Financial life in a big town

Microsoft Chief Executive Steve Ballmer said Thursday that the software giant is urgently working with its partners to unveil a host of tablet computers running Windows 7, to compete with Apple’s fast-selling iPad.

At a meeting with financial analysts on Thursday, Ballmer outlined the company’s strategy to catch up to Apple and Google in the consumer space. He said Apple is doing an "interesting" job with the iPad and has "sold certainly more than I’d like them to sell." As a result, Ballmer said his company’s "job one urgency" is bringing Windows-based tablet computers to the market.

"No one is sleeping at the switch here," Ballmer said. "We have got to make things happen with Windows 7 on slates. We’re in the process of doing that as we speak. As focused as we are on this, our partners are also focused on this to deliver systems and chips to make this happen."

But Ballmer declined to give an exact timeline, saying only that the tablets will be ready "as soon as they’re ready" and "it ain’t a long time from now."

The CEO claimed that Microsoft needs to take its time to get its products just right to compete in the intensely scrutinized tablet space. He said that chipmaker Intel (INTC, Fortune 500) will be coming out next year with a tablet-specific processor called "Oak Trail" that will help manufacturers make better tablets that run Windows 7.

Ballmer famously canned a turmoil-fraught Microsoft tablet project that had been in the works for almost a decade before the iPad came to market. With the early success of Apple’s (AAPL, Fortune 500) iPad, many analysts are predicting that the tablet space will be one of the fastest-growing tech segments this decade, alongside smartphones. That makes Microsoft’s urgency all the more palpable.

Ever confident, Ballmer exclaimed, "We’re gonna sell like crazy!" Still, after the CEO outlined Microsoft’s tablet plans, an analyst told Ballmer that it appeared that Microsoft had "no clear strategy."

Ballmer disagreed, saying Microsoft’s tablets will run Windows 7, they’ll run Intel processors, they’ll be available in a wide array of shapes and sizes across many manufacturers, and they’ll likely be cheaper than the iPad.

Some analysts remained skeptical.

"Microsoft will have to pull a rabbit out of a hat to compete with Apple," said Al Hilwa, applications development software program director at IDC. "Apple has a less-is-more strategy to broaden its consumer approach with the iPad. Microsoft is committed to running Windows 7 on tablets, which is a concern."

Microsoft’s CEO focused his entire presentation on the company’s consumer businesses, which are almost all trailing their competitors.

Bing continues to lose money. "I can’t say there’s a point on the horizon where the business results will flip," Ballmer admitted.

After demonstrating Windows Phone 7, which is set to go on sale in the fall, Ballmer said the company still had a lot of work to do to compete with Apple and Google. Microsoft intends to throw enormous marketing muscle behind the new smartphone operating system, riding the success of its "I’m a PC" campaign with an "I’m a phone too!" campaign.

Xbox is the exception. It’s a consumer product that is finally making money for Microsoft, Ballmer said. The controllerless Kinect accessory will be closely watched when it goes on sale for the holiday season, targeting the Xbox’s 42 million users.

The cloud around businesses

Other top Microsoft (MSFT, Fortune 500) executives mapped out the company’s plans for maintaining its leadership in the corporate market, which makes up three quarters of Microsoft’s business. Microsoft’s lack of success in the consumer world tends to overshadow how well it is doing in the enterprise space.

It also doesn’t help that Microsoft’s primary strategy is relatively unexciting for the majority of non-geeks: The company aims to leverage its broad array of business products, massive data centers and experience in services to take a leadership position in cloud computing.

Still, Microsoft is confident that its success in the future will depend heavily on how well it carries out its cloud strategy with businesses. Chief Operating Officer Kevin Turner said the company’s cloud offerings will help fuel physical product sales and noted that 70% of Windows cloud customers are new customers.

Turner lashed out at Microsoft’s competitors like Google (GOOG, Fortune 500), Salesforce.com (CRM), Amazon.com (AMZN, Fortune 500), and VMWare for only offering only partial cloud services and solutions that he described as less than adequate for business customers.

The harshest criticism was reserved for Google’s Web Apps, which compete with Microsoft Office. Turner said Office’s Web Apps are far more powerful than Google’s, calling to attention to small things like Google’s lack of a ruler function on its Docs app — "things that we put in market almost 13, 14 years ago."

He also shared several customers’ complaints about Google’s services and said a handful of companies that left Microsoft for Google are now coming back.

Unlike its competitors, Microsoft can offer companies a full set of cloud-based services, including managed data centers and business software tools in one package, Turner said.

Microsoft’s cash cows also have room to grow. Windows 7 is selling faster than any other Windows version in history, but the vast majority of the company’s customers are still using older versions of Microsoft software. Eighty-four percent of Windows users are running XP and Vista, 52% are using Internet Explorer versions 6 and 7, and 63% are using Microsoft Office 2003 and earlier.

Now that businesses are beginning to refresh their hardware again, Microsoft believes there will be a tremendous upgrade opportunity to Windows 7 and Office 2010. 

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In a desperate attempt to fill a $70 million budget hole, Newark’s mayor is taking a chainsaw to the town’s budget — even going so far as to cut toilet paper from the 2010 budget.

"Every single contract that does not go to the core function of our city in providing safe streets, providing fire protection, or other things to keep our city afloat will now be cut," Mayor Cory Booker said during an emergency press conference Wednesday.

The reductions include not buying toilet paper for city offices, cutting the work week to four days for non-uniformed city workers, which is equivalent to a 20% pay cut, scrapping city holiday decorations, and closing city pools. These extreme measures, most of which will take effect beginning in August, are expected to save the city between $10 million and $15 million.

The city came to this impasse after the city council deferred a vote to create a Municipal Utilities Authority, a key component of Booker’s method of balancing the budget no fax cash advance. Because Newark could issue bonds on the Authority, it would have cash inflow to cover the immediate deficit. Without that infusion, the mayor said they can’t make ends meet.

While he accepts the council’s decision, Booker said that the move leaves Newark without a budget and "an incredible financial issue."

"If the council chooses to rely on a tax increase to fill this budget hole, our homeowners will receive an entire year’s worth of that tax increase in the fourth quarter — people will see tax bills into the thousands," Booker warned.

He added that raising property taxes will likely result in massive foreclosure rates, which is unacceptable.

Booker said he is making the severe cutbacks "to avoid a tax shock to our city." 

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A North Carolina software developer has picked up Sunbelt Software Inc., which employs 250 people in Clearwater and offices around the world. The sale will soon create a spin-off company offering Sunbelt’s software distribution business.

Terms of the deal were not disclosed.

GFI Software, based in Cary, N.C., was most interested in Sunbelt’s Vipre technology, which the software infrastructure products provider said it could use in its e-mail security and Web security services group, according to a release.

Alex Eckelberry, Sunbelt’s chief executive officer, told the Tampa Bay Business Journal in an e-mail that the extent of the impact the acquisition will have has not been worked out yet. He will remain with the newly merged company, as will Mark Patton as vice president of research and development, Eric Sites as chief technology officer, and Bill Emerick as senior vice president of products and services.

Sunbelt co-founder Stu Sjouwerman will retire but remain with Sunbelt’s various publications including WServerNews, Win7News and SecurityNews online payday loans.

“It’s an exciting day for us here at Sunbelt, and I believe sincerely that this acquisition was in the best interests of all parties,” Eckelberry said. “Not only our shareholders and employees, but most importantly, our customers and partners.”

Both companies are working to integrate various sales, marketing, finance and technology teams.

“Our goal is to make the combination as seamless as possible to our customers and partners,” Eckelberry said.

GFI already has plans to sell Sunbelt’s software distribution business, which was started more than 16 years ago and has operated separately from the technology side of the company, it said in a release.

Sunbelt Software, a TBBJ Best Places to Work finalist last year, presented at the Florida Venture Forum’s 2009 Venture Capital Conference in Naples. The company was founded in 1994.

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Less than three weeks after gold surged to record highs, the precious metal has scaled back about 5% and is hovering once again around $1,200 an ounce.

On Thursday morning, gold for August delivery — the most actively traded contract — was down $7.50, or 0.63%, at $1,191.40 an ounce.

But the two major factors behind the precious metal’s recent highs around $1,250 — Europe’s debt woes and volatile stock markets — are still major concerns. So what gives?

For the first clue, look no further than July 1 — the day gold fell nearly $40.

Good news for Europe, bad for gold

Facing the expiration of about $554 billion in debt last Thursday, the European Central Bank announced it would assist 78 banks in refinancing their loans, a move that would essentially roll over a quarter of that debt.

The euro rose after the news, and institutional investors, who just weeks earlier had been betting in favor of gold and against the euro, suddenly rushed to close out their bets and reap profits at gold’s still relatively high prices, said Phil Streible, a senior market strategist with futures broker Lind-Waldock.

Traders had previously been taking advantage of the euro’s weakness amid growing concerns about Europe’s debt crisis. Gold, as a tangible asset, was perceived to be a safer alternative to the paper currency, Streible said. But in light of the ECB’s news, that trade may have run its course.

So investors seem temporarily content to take their profits and put their fears about Europe’s debt crisis on the back burner, and that’s one factor driving gold down. But there’s another.

Deflation, not inflation, fears

Disappointing economic data on this side of the Atlantic may also be leading investors to sell gold. On Friday, readings on U.S. manufacturing, housing and jobs all came in worse-than-expected, sending stocks to fresh 2010 lows.

It’s a bit curious that gold, a so-called safe haven, has slipped despite some dismal economic reports. But gold is also considered a hedge against inflation — a trend investors now have little reason to fear.

Michael Cheah, a bond fund manager with SunAmerica, said the most recent economic reports have fed increased fears of deflation, a persistent decline in the prices of assets and consumer goods fast cash advance loan.

In a deflation scenario, Cheah said investors would be wise to put their money behind a different safe haven: U.S. Treasurys.

That’s because Treasurys pay interest regularly, and although the yield may be low, it’s still better than taking a loss in stocks or gold should double-dip recession fears come true, Cheah said.

Gold rush not over yet

But with all these factors in mind, analysts still say gold prices could climb higher. Streible forecasts gold to rebound to as high as $1,325 by the end of the year.

Jeffrey Nichols, a senior economic advisor to Rosland Capital, a precious metals firm, has even loftier expectations. He anticipates the metal to rise as high as $1,500 an ounce by year-end — a prediction he has stuck with for the last several months.

Nichols points out that gold is a very small market when compared to Treasurys or currencies, so it’s easily swayed in one direction, especially during weeks of low trading volume.

The recent dip may be entirely the work of institutional investors at big banks and hedge funds who are taking profits during light trading surrounding the July 4 holiday and summer vacations, Nichols said.

And those are quite "possibly the very same people who will come back in the next few weeks and push gold higher again," he added.

Meanwhile, Streible said he thinks concerns about Europe’s debt crisis are likely to resurface, pushing the euro down and gold up once again.

Investors will be watching for the results of the ECB’s so-called financial "stress tests" of 91 banks, which it plans to release on July 23, as a barometer of the region’s economic health.

Cheah also expects gold to rise later in the year because he thinks a double-dip is likely. If that happens, he said, investors probably would eventually lose faith in the U.S. dollar and Treasurys, sending gold once again to record highs, he said. 

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Toyota Motor Co. plans to start recalling luxury vehicles possibly affected by engine problems on Monday.

Toyota will submit documents to recall of 90,000 vehicles in Japan on Monday, company spokesman Mieko Iwasaki told CNN. Recall announcements in other regions will subsequently be handled by each country individually.

On Thursday, Toyota said it was investigating engine problems affecting 270,000 vehicles worldwide. Small valve springs that were made from low-quality metal could crack, potentially causing engines to stall, said Toyota spokesman Paul Nolasco.

In most cases, owners will experience only abnormal idling or engine noise, Toyota said in a written statement, although even that was described as a "remote possibility."

Approximately 137,000 vehicles in the U.S. are potentially affected, the automaker said. The cars sold in the U.S. that could be affected include the Lexus IS 350, GS 350, GS 460, GS 450h, LS 460, LS 600hL. All are luxury sedans and two, the GS 450h and LS 600hL, are hybrid cars.

Only cars from model years earlier than 2010 could be involved, Toyota said.

Also involved is the Toyota Crown, a large luxury car that is not sold in the United States.

Toyota has not received any reports of injuries or fatalities related to the issue, the automaker said instant payday loan.

Toyota’s Lexus luxury division will announce a remedy for the problem as soon as possible, the automaker said in its statement.

"In the meantime, we sincerely apologize to our customers for any inconvenience and request that they contact their nearest Lexus dealer if they believe there is a problem with their vehicle," said Mark Templin, general manager for Lexus in the U.S.

Toyota has been dealing with a long-running spate of quality and safety problems.

Toyota has, in recent months, recalled more than 8 million vehicles worldwide for a variety of potential safety issues including possible unintended acceleration and problems with anti-lock brake software.

Most recently, the automaker recalled some Lexus SUVs because of problems with electronic stability control software.

In a recent J.D. Power survey of initial quality, Toyota slipped to 21st place this year from 6th place last year.

CNN’s Yoko Wakatsuki and CNNMoney.com senior writer Chris Isidore contributed to this report. 

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Lincoln County Bancorp and its Peoples Bank and Trust Co. subsidiary of Troy, Mo., reached an agreement last week with the Federal Reserve Bank of St. Louis “in recognition of their common goal to maintain the financial soundness” of the two financial entities, the Federal Reserve Board said Monday.

Under the agreement, dated June 14, Peoples Bank must file plans to strengthen credit risk management practices, strengthen commercial real estate concentrations, real estate appraisal practices and asset improvement. The plans primarily are due within 60 days of the agreement.

According to the agreement, the bank also must get prior approval to extend, renew or restructure any loans that are criticized in the Fed’s examination of the bank that began Sept. 8, 2009.

Peoples Bank also must charge-off or collect all assets classified as a “loss” in the Fed’s examination report.

The holding company and bank must submit a joint written plan to each maintain sufficient capital.

Peoples Bank is to submit to the Fed a written business plan for the rest of 2010 to improve the bank’s earnings and overall condition. The holding company has to submit a written statement of its planned sources and uses of cash for 2010.

Neither Lincoln county Bancorp or Peoples Bank are to declare or pay dividends without prior approval from the Fed.

Donald Thompson is chairman of both Lincoln County Bancorp and Peoples Bank and Trust Co.

In addition to Peoples Bank and Trust Co., Lincoln County Bancorp.’s subsidiaries are: People’s Bank of Altenburg, Mo., in Perry County; Bank of Louisiana, Mo., in Pike County; Exchange Bank of Missouri in Fayette, Mo., in Howard County; and Exchange Bank of Northeast Missouri in Kohoka, Mo., in Clark County. The company also owns an unregulated subsidiary, Vacations, a travel agency.

As of March 31, Lincoln County Bancorp had combined total deposits of $584.7 million, and combined total assets of $707.9 million as of Peoples Bank and Trust Co. had total assets of $415.9 million as of March 31.

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THURSDAY

Information Modeling — The St. Louis Council of Construction Consumers sponsors "ABCs of Building Information Modeling" to improve efficiency, savings and quality in the workplace.

— 7 a.m. Engineers Club, 4359 Lindell Boulevard, St. Louis

— $40 for members; $60 for nonmembers. Register online at www.slccc.net.

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The cities of Sacramento and West Sacramento are examining whether one or more new Sacramento River crossings are needed to better connect the two communities, and want members of the public to weigh in on the matter.

A non-scientific survey was launched Monday as part of the Sacramento River Crossing Study: http://www.cityofsacramento.org/transportation/planning-policy/SacRiverCrossingsStudy.html. The online survey is available here.

The survey will accept one response per computer through June 24. Results will be released in mid-July.

“The nine-question survey will take just a few minutes to complete, but we believe it will yield a wealth of insight,” Sacramento city operations manager Fran Halbakken said in a news release. “For example, what kind of crossing is envisioned to address riverfront development on both sides of the river? Is the need best addressed by building one or more new facilities? Should a new structure be dedicated to public transit and bicycles/pedestrians or cars or all of the above modes? Where should it be located? That’s what we are exploring with the public low fee payday loans.”

The cities kicked off a joint feasibility study in April. It is intended to evaluate a number of alternatives from a “no build” option to multiple crossings and locations.

A final report is set to go to the city councils by the end of the year.

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RxMedic, a maker of automated pill dispensing systems used in pharmacies, has been purchased by J M Smith, a South Carolina company that provides various products and services to the pharmacy industry.

J M Smith, based in Spartanburg, S.C., closed on its purchase of privately held RxMedic in late May, says RxMedic Senior Director Chris Cox. J M Smith had been one of the investors in the Raleigh company.

RxMedic, incorporated in 2007, sells its pill dispensing systems in North and South Carolina and parts of Virginia, Tennessee and Georgia. Cox said J M Smith’s purchase of the company gives it a better opportunity to grow because it can tap into J M Smith’s national sales and marketing force bad credit payday advance.Cox declined to disclose RxMedic’s revenue. The company’s competition includes Durham-based Parata Systems.

With the sale of the RxMedic, former CEO Alan Winchester has left the company. RxMedic currently employs 15. Cox says all of the remaining employees will be retained by the company and additional workers could be hired for its manufacturing operations in coming months. Cox said the number of workers the company hires depends on sales of the product.

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LITTLE ROCK, Ark. — Wal-Mart Stores Inc. announced a program Thursday in which its workers can receive college credit from the online American Public University and receive a tuition discount from the school.

The company also said it will commit $50 million over three years to help workers pay for books and tuition above the reduced tuition rate. After the reduction, tuition will cost $212.50 per undergraduate credit hour and $255 for graduate credits.

Wal-Mart Chief Administrative Officer Tom Mars said the program grew out of a larger commitment to cultivate talent within the company. The plan is open to domestic workers at Walmart and Sam’s Club stores.

Alicia Ledlie, Wal-Mart senior director for associate development, said nearly three-quarters of Wal-Mart workers contacted in a survey said they preferred online study to attending a local college.

Ledlie said Wal-Mart looked at 81 colleges, including brick-and-mortar schools, and found American Public University, based in Charles Town, W.Va., to be the best fit.

Wal-Mart workers receive job training in areas ranging from ethics to retail inventory management, for which they can receive credit, she said.

Sara Martinez Tucker, a former U.S. undersecretary of education who is on Wal-Mart’s external advisory council, said Wal-Mart would have had to form a tremendous coalition of schools to offer a similar program through local community colleges and universities.

Tucker said it is helpful to employees because they don’t have to apply for reimbursement from their employer.

Students won’t have to pay for credits awarded based on their training.

American Public University, with 70,000 students, offers more than 100 certificate and degree programs.

The credit for training can be applied mainly to business- and retail-related courses. Wal-Mart said the school will have evaluated for credit jobs held by 70 percent of Wal-Mart workers by 2012. That covers about 1 million workers.

Wal-Mart also offers scholarships through its foundation and offers assistance to workers seeking GEDs.

Wal-Mart executives said the link with the school will help workers attain better jobs both inside and outside the company.

Tucker noted that if 10 percent of Wal-Mart’s U.S. workers get degrees, "that would be like adding three Ohio State’s worth of graduates."

American Public University is accredited in various ways, including national accreditation by the Accrediting Commission of the Distance Education and Training Council. It is run by for-profit American Public Education Inc.

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