The Wall Street Journal: Saturday, August 24, 2013

CEO Exit Sets Microsoft on New Path (page A1): In announcing his sudden retirement Friday after more than three decades at Microsoft Corp., Chief Executive Steve Ballmer will leave his successor with the enormous task of reviving one of the world’s largest technology companies that finds itself beset by competitors on all fronts. Mr. Ballmer, 57 years old, along with his college buddy and Microsoft founder Bill Gates, built the company into a profit machine whose Windows operating system will still power nearly all the 305 million personal computers expected to be sold globally this year, according to research firm Gartner Inc. But it will run just 15% of all computing devices, if PCs, smartphones, tablet computers and other gadgets connected to the Internet are lumped together, given the rise of rivals such as Apple Inc. and Google Inc. Investors cheered the news of Mr. Ballmer’s departure, sending Microsoft shares up 7% to $34.75 on the Nasdaq Stock Market. Microsoft remains a behemoth financially. It generated nearly $78 billion in revenue in the year ended June 30—an average pace of $150,000 worth of sales every minute. The company’s fat profit, amounting to $21.86 billion last year, remains the envy of most industries. Under Mr. Ballmer’s watch, the company succeeded in limiting many threats, including the open software standard called Linux that Mr. Ballmer once described as a “cancer.” He also helped Microsoft recover from the shock of the U.S. government’s effort to break the company apart. But Microsoft generates nearly all of its profit from a trio of products—Windows, Microsoft Office and related software to run companies’ back-end computing gear—that are deeply dependent on the sales of Windows-powered PCs. Other products, such as the Xbox videogame machine and the Bing search engine, are either unprofitable or only marginally so.

The Real Reason College Costs So Much (page A9): Another school year beckons, which means it’s time for President Obama to go on another college retreat. “He loves college tours,” says Ohio University’s Richard Vedder, who directs the Center for College Affordability and Productivity. “Colleges are an escape from reality. Believe me, I’ve lived in one for half a century. It’s like living in Disneyland. They’re these little isolated enclaves of nonreality.” Mr. Vedder, age 72, has taught college economics since 1965 and published papers on the likes of Scandinavian migration, racial disparities in unemployment and tax reform. Over the last decade he’s made himself America’s foremost expert on the economics of higher education, which he distilled in his 2004 book “Going Broke by Degree: Why College Costs Too Much.” His analysis isn’t the same as President Obama’s. College costs have continued to explode despite 50 years of ostensibly benevolent government interventions, according to Mr. Vedder, and the president’s new plan could exacerbate the trend. By Mr. Vedder’s lights, the cost conundrum started with the Higher Education Act of 1965, a Great Society program that created federal scholarships and low-interest loans aimed at making college more accessible. In 1964, federal student aid was a mere $231 million. By 1981, the feds were spending $7 billion on loans alone, an amount that doubled during the 1980s and nearly tripled in each of the following two decades, and is about $105 billion today. Taxpayers now stand behind nearly $1 trillion in student loans. Meanwhile, grants have increased to $49 billion from $6.4 billion in 1981. By expanding eligibility and boosting the maximum Pell Grant by $500 to $5,350, the 2009 stimulus bill accelerated higher ed’s evolution into a middle-class entitlement. Fewer than 2% of Pell Grant recipients came from families making between $60,000 and $80,000 a year in 2007. Now roughly 18% do. This growth in subsidies, Mr. Vedder argues, has fueled rising prices: “It gives every incentive and every opportunity for colleges to raise their fees.”

Enter the Post-Ballmer World (page B1): Microsoft Corp.’s Steve Ballmer tried new operating systems, new gadgets and new management structures. But the times caught up with a man who helped build one of the greatest companies of the 20th century. Mr. Ballmer’s surprise retirement announcement Friday follows years of criticism about the waning growth and stagnant stock price of Microsoft, a force in the personal-computer era whose power was once so great that U.S. regulators sought to break up the company. PC sales—the lifeblood of Microsoft’s business—are on a steady decline. Business and casual users alike are switching to devices and services offered by Apple Inc. and Google Inc. Investors cheered the news, pushing Microsoft shares up 7%, or $2.36, to $34.75, in 4 p.m. trading Friday on the Nasdaq Stock Market. Microsoft’s offerings to customers “are downright confusing,” said Daniel Gasparro, an IT consultant who recently managed Microsoft software purchases for clients including Washington, D.C. law firm Patton Boggs LLP. “When you’re spread too thin, you’re not good at anything.” Mr. Ballmer, who took the reins from Chairman Bill Gates in January 2000, has responded to the changes by recently overhauling the company’s Windows software to be used with touch commands and introducing a Microsoft-designed tablet computer called Surface. More broadly, Mr. Ballmer has attempted in the past year to remake the company’s overarching strategy to become a provider of devices and services rather than emphasizing software sales. A management structure announced in July that abandons autonomous product groups is expected to speed the transition. But the shifts haven’t yet helped reignite the company’s growth, though its longtime businesses continue to produce healthy profits. Its stock hasn’t shown significant gains since the crash following the Internet bubble, which had taken its share price to a high of $58.03.

Inside Comcast’s $30 Billion TV Bet (page B1): Cameras popped as celebrities stepped out of tinted-window vehicles at a Manhattan ballroom where E! cable network was hosting an event for advertisers. Kim Kardashian preened on the red carpet while Ryan Seacrest chatted with fans. But Steve Burke, the CEO of E’s parent, NBCUniversal, was decidedly not in a partying mood. “I want to kill myself,” he said before ducking into an elevator. “They tried to get me to do the red carpet, but I said ‘no’,” he laughed. When the doors opened, a woman asked him to pose for a picture with the Olympian swimmer Ryan Lochte. “You’re a good sport to put up with all of these suits,” he told Mr. Lochte, leaning in for the photo. In the two years since Comcast Corp. bought NBCUniversal, Mr. Burke has shown a zeal for shaking things up with little sentimentality, weeding out some of the company’s most well-known personalities in the process. A straight-talking Harvard Business School graduate, Mr. Burke belongs to a new generation of media chieftains—including Time Warner Inc.’s Jeff Bewkes and Viacom Inc.’s Philippe Dauman—who are more enamored with the bottom line than with Hollywood glamour. He refrains from hanging out in the news rooms and indulging stars—hallmarks of his predecessor Jeff Zucker. Warren Buffett, who made him a director on his board at Berkshire Hathaway, describes him as “a personable guy, but not flamboyant.” Mr. Burke is the man in charge of pulling off a colossal wager. With Comcast’s two-stage, $30 billion deal completed in March, the cable giant is betting that its distribution business, combined with a content company, can create outsize benefits. That logic, of course, runs counter to the trend of big U.S. media companies breaking themselves into smaller pieces. Time Warner Inc. spun off its cable operations in 2009 after failed bids to happily marry its content and distribution arms; Viacom Inc. carved out its CBS broadcast television and radio business into a separate company in 2005. Mr. Burke argues that the Comcast model is different, and that the company he took over from General Electric Co. was “very broken.” “You don’t get a chance to buy a company like NBCUniversal unless it’s not doing well,” he said in his first major interview, sitting in an office notable only for its multiple television screens and many framed family photos. “We started from the premise there is a lot of opportunity here.”

Intern’s Death Scrutinized (page B2): Bank of America Merrill Lynch has appointed a committee of senior officials to investigate the circumstances surrounding the death of a summer intern in London, the bank said. The bank’s statement said the “formal senior working group” would “review all aspects of this tragedy” and “listen to employees at all levels” as more information becomes available. The group at the investment-banking division of Bank of America Corp. will be looking at, among other things, whether its interns and other junior employees are encouraged to work overly long hours or are pushed into unhealthily competitive environments as they vie for a limited number of jobs, said a person familiar with the situation. Moritz Erhardt, who was 21 years old, died on Aug. 15, just before completing his internship with the bank’s investment-banking group. While his cause of death is unknown, it has become a cause célèbre in the U.K., generating widespread media coverage. Like other Bank of America interns, Mr. Erhardt was rotating through the division, working on a variety of projects. Long working hours were the norm, as is often the case at investment banks in London, according to a person familiar with the matter. Interns at investment banks often work between 60 to 80 hours a week, said Scott Rostan, founder of Training the Street Inc., which provides financial-training courses for new Wall Street employees.

Friday’s Markets: Microsoft Helps Pull Stocks Up (page B5): U.S. stocks ended the week on a bright note, as a drop in Treasury yields and a rally in Microsoft helped divert investors’ attention away from recent concerns over Federal Reserve policy. It was an eventful week for stocks, if not an active one in terms of volume. Stocks slumped early in the week, with blue chips experiencing the longest losing streak in over a year and Treasury yields jumping to two-year highs, amid increasing worries that an improving economy would prompt the Fed to start slowing the flow of liquidity by tapering bond purchases as early as September. The market started rebounding on Thursday, as investors shook off technical issues that forced trading halts in all Nasdaq Stock Market-listed for three hours that afternoon. The Dow Jones Industrial Average rose 46.77 points, or 0.3%, to 15010.51 on Friday. The Dow still posted a third-straight weekly loss, the longest such stretch since November 2012. The S&P 500-stock index gained 6.54 points, or 0.4%, at 1663.50, and the Nasdaq Composite Index advanced 19.09 points, or 0.5%, to 3657.79. The S&P 500 and Nasdaq posted weekly gains.

Investors Embark on a European Tour (page B7): Things are starting to come together for the continent that almost fell apart. The economy in the 17-member euro zone is growing again—slowly—after contracting for more than a year. Signs of revival are showing up in data on business activity and consumer confidence. As in the U.S., central bankers’ extraordinary commitment to injecting cheap money into their economies has so far helped avert disaster. The euro zone hasn’t splintered, as some feared, and no country has dropped the common currency. As worries ease, markets are up from Ireland to Italy. Benchmark national indexes in the U.K., France and Germany have climbed at least 10% this year. The pan-European Stoxx Europe 600—akin to the S&P 500 in the U.S.—is up 19% in the 13 months since Mario Draghi said the European Central Bank, which he heads, was “willing to do whatever it takes to preserve the euro.” Investors planning their own grand investing tour of Europe’s stocks should know there still are discounts available. But as many a shopper in the markets of London, Paris or Rome will agree, it can pay to be choosy. For instance, many fund managers see more near-term upside in consumer goods and banks than in European utilities or energy firms. There are several options for investors. Low-cost index funds, such as the Vanguard FTSE Europe exchange-traded fund—which charges 0.12% in fees, or $12 for every $10,000 invested—offer broad exposure that includes many of the region’s global heavyweights. There also are actively managed, Europe-focused funds run by stock pickers who try to beat benchmark indexes, and global funds that feature a hefty dose of European exposure. In addition, many European companies issue American depositary receipts that trade like shares on U.S. exchanges. Some firms only trade on home-country exchanges, which U.S. investors can access through brokers or international accounts, though this typically involves taking on currency risk and navigating complicated tax rules.

Lofty Profit Margins Hint at Pain to Come for U.S. Shares (page B7): Profit margins at near-record levels—watch out below! If you are wondering what might prove to be the stock market’s Achilles’ heel, look no further than its dependency on near-record corporate profit margins. Any sizable decline would almost certainly translate into big losses for the stock market. Given the current high levels, such a retreat seems likely. Investors therefore may want to begin building up a healthy cash position to take advantage of lower prices in coming years. U.S. corporations, on average, currently report a profit of 9.3 cents for every dollar of sales, according to U.S. Commerce Department data—a profit margin of 9.3%. It has gotten only slightly higher than this over the past six decades: In the fourth quarter of 2011, it was 10%. The average since 1952 is 5.9%. Profit margins in the past have exhibited a strong historical tendency to “revert to the mean,” according to James Montier, a visiting fellow at the U.K.’s University of Durham and a member of the asset-allocation team at Boston-based GMO, an investment firm with $108 billion under management. That is, above-average levels in the past have tended to quickly fall, just as below-average levels in the past have soon risen. Consider all occasions since the early 1950s in which the profit margin rose to at least 6.9% or fell to at least 4.9%—one percentage point away from its historical mean, in other words. On average, it was back at its mean in just 4.8 years.

Microsoft: Hitting Ballmer Out of the Park (page B14): Merely by announcing his retirement, Steve Ballmer can more than pay for it. Shares in Microsoft leapt more than 7% Friday when the software giant announced its chief executive will retire within 12 months. Owning 333 million shares of Microsoft, Mr. Ballmer’s personal net worth increased by about $800 million on the news. Microsoft needs a change in leadership. This is a company that, after establishing its dominance in the personal-computing market 30 years ago, whiffed badly on two of the next three computing megatrends: the Internet and mobile. Former CEO Bill Gates deserves blame for missing the Internet. Blowing it in mobile is Mr. Ballmer’s error, having taken the reins in 2000. And that is arguably more dangerous to Microsoft’s long-term financial outlook, because one of the company’s largest businesses is writing software that powers computers, most successfully in PCs and servers.

Tell Harvard What You Think (page C3): This spring, with little fanfare, the folks behind the Common Application—the main application form for almost 500 of the nation’s top colleges and universities—announced a big change: the personal statement, the form’s core essay, has been extended from 500 to 650 words long. I thought: That’ll be $13,000. Several years ago, on a high floor in a midtown Manhattan office, a father offered me $10,000 to write his son’s personal statement. Apparently he had misunderstood what was meant by “independent college applications adviser.” The publishing industry may be in a tailspin, but in some places, writers can still earn $20 a word. Thanks to the Common Application’s changes (and not including inflation), that’s $13,000 a kid. Though I had other “day jobs,” for 15 years I worked discreetly as a college-applications adviser in cities from Los Angeles to London. I never wrote a student’s essay, but I was practicing a dark art: such tutoring privileges the elite whose parents can afford it and profits from a miserable process. The grim statistics of the college admissions race (last year Harvard reported a 5.79% acceptance rate), fueled by an obsession with trophy schools, have warped what might be a powerful threshold for adolescents. At the very moment when teenagers are invited to offer what they’ve learned and who they’ve become, their voices are hijacked by well-meaning adults who think kids can’t possibly be allowed to risk answering these questions on their own. In my years handling applications to elite schools, from Harvard to Haverford, Davidson to Dickinson and everything in between, I was often surprised by where students did gain acceptance. But in every case it was a student who wrote a fabulously independent essay. Not necessarily hyper-sophisticated. But true. My students always asked me, What should I write about? I’d answer: You are a student of the world. What is it that moves you? What incites you, enrages you? The first-person pronoun is a mighty tool. Use it.

Weekend Confidential: An Interview with Edward Frenkel (page C11): The words love and math aren’t usually uttered in the same breath. But mathematician Edward Frenkel is on a mission to change that, uniting the terms in both his recent film, “The Rites of Love and Math,” and upcoming book, “Love and Math.” Both are attempts to bridge the gap between his passion for math and the popular appetite for it. “You say the word ‘math’ and people shut down,” says Mr. Frenkel, sitting outdoors in New York’s Bryant Park. In his book, to be published in October, the tenured professor at the University of California at Berkeley argues that the boring way that math is traditionally taught in schools has led to a widespread ignorance that may have even been responsible for the recession. “It’s like teaching an art class where they only tell you how to paint a fence but they never show you Picasso,” he says of elementary school math classes. “People say, ‘I’m bad at math,’ but what they’re really saying is ‘I was bad at painting the fence.’ ” Love is a different story, though. “People might think they hate math but everyone loves love,” he says. “I want to put more love into math.” And Mr. Frenkel, a youthful, puckish 45-year-old with a slight Russian accent and a flair for fitted shirts and tailored jeans, hopes to be math’s next leading man. With YouTube videos of his lectures at UC Berkeley viewed by hundreds of thousands of people—”and that’s even the most boring stuff,” he adds—Mr. Frenkel does indeed talk about math adoringly. “It is this great connector,” he says. “Nobody can take it away from us.” What he means is that while the philosopher Pythagoras lived over 2,000 years ago, his theorem still exists today; it holds true across cultures, time and space. “How many things have the same endurance?” he asks. Mathematical formulas “have a quality of inevitability.”

Suites Get Even Sweeter (page D1): Over the past few years, the world’s fanciest hotels have been introducing a new generation of incredibly posh suites. These signatures spaces have eye-widening views and couture furnishings, and they are immense—in many instances, bigger than the average American home, which is about 2,200 square feet, according to the U.S. Census. In tourist magnets like New York, Paris, London and Dubai, the suites can be priced at tens of thousands of dollars a night. “These are for people who don’t pay their own bills,” said Steven Carvell, associate dean for academic affairs at the Cornell University School of Hotel Administration. “They have people who pay their bills for them.” Some of these super-suites are the crowning glories of new, haute hotels hoping to make a splash; others are being carved out of existing space by properties seeking to raise their profiles in the luxury market. And plenty are remakes of older suites that had faded and grown dated over the years.

Juicing, A to Z (page D7): “A juice bar on every corner” could be the unofficial slogan of the Obama era. In New York, the trend hit critical mass in the last year or so, but long before that, there was Melvin Major, Jr. “When I got into juicing 23, 24 years ago, it was kale, collards, chard,” he said of the prevailing circa-1990 approach. “I couldn’t do all-green—it was too hard-core. I wanted a great taste.” Today, at Melvin’s Juice Box in SoHo, Mr. Major serves the Jamaican Green, a lively kale, apple, lemon, ginger and celery blend with terrific body and a mineral finish. To describe a juice in this way—as one might a wine—is beginning to make sense now that more chefs are getting into the game. At long last, juice is having its epicurean moment. The new wave runs to refined combinations like beet, blood orange, fennel and shiso leaf—aka the Zest for Life, at Creative Juice in New York. (The juice’s creator, chef Michael Romano, said, “I’d serve it with a meal, something like roasted venison.”) Or elegantly spare sips like a honeydew, cilantro and lime mix at Moon Juice in Venice, Calif. Owner Amanda Chantal Bacon, a veteran of top restaurant kitchens, said, “I didn’t want to distract from the honeydew. The lime just polishes it a bit.” Up the beach in Santa Monica, Matthew Kenney of the acclaimed raw-vegan restaurant M.A.K.E. spikes his citrusy Spice-C with jalapeño. “You’re getting superpowered nutrition; you should feel it,” he said. “It’s a dynamic mouth experience.” Mixologists are expanding the repertoire of ingredients still further. In Portland, Ore., Lydia Reissmueller of TenderBAR is in the process of launching her own juice company. Her Succotash Smash of squash, tomato and sweet pepper gets its exotic herbal note from Mexican epazote. Among serious home juicers, cold-pressing—a slow process said to extract a more nutrient-rich juice—is the prevailing orthodoxy. But for those just starting out, Matt Shook of JuiceLand in Austin, Texas, recommends the easy-to-use Breville Juice Fountain (models start at $100), a centrifugal machine that pulverizes produce and spins to separate juice and pulp. The 26 fruits, vegetables, herbs and spices featured here are another great place to start. Use them in the recipes below, or just go with whatever tastes good to you. Delicious is the new hard-core.

2013_08_24_cmyk_NA_04To Tokyo with Gadget Love (page D11): Rest and relaxation in Waikiki. A boys’ night out in Vegas. Gadget shopping in Tokyo. Most guys might choose the first two escapes, but I’ve been going to Tokyo every year for the past decade to seek out the newest gizmos—products that haven’t yet made it to the west or are simply too niche to ever be imported. In my travels, I’ve found tiny wooden speakers hand-carved out of rare Japanese cedar, silicone keyboards that roll up like a burrito and a Gameboy cartridge filled with 500 games that were never released stateside. Some of the gadgets are brilliant solutions to urgent nerd problems; others will leave you dumbfounded. Don’t let the sillier products deter you, though. For every bewildering gadget you’ll find, a dozen more will be worth taking home. And, luckily for tech-obsessed tourists, getting around is easy: Most of the key stops are in the Akihabara neighborhood, on the Japan Railway’s Yamanote line. Here are five of my favorite spots, as well as a few of the curios that I found on my latest trip. While you can buy some of these products online, there’s no substitute for making an actual pilgrimage.

Don’t Let the Tech out of the Bag (page D12): Two bags keep your iPad, iPhone and other essential gear at the ready, here are two backbacks: the Osprey Pixel Port and Cocoon SLIM.


The Wall Street Journal: Thursday, July 25, 2013

Four Ideas for Fixing Higher Education (page A2): Until now, the federal government’s response to rising college costs has been to spend more on grants, loans and tuition tax breaks. But that is increasingly expensive and does little to assure that taxpayers’ and students’ (increasingly borrowed) money is well spent. So President Barack Obama is on the hunt for alternatives. “Families and taxpayers can’t just keep paying more and more into an undisciplined system,” he said Wednesday at Knox College in Illinois. “We’ve got to get more out of what we pay for.” In one way, the federal approach has worked: It has shielded students and families from even-more-rapid increases in tuition. Still, the average cost of in-state tuition, room and board ($12,110 a year last year) at a four-year public university, after scholarships and tax breaks, has risen 40% faster than economywide inflation over the past decade, the College Board estimates. Private schools are more expensive (average net cost $23,840), but their inflation-adjusted net price has climbed more slowly, at 9%. The president essentially is asking: If the federal government is trying to pay for quality, as opposed to volume, in health care, should it do the same in higher education? Which levers does he have?

  • The Stick
  • The Carrot
  • Transparency
  • Lowering Barriers to Entry

New Homes Sell Briskly, Bucking Rate Rise (page A2): Sales of new homes surged in June despite higher mortgage rates, maintaining momentum for a key sector driving the economic recovery. New-home sales increased 8.3% last month to a seasonally adjusted rate of 497,000, the Commerce Department said Wednesday. That was the highest level since May 2008. Sales were up 38% from a year earlier. The sales jump comes amid a sharp escalation in mortgage rates, which began rising in late May. The average for a 30-year fixed-rate loan is now up about one percentage point from its recent low to 4.58%, according to Mortgage Bankers Association data also released Wednesday. That’s down from 4.68% a week earlier. “The increase in mortgage rates over the past two months does not appear to have dented new-home sales, at least not yet,” said Stuart Hoffman, chief economist at PNC Financial Services Group. He cited pent-up demand, a better labor market and stronger consumer confidence as factors behind the sales boost.

SEC Rules Will Clip the Wings of Angel Investors (page A11): Following through on a key provision of last year’s JOBS Act, the Securities and Exchange Commission has ended the ban on the general solicitation of capital for privately offered securities. The agency’s action is being hailed as a boon that will open the door for vast stores of money that entrepreneurs can use to start up new businesses and hire workers. More likely, the SEC’s move could slam the door shut. That is because the agency’s new rules end the decades-old practice of letting individuals self-certify that they meet the legal rules that allow them to risk their money in a new venture that was not a “public offering.” The SEC has replaced self-certification with a verification scheme that would require most individuals who want to be considered as “accredited investors” to provide detailed personal financial information to entrepreneurs. This is a huge step backward.

Facebook’s Revenue Surprises (page B1): With a big earnings surprise, not all sins are forgiven—but Facebook Inc. is drawing some investors back. On Wednesday, Facebook easily beat second-quarter profit and sale expectations, sending its shares up 17% in late trading. The company swung to a profit as its sales rose 53% to $1.81 billion from a year ago, boosted by a surge in mobile and local ad sales. The company booked a profit of $333 million, or 13 cents a share. Facebook is getting traction in its quest to become what founder and CEO Mark Zuckerberg has called, a “mobile best” company. Since going public last May, Facebook’s stock has floundered, amid persistent concerns the company wouldn’t be able to offset the attrition in its desktop ad sales business and thrive in a mobile world. Facebook’s mobile-ad business rose 75% from the prior three months, to $656 million in sales, and now makes up 41% of its advertising sales. In the first quarter, that percentage was 30%.

Soda Sales Sag, but It’s Not All Because of the Sugar (page B4): It appears sugar isn’t the only thing turning some consumers off of soda. Fake sugar is bubbling up as a worry, too. Larry Young, chief executive of Dr Pepper Snapple, is the latest to voice the concerns. On Wednesday’s earnings conference call, Mr. Young said consumers “love the bubbles, they love the flavor, but they have concerns about artificial sweetener.”  The common narrative around the decline in U.S. soda sales has been that consumers have become more hesitant about high sugar levels, which have made soda a target in efforts to lower the obesity rate. Beverage companies that try to maneuver around those objections by emphasizing diet drinks may not have much luck.

Google Makes Another TV Push (page B5): Google Inc. on Wednesday made another attempt to embed itself into living rooms, after several false starts. The search giant unveiled a $35 device to wirelessly connect TVs to mobile devices so that people can view and listen to Web content on their biggest screens. Google joins Apple Inc.,Microsoft Corp. and others in the race to bring more Web content to the TV screen, which has remained a big focal point of home entertainment even as tablet computers and smartphones have commanded a greater share of consumers’ time. Google’s new two-inch TV device, called Chromecast, looks like a thumb drive, plugs into the HDMI port of a TV and can be controlled by a person’s mobile device or laptop using a wireless Internet connection. The device, which is compatible with mobile devices powered by Google’s Android software as well as Apple iPhones and iPads, went on sale Wednesday at, and the Google Play online store.

Google May Slow Rollout of Driverless Cars Tech (page B5): Google Inc. , under pressure to slow down development of driverless cars, may crimp the capabilities of the first auto products that it brings to market, people close to the company say. That may mean that cars using Google’s software may not drive faster than 25 miles per hour and may feature a foam front end to limit the extent of damage caused in the event of a collision. The future of the car products — which are not planned to begin entering the market until 2017, has been a topic of heated debate inside the company, say people familiar with the deliberations. One camp favors debuting the “Google Car” with its full capabilities. Others favor taking a more gradual approach, saying it will have to be introduced slowly and with minimal shock to consumers, policymakers, insurers and industry alike. While proponents argue the new technology will provide important societal benefits such as reduced accidents, improved energy efficiency and productivity gains, there are still policy and legal hurdles to be overcome.

Mining Silicon Valley’s Culture (page B5): In roughly the past two years, Target Corp., General Electric Co., Ford Motor Co.,Johnson & Johnson and other big companies have opened outposts in or near Silicon Valley in search of ideas and exposure to new technologies not likely to be created in places like Fairfield, Conn., or Detroit. Such companies spent decades watching from the sidelines as Silicon Valley startups developed into some of the fastest-growing and most influential companies of their time. Not surprisingly, companies from around the world—including retailers and old-line industrial giants—ventured to California to tap some of Silicon Valley’s culture based on risk taking, speed, innovation and both hypercompetition and collaboration. Some of the efforts have paid off with increased e-commerce sales, entries into new markets and faster new-product development. But for every company like auto maker BMW AG that reaped benefits from early partnerships with firms such as Apple Inc.,there are companies like Barnes & Noble Inc. that have struggled to capitalize on their Northern California investments.

Untangling the Numbers for (page C1): Any math buff will tell you right away that 79 is a prime number. But is it a profitable one? With Inc. preparing to unveil second-quarter results on Thursday, the enthusiasm of its Prime customers, who are its most loyal buyers, will be in focus. An analysis by RBC Capital Markets figures they spend about $533 a year in addition to their $79 annual fee for expedited shipping and digital goodies. Even if these shoppers help Amazon’s revenue increase by even more than the 23% year over year that analysts predict, big questions remain. Sure, earnings per share are seen rising fivefold from a year ago to five cents. Aside from the fact that the estimate has dropped steadily from 46 cents last fall, though, those are rounding errors for a stock now fetching $300 a share. The optimistic spin for Amazon is that it is spending heavily today and sustaining losses on products such as its Kindle tablets to rake in profits tomorrow. Following last year’s small net loss, Amazon is seen earning $1.21 a share this year and a far higher $5.95 by 2015, according to FactSet. Even if those projections play out and the company’s price/earnings multiple drops from an eye-watering 250 times today to a mere 50 times, Amazon still isn’t a bargain. And the payoff is years away.

Bond Investors Turn to Cash (page C1): Investors are cashing out of bonds but remain hesitant to plunge into stocks, preferring instead to buy money-market mutual funds despite their low returns. The surprise move highlights persistent investor anxiety with equities even as stock indexes reach new highs. Investors withdrew an estimated $43 billion from taxable bond mutual funds last month, the largest-ever monthly outflow, according to the Investment Company Institute. The debt-market swoon was fueled by worries that the Federal Reserve was softening its commitment to keeping interest rates low. Rising interest rates mean lower bond prices. Many observers expected to see those flows turn to funds tracking U.S. stocks. But in a twist, the main beneficiary of the rush out of bonds has been money-market funds, which are cash-like investments that appeal to safety-minded investors.

Wednesday’s Markets: Investors Develop Fear of Heights (page C4): U.S. stocks declined Wednesday, as the latest push to record highs lost steam amid a mixed bag of corporate earnings reports. The Dow Jones Industrial Average declined 25.50 points, or 0.2%, to 15542.24, retreating from its record closing high set Tuesday. The Standard & Poor’s 500-stock index lost 6.45 points, or 0.4%, to 1685.94, after setting its own record Monday. The tech-heavy Nasdaq Composite Index gained 0.33 point, less than 0.1%, to 3579.60. The Nasdaq got a boost from a strong quarterly earnings report from consumer-electronics giant Apple Inc.

Google Casts Chrome as a New TV Star (page C10): Google already makes a ton knowing what websites you visit and what you are searching for. Soon it may profit by knowing what you watch on TV. That is the subtle brilliance of a small device it released Wednesday. Called “Chromecast,” it is a $35 attachment that plugs into a high-definition TV, enabling users to broadcast video and other content from their smartphone, tablet or computer directly to their television. Even more interesting is the so-called “cast” button that makes Chromecast work. Similar to websites that incorporate Facebook’s “like” button, the cast button will enable users to stream content from websites or mobile apps directly to a TV via Chromecast.

When a Retweet is Less Sweet, Try Favoriting (page D2): What’s trending on Twitter? The use of an option known as ‘favoriting,’ which is becoming a go-to tool for some people who long for a more discreet, less public way to navigate the raucous waters of the popular social network. The Twitter feature allows users to mark with a star icon tweets they find amusing or useful. Doing so both bookmarks the tweet and alerts its creator that they appreciate the sentiment without republishing it in their own streams. The rise in ‘favoriting’—or starring, as it’s also known—is a safer way to engage with others on the network. Rather than retweeting risky comments or observations, users can more quietly add their approval or note their amusement by favoriting.

Beating America’s Fittest Mayor (page D6): Chicago mayor Rahm Emanuel is routinely described as America’s fittest mayor but here’s the thing: If you’re a respectably fit 50-something endurance athlete, it shouldn’t be nearly as difficult as you think.

The Wall Street Journal: Monday, July 15, 2013

China Slump Ripples Globally (page A1): As the numbers pile up showing China’s sizzling growth cooling down, industries world-wide—from German paper-cutter makers to Indonesian palm-oil exporters—are confronting an altered landscape of winners and losers. The ones that benefited the most from China’s rise are now being hurt. Others, aiming at China’s 1.3 billion consumers, are faring better. Growth in China, the world’s second-biggest economy after the U.S., has been slowing since 2007’s peak, but that slowdown has accelerated recently. China’s second-quarter gross domestic product released early Monday showed the economy expanded 7.5% from the year earlier, slower than the 7.7% growth in the first quarter. That matches the government’s full-year growth target of 7.5%, a rate that would make this year the slowest since 1990. Some economists figure China will grow even slower than that.

Business Confidence Declines in Survey (page A8): Businesses around the world became more gloomy about their prospects in June, an indication that they are unlikely to increase their investment spending and hiring, hindering a so-far tepid and patchy economic recovery. Of 11,000 manufacturers and services providers in 17 countries surveyed between June 12 and 26, the proportion expecting an increase in activity over the coming 12 months exceeded the proportion expecting a decline by 30 percentage points—down from 39 percentage points in February, data-analysis firm Markit said. The slipping business confidence is the latest indication that there is unlikely to be a substantial pickup in global economic activity this year. When businesses are confident that future activity will increase, they typically invest in new equipment and hire workers, in turn driving a rise in economic output. The International Monetary Fund last week cut its forecast for global economic growth this year to 3.1% from 3.3%, citing slowdowns in some large developing economies, as well as the euro zone’s struggle to emerge from the region’s longest postwar contraction. Markit said the decline in business confidence was most notable in the U.S. and China, with smaller declines recorded in the euro zone and Japan.

The Plight of the Teenage Pretzel-Heads (page A10): Mixed messages about the value of education and hard work are causing some twisted thinking. New York Mayor Mike Bloomberg got it right the other day when he encouraged kids to think about forgoing college and becoming plumbers instead. Not everyone needs to go to college. After all, what’s wrong with plunging those toilets? You get good at the job, do it for a few years, and maybe you open your own plumbing business and hire people to work for you. Sometimes it seems like America has lost sight of the kind of entrepreneurship that elevated the nation from a colony to the world’s superpower. Young people today are independent-minded and entrepreneurial. The problem is they don’t know what that means. Entrepreneurship does not equal innovation. It doesn’t necessarily mean creating the next Twitter—though it could. Entrepreneurship is the carpenter laying a foundation, the electrician fixing a lamppost, the ice-cream man pushing his product in the middle of July. It’s building upon hard work, experience, success—and even failure—to create opportunities for yourself and others. I suspect that it’s also the cure for Pretzel Head.

Poof! It’s J.K. Rowling (page B1): J. K. Rowling had more magic up her sleeve after all. Over the weekend the Sunday Times (London) disclosed that she is the author of “The Cuckoo’s Calling,” a well-reviewed crime novel issued in April under the pseudonym Robert Galbraith. The book, which features a private investigator named Cormoran Strike, who lost a leg in Afghanistan, quickly zoomed up the charts Sunday after Ms. Rowling was identified as the writer. The author had originally been described as having served in the military, where his experiences helped shape the novel.

Microsoft Cuts Price of Its Surface Tablet by Up to 30% (page B3): Microsoft Corp. has cut the price of its Surface RT tablet by $150, or as much as 30%, as even some Microsoft partners have called the device a sales laggard. The software company’s websites on Sunday began showing a price of $349 for the least-expensive model of the tablet, without a cover that doubles as a keyboard for the device. That model, which launched last fall, previously cost $499 without the cover-keyboard combination. Microsoft also cut the price on the Surface RT model with twice as much memory to $449 from $599. That version, with a type of cover-keyboard combination, now costs $549, down from $699.

Emerging Markets Beckon (page C1): The recent rout in emerging markets is enticing some investors to jump back in to search for cheap stocks, bonds and currencies. But the selloff is prompting these bargain hunters to be a lot pickier than in the past. Markets from Brazil to China have tumbled since mid-May amid growing expectations that the U.S. Federal Reserve is preparing to end its $85 billion in monthly bond purchases. That would shut off a flow of easy money into emerging markets just as prospects for economic growth in some of them have begun to dim. On Tuesday, the International Monetary Fund cut its outlook for the global economy in 2013, citing flagging growth in emerging markets as a major reason for the downgrade. Investors who are buying have a different take. They say two months of outflows have cleared away much of the “hot money”—from hedge funds and other investors with a short time frame—that had pushed asset prices higher. They see little change to what attracted them to these markets in the first place: faster growth and higher yields than can be found in the developed world.

Netflix Should Read Amazon’s Script (page C1): It turns out ’13 has been lucky for Netflix. The stock has surged 178% so far, the best performance in the Standard & Poor’s 500-stock index. But to keep the odds in its favor, the video-streaming and DVD-rental company will need to be more like an than an HBO. Netflix’s paid domestic streaming subscriber base has increased to nearly 28 million from 25.5 million at the start of 2013 and 22 million a year before. This puts it just below Time Warner’s HBO. Meanwhile, Netflix’s domestic streaming margin on the basis of contribution profit, revenue less cost of sales and marketing, was 20.6% in the first quarter, up strongly from 14.3% a year earlier. But expanding margins may represent a risk for Netflix. That sounds counterintuitive. But when Netflix reports second-quarter earnings on July 22, investors will be more focused on how many subscribers it added, something that may require extra spending. For Netflix, building a formidable subscriber base should be a more immediate concern than raising margins. Having more users enables Netflix to spread the costs of buying and creating new content. And rising market share should help it raise subscriber fees. Considering the stock’s recent performance and the mounting evidence of its potential, investors are likely to give Netflix a free pass on margin growth for the time being if it can keep its subscriber numbers climbing. That leeway can itself be a competitive advantage: Just look at rival Amazon, which has used razor-thin margins to dominate retail, all with Wall Street’s apparent blessing. It is notable that, at 176 times 2013 earnings, Netflix’s valuation is already approaching Amazon’s 200-plus level.

Verizon Wireless’s iPhone Commitment (page C8): Is the iPhone becoming the smartphone world’s Alex Rodriguez? One data point suggests the aging all-star device may be struggling to put up the sales numbers to justify its gigantic contract. Like some rivals, Verizon Wireless appears to have made a multiyear, multibillion-dollar commitment to buy iPhones in order to get Apple’s smartphone onto its network. Now, the No. 1 U.S. carrier by subscribers doesn’t appear to be selling as many of the devices as it thought it could. That’s judging from Verizon Wireless’s ballooning purchase commitments as reported by one of its corporate parents, Vodafone Group. In the short term, any shortfall could mean Verizon Wireless faces some sort of contract penalty. More important will be the likely impact on future contract negotiations with Apple. Verizon Wireless, which is also part-owned by Verizon Communications, hasn’t disclosed the terms of its Apple deal. But Moffett Research points to a footnote in Vodafone’s filings detailing the division’s commitments to purchase equipment from companies such as Apple.

The Wall Street Journal: Wednesday, July 3, 2013

A Novel Way to Fund College (page A2): As lawmakers in Washington remain at loggerheads over the student-debt crisis, Oregon’s legislature is moving ahead with a plan to enable students to attend state schools with no money down. In return, under one proposal, the students would agree to pay into a special fund 3% of their salaries annually for 24 years. The plan, called “Pay it Forward, Pay it Back,” would create a fund that students would draw from and eventually pay into—potentially bypassing traditional education lenders and the interest rates they charge. The state would likely borrow for the fund’s seed money, which could exceed $9 billion, but the program’s designers intend it to become self-sustaining.

For NSA, Hackers Are Both Needed and Risky (page A4): When President Barack Obama last week called intelligence leaker Edward Snowden a “hacker,” the comment was designed to be dismissive. But the president also put his finger on a growing fear among national-security officials: that others in the ranks of young, tech-savvy new recruits could prove as unpredictable as they are indispensable. Faced with accelerating technological advances over the past decade, and pressed to outsource vital government services, U.S. spy agencies are reaching ever further outside the traditional government hierarchy for expertise. That approach likely led them to Mr. Snowden, a community-college dropout whose sophisticated computer skills trumped his lack of formal education, a situation that has become increasingly common in hiring within the National Security Agency, officials there confirm. The 30-year-old’s work as an NSA infrastructure analyst gave him the ultimate insider’s access to national secrets. “We have developed this hacker concept, so we want the people that will be the best at breaking into a network,” said Dickie George, who served as the NSA’s technical director of information assurance, responsible for recruiting those who have proven technical skills, before retiring in 2011. The NSA, he said, “will take a chance on somebody who has the skills we need,” even a person without a college degree or government experience.

Wanted: Gurus with Actual Experience (page B6): What can a 20-something Tunisian medical intern teach senior managers at KPMG LLP? A lot, apparently. Skander M’zah, a doctor who participated in the 2010-2011 Tunisian revolution, was one of about a dozen speakers featured at the accounting firm’s October 500-strong new-partner meeting in New Delhi. The topics of Mr. M’zah’s speech included lessons learned during Tunisia’s political turmoil and how to mentally prepare for change. Companies have long hired motivational speakers and business “gurus” to address employee audiences. But lately, fueled by demand for a more tangible return on investment and boredom with the regular speaker circuit, event planners are tapping CEOs, historians, and even fighter pilots, to offer a fresh take on topics such as crisis management and corporate culture. The shift has been accelerated by growing fervor for TED talks, a conference series featuring short addresses from multiple academics, politicians and executives. Inspired by the enthusiasm surrounding such talks, KPMG staged its meeting as a TEDx event, under the TED umbrella but independently organized. “It’s not just telling someone else to go out and do something,” says David Lavin, whose Lavin Agency represents the founders of Kiva and ING Direct, neuroscientists and politicians, among others. “[Speakers] are saying, ‘Look what I’m doing. It’s pretty cool. What are you doing?’ ”

Asking Price

  • Biz Stone, Twitter co-founder: Has spoken at: The Art of Marketing, Turnaround Management Association, Hult International Business School Booking Fee: $75,000 (est.)
  • Tony Hsieh, Zappos CEO: Has spoken at: Ernst & Young Strategic Growth Forum, General Mills, Credit Suisse Entrepreneurs Summit; Booking Fee: $75,000 (avg.)
  • Kate Tellers: The Moth senior producer: Has spoken at: Beam’s Global Marketing Conference, Kellogg Foundation, Mass Mutual, Nike; Booking Fee: $15,000 (avg.)

The Hunt for the Never-Been-Done ETF (page C1): Maybe the Wall Street financial-product machine really can run out of new ideas. Just 70 exchange-traded funds and other exchange-traded products were launched from Jan. 1 to June 30, according to IndexUniverse LLC, a research firm in San Francisco. The total is down 44% from 126 in the same period a year earlier. The slide is a sign the market for ETFs—which hold a bundle of investments and boomed in the past decade as a cheaper, tax-efficient alternative to traditional mutual funds—has gotten so saturated fund companies are struggling to come up with niches that aren’t served by existing ETFs.

Dividend Stocks Enter New Era of Caution (page C4): Jitters about Federal Reserve policy have made investors more cautious about stock sales by companies that pay high dividends, but the window is still open for new offerings. Investors may no longer be rushing to buy just about anything with a high yield at just about any price, as they seemed to be doing at times during the first five months of the year. Yet interest rates are expected to remain exceptionally low even if the Fed begins to scale back its stimulus efforts. That, many analysts and investors say, will continue to fuel a search for yield through dividend stocks, and provide an appetite for new offerings. At the same time, the kind of improved growth outlook that would lead the Fed to taper its easy-money policies could encourage stock sales by companies more sensitive to economic growth. Investors look to shares of these companies because they offer potential for price appreciation.

Tuesday’s Markets: Shares Erase Gains as Investors Brace for Friday (page C4): U.S. stocks ended a volatile but low-volume session with slight losses, as some jitters over Friday’s key jobs data and a jump in crude-oil prices kept sentiment in check. The Dow Jones Industrial Average lost 43.55 points, or 0.3%, to 14932.41. The Dow was up as much as 74.26 points at the intraday high and down 104.45 points at the low. The Standard & Poor’s 500-stock index declined 0.88 point, or 0.1%, to 1614.08, and the Nasdaq Composite Index eased 1.09 point, or less than 0.1%, to 3433.40.

Meet the Speed Cleaners (page D1): We are eating faster, talking faster, driving faster. So it stands to reason we want to clean faster too. Unwilling to engage in housecleaning marathons, consumers have a new strategy—frequent bursts of mess-busting touch-ups. Cleaning a kitchen counter or bathroom sink now often happens with a passing swipe. Plates get wiped with a sponge and a squirt of soap. Floors get washed one spill at a time. The change is creating a nation of housecleaning multitaskers who can clean a stovetop, cook and chat on the phone at the same time. They have a high tolerance for rooms that are works-in-progress—and a low tolerance for Saturday afternoon scrubbing sessions. Consumers used to clean the way their mothers showed them to. But the shift to speed cleaning is happening so fast that companies are racing to keep up. Makers of cleaning supplies, who translate a slight change in human behavior into billions in sales, are tracking the shift closely, updating decades-old products and inventing new ones. The most common and fastest-growing cleaning technique is touch-up cleaning, defined as a task that takes 15 minutes or less, according to research from SC Johnson & Son Inc., maker of products including Windex and Pledge. Touch-ups now account for 70% of all cleaning, up from 40% five years ago.

Walter Mossberg: Ways to Edit Videos to Be Not Too Long, Not Too Short (page D1): Very short videos are having their moment. Twitter’s Vine smartphone app, which shoots and posts clips of up to 6 seconds, has been a hit. And Instagram, the wildly popular photo-sharing app owned by Facebook, recently added shared video clips, which can last 15 seconds. These clips are infinitely less work than traditional digital videos, which often take hours to edit in programs like iMovie and run 15 or 20 minutes or more. But instant, no-work short clips also convey limited content. Instead of a whole holiday gathering, they tend to capture quick moments during a day, like a baby or pet doing something cute, friends acting goofy, or just a glimpse of a more meaningful event. They’re like animated snapshots. What if you could easily produce videos long enough to show viewers a decent chunk of a memorable occasion, yet short enough to avoid being boring and hard to share? Well, there are services that let you simply gather relevant photos and video clips, and upload them for automated video editing. There, they get boiled down, enhanced with effects and turned into professional-looking videos typically lasting from one minute to a few minutes, accompanied by music, and easily shared. These programs let you choose styles, or visual themes, and videos are produced in accordance with the themes and the music. This week, I tested two such services, Magisto and Animoto. Both work on iPhones and Android phones, but also via Web browsers on PCs and Macs. Both offer free versions, as well as paid versions with richer features. I found both worked well, but Magisto was easier to use. It, however, offered fewer options and less control. It’s focused on automated video editing based on algorithms it claims allow it to deduce the gist, or emotion, of the video, in accordance with the theme. Animoto offers more customization, with a greater variety of styles and more manual controls. It keys its production mainly from the music you choose. Each has some drawbacks, but I generally preferred Magisto. It took less time and its free version offers longer videos. I’d use Animoto if I wanted greater control.


The Wall Street Journal: Wednesday, June 19, 2013

Schools Get Reprieve on Teacher Mandate (page A2): U.S. Education Secretary Arne Duncan announced Tuesday a one-year reprieve on federal guidelines requiring states to link student test scores to teacher personnel decisions, bowing to pressure from educators who complained that they need more time to implement universal math and reading standards known as the Common Core. The decision, which would cover most states, was praised by the two largest teachers unions. To win waivers from the Obama administration from provisions of the federal No Child Left Behind law, which mandates student testing in most grades, more than three dozen states and the District of Columbia agreed in recent years to employ new academic standards by next school year. Most of them agreed to roll out new exams and link them to teacher evaluations by the 2014-15 school year. They also agreed to use test results for teacher personnel decisions, such as pay raises and tenure, by 2016. Mr. Duncan said he now will give states until 2017 to make that test-personnel link, if they apply for an extension. The decision follows a backlash against the Common Core, a set of voluntary academic standards developed by a group of governors, state school officials and other experts to detail what students should know from kindergarten through 12th grade. The standards, intended to better prepare students for college and careers, have been adopted entirely by 45 states and the District of Columbia, and rolled out in many states during the school year now ending.

Survey Finds Number of Adult Smokers Falling (page A6): Fewer U.S. adults are smoking, a new government report says. Last year, about 18% of adults participating in a national health survey described themselves as current smokers. The nation’s smoking rate generally has been falling for decades but had seemed to stall at about 20% to 21% for about seven years.

Wal-Mart’s E-Stumble (page B1): Inc. has become the runaway leader in online sales thanks to a network of more than 40 U.S. warehouses, some employing robotic assistants, which speeds orders to homes with ruthless efficiency. As it seeks to play catch-up in e-commerce, Wal-Mart Stores Inc. has concluded it doesn’t want to simply clone Amazon’s model since it also has to worry about supplying its stores. Instead Wal-Mart is creating a vast new logistics system that includes building new warehouses for Web orders, but also uses workers in stores to pack and mail items to customers, because Wal-Mart has determined it is faster and cheaper to send some shipments from its more than 4,000 U.S. stores. Wal-Mart is being forced to invent its own solution because it still hasn’t figured out how to economically deliver all its products into the hands of online shoppers, current and former executives say. It is a remarkable admission for the Bentonville, Ark., company, which became the world’s largest retailer in part by the efficiency of its supply chain. Despite countless promises to become an online force since it got into e-commerce a decade ago, Wal-Mart has fallen far behind Amazon.Last year, Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for Wal-Mart, according to trade publication Internet Retailer.

Wal-Mart: A Pro in Physical-Store Retail Logistics (page B2): Few have done better than Wal-Mart Stores Inc. when it comes to retail logistics—the art of ordering, transporting, stocking and tracking merchandise. Wal-Mart pioneered a sophisticated hub-and-spoke distribution network which uses warehouses to service stores less than a day’s truck drive away so it could remove middlemen, quickly replenish shelves and reduce costs. At its distribution centers, scanning technology tracks merchandise as it flows at 6 miles per hour on 12 miles of conveyor belts onto trucks. Some items spend less than 45 minutes in warehouses. Supply trucks crisscross the country and arrive daily at Wal-Mart’s more than 4,000 U.S. stores. Shipments are based on real-time data of shopper purchases, transmitted by the second as employees scan items at store checkouts. But with its e-commerce operations, which began in the late 1990s, Wal-Mart has been less exacting, instead relying on makeshift spaces carved out of store-serving warehouses and third-party operators to handle the load.

Unpaid Internship? Some Colleges Pick Up the Tab (page B1): The plight of the unpaid intern is improving. Not because businesses are paying more for summer helpers, but because colleges are stepping in to pay when companies can’t, or won’t, compensate student hires. Schools have long granted stipends for stints in nonprofits and the arts, where unpaid labor is common, but now they are paying the way for students to work at profit-making enterprises, including a New York money-management firm, a Washington, D.C., lobbying firm and even a General Motors Co. plant. Colleges’ job-placement rates have come under intense scrutiny as cost-conscious families, stung by rapidly rising tuition, want proof that universities can deliver on both academic and career fronts. While career-services officers say they aren’t thrilled to foot the bill, they need students to gain the skills and experience that will eventually get them hired.

Starbucks to List Counts of Calories for Offerings (page B3): Starbucks Corp. is posting its calorie counts on menu boards nationwide beginning next week, making it easier for customers to decide just how many Frappuccinos their waistline can handle. The move is, in part, an effort to get out ahead of federal menu-labeling requirements, which are expected to go in to effect this year.

‘Candy Crush’ Heads to IPO (page B4): “Candy Crush Saga” is lining up something besides jelly beans: bankers. Midasplayer International Holding Co., the publisher of online and mobile games including the popular “Candy Crush Saga”—which involves matching up columns and rows of candy items—has hired banks to pursue a U.S. initial public offering, according to people familiar with the move. The London company, better known as King, has tapped banks including J.P. Morgan Chase & Co., Credit Suisse Group AG, and Bank of America Corp., to handle a potential offering, these people said. They cautioned that the pricing and timing of any deal hadn’t yet been completed.

At Work: Just Say ‘Yeah’ (page B8): The next time you’re in a meeting and want to get people on your side, just say “yeah.” New research out of the Massachusetts Institute of Technology found that certain words seem to help participants appear more persuasive in meetings and increased the chances that their ideas would win acceptance from the group. Researchers Cynthia Rudin and Been Kim, a statistics professor and graduate student, respectively, at MIT’s Sloan School of Management, analyzed vocabulary usage and dialogue patterns in 95 meetings to see which words appeared to sway colleagues most. Among the words most likely to result in accepted proposals: yeah, give, start and discuss.

Bond Investors Head for the Hills (page C1): Signs of a stronger U.S. economy are rippling through the bond markets, sending investors and corporate leaders racing to prepare for higher interest rates. Investors have pulled money out of assets ranging from lower-rated corporate bonds to ultrasafe U.S. Treasurys in sums unseen since the financial crisis. Investors yanked $17.672 billion from funds that invest in bonds in the two weeks ended June 12, according to data company Lipper, a unit of Thomson Reuters. Trading has been volatile, and some investors have lost money after a long rally in many debt markets. Some lower-rated companies such as Yankee Candle Co. scrapped plans to sell bonds, while some others had to pay more to get their money. Others, like highly rated Wal-Mart Stores Inc., locked in funding at low rates. Some of the bonds issued by Apple Inc. in its record-setting $17 billion April deal have seen prices decline more than 8%, according to MarketAxess. Some highly rated companies have waded back into the U.S. market with sales tailored to investors’ preference for debt that matures in short time frames. Longer-dated debt is more sensitive to rising interest rates. Bond yields rise when prices fall. Mark MacQueen, co-founder and portfolio manager at Sage Advisory Services Ltd., has no regrets over buying Apple Inc.’s 30-year bonds near the top of the market in April. He has watched them fall about 8.6% from their issue price at 99.418 cents on the dollar to 90.823 cents on the dollar Tuesday, according to MarketAxess.

Tuesday’s Markets: Stocks Keep on Trucking (page C4): Stocks pushed to the highest levels in nearly three weeks as investors awaited news on whether the Federal Reserve will pull back on its efforts to stimulate the economy. Small-company stocks were among the best performers in Tuesday’s rally. The Russell 2000 index, which tracks smaller company shares, jumped 12.15 points, or 1.2%, to a record of 999.99. The Dow Jones Industrial Average added 138.38 points, or 0.9%, to 15318.23. That extends gains in the blue-chip index to 1.6% in the past two days and just 0.6% shy of its record set on May 28. The Standard & Poor’s 500-stock index rose 12.77 points, or 0.8%, to 1651.81, while the Nasdaq Composite Index climbed 30.05 points, or 0.9%, to 3482.18.

Emerging Markets Still Offer a Lure (page C4): Some investors are betting a month of steep losses for emerging-market stocks, currencies and bonds will prove to be a temporary setback. These assets have sold off amid fears the Federal Reserve is preparing to cut off the flow of easy money that has fueled a years long rally in markets as diverse as Thai stocks and Brazilian bonds.

Beware of Investor Candy Crush after IPO (page C14): Investors that can buy into “Candy Crush Saga” are in for a sweet return. But all sugar highs come to an end. The maker of that popular mobile game, officially called Midasplayer International Holding but colloquially known as King, has just hired bankers to help it pursue an initial public offering in the U.S. Expect huge demand for King’s shares, as investors will want to capitalize on its fantastic mobile momentum. Another mobile game developer, GungHo Online Entertainment, has seen its share price jump 70-fold in the past year, thanks to the success of its “Puzzle & Dragons” game in Japan. GungHo’s revenue is expected to rise by more than 600% to 184 billion yen ($1.95 billion) in 2013. “Candy Crush” may be tops in the U.S., but for now GungHo is likely well ahead globally, as Japanese mobile game players are more likely to spend money on casual games. King recently released a Japanese version of “Candy Crush,” and it is climbing the app charts. Even so, investors should be wary of according a high valuation multiple to King stock. Mobile game players can be a fickle bunch. True, King just recently launched another game, “Pet Rescue Saga,” which is becoming popular. But Zynga had a number of popular games at one point, many of which have flamed out. Its stock has fallen 82% from its March 2012 peak.

With 31 Sharpies and Duct Tape, Tweens Say, ‘This Is Who We Are’ (page D1): Crafting is going way beyond teachers’ gifts and holiday ornaments to a whole new level of self-expression. Tweens and teens are using colored tape and glitter glue, fabric paint and Bubble Wrap to put a personal stamp on every inch of their lives, from school binders and lunchboxes to cellphones and skateboards. And after they have embellished their sneakers, glammed up bedroom walls and put 10 different designs on their fingernails, many flaunt their creations on the Internet. “They are building their own little brand,” said Paula Puleo, chief marketing officer at arts-and-crafts retailer Michaels. Personalization of everyday objects is a major retail trend this year. Companies are rolling out a dizzying variety of affordable, convenient products for kids to use to style their stuff.

At Work with Microsoft Office an an iPhone (page D2): If you asked someone on the street to name a Microsoft product they can’t live without, they would likely mention Microsoft Office, the suite that includes Outlook, Word, Excel and PowerPoint. Even Apple fans find themselves installing Office the second they buy a new Mac. IPhone owners have yearned for a way to access and edit Office documents on the go, yet Microsoft has kept this valuable asset restricted to its Windows Phones and Surface tablets. Until now. Last Friday, Microsoft released Office Mobile, a free app in the Apple App Store. This mobile version of Office lets you work on something at your desk, like a Word document or PowerPoint presentation, leave your desk and pull up the exact same document on your iPhone later. Any changes you make get saved back to a copy of the document and are there when you open it at your desk again.

The NCAA Nears Judgment Day (page D6): On Thursday, a federal judge in California will decide whether the Ed O’Bannon lawsuit merits expanding from a handful of athletes to the thousands that the plaintiffs say have been harmed by being kept high and dry from the NCAA’s revenue stream. Class-action certification also would raise the financial stakes considerably, putting pressure on the NCAA to settle.

The Wall Street Journal: Saturday, June 8, 2013

Jobs Rise Enough to Soothe Markets (page A1): Employers added 175,000 jobs in May, maintaining a pace that hasn’t brought unemployment down quickly but has been enough to ease worries of a summer slowdown after a run of murky economic reports. Friday’s report pushed the Dow Jones Industrial Average up 207.50 points, or 1.4%, to close at 15248.12, its biggest climb since Jan. 2. Investors also took heart that the latest numbers will likely keep the Federal Reserve on course to continue its stimulus effort of buying long-term bonds at a pace of $85 billion a month for now and consider scaling back those purchases later this year. The unemployment rate ticked up to 7.6% from 7.5%, but for what economists say are the right reasons: More Americans jumped into the job market looking for work, a sign that workers sense better prospects.

Merion’s U.S. Open Comeback (page A16): That the event is back at Merion, with its short course and lack of room for fans and corporate tents, stems from more than two decades of costly improvements by the club and behind-the-scenes encouragement by the USGA.

Nadal, the Lord of Suffering (page A16): The stats for the French Open semifinal match between Rafael Nadal and Novak Djokovic will say Djokovic made 13 winners and 21 unforced errors in the decisive fifth set. These are half-truths. When Nadal is on the court, tennis needs a new statistical category: the un-winner. Against any other player, Djokovic would have hit at least 20 winners, maybe more. “Whenever [Nadal] needs it, he gets [to] such a ball, which is almost impossible,” said Marian Vajda, Djokovic’s coach. There has never been a tennis player who so enjoys the chase, the pursuit of a drop shot, the lunge for a ball that seems out of reach—and also the physical pain that comes with it. After the match, in one of the great understatements of the tennis season so far, Nadal, the seven-time French open champion, told reporters: “I learned during all my career to enjoy suffering.” The moment that best defines Nadal’s 6-4, 3-6, 6-1, 6-7(3), 9-7 victory at Roland Garros Friday came in the fifth set, when he’d fallen to within six points of losing. Djokovic had just attempted his latest kill shot, clobbering another tough-to-reach ball to Nadal’s backhand corner. Nadal lunged for it and, as only he can, managed to get enough racket on the ball to float it high into the wind.

Friday’s Markets: Dow Soars as Fed Fears Fade (page B1): A Goldilocks jobs report sent U.S. stocks surging, easing investors’ fears of an imminent reduction in Federal Reserve bond purchases and allaying anxiety about the strength of the economic expansion. The Dow Jones Industrial Average posted its second-biggest gain of the year, amid a sharp reduction in the stock market’s so-called fear gauge, while the dollar gained and Treasury bonds registered a modest decline. The moves came after the government said the U.S. economy added 175,000 jobs last month, in line with what economists had expected. “Today’s [jobs report] was about as good as we could have hoped for, for the market,” said Rob Bartolo, who manages the $33.8 billion T. Rowe Price Growth Stock Fund. “It showed the economy is still kind of chugging along at the same pace it has been.” The rally ended a hectic week that included a large Dow drop Wednesday, followed by whipsaw trading Thursday in both stocks and currencies. Major benchmarks ended higher for the week, but many investors are wondering whether stocks’ consistent gains in 2013 have set the market up for a pullback. The Dow industrials jumped 207.50 points, or 1.4%, to 15248.12 and rallied into the close to log their biggest climb since Jan. 2. The blue-chip benchmark finished the session just 1.05% below its May 28 record close of 15409.39 and is up 16% this year. The Standard & Poor’s 500-stock index added 20.82 points, or 1.3%, to 1643.38. The Nasdaq Composite Index rose 45.16, or 1.3%, to 3469.22.

Wal-Mart Sets Big Buyback (page B3): Wal-Mart Stores Inc. said at its shareholder meeting Friday that it plans to repurchase $15 billion in shares, as the retailer’s rapid global growth propels it toward a half-trillion dollars in annual revenue. “I just love saying half a trillion,” finance chief Charles Holley told a stadium full of investors and employees, noting that Wal-Mart in 2012 reported $466 billion in revenue and opened 642 new stores around the world. The new share-buyback program replaces an earlier $15 billion plan begun in 2011 that had used all but $712 million of its authorization. The timeline of the new buyback program wasn’t immediately clear.

Why ‘Boring’ Stocks Have an Edge Over ‘Exciting’ Ones (page B7): In the stock market, boring is often beautiful. That is because “boring” stocks—those that have exhibited the least historical volatility—on average outperform the most “exciting” issues—those that have been the most volatile. And not by just a small margin, either. By “historical volatility,” we mean the magnitude of a stock’s price swings over a specified period. Just take Apple,  whose stock has certainly been one of the more volatile in recent years. Its shares have lost 21% over the past 12 months, compared with a 20% gain for those stocks with the least historical volatility, as measured by the MSCI USA Minimum Volatility index. Not all volatile stocks perform as poorly as Apple has over the past year, of course, and not all boring stocks have done well. But the extent to which Apple lags behind the average boring stock over the past 12 months is right in line with historical research conducted by Nardin Baker, who manages global equity at Guggenheim Partners. The firm has $180 billion under management. Consider a portfolio that invested in the 10% of U.S. stocks that had the lowest historical volatility. According to Mr. Baker, this portfolio from 1990 through 2012 did 19 percentage points a year better than the 10% of stocks with the greatest historical volatility. He says that he found nearly identical results in each of 20 developed-country stock markets outside the U.S. and in 12 emerging markets. Why would boring, low-volatility stocks perform so much better than those with the highest volatility? Terrance Odean, a finance professor at the University of California, Berkeley, who has researched the subject extensively, believes it in large part has to do with the natural human tendency to be drawn toward what is most exciting, one consequence of which is to cause volatile stocks to become overpriced. “Individual investors don’t systematically search for stocks to buy. They buy the stocks that catch their attention,” Mr. Odean said in an interview. “These tend to be volatile stocks, with big price moves, about which exciting stories can be told.

How to Save Enough to Pay for College (page B8): Want to cut your kids’ college costs in half? Stash money in a savings plan for 15 years instead of taking out a loan, new research suggests. That’s right: Borrowing, rather than saving ahead, can effectively double the amount a family ultimately has to spend on tuition, according to asset manager T. Rowe Price Group. To cover $25,000 in college costs today, a family taking out loans would wind up repaying about $35,000 over 10 years, or $288 a month, assuming a 6.8% loan rate. Instead, the parents could put about $92 a month into a 529 college-savings plan for 15 years, or $17,000 in all. (This assumes that the plan returns 6% a year and charges annual fees of 0.85%.) Any growth in 529 plans used for legitimate college expenses can be withdrawn free of taxes. If the parents then put the $35,000 saved in borrowing costs into a Roth individual retirement account, they could wind up with $100,000 in 20 years, assuming a 7% annual return, according to T. Rowe Price’s model. And those withdrawals generally would be tax-free in retirement after the holding requirements are met.

After Jobs, Fed to Employ Patience (page B14): These weren’t the jobs figures the Federal Reserve was looking for. After a couple of weeks of less-than-inspiring economic data, the May jobs report was in many ways a relief. The economy added 175,000 jobs during the month, the Labor Department reported Friday, a tad more than economists had estimated, with minimal revisions to previous months. The unemployment rate rose to 7.6% from 7.5%, but for the right reason: More people went back on the job hunt. But while the jobs report didn’t register as weak, neither did it register as particularly strong, with employment growth matching its trend of the previous 12 months. At that pace, the unemployment rate won’t hit the 5.5% that Fed officials consider optimal until 2017. That assumes the labor force merely expands at the same speed as the overall population; if an improving employment outlook pulls more people into the job pool, it will take even longer.

The Upside of Favoritism (page C3): Maybe you’ve played favorites. Maybe you’ve been the favorite. Most anyone who’s worked in an office or team environment knows that favoritism is a fact of nearly every modern workplace. A 2011 survey conducted by Georgetown University’s McDonough School of Business found that 92% of senior business executives have seen favoritism at play in employee promotions, while a quarter of executives admitted to practicing favoritism themselves. When we talk about favoritism in an office environment, we usually have in mind how preferring some individuals to others can damage the team as a whole, creating rifts and fostering resentment. In order to create a collegial and productive work atmosphere, we often hear, bosses need to treat everyone the same way. But this isn’t always the case—especially not if done right, and for the right reasons. Recent studies show that playing favorites can actually be a boon, motivating and empowering employees in ways that benefit the entire team.

Dan Ariely: Ask Dan (page C12):

  • How to Get More Tips as a Waiter
  • How Not to Get too Attached to Our Ideas
  • How to Enjoy Your Scotch Instead of Hoarding it

The Wall Street Journal: Thursday, June 6, 2013

Humanities Fall From Favor (page A3): The humanities division at Harvard University, for centuries a standard-bearer of American letters, is attracting fewer undergraduates amid concerns about the degree’s value in a rapidly changing job market. A university report being released Thursday suggests the division aggressively market itself to freshmen and sophomores, create a broader interdisciplinary framework to retain students and build an internship network to establish the value of the degree in the workforce. This “is an anti-intellectual moment, and what matters to me is that we, the people in arts and humanities, find creative and affirmative ways of engaging the moment,” said Diana Sorensen, Harvard’s dean of Arts and Humanities. The division needs to show “what it is our work does so they don’t think we’re just living up in the clouds all the time.” Universities’ humanities divisions and liberal-arts colleges across the nation are facing similar challenges in the wake of stepped-up global economic competition, a job market that is disproportionately rewarding graduates in the hard sciences, rising tuition and sky-high student-debt levels. Among recent college graduates who majored in English, the unemployment rate was 9.8%; for philosophy and religious-studies majors, it was 9.5%; and for history majors, it was also 9.5%, according to a report this month by the Georgetown Public Policy Institute that used data from 2010 and 2011. By comparison, recent chemistry graduates were unemployed at a rate of just 5.8%; and elementary-education graduates were at 5%. Students have taken note. In 2010, just 7% of college graduates nationally majored in the humanities, down from 14% in 1966. At Harvard, humanities majors have fallen to 20% in 2012 from 36% in 1954. In the last decade, the decline in humanities students at Harvard has been particularly pronounced, with one-third fewer prospective freshmen expressing interest in the field. Mr. Bhabha, director of the Humanities Center at Harvard, said he didn’t give much weight to criticism from some elected officials who carp that young people need to go into fields that are supposedly more useful. “I think that’s because they have a very primitive and reductive view of what is essential in society,” he said. “There are jobs, and even in business, the humanities play a major role.” In fact, to hear Mr. Bhabha and Harvard tell it, the outlook is actually good for humanities majors. They have a high acceptance rate into law and medical schools, and are in demand in business world for critical writing and thinking skills, Mr. Bhabha said.

What Enron and the IRS Have in Common (page A17): Any good CEO will tell you that ethical meltdowns like the IRS political-targeting scandal are rarely the work of a few rogue employees. Such messes are the result of a toxic culture that has been allowed to fester. What does Enron’s collapse have to tell us about the shocking revelations of IRS political targeting? Plenty. IRS senior managers like acting Commissioner Steven Miller insist that the illicit behavior was the work of a handful of rogue employees. The trouble is that even though we are starting to learn who those employees are and who supervised them, we still don’t know what orders they were acting on, why no one stopped them and why they thought it was appropriate to selectively harass private citizens on the basis of their using such dangerous labels as “Tea Party,” “liberty” and “patriot.” What the Enron scandal teaches is that such implicit permission can be communicated by a toxic culture fostered by the company’s top brass.

Barbies, Auto Parts Hot Off the Press (page B1): Companies such as General Electric Co., Ford Motor Co.  and Mattel Inc. are pushing 3-D printing further into the mainstream than most people realize. Also known as additive manufacturing, because objects manufactured in this manner are built one successive layer of material at a time, the technology is allowing manufacturers to get products to their customers more quickly. Unlike traditional techniques, where objects are cut or drilled from molds, resulting in some wasted materials, 3-D printing lets workers model an object on a computer and print it out with plastic, metal or composite materials. “It allows us to be far more productive, efficient and innovative in designs,” said Scott Goodman, senior vice president of global product development at Mattel Inc. While prices have been coming down, 3-D printing materials—metals, plastics and composites—are more expensive than traditional manufacturing materials. Gartner Inc. analyst Pete Basiliere said he expects the costs of such materials will fall as demand for 3-D printing increases.

Amazon Expands Grocery Delivery (page A3): Inc. on Wednesday began offering fresh grocery delivery in its first major market outside of Seattle. The online retailer quietly added metropolitan Los Angeles to its website as a delivery area for its AmazonFresh business, hinting at what could be a broader expansion.  In its hometown, Amazon has been running the business for nearly six years. The service brings produce, dairy, meat, boxed groceries and other items in insulated containers direct to customers’ doors during appointed one- or three-hour windows. Expanding its grocery delivery business comes with fresh risks for Amazon, though it has demonstrated a willingness to lose money on new ventures to gain a foothold. Grocery sales have notoriously thin margins and it’s a crowded market dominated by heavyweights such as Wal-Mart Stores Inc.,  Kroger Co. and Safeway Inc. Further, companies like FreshDirect LLC and Peapod LLC already operate grocery delivery services in major cities including New York, Chicago and Philadelphia. And grocery deliverer Webvan Group Inc. remains one of the more spectacular failures of the Internet bubble early last decade.

Apple, AT&T Vulnerable on Ruling (page B5): The Apple Inc. products caught up in the import ban imposed by the U.S. International Trade Commission are older, but not irrelevant. In fact, Apple and AT&T Inc. —the two companies most affected by Tuesday’s ruling—are particularly vulnerable to limits on off-the-run iPhones. The revenue hit if the ban is upheld won’t be big, but it won’t be completely negligible either. Tuesday’s ruling threatens a phone near the end of its life cycle, but one that has played an important role as an entry-level smartphone. As such, it is the clearest sign yet that the yearslong legal fight between smartphone manufacturers over patents could have a real impact on how the wireless carriers go about their business.

Hot New MBA: Supply Chain Management (page B6): Call it a problem of supply and demand. With global operations becoming more complex, companies in manufacturing, retail and technology—and the consulting firms that service them—are scrambling to hire people with supply-chain expertise. But these experts are hard to come by. Sensing growing demand, more than a half-dozen universities have recently introduced undergraduate majors, M.B.A. concentrations and even entire degree programs dedicated to procurement, inventory management and global supply-chain strategy. Headlines of horse meat found in frozen beef products in Europe and see-through yoga pants illustrate the need. Supply-chain management has moved from a “necessary evil” to a “core competency” at companies across industries, says Rick Blasgen, president and chief executive of the Council of Supply Chain Management Professionals, an industry group. The supply chain includes production, transport, distribution and other logistics, as well as the engineering and financial considerations involved in each of those elements.

Interns Take the Lead (page B7): Internship season is under way, and unless business students are already spending the summer with their dream employer, a full-time offer may be out of reach. Banks and consulting firms have long funneled interns into full-time roles, but companies in other industries are increasingly turning to summer M.B.A. talent when they’re ready to make permanent hires, with some locking in candidates nearly a year ahead of their start date. At many schools, it isn’t uncommon for one-third to a half of M.B.A. students to work for their summer employer after graduation, and administrators say that figure—which had dipped during the recession—is still on the rise. The trend suggests optimism on employers’ parts, but it also raises the stakes for students, who begin the summer recruiting process almost as soon as they arrive on campus.

Mastering Philanthropy (page B7): Before business school students set out to master capitalism, Stanford University lecturer Laura Arrillaga-Andreessen teaches them how to master philanthropy. Ms. Arrillaga-Andreessen, the wife of tech entrepreneur and investor Marc Andreessen and daughter of Silicon Valley property developer John Arrillaga, teaches four philanthropy courses at Stanford, including one at its business school. She also leads the recently founded Marc and Laura Andreessen Foundation and serves as a director of the Arrillaga Foundation, which focuses on Silicon Valley community projects. To spread her message beyond Palo Alto, Calif., on Thursday Ms. Arrillaga-Andreessen will release online all of her teaching notes and syllabi, along with a library of 26 case studies on philanthropy—a move that she hopes will enable more schools to bring philanthropy education into their course catalogs. Ms. Arrillaga-Andreessen, 42 years old, spoke with The Wall Street Journal about what makes a philanthropist—and what most donors get wrong. Edited excerpts:

Wednesday’s Markets: Stocks Take Tumble in Global Selloff (page C1): Stocks posted broad losses on the heels of overseas stock-market declines and as investors braced for data on the jobs market due out Friday. Investors have become jittery in recent weeks, spooked by wild swings in Japanese stocks and amid rising expectations that the Federal Reserve is moving closer to scaling back its efforts to ease monetary policy that have helped drive stock indexes to records. In a selloff Wednesday that marked the second-largest point decline of 2013 for the Dow Jones Industrial Average, the blue-chip index dropped 216.95 points, or 1.4%, to 14960.59, sliding below 15000 for the first time since May 6. The Standard & Poor’s 500-stock index lost 22.48 points, or 1.4%, to 1608.90, with all 10 sectors in the red. The Nasdaq Composite Index fell 43.78 points, or 1.3%, to 3401.48.

Legal Ruling Won’t Bruise Apple’s Skin (page C10): It makes for an ugly headline, sure. For Apple investors, though, the ruling that would ban U.S. sales of some older iPhones and iPads doesn’t matter that much. Apple unexpectedly lost a legal ruling at the U.S. International Trade Commission on Tuesday, which said certain iPhones and iPads violate one of Samsung’s patents. Yet only devices using AT&T’s network fall under the ruling. And only a handful of older models are affected. What’s more, only two of the affected models, the iPhone 4 and the “3G version” of the iPad 2, are still being sold. Slightly more than a third of Apple’s overall sales are in the U.S. And, according to a survey by Consumer Intelligence Research Partners, half of iPhone 4s and two-thirds of 3G iPad 2s sold in the U.S. are on AT&T’s network. Respectively, they generate 13% and 14% of U.S. iPhone and iPad sales, according to CIRP. Putting all those numbers together suggests that, at most, the ban impacts roughly 2% of Apple’s sales, based on March-quarter numbers. Their contribution will be blunted further when Apple launches new versions of the iPhone and iPad later this year. And, don’t forget, Tuesday’s ruling could yet be overturned by an appeals court or vetoed by a president who, given his own patent announcement that day, clearly wants to overhaul rules and stem litigation.

Please Log into Our Wedding (page D1): As wedding season arrives this summer, more guests are being invited to witness nuptials virtually. Live-streaming started out as a way to accommodate friends and relatives who were in far-flung countries or in poor health. But increasingly, couples just want to share their big day with a larger audience. Meanwhile, professional wedding live-stream services, such as I Do Stream and My Streaming Wedding, are making virtual guests as simple to order up as the cake. The companies can set up couples with a login to give their guests, sometimes providing cameras and crew as well. On the big day, guests simply go to a website and enter the login to watch the ceremony.

The Wall Street Journal: Monday, June 3, 2013

Risk-Averse Culture Infects U.S. Workers, Entrepreneurs (page A1): Americans have long taken pride in their willingness to bet it all on a dream. But that risk-taking spirit appears to be fading. Three long-running trends suggest the U.S. economy has turned soft on risk: Companies add jobs more slowly, even in good times. Investors put less money into new ventures. And, more broadly, Americans start fewer businesses and are less inclined to change jobs or move for new opportunities. The changes reflect broader, more permanent shifts, including an aging population and the new dominance of large corporations in many industries. They also may help explain the increasingly sluggish economic recoveries after the past three recessions, experts said.

In Economics, Hunt for Answers (page A2): On Tuesday mornings, graduate students and professors fill a classroom here to watch doctoral candidates run the economic gantlet. For an hour and a half, the presenters explain their works in progress to the crowd, who pepper them with questions, critiques and suggestions. The sessions weren’t always so lively, said Harvard professor Benjamin Friedman, who has been participating in the university’s Research in Macroeconomics seminars for years. The packed classrooms these days—a contrast with the thinly attended presentations a decade ago—illustrate how the 2008 financial crisis and the accompanying recession have revived scholarship in macroeconomics. “Academics are looking…for areas that have lots of unsolved questions,” said James Poterba, a professor at the Massachusetts Institute of Technology and president of the National Bureau of Economic Research. There has been “a substantial uptick in interest and excitement around macroeconomic research.” The scholarship goes beyond Harvard’s seminar. Here are three of the biggest questions sparked by the recent economic and fiscal troubles:

  • What are the consequences of too much household debt?
  • What’s going to happen when the Fed pulls back?
  • What form should fiscal stimulus take—and does it help?

Techies Cheer Creative Destruction (page A15): When the howls of creative destruction blew through the auto and steel industries, their executives lobbied Washington for bailouts and tariffs. For now, Silicon Valley remains optimistic enough that its executives don’t mind having their own businesses creatively destroyed by newer technologies and smarter innovations. That’s an encouraging lesson from this newspaper’s recent All Things Digital conference, which each year attracts hundreds of technology leaders and investors. The personal computer has dominated the digital revolution, but the PC era effectively ended this year. Smartphones are beginning to eclipse computers, and three years after the launch of the iPad, tablets outsell desktops and notebooks. Mary Meeker, a Wall Street analyst turned venture capitalist, gave her annual update on Internet trends at the conference, forecasting the next big thing as “wearables, drivables, flyables and scannables”—innovations such as Google Glass, self-driving cars and civilian drones.

Professors Are About to Get an Online Education (page A17): Anyone who cares about America’s shortage of computer-science experts should cheer the recent news out of Georgia Tech. The Atlanta university is making major waves in business and higher education with its May 14 announcement that the college will offer the first online master’s degree in computer science—and that the degree can be had for a quarter of the cost of a typical on-campus degree. Many other universities are experimenting with open online courses, or MOOCs, but Georgia Tech’s move raises the bar significantly by offering full credit in a graduate program. It comes just in time. A shortfall of computer-science graduates is a constant refrain in Silicon Valley, and by 2020 some one million high-tech job openings will remain unfilled, according to the Commerce Department. That’s why Georgia Tech’s online degree, powered by Udacity, is such a game-changer. For the same $7,000 a year that New York City spends per student on school buses, you can now get a master’s from one of the most well-respected programs in the country. Moore’s Law says these fees should drop to $1,000 by 2020—a boon for students and for the economy. You’d think professors would welcome these positive changes for students. Some teachers across the country are, however cautiously, embracing the MOOC model. But plenty of professors smell a threat to their livelihood. Something’s got to give. Education is going to change, the question is how and when. Think about it: Today’s job market—whether you’re designing new drugs, fracking for oil, writing mobile apps or marketing Pop Chips—requires graduates who can think strategically in real time, have strong cognitive skills, see patterns, work in groups and know their way around highly visual virtual environments. This is the same generation that grew up playing online games like Call of Duty and World of Warcraft, but who are almost never asked to use their online skills in any classroom. MOOCs will inevitably come to K-12 education too. Everyone knows great public school teachers. But we also all know the tenured type who has been mailing it in for years. The union-dominated teaching corps can be expected to be just as hostile as college professors to moving K-12 to MOOCs. But a certain financial incentive will exist nonetheless.

PCs Learn New Tricks for Mobile Age (page B1): Rocked by the mobile-device movement, personal-computer makers and their partners are planning a counterattack that leans heavily on two weapons: lower prices and power consumption. The companies, gathering for the big Computex trade show in Taiwan this week, are maneuvering to win back consumer spending that has shifted to smartphones and tablet computers by emulating more of those devices’ features and prices. In one significant thrust, manufacturers plan to begin offering much less expensive laptop computers that have touch screens for tablet-style operation. Prices later this year are expected to drop more than 50% in some instances. Manufacturers are also expected to begin delivering thinner and less costly “two-in-one” convertibles, whose screens swivel or can be detached to operate in tablet or clamshell mode.

Apple Progresses with Radio Plan (page B3): Apple Inc. is inching closer to a new streaming music service for iTunes, according to people familiar with the matter. On Sunday, Apple inked a licensing deal with Warner Music Group for the rights to its recorded music and music publishing, agreeing to terms on the publishing side that other major music publishers have been seeking, according to people familiar with the matter. Under the deal, Apple will give Warner Music Group’s publishing arm 10% of ad revenue—more than twice what Internet radio giant Pandora Media Inc. —pays major music publishers. Warner’s terms with Apple could pave the way for other major publishing deals to follow. Apple has indicated to people involved in the negotiations that the service could be announced at its annual developers conference, which begins June 10 in San Francisco. Apple’s plans for an Internet radio service—which has been previously reported in The Wall Street Journal—has been in the works for at least a year, but negotiations with music labels have been slow and focused on three issues: royalty rates; minimum guarantees in case Apple should decide not to sell ads during the first few months of launching the service; and the point at which Apple will start splitting ad revenue with labels, something it won’t do until a certain scale is reached, these people said.

Big Boogeyman on Campus (page B5): For its new feature film, “Monsters University,” Pixar Animation Studios went back to school. The movie, scheduled for release June 21, is a prequel to Pixar’s 2001 “Monsters, Inc.,” which grossed $559.8 million world-wide, according to, including its 3-D re-release last December. The new film traces the lives of “Monsters, Inc.” characters Mike (voiced by Billy Crystal) and Sulley (John Goodman) back to college, where they majored in Scaring and joined the Oozma Kappa fraternity. In the film, Mike’s sole ambition is to become a professional Scarer—a monster employed to capture “scream energy” by frightening children in their beds at night. But college forces him to realize it isn’t going to be as easy as he thought. “It’s tough to tell a story when everyone knows how it ends, so that was one of the biggest challenges,” said director Dan Scanlon. “We were telling a story about a character whose dream didn’t work out the way he thought it would, and that’s what we found interesting.” The filmmakers focused on the theme of defining oneself in the face of unexpected obstacles. In other words, college isn’t easy for Mike and Sulley. “So often in movies, we say if you work hard and never give up, everything will always work out,” Mr. Scanlon said. “It’s not always true, and we wanted to make a movie for the people who had things not work out.”

Dividend Stocks Fall Victim to Fed (page C1): Stock investors are getting a taste of what could be in store with a sustained rise in bond yields. A month of sharply climbing U.S. Treasury yields culminated last week in an abrupt selloff among stocks that had been posting big gains thanks to demand from income-hungry investors. Hardest hit were utilities, telecommunications stocks and real-estate investment trusts, all of which had benefited from the Federal Reserve keeping government-bond yields at rock-bottom levels. The Fed’s extraordinary stimulus policies, which have pumped billions of dollars into the financial markets, had caused investors to seek out income in riskier fare, such as stocks that pay high dividends. Behind the recent change of heart among investors is a belief that the economy may be picking up enough steam to prompt the Fed to scale back on its $85 billion a month in bond purchases.

Overheard: The New Steve Jobs? (page C6): Silicon Valley may have found another Steve Jobs—and this one comes with an even more impressive “reality distortion field.” That evocative phrase, according to Walter Issacson’s biography, described Mr. Jobs’ unusual ability to determine the future, no matter how implausible it seemed in the present. It helped him deliver revolutionary changes to how we listen to music and use phones and computers. Elon Musk’s ambitions soar even higher, as was on full display during an interview at the recent All Things D conference. His electric-car company Tesla Motors  aims to remake the way we drive, while the ultimate goal of his rocket company SpaceX, he said, is to travel to Mars and help build a self-sustaining base there. Skepticism is the natural response. But each time Mr. Musk delivers a better, less-expensive electric car or launches another rocket successfully, he proves his doubters wrong. Oh, and he co-founded a multibillion-dollar company called PayPal. But there is more to Mr. Musk than cars and Mars.

After Leaning In (page D1): Sheryl Sandberg has been one of the driving forces behind Facebook’s ascent—and now she has opened a dialogue about gender imbalance with her book “Lean In: Women, Work, and the Will to Lead.” The Facebook chief operating officer spoke with Walt Mossberg and Kara Swisher, co-executive producers of All Things Digital, about bringing gender discussions into the workplace and managing the future of the social-networking giant. Here are edited excerpts of their discussion.

Is Apple in Trouble (page D2): Apple Inc. Chief ExecutiveTim Cook has been in the hot seat lately for a host of reasons, including a congressional inquiry into his company’s use of overseas subsidiaries to reduce its overall tax bill. Of greater concern to some is the recent slide in Apple shares, fueled in part by critics who say Apple has lost its touch at creating exciting consumer-electronics products. Mr. Cook spoke with All Things Digital’s Walt Mossberg and Kara Swisher about what Apple is doing to turn things around. One area he sees as ripe for development: wearables, or computing devices worn as an accessory, like Google Glass and the Nike  +FuelBand. Edited excerpts of their interview follow.

For Twitter, the Challenge Is to Keep It All Simple (Page D2): Dick Costolo has been at the helm of Twitter Inc. since 2010. The microblogging service is one of the most popular social networks, and many are expecting an initial public offering soon. In a conversation with All Things Digital’s Kara Swisher, Mr. Costolo dodged questions about a potential IPO, but he did talk about Twitter’s current focus on TV and why he thinks simplicity is important. Here are edited excerpts.

Social Media + Pop Culture = ? (page D6): The spread of social media has had a huge impact on pop culture, letting fans interact with creators and stars and give them instant feedback on what they like and what they don’t. To get an inside look at this new convergence, and the possibilities it holds, All Things Digital’s Kara Swisher spoke with Anne Sweeney, co-chair of Disney Media Networks and president of Disney/ABC Television Group, and I. Marlene King, executive producer of the programs “Pretty Little Liars” and “Ravenswood.” Here are edited excerpts of the discussion.

First Comes an Electric Car, Next, a Trip to Mars (page D6): For Elon Musk, the South African inventor and entrepreneur, it may not be a giant leap to go from founder of an electric-car company to space-rocket engineer. He’s had success with innovation before, as co-creator of the well-known Web-based payment system, PayPal. He sat down with All Things Digital’s Kara Swisher and Walt Mossberg to discuss recent developments at Tesla Motors and Space Exploration Technologies.

What Are You Afraid Of (Page R1): It has taken four years for stocks to recover from their 2009 lows. So, can you rest easy? Hardly. With markets trading at warp speed, a new shock could vaporize a big chunk of your hard-won equity gains in minutes. Consider how the market might react to a sudden war or major natural disaster. Could your portfolio handle that? How about another flare-up of the euro-zone fiscal crisis? Or the long-feared bump in interest rates? Even something as relatively mild as a stock-market correction could do real damage, as could the current no-yield, fixed-income environment if it stretches on for years. Other than holding a lot of cash—which pays next to nothing and will lose value once you factor in inflation—there isn’t any easy way of hedging against every conceivable danger. But some mutual-fund and exchange-traded-fund strategies could cushion the impact while keeping you in the game if markets continue to rally. Certain equity funds, for instance, might make your stockholdings more resilient. Some types of bond funds could be a safer bet in an environment of rising—or persistent near-0%—interest rates. And you could add other assets that wouldn’t move in sync with stocks or bonds. Here are some strategies that might help you hedge against whatever scenario you most fear.

What Is the Best Way to Invest on Your Own? (page R4):  What advice do prospective do-it-yourself investors need to hear before they start managing their own money? The Wall Street Journal put this question to The Experts, an exclusive group of industry and thought leaders who engage in in-depth online discussions of topics from the print Report. This question relates to a recent article about do-it-yourself investors who are using new online tools and a-la-carte advice services to manage their money and formed the basis of a discussion in The Experts stream on Monday, May 6.

ETFs to Buy and Hold (page R9): Investors are gaining access to a growing number of exchange-traded funds, but financial planners don’t always agree about whether that’s good news for buy-and-hold investors. Many advisers say the profusion of narrowly focused ETFs runs counter to one of the central ideas of conservative investing: building a simple diversified portfolio with funds that each cover a broad market swath.

Stock Dividends Look Good for Income (page R10): Dividend-paying stocks might lag behind the broader market during a stock rally like the current one, but they still make sense for retired investors who need steady cash flow, says Jeff Layman, chief investment officer of BKD Wealth Advisors in Springfield, Mo. In late 2011, Mr. Layman and his team created a portfolio specifically for investors who rely on their portfolios for income. It emphasizes dividend-paying U.S. and foreign stocks, since high-quality bonds are paying very low yields. While Mr. Layman expects bond yields to remain low until at least 2014, he expects both American and foreign companies to pay steady or higher dividends over time as economic growth picks up. “The cash flow from dividends is pretty safe,” he says. This column features model portfolios of mutual funds and exchange-traded funds from prominent advisers. BKD Wealth is a unit of BKD LLP, an accounting firm with an insurance unit, among others. BKD Wealth manages $2.3 billion, mainly for wealthy individuals and families. Here, Mr. Layman shares the firm’s income-oriented portfolio, used for clients in or approaching retirement. “If someone wants to keep pace or exceed the Standard & Poor’s 500-stock index, this is not the portfolio for them,” he says. “We’re looking for…yield.”

The Wall Street Journal: Thursday, May 30, 2013

China Makes Biggest U.S. Play (page A1): China’s largest meat processor struck a surprise $4.7 billion agreement to acquire Smithfield Foods Inc., a deal that would mark the biggest Chinese takeover of an American company and underscores the Asian nation’s renewed determination to scoop up overseas assets. Shuanghui International Holdings Ltd. agreed to pay $34 a share for Smithfield, the world’s largest hog farmer and pork processor. Including debt, the deal values the Smithfield, Va., company at $7.1 billion. People involved in the deal said Wednesday that the purpose of the tie-up is to export more of Smithfield’s output to feed rising demand in China, the world’s biggest pork market, and not to import Chinese meat into the U.S. The proposed deal marks the latest effort by a Chinese company to strike a foreign acquisition aimed at securing access to resources that can drive China’s economy—the world’s second largest. In the past, its focus has largely fallen on the mining and oil industries and less on food.

Economy Is Better, Not Healthy (page A2): How is the U.S. economy doing now? Better. What’s the near-term outlook? Cloudy. What’s the Federal Reserve going to do about it? That depends on whether those clouds give way to sunny skies or it starts to rain again. The U.S. economy is still not good. Unemployment is at 7.5%, and would be higher if so many people hadn’t dropped out of the labor force. Wages for many who do have jobs are stagnating. But the economy is gradually getting better. Consumer confidence is at a five-year high and new claims for jobless benefits at a five-year low. In the past six months, employers have added 200,000 jobs a month. That isn’t enough to bring the jobless rate down quickly, but it’s better than the 140,000 a month added in the previous six months. Car and light-truck sales are running 7% ahead of last year, and most of the increase came from made-in-America vehicles. The latest Case-Shiller index of home prices, though far from its precrash peak, is 10% above year-ago levels. Despite Wednesday’s dip, stock-market indexes are up more than 15% so far this year. And some analysts see the recent upturn in yields on Treasury debt as a traditional market signal that the economy is improving.

Web Courses Woo Professors (page A3): Technology companies trying to reinvent higher education through online instruction are looking to win over the group with the most to lose from the effort: professors. Coursera, one of the biggest providers of Massive Open Online Courses, or MOOCs, plans to announce Thursday it will open its doors to professors at 10 major university systems to create their own online courses. Until now, Coursera content has come almost exclusively from professors at the world’s most prestigious institutions, making it vulnerable to charges that it was helping to create a system where elite professors would produce the content and eventually cost faculty at less selective schools their jobs. The contracts broaden Coursera’s audience, currently 3.68 million people, by giving it access to more than 1.25 million students enrolled in the combined university systems. Professors will be able to incorporate MOOCs into their campus-based classes, creating a blended model designed to free up time for more classroom discussions as students watch lectures on their own. “I think that what we’re looking at here is not a job loss but rather a change in a job description to something that I consider to actually be more challenging and more intellectually stimulating than just delivering the lecture,” said Daphne Koller, co-founder of Coursera. Still, many critics within academia remain concerned that MOOCs will eventually limit live lectures to the wealthiest schools. Meanwhile, faculty at cash-strapped public or midtier colleges might be displaced by low-paid staff who lead discussions after students have watched lectures from other schools’ star professors online.  “Higher education is being disrupted just like the steel industry or the newspaper industry,” said Ray Schroeder, director of the Center for Online Learning, Research and Service at the University of Illinois Springfield. “From that shakeout, a lot of people will become unemployed.”

New Tack in Preventing Hospital Infections (page A7): To prevent deadly infections in intensive-care units, hospitals often screen all patients for the drug-resistant bacteria MRSA, then isolate or treat those found to carry it with germ-killing soap and ointment. But the largest prevention study of its kind has shown it is far more effective to treat every patient in the ICU with the regimen, without any prior testing.

Life Lessons on the Basketball Court (page A8): Sarah Esther Wolin caught a pass from Baylee Thomas, dribbled down the court and buried a three-pointer, bringing Fairfax High School within two points of rival Venice High. The crowd in the bleachers roared. Their teamwork could set a national example. Sarah Esther is 17 years old and has Down syndrome; Baylee, 16, is her “peer coach.” In an innovative program, the pair play basketball on a coed team that matches up special-needs teenagers with nondisabled students. “I really appreciate what I have learned from helping her,” said Baylee, a sophomore. The Los Angeles program, which began in 2012, is in line with Education Secretary Arne Duncan’s instruction to school districts early this year to ensure students with disabilities have “equal opportunity to benefit from life lessons they can learn on the playing field or on the court.” Disabled students should be considered for a traditional team if “reasonable modifications” can be made to accommodate them, according to the Education Department’s guidance, which was issued to clarify schools’ obligations under federal law. If adjustments would alter the sport, schools can establish other programs, such as blended teams.

Canada Imposes a Total Ban on Trade in Goods with Iran (page A9): Canada said it would enforce a total trade ban on Iranian goods, going further than any other major Western nation in imposing trade-related penalties amid a broad effort by Washington and its allies to persuade Tehran to give up its nuclear program. Canadian Foreign Minister John Baird said on Wednesday that the trade ban would prohibit the import or export of all Iranian goods.

People Are Cutting the Cord – For Web More Than TV (page B1): For all the fuss over Americans dropping their cable subscriptions in favor of Internet video, another type of cord cutting appears to be more common. Hundreds of thousands of Americans canceled their home Internet service last year, surveys suggest, taking advantage of the proliferation of Wi-Fi hot spots and fast new wireless networks that have made Web connections on smartphones and tablets ubiquitous. Last year around 1% of U.S. households stopped paying for home Internet subscriptions and relied on wireless access instead, according to consumer surveys by Leichtman Research Group Inc. Just 0.4% of households in the last year canceled their pay-television subscriptions in favor of getting video entertainment over the Internet via services such as Hulu or Netflix.

Apple Shifts From Foxconn to Pegatron (page B5): For years, nearly all of the world’s iPhones and iPads rolled off the assembly lines of a single company: Foxconn. It was a famous partnership between two outsize personalities— Steve Jobs, Apple Inc.’s intense and mercurial co-founder, and Terry Gou, the Taiwanese manufacturer’s equally demanding chairman. But under current Chief Executive Tim Cook, Apple is dividing its weight more equally with a relatively unknown supplier, giving the technology giant a greater supply-chain balance. Pegatron Corp., named after the flying horse Pegasus, will be the primary assembler of a low-cost iPhone expected to be offered later this year. Foxconn’s smaller rival across town became a minor producer of iPhones in 2011 and began making iPad Mini tablet computers last year.

Facebook Home App Has a ‘Long Road’ Ahead (page B5): Facebook Inc.’s operating chief, Sheryl Sandberg, acknowledged recent missteps with Facebook Home, the company’s new mobile application for phones powered by Google Inc.’s Android software. Ms. Sandberg said some users have become frustrated with the organization of the app. But she said the users who are sticking with it were spending 25% more time on Facebook and sending 10% more messages. Ms. Sandberg said she is encouraged by the company’s momentum on mobile and its larger vision for a mobile experience centered on people. “Facebook Home is version one of a very large transformation,” she said. “We think it’s going to be a long road.”

Wednesday’s Markets: Fed Fears Shake Stocks (page C4): U.S. stocks declined broadly Wednesday, with high-yielding sectors lagging for a second day amid jitters over rising Treasury yields. But the blue chips closed nearly even with where they started the week, after two days of triple-digit moves. The Dow Jones Industrial Average declined 106.59 points, or 0.7%, to 15302.80, almost exactly undoing Tuesday’s 106-point rise. The Standard & Poor’s 500-stock index fell 11.70 points, or 0.7%, to 1648.36, with nine of 10 sectors in the red. The Nasdaq Composite Index shed 21.37 points, or 0.6%, to 3467.52.

Eat While It’s Hot at Smithfield (page C10): Toxic chickens and dead pigs are bad news for Chinese consumers. But this presents a rare bit of good news for shareholders in Smithfield Foods Smithfield, the world’s largest pork producer by volume, agreed Wednesday to a $4.7 billion cash takeover by Shuanghui International Holdings, which owns China’s largest meat processor. Agricultural suppliers in China are battling poor public perceptions of quality after a string of food-related scandals—including thousands of dead pigs in a Shanghai river. And Shuanghui has unique reasons to buy. Rather than cost savings, it needs to increase its stock of pork in China, where rising incomes whet higher-protein appetites. A vertically integrated brand that Shuanghui can advertise as American and safe is another benefit.

One Kid’s Personal Tennis Academy (page D6): On 5 acres in Florida, a 12-year-old tennis prospect has his own hard court, clay court, indoor gym and CVAC pod—all conveniently located in his backyard. Guy and Ann Neff didn’t want to send their 12-year-old son Adam away to a tennis academy. So they built one in their backyard. It is on 5 acres of land down a dirt road in Bradenton, Fla., next to a bird sanctuary with chickens, roosters and peacocks. It has a red clay court like the French Open. And a purple hard court like the Sony Open tournament in Key Biscayne, Fla. The Neffs are also building a replica U.S. Open hard court that should be finished in a few weeks. Next to the courts, there is a basketball court, a jungle gym and a giant trampoline. There is also an indoor gym with a hitting wall. On a recent morning at the academy, a bulldozer and a dump truck leveled a stretch of soil for a running field. The Neffs’ German shorthaired pointers—Coco and Rafa, named for Adam’s favorite player, Rafael Nadal—raced around the yard.

1: The number of blown saves Mariano Rivera has had in his 19-year career in which he didn’t record an out. The New York Yankees’ loss Tuesday was the first.

The Wall Street Journal: Tuesday, May 28, 2013

States Raise College Budgets After Years of Deep Cuts (page A1): After cutting spending on public colleges and universities during the economic crisis, many state governments have begun to boost higher-education budgets once again. The new funding reflects the brightening financial picture in many state capitals. Tax revenue in 47 states rose last year, according to Census Bureau data. Government revenue collections for all states increased by an average of 4.5%.

U.S. Oil Boom Divides OPEC (page A1): The American energy boom is deepening splits within the Organization of the Petroleum Exporting Countries, threatening to drive a wedge between African and Arab members as OPEC grapples with a revolution in the global oil trade. OPEC members gathering on Friday in Vienna will confront a disagreement over the impact of rising U.S. shale-oil production, with the most vulnerable countries arguing that the group should prepare for production cuts to prop up prices if they fall any lower. African OPEC members such as Algeria and Nigeria—which produce oil of similar grade to shale oil—are suffering the worst effects from the North American oil boom. Nigeria Oil Minister Diezani Alison-Madueke deemed U.S. shale oil a “grave concern.” Gulf countries, notably Saudi Arabia, pass relatively unscathed—and are the only OPEC members with the flexibility to cut production. But they are unlikely to let that happen at Friday’s meeting, several OPEC delegates said. That would deepen power struggles that have dominated the organization in recent years. Iran, Venezuela and Algeria, who need high oil prices to cover domestic spending and offset falling production, have regularly clashed with Gulf countries led by Saudi Arabia, who have the financial strength to withstand lower prices.

Economists’ Dispute Over Austerity and Debt Escalates (page A2): An academic dispute over government austerity and the dangers of debt has boiled over. Harvard economists Kenneth Rogoff and Carmen Reinhart over the weekend accused Princeton economist and New York Times columnist Paul Krugman of “spectacularly uncivil behavior” and of inaccurately alleging that they refused to share data supporting their work linking heavy debt levels to subsequent slow economic growth. Papers such as Mr. Rogoff’s and Ms. Reinhart’s, which warn of the perils of too much government debt, “haven’t just lost their canonized status, they’ve become the objects of much ridicule,” Mr. Krugman wrote in the New York Review of Books recently. “Despite their paper’s influence, Reinhart and Rogoff had not made their data widely available—and researchers working with seemingly comparable data hadn’t been able to reproduce their results,” Mr. Krugman wrote. Mr. Rogoff and Ms. Reinhart responded to Mr. Krugman in a letter on their website.

Flippers Ride Housing Wave (page A3): Rising home prices have fueled the return of a practice that some blamed for inflating the bubble: house flipping. In California, the number of homes sold in recent months that had been flipped—or bought and resold within six months—has reached the highest levels since late 2005, according to PropertyRadar, a real-estate data firm. About 6,000 homes have been flipped in the state this year through April, or more than 5% of all homes sold statewide.

Australia Tops List of Happiest Countries (page A11): A fading mining boom may be taking the gloss off Australia’s resource-rich economy but the country has retained the title of happiest industrialized nation in the world. That’s according to the Organization for Economic Cooperation and Development’s Better Life Index, which ranked the world’s developed economies on criteria such as jobs, income, environment and health. Australia kept the top spot for the third year running, ahead of Sweden—also known for its high living standards and robust economy—and Canada, a rival resource-exporting nation that, like Australia, has reaped the benefits of increasing Asian demand for raw materials. The OECD’s Better Life Index ranks the world’s developed economies on quality-of-life criteria. Here is the list of the top10:

  1. Australia
  2. Sweden
  3. Canada
  4. Norway
  5. Switzerland
  6. United States
  7. Denmark
  8. The Netherlands
  9. Iceland
  10. United Kingdom

Yes, Lady Gaga’s Songs Contribute to GDP (page A13): The U.S. government recently announced a welcome revision to the way it estimates gross domestic product. Starting July 31, the Bureau of Economic Analysis will record expenditures for “R&D and for entertainment, literary and artistic originals as fixed investment,” grouping them with expenditures for software into a new investment category called “intellectual property products.” What does this mean for GDP? Until this change, as Wellesley economist Daniel Sichel recently told NPR, “If Lady Gaga did a concert and sold concert tickets, the concert tickets would count as GDP,” but the money she spent writing and recording an album wouldn’t. That didn’t make sense, because as Mr. Sichel pointed out, the money an artist invests in a film or song is “really quite analogous to a factory investing in a new machine.” The same is clearly true of money invested in R&D for new drugs or smartphones.

Dear Grads, Don’t ‘Do What You Love’ (page A15): This month, commencement speakers across the country are exhorting graduates not to settle. They are urged instead to find their passion—to “do what you love.” But is this the best advice for college students entering a tough labor market? For those grads who do get jobs, the work will often be low-paying, with little in the way of long-term prospects. Some will soon go on to better jobs, but many will stay in these “day jobs” for years, waiting for their big break, waiting to be discovered—or simply waiting to find out what exactly it is that they truly love. “Do what you love” is an important message, but it’s unwise to build a career on the notion that we should all be paid for our passions. The advice captures only part of the story. It tells us how excellent work might be accomplished—by loving it—but it doesn’t tell us why the work should be done. What is the point of all the effort? What is being worked toward?  The answer lies in working with a deeper sense of purpose or vocation. You don’t need to be a religious or spiritual person to tap into this higher purpose; it can be derived from a sense of community and a desire to pull together. Yet without such a higher purpose where all this love and ambition can be directed, we don’t have a very useful guidepost for meaningful success. We simply have a call to discover what it is that we love, and then to do it.  Maybe there’s another way to encourage new college graduates to think about their careers. Maybe all those commencement speakers would send more young people into the world likelier to be happy in their jobs if the speakers talked about love as a consequence of meaningful work instead of as the motivation for it. Does the doctor love going into the hospital to see a patient in the middle of the night? Does the firefighter love entering a burning building? Does the teacher love trying to control a classroom full of disrespectful children? Not likely. But the work is performed with a sense of purpose that “love” doesn’t capture.

Common Core Education Is Uncommonly Inadequate (page A15): Common Core recycles a decades-old, top-down approach to education. Its roots are in a letter sent to Hillary Clinton by Marc Tucker, president of the National Center on Education and the Economy, after Bill Clinton’s presidential victory in 1992. The letter laid out a plan “to remold the entire American system” into a centralized one run by “a system of labor-market boards at the local, state and federal levels” where curriculum and “job matching” will be handled by government functionaries. Today, many advocates of national education standards embrace these same anti-academic impulses. In a 2011 speech before the National Governors Association, Bill Gates, whose foundation has been Common Core’s major funder, called on states to essentially brush aside liberal arts departments and fund public college and university disciplines based on their job-creation potential.

E-Books Are Gripping Story at Expo (page B2): When the book industry gathers at BookExpo America this week in New York, among the hot titles they’ll preview will be Malcolm Gladwell’s “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants.” It could be a metaphor for the debate about the industry’s future that will likely dominate much of the backroom chatter at the show. The roughly 12,000 attendees are coming together for North America’s biggest trade-book show as a shift toward e-books is transforming the industry. Barnes & Noble Inc., the biggest bookstore chain, has said it is evaluating the sale of its retail stores to its chairman, Leonard Riggio, while its ascendant Web rival, Inc., has been given a boost from a recent antitrust settlement forcing a return of e-book discounting.

Hon Hai Looks Beyond Apple (page B4): Hon Hai Precision Industry Co. has made a fortune over the years assembling iPhones and iPads for Apple Inc. But now that competition is biting into Apple’s market share, the Taiwanese contract manufacturer is feeling the pain too. Hon Hai, also known as Foxconn Technology Group, is moving aggressively to add new clients and is looking at ways to diversify beyond contract manufacturing. Perhaps the biggest sign of the Taiwanese company’s larger ambitions is its planned investments in media content and software. It is also reviewing plans to sell its own brand of electronics accessories to improve profit margins, said executives familiar with the matter. Hon Hai mostly operates factories in mainland China. It doesn’t break down revenue from each client but analysts estimate Apple accounts for 50% of its revenue, which totaled about US$130 billion last year. The company’s 2012 revenue growth of 13% was sharply slower than the 53% increase in 2010 when the iPad first launched.

On Demand: Quick Ad Switch (page B6): A few weeks ago, Travel Channel viewers using cable video-on-demand services started seeing Land Rover ads. Viewers wouldn’t know it, but the spots were the result of a significant advance in TV-advertising technology that media companies hope will help shore up their bottom lines. Scripps Networks Interactive Inc., the owner of Travel Channel, is among several media companies rolling out “dynamic ad-insertion” or working toward doing so, according to people familiar with the matter. The new technology is being introduced by a cable operator-owned venture that lets TV networks switch out and replace ads on programs that air on video-on-demand in as little as 24 hours—instead of having to wait weeks as is currently the case. News Corp. also owns The Wall Street Journal. If it takes off, the new technology could make video-on-demand a much more appealing outlet for advertisers. In turn, it would give TV networks a better way of making money off the growing numbers of people who watch TV on a “time-shifted” basis—days or weeks after a show airs.

$565 Billion: The Amount of Free Cash Flow Recorded by 1,000 of the Largets U.S. Public Companies (page B9): The amount of free-cash flow recorded by 1,000 of the largest public companies in the U.S. by revenue fell to $565 billion for 2012, down 14% from 2011, according to REL, a division of Hackett Group. Free-cash flow measures the cash that companies have after they have paid off all their expenses. The decline recorded between 2011 and 2012 is the first since 2007. That means companies became less efficient in converting their revenues into cash in 2012, reversing a trend that began in 2009, when businesses hit by the recession began to get more efficient as revenues fell. “For companies, it takes effort to generate cash from operations. It’s harder to do so than borrow from the debt markets,” Ms. Iddamsetty, a senior manager at REL Consultancy says. “We believe there’s a correlation.”

Accounting Fraud Targeted (page C1): U.S. securities regulators are turning back toward Main Street, renewing their focus on accounting fraud and other financial-disclosure failings. Such cases were long a staple of the Securities and Exchange Commission’s enforcement efforts, leading to more than 25% of civil-enforcement actions filed by the agency in its 2003 to 2005 financial years. The financial crisis shifted attention and money elsewhere. In the year ended last September, accounting fraud and financial-disclosure problems made up just 11% of SEC enforcement actions. But as the volume of crisis-related cases ebbs, top SEC officials are expected to announce soon a broad shuffling of resources in the agency’s enforcement division that will include an increased focus on accounting fraud, according to people close to the agency. The decision to hunt for wrongdoing by Main Street, as well as Wall Street, puts America’s corporations in the SEC’s cross hairs.

Mobile-Gaming Companies Are on a Quest for Multiple Lives (page C8): Smartphone users have swallowed mobile gaming hook, line and sinker. King and Supercell, two of Europe’s largest mobile-gaming companies, top Apple’s app charts by gross revenue in the U.S., according to App Annie. London-based King, developer of “Candy Crush Saga,” says its games are played by 70 million people a day globally, a sevenfold rise from a year ago. Helsinki-based Supercell, maker of “Clash of Clans” and “Hay Day,” is making $2.4 million a day in gross revenue and recently raised capital valuing it at $770 million. The two companies have been discussed as candidates for a public offering, though say they have no plans to float. Just as well. It is too early to say whether they can carve out a sustainable business. Mobile gaming has transformed the games industry. Veteran console and PC games publishers depend on big production budgets, selling games as software or through subscriptions. Reflecting this, many have become dependent on franchise games. Most mobile games, by contrast, cost relatively little to produce, are free to download and rely on compulsive players buying tokens to speed up games. The trick for mobile-game makers is to show they are more than one-hit wonders.

A Better Way to Treat Anxiety (page D1): Getting up the nerve to order in a coffee shop used to be difficult for 16-year-old Georgiann Steely. Speaking in front of classmates was unthinkable. The high-school sophomore overcame a crippling case of social anxiety as a patient in the Child and Adolescent Anxiety Disorders program at the Mayo Clinic in Rochester, Minn. Therapists there use an innovative approach early in treatment, gradually exposing children to things they fear most and teaching parents to act as “exposure coaches” rather than enable their children to avoid things and situations as a protective measure. When parents help children to escape from feared situations, anxiety symptoms may worsen and children frequently become more impaired, says Stephen Whiteside, a Mayo pediatric psychologist. “Kids who avoid fearful situations don’t have the opportunity to face their fears and don’t learn that their fears are manageable,” he says. But researchers at Mayo, Virginia Tech and other institutions are finding that slowly exposing children to the things they are anxious about, at an early point in treatment, can be highly effective in helping them overcome anxiety. Sometimes, it doesn’t require a long course of therapy.