Why So Many People Hate The iPhone 5

As soon as I got the official news up about the iPhone 5, the comments started rolling in. They were overwhelmingly negative. 

Now, it's easy to assume this is just a vocal minority of Apple haters flooding the comments section. The Tea Party of the tech world. But if you look past all the spelling errors and vitriol, there are some intelligent nuggets buried in there.

 Most notably, a lot of people took Apple to task for including hardware upgrades that already feel outdated because Androidphones have had them for years now. Plus, there's all the stuff Apple didn't include.

Here's the breakdown:

The iPhone 5's two biggest hardware updates are its larger 4-inch screen and 4G LTE radio. It's extremely rare to find a new Android phone nowadays with anything smaller than a 4-inch screen. In fact, Android manufacturers continue to make their phones bigger, sometimes absurdly so. With the iPhone 5, it's clear Apple finally broke down and realized consumers love large screens. It's also clear those who have defended Apple's decision to stick with a smaller screen were dead wrong. 

--> </ br> So, good point. Four-inch displays are nothing new in smartphones.

Then there's LTE, the fastest wireless data standard available. LTE has been around for over a year, starting with HTC's Thunderbolt Android phone that launched in spring 2011. Since then, nearly every premium non-iPhone device that's launched ran on LTE networks. It took a year and a half for the iPhone to achieve that.

So, good point. LTE has been around for an eternity by tech standards. It's a bummer Apple didn't include it in the iPhone 4S last year.

-->
</ br> As for what Apple left out of the iPhone 5, there's Near Field Communication (NFC) and wireless charging. NFC chips let you make mobile payments with your phone and swap content with other devices just by tapping them together. Wireless charging lets you charge your phone by resting it on a power pad. (We saw wireless charging last week with Nokia's new Windows Phone, the Lumia 920.) Both of these features are increasingly becoming standard in smartphones, but Apple didn't include them in the iPhone 5.

Bad point. I still don't think NFC is ready for widespread use. Mobile payments are cool in theory, but the infrastructure at point of sale isn't there yet. The world isn't ready to ditch cash and credit cards for a phone. And I'm on the fence about wireless charging. It seems cool in theory, but charging is much slower using one of those wireless pads. I'd rather have my phone get to 100% in several minutes, not several hours. As history shows us, Apple isn't going to put features like these in the iPhone just because it can. It's going to wait until they've perfected them.

At the end of the day, the criticism doesn't matter. Apple leapfrogged everyone by several years when it introduced the first iPhone. Today, its mobile ecosystem is the best there is. Its mobile operating system is the best there is. And that's what really grabs people's attention. Software. Not hardware tricks and specs.  News from Yahoo News

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Sahara asked to return Rs.17,400 crore to investors

In a major setback to the Sahara Group, the Supreme Court on Friday directed two of its companies to refund around Rs 17,400 crore to their investors within three months with 15 per cent interest.

A bench of justices K.S. Radhakrishnan and J.S. Khehar directed SEBI to take action against the companies, Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, if they fail to refund the money.

The Supreme Court allowed the regulatory body to attach properties and freeze bank accounts of the two companies if they did not comply with its order.

The bench further directed SEBI to conduct investigation against the companies to find out their actual subscriber base besides getting other relevant information.

It directed the companies to furnish all their documents and account details before the regulatory body and appointed a former judge B.N. Aggarwal to oversee the probe by SEBI against the two Sahara firms.

Keywords: SEBI, Sahara Group, Supreme Court
News By:The Hindu.com

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Small Firms Seek Skilled Workers but Can't Find Any

It isn't the just big manufacturers, oil companies and railroad operators that are struggling to hire skilled workers.
The "Help Wanted" sign is also a regular fixture at small firms such as Group One Safety & Security in Stuart, Fla., despite the high national unemployment rate, which was 8.2% in June.
About 31% of 811 small-business owners and chief executives said they had unfilled job openings in July because they couldn't identify applicants with the right skills or experience, according to a survey by The Wall Street Journal and Vistage International, a peer advisory organization for senior-level executives.
About 41% of the 154 manufacturing firms that answered the survey said they couldn't find applicants with the relevant experience or skills, compared with 30% of the 283 services businesses and 29% of the 56 retail businesses.
"We could grow a lot faster if we could find the right people," says Kevin Madden, president of Group One, which installs alarms and video surveillance in homes and commercial properties. He says he frequently declines new work because he doesn't want to jeopardize his company's customer service due to lack of sufficient support staff.
The 16-employee company currently has two unfilled job openings—for fire-alarm and burglar-alarm technicians. The jobs have been open for nearly 18 months.
The skills gap is a big topic among economists because of its policy implications. If companies aren't hiring due to an inability to find skilled workers, then part of the remedy for high unemployment might be training to help workers develop the required skills, rather than, say, lower taxes or lower interest rates.
For small businesses, in particular, the effects of the skills gap can be profound: The addition of just one or two employees to a small firm can be a significant growth move. Yet the amount of training small firms can afford to provide is often limited.
Most small firms "don't have the luxury of a training budget," says Kevin Sheridan, a senior vice president at Avatar HR Solutions Inc., a human-capital management consulting firm in Chicago.
Employers can be picky, especially at small businesses, where "the employer will say, 'It's saving me money not to fill it, and I'm in no rush here, really, so I may as well wait for someone who is perfect,' " says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's business school.
"Any new hire is a major new investment and a major new risk for a small business," says Michael A. Marasco, director of the Farley Center for Entrepreneurship and Innovation at Northwestern University in Chicago. "Your tendency is to be conservative and try to make do with the employees you currently have."
According to the survey, 36% of small businesses said they offer training to help prospective employees develop the required skills for their unfilled jobs. About 24% of respondents said they tried raising salary offers to attract applicants for hard-to-fill positions.
At Ad-Ex International Inc., a 125-employee company that creates exhibits for corporate trade shows, there are now about half a dozen positions open, for sales personnel and tradesmen. Most have been available for months, including one that has been open for more than a year.
"Based on present economic conditions, we have to be cautious. It's expensive to train someone," says co-owner Mike Pierdiluca. He says he can get hundreds of applications for a job opening but many of the younger applicants lack the carpentry, painting and metalworking talents needed to perform the work.
In some cases, like an open administrative assistant position, many applicants are overqualified. He is wary of those candidates, he says, because he believes they "won't like the job—at least for very long."
Matt Noon, owner of Noon Turf Care, a lawn-maintenance business in Hudson, Mass., said he regularly has openings for telemarketing professionals because the work they are required to do—calling hundreds of prospective customers a day—isn't sexy. Five months ago, he raised the job's base salary to $45,000 from $25,000 and has since made four hires.
"It's increased the quality of applicants," he says, adding that he is hoping to hire at least five more sales professionals by the end of this year.
Echo Interaction Group Inc., a maker of smartphone applications in Orlando, Fla., has had four openings for mobile developers since January. Carlos Carbonell, chief executive officer of the 16-employee business, says not enough people have the skills needed to do the job.
Though the firm offers to train new recruits, past hires who have taken up the opportunity didn't work out because they found the job to be too daunting, he says.
Mr. Madden of Group One offers $18 to $30 an hour for fire-alarm technicians and $16 to $22 an hour for security-alarm technicians, depending on their experience and skills. If qualified candidates ask for more, he is open to negotiating, he says. On one occasion he offered the candidate overtime work, such as cleaning the warehouse.
He says he believes that "every kid in this country has been raised to go to college and they don't want to do the trade, construction, blue-collar work."
He estimates that about 80% of his applicants misrepresent or overestimate their skill sets. The rest may be qualified but don't take his offer because they seek higher pay or they are looking for easier work, he says.
Over the past two years, there have been about 10 instances where prospective hires with no skills asked Mr. Madden for a job. He provided them with a low-level burglar-alarm manual, he says, and asked them to come back and show they could operate the alarm panel. "None have come back," he says.
He is also hoping to eventually find a fire alarm inspector, an installer and a service manager. "If I can find five" of the right candidates "I will take them on," he says.

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Facebook Earnings: Forget EPS, It’s All About the User Base Says Karabell

As if the scrutiny Facebook (FB) received leading up to and immediately following their IPO in May wasn't enough, the social media giant is back under Wall Street's microscope ahead of their first quarterly earnings report as a public company due out after the market close today. What does a win look like for Mark Zuckerberg & Co.? According to Zachary Karabell of RiverTwice Research it may have less to do with EPS and revenue and more to do with their user base.

"You look at how much they're monetizing their billion plus Facebook users," he says, "and to what degree they are or not will determine the fate of that particular company."
Karabell contends that regardless of their highly anticipated second-quarter earnings Facebook's impressive number of users will keep the company successful. "If Facebook had just stayed the private company they were," Karabell argues, "we would still be talking about the Facebook effect, we'd be talking about Facebook as it's changing interactivity and communication, and we probably should have stuck with that because that's more important."
Still, he admits, the company itself has problems. As an investment Karabell says it's "not a stock I would be so engaged in." More specifically he says that he is short some Facebook puts and believes the stock is range bound somewhere between the low $20's and high $30's.
As for Zynga (ZNGA), Karabell didn't like it before the latest earnings disaster calling it just a "tiny derivative" of Facebook and a stock with little reason to buy. But he admits Facebook and Zynga do have time to turn things around.
Unlike the Nokia (NOK) and Rim (RIMM), he says "these names do have a floor until there's evidence that the businesses are collapsing…They have a few years. I mean even Groupon (GRPN) has had a few years when it clearly has a much more challenged business model."
What do you think? Will Facebook's earnings results change your outlook on the stock one way or the other? Let us know on our Facebook page.

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What We Know About the iPhone 5

 

Apple (AAPL) reported disappointing third-quarter earnings yesterday, but investor attention is shifting to the company's most important product, the iPhone 5.

Apple sold 35.1 million and 26 million smartphones, respectively, in its recent fiscal second and third-quarters, and many are predicting this release will be the biggest product launch Apple has ever had. CEO Tim Cook alluded to the coming "fall product transition," suggesting the iPhone 5 will be announced then.

The iPhone 5 will have a slew of new features, said Channing Smith, portfolio manager at Capital Advisors Growth Fund.

"We expect it to have Near Field Communications (NFC), a larger screen, and a better camera -- we expect it will be done without conceding battery life," he said in a recent phone interview. "Apple needs to continue to improve the competitive advantages it already has -- the way Apple has built its ecosystem is brilliant. They've locked so many users into their ecosystem -- I think that gives them an enormous advantage." Apple is Smith's largest holding in the fund.

There are tons of rumors about what the new iPhone will look like and what it will be called. Half of the fun of an Apple product launch is speculating what will go into the product as the rumor mill churns out report after report about the latest and greatest gadget from Cupertino, Calif.

It's not clear, though, what Apple will even call its new iPhone. The gadget maker has typically numbered its latest offerings, but ditched this nomenclature for the new iPad.

Nonetheless, here's a list of features that might be in the phone, which could be called the iPhone 5, and is expected to be released later this year.

More from TheStreet.com

• Why Apple's Earnings Miss Doesn't Matter
• Nothing to Fear in Apple Call, but No Need to Rush to Buy
• The Digital Wallet's Future Is Now

What It Will Look Like

Apple's past two releases, the iPhone 4S and the new iPad, were more evolutionary than revolutionary. This could be Apple's big opportunity to push the envelope in terms of innovation.

Apple has kept the iPhone's design fairly stable, with a 3.5-inch screen size, tweaking it slightly, as it refines the five-year old product. Many now believe the next iPhone will have a 4-inch screen, as it competes with offerings like the Samsung S III Galaxy and other 4-inch phones.

The iPhone's screen size has not changed since inception, so this is a slight strategy change for Apple, perhaps a direct result of Tim Cook running the company now.

The next iPhone may also be slightly thinner than its predecessors, as Apple utilizes in-cell technology. This technology will allow Apple to integrate touch sensors into the LCD, eliminating one layer of the phone. It could also help cut costs and simplify Apple's supply chain even further, according to The Wall Street Journal.

The casing of Apple's next smartphone could be aluminum, as Apple looks to abandon the glass backing of the current form-factor. There have been problems with the glass backing scratching, so Apple may look to alleviate that.

It's almost a certainty at this point that the next iPhone will run on Long Term Evolution or 4G high-speed networks from AT&T (T) and Verizon (VZ). This will allow the next-gen phone to consume data at a faster speed and make the browsing and data consumption experience all that more enjoyable.

Usage of LTE has shown battery life to decrease. Apple acknowledged that in its new iPad, when it said the battery would last nine hours on LTE, as opposed to 10 otherwise. Apple could improve the battery life in the new iPhone, as Capital Advisors' Smith suggested.

Given Apple's long-standing relationship with Qualcomm (QCOM), there is a strong possibility that a Qualcomm chip could be powering the 4G capabilities of the phone. Qualcomm chips feature predominantly throughout the previous versions of iPhones and iPads.

Another major feature which Apple could introduce is Near-Field Communications. Apple started to open up the possibility and potential for the iPhone becoming a "digital wallet" when it announced Passbook, as part of iOS 6, its new mobile operating system.

Passbook is a location-aware app that lets users put their discount cards, gift cards, movie tickets and boarding passes into one app. Apple was recently awarded a patent for Passbook that could expand its uses, and move Apple towards the digital wallet.

Apple's mobile operating system will have more than 200 new features, including Passbook, enhanced support for Siri, as well as Apple Maps, as it removes Google (GOOG) Maps from the phone. There will also be heavy integration with Facebook (FB), which the company announced at its recent Worldwide Developers Conference.

Apple may bring FaceTime, its video chat software, to wireless networks. Currently, FaceTime on iPhones can only be done on Wi-Fi networks, but with LTE networks the capability for increased use of FaceTime has expanded. Apple announced this as part of iOS 6 for the iPad, and it's a safe bet that the same will happen for the new iPhone.

Many are wondering whether Apple will introduce a new processor with the latest iPhone. Apple announced the A5X chip when it unveiled the iPad, and given its propensity to release the chip, which is designed from ARM Holdings (ARMH) property, in the iPad first, this is an uncertainty.

There is no doubt that the new iPhone will have some of these features, and others that we haven't thought of. There's always "one more thing" to shock, surprise and amaze the Apple audience. We'll find out soon enough.

Interested in more on Apple? See TheStreet Ratings' report card for this stock.

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European market rally runs out of steam

LONDON (AP) — European stocks gave up some of their recent gains Wednesday after more disappointing economic data reinforced fears over Europe's economy in the run-up to key central bank policy statements.

With trading subdued because the U.S. is on holiday for Independence Day, investors in Europe have had little incentive to push stocks higher following a three-day rally.

Markets have largely welcomed last Friday's agreement by the leaders of the 17 euro countries to allow Europe's bailout fund to capitalize banks directly and to buy bonds of imperiled countries. Stocks, particularly in Europe, have rallied hard, as have the euro and oil prices.

However, with the eurozone economy showing signs of heading back into recession, the crisis has the potential to flare up again. Mounting concerns over the state of the U.S. economic recovery are also keeping sentiment in check, especially ahead of Friday's closely-watched nonfarm payrolls report for June. The payrolls data often set the market tone for a week or two after their release.

Before the payrolls data, the European Central Bank is expected on Thursday to reduce its main borrowing rate below 1 percent for the first time ever in an attempt to shore up the eurozone economy. A services sector survey Wednesday from financial information company Markit added to the prevailing view that the eurozone is heading back for recession.

The Bank of England is also expected to do more to help the British economy, which is already in recession, at its meeting on Thursday. The consensus view is that it will pump another 50 billion pounds into the economy.

"There is plenty of scope for disappointment given the high expectations, so traders will be cautious ahead of the meetings, and also as we approach non-farm payrolls," said David Morrison, senior market strategist at GFT Markets.

In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 5,673 while Germany's DAX fell 0.5 percent to 6,547. The CAC-40 in France was 0.4 percent lower at 3,258.

The euro was down 0.2 percent at $1.2583, while oil prices gave up some ground amid the softer tone in Europe — benchmark oil for August delivery was down 35 cents at $87.31 a barrel in electronic trading on the New York Mercantile Exchange.

Earlier in Asia, stocks ended mostly higher. Japan's Nikkei 225 index rose 0.4 percent to 9,104.17 and South Korea's Kospi gained 0.4 percent to 1,874.45. China's Shanghai Composite fell 0.1 percent to 2,227.31 and Hong Kong's Hang Seng was down 0.1 percent at 19,709.75.

News By : Yahoo News

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Barclays' ex-boss faces parliamentary grilling

LONDON (AP) — The former chief executive of Barclays will be in the spotlight later Wednesday when he is quizzed by an influential group of British lawmakers over the bank's manipulation of interbank lending rates.

The appearance of Bob Diamond before the House of Commons Treasury Committee had been planned before his resignation on Tuesday, and there is mounting speculation that he will say that others, outside the confines of Barclays, knew about the interest-rate fixing scandal.

Particular interest will center on what Diamond says about a conversation he had in 2008 with Paul Tucker, the deputy governor of the Bank of England, about Barclays reporting higher borrowing costs than other banks.

A note recorded by Diamond, which has been submitted to the committee, said Tucker initiated the call as senior government officials were wondering why Barclays was reporting higher borrowing rates than other banks.

"I asked if he could relay the reality, that not all banks were providing quotes at the levels that represented real transaction," Diamond recorded. "His response (was) 'Oh, that would be worse.'"

Diamond added that Tucker told him "that while he was certain we did not need advice, that it did not always need to be the case that we appeared as high as we have recently."

Barclays insists that Diamond did not take this to be an order from Tucker. However, it says a subordinate, 

Jerry del Missier, mistakenly thought the central bank had ordered Barclays to report lower rates and passed the instruction on.

The Bank of England said Wednesday that Tucker was "quite keen" to testify to the committee to give his version of the conversation.

Barclays shares were down 0.4 percent at 166.45 pence in midday trading in London, while HSBC, Lloyds Banking Group and Royal Bank of Scotland were all down more than 1 percent.
The Bank of England has denied knowing of any impropriety in setting the London interbank offered rate, or LIBOR. "If we had been aware of attempts to manipulate LIBOR we would have treated them very seriously," it said.
Barclays has said it had no intention of manipulating LIBOR in 2008, though some of its traders had done so to protect their own positions starting in 2005.

Diamond is not the only victim of the scandal. Barclays chairman Marcus Agius and del Missier have resigned this week too over the scandal. Del Missier, formerly a top executive at Barclays Capital in New York, was identified as the subordinate who gave an order to report lower rates.

Pressure had been building on the bank over the past week since U.S. and British regulators imposed fines totaling $453 million against Barclays for false reporting of its borrowing costs between 2005 and 2009.

Those reports, along with those of other banks, feed into the calculation of LIBOR.

Barclays has said it suspected that other British banks were reporting lower than accurate borrowing rates at the height of the credit crisis. Lower rates would tend to indicate that lenders had confidence in those banks. Barclays has said its higher reports generated rumors that it was in trouble.

The release of Diamond's memo has also piled the pressure on the Bank of England, raising questions about whether the central bank was aware of reports that banks were giving false readings of borrowing costs and, if so, why it apparently did nothing about it.

Paul Myners, a Treasury minister in the previous Labour government, said Wednesday that the Bank of England probably would have a recording or a formal minute of Tucker's conversation with Diamond.

"We will find the answer to this quite quickly," he told BBC radio.

The Bank of England has declined to comment on reports that its governor, Mervyn King, joined with Adair Turner, chief executive of the Financial Services Authority, in advising Barclays that Diamond had to go.

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Manchester United picks NYSE for U.S. public offering

(Reuters) - Manchester United has picked the New York Stock Exchange to make its stock market debut, ending months of speculation over where the world's best-supported soccer club would list.

After first eyeing a Hong Kong IPO, the former English Premier League champions had planned a $1 billion listing in Singapore in the second half of last year before putting plans on hold because of market turmoil.

The U.S.-owned club filed with the Securities and Exchange Commission on Tuesday to raise up to $100 million in an initial public offering of its Class A ordinary shares in New York.

In the United States, the amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.

Thomson Reuters publication IFR reported last month that the club, which has been English champions a record 19 times and features players such as England's Wayne Rooney, had dropped its plans for an Asian listing in favor of a U.S. listing.

The company filing for a much lower amount than $1 billion originally expected does not come as much of a surprise, said Josef Schuster, founder of Chicago-based financial services firm IPOX Schuster LLC.

"The smaller the float, the higher the relative valuation can be...This may just be a strategy initially to make it appear like a low float IPO," Schuster said. "Traders may believe if the deal is very low, then the company can pop at the opening."
GLOBAL FAN BASE

Manchester United has a global fan base of 659 million, according to a survey commissioned by the club and carried out last year by market researcher Kantar. Almost half of United's supporters were in the Asia-Pacific region.

"It remains to be seen how much the football club is going to benefit in the U.S. where the sport is not very popular ... The perfect place for it to have listed should have been London," Jay Ritter, a University of Florida IPO expert told Reuters.

The club, founded in 1878 as Newton Heath LYR Football Club, plays its home games at Old Trafford in Greater Manchester.

The club's American proprietors, the Glazer family, are well known in the United States as owners of American football team the Tampa Bay Buccaneers.

However, they have faced opposition from United fans after taking over the club in 2005 in a leveraged buyout that left it saddled with hefty debt repayments.

The club's total debt as on March 31 was 423.3 million pounds ($663.67 million), according to the filing.

It intends to use the net proceeds from this offering to repay debt.
"It is going to come down to the valuation. U.S. investors are not going to jump on it right away," IPOX Schuster LLC's Schuster said.
The Glazer family will hold class B shares, which will have 10 votes each representing 67 percent of the voting power of all shareholders, keeping the club's management within their control.
U.S. investors are familiar with the dual-class share structure, which has been used by household names such as Google, Facebook and News Corp.

Jefferies, Credit Suisse, J.P. Morgan, Bank of America Merrill Lynch and Deutsche Bank Securities are underwriting the IPO, Manchester United said in a preliminary prospectus. This leaves out Morgan Stanley, which h was one of the investment banks originally expected to underwrite the Singapore listing.

United did not reveal how many shares it plans to sell or their expected price.

(Reporting by Sharanya Hrishikesh and Ashutosh Pandey in Bangalore; Additional reporting by Kartick Jagtap; Editing by Supriya Kurane and Alex Richardson)

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Exclusive: Mexico's Slim not eyeing more Europe buys for now

MEXICO CITY (Reuters) - Mexican tycoon Carlos Slim said on Tuesday he has no immediate plans for further telecommunications purchases in Europe after buying into Dutch firm KPN and Telekom Austria.

Asked if he was looking to expand further in Europe after the two recent deals, Slim told Reuters: "No, no. We're not looking for nothing now. We are going to consolidate what we've got."
Slim's America Movil, which is present in roughly a dozen Latin American countries, is establishing a beachhead in Europe where a combination of tough competition, regulatory pressure and recession in many markets has beaten down some company valuations to near decade lows.
Unlike his expansion in Latin America, where the 72-year-old entrepreneur has purchased much bigger stakes or whole companies, he has taken a more cautious approach in Europe.
Slim recently increased his stake in KPN to 27.7 percent and boosted his stake in Austria Telekom to 23 percent, his biggest foray yet into the European market.
His arrival in Europe touched off a period of turbulence in the telecoms sector, with industry executives and analysts questioning if it would lead to a long-awaited consolidation in some markets like Germany or Spain.
OPEN TO OPPORTUNITIES
With an empire stretching from banking to hotels to mining, the world's richest man said he remained open to opportunities.
"We're always open in the world for everything... Well not everything," he said in English at an Independence Day party at the U.S. ambassador's residence in Mexico City, laughing as party guests snapped pictures of him with their phones.
"Careful, you'll fall in the water," he warned one picture taker who was backing away to get a wider angle and nearly fell into the ambassador's swimming pool.
Austria's competition watchdog said on Monday it was examining America Movil's bid to buy up to 25.9 percent of Telekom Austria and will give its decision in four weeks' time.
Slim is spending over $1 billion on the stake in the Austrian telecoms firm, most of which he is buying from investor Ronny Pecik and his partner, Egyptian telecom tycoon Naguib Sawiris.
(Reporting By Simon Gardner and Krista Hughes; Editing by Ryan Woo)

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ECB expected to cut, may take more to sustain markets

FRANKFURT (Reuters) - The European Central Bank is expected to cut interest rates to a record low on Thursday but may need to do more to satisfy financial markets already starting to wonder about the solidity of last week's summit measures to tackle the euro zone crisis.

Steady inflation and a dire batch of economic performance indicators, including signs of weakness in euro zone powerhouse Germany, give the ECB cover to back up the EU summit deal with a quarter-point cut in its benchmark rate to 0.75 percent.

The ECB has never cut its main refinancing rate below 1 percent but policymakers say there is nothing to stop them doing so and they may want to bolster euro zone leaders, even if they never admit to such 'quid pro quo' deals.

At the summit, ECB President Mario Draghi strolled into the middle of the media zone to declare his satisfaction with the agreement to speed up cross-border banking supervision and to allow the euro zone rescue fund to recapitalize banks directly thereafter.

"I think Draghi saying that he is happy with the summit results is a strong sign that the ECB is ready to do something," said Christian Schulz at Berenberg Bank, forecasting a quarter-point cut.

But Schulz, a former ECB economist, added: "We think if it's just a rate cut, that would be a disappointment for markets because a rate cut would not do very much at all for the peripheral economies ... that's why something else is needed."

Markets have rallied since the EU meeting, which also empowered the ECB to lead the supervision of European banks and opened the way for the rescue fund to intervene on debt markets to support troubled members, though Finland and the Netherlands have questioned this bond-buying provision.

Even with political backing, there are questions over the rescue fund's capacity to lower borrowing costs. It has a maximum 500 billion euros capacity with 100 billion already earmarked for Spanish banks, a sum which could quickly dwindle.

Those limitations put a spotlight back on the ECB's readiness to take 'non-standard' measures - such as reactivating its own bond-buy program or offering banks fresh liquidity.

The ECB calmed investors earlier this year by unleashing over 1 trillion euros into markets with twin 3-year funding operations, or LTROs. Andrew Bosomworth at bond fund Pimco expected the bank to hold off any further such measures.

"I don't think the ECB will do more super-long LTROs or impose spread caps as a quid pro quo for what EU leaders agreed at the summit," said Bosomworth, a senior portfolio manager.

"If they are going to go down that route, then hopefully it would be in response to fending off deflation, not that we hope for deflation, rather than as a gift to the Italian government for passing a mediocre labor market reform," he said.

DEPOSIT RATE

A Reuters poll of economists showed the majority expected the ECB to cut its main rate to 0.75 percent.

The ECB board member in charge of economics, Peter Praet, said last Wednesday there was nothing to stop the bank cutting rates further, firming expectations for a cut.

In addition to the main refinancing rate, the ECB has two other interest rates: the marginal lending rate that banks use for emergency overnight borrowing which now stands at 1.75 percent, and its deposit rate - now at 0.25 percent.

A cut in the deposit rate, which acts as a floor for the money market, to as low as zero could encourage banks to lend to each other rather than simply parking funds of up to 800 billion euros back at the ECB every night.

But even if the ECB cuts the deposit rate, banks may still be unwilling to lend to peers in euro zone periphery countries if they are not convinced of their creditworthiness.

Money market traders are evenly split on whether the ECB will cut the deposit rate, a Reuters poll showed.

Policymakers have deep reservations about taking other measures, such as reactivating the bank's bond-buy plan - a tool many investors would like it to use to cap the bond yields of countries embroiled in the euro zone crisis.

The ECB spent some 210 billion euros in the last two years to buy Greek, Irish, Portuguese, Spanish and Italian bonds without achieving any lasting improvement.

With the ECB's bond program such a hot potato, Draghi is likely to be asked at Thursday's post-meeting news conference about another crisis response option: allowing the ESM fund to have access to the central bank's ultra-cheap loans.

That would boost the ESM's firepower and allow it to intervene with real impact on bond markets, where Spain's benchmark yields are still well above 6 percent. So far, both Germany and the ECB are opposed.

(Editing by Mike Peacock)

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Microsoft takes $6.2 billion charge, slows Internet hopes

SEATTLE (Reuters) - Microsoft Corp admitted its largest acquisition in the Internet sector was effectively worthless and wiped out any profit for the last quarter, as it announced a $6.2 billion charge to write down the value of an online advertising agency it bought five years ago.

The announcement came as a surprise, but did not shock investors, who had largely forgotten Microsoft's purchase of aQuantive in 2007, which was initially expected to boost Microsoft's online advertising revenue and counter rival Google Inc's purchase of digital ad firm DoubleClick.

Microsoft's shares dipped slightly to $30.28 in after-hours trading, after closing at $30.56 in regular Nasdaq trading.
The world's largest software company said in a statement that "the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down."

Microsoft bought aQuantive for $6.3 billion in cash in an attempt to catch rival Google Inc in the race for revenues from search-related display advertising. It was Microsoft's biggest acquisition at the time, exceeded only by its purchase of Skype for $8.5 billion last year. But it never proved a success and aQuantive's top executives soon left Microsoft.

As a result of its annual assessment of goodwill - the amount paid for a company above its net assets - Microsoft said on Monday it would take a non-cash charge of $6.2 billion, indicating the aQuantive acquisition is now worthless.

The charge will likely wipe out any profit for the company's fiscal fourth quarter. Wall Street was expecting Microsoft to report fiscal fourth-quarter net profit of about $5.25 billion, or 62 cents a share, on July 19.

In addition to the write-down, Microsoft said its expectations for future growth and profitability at its online services unit - which includes the Bing search engine and MSN Internet portal - are "lower than previous estimates".

The company did not say what those previous estimates were, as it does not publish financial forecasts.

Microsoft's online services division is the biggest drag on its earnings, currently losing about $500 million a quarter as the company invests heavily in Bing in an attempt to catch market leader Google. The unit has lost more than $5 billion in the last three years alone. Even though its market share has been rising, Bing has not reached critical mass required to make the product profitable.

Before rolling out Bing in June 2009, Microsoft's Windows search engine had 8 percent of the U.S. Internet search market, compared with Yahoo's 20 percent and Google's 65 percent.

In the three years since then, Bing has almost doubled its market share to 15 percent, but that has been mostly at the expense of Yahoo, which has had its share whittled down to 13 percent. Google now has almost 67 percent, according to research firm Comscore.

Yahoo's internet searches are powered by Microsoft's Bing under a 10-year agreement initially struck in 2009. Microsoft hands back to Yahoo 88 percent of revenue generated from search ads on Yahoo sites. That deal has not met the ambitious targets set by either company.

(Additional reporting by Siddharth Cavale in Bangalore, editing by Supriya Kurane, Bernard Orr and Richard Pullin)

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Stock index futures mixed; Microsoft eyed

PARIS (Reuters) - * U.S. stock index futures pointed to a mixed start for Wall Street on Tuesday, with futures for the S&P 500 and Dow Jones futures down 0.02 percent and Nasdaq 100 futures up 0.09 percent by 3.55 a.m. EDT.

Microsoft Corp will be in focus after it admitted its largest acquisition in the Internet sector was effectively worthless and wiped out any profit for the last quarter. Microsoft shares traded in Frankfurt eased 0.8 percent.

European stocks climbed for the third session in a row as a recent raft of weak U.S. and European macro data has raised investors' expectation that central banks will soon take fresh policy action to kick-start their economies.

A majority of analysts expect the European Central Bank to trim interest rates at its policy meeting on Thursday, with most predicting a 25 basis point cut to 0.75 percent. The survey was taken before European leaders agreed a more flexible use of euro zone rescue fund late last week, but given recent economic data and rhetoric from the central bank's policymakers, analysts are still betting on more monetary easing.

Monday's U.S. ISM manufacturing index, which registered a contraction in the sector for the first time since July 2009, also boosted speculation that the Federal Reserve will announce it will embark on a third round of asset purchases, known as 'QE3', perhaps as soon as the central bank's next policy meeting from July 31 to August 1.

On the macro front, investors awaited the Institute for Supply Management-New York June index of regional business activity, due at 9.45 a.m. EDT, and May factory orders, due at 10 a.m. EDT. Economists in a Reuters survey expect a rise of 0.2 percent in factory orders compared with a 0.6 percent decline in April.
Barclays Plc Chief Executive Bob Diamond quit with immediate effect on Tuesday over an interest-rate-rigging scandal, becoming the highest-profile victim so far in a probe that spans a dozen major banks across the world.

A U.S. judge on Monday rejected a request by Samsung Electronics Co. <005930.KS> to lift a ban on U.S. sales of its Galaxy Tab 10.1, another setback for the South Korean firm in its tablet patent battle with iPad maker Apple Inc. .

U.S. investment management firm BlackRock is buying Swiss Re's European private equity and infrastructure fund of funds franchise, it said on Tuesday.
Activist investor Carl Icahn said on Monday he intends to look into disclosures that Forest Laboratories Inc CEO Howard Solomon made before selling stock in the U.S. drugmaker over the years, launching the latest salvo in his proxy fight against the company.
U.S. states and localities have run up more than $2 trillion of unfunded pension liabilities, Moody's Investors Service said on Monday, citing data on plans offered by 8,500 local governments and over 14,000 individual entities.

U.S. stocks edged higher on Monday, shaking off a surprise contraction in U.S. manufacturing, which some investors took as a signal the Federal Reserve will take more forceful actions to boost the economy.

The Dow Jones industrial average <.DJI> eased 8.7 points, or 0.07 percent, to 12,871.39. The Standard & Poor's 500 Index <.SPX> rose 3.35 points, or 0.25 percent, to 1,365.51. The Nasdaq Composite Index <.IXIC> added 16.18 points, or 0.55 percent, to 2,951.23.

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