Category: Business
Microsoft’s Memos
Via Dave Winer. Microsoft discusses fundamentally altering their business to compete in the internet era. Microsoft has for years been fighting the net. They killed Netscape and let their browser die (Internet Explorer has not been updated for years. It will be in 2007 largely due to the rise of the superior, free, open source mozilla firefox browser). Cringely has more.
Microsoft’s Irish Tax Shelter
The citizens of other nations where Microsoft sells its products are less fortunate. Round Island One provides a structure for Microsoft to radically reduce its corporate taxes in much of Europe, and similarly shields billions of dollars from U.S. taxation.
Giant U.S. companies whose products are heavily based on their innovations, such as technology and pharmaceutical firms, increasingly are setting up units in Ireland that route intellectual property and its financial fruits to the low-tax haven — at the expense of the U.S. Treasury.
Much of Round Island’s income is licensing fees from copyrighted software code that originates in the U.S. Some of the rights to these lucrative assets end up in Ireland via complex accounting rules on intellectual property that the Treasury is now seeking to overhaul. The Internal Revenue Service said it is also looking closely at how companies account for such transactions.
In a statement, Microsoft said its European units “report and pay significant amounts of taxes” and that Microsoft “is fully compliant with the tax laws of the United States and all other countries.”
Through a key holding, dubbed Flat Island Co., Round Island licenses rights to Microsoft software throughout Europe, the Middle East and Africa. Thus, Microsoft routes the license sales through Ireland and Round Island pays a total of just under $17 million in taxes to about 20 other governments that represent more than 300 million people.
Microosft is not unique. Many firms route their IP through tax havens such as Ireland, Puerto Rico, Cyprus and others.
This tax saving process occurs in everyday products (for some) as well, such as Pepsi & Coke. Both beverage giants locate their flavor facilities in tax havens.
Fascinating: What are Frequent Flyer Points Really Worth?
Gary posts an interesting summary of how frequent flyer programs have propped up several bankrupt airlines.
Silicon Valley, Where Brains Meet Bucks
A recent visit and discussions with a mentor friend of mine reinforce Alan T. Saracevic’s article: Silicon Valley, Where Brains Meet Bucks. My friend mentioned two ventures where he stuck with ideas through two bankruptcies until they were successful. That type of risk taking and stick to it attitude is generally not seen (there are exceptions) here.
What do you get when you mix two parts money, a healthy dose of brains and another three parts money? Why, Silicon Valley, of course. The most opportunistic place in the world.
The Madison area has plenty of cash. We simply must be willing to use it. Judy Newman notes that Wisconsin lags in high-tech jobs.
Part-Time Entrepreneurs: www.cmbsweets.com
Carolina Braunschweig, 28, worked as a reporter covering the venture-capital industry for Thomson Corp. in San Francisco. During that period, she also began contemplating the direction of her career and considering ways to supplement her modest reporter salary.
Ms. Braunschweig launched cmbsweets in June 2004, selling jams over the Internet at cmbsweets.com. Today her product line, which includes strawberry, boysenberry and olallieberry jams and apple-honey butter, is also sold in stores in New York, Chicago and the San Francisco Bay Area.
Listenomics
Why? Because the information society is reversing flow. What began as an experiment among a few software nerds has, thanks to the Internet, expanded into other disciplines, notably media and law. But it won’t stop there. Advertising. Branding. Distribution. Consumer research. Product development. Manufacturing. They will all be turned upside down as the despotism of the executive suite gives way to the will, and wisdom, of the masses in a new commercial and cultural epoch, namely: The Open Source Revolution.
“We’re tired of the 20th-century model of being passive consumers of mass content,” says J.D. Lasica, author of Darknet: Hollywood’s War Against the Digital Generation. “We’re transitioning to a new kind of culture. More participatory, more open, more interactive where the locus of control passes.”
Lasica, who believes for example that by now Mickey Mouse should be in the public domain, doesn’t think he’s demanding anything outlandish.
Sun Prairie, China and the Yuan
Richard T. Wilkey (owner of Fisher-Barton), who runs a small Wisconsin company that makes cutting blades for lawn mowers and harvesting equipment, worries that he will soon be vulnerable to competition from China. But he is afraid that by the time he gets help from Washignton, it ma be too late.
Delphi’s Bankruptcy
Peter DeLorenzo points out the stakes in play with Delphi’s bankruptcy:
The Delphi bankruptcy is the latest major crack in the pressure cooker that the U.S. auto industry has become over the last two decades – only this one is definitely the tipping point into a dimension that industry insiders have been dreading. Lower cost competition from around the world has changed the auto manufacturing landscape completely – and Detroit has been operating under a model that has been obsolete for years. Strapped with a crushing wage and benefits structure negotiated in an environment fueled by an optimism that in retrospect had absolutely no right to exist, the American car companies and the United Auto Workers union are now facing a future that revolves around a harsh reality that comes down to this one simple but all-encompassing statement: change or die.
Bogle’s New Book: The Battle for the Soul of Capitalism
Time magazine called him one of the world’s 100 most powerful and influential people. Now John Bogle weighs in on the current direction of America with his new book, The Battle for The Soul of Capitalism.
Bogle, who founded the Vanguard Group of mutual funds in 1974, was the company’s chairman until 2000. Vanguard, one of the largest fund groups in the world, holds accounts totaling more than $800 billion.