Tuesday, July 26, 2011

The Help-Wanted Sign Comes With a Frustrating Asterisk

The unemployed need not apply.

That is the message being broadcast by many of the nation’s employers, making it even more difficult for 14 million jobless Americans to get back to work.

A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.

Unemployed workers have long suspected that the gaping holes on their résumés left them less attractive to employers. But with the country in the worst jobs crisis since the Great Depression, many had hoped employers would be more forgiving.

“I feel like I am being shunned by our entire society,” said Kelly Wiedemer, 45, an information technology operations analyst who said a recruiter had told her that despite her skill set she would be a “hard sell” because she had been out of work for more than six months.

Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.

The practice is common enough that New Jersey recently passed a law outlawing job ads that bar unemployed workers from applying. New York and Michigan are considering the idea, and similar legislation has been introduced in Congress. The National Employment Law Project, a nonprofit organization that studies the labor market and helps the unemployed apply for benefits, has been reviewing the issue, and last week issued a report that has nudged more politicians to condemn these ads.

Given that the average duration of unemployment today is nine months — a record high — limiting a search to the “recently employed,” much less the currently employed, disqualifies millions.

The positions advertised with preferences for the already-employed run the gamut. Some are for small businesses, and others for giants, including the commercial University of Phoenix (which, like some other companies, removed the ads after an inquiry by The New York Times) or the fast-food chain Pollo Tropical. They cover jobs at all skill levels, including hotel concierges, restaurant managers, teachers, I.T. specialists, business analysts, sales directors, account executives, orthopedics device salesmen, auditors and air-conditioning technicians.

“It is really a buyer’s market for employers right now,” said Harry J. Holzer, an economist at Georgetown University and the Urban Institute. One consequence is that the long-term unemployed will rack up even more weeks of unemployment, Mr. Holzer said, and will find it harder to make the transition back to work.

Even if Congress passed a measure forbidding companies from making current employment a requirement for job applicants, companies could still simply decide not to hire people who are out of work. Discrimination would be difficult to prove.

After all, there are legitimate reasons that many long-term unemployed workers may not be desirable job candidates. In some cases they may have been let go early in the recession, not just because business had slowed, but because they were incompetent.

Idle workers’ skills may atrophy, particularly in dynamic industries like technology. They may lose touch with their network of contacts, which is important for people in sales. Beaten down by months of rejection and idleness, they may not interview well or easily return to a 9-to-5 schedule.

“We may be seeing what’s called statistical discrimination,” said Robert Shimer, a labor economist at the University of Chicago. “On average, these workers might be less attractive, and employers don’t bother to look more closely to pick out the good ones.”

Employers receive so many applications for each opening that some may use current employment status as an easy filter. In some cases — as with Ms. Wiedemer, of Westminster, Colo. — recruiters merely assume employers do not want jobless workers.

“Clients don’t always tell us ‘we don’t want to see résumés from unemployed workers,’ but we can sense from what people have interested them in the past that they’re probably looking for somebody who’s gainfully employed, who’s closer to the action,” said Dennis Pradarelli, a talent acquisition manager for Marbl, a recruiting firm in Brookfield, Wis. Many of the job ads posted by his firm seek workers who are “currently employed or only recently unemployed.”

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Thursday, July 14, 2011

Google Challenge to Facebook will cost more than $200 million

Google’s challenge to Facebook Inc. in social networking, an effort analysts said will cost more than $200 million, probably slowed second-quarter profit growth for the world’s largest Web search engine.

Profit excluding some costs rose to $7.85 a share in the period, Google will report later today, according to analysts surveyed by Bloomberg. Profit would have been higher if not for spending on Google+, a service unveiled by new Chief Executive Officer Larry Page last month to compete with Facebook, said Colin Gillis, an analyst at BGC Partners LP.

“Larry’s here, and he’s here to spend,” said Gillis, who estimates that Google spent about $100 million on the project, half the total, in the second quarter alone. “There are some large opportunities that they’re chasing after.”

Google+, an online tool that lets users create and communicate with groups of friends, is part of Page’s attempt to lure Web users from rivals including Facebook. Higher spending on social networking, mobile software and e-commerce -- areas aimed at lessening Google’s reliance on traditional Internet search -- eats into profitability.

“What investors are thinking about in general right now is return on these investments,” said Schachter, who rates the stock “outperform” and doesn’t own it. “They certainly haven’t shied away from spending money. My view is that this is money that is well spent.”

Sales Boosted By Search

Second-quarter revenue, minus sales passed on to partner sites, likely rose to $6.57 billion in the June period, the average estimate of analysts. Google’s first quarter revenue of $6.54 billion, announced in April, topped analysts’ predictions.

Google, based in Mountain View, California, lost 52 cents to $537.74 at 10:02 a.m. New York time in Nasdaq Stock Market trading. The stock fell 9.4 percent this year before today.

While Google’s sales are buoyed by demand for online ads, margins are likely to keep narrowing into next year amid costs for such services as Google Offers, a feature that mirrors Groupon Inc. by providing daily deals to users at local businesses, according to Morgan Stanley.

‘Stiff Competition’

“We are encouraged by early progress of Google Plus and Google Offers, but Google faces stiff competition from incumbents who have first-mover advantage,” Morgan Stanley analysts, who downgraded the company to “equalweight” from “overweight,” wrote last week in a research note. “The payoffs of such endeavors may be longer term.”

Adding to costs, Google increased hiring by 1,900, or 7.9 percent, in the first quarter, part of its plan to boost overall hiring by 6,000 this year. Research and development costs rose 50 percent in the March period while sales and marketing increased by 69 percent.

‘Slicker Products’

The new service has a look and feel similar to Facebook’s, but with a focus on managing contacts around different relationships. Just days after its debut, Google temporarily shut down the invite mechanism for Google+ following “insane demand,” Vic Gundotra, head of social efforts, said on the company’s website.

“This is definitely one of the slicker products that has come out of Google in a long time,” said Sameet Sinha, an analyst at B. Riley & Co. in San Francisco who rates Google a “buy.”

Google+ is still early in its development, with less than a month for users to try out the service, Gillis said.

“It’s way too soon to make a call on Google+,” he said. “It’s a credible alternative to Facebook, but social networking is all about scale.”

Americans are deeply pessimistic about the future as economic concerns rise and White House talks on raising the U.S. debt limit sputter, according to a Reuters/Ipsos poll released on Wednesday.

The number of Americans who believe the country is on the wrong track rose to 63 percent this month, up from 60 percent in June, with stubbornly high unemployment and prolonged gridlock in Washington dashing hopes of a swift economic recovery.

But voters do not appear to be holding President Barack Obama responsible for the problems so far. Obama's approval rating held relatively steady at 49 percent, down 1 percentage point from June. His approval rating among independents -- a group Obama needs to win re-election -- fell to 39 percent from 44 percent.

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Wednesday, July 13, 2011

The Rich Are Now Richer Than Before The 2008 Credit Meltdown

Unemployment is at 9.2%, the ruins of the U.S. housing market are still smoldering after the 2008 bonfire, and Greece, Italy and Portugal are balancing on the razor’s edge of default. But the planet’s rich are getting richer, especially in the growing BRIC economies. In fact, there are more rich people on the planet today than before the credit crisis destroyed Lehman Brothers and Bear Stearns and nearly crippled the World’s financial industry.

Not only are there more rich running around the globe; but the rich are richer. The study estimates that financial wealth control by the HNWI population jumped 9.7% over the last year to $42.7 trillion. Meanwhile the U.S. GDP grew 1.9% in the first quarter of 2011, according to the U.S. Department of Commerce. I’ll be curious to see how this report will be used in Washington’s current battle over the debt ceiling, and the debate on the millionaire tax. Many might initially point out (as I first did) that Obama’s stimulus package isn’t creating jobs, but for a lucky few, it is creating a ton of wealth.

But while the World’s grown wealthier, the U.S. and European HNWI populations are still not up to the 2007 levels. Most of the growth has come from the red hot economies of China, India and Brazil.

The UK economy is flat, the US is weak and the Greek debt crisis, according to some commentators, is threatening another Lehman Brothers-style meltdown. But a new report shows the world's wealthiest people are getting more prosperous – and more numerous – by the day.

The globe's richest have now recouped the losses they suffered after the 2008 banking crisis. They are richer than ever, and there are more of them – nearly 11 million – than before the recession struck.

In the world of the well-heeled, the rich are referred to as "high net worth individuals" (HNWIs) and defined as people who have more than $1m (£620,000) of free cash.

According to the annual world wealth report by Merrill Lynch and Capgemini, the wealth of HNWIs around the world reached $42.7tn (£26.5tn) in 2010, rising nearly 10% in a year and surpassing the peak of $40.7tn reached in 2007, even as austerity budgets were implemented by many governments in the developed world.

The report also measures a category of "ultra-high net worth individuals" – those with at least $30m rattling around, looking for a home. The number of individuals in this super-rich bracket climbed 10% to a total of 103,000, and the total value of their investments jumped by 11.5% to $15tn, demonstrating that even among the rich, the richest get richer quicker. Altogether they represent less than 1% of the world's HNWIs – but they speak for 36% of HNWI's total wealth.

Age also helps: more than eight out of 10 of the world's wealthiest people are aged over 45. So does being male: women account for just over a quarter of the total – though this is slightly higher than in 2008. The highest proportion of wealthy women is in North America – 37% of HNWIs – while the lowest is in the Middle East, which has 14%.

Generally, HNWIs are most concentrated in the US, Japan and Germany: 53% of the world's most wealthy live in one of those three countries, but it is Asian-Pacific countries where the ranks of the rich are swelling fastest. For the first time last year the region surpassed Europe in terms of HNWI individuals.

This scale of wealth of the richest people in Asia Pacific – fuelled by the fast-growing economies in China and India – is now threatening to overtake North America, where the value of the wealth rose more slowly – 9% – to reach $11.6tn.

The richest people in the Asia-Pacific region have also fared better since the crisis. Their wealth is now up 14.1% since 2007 while individuals in North America and Europe are yet to recoup the losses they suffered during the banking crisis.

Britain is lagging behind in the league of affluence – it has not yet enjoyed a return to pre-crisis levels of wealth as sluggish economic growth holds back prospects. The growth in the number of rich individuals in the UK was among the slowest in the top 10 nations, showing a 1.4% rise to 454,000 and remaining below the 495,000 recorded in 2007.

The report said that while the UK stock market rose almost 30% and GDP grew 1.3% – after contracting by 4.9% in 2009 – the fortunes of the rich were held back by falling house prices and the rise in unemployment. Their prospects might improve next year, however. "Construction spending for the 2012 London Olympics is expected to help propel the economy and the housing market recovery," the report said.

The 1.4% rise in the number of rich people in Britain compares with a 7.2% rise in Germany and 8.3% in the US – where there are 3.1m HNWIs – and the 3.4% rise in France.

India moved into the top 12, with a 20.8% rise to 153,000, for the first time, while Italy, 10th in the table, endured a contraction in the number of wealthy people from 190,000 to 170,000.

The performance of investments made by wealthy individuals in shares and commodities, and their willingness to take more risks, helps drive their wealth, which in turn fuels "passion" purchases of multimillionaire must-haves, ranging from Ferraris to diamonds, art and fine wines. Demand for such luxuries is especially high among the growing number of wealthy individuals in the emerging markets.

The report warns of problems for this year, saying "the path to global recovery will likely be uneven and various risks remain".

It added: "The global effects of the financial crisis receded in 2010 but aftershocks still materialised in many forms, including the sovereign debt crisis in Europe and the growing burden of a gaping fiscal deficit in the US. These types of shocks showed the fragility of the economic recovery and could still pose an obstacle to growth in 2011".

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Friday, July 8, 2011

Google+: The Social Sharing War Is Fully On

Google and Facebook are at war. This is old news. They both want to be the center of the Internet — but there can be only one center. For a while, it looked like things were quickly shifting Facebook’s way after years of dominance by Google. Then Google+ appeared — already the most compelling social experience Google has ever offered.

While it’s still far from clear what the actual impact of G+ will be on the Internet at large, it’s pretty clear already that it’s something Facebook is going to have to take seriously. And they are. Despite Mark Zuckerberg downplaying it, Facebook did just launch a video chat feature a week after Google did in G+. And last summer, Facebook rushed to get the new Groups done in time to beat Circles to the same punch.

But where things are going to be really interesting is on the social sharing front. Facebook has long been in the lead here — and is proud of it. But after just a week, it sure seems like Google+ is seeing some impressive numbers as well (with only a fraction of Google users using it). And a small change Google quietly made yesterday shows just how seriously they’re taking this.

As we noted a couple days ago, it is possible to track the referrals coming in to your site from G+, but it’s not straightforward. Yesterday, Google made it much more straightforward.

When you click on a link now in G+, it redirects it through the plus.google.com domain. Why? Because Google+ uses HTTPS to be more secure, but that strips referrer information that would normally be passed to sites like TechCrunch. So they have to redirect to another non-HTTPS domain to pass that data. Previously, it was simply through a google.com/url domain (which we were tracking). Now it’s a plus.google.com domain — much easier to track for a casual analytics user.

And sure enough, as of yesterday, plus.google.com is showing up as a referrer to TechCrunch — and yes, a big one despite us not actively using it to send out articles just yet (and again, the limited number of users).

Facebook does a similar redirect to ensure that the pageviews they’re sending others’ way are correctly counted. Others, like Twitter, do not generally do this, which likely makes their sharing stats appear lower than they actually are.

There is real opportunity for Google to leap ahead on the sharing analytics front.

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Sunday, July 3, 2011

Google’s “Pi” In The Face

As we’re all well aware by now, Google did not win the rights to the 6,000+ Nortel wireless and mobile patents. Instead, a consortium featuring many of their main rivals did. That has to sting. But as more details emerge about the auction itself, it sure looks as if Google wasn’t taking the entire thing too seriously. And that’s too bad. Because Android may be royally screwed without those patents.

Specifically, Nadia Damouni of Reuters reports today that following their initial “stalking horse” bid to get the ball rolling, Google put forth bids of $1,902,160,540, $2,614,972,128 — and $3.14159 billion. If those numbers look familiar, it’s because you’re a nerd. Brun’s constant, Meissel-Mertens constant, and yes, Pi. That’s how Google was bidding on perhaps the most important auction they’ve ever been involved in.

It would have been one thing if Google had done this during the Spectrum auction in 2008 — which they never intended to win. They simply wanted to push the bidding high enough to ensure that the government would enforce the open rules on the sold spectrum (which Verizon ended up winning the biggest chunk of). But with the Nortel patents, Google absolutely did want to win. And many within the company expected to.

Sure, in hindsight you could say that Google wasn’t going to win anyway — Reuters also reports that Google was only willing to go as high as $4 billion and the winning bid ended up being $4.5 billion. But again, they did not know that at the time. They thought they were going to win and apparently thought they could have some fun in the process. Meanwhile, according to Reuters’ sources, they found this behavior aloof and off-putting. It certainly did not help Google’s case.

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