: November 15, 2009

For almost as long as Americans have been hearing about jetpacks and picturephones, they have been hearing that money bills, coins and plastic cards might cease to exist, or at least become a novelty. Instead of leather wallets, consumers could, sooner than they think, carry virtual wallets, with their credit card and bank information stored on remote computers that are accessible everywhere and anytime. They could use them whenever they want to buy something, whether on the Web, on cellphones or at cash registers. With a new cellphone application called ShopSavvy, for instance, a shopper can use the phones camera to scan an items bar code in a store to see if it is available for less online. If so, the shopper can buy it with one click if they have already entered their credit card and shipping information on PayPals Web site. What were trying to do and what we think is very important is to displace the use of cash or checks, said Scott Thompson, president of PayPal, which is a leader in digitizing money. Well just have one wallet, and it lives in the cloud. PayPal says its service makes the checkout process more convenient and secure for both shoppers and merchants. The way consumers pay for things has transformed only a few times. Coins replaced bartering, paper bills mostly replaced coins, and bank drafts and checks developed as an alternative to cash. In the 1950s, the credit card was introduced, and today, Americans pay for more on plastic than they do in cash. Some airlines and restaurants, for instance, no longer accept cash. The coming evolution to digital money that is handled over the Web is under way, led by companies like PayPal,

MasterCard and Visa, as well as start-up companies and retailers. Some methods involve using a cellphone instead of a credit card, while others call for using a single password or code to tap into their credit cards. It just keeps getting more and more convenient to get access to your money and to transfer it to someone else, said Lawrence H. White, a professor of economics at George Mason University who specializes in the history of money. When everyone has a cellphone, why reach into your wallet? Digital money has been promised for well over a decade. During the dotcom bubble, several companies tried and failed to come up with Web-based cash alternatives. Flooz and Beenz tried to create an Internet-only virtual currency, for example, and a company called CyberCash developed an unsuccessful service for online micropayments. The biggest barrier is not technological. It is that Americans think credit cards are already a fine solution. For a nation that thrives on plastic, pulling out a credit or debit card is just as convenient as pulling out a cellphone. It is also expensive for retailers to install machines to scan cellphones, and many phones screens are too reflective for scanners to read. Where theres a paper system, its not that difficult to beat cash with an electronic payment, said Tim Attinger, Visas head of global product innovation. But in this country, we have yet to find the unique value proposition thats vastly superior to the existing ways that consumers are paying. Someday, scanners could recognize the pattern of blood vessels in a finger and connect it to a credit card number, according to Alvin and Heidi Toffler, consultants on economics and technology and authors of Revolutionary Wealth, a book about the ways in which wealth will be created in the future. But while shoppers wait for that day to arrive, they will be touching, clicking and swiping cellphones and computer mice more often.

PayPal took a step toward making the virtual wallet more of a reality recently when it held a conference in San Francisco for 1,500 software developers to encourage them to incorporate PayPal into a Web or mobile application. Shoppers have spent $500 million in the last year using eBays iPhone application, which is integrated with PayPal. A start-up called iCents.net wants to give online publishers a way to charge viewers. For instance, readers could buy a $50 subscription using PayPal, and each time they read an article on a Web site, 50 cents would be subtracted. A developer from Australia is building an application for a real estate company that would let tenants log on to the landlords Web site to pay rent with a single click. A start-up company called MedPayOnline.com is making it possible for patients to pay medical bills with PayPal. Opening up the payment systems in a flexible and frictionless way like PayPal is doing is a really big deal, said Dana Stalder, a venture capitalist at Matrix Partners. I think it will lead to innovation far beyond what anyone imagines today, and I think it will be the advent of the digital wallet that goes with you in all parts of your life. Big credit card companies have also been working on ways to use the Web and mobile phones to pay. MasterCard partnered with a start-up called Obopay to make it possible for people to transfer money with a text message. After they sign up for the service and link their MasterCard number to their cellphone number, they can send anyone money with a text message. Recipients who have an account receive the money immediately, and others open an account to receive the deposit. In Malaysia, Visa has started installing chips in cellphones so people can swipe their phone instead of a credit card, though Mr. Attinger said that is unlikely to take off in the United States anytime soon. Still, there is a lot of excitement about the idea of phones doubling as credit cards, and a few companies are trying this on a small scale in the United States. Starbucks created an iPhone application that lets people upload

money and swipe their phone instead of a card at the cash register. A company called Bling Nation makes tags linked to bank accounts that users can stick on the back of cellphones and tap on a point-of-sale terminal. Pulling out a credit card may be as convenient as a phone when paying offline, but it can be more convenient to avoid pulling out the card at all when shopping on a computer or a phone. Obopay and other start-ups, including Zong and Boku, let people link their cellphone bills so they need only enter their 10-digit cell phone number when they want to buy a virtual good online. In five years, the terminals for swiping credit cards at stores will probably be connected to the Web wirelessly, so people could use PayPal and similar services to pay offline as well, Mr. Thompson said. Offline is changing so rapidly, and the line is very blurry where off- and online meet today.

California teen trades up from an old cell phone to a Porsche Boxster

Oakland Tribune July 20, 2010 | Rebecca Kimitch San Gabriel Valley Tribune | Copyright

GLENDORA - Seventeen-year-old Steven Ortiz is fairly sure he is the only student at Charter Oak High School who drives a convertible Porsche to school. And, to the surprise of some of his friends, it doesn't belong to his parents. Steven started with an old cell phone and eventually traded up to his impressive ride. It didn't happen overnight, but with the help of the Craigslist website and a lot of patience, Steven made 14 online swaps over two years to get his 2000 Porsche Boxster S. Steven is part of a growing number of people who use the barter section of Craigslist to unload unwanted items and acquire desired goods, rather than just buying and selling them. But he does more than just make a casual posting to swap concert tickets or an old bike. He spends five to six hours a day on his i-Phone scouring the website for good deals. "I get so many people who say, `Can you trade my phone for a car?' I just say, `Yeah. It's not that easy,"' he said. Steven started his lucrative journey when his friend gave him an old cell phone - the sort most people would throw away or shove into a junk drawer. He traded that phone for a better phone, which he then traded for an i-Pod touch. He traded that for a series of dirt bikes, a MacBook Pro, and a 1987 Toyota 4Runner. At the time, Steven was just 15 and unable to drive his new acquisition. So he quickly swapped it out for a souped-up off-road golfcart, another Advertisement more valuable dirt bike, a streetbike, then a series of cars ending with a 1975 Ford Bronco. He spent a few months enjoying each acquisition before determining he was looking for something else.

It was that Bronco that got him the Porsche. Because some older Broncos are considered collectibles, Steven estimated his was worth $15,000. He got offered all manner of trades - including a locksmith business - for the Bronco. The Porsche, worth about $9,000, was actually a trade down. Ortiz's love of Craigslist, and a good deal, came long before his interest in bartering. For years he has bought his friends' old cell phones for $30 then turned around and sold them for three times that online. And whenever his parents need anything, like a new washer and dryer, he scours the site for good deals. He has a knack for fixing small electronics, and sometimes makes a few repairs to get something someone thought was nearly worthless working again. Then one day he came across the bartering tab, and decided to have a go at it. At the time, he had never heard of Kyle MacDonald, a Canadian who made international headlines when he traded a red paperclip for a two-story farmhouse through a series of transactions in 2005 and 2006. MacDonald blogged and wrote a book about the adventure, spawning many copycats. Steven was not one of them. The teen said most of the people he trades with aren't after something for nothing. They are simply looking to get rid of an item they don't need in exchange for something they do. And they often can get a better deal than if they sold the item for cash. "A lot of people don't have money right now, in this economy. So they think, `I really need a new phone, but I don't have the money. Here I have this CD player lying around that I don't use anymore, maybe I can trade,"' Steven's father Esteban explained. Because expensive items can quickly lose value, sometimes people think they're better off trading. For example the man who traded his 4Runner for a MacBook is a musician who really needed the computer for his band, and didn't need the car, Steven said. That is why it frustrates Steven when some of his relatives - who don't

understand what he does - call him a con artist. "People just make these trades," Steven said. "I am not lying to anyone." Esteban has stressed the value of honesty in such transactions and not to take advantage of anyone. Steven and his dad have themselves been hit hard by the economy. Steven lost his job at a sushi restaurant, and his father has seen business at the cement laying company he owns plummet. Steven's knack for trading and finding good deals has come in handy. Esteban hopes his son's knack for sales and trading can lead to better things. "I think this is teaching him something. I want him to go to college - make something of his life," he said. "He is learning the value of things, responsibility and negotiation skills." Steven wants to study either law or business and he says his sales skills and persistence will help get him there. In the meantime, he is already looking for a new car. Soon after he acquired the Porsche a few months ago, Steven realized it has had its drawbacks, namely operating expenses. An oil change costs at least $150, and a routine tune-up at least $1,000. So he is considering his next trade - maybe an Escalade.

Dairy Queen: Small-Town Texas Institution

By Michael A. Parks
Along the cracked and endless highways of rural Texas, certain types of landmarks appear repeatedly. Whitewashed grain elevators rise on the horizon, like flags marking the settlements below. Larger towns have schools, and almost every town has a water tower. Wherever Main Street is, the courthouse sits at the end of it. There's the cemetery, and there are the churches. Then, if the town is big enough, there's the Dairy Queen. For residents, the Dairy Queen is at once a restaurant, meet up spot, and place to pass the time. For travelers, the Dairy Queen is an oasis; it's what transforms a blur of buildings into a real, memorable place. As a native of the relatively large (population 212,169) city of Lubbock, which is six hours from everywhere, I've always appreciated rural Dairy Queens. At home, my family never goes to a Dairy Queen. On the road, though, we sometimes start planning our orders hours in advance. And yet I've never known how Dairy Queen came to be the small town restaurant of Texas. A few weeks ago, I traveled to Idalou (population 2,157) to sit at the Dairy Queen and ponder Texans' affection for the brand. It was a Sunday, and church had just let out. Almost every seat was full. A little boy in church clothes carefully deconstructed a vanilla cone. An old man and woman sat on the same side of a table, the woman feeding the man a Blizzard. All over the state, citizens of small towns had made the same ritual Sunday trip, and within a few hours, before the wind picked up, everyone went home. Searching for Dairy Queen in Google's newspaper archives: In 1997, Warren Buffet buys Dairy Queen for $585 million. In the 1950s, Dairy Queen goes national. In the 1940s, Dairy Queen ceases to be a restaurant and becomes an honorific. "A Dairy Queen was chosen. She is willowy Willough Thomas." "Miss Alice Baker, 18 year-old Dairy Queen of Wisconsin, arrived yesterday ... to celebrate the climax of Cheese Week." All over the country, "girls 17 to unmarried" pursue the coveted title. Prior to 1900, America fades from the news. Real monarchs appear. "The Queen is one of the most enthusiastic farmers in the British Isles ... there is not a dairy in the three kingdoms that can hold a candle to the dairy at Shaw Farm, Windsor." Asking around about Dairy Queen, I eventually encountered Robert Mayfield. In the 1940s, Mayfield's father, Tolbert, a cattleman who traveled between Kansas and Texas, happened to stop at a Dairy Queen in Forth Worth, and decided to open his own. Though an attorney by training, Robert Mayfield now operates a small fleet of stores. "My son does a lot for me," he said when I called him. "But I'm still the emperor." When Tolbert Mayfield opened his stores, franchising was new, and Dairy Queens were spreading rapidly across Texas. Most of the innovation came from franchisees. "My dad was experimenting with drive-in windows, and even the first dining rooms, if you can believe that," said Robert. Another secondgeneration operator, Perry Anderson, told me Texas Dairy Queens were the first to serve food. In January

of 1950, Anderson's dad became one of the earliest franchisees to sell hamburgers. To this day, Texas Dairy Queens offer a food menu unique to the state. One later franchisee innovation is Robert Mayfield's favorite frozen item: the Blizzard. It's a product Dairy Queen aficionados are generally enthusiastic about. In 1985 alone, a year after a St. Louis operator inspired by Ted Drewe's frozen custard made a prototype, Dairy Queen sold 175 million Blizzards nationwide. "I tell you, they're all good, man," Mayfield said. "You see how they mix 'em up? I don't know how it does it, but when they beat it up it beats out all the calories. It's like, W.C. Fields would say, 'I've never met a bottle I didn't like.' I've never met a Blizzard I didn't like." In Crosbyton (population 1,874) on another Sunday, the church crowd had already gone home for the day and the famous West Texas wind was blowing full gale. A flagpole wire pinged wildly against its pole. At the deserted Dairy Queen, I ordered a Snickers Blizzard. The machine beat out the calories. Would the server turn the Blizzard upside down? She turned the Blizzard upside down. Mayfield told me that Blizzards do sometimes fall out. But in Crosbyton mine stayed put. The Blizzard has been good for Dairy Queen, but neither it nor Dairy Queen itself would exist without soft serve ice cream. After all, Sherb Noble opened the first store in Joliet, Illinois, only to sell the soft serve his friends, J.F. "Grandpa" McCullough and his son, Alex, had invented. Today, of course, soft serve is not so glamorous or novel as it was when it first debuted. Having now considered it in detail, however, I think I should offer some praise for soft serve ice cream. First off: soft serve is cheap and soft serve is low in fat. (Unlike Mayfield's claim about Blizzards, this is actually true.) Furthermore, because soft serve doesn't freeze your mouth, it tastes better than hard ice cream. That was Grandpa McCullough's theory, anyway, and Dairy Queen boosters have treated it as gospel ever since. I haven't done a taste comparison, but I did tackle a monstrous Brown Derby (chocolate dip cone) in Aspermont (population 1,021). In size and shape, it recalled a Dr. Seuss mountain. Tens of millions of Whos could have lived on top; even with the help of my mom and dog, I couldn't finish it. Though I can't say how soft serve compares to other ice creams I've had, I will say that it was deliciousand that the structure itself was a modern-day miracle. Finally, and most importantly, soft serve requires a machine. A machine, in turn, requires a store. Not quite solid, and made largely of air, soft serve can't survive a freezer. You can't buy soft serve in a carton. Every cone requires an excursion into the world. It is a public ice cream, meant to be eaten fresh. Following the invention of soft serve, the creation of thousands of new places to go and sit and eat it was almost inevitable.

Students Find $100 Textbooks Cost $50, Purchased Overseas

By TAMAR LEWIN Published: October 21, 2003 Richard Sarkis and David Kinsley were juniors at Williams College, surfing the net for a cheap source for their economics textbook, when they discovered a little known economic fact: the very same college textbooks used in the United States sell for half price -- or less -- in England. Just like prescription drugs, textbooks cost far less overseas than they do in the United States. The publishing industry defends its pricing policies, saying that foreign sales would be impossible if book prices were not pegged to local market conditions. But many Americans do not see it that way. The National Association of College Stores has written to all the leading publishers asking them to end a practice they see as an unfair to American students. ''We think it's frightening, and it's wrong, that the same American textbooks our stores buy here for $100 can be shipped in from some other country for $50,'' said Laura Nakoneczny, a spokeswoman for the association. ''It represents price-gouging of the American public generally and college students in particular.'' But thanks to the Internet, more and more individual students and college bookstores are starting to order textbooks from abroad -- and a few entrepreneurs, including Mr. Sarkis and his friends, have begun what are essentially arbitrage businesses to exploit the price differentials. ''We couldn't understand why what costs $120 here should cost $50-something there,'' said Mr. Sarkis, who, with Mr. Kinsley and another classmate, has spent three years building a Web-based company, BookCentral.com, selling textbooks from abroad to students in the United States. ''It seemed so sleazy of the publishers. We were sure that college students would be shocked and outraged if they knew about the foreign prices. But it's been this big secret.'' That is changing, though. To the despair of the textbook publishers who are still trying to block such sales, the reimporting of American texts from overseas has become far easier in recent years, thanks both to Internet sites that offer instant access to foreign book prices, and to a 1998 Supreme Court ruling that federal copyright law does not protect American manufacturers from having the products they arranged to sell overseas at a discount shipped back for sale in the United States. Before the Supreme Court decision, Americans could not take advantage of the discounts abroad without violating the copyright law.

Now, however, ''gray market'' sales are taking off on campuses. At one prestigious university, a sophomore imported 30 biology books from England this fall and sold them outside his classroom for less than the campus-bookstore price, netting a $1,200 profit. Next semester, if all goes well, he plans to expand the operation. ''The only difference is that they say 'international edition' in little print on the cover,'' said the student, who added that he was not certain whether his project raised any legal issues, and therefore asked that neither he nor his college be identified. At other colleges, Asian students have banded together to take advantage of textbook prices in Taiwan, Singapore and Malaysia, which are even lower than those in Europe. Many students, individually, have begun to compare the textbook prices posted on American sites like Amazon.com, with the lower prices for the same books on foreign sites like Amazon.co.uk. The differences are often significant: ''Lehninger Principles of Biochemistry, Third Edition,'' for example, lists for $146.15 on the American Amazon site, but can be had for $63.48, plus $8.05 shipping, from the British one. And ''Linear System Theory and Design, Third Edition'' is $110 in the United States, but $41.76, or $49.81 with shipping, in Britain. Many college bookstores, meanwhile, have taken matters into their own hands, arranging their own overseas purchases. ''I buy from Amazon.co.uk and from sources in the Far East, and I knew more and more students were doing the same thing, individually,'' said Tom Frey, owner of the University Bookstore at Purdue University, who sells the new books from overseas at the same price as a used American book. ''Then this fall, for the first time, the Fed Ex man told me that the students at the Indian Association here at Purdue had just gotten a delivery of 14 skids of books, about 50 books each, from India. I think I'm losing about 10 percent of my sales to overseas books.'' Relations between textbook publishers and college booksellers have been seriously roiled by the issue. ''This has become a very hot issue since last year, when it just seemed to explode all of a sudden,'' said Ms. Nakoneczny, of the college store association. The association's letter to the publishers warned that the pricing structure might be an antitrust violation. ''The sale of identical books to foreign buyers at prices significantly lower than to domestic buyers, while publicly stating that domestic prices are due to high costs, could constitute an unfair or deceptive act,'' the letter said. While there is no longer protection in the federal copyright law for the pricing differentials, the major publishers are still trying to stop the reimporting of texts priced for foreign markets, mostly through contract language forbidding foreign wholesalers to sell to American distributors. Some have

placed stickers on covers, saying ''International Edition RESTRICTED Not for Sale in North America'' or added the cover line ''International Student Edition.'' None of the three major textbook publishers -- Pearson, McGraw Hill, and Thomson -would discuss why overseas prices are so much lower than domestic ones, referring all questions to Allen Adler, the lawyer for the American Association of Publishers. ''This is a season when textbook publishers get kicked around a lot, and they're feeling vulnerable,'' Mr. Adler said. ''The practice of selling U.S. products abroad at prices keyed to the local market is longstanding. It's not unusual, it doesn't violate public policy and it's certainly not illegal. But publishers are still coming to terms with the dramatic change in the law.'' Mr. Adler contends that foreign textbook prices are pegged to the per capita income and economic conditions of the destination countries -- and that foreign sales are a boon to America's standing in the world, to foreign students seeking an American-quality education, and even to American consumers, since each extra copy sold overseas, even at a low price, helps to spread the high costs of putting out a new textbook. As more and more customers turn to reimporting books, it is an open question how long the overseas price differentials will last. ''We buy from the U.K., France, Israel and the Far East,'' said Bob Crabb of the University of Minnesota Bookstores. ''As long as the publishers are offering books at less than half the price that's available here, we'll take advantage of it. It's great for students. For publishers, the marginal costs of printing a few extra books and selling them overseas are very, very low. But I would guess that shortly, the sales here will begin eating into their U.S. sales in a serious way.'' Disgruntlement over textbook costs has been growing in the United States as prices have risen. Last month, Senator Charles E. Schumer, Democrat of New York, announced that the average New York college freshman and sophomore spends more than $900 a year on texts -- 41 percent more than in 1998 -- and proposed a plan to make $1,000 of textbook costs tax deductible. The same week, University of Wisconsin students demonstrated against high textbook prices and in favor of creating a textbook rental system. To be sure, textbook costs, however high, are only the final straw for American college students, whose tuition costs and fees have been rising rapidly. At Williams and other elite universities, for example, tuition, room and board now tops $35,000 a year. In Britain, though, the cost of tuition is largely borne by the government and students pay much less. For example, tuition alone for undergraduates at Harvard is currently $26,066 a year as compared with $1,840 at Oxford University.

In the United States, one in five students does not buy all the required texts. And more and more, like Mr. Sarkis and Mr. Kinsley, are willing to go to great lengths for a cheaper alternative. ''I got mad when I found out that our labor economics book was something like $90,'' said Mr. Kinsley, who, like Mr. Sarkis, graduated in 2001. ''I didn't think I would read $90 worth in it, so I was determined to find something cheaper, and I spent five hours searching on the Web.'' Mr. Sarkis said Williams's campus bookstore made the high costs all too visible. ''They really rubbed it in,'' he said. ''If you were the highest spender of the day, they'd ring this little bell and say they had a new winner, and give you a lollipop. I got the lollipop twice.''

Ethnic Marketing: McDonald's Is Lovin' It

The BBW50 chain taps Latino and black culture for mainstream ads
By Burt Helm The music industry has long sold black culture to white Americans. Now McDonald's (MCD) is doing much the same. It's taking cues from African Americans, Hispanics, and Asians to develop menus and advertising in the hopes of encouraging middle-class Caucasians to buy smoothies and snack wraps as avidly as they consume hip-hop and rock 'n' roll. "The ethnic consumer tends to set trends," says Neil Golden, McDonald's U.S. chief marketing officer. "So they help set the tone for how we enter the marketplace." Golden says preferences gleaned from minority consumers shape McDonald's menu and ad choices, which are then marketed to all customers. The fast-food giant's strategy is a departure from the way companies typically market to American households. Usually, a company works with an agency to develop advertising aimed at the general market, then turns to boutique multicultural agencies to create versions tailored to blacks, Hispanics, or Asians. McDonald's still creates ads specially tailored to minority groups, as it has for over 30 years, but minorities exert an increasingly influential role in its mainstream advertising as well. The company thinks they provide early exposure to new trends. "Most companies think they can box in Latinos, box in African-Americans, and then run the general market ad," says Steve Stoute, chief executive of Translation, which advises brands, including McDonald's, on how to reach young adults. "McDonald's will take an ad that could be primarily geared toward African-Americans and put a general market advertising dollar behind it." The move reflects a demographic shift under way in the U.S. as a whole. As whites head toward minority status by mid-century, according to Census Bureau projections, Hispanics, Asians, and black populations are growing faster. California and Texas, the two largest states, are already "majority minority," meaning white non-Hispanics make up less than 50 percent of the population. Its low prices have helped fuel McDonald's recent strong performance, even as the rest of the restaurant industry struggles to recover from the recession. But Golden says his minority-shapesmajority marketing strategy is paying off, too. U.S. sales rose 1.5 percent in the first three months of the year, thanks to the success of new menu items and, he says, an improved perception of the brand among all ethnic groups. Golden says he first discovered how dramatically minority tastes can influence mainstream preferences when he oversaw McDonald's marketing in the U.S. West in the 1990s. His team had

developed products aimed at Hispanics called the "Fiesta Menu," which included guacamole and spicy beef tortas. After the launch, the items sold well enough in Hispanic neighborhoodsbut sales rose more than expected in Orange County and specifically Laguna Beach, an area that was more than 90 percent white. "The intended consumer said, 'We sure appreciate what you're trying to do, nice try.'" Golden recalls. "But [the Fiesta menu] overperformed in the general market." Golden went on to create a strategy for the U.S. business that he calls "Leading with Ethnic Insights." Working with Jonah Kaufman, a McDonald's franchisee who has 13 restaurants on Long Island, N.Y., Golden doubled the spots designated for minority franchisees on the national advertising committee, which advises on and approves ads. McDonald's also uses a disproportionate number of blacks, Hispanics, and Asians in focus groups. Later, marketers are asked to imagine how they would sell a product if the U.S. population were only African American, Hispanic, or Asian. They look for differences to McDonald's general market plan. That sensitivity has already influenced new products. The fruit combinations in McDonald's latest smoothies, for instance, reflect taste preferences in minority communities. And when the company started heavily advertising coffee drinks last year, the ads emphasized the indulgent aspects of sweeter drinks like mochas, a message that resonated with blacks, says Golden. In fact, many of McDonald's ads now feature only African Americans. Of the 10 most-aired TV ads from the past 12 months, compiled by ad tracker Nielsen IAG, five had all-black casts. While the ads usually push specific products or deals, many use situations aimed directly at ethnic consumers. In a recent commercial called "Big Day," a young boy at a wedding looks bored while watching the bride and groom kiss and jump over a brooman African American matrimonial tradition. His eyes light up, however, when he gets to his seat and finds a Happy Meal. The bottom line: McDonald's is increasingly taking its marketing cues from minority groups, which it considers to be trendsetters for white America.

What is the Gray Market?

wisegeek.com
Written By: O. Wallace, Edited By: Niki Foster Last Modified Date: 31 August 2011 Copyright Protected: 2003-2011 Conjecture Corporation The gray market, while not illegal like the black market, involves the sale of goods through means other than what was intended or approved by the original maker of a product. A private person or business purchases the good at retail, wholesale, or a discounted price, and attempts to resell it legally at a higher price. The list of things that can be sold on the gray market is endless, but popular items include electronics, photographic equipment, cigarettes, DVDs and wine. The term gray market can also refer to the securities market, where it defines the buying and selling of securities that will be issued at some point in the future. The gray market is extremely hard to track, because once a good is sold to an unauthorized dealer, the manufacturer has no way of tracking the sale of the goods. The gray market exists just about everywhere. In the suburbs, one prime example is the snack stand at a high school football game. In an effort to raise money, the student council may purchase soda, hot dogs and chips at a wholesale warehouse store like Costco, then sell them for a profit at the game. Another good example of the gray market is when someone buys goods at a garage sale or outlet store and resells them on eBay at a higher price. Under some circumstances, different countries have different markets for different goods. When a person takes advantage of the disparity in market prices of a particular good, it is called arbitrage. An arbitrageur takes advantage of this disparity by buying a good in a country where it is significantly cheaper, then reselling it legally in another country where they can demand a higher price. One drawback of the gray market is that many manufacturers will not honor warranties on electronics purchased through it. Because the good is not purchased through authorized channels, manufacturers refuse to spend the money to honor the warranty. One of the ways that manufacturers identify items resold on the gray market is by putting different model numbers on the same product in different countries. When someone calls for warranty issues, they can identify whether their product was sold in the correct country. The warranty cannot usually be enforced, because it was sold through a third party in a different country. Authorized agents and sellers are most often financially affected by the gray market, because they lose business to unauthorized sellers. Local laws can help or hurt the gray market. In some cases, food is difficult to resell because local laws dictate packaging, so what is legal in one state or country may not be in another. In an effort to curb the resale of DVDs and DVD players, DVD region codes are written onto the disc for the specific geographical area it is supposed to be sold in. Only the DVD players intended for sale in that area can play these DVDs. Low tariffs and free trade are beneficial to the gray market, but manufacturers and big business lobby constantly to enact laws to make it difficult for gray marketeers to do business. This, coupled with advances in technology, make the most popular goods difficult to resell on the gray market.

Water, Water Everywhere...

The LifeStraw looks simple. But it has the potential to save many lives
By JILIAN M INCER
JUNE 23, 2008

Mikkel Vestergaard Frandsen didn't set out to help millions of people get access to safe drinking water. At the age of 19, he dropped out of school and moved to Nigeria to sell trucks. But when a political coup forced him to leave Africa and return to his native Denmark in 1992, he reluctantly agreed to join the family textile business -- if he could focus on relief-aid products. His experience in Africa and later working with the Carter Center in Atlanta, a humanrights organization founded by former President Jimmy Carter and his wife, Rosalynn, convinced him that people in developing countries needed a simple, durable device to purify water. The result was the LifeStraw, a personal, portable water purifier that eliminates virtually all waterborne bacteria and most viruses responsible for causing diarrheal diseases. The product, which costs as little as $3, has won a number of awards, including the 2008 Saatchi & Saatchi Award for World Changing Ideas. "The LifeStraw empowers people so they don't have to wait for the government to come up with solutions," says Mr. Frandsen, who is now 36 and president and chief executive officer of the family's Lausanne, Switzerland-based company, Vestergaard Frandsen, which manufactures the LifeStraw. The light blue straw with a resilient polystyrene shell looks like a child's musical recorder. When someone sucks through the straw, the water flows through textile and iodine filters, which kill off viruses and bacteria such as E. coli. The company says nongovernmental organizations and nonprofit agencies already have bought hundreds of thousands of the drinking tubes and are distributing them in countries with unsafe drinking water. Aid groups also are buying them for communities devastated by natural disasters. Demand has been so high for LifeStraws in Myanmar, which was ravaged by a cyclone last month, and China, which was hit with an earthquake, that the two plants that manufacture the device are working around the clock to produce more, Vestergaard Frandsen says. The U.S. government, faith-based organizations and nonprofit groups such as Convoy of Hope have sent 21,000 of the straws to Myanmar so far, and photos coming out of the country indicate they are reaching at least some of the people who need them, a

company spokesman says. Vestergaard Frandsen eventually expects to provide 50,000 straws to both Myanmar and China, he says. Jeff Nene, a spokesman for Convoy of Hope, says people in dire situations make the mistake of drinking dirty water, not realizing the impurities can cause diarrhea, dysentery and eventually death. "You can go for a long time without food," he says. "But you can't live long without water." Planting the Seed Founded in 1957 as a maker of fabric for work clothing, Vestergaard Frandsen shifted into relief-aid products such as blankets and tents in 1992, the year Mr. Frandsen joined the company. It eventually began making disease-control textiles such as the now widely distributed PermaNet, an insecticide-treated mosquito bed net that costs as little as $4 and doesn't need to be re-treated for three to four years. It was while working in the mid-1990s on a project with the Carter Center to eradicate Guinea worm -- a parasite that enters the body through contaminated drinking water and eventually emerges through a very painful blister in the skin -- that Mr. Frandsen's interest in water-purification systems began. Vestergaard Frandsen provided materials for a drinking-pipe filter aimed at preventing people from swallowing the Guinea worm's larvae and suffering the misery of infection. After millions of the pipes were distributed, the number of Guinea worm cases plummeted to fewer than 10,000 world-wide in 2007 from 3.6 million in 1986, according to the Carter Center. Mr. Frandsen says the fact that a disease that caused so much suffering could be prevented so easily got him thinking about other waterborne illnesses in the developing world. He rattles off the numbers: More than a billion people are without access to safe drinking water. Diarrhea kills more than 1.8 million people a year, and chronic diarrhea is the leading killer of people with AIDS. "We started thinking, with 6,000 children dying a day from waterborne diseases, what could we do?" said Mr. Frandsen on a recent visit to the U.S. He wanted to create a filter that could be used at the water source to reduce these diseases. It had to be easy to carry, and require no electricity, batteries or repairs. Mr. Frandsen's father, Torben Vestergaard Frandsen, was involved in the early work on the design of the LifeStraw. When it was determined that the Guinea-worm pipe filter removed 96% to 97% of all cholera bacteria, the company thought developing a product to prevent cholera would be a "piece of cake," he says. It wasn't. The 3% to 4% of the cholera bacteria that made it through the Guinea-worm pipe filter was too much to call drinking water safe. "That was when we embarked on a long line of development to make the product useful against a wide variety of waterborne viruses and bacteria," the elder Mr. Frandsen says in an email.

The company initially tried creating filters only from textiles, he says. But when it found they weren't entirely effective, it began experimenting with other substances, including iodine and carbon. As far as the colors -- they weren't chosen by any designers or focus groups. "I always loved turquoise and navy," says Torben Vestergaard Frandsen. "After all these years I managed to have a product in my favorite colors. Luckily, the color combination is not that bad for water." The LifeStraw, introduced in 2005, is 10 inches long and weighs about 4.3 ounces. When someone sucks through the straw, the water flows through textile and iodine filters, which kill off bacteria and viruses. A second chamber consists of granulated active carbon that absorbs residual iodine, thereby improving the taste of the water. The Real Test The straw was tested at the University of North Carolina and tweaked by the company's engineers to decrease clogging and make it easier to clean, says Mark D. Sobsey, the professor who conducted the study. One straw is capable of purifying at least 700 liters (182 gallons) of water, removing an estimated 99.9% of bacteria and 99% of waterborne viruses, which, while not perfect, is enough to significantly reduce the risk of infection and illness, according to Prof. Sobsey. The straw doesn't completely remove turbidity from water or make saline water potable. It also doesn't remove or filter heavy metals. While LifeStraw's ability to filter out waterborne bacteria and viruses has been demonstrated in the lab, its effectiveness at reducing diarrheal illnesses in the field -which depends on things such as whether people use the device consistently and correctly -- is still being measured. Thomas F. Clasen, a lecturer in the department of infectious and tropical disease at the London School of Hygiene and Tropical Medicine, expects to complete a study of the device among users in Ethiopia in the next several months. He declined to release details on data collected so far. If the LifeStraw reduces diarrhea even 10% to 15%, it would be considered "an effective device," Prof. Sobsey says. If the reduction is 25% to 50%, then "we can declare it a victory," he says. This year, Vestergaard Frandsen introduced the LifeStraw Family, a $15 water purifier that families can use at home. Families pour water into the purifier, which kills off parasites in addition to viruses and bacteria that cause diarrhea. It is designed to last long enough to provide about two years of clean drinking water for a family of six.

Although Vestergaard Frandsen, which is closely held, declines to provide sales figures for the LifeStraw or the LifeStraw Family, it does say that all of its products "are selling very robustly, and we have significant growth every year." "There is no conflict between doing good and doing business," the younger Mr. Frandsen says.

Clothes Made Abroad Create Factory Jobs In L.A. for Mr. Fix-It; Barry Forman Left Rag Trade, But Is Back, Salvaging Flawed Chinese Garments
Stephanie Kang

Nov 13, 2006

LOS ANGELES -- Barry Forman's garment business here thrived by making ladies' polyester pantsuits in the 1970s and working with relaxed rayon during the 1980s. But 14 years ago, he spotted a trend he didn't like: The work was going overseas, lured by dramatically lower labor costs in China, among other places. Rather than make the move, Mr. Forman sold his Los Angeles clothing business and, at the age of 50, retired. Today, Mr. Forman is back at work in L.A.'s grungy fashion district. Overseas garment factories, it turns out, make their share of mistakes. And by the time defective goods reach U.S. shores, it isn't feasible to send them back for repairs. Mr. Forman's company, Santa Fe Finishing, does some of the fixing in Los Angeles. In the process, he rescues millions of dollars in merchandise that might otherwise be junked. "When I was a manufacturer, I drove a mile to the factory when there was a problem," Mr. Forman said recently from his second-floor office overlooking a factory floor. "What the hell do you do when your goods are from 9,000 miles away?" The resurrection of Mr. Forman's apparel career shows how the garment industry in Los Angeles has adapted in order to survive. No longer able to compete with low labor costs in Latin America and Asia, many L.A. apparel companies shifted gears to become specialty service businesses: They embroider stitching on jeans that are made elsewhere, or dye, wash or screen print T-shirts that come from abroad. Mr. Forman sees his business as an emergency room for garments. With a staff of about 100, he triages the different damaged goods that come in -- with stains, missing stitches and other maladies -- figuring out what can be saved and how quickly. The goal is to rescue a garment that would otherwise die. In late August, for instance, 17,000 denim pants made in a Chinese factory were confiscated at the port of Long Beach, after U.S. customs officials determined that zippers on the garments were counterfeits of a Japanese fastening brand called YKK. To get out of the jam, a representative for the brand called on Mr. Forman.

Fifteen employees headed to the warehouse and set up a makeshift factory, complete with lamps, tables and tools. They spent the next five days grinding off the fake YKK mark with handheld drills. Because the pants now had generic zippers -- rather than counterfeit YKK's -- U.S. customs officials approved the change and let the jeans enter the country, just one week late. The apparel industry has always had to deal with knockoffs and imperfect, unsalable goods, and it's unclear whether manufacturing mistakes have increased along with imports. Apparel and textile imports into the U.S. grew 15% to $95.57 billion in 2005 from 2003, according to the U.S. Census Bureau's Foreign Trade Division. Before he shifted gears, Mr. Forman spent nearly 30 years in the garment business, first selling textiles and later helping start fashion line Laundry by Shelli Segal, now a division of Liz Claiborne Inc. Mr. Forman was running a young women's sportswear line in 1992 when he realized he wanted out. "I couldn't make a profit anymore and I didn't want to go overseas like everyone else," Mr. Forman says, adding that he had made enough money to "take his chips off the table for a while." For the next eight years, he raised his daughter, who's now 16, took up golf, operated a carwash and invested in commercial real estate. But he missed the hectic pace of the apparel business, and in 2000 he bought Santa Fe Finishing. In addition to fix-it jobs, the company also specializes in readying garments for shipment to retailers such as Victoria's Secret, Barneys New York and Wal-Mart. That work can involve checking garments for mistakes, pressing and folding, trimming loose threads and packaging. Now 63, Mr. Forman says he relishes working in the apparel business again. In his office, near framed Ansel Adams photos, hangs a T-shirt that says: "I'm not crazy, I've just been in a bad mood for 10 years." "I'm maniacal," he says. Santa Fe Finishing charges an average of 70 cents per garment for fix-it jobs. Mr. Forman says his clients range from smaller companies such as Alarmex Holdings to giant apparel companies like Liz Claiborne and Kellwood Co. Mr. Forman says the business is growing rapidly. Santa Fe worked with seven million garments last year, and Mr. Forman says sales for 2005 are about $4 million, up from $2 million in 2001. Garment projects usually require just a little nip and tuck, but sometimes, Mr. Forman says, the company engages in more major apparel surgery. Two years ago, he charged a men's golf apparel maker $4.25 a garment to fix 20,000 rain jackets with sleeves that were six inches too long. "Only a gorilla could wear it," Mr. Forman remembers. Workers remeasured, cut, and sewed in heavy-duty elastic to salvage the order, he says.

Other garments get blemished en route to the U.S. In June, employees spent a day digging through 15,000 pairs of pants that had been sitting in a cargo hold partly filled with sea water for several weeks. "They were mush," Mr. Forman says. Salvageable pieces were sprayed with odor remover, while more than one-third of the shipment was taken away by waste-management control. On a recent morning, the 22,000-square-foot factory floor at Santa Fe Finishing buzzed with activity. In one area, workers cleaned oil stains or removed odors, while nearby seamstresses made spot repairs. On the opposite end of the floor, steam from about 20 industrial pressing irons filled the air. In the center of the floor, 13 workers softly ran their fingers down the sides of long-sleeve, multicolored striped tops. Designed by a local children's apparel line called Stony Apparel Corp., the 14,000 garments were supposed to go to Kohl's Corp. stores, which require manufacturers to comply with strict qualitycontrol standards before hitting store shelves. Mr. Forman's shop found that in 15% of the garments, made by a factory in China, a slight tug popped the elastic seam at the bust line. Workers on one end of the floor restitched the popped seams, while others marked other problems -- broken stitches or sewing mistakes -- with colored tape. Business for fix-it shops like Mr. Forman's is so good that several competitors have popped up in Los Angeles and New York, and some U.S. garment companies are starting to open up their own emergency rooms in places such as China to cut out businesses like his. Mr. Forman says there's enough business -- that is, mistakes -- for everyone. "Perfection is a fantastic goal," he says. "But, hey, it's never going to happen."

Online, Souped Up, and Making Tracks

Web pioneer Edmunds continues to set the pace for all things online about cars
by Matt Vella It's 8:40 a.m., and the staff of Edmunds is already rowdy. Chief Executive Jeremy Anwyl is calling new hires to the center of the room, a vast, loft-like space that forms the core of the company's Santa Monica (Calif.) headquarters. Each new employee in turn, from every level and every department, is met with applause and raucous hoots from a crowd of several hundred, as well as by digitally transmitted cheers from a satellite office in suburban Detroit, connected via videoconference. The weekly welcoming ceremony is emblematic of the open culture and rapid growth of the automotive Web publisher. Edmunds started in 1966 as a publisher of booklets packed with automotive specifications intended to help car shoppers make buying decisions. In 1995 its Web site was launched as a trial balloon by a skunk works team of employees. Since then, Edmunds has developed into the go-to online resource for car buyers and enthusiasts. "It's become the iconic name for car research and pricing," says Wes Brown, a partner in the Los Angeles consumer marketing-research firm Iceology, who has worked with Edmunds in the past. The cornerstone of the business is the data-driven Edmonds.com, which helps shoppers compare and price new vehicles. In a little over a decade the Web site so overshadowed the print operations that Edmunds last year got out of the print business altogether. "It was difficult for us emotionally, but not financially," says Avi Steinlauf, president, chief operating officer, and son of Peter Steinlauf, the entrepreneur who is the private company's largest investor. At the time, the print publication was contributing less than 1% of sales. Edmunds generates revenue by selling advertising and sales leads to local car dealers. It won't break down its finances, but executives say it is profitable and revenues have grown at a compound annual rate of 43% over the past seven years. The staff has ballooned to some 370 employees from just 20 in 1998. And a profit-sharing program is on track to give every worker a 20% salary bonus in 2007, up from 9% last year. Many media outfits have tried to reformulate around narrow topics to give advertisers more targeted audiences. Earlier this month, for instance, Barry Diller said that he was breaking up IAC/InterActiveCorp (IACI) into four "pure play" Web companies. Edmunds faced the opposite challenge: Its shopping data already drew highly motivated one-time visitors. The key to much of its recent growth, company executives say, was the ability to create a car-themed microcosm to keep consumers returning to the site even after they bought a vehicle. "We're all headed toward the same place," says Mike Dushane, executive

editor of rival Car and Driver magazine's Web site. "While we're building data and tools to complement our editorial, they're at the same time trying to build editorial brands." Edmunds executives fostered the rapid development and launch of a host of other projects to create an online environment for every auto enthusiast. One such project is Inside Line, a Web car magazine that Edmunds unveiled in January, 2005. Inside Line's monthly readership has grown to 3.5 million. In February, 2006, executives launched CarSpace, an auto-themed social networking site based on the fevered debates on Edmunds.com's forums over such topics as the environmental merits of hybrid vs. diesel technology. More recently, they initiated several blogs--some in just a matter of weeks--to cover green technology and car industry news. Says Erich Merkle, vice-president for forecasting at the Grand Rapids (Mich.) research firm IRN: "They've managed to thoroughly broaden their audience. It's one thing to be used by the 16 million potential auto buyers every year, but quite another to be able to draw in the enthusiast crowd of readers which is intensely loyal."

Cashing in on doctors' thinking

Sermo lets institutional investors listen in -- for a price -- as physicians talk among themselves.
By Susanna Hamner, Business 2.0 Magazine writer-reporter June 19 2007: 5:07 PM EDT

(Business 2.0 Magazine) -- Even when he was still doing his surgical training at Beth Israel Deaconess Medical Center in Boston, Daniel Palestrant's friends would pester him for what amounted to stock tips: What did he think of this controversial drug? What about that new medical device? Palestrant often had answers, thanks to the buzz he was picking up from other doctors. For example, months before it became front-page news and sent Merck's (Charts, Fortune 500) stock into free fall, Palestrant's colleagues were talking about the possibility that Vioxx might be speeding some heart patients to their death. It was from those impromptu chats in the hospital lounge that Palestrant got the idea for Sermo, an eight-month-old social network for MDs based in Cambridge, Mass. The company is already pulling in about $500,000 in revenue a month -- in a most unusual fashion. It doesn't get a penny from advertising, job listings, or membership fees. Rather, it makes its money by charging institutional investors for the opportunity to listen in as doctors chat among themselves. It works like this: Say a young patient breaks out in hives after taking a new prescription. Does the medical community think it's a side effect of the drug, a rare symptom of the child's disease, or something else entirely? A doctor might write a bloglike post on the topic and pair it with a multiple-choice survey. Other doctors can rate the question's value (on a scale of 1 to 5), vote on possible causes, or leave comments. All the while, Sermo is collecting fees from institutional investors who pay to troll the site for information that could move the market. The doctors, for their part, know that they are being observed. In fact, Sermo offers them a cut of the action. Doctors who ask or answer a question that paying observers deem especially valuable receive bonuses of $5 to $25 per post. Only about 1 percent of posts have such payments associated with them, Palestrant says, and doctors don't know whether they're getting paid until the discussion triggered by their question is closed. To keep that discussion untainted by commercial interests, only doctors whose credentials have been vetted are allowed to participate, and investors are not permitted to post comments.

But both sides seem to be getting value from the arrangement. Sermo has signed up 15,000 physicians -- making it the most popular social network for MDs, ahead of sites such as DoctorNetworking.com and DocsBoard.com -- and thousands more join every month. (Sermo has plenty of room to grow; the American Medical Association lists roughly 650,000 doctors as members.) Informal e-mail chatter among physicians, of course, is no substitute for the peer-reviewed journal articles that are the gold standard of medical knowledge. The danger of a site like Sermo, critics point out, is that it can become a platform for misinformation -- one with the power to make or break a company. Soon after the site launched in October, for example, one doctor reported -- without supporting evidence -- that the diabetes drug Byetta had been associated with sudden death in 50 patients. Byetta's manufacturer says the claim was false, and no deaths are connected to the drug. Palestrant defends the site by noting that because no other doctors corroborated the post, it was never deemed credible. And he points proudly to the Sermo community's contrarian prediction in March that the FDA would eventually approve Provenge, Dendreon's drug for treating late-stage prostate cancer. The next day an FDA panel called it safe and effective, sending Dendreon (Charts) stock up 150 percent. Palestrant is now courting further controversy by inviting pharmaceutical companies to buy the same kind of access as the investors. He insists that, like the Wall Street crowd, representatives of Big Pharma will not be able to interact directly with the doctors. For Sermo to remain a useful forum -- and a viable business -- it must protect the MDs from interference while satisfying the curiosity of the paying subscribers. Finding the right balance will be tricky, but if Palestrant can pull it off, Sermo is positioned for healthy profits for many years to come.

In-Store Sales Begin at Home

Marketers Rethink Strategies as Consumers Research Online Before Making Lists
Wall Street Journal By Ellen Byron

Determined to find the best deals, more shoppers are researching their grocery lists online before going to the store. For marketers, that means big changes in how and when they tempt consumers to buy. In-store marketingthe practice of trying to influence consumers' buying decisions as they shoptraditionally consisted of flashy product displays, special promotions at the end of the aisle and attention-grabbing packaging on the shelf. It's well known that consumers research expensive products like electronics online, but coming out of the recession, consumers are more scrupulous about researching their everyday products such as diapers and detergent, too. More than a fifth of them also research food and beverages, nearly a third research pet products and 39% research baby products, even though they ultimately tend to buy those products in stores, according to WSL Strategic Retail, a consulting firm. That has led retailers and brands to target customers via blogs, social-media sites such as Facebook and Twitter and campaigns on retail sites, in addition to in-store campaigns. Ms. Howell argues that consumers' careful research means the shopping trip now begins long before the shopper enters the store, so store-focused marketers have to move their efforts forward. Three years ago, just 10% of Saatchi X's in-store marketing projects included an online component, but now "almost 100% do," she says. Likewise, nearly 20% of the firm's revenue comes from digital work, up from less than 5% three years ago. A 2010 campaign for Procter & Gamble Co.'s new CoverGirl "Smoky Eye Look" makeup kit illustrates the more complex route marketers are taking. To drum up hype for the product launch online, P&G, with Saatchi X, shipped the packs of mascara, eyeliner and eye shadow to makeup bloggers before they were available in stores. The "Makeup Master" kit also included application instructions, blogging tips, product photographs and a CoverGirl-emblazoned director's chair.

 Inside stores, CoverGirl drew attention to its kits with live product demonstrations, its co-branded print ads with Wal-Mart Stores Inc. and cardboard trays that carried the kits on the shelf while highlighting the product's features. After a purchase, shoppers were encouraged via Facebook and other online campaigns to write a review of the product, thus spreading the word to more customers researching makeup online. The digital shift is a particular challenge for food and household-product companies, which typically aren't as advanced online as their electronics and apparel counterparts. They have been deterred by the cost of shipping bulky but low-value items like paper towels, detergent and canned soup, especially given the ubiquity of brick-and-mortar stores selling the products for about the same price. In the weeks leading up to this year's Super Bowl, Saatchi X created a campaign to promote PepsiCo Inc.'s Pepsi beverages and Frito-Lay foods at Walgreen Co. stores. Customers received weekly co-branded emails containing Pepsi and Frito-Lay promotions and Walgreens' coupons. Facebook promotions, online ads and text messages also directed shoppers to the deals, while inside Walgreens stores Pepsi and Frito-Lay products used displays, fliers and in-store radio to tout the specials, too. "It was a successful campaign both in our stores and online," a Walgreen spokesman said. Some 62% of shoppers say they search for deals online for at least half of their shopping trips, according to a survey by consulting firm Booz & Co. and trade group Grocery Manufacturers Association. "It's become a matter of, 'I need six things, who has the best price on them?' " says Candace Corlett, president of WSL Strategic Retail. "It takes 90 seconds to research that online, and that's how shoppers choose the store where they shop." Ms. Corlett says consumers' increased shopping research is driven by improving technology and a more scrupulous shopper. About 80% of women say they pay more attention to price on "just about everything," says Ms. Corlett, citing a WSL shopper survey from last year. That's up from 64% in 2008, she says. Google Inc.'s user queries for local searches (like store locations), coupons, recipes and product reviews have doubled or tripled year on year, says Kevin Kells, Google's

national industry director for consumer-product companies. "Those are just proxies for this more informed, more sophisticated shopper," he says. "The shopper is saying 'I can't really afford to be wrong.' " Wal-Mart is banking on the trend to accelerate. Lately, it has made its online circulars more user-friendly. It is also developing ways to offer more customizable circulars online, based on a shopper's interests or needs. "If you don't have a pet, your circular won't need to include pet stuff," says Stephen Quinn, chief marketing officer of Wal-Mart. The retailer has also broadened its use of Facebook and other social media sites. "Over time people will use these [online] tools much in the way they've used media or word of mouth," says Mr. Quinn. Brands including household goods are reacting by trying to be visible online where deal hunters research. "Buy now" buttons on social media sites like Facebook, product reviews on retailer and manufacturer websites, online circulars, digital coupons, and blogger buzz are now crucial for products to make it on to the shopping list and ultimately into the cart, marketers say. To be sure, the shift hasn't eliminated the need for effective campaigns inside stores. In-store marketing gained appeal and sophistication amid the fragmentation of television and print audiences, and accelerated during the recession, when marketers believed cash-strapped shoppers made even more purchasing decisions when looking at the store shelf. But as consumers are starting to open their wallets, companies are more focused than ever on attracting them during their shopping trips: Post-recession, 83% of consumer-product companies say they plan to increase their investments in shopper marketing over the next three years, while 55% say shopper marketing is their top investment, with spending increases topping 5% annually, according to the Booz & Co. survey. "The reality is marketers have to pull more levers today than they ever had to before. All of us are consuming media in so many different wayssome people are only online, some only watch TV," says Ms. Howell. "The bulk [are] somewhere in the middle, and that's what's making it harder to determine what is the correct formula."

Retailers Wrap Up Layaway

Installment Purchases Thrive in Tough Economy; Absence Clips Target Toy Sales
DECEMBER 17, 2011, WSJ By A N N Z I M M E RM A N And M I G U E L B U S T I L L O

DALLASArquietta Bold, a 23-year-old teacher's aide, endured two long lines at a Wal-Mart on Friday to pay the balance on $300 worth of toys and a digital camera she put on layaway two months ago. The hour-long wait with dozens of others was worth it, she said. "Layaway took away a lot of the stress," Ms. Bold said. "If I had to pay all at one time, I couldn't have bought this much." Friday was the deadline for many shoppers to pay the balance of their layaway purchases, which made a big comeback this holiday season. Around the country, retailers reported Good Samaritans were even stepping in to pay layaway for some customers. Layaway allows shoppers to pay in installments until the full price is met; there is also a service fee, usually $5, and an additional charge if shoppers cancel their purchases. No one knows how much layaway programs contribute to the $469 billion Americans are expected to spend on holiday purchases this year. But retailers such as Wal-Mart Stores Inc. are bringing back or expanding them in the tough economy. Wal-Mart this year resurrected layaway for electronics and toys for the first time since 2005. Toys "R" Us, which in years past had offered layaway only for very expensive toys, expanded its program storewide this year. The company said the number of shoppers who used its layaway program this year exceeded its internal estimates. Neither would provide numbers on how many shoppers used layaway, nor would Sears Holdings Corp., which has layaway all year round at its Kmart department stores. And it remains unclear how many shoppers will not be able to pay off their balances and pick up their layaway purchases. Some retailers have said they are seeing the effects of rivals' layaway programs. Target Corp. blamed its lack of a layaway program for its slow toy sales at the season's outset. "Wal-Mart's layaway program has certainly hurt us in November," Kathee Tesija, Target's executive vice president for merchandising, told analysts in an earnings call last month. "Toys are off to a slow start, and I think that's going to be a bit of an uphill climb for us this year." Layaway has sparked controversy. Sen. Charles Schumer (D., N.Y.) recently criticized retailers for service and cancellation fees that he said, on an annualized percentage basis, were like "sky-high" credit card rates. Wal-Mart defended the fees on its plan, which include a $5 charge up front and a $10 fee for cancellation, saying that critics such as Sen. Schumer used misleading calculations that made the fees look too high. "I am not sure how they did their math, but they are not portraying it the way it is," said Wal-Mart spokesman David Tovar. "If you put a couple hundred dollars of items on layaway, then the fee percentages they cited obviously don't apply." Sears said it makes the terms of its layaway contracts clear to its customers and that it is flexible if customers have trouble coming up with the final payment. Sears customers are given up to two extra weeks, and at Kmart, at least seven days. Layaway seems to have brought out the Christmas spirit in some Americans, who have been paying off other people's balances at Kmarts and Wal-Marts around the country. Catharine Osborn, assistant manager at a Wal-Mart in Stow, Ohio, about a half hour outside of Cleveland, said anonymous donors have paid bills for a dozen layaway customers as of Friday. The benefactors included one couple who offered to pay off five accounts with balances of about $100 each after hearing about a similar Good Samaritan. The couple wanted to remain anonymous. After learning that someone had paid their debts, "We had a couple of people cry," Ms. Osborn said. "Other people who saw it were crying. It was just great to see that people were willing to help other people at Christmas."

No Need to Buy Toys for Toddlers. Rent Them Instead

By ALINA TUGEND Published: December 16, 2011

IF you want to avoid spending a lot of money this year on things that wont last, like Christmas trees and toys, you dont have to buy. You can now rent them, enjoying the items in your house but sending them back when you dont want them anymore. Sounds like heaven to me. I first started thinking about this when I heard about a company that rented out toys and collected them for a nominal fee after your child lost interest. Who among us hasnt had the experience of buying a selection of expensive playthings for our children, only to see them gather dust in a corner in a few weeks or months, if were lucky. Babyplays.com, which has been around since 2007, offers a single toy for $2.99 to $8.99 plus shipping, or you can buy a $19.99 membership that gives you four toys every other month, said Stephanie Weber, owner of the company. Customers can also pay $32.99 and receive four toys a month. The site caters to children from infancy to about 4 years old. After that, they usually become more attached to their toys, like action figures or Legos, she said. For parents worried about the used toys cleanliness, Ms. Weber said that all items without electronics went through a commercial dishwasher and others were thoroughly sanitized. But what if your child breaks one? Give Babyplays a call and another is sent free. We get it, she said. Were all moms here. Its only happened a handful of times. Interestingly, a lot of people ask for toys to be shipped directly to a hotel or wherever they are staying on vacation. The toys are then picked up at the end of the holiday, which means parents dont end up lugging them home in the car or on an airplane. You can even rent to own, buying the toys for 30 to 50 percent off the retail cost, depending on how long that toy has been in circulation. Renting toys may seem strange, but you can also now rent designer-label handbags as well as some truly unexpected items. Say you want to rent a Christmas tree. If you live in Southern California, you can contact Scott Martin, who started livingchristmas.com in 2008.

The trees, which run about $145 and up for a seven- to eight-foot tree, plus a delivery and setup fee ranging from $30 to $60, arent necessarily cheaper than buying, but the appeal is that youre renting a live tree rather than buying a dying one, Mr. Martin said. He started with about 70 customers and is now up to around 1,000. The potted trees are dropped off and reclaimed after Christmas, then moved to a six-acre industrial site that belongs to the Shell Oil Company in Carson, Calif. About 90 to 95 percent of the slow-growing trees, but not all of them, can serve as Christmas trees again the following year. To be a Christmas tree, you have to be perfect, Mr. Martin said. Otherwise youre just a pine tree. Families can even order the same tree year after year to see how it has grown. Need some tools to put together some complex toys you bought? No need to run out and purchase your own. In fact, you may not even have to pay anything. Tool-lending libraries are becoming increasingly popular around the country. To see if one is in your area, check out localtools.org/find/, the newly created Web site. The Berkeley Public Library has been lending tools for 31 years and offers everything from screwdrivers to table saws to plumbing wrenches. You can unstop a sink or build a deck with our tools, said Adam Broner, a lending specialist who has been working at the Berkeley library for about 20 years. Power tools can be checked out for three days, while smaller tools are available for a week. The late fees are heftier than those for books they can be as high as $15 a day and with the $20,000 a year the library receives from those fines, it replaces worn-out items, Mr. Broner said. About 2,000 to 3,000 tools are checked out a month, he said. If there is no tool library near you, call a local tool rental company or home improvement store in your area but be prepared to pay. Enough about toys and tools. If youre a woman looking for something for yourself, say, for a party, why not rent a designer handbag? At bagborroworsteal.com, the least expensive offering is a Tory Burch card case for $5 a week or, on the high end, an Herms Crocodile Birkin bag for $1,632 a week (as opposed to buying one retail for $40,000 and up). We offer $150 insurance for free, and if you want, you can purchase additional insurance, said Hayley Brothers, a spokeswoman for the company.

Although the company is based in Seattle, the New York area is its largest market, she said. Surprisingly, the specialoccasion portion of the business is small, Ms. Brothers said. Her company mostly caters to women who want a designer bag for everyday use. Bags by Louis Vuitton, Prada and Chanel, for example, all have waiting lists. From the sublime to the subterranean: you can rent a coffin, too. Its usually done when people are cremated, said Jessica Koth, a spokeswoman for the National Funeral Directors Association. A body that will be cremated needs to be in some sort of container, and a simple cardboard box will do as well as a lavish coffin. But if youre going to have a viewing, you can rent a casket through the funeral home, she said. The cost of a rental can range from a few hundred dollars to more than $1,000, she said, while buying the coffin can easily run to $15,000. And since cremation rates topped 40 percent last year for the first time since national statistics on started being kept in the 1960s, the market for rented coffins will probably grow, Ms. Koth said. If I havent mentioned an item youre interested in renting, feel free to peruse the new Web search engine rentabilities.com, which offers rentals ranging from ice cream trucks to skateboards. The idea, said Alex Cook, co-founder of the site with his brother Andy, is that companies post items on the site there are about 98,000 unique items there now and the site helps them connect to new customers. For that, the Cooks take a 15 percent transaction fee. The site shows the desire to rent is high. About 15,000 people visit monthly and about 350 rent, Mr. Cook said. Some of the more unusual rentals? Inflatable movie screens, Elmo and Scooby Doo costumes and foosball and PingPong tables. And soon, Mr. Cook said, he hopes to make iPad rentals available by the day, week or month. Renting seems to be the wave of the future. There are even sites that offer rental wives or friends, though I dont know about that. Im open to renting handbags or clothes (although I draw the line at underwear, which I saw advertised). But I prefer to get my spouse and friends the old-fashioned way.

E-mail: shortcuts@nytimes.com

Take that back! Returns are big for the holidays

By ANNE D'INNOCENZIO AP Retail Writer Posted: 12/14/2011

NEW YORKAh, the warm feelings of the holidays: Comfort and joy. Good cheer. And buyer's remorse. People who rushed to snag discounts on TVs, toys and other gifts are quickly returning them for muchneeded cash. The shopping season started out strong for stores, but it looks like the spending binge has given way to a holiday hangover. Return rates spiked when the Great Recession struck and have stayed high. For every dollar stores take in this holiday season, they'll have to give back 9.9 cents in returns, up from 9.8 last year, according to the National Retail Federation's survey of 110 retailers. In better economic times, it's about 7 cents. This time of year, fractions of a penny add up. Stores are expected to ring up $453 billion during the holiday season. Merchants make up to 40 percent of their annual sales in the last two months of the year. Returns are typically associated more with January than December. After all, that hot pink sweater with yellow stars on the sleeves may not be exactly what your sister had in mind. But these days, more is going back before it ever gets to Santa's sack. "When the bills come in and the money isn't there, you have to return," says Jennifer Kersten, 33, of Miami. She spent $300 the day after Thanksgiving on books, movies and clothes for her nephews. Last week she returned half of it. Some reasons for the many unhappy returns: Shoppers are binging on big discounts. Stores are desperate to get people in the door. But the same shoppers who find a "60 percent off" tag too good to resist may realize at home that they busted the budget. Stores have made it easier to take things back. Nordstrom is letting online shoppers return items at no extra charge this year. It used to charge $6. Other stores are offering more time to return or rolling out "no questions asked" policiesno tag or receipt required. But that can backfire. "Spurring more returns wasn't part of the plan," says Al Sambar, a retail strategist for consulting firm Kurt Salmon. Stores are undercutting each other in a tough economy. Wanda Vazquez spent $39.99 at a New York Target on iPad speakers for her 12-year-old daughter, then returned them when she found something similar for $16.99 at Marshalls.

Consumer electronics in particular are being returned at a rapid clip. Stores and manufacturers are expected to spend $17 billion re-boxing, repairing, restocking and reselling electronics this year, up 21 percent from four years ago. At about half of the 100 electronics manufacturers and stores surveyed by Accenture, a consulting firm, return rates have increased over the past three to five years. Most of the items are returned without flaws. In an industry where profit margins are thin and competition is brutal, those return rates are unsustainable, says Mitch Cline, managing director of Accenture's electronics and high-tech group. Several retailers declined to talk about returns. But if they need any evidence of growing remorse among their shoppers, all they have to do is look at the overstuffed aisles of liquidator warehouses. Liquidation.com, which buys returned merchandise from big stores like Wal-Mart and auctions it to small businesses and dollar stores, says return rates are 12 percent to 15 percent, two percentage points higher than last year and double the rate in better times. Its four warehouses across the country are packed with thousands more smartphones, TVs other holiday castaways than a year ago, says Bill Angrick, CEO of the site's parent company, Liquidity Services. To get rid of all that extra stuff, the company says it is holding 20 percent more online auctions than it did last year, though it declined to give a total. "This is going to be a record year for returns," Angrick says. "People are still reluctant to spend." Dave Vehec, senior vice president of GENCO ATC, a liquidator that sells returned merchandise from six of the nation's top 10 retailers, also says stores are reporting a spike in returns this year. Americans spent $52.4 billion over the four-day Thanksgiving weekend, the highest total for that period, according to the NRF. But business has fallen. Sales last week were down 1.9 percent from a year ago, according to research firm ShopperTrak. Stores are already being squeezed by rising costs for materials and labor. Returns make it worse. When you return a sweater, a paid worker has to restock it. Return a computer after just turning it on, and the hard drive has to be scrubbed. It adds up to lost dollars for stores, which have to eat as much as 12 percent of the cost for returned clothes and 50 percent for returned electronics. Shoppers, of course, are more concerned with their own bottom line. That's why Lisa Dublin, a New York mother of three, last weekend returned half of the $200 she spent at Banana Republic. The clothes were going to be gifts for her 15-year-old son. Dublin, 33, also returned a pair of knee-high boots she'd bought for herself at Charlotte Russe for $25, marked down from $40. It was a good deal, she says, but not good enough. "I have been buying a bunch of stuff at a time," Dublin says. "Then, when I get home I analyze and figure out what I really need."

Youre the Boss. The Art of Running a Small Business.

Mr. Cohen Has a Beef

By BRUCE BUSCHEL March 15, 2011
We attempted to eat at the restaurant on 12/30/10. We waited a total of two hours and were finally told that they were out of nearly every entree and would we consider sampling what they had left? When they couldnt confirm how long it would take to get tastings, we left NEVER TO RETURN TO THIS HORRIBLE PLACE And the owner came up to us to say it was a bad night He was arrogant and didnt apologize or offer us the opportunity to return comped or discounted. AVOID THIS RESTAURANT. Alex C. This review has now appeared on Yelp, TripAdvisor, 27East.com and will soon be showing at a local Web site near you. If we ever get on Zagat. it will be there too. If the reviewer who also identifies himself as Alex Cohen ever uses OpenTable, it will be there too. It will follow us to the cyber cemetery. Mr. Cohen is on an upper-case mission. How should we play this? Respond on each site? Let it be? Respond with vigor? Kill Mr. Cohen with kindness? Hope that a preponderance of good reviews will bury this one, or at least dilute its impact? Ignore Mr. Cohen completely? (I guess its too late for that, showing up here and all.) To date, we have done none of the above. We are stymied and need guidance. There are three main issues: 1) That Mr. Cohen had a rotten time is indisputable. 2) That Mr. Cohen has the right to speak his mind about his rotten time is also indisputable. 3) That Mr. Cohen is using social media to disseminate the rottenness of his time might call for some disputation. I am not certain. Risking the distinct possibility of sounding defensive and full of sour grapes, there are a couple issues surrounding Mr. Cohens experience that might influence your opinion, or might not. The first issue is the easiest to handle. Mea culpa. The Cohen party waited a long time and then we ran out of certain items. We committed a cardinal sin in hospitality. We promised something and didnt deliver. It was the night before New Years Eve, and we were crowded and Mr. Cohen did not have a reservation. For Christmas dinner, we had had a special Feast of Seven Fishes and for New Years Eve we planned a different dinner altogether, with noisemakers and bubbly. And then we were closing the restaurant for a two-month hiatus. All that threw off the levels in the larder, and we miscalculated the traffic flow and the food we needed. That there had been a snow storm that week and fishing boats were not arriving on schedule was our problem, not Mr. Cohens. That we had never been through a winter before was our problem, not Mr. Cohens. We messed up. We knew it and we were embarrassed. The server was unaware of our miscalculation, so the Cohen party was surprised and dismayed when said server returned from the kitchen with word that we had run out of things. That compounded our infractions. The cover up, intended or not, is worse than the crime. We felt terrible and we conveyed that feeling.

Issue No. 2 is easy too. Not only does Mr. Cohen have every right to voice his opinion, but we ought to thank him for focusing our attention on TripAdvisor and Yelp and all the social media sites that might affect us. Thank you, Mr. Cohen. Issue No. 3 is more devilish. As the owner of Southfork Kitchen, I am always sorry to hear about unmet expectations, but I expect to hear about them. Mr. Cohens comment, as abbreviated comments must, overlooks several key points that may be salient. His party of four was invited to dine at the bar. They sat at the bar but decided to wait for a table. The time of the wait was unknowable. It turned out to be an hour, which is way too long. We apologized. We apologized again with some wine. After being seated and perusing the menu, Mr. Cohen was shocked that we offered no red meat. He asked to speak to the owner. After praising the architecture and design, Mr. Cohen expressed puzzlement about the absence of red meat on the menu. There was a duck appetizer and a chicken entre, but no meat. I generally enjoy the opportunity to talk to guests about our philosophy, why we are a sustainable seafood restaurant, first and foremost, that features local vegetables and artisanal products. This concept is not easily swallowed by all guests, even if they had spent the day at the ocean or driving past open fields and dairy farms. It it especially hard for guests bent on beef or veal or lamb, or salmon or tuna or swordfish. Their comments are often cogent. The feedback is invaluable. No surveys, no prospecting, no Facebook walls, no mining of data the information is right there, in their faces, in their voices, on their plates. Instant and personal connectivity. This used to be called talking. I am old. Mr. Cohen remained steadfast in his opinion that our restaurant would be improved with the addition of red meat and that our philosophy would not be co-opted one bite, or bit. He said, in essence, we could have our steak and eat it too. He proffered the notion that adding beef would be a wise business move, and sticking to our fish guns would lead to disaster. I didnt understand why he was interested in our business model, but I saw his point. It was not the first time I had heard that warning. Mr. Cohen dug in his heels. His friends asked him to tone down his rhetoric, let the issue go. They ordered. They waited. They got skewered. It was awful. As the hour was late, and the next day would feature a different menu, we had run out of some items. Wea culpa. We offered Mr. Cohen our sincere apologies, again, and anything we had in the kitchen an impromptu tasting menu of sorts, a sampling of all our remaining dishes, free of charge. We did not offer to comp the party in the future, thereby forcing them to return to the scene of the crime; we did not know where they lived or when they planned to return to the area. We wanted to comp this meal. Here and now. But it was too late. The Cohen party departed. They were unhappy. We were unhappy they were unhappy. In a season of good cheer, we had spread bad vibes and left four guests unsatisfied in many ways. New Years may seem like a long time ago, but we are about to re-open and we are going over everything that went right and wrong. We want to restart with a clean slate. This review lives on and on, like a permanent blemish. Is it too late to react? Should we let it go? Invite Mr. Cohen to return? Respond to his reviews on all the sites? Or just work harder to ward off future complaints? We are fishing here. Thank you for biting.

The Platformate Style of Reporting

Squelching of key facts to push an agenda now a part of journalism
By Jon Ham
July 21, 2006 RALEIGH In my first journalism course in 1971 we were given an example of what makes journalism superior to advertising. It involved a Shell Oil commercial that ran in the late-60s and early-70s touting an additive called Platformate. The commercial showed two cars on a straight desert road, one fueled with Shell gas containing the wonder additive Platformate and the other topped up with gas without Platformate. Not surprisingly, the car without the Shell gasoline sputtered to a stop in the hot sun while the Shell car kept going a considerable time longer. The announcer told us that this was proof that Shell with Platformate was a superior auto fuel to gasoline without Platformate. All of this was perfectly true, in a sense that decades later would be called parsed and Clintonian. What the ad did not tell you was that all commercial gasolines contained Platformate, and without it your mileage will plummet. The impression left with the consumer was clear: Use Shell with Platformate instead of those other brands without Platformate if you wanted good gas mileage. As my professor at the University of Georgia, Beverly Bethune, told us, this kind of subterfuge was what made journalism noble compared to the advertising game. Journalism, we were told, would never leave out meaningful context in an effort to mislead readers. It was concerned with truth, not casemaking. This was probably true 35 years ago. But even then something new called advocacy journalism was on the horizon. It was considered alternative and not quite responsible journalism back then. Unfortunately, it is today the norm among mainstream reporters. It borrows many techniques from advertising, among them the squelching of facts that dont fit an agenda-driven template. Just a few recent examples: The status of Valerie Plame at the time her name became public. There is a serious question whether Ms. Plame was an operative at all, much less a covert operative, when her name was first used in Robert Novaks column. The mainstream media, however, have ignored this debate and consistently reported that she was unquestionably a covert operative at the time.

 Joseph Wilsons original report after returning from Niger. Wilson, Valerie Plames husband, reported to the CIA when he returned from his mission to Niger that there was indeed evidence that Iraq had tried to obtain nuclear material from Africa. When he wrote his famous op-ed for The New York Times, however, he claimed the opposite. The mainstream media, of course, have virtually ignored his original report. [Ed.: Correction made to this paragraph subsequent to posting.] Jamie Gorelicks role in erecting the so-called wall between domestic and foreign intelligence while she was deputy attorney general in the Clinton administration. Gorelick was also a member of the 9/11 Commission. However, even though the wall she helped erect was determined by the commission to be instrumental in the intelligence failures prior to the 9/11 attacks, stories by the mainstream media ignored her crucial role in the exact problem the commission was studying. The stem cell debate. There are several examples of Platformate reporting here. First, the notion that President Bush opposes all stem cell research instead of just embryonic stem cell research has been encouraged by shoddy reporting. Second, the fact that what is at stake is only public funding of embryonic stem cell research has also been obscured in the reporting of this issue. And third, the fact that Bush is the first president ever to have provided any federal funds for stem cell research goes unmentioned, or is buried, in most stories. The Kyoto Treaty. Almost never mentioned in any story about the wisdom of the Kyoto Protocols and the Bush refusal to join other nations in their ratification is that the U.S. Senate defeated it by a 95-0 vote, that a panel of economists recommended against ratification, and that President Clinton, while he was in office, made no serious effort to get it ratified. Global warming. The mainstream media ignore serious scientists who dont subscribe to the Chicken Little hysteria surrounding this issue, reporting man-made global warming as an uncontested fact. Illegal immigration. The media consistently, in stories and headlines, use immigration as a synonym for illegal immigration, leading readers to believe that reformers are antiimmigration, racist xenophobes rather than people asking that the existing immigration laws be enforced. These are just a few examples of cases in which the deletion of key facts and context changes how the average reader perceives important issues. There are many, many more. Like the ad that withheld a key fact to get people to buy a certain gasoline, these stories use the same tactic in an attempt to affect public opinion. Some people call that propaganda, not journalism. Jon Ham is vice president of the John Locke Foundation and publisher of its newspaper, Carolina Journal.

Retailers Try to Thwart Price Apps

Programs Like RedLaser Prompt Bricks-and-Mortar Stores to Develop Exclusive Product Lines
By DANA MATTIOLI

The smartphone boom is unleashing a new era of pricing transparency to consumers able to use wireless apps and search engines on their mobile devices in stores to check if they are offering the best deal. But retailers are fighting back harder than ever to prevent their stores from becoming mere showrooms. More bricks-and-mortar stores are reviewing prices of online stores when setting initial price of an item. If prices are out of whack, they are more aggressively matching the prices of their online rivals. Some retailers are investing heavily in exclusive products that are less vulnerable to price competition. "Our pricing has to be very competitive," says Best Buy Co. Chief Marketing Officer Barry Judge. "We know what Amazon's price is on everything they sell," he says. Best Buy stores will price-match other bricks and mortar stores, but "chooses not to" match its online competitors, says Mr. Judge. It does adjust Bestbuy.com prices of certain items to compete with online retailers, he says. In the U.S., 44% of shoppers now have smartphones, up from 18% just two years ago, says Nielsen. In 2010, those shoppers spent $3.4 billion using their mobile phones to place retail orders, excluding travel. This year, that number is expected to jump to $8 billion, according to market research firm ABI Research. The figures do not include orders placed from tablets. While more people are using their mobile phones to order products, handsets are influential for pricing research and directing users to online sites to complete a purchase. Popular price comparison apps like eBay Inc.'s RedLaser and TheFind have 16 million and 1.4 million downloads, respectively, up from 6 million downloads for RedLaser and 1 million downloads for TheFind last year. Each app allows users to scan barcodes, take a photo or search a product while in a store, and then spouts out the prices of online competitors. TheFind says its mobile app averages between 18 million and 20 million price checks each month, up from 13 million to 15 million checks per month last year. A May survey of 3,000 shoppers by consultants AlixPartners found that about 40% had searched for a lower price using an in-store shopping app or search engine, then purchased the item for a lower price online. The use of such apps recently sparked a furor. After Amazon.com Inc. launched a promotion on Dec. 8 on its Price Check shopping app that gave customers 5%, or up to $5, on up to three qualifying items on its site if they checked the prices of those goods while browsing at a physical store, retail groups and politicians denounced the offer. Sen. Olympia Snowe (R., Maine) called

the promotion "anti-competitive" and "an attack on Main Street businesses that employ workers in our communities." To respond, some stores find themselves having to more frequently match prices of their rivals to keep cell phone-wielding shoppers from defecting. Since tablets such as the iPad have become a bigger factor in e-commerce, cooking retailer Sur La Table Inc. more regularly matches the price for online competitors, such as WholeLatteLove.com and Amazon.com, which CEO Jack Schwefel refers to as "the A-word." "It has amped up to a whole 'nother level post iPads," said Mr. Schwefel. Competition from e-tailers is also amplifying the importance of exclusives and store-branded merchandise that prevent consumers from being able to directly compare items, says John Long, a retail strategist with Kurt Salmon. Several department stores collaborated with high-end designers to build exclusive product lines, and the trend is becoming increasingly important for specialty stores and electronics retailers, he says. GNC Chief Marketing Officer Jeff Hennion says 56% of the products GNC sells today are exclusives or GNC branded. Electronics and gift retailer Brookstone Inc. is also spending more on private and proprietary brands as a way to compete with online stores, says CEO Ron Boire. This month one of its best sellers is an iPhone projector that the company developed internally that allows users to display movies on walls and other surfaces for $229.99. In addition, retailers now take online competitors into account when determining the initial prices for both in-store and only items. This year, Brookstone created a separate team of merchants for in-store and online commerce. Every day, the online team scours pricing of online electronics rivals and adjusts the prices of thousands of its online-only items. Merchants at department store chain Bon-Ton Stores Inc. can adjust in-store prices within a day to compete with online rivals, especially in the home and small electronics parts of the store, says Chief Operating Officer Barbara Schrantz. Despite these steps, in some cases retailers just can't win. Earlier this month, Alex Plitsas ordered a Fuji digital SLR camera for his wife as a Christmas gift. The 26-year-old scoured the Web for deals before placing an order with a smaller, online-only retailer. "I found it cheaper at a random website and paid 60% less than the listed price at a brick and mortar," he says. Write to Dana Mattioli at dana.mattioli@wsj.com

A Rich Vein for 'Reality Mining'

Researchers and companies are finding novel uses for information extracted from cell-phone data
by Arik Hesseldahl In the aftermath of the September 11 attacks, U.S. officials quickly turned their attention to other potential targets, including California's Golden Gate Bridge. What would happen if terrorists took down the bridge between San Francisco and Marin County? How much of the region would be affected and for how long? For insights, the Homeland Security Dept. turned to a Microsoft spin-off called Inrix. The startup analyzes data from satellite navigation gear that's widely installed on trucks and some cars to produce real-time traffic information, which it sells commercially. Parsing years of stored traffic data using proprietary software, Inrix was able to model not only the immediate impact of a Golden Gate Bridge catastrophe, but also how drivers in the region would work around it. In the model, the Bay Area pulls off an amazingly quick recovery. Within a few days, drivers understand what is happening and adapt to the new reality, says Inrix Chief Executive Bryan Mistele. The technique Inrix used is called reality mining. It's a twist on data mining that allows researchers to extract information from the usage patterns of mobile phones and other wireless devices. Because these machines are almost always switched on and are constantly in contact with cellular base stations, they produce a persistent digital record of where the users are going, how long they stay, and who they come in contact with. Particularly when phones are equipped with global positioning system chips, they can generate precise location maps in phone company databases. Such trails are far more accurate than human beings' subjective accounts of their comings and goings. The reality miners excel at dreaming up exotic applications. In addition to helping cities prepare for possible terrorist attacks, they have devised ways to ease traffic congestion; helped city planners find the best locations for schools, hospitals, and convention centers; and enabled all types of businessesnot least, phone companiesto improve customer service. In the future, reality mining may also allow health officials to track and contain outbreaks of infectious diseases. "There is so much societal good that can come from this," says Alex "Sandy" Pentland, a Massachusetts Institute of Technology professor and reality mining pioneer. "Suddenly we have the ability to know what is happening with the mass of humanity."
A MARKETING BONANZA

Signals among phones and base stations can be detected by commercial sensing devices. But the detailed records of who is calling whom belong entirely to the phone companies. Right now, they make little use of that data, in part because they fear alienating subscribers worried about privacy infringement. But cellular operators have begun signing deals with business partners who are

eager to market products based on specific phone users' location and calling habits. If reality mining catches on, phone companies' calling records will become precious assets. And these will only grow in value as customers use their phones to browse the Web, purchase products, and update their Facebook pagesand as marketers apply reality mining's toolkit to these activities. In academia, reality miners are interested in applying the technology to areas such as disease management. Suppose health officials in a city suspect passengers arriving at an airport have been exposed to avian flu. In the not-too-distant future, they might be able to enlist cellular operators and use reality mining to monitor clusters of individuals thought to be at risk. Phone records could reveal that an unusual number of passengers on the flight are staying home from work or are in the hospital. With further digging, officials could uncover a record of contacts with taxi drivers, waiters, even random people in a supermarket. In such a crisis, the technology could save lives. "It's one of the application areas that [works] well both on the individual and on large groups," says Alex Kass, a researcher at consulting firm Accenture (ACN). Even in an imagined crisis, however, such scenarios would raise red flags among privacy advocates. Guilherme Roschke, a staff attorney at the Electronic Privacy Information Center, a nonprofit in Washington, D.C., worries whenever people are monitored without their consent. "There is a lot of new information being collected, and it brings significant new capabilities," he says. "Whenever it's put to a new use, it must be disclosed." Academic researchers acknowledge the risks and have begun setting rules for how data should be collected and used. "Our first assumption is that people own their own data," says MIT's Pentland. But companies may find it difficult to comply with the new rules. Nathan Eagle, one of Pentland's MIT colleagues, has access to a database that holds an entire month's worth of calling data for a whole European countryhe won't say which one. The data set contains information on 250 million cell phones and land lines and some 12 billion phone calls. For research purposes, the data has been scrubbed of all information that might be used to identify individuals. In Eagle's lab, which is funded partly by Nokia (NOK), he and his colleagues use the data to test the power of their algorithms. They've observed phenomena that may interest the phone companies that own the unscrubbed data. For example, each neighborhood has heavy users who influence other people, say, by proselytizing for new phone applications. Eagle says phone companies can identify these "influencers," and they'll bend over backwards to make sure these subscribers don't jump to rival carriers. "If someone who makes a lot of calls walks away, there's a higher potential that they'll take more people along with them," Eagle says.

Reaping Results: Data-Mining Goes Mainstream - New York Times

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May 20, 2007

BRIGHT IDEAS

Reaping Results: Data-Mining Goes Mainstream

By STEVE LOHR

RODNEY MONROE, the police chief in Richmond, Va., describes himself as a lifelong cop whose expertise is in fighting street crime, not in software. His own Web browsing, he says, mostly involves checking golf scores. But shortly after he became chief in 2005, a crime analyst who had retired from the force convinced him to try some clever software. The programs cull through information that the department already collects, like 911 and police reports, but add new streams of data about neighborhood demographics and payday schedules, for example, or about weather, traffic patterns and sports events to try to predict where crimes might occur. It sounded nutty at first, Mr. Monroe recalled, but the more and more you get into it, the more sense it makes. The technology, for example, pointed to a high rate of robberies on paydays in Hispanic neighborhoods, where fewer people use banks and where customers leaving check-cashing stores were easy targets for robbers. Elsewhere, there were clusters of random-gunfire incidents at certain times of night. So extra police were deployed in those areas when crimes were predicted. The crime rate in Richmond declined about 20 percent last year, and it is down again this year. The Richmond experience is part of a wave of sophisticated computing and mathematical analytics that is moving into the mainstream. Fueling the trend are the digitization of information, ever faster and cheaper computing, and the explosion of online networks and data collection. The results, says Jon M. Kleinberg, a computer scientist at Cornell University, are a revolution in measurement and the introduction of computing and algorithmic processes into the social sciences in a big way. The phenomenon is strikingly evident in economics, business and crime prevention. Productivity research has traditionally focused on manufacturing, because the output of widgets and the headcount of factory workers were easy to measure, notes Erik Brynjolfsson, a professor at the Sloan School of Management at the Massachusetts Institute of Technology. The productivity of information workers much of the nations work force was shunted into a category that economists labeled difficult to measure and given short shrift. But the digital age, he says, has opened the door to detailed measurement of the labor of professionals and office workers who handle ideas and information from customers, suppliers, colleagues and marketers. My thinking on productivity has completely changed, says Mr. Brynjolfsson, who is also a research associate at the National Bureau of Economic Research. By tracking e-mail traffic, instant messages and other digital communications stripped of personally identifiable information he and other researchers are beginning to study the flow of work and ideas through the social networks inside companies minute by minute, bit by bit.

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Reaping Results: Data-Mining Goes Mainstream - New York Times

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Were really on the cusp of being able to understand what goes on inside corporations in a much more scientific way than ever before, he said. Its similar to the way that the microscope opened up biology in the 17th century, so that you could see blood cells. Now, we can start to see bits of information as they flow through the organism of the corporation. The desire to exploit computing and mathematical analytics is by no means new. In the 1960s and 70s, operations research combined computing and math mainly to make factory production work more efficient. And in that period, decision support software was intended to help managers more intelligently use information in the big computing file cabinets databases that were becoming common in corporations. But the earlier efforts were limited mainly to information access and reporting systems, says Thomas H. Davenport, a professor at Babson College. The quantity and quality of data were typically inadequate, he notes, and the software could not do the advanced optimization and predictive calculations of todays programs. Faster and cheaper computing and ample sources of information in digital form plucked from enterprise resource planning systems, point-of-sale devices and Web sites mean that most companies now have the tools to do the kind of competitive analytics that only a relative handful of elite companies could do in the past. Its really starting to become mainstream, says Mr. Davenport, co-author with Jeanne G. Harris of Competing on Analytics: The New Science of Winning (Harvard Business School Press, 2007). The entry barrier, he says, is no longer technology, but whether you have executives who understand this. There are plenty who do. Big retailers like Wal-Mart Stores and Kohls use todays advanced computing and math to more accurately predict what sizes of clothes should go to what stores. Harrahs and other casinos decipher slot-machine results to optimize customer traffic and profits, and they use face-recognition software to identify people with criminal records. And Stockholm and other cities use traffic data and patterns to determine congestion pricing. In the financial industry, Capital One and other banks mine all kinds of transaction data to identify, and stop, fraudulent transactions. And Cemex, the big cement company, uses global positioning satellite locators and traffic and weather data to improve delivery-time performance in Mexico. In the last year or so, Whirlpool, the appliance maker, has begun using new analytics software to automatically scan warranty reports as well as manufacturing, supplier, sales and service data to try to further trim its warranty costs and improve quality. That is no small task, since it sells an average of 25,000 washing machines a day, for example. A human being cannot see and detect all those trends, says John Kerr, the general manager for global quality. With the new computing tools, Whirlpool has trimmed by 30 to 90 days the time required to detect and fix parts or manufacturing problems that cause defects. The math is astounding, Mr. Kerr says. The results help explain why business-intelligence software is one of the hot markets in technology, supplied by companies like SAS, Business Objects, Cognos, MicroStrategy and Information Builders. In March, Oracle offered a hefty $3.3 billion for Hyperion, a maker of business intelligence software. Microsoft has entered the field as well. But packaged software is not the only way to combine powerful computing with deep math tools. The major technology services companies, like I.B.M., Accenture and Hewlett-Packard, have researchers, programmers and industry specialists doing this kind of work for clients. Internet marketing and advertising is a social market made for the use of heavy-duty computing and

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Reaping Results: Data-Mining Goes Mainstream - New York Times

powered computing brains.

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sophisticated mathematics. Investment and start-up money is pouring into the market, and so are many high-

Basem Nayfeh has a Ph.D. from Stanford, where he did his graduate research down the hall from one of Googles founders, Sergey Brin. Mr. Nayfehs thesis was on multiprocessor chips, and he has worked in corporate labs in Silicon Valley on things as diverse as climate and computer design. Today Mr. Nayfeh, 37, is the chief technology officer of Revenue Science, which tracks, analyzes and predicts online behavior to help advertisers find people most likely to buy their products. Many of his fellow computer wizards are in online marketing. If you asked any of us 5 or 10 years ago if we would be in advertising, he says, none of us would have said yes.

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http://www.nytimes.com/2007/05/20/business/yourmoney/20compute.html?ref=technology&pagewa... 20-05-2007

"Searching for Clients From Above; More Small Businesspeople Use Aerial Mapping Services To Scout Potential Customers"
Kevin J. Delaney WSJ, 2007 When a customer recently inquired about roofing five apartment buildings in Grass Valley, Calif., Jay Saber didn't bother to jump in his truck to drive out and take measurements. Mr. Saber, the owner of Saber Roofing Inc. in Redwood City, Calif., instead punched the addresses into Google Inc.'s free Earth software to pull up aerial views of the buildings. He used the program to measure the roofs and eyeball their conditions. After he determined that the job would cost more than $100,000, he emailed the estimate to the client the next day. The software saved Mr. Saber a roughly 350-mile round trip to see the roofs in person. "Instead of nine hours, I spent 10 minutes on the computer," he says. Many small businesspeople like Mr. Saber are turning to Google Earth and other mapping services with aerial imagery such as Microsoft Corp.'s Live Search Maps and closely held Zillow.com to find new clients, estimate job costs and inspect properties, saving time they would have spent driving around. Those services provide access to aerial images of buildings taken by airplanes and satellites, and in some cases let users extract measurements and other useful data as well. Businesses in the past could buy aerial photos, but the cost and time required to find the images, or commission someone to take specific shots, put them out of the reach of most mom-and-pop companies. Microsoft's Live Search Maps and Zillow.com, a real-estate site with extensive aerial imagery, are Web-based. Google Earth requires a software download, though the related Google Maps service is Web-based. The services are all free of charge, although premium versions of Google Earth cost $20 a year or more. Roofers aren't the only ones taking advantage of aerial mapping -- landscapers, pool maintenance people, real-estate agents and insurance companies are also using such services. In some cases, they're checking out specific locations where they're bidding for or working on a job. In others, they're perusing the images for signs -- such as pools or big lawns -- indicating homes that might be potential clients for their services. Some of the mapping services are now adding photographs of buildings and streets taken from the street level, potentially increasing their usefulness to small businesspeople. While the aerial images can be as much as a few years old, things such as roofs and the areas of lawns generally don't change much over that period of time. And the small businesses often find the tools provided by the mapping services are accurate enough for their purposes. Mr. Saber

says he recently was within 50 square feet of accuracy measuring a 10,000-square-foot San Francisco roof using Google Earth that he later measured in person, which he deems remarkably good. Keith Harper of Chattanooga, Tenn., has used Google Earth to prospect for large lawns for his landscaping business to mow. Mr. Harper a few years ago discovered three lawns, each about two acres large, while scouting in Google Earth for potential clients in his neighborhood. The next day he knocked on the homeowners' doors and landed a contract to mow one of them, for a price of around $80 per mow. "I knew the area, just hadn't realized they were there," says Mr. Harper. Looking for homes that might be interested in his pressure-washing services, Mr. Harper also used Google Earth to find houses with concrete patios. Such patios are normally made of lightercolored concrete, so they are visible when zooming in on Google Earth; Mr. Harper says he found several clients this way. George Wittren, who has a landscape design business in Renton, Wash., takes property measurements using Google Earth and looks at the surrounding environment with Zillow.com. "It saves my clients a little bit of money, just in terms of minimizing site visits a little more and saving time," Mr. Wittren says. Even companies that potentially compete with Google and others to provide aerial images to businesses are themselves using the free software. Stockton Infrared Thermographic Services Inc., Randleman, N.C., takes high-resolution and infrared aerial images of buildings that it sells to clients. President Gregory Stockton says the custom infrared images can offer more detail than Google Earth for service providers, such as the condition of roofs and the effectiveness of building insulation. But his company also uses Google Earth to plan out image-gathering flights and check the measurement of roofs it plans to photograph. "It's very, very handy," Mr. Stockton says. Meanwhile, Whitegold Solutions Inc. in San Rafael, Calif., employs about 75 people in India to analyze aerial images from Google Earth and other sources. Using information gleaned from the images, Whitegold's precigeo service offers customers the addresses of prospective clients in specific areas that meet certain criteria -- such as pool owners or people with large lawns. President Jack Zoken says precigeo customers include lawn-care companies, roofers, insurance company adjusters and solar panel installers. He says Whitegold's custom software tools and specialized staff make it more efficient in analyzing the images than its clients would be on their own. He wouldn't be specific about how much the company charges customers, saying the price varies. But some small businesses find they can get real value out of free aerial imaging services without such help. In addition to using Google Earth for jobs, for example, Saber Roofing also relies on it

to decline them. Terry Nagel, the mayor of Silicon Valley town Burlingame, Calif., says she called Saber last year about roofing her home. While she was on the phone, a Saber employee told her he was looking at her roof using Google Earth and that it was too steep for his company to tackle. Ms. Nagel says she found another roofer to handle the job, but was surprised by the experience. "It sort of gives you a feeling that Big Brother is watching," she says.

Turning Customers Into Creators

By JENNA WORTHAM October 23, 2010 A FEW young women are gathered around a conference table dotted with bottles of colorful vitamin drinks, iPod cables and slender laptops. A whiteboard with lime-green writing almost swallows a wall in the room. One bites her lip; another taps lightly on the table. Theyre all quiet, deep in thought, as they decide whether it would be a good idea to add a music feature to the Web site theyre working on a new online shopping site called PlumWillow. The problem, says one of them, Sarah Murphy, is that there are so many genres of music that itd be hard to get it right what people want to listen to. Right, Carla Larin concurs, tossing her wavy brown hair. But itd be cool to have, like, a PlumWillow station full of songs we think are cool. None of these girls are the companys founders, nor are they social media consultants. They arent at PlumWillows office for take your daughter to work day, either. Rather, theyre part of a team of 15- and 16-year-old interns who are being tapped for their own special brand of expertise and insight: a birds-eye view into the life and mind of high school teenagers, exactly the audience that PlumWillow is seeking. They definitely arent shy about telling us what they like and dont like, says Lindsay Anvik, director of marketing at PlumWillow, who helps oversee the internship program at its offices in Manhattan. The interns are also emblematic of how Web-based businesses are doing more than merely shaping their products and services around customer preferences. The companies are corralling those customers in the workplace and making them part of the design and marketing process, according to Susan Etlinger, a consultant at the Altimeter Group, which researches Web technologies and advises companies on how to use them. Of course, search engines like Google and Bing have been racing to tailor their results to individual users, and Facebook is constantly tweaking its algorithm to show members updates and the Web links that are most relevant to them. But whats happening at PlumWillow is a sign of an even more intimate relationship between a company and its customers. Moving beyond the old-fashioned focus group and into co-creation with your demographic is something that will happen more in the next couple of years, Ms. Etlinger says. All business will have to learn how to cope with a new generation of users that are used to their particular experience of the Web.

Because PlumWillow wants to be more than just an online shopping destination its tackling the tricky challenge of recreating the experience of a gaggle of girls going to the mall its success hinges on getting all the details right, down to the pop songs that girls want to hear while hunting for a new pair of slouchy ankle boots. The site needs to be authentic to their voice and how they shop, says Charlie Federman, PlumWillows chairman, whose venture capital firm also led a round of seed funding in the company. Adults trying to recreate that are just asking for trouble because these kids are smart and sophisticated and know when something is phony. The girls were initially brought on as a sanity test, Mr. Federman says. We were all excited and talking about this great idea when we realized a wise thing to do would be to actually talk to some teen girls. Once the conversation began, the dynamic changed. It went from us talking to them to us listening to them, says Scott Stone, co-founder and head of business development at PlumWillow. We decided we might as well institutionalize it and make it part of our culture. Two days a week, Ms. Anvik and Tal Flanchraych, the product manager, grill the girls on all kinds of topics, asking whether the sites comment system is too confusing, for example, or brainstorming about prizes for the sites Halloween contest. Then we go back to our desks and regurgitate everything and think about how it fits into our future planning, Ms. Flanchraych says. Nearly 20 girls have cycled through the company since early this year, PlumWillow says. They help keep the company nimble enough to catch and fix mistakes before they are pushed out to broader audiences, executives say. We watch what they click on, see what they do and how they use the site, says Eric David Benari, another of the sites founders and its chief technology officer. Its not something we can do virtually. Its nothing new for companies to gather input from audiences they serve. Gap recently reverted to its boxy old logo after users complained about a new design. Twitter famously formalized the shorthand of its users as the site began to balloon in popularity. PlumWillow doesnt want to wait until it hears positively or negatively from its customer. It wants customers in-house so it can always be ahead of the curve. For PlumWillow, however, the trick is to find a balance between its own strategic direction and fickle consumer feedback. You dont want to put a bunch of teenagers in charge of the site, but they are revealing the way they think about it, which can be extremely useful for a start-up, says Josh Bernoff, an analyst at

Forrester Research. If you go too far in one direction, you become like a politician pandering to its audience. FOR all the effort that the girls are putting into the site, what do they get in return? School credit and ripe material for college application essays, for starters. But there may be something more in it for them. While many of their peers may spend their internships doing office work at various companies, the PlumWillow interns are getting a taste of the challenges of entrepreneurship. I loved seeing the whole process from start to finish, Ms. Larin says. Six months ago we were looking at PDFs of the site; now we have the live version that we helped create. Its incredibly cool to see.

The New Focus Groups: Online Networks

Proprietary Panels Help Consumer Companies Shape Products, Ads By EMILY STEEL
JANUARY 14, 2008

http://online.wsj.com/article/SB120027230906987357.html# When Del Monte Foods was considering a new breakfast treat for dogs, it sent out a note to an online community of dog owners asking them what they most wanted to feed their pets in the morning. The consensus answer was something with a bacon-and-egg taste. The result: Last summer, Del Monte introduced its Snausages Breakfast Bites. They are flavored like bacon and eggs, and contain an extra dose of vitamins and minerals, which the dog owners said was also important to them. The online community, called "I Love My Dog," isn't some random chat room or yet another Web site for dog enthusiasts -- the group was created by Del Monte. Its 400 members were handpicked to join the private network, which the company uses to help create products, test marketing campaigns and stir up buzz. Such online networks, first cultivated as a tool for consumer research by tech and videogame firms, are now rapidly spreading to companies ranging from Coca-Cola to Walt Disney's ABC Television Studios. They are often cheaper and more effective than phone surveys or traditional focus groups because companies can draw on the participants in a much broader and deeper way than they could in an offline setting. The sites often bear some resemblance to other social-networking sites, where members create profile pages and post to discussion boards. Companies use them to administer polls, chat in real time with consumers and even ask members to go to the store to try out specific products. The rapid back-and-forth between the company and the online community can help substantially shorten the product-development cycle. It can typically take a year or more from the time a company comes up with a product idea until the item arrives in stores. For Snausages Breakfast Bites, that process took six months. During that time, Del Monte contacted "I Love My Dog" members dozens of times, both as a group and individually. The company has also tapped members for prelaunch insights into other products, including a 50-calorie pack of its Pup-Peroni treat that recently landed on store shelves. "It is not just a focus group that you see for three hours; you are developing a relationship with these pet parents," says Gala Amoroso, Del Monte's senior manager of consumer insights. But as with any social-networking site, the consumer companies that run these private networks face the constant risk of member boredom -- and ultimately, member flight.

There can be a fair amount of turnover on the private networks, and the companies that set them up have to constantly add games and other features -- as well as provide incentives such as coupons, giveaways and sneak peaks at new products -- to keep members around. The private networks are part of companies' continuing efforts to figure out how to use the Web to assess and shape the way consumers think about their products. Some have created profiles on popular social-networking sites such as Facebook and News Corp.'s MySpace, while others, including Procter & Gamble, have set up their own socialnetworking sites. But many of those efforts have fallen flat, because people typically join a social-networking venue not to talk about brands but to socialize with friends. Other marketers, particularly in the tech community, have tried scanning blogs for consumer insights. Networks such as "I Love My Dog" help remove some of the guesswork for marketers, by letting brands know exactly to whom they are talking -- and giving them more control over the discussions. The companies work with technology firms such as MarketTools and Passenger to create the members-only networks, whose participants are often drawn from a company's internal databases. "Otherwise, it is completely controlled by the users. That is allowing the inmates to run the asylum," says Jonathan Edwards, an analyst at market-research firm Yankee Group. Some companies are using the private online communities to test new advertising campaigns. Sylvan Learning, for instance, is working with MarketTools to survey a group of mothers as it creates a new national ad campaign to launch next month. Sylvan sent mothers with children in first through 12th grades potential story boards for a possible TV commercial. Through online chats, email and other research, Sylvan found that it needed to focus on the success children can have through tutoring instead of the struggles kids face with school. To conduct similar research in the past, Sylvan has interrupted people at places like shopping malls or called them at home. Because mothers participating in the online network are generally in their own homes and choose to participate in the research, Sylvan thinks they are relaxed and willing to give more honest answers. While spending on these proprietary market-research networks is a small piece of total market-research spending, it is growing. In 2007, spending on proprietary panels in the U.S. came to $40 million, according to Inside Research, a firm that tracks marketresearch spending. That figure is projected to grow to $69 million this year. Now, some of the big social-networking sites are thinking about ways they can tap their own communities to generate market research. MySpace, for instance, says it is talking with Passenger about how it could sell advertisers the option of creating such private communities using MySpace members.