Pogue’s Posts: A Reader’s Question: How Do You Hang Up on Voice Command?

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DealBook: Some Question Numbers in H.P.'s Write-Down

The “kitchen sink” charge, in which all kinds of write-downs and costs are rolled into one gargantuan number, is something of a ritual in corporate America. The $8.8 billion charge that Hewlett-Packard announced on Tuesday, however, shows why such moves should be scrutinized carefully.

H.P. took the charge in its fourth quarter to reflect the reduced value of Autonomy, the British software firm that it bought last year for about $10 billion. The computing giant said it had discovered “serious accounting improprieties” at Autonomy, including what it said were ruses that inflated revenue and profitability metrics.

H.P. contends that such accounting improprieties were behind more than $5 billion of the $8.8 billion charge. For some analysts, that didn’t add up.

“Out of the $8.8 billion, I’d be very surprised if more than a couple of billion was due to accounting improprieties,” said Aswath Damodaran, a professor of finance at New York University’s Stern School of Business.

In other words, the skeptics say they think H.P. may be overstating the financial effects of the supposed accounting chicanery. They say that H.P.’s management may have wanted to write off as much of Autonomy as possible, and that the accounting allegations allowed it to increase the charge.

This move, of course, hurt H.P’s fourth-quarter earnings. But a big charge has the advantage of cleaning the slate for the next fiscal year for the company’s chief executive, Meg Whitman. With Autonomy now only a small part of H.P.’s balance sheet, there is a much smaller chance that the troubled division will lead to more embarrassing write-downs. The Autonomy acquisition was initiated by H.P.’s previous chief executive, Léo Apotheker.

Evaluating the validity of the charge requires understanding exactly what H.P. was writing down.

When a company accounts for an acquisition, it assesses the value of the target, subtracting its liabilities from its assets. It then compares this so-called fair value with the price it is paying. If it is paying more than the fair value, the difference is recorded as good will on the buyer’s balance sheet. When H.P. acquired Autonomy, it got roughly $4 billion of intangible assets (Autonomy’s expertise, intellectual property and brand recognition) and recorded roughly $6 billion of good will. In the charge announced Tuesday, H.P. slashed the value of both, effectively saying Autonomy was worth 80 percent less than it originally thought.

In some ways, an 80 percent reduction might seem deserved, if Autonomy was in fact cooking its books. But despite their accusations, H.P. executives in a conference call did not seem to present a dire picture of Autonomy. The ruses, if that’s what they were, helped revenue and profits, but probably not enough to account for $5 billion of the charge, said Anup Srivastava, an assistant professor at the Kellogg School of Management at Northwestern University. “I can’t justify it,” he said.

Autonomy’s revenue benefited from one alleged ruse, but only by 10 to 15 percent, according to Hewlett. Catherine A. Lesjak, the H.P. chief financial officer, said Tuesday that without accounting tricks, Autonomy would have appeared less profitable. But it was still making money, according to her figures.

Without the tricks, Ms. Lesjak said, Autonomy probably had operating margins as high as 30 percent, compared with as much as 45 percent with them. And on Tuesday, Ms. Whitman said Autonomy could still be something of a “growth engine” for H.P.

Still, some people think the charge may be reasonable. In assessing the size of an impairment charge, companies focus on projections of cash flows from the affected divisions. If H.P. can show that Autonomy’s cash generation is far below its expectations, and that cooking the books largely hid that, the charge may be sound, said Cynthia Jeffrey, associate professor of accounting at Iowa State University.

“If there’s fraud involved and that wasn’t found during due diligence, the whole thing could be valueless,” she said.

H.P. could argue that the high valuation it placed on Autonomy’s cash flows looks all the more untenable in light of the legerdemain allegations, and that that’s why it had to take the charge.

When asked to comment on the charge, an H.P. spokesman, Michael Kuczkowski, e-mailed a list of what he said were the improper accounting maneuvers at Autonomy.

“Because our investigation into the accounting improprieties and misrepresentations at Autonomy remains ongoing, and given our referral of this matter to regulatory authorities in the U.S. and the U.K., it would not be appropriate for us to provide a more detailed description at this time,” he said.

ONLY White Men Can Jump: Black Civil Rights Leaders Question The Minnesota Timberwolves Mostly WHITE Roster!

A team full of “Billy Ho’s”???

Via Minnesota Star Tribune

Dante Cunningham noticed when he reported for work in Minnesota this fall that his new Timberwolves team is unlike any for which he has ever played.

“Day One, we were all in the elevator and I kind of looked up,” he said about a crowded ride with many of his new teammates, “and I was just like, ‘Where is everybody?’ “

Everybody, in this case, being black teammates. Come opening night on Friday, Cunningham will be one of five black players on a 15-man Wolves team that has reversed the National Basketball Association’s historical racial percentages with a roster that is the league’s whitest since the Boston Celtics teams of the 1980s.

Raised in Washington, D.C., and educated at Villanova, Cunningham played his first four professional seasons for three different teams in a league where American-born black players constituted 78 percent of roster spots last season and have been at least 75 percent since 1991-92.

Things that make you go “hmmmmmm…”

Twin Cities black leaders have noticed, suggesting the franchise strategically has rolled back the calendar by decades in a league that long has been at the forefront of diversity among America’s professional sports leagues.

“How did we get a roster that resembles the 1955 Lakers?” asked Tyrone Terrell, chairman of St. Paul’s African American leadership council. “I think everything is a strategy. Nothing happens by happenstance.”

That strategy, Terrell and others in the black community believe, is to sell tickets to the Wolves’ fan base, which is overwhelmingly white.

Another black community leader says:

Ron Edwards, a longtime Minneapolis civil rights advocate, said he remembers a day last winter when he was watching the Wolves and the only black player on the floor was Wes Johnson, a situation he calls “somewhat disturbing.” His sentiments grew stronger, he said, as he watched the team’s roster grow even more white this offseason.

“It raises some real questions to me about what’s really intended,” Edwards said. “I think, personally, that it was calculated. Is this an attempt to get fans back in the stands? Minnesota, after all, is a pretty white state.”

Pretty strong accusations, the Timberwolves (obviously) deny that any discrimination has taken place.

“Patently false,” said David Kahn, Wolves president of basketball operations. He and other Timberwolves executives instead call it a coincidence of circumstance and a purposeful plan to scour the globe for the best players they can possibly obtain. They will start the season with players from Russia, Montenegro, Spain and Puerto Rico, a total of five international players among a group that also includes five white American-born players.

Ultimately, the players say they just wants to play with talented guys, regardless of race.

“Obviously, our team is a little unique in [racial makeup], but everybody on our team gets along and everybody on our team can really play,” guard Will Conroy said. “You’ve got a guy like Chase Budinger who can jump out of the gym and then you’ve got Brandon who’s not jumping out of the gym, which is the opposite. Usually you have the black guys jumping out of the gym, but on our team it’s switched around.”

“Honestly, I couldn’t tell you I’ve had more than two or three white guys on a team before,” Cunningham said. “It just happened to get dealt this way. There’s just as many athletic white guys on this team as there are black guys who are athletic. It’s no big deal. We’re here to play ball, so regardless of whether we’re white or black or yellow or purple, we’re going to go out and play.”

What do YOU think? Does it appear that the Timberwolves are trying to limit the “blackness” on their team to appease their mostly-white fanbase??

Hit that comments section and fill it up!

Image via Star Tribune

Bits Blog: Authorities Question Head of Google in Brazil Over Video

The authorities in Brazil questioned Google’s senior executive there on Wednesday over a YouTube video that criticized a local mayoral candidate, and a court ruled that YouTube must block the video.

A Brazilian judge had issued a warrant for the arrest of Fabio Coelho, Google’s country director in Brazil, because YouTube, which is owned by Google, had not yet blocked or removed the video. Authorities said it violated a local law against ads that “offend the dignity or decorum” of a candidate, according to Reuters.

YouTube had appealed Brazil’s request to remove the video, and the arrest warrant was issued while YouTube awaited a decision on the appeal. Late Wednesday, YouTube learned that a judge had denied the appeal and forced YouTube to block the video, Mr. Coelho said in a post on Google’s Brazil blog Thursday.

“We are deeply disappointed that we have never had the full opportunity to argue in court that these were legitimate free speech videos and should remain available in Brazil,” Mr. Coelho wrote.

Mr. Coelho was released after being questioned by the police.

The incident comes as Google and YouTube face intense scrutiny and pressure over an anti-Islam video on YouTube that has sparked deadly riots around the world. YouTube blocked the video in some countries and not in others, raising questions about the definition of free speech and who gets to control what people say on the Internet.

There have also been reports that Brazil is trying to block the anti-Islam video, though YouTube said it had not received a formal request.

YouTube’s policy is to review videos that are flagged as inappropriate by users or as unlawful by a government or court. YouTube generally only removes videos if they are illegal in a country in which it operates, or if they violate YouTube’s guidelines against things like hate speech and pornography.

YouTube receives many such requests, and the company says it pushes back as often as possible in favor of free speech, including in the Brazilian case.

“Despite all this, we will continue to campaign for free expression globally — not just because it’s a key tenet of free societies, but also because more information generally means more choice, more power, more economic opportunity and more freedom for people,” Mr. Coelho wrote.

He added that the YouTube user who posted one of the controversial videos had removed it and closed the account, “showing just what a chilling effect these episodes can have on free speech.”

The Media Equation: Yahoo’s Big Question: What Is It?

That straightforward question has so far baffled the people who run the company.

I got a taste of the fuzziness when I visited Carol Bartz, then the chief executive, back in 2010. She was funny, profane and articulate, except on the question of what the company is. After five minutes of listening to her I still had no idea. Seventeen years after the company was founded, you still have to wonder whether the frothy trademark Yahoo! should be replaced with Yahoo? to convey the uncertainty of purpose.

Now that question falls to Marissa Mayer, who was named the new chief executive last week. Anybody who has followed tech knows she has remarkable credentials and savvy — she embodied much of Google’s intellectual charisma — but her tenure will be a pass/fail test based on answering that single question.

I’m going to take a whack at it and say that Yahoo is a media company, mostly by accident (more on that in a bit). Yes, its headquarters in Silicon Valley are filled with technologists and have the familiar trappings of a digital enterprise — foosball, anyone? — but for most Americans, Yahoo is where they get news.

In business, people will tell you that everything else is secondary to being first. And Yahoo, despite its tattered reputation, is No. 1 in 10 content categories, according to the measurement service comScore, including news, finance, sports, entertainment and real estate. Yahoo reaches more than 75 percent of the total Internet audience in the United States, with 167.2 million unique users in June. On any given day, 30 million or more people stop by. Globally, about 700 million people visit the site in 30 languages every month.

What they get, more often than not, is carefully selected and displayed commodity news drawn from a variety of sources, but they also can read smart proprietary reporting from one of the 300 journalists — that’s a huge newsroom these days — who work for Yahoo.

It is worth remembering when people start talking about poor, feckless Yahoo that the company suffers from a severe contextual handicap. No, it is not Google or Facebook, but it isn’t nothing, either. Second-quarter earnings announced last week reflected a slide of 4.4 percent from the year before, but the company had $1.22 billion in revenue and earned $226.6 million. Display advertising was actually up, to $534.9 million, compared with $523.5 million from the year before.

So Ms. Mayer may be taking over a stagnating company, but it is not a collapsing one. Yahoo has what all media companies want, which is a large audience. The company just doesn’t know what to do with it.

When Ms. Mayer starts poking around under the hood of the news operation, she will find a home page that has the kind of traffic that can melt servers when it points to another site.

The secret sauce of Yahoo’s front page is more clicky than sticky: the slide show of news that runs at the top is not very deep, but it is difficult to resist. Editors have real-time analytics on click-through rate and can adjust the presentation on the fly; underperformers are quickly dumped or reconfigured. Yahoo uses a combination of technological and human curators to feed a robust audience. (Lest you think that’s easy, compare the home page to that of AOL, another legacy portal. Yahoo smashes AOL flat.)

On Friday, news of the shooting in Aurora, Colo., was mashed up on Yahoo’s home page with an article about a Taiwanese teenager who had died after 40 hours of video gaming and a picture of a Burger King employee standing on tubs containing lettuce about to be served to customers. But that was juxtaposed with a thoughtful, original take on why the New York Knicks had not signed Jeremy Lin.

Yahoo did not set out to be in the news business — it ended up there by default. It was delivering useful apps to consumers long before there was an iPad. Early excellence in search and e-mail generated a huge realm of users. Its ability to help consumers use data led to remarkable success in its finance and fantasy sports portals, which generated huge, loyal comment groups.

Eventually, Yahoo began feeding its audience bare headlines on news it bought from The Associated Press. It added pictures and began making other content-sharing agreements, while adding its own journalists over time.

Yahoo Sports was the prototype for what the company hoped would be a broader play in proprietary news. The money from fantasy sports bought must-read bloggers doing timely work in various verticals, deep investigative projects and big-name columnists.

E-mail: carr@nytimes.com;

Twitter: @carr2n

The Media Equation: Yahoo’s Big Question: What Is It?

That straightforward question has so far baffled the people who run the company.

I got a taste of the fuzziness when I visited Carol Bartz, then the chief executive, back in 2010. She was funny, profane and articulate, except on the question of what the company is. After five minutes of listening to her I still had no idea. Seventeen years after the company was founded, you still have to wonder whether the frothy trademark Yahoo! should be replaced with Yahoo? to convey the uncertainty of purpose.

Now that question falls to Marissa Mayer, who was named the new chief executive last week. Anybody who has followed tech knows she has remarkable credentials and savvy — she embodied much of Google’s intellectual charisma — but her tenure will be a pass/fail test based on answering that single question.

I’m going to take a whack at it and say that Yahoo is a media company, mostly by accident (more on that in a bit). Yes, its headquarters in Silicon Valley are filled with technologists and have the familiar trappings of a digital enterprise — foosball, anyone? — but for most Americans, Yahoo is where they get news.

In business, people will tell you that everything else is secondary to being first. And Yahoo, despite its tattered reputation, is No. 1 in 10 content categories, according to the measurement service comScore, including news, finance, sports, entertainment and real estate. Yahoo reaches more than 75 percent of the total Internet audience in the United States, with 167.2 million unique users in June. On any given day, 30 million or more people stop by. Globally, about 700 million people visit the site in 30 languages every month.

What they get, more often than not, is carefully selected and displayed commodity news drawn from a variety of sources, but they also can read smart proprietary reporting from one of the 300 journalists — that’s a huge newsroom these days — who work for Yahoo.

It is worth remembering when people start talking about poor, feckless Yahoo that the company suffers from a severe contextual handicap. No, it is not Google or Facebook, but it isn’t nothing, either. Second-quarter earnings announced last week reflected a slide of 4.4 percent from the year before, but the company had $1.22 billion in revenue and earned $226.6 million. Display advertising was actually up, to $534.9 million, compared with $523.5 million from the year before.

So Ms. Mayer may be taking over a stagnating company, but it is not a collapsing one. Yahoo has what all media companies want, which is a large audience. The company just doesn’t know what to do with it.

When Ms. Mayer starts poking around under the hood of the news operation, she will find a home page that has the kind of traffic that can melt servers when it points to another site.

The secret sauce of Yahoo’s front page is more clicky than sticky: the slide show of news that runs at the top is not very deep, but it is difficult to resist. Editors have real-time analytics on click-through rate and can adjust the presentation on the fly; underperformers are quickly dumped or reconfigured. Yahoo uses a combination of technological and human curators to feed a robust audience. (Lest you think that’s easy, compare the home page to that of AOL, another legacy portal. Yahoo smashes AOL flat.)

On Friday, news of the shooting in Aurora, Colo., was mashed up on Yahoo’s home page with an article about a Taiwanese teenager who had died after 40 hours of video gaming and a picture of a Burger King employee standing on tubs containing lettuce about to be served to customers. But that was juxtaposed with a thoughtful, original take on why the New York Knicks had not signed Jeremy Lin.

Yahoo did not set out to be in the news business — it ended up there by default. It was delivering useful apps to consumers long before there was an iPad. Early excellence in search and e-mail generated a huge realm of users. Its ability to help consumers use data led to remarkable success in its finance and fantasy sports portals, which generated huge, loyal comment groups.

Eventually, Yahoo began feeding its audience bare headlines on news it bought from The Associated Press. It added pictures and began making other content-sharing agreements, while adding its own journalists over time.

Yahoo Sports was the prototype for what the company hoped would be a broader play in proprietary news. The money from fantasy sports bought must-read bloggers doing timely work in various verticals, deep investigative projects and big-name columnists.

E-mail: carr@nytimes.com;

Twitter: @carr2n

The Media Equation: Yahoo’s Big Question: What Is It?

That straightforward question has so far baffled the people who run the company.

I got a taste of the fuzziness when I visited Carol Bartz, then the chief executive, back in 2010. She was funny, profane and articulate, except on the question of what the company is. After five minutes of listening to her I still had no idea. Seventeen years after the company was founded, you still have to wonder whether the frothy trademark Yahoo! should be replaced with Yahoo? to convey the uncertainty of purpose.

Now that question falls to Marissa Mayer, who was named the new chief executive last week. Anybody who has followed tech knows she has remarkable credentials and savvy — she embodied much of Google’s intellectual charisma — but her tenure will be a pass/fail test based on answering that single question.

I’m going to take a whack at it and say that Yahoo is a media company, mostly by accident (more on that in a bit). Yes, its headquarters in Silicon Valley are filled with technologists and have the familiar trappings of a digital enterprise — foosball, anyone? — but for most Americans, Yahoo is where they get news.

In business, people will tell you that everything else is secondary to being first. And Yahoo, despite its tattered reputation, is No. 1 in 10 content categories, according to the measurement service comScore, including news, finance, sports, entertainment and real estate. Yahoo reaches more than 75 percent of the total Internet audience in the United States, with 167.2 million unique users in June. On any given day, 30 million or more people stop by. Globally, about 700 million people visit the site in 30 languages every month.

What they get, more often than not, is carefully selected and displayed commodity news drawn from a variety of sources, but they also can read smart proprietary reporting from one of the 300 journalists — that’s a huge newsroom these days — who work for Yahoo.

It is worth remembering when people start talking about poor, feckless Yahoo that the company suffers from a severe contextual handicap. No, it is not Google or Facebook, but it isn’t nothing, either. Second-quarter earnings announced last week reflected a slide of 4.4 percent from the year before, but the company had $1.22 billion in revenue and earned $226.6 million. Display advertising was actually up, to $534.9 million, compared with $523.5 million from the year before.

So Ms. Mayer may be taking over a stagnating company, but it is not a collapsing one. Yahoo has what all media companies want, which is a large audience. The company just doesn’t know what to do with it.

When Ms. Mayer starts poking around under the hood of the news operation, she will find a home page that has the kind of traffic that can melt servers when it points to another site.

The secret sauce of Yahoo’s front page is more clicky than sticky: the slide show of news that runs at the top is not very deep, but it is difficult to resist. Editors have real-time analytics on click-through rate and can adjust the presentation on the fly; underperformers are quickly dumped or reconfigured. Yahoo uses a combination of technological and human curators to feed a robust audience. (Lest you think that’s easy, compare the home page to that of AOL, another legacy portal. Yahoo smashes AOL flat.)

On Friday, news of the shooting in Aurora, Colo., was mashed up on Yahoo’s home page with an article about a Taiwanese teenager who had died after 40 hours of video gaming and a picture of a Burger King employee standing on tubs containing lettuce about to be served to customers. But that was juxtaposed with a thoughtful, original take on why the New York Knicks had not signed Jeremy Lin.

Yahoo did not set out to be in the news business — it ended up there by default. It was delivering useful apps to consumers long before there was an iPad. Early excellence in search and e-mail generated a huge realm of users. Its ability to help consumers use data led to remarkable success in its finance and fantasy sports portals, which generated huge, loyal comment groups.

Eventually, Yahoo began feeding its audience bare headlines on news it bought from The Associated Press. It added pictures and began making other content-sharing agreements, while adding its own journalists over time.

Yahoo Sports was the prototype for what the company hoped would be a broader play in proprietary news. The money from fantasy sports bought must-read bloggers doing timely work in various verticals, deep investigative projects and big-name columnists.

E-mail: carr@nytimes.com;

Twitter: @carr2n