February 2008 Archives

Great Response by Southwest Airlines

Using YouTube to respond to two teenage passengers who claimed that they were too pretty and had been "banned for life".

Leon Black on Current Markets & Realogy

Reuters:

"For this to be an attractive private equity market again, with tougher financing we are going to have to have a parallel of lower prices and on that basis we're happy to over-equitise deals and, hopefully, in a few years refinance them," he said.

But if equity prices fail to decline and tougher financing conditions remain, private equity returns will weaken, he added.

In terms of challenges posed by slower economic growth to companies in Apollo's portfolio, Black said U.S. real estate brokerage Realogy Corp, which it bought last year for $6.65 billion, was already affected.

Consumer and retail companies were also suffering but businesses operating in the packaging, chemicals, gambling and transport industries were doing quite well, he said.

A conversation with Valdis Krebs about social network analysis

Jon Udell:

For this week’s ITConversations show, introduced by special guest introducer Lynne Windley, I got together with Valdis Krebs, who’s been mapping and analyzing social networks since Mark Zuckerberg was in diapers.

I can’t remember how I first got to know Valdis, but this snippet from a 2004 interview — for an InfoWorld cover story on enterprise social software — gives you a sense of what he does and how he thinks:

IW: Social network analysis can reveal that highly connected people are more valuable than the org chart or salary plan suggests. Is this becoming a factor?

VK: Yes. I did a project with an investment bank, and they took into account who was most valuable in getting a deal done, and factored that into the bonus. I’ve had execs inside and outside IBM saying, “If this data is true, then I’m not paying the people who bubbled up to the top what they’re worth.”

Do Consumers Perceive Precise Prices to be Lower than Round Prices?

Manoj Thomas, Daniel H. Simon , and Vrinda Kadiyali:

In considering price tags, do consumers perceive round numbers to be larger or smaller than precise numbers of similar value? The authors examined the prices of 27,000 homes in South Florida and Long Island, N.Y., and their results showed that homes priced with a rounded number (for example, US$550,000) sold for about 0.73 percent less on average than homes with a more precise price (say, $553,505). Furthermore, the authors found that buyers perceived precise prices to be lower, and were therefore willing to pay an amount closer to the asking price than they were when the price was a round number.

Bottom Line:
People tend to perceive precise prices as less than round prices of similar value. This discovery could have significant implications for buyers, sellers, and pricing strategists in any number of industries.

350K PDF File. Clusty search.

Stimulus Plan Aids Buyers of High-Priced Homes

Katie Hafner:

nd if the limit on loans backed by a government-backed housing finance entity like Fannie Mae is raised from $417,000 to the full $729,750 she has been hearing about, Ms. Kilgore said, “we will be able to get a 30-year fixed mortgage for less than what we’re paying now plus our homeowner’s dues.”

The temporary change in the loan limits is not about to revive the housing market on its own. But in some of the higher-priced regions of the country that have been hit hardest by the flagging real estate market, it could make a big difference. For if anything is going to breathe new life into the local housing economy in places like the San Francisco Bay Area, San Diego, Washington and Boston, it is home buyers emboldened by the prospect of larger loans at lower interest rates.

LA Rent Prices Rising

Andrew Chang:

Apartment rents are indeed climbing, hitting an average of $1,494 a month in Southern California for the last three months of 2007, an increase of 4.5% over the same period a year earlier, according to a survey of larger apartment complexes by RealFacts, a property research firm.

Yet housing prices are falling sharply. The median price for homes and condominiums in the six-county region fell to $415,000 last month, 18% below last year's peak, according to DataQuick Information Systems.

But just because home prices are falling doesn't mean rents should be dropping too. In fact, home values and rents often move in opposite directions, real estate analysts said.

"The downward pressure on house prices and the upward pressure on rents are in some respects reciprocal of one another," said Stuart Gabriel, director of the Richard S. Ziman Center for Real Estate at UCLA. "The two go hand in hand."

The Cachet of Professional Home Photos

Kimberly Stevens:

THERE has always been a certain status attached to owning a home that is featured in a magazine. And a certain pleasure, for a homeowner, in leaving the evidence lying casually on the coffee table.

But now there’s another way to flaunt the importance of your house, and your affection for it: hire a well-known photographer yourself to immortalize it. To some, that’s even better than a magazine photo spread, because the results can be displayed in entry halls and over fireplaces, just like any piece of art, or bound in a book.

“We fetishize homes now, in a way that we never used to,” said Todd Eberle, a photographer whose work appears in Vanity Fair and in prominent museums. He has been hired by many celebrities, including Martha Stewart and Bill Clinton, to document their homes and offices. His clients, he said, want him both to memorialize their homes as they really are, and at the same time to “take it to a different level, and somehow improve upon the reality.”

Jon Miller, an architectural photographer and an owner of Hedrich Blessing, a firm in Chicago that has been documenting American architecture since the 1930s, said he had seen a marked increase in homeowner commissions in recent years.

“People have a lot of pride in their homes, and they want to glamorize them,” he said.

Marketing HR

Seth Godin:

What if you started acting like the VP of Talent? Understanding that talent is hard to find and not obvious to manage. The VP of Talent would have to reorganize the department and do things differently all day long (small example: talent shouldn't have to fill out reams of forms and argue with the insurance company... talent is too busy for that... talent has people to help with that.)

How Sticky Is Membership on Facebook? Just Try Breaking Free

Maria Aspan:

Are you a member of Facebook.com? You may have a lifetime contract.

Some users have discovered that it is nearly impossible to remove themselves entirely from Facebook, setting off a fresh round of concern over the popular social network’s use of personal data.

While the Web site offers users the option to deactivate their accounts, Facebook servers keep copies of the information in those accounts indefinitely. Indeed, many users who have contacted Facebook to request that their accounts be deleted have not succeeded in erasing their records from the network.

“It’s like the Hotel California,” said Nipon Das, 34, a director at a biotechnology consulting firm in Manhattan, who tried unsuccessfully to delete his account this fall. “You can check out any time you like, but you can never leave.”

It took Mr. Das about two months and several e-mail exchanges with Facebook’s customer service representatives to erase most of his information from the site, which finally occurred after he sent an e-mail threatening legal action. But even after that, a reporter was able to find Mr. Das’s empty profile on Facebook and successfully sent him an e-mail message through the network.

Scrutiny Tightens for Title Insurers


John Wilke:

The collapse of the housing boom is bringing harsh new scrutiny to the $17 billion title-insurance business, including allegations that insurers colluded illegally and paid kickbacks to agents or brokers to get business.

In the latest legal challenge, an antitrust suit filed Feb. 1 in federal court in Brooklyn accuses the four firms that dominate title insurance nationwide of illegally fixing prices in New York state. Although insurance firms have limited immunity from antitrust claims because state regulators approve their rates, the suit accuses title firms of concealing improper costs underlying their rate requests.

The recent housing bust is putting the spotlight on what critics see as abusive practices across the housing industry. Mortgage brokers and lenders who pushed high-cost loans onto borrowers and appraisers who bent their estimates to ensure deals could go through are among those facing pressure to clean up their acts.

The New York suit, which seeks to represent all home buyers in the state, says consumers were forced to pay hundreds of millions of dollars in extra closing costs.

At least six states, including California, Colorado, Florida and New York, have targeted alleged kickbacks and payments by title insurers to agents and others. Since 2003, title insurers, their agents or affiliates have paid more than $100 million in fines, penalties and settlement money in cases brought by state and federal regulators, according to a 2007 report by the Government Accountability Office. The report also cited a lack of competition in most states.

When Facebook Ads Go Wrong

Richard MacManus:

Social ads have social consequences. Josh Kopelman, Managing Director of VC firm First Round Capital, recently found that out. Kopelman, a very savvy web 2.0 investor who got in early with StumbleUpon, Odeo, LinkedIn, and others, tried an experiment with Facebook's controversial SocialAds advertising system. He spent $50 to test the platform, with an advertisement for his VC fund. Specifically he ran an advert targeting Yahoo and Microsoft employees who may be thinking of leaving their jobs to do a startup (see top left image).

Initially the experiment seemed to be working, with reports of Yahoo employees clicking the ads. But in a follow-up post, Kopelman discovered the ads had unintended consequences.

It turned out that the advert was being displayed alongside photos of current Yahoo employees - people who had previously joined the First Round Capital Facebook group. In other words, they were connected in Facebook's system by being associated with both Yahoo and First Round Capital via its Groups feature. But the way the advert was displayed made it seem like those people were leaving Yahoo, something which Josh Kopelman had no intention of implying. One of the Yahoo people affected wrote to Josh:

$16 Billion For Title Insurance?

Peter Viles:

If you could scan the entire American economy for money that is thrown away -- gift cards never redeemed, home gyms never used, etc. -- one of the biggest piles you would find is the title insurance industry. Sixteen billion a year -- that's nearly double the size of what Hollywood movies gross in a year in American theaters.

From LATimes.com: "Americans spend more than $16 billion annually for title insurance when buying, selling or refinancing their homes. But few people question the expense, even though they're probably paying too much, say consumer advocates and government regulators."

More: "What's more, title insurers have been fined repeatedly for illegally giving concert tickets, trips and even cash kickbacks to real estate agencies, lenders and builders. Consumers typically go with a recommendation from one of those sources, experts say, and may not even realize that they have a choice."

Real estate agents sue Google for links to stories about them

Mark Frauenfelder:

Real estate agents Mark Forytarz and Paul Castran of Castran Gilbert in Victoria Australia have filed a defamation lawsuit against Google. The two agents said that they asked Google to remove allegedly defaming links to articles about them, but that Google did not take any action.

Trying to Clear Fog From Pension Plans

Mary Williams Walsh:

How to find out which pension funds may be in trouble? One way is to wait until April, when — for the first time — the new law will require all companies that may have to curtail benefits to notify the affected workers in writing. The Pension Rights Center, a nonprofit consumer group in Washington, can explain the workings of the new law.

Employees who want more information before April may find it helpful to experiment with one of the online tools that make detailed pension information readily available. They won’t give a crisp answer at the click of a mouse, but they can give some sense of which way a pension plan has been heading in the last few years.

One such database comes from AtPrime Media, which offers a Web site with tax, pension and other information geared toward people over the age of 50 (www.AtPrime.com). The database is free but requires registration.

Called the Pension Inspector, the database contains extensive information on hundreds of thousands of pension and other retirement plans in the private sector, culled from annual reports that such plans must file with the Internal Revenue Service.

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