FEDERAL RESERVE
Bernanke offers no hints of further aid to economy
Federal Reserve Chairman Ben S. Bernanke said Thursday that he is surprised by how cautious consumers remain more than two years after the recession officially ended. But he offered no hints of further steps the Fed might take to try to boost the weak economy.
Mr. Bernanke noted that several factors have kept consumers from spending more: from high unemployment and falling home values to still-heavy debt loads and higher gasoline prices.
“Even taking into account the many financial pressures they face, households seem exceptionally cautious,” he said in a speech in Minneapolis to the Economic Club of Minnesota.
Mr. Bernanke said that higher prices for gas, cars and other consumer goods were due, in part, to temporary factors, such as supply disruptions stemming from Japan’s earthquake and nuclear crisis. As those factors continue to ease, the Fed chief said he expects inflation to ease in the coming months.
CALIFORNIA
Activist buys stake in Yahoo, slams board
LOS ANGELES — An activist investment fund disclosed Thursday that it has bought a 5.2 percent stake in troubled Web portal Yahoo Inc. and called for sweeping changes to the board.
A public letter from Daniel Loeb, chief executive of investment adviser Third Point, comes after Yahoo’s board fired CEO Carol Bartz on Tuesday after 2 1/2 years on the job, a move she bitterly criticized in an interview published Thursday.
Mr. Loeb said the board made a “serious misjudgment” in hiring Ms. Bartz, and he criticized it for taking so long to fire her, given her “abysmal performance.” He disparaged Ms. Bartz personally for alienating the company’s Asian partners Alibaba Group, Softbank and Yahoo Japan as well as Yahoo’s shareholders, analysts, bloggers, customers and employees.
“While the decision to hire her alone is grounds for questioning the board’s competence, its willingness to turn a blind eye to these serious problems … is even more troubling,” Mr. Loeb said.
Mr. Loeb also said it is now apparent that the board made a “gross error” in turning down Microsoft Corp.’s takeover bid in 2008 for $31 a share. He estimated the company’s intrinsic value now at $20 per share.
“This mistake is all the more frustrating given Yahoo’s current depressed stock price,” he said.
Yahoo’s stock jumped 34 cents, or 2.5 percent, to $13.95 midday Thursday after the letter was released. Since Ms. Bartz’s firing, shares are up 8 percent.
CALIFORNIA
Google buys dining review service Zagat
SAN FRANCISCO — Google has swallowed restaurant review service Zagat to ramp up its efforts to connect people with local businesses.
The founders, husband and wife team Nina and Tim Zagat, said they will remain co-chairmen of the 32-year-old company and will use Google’s resources and expertise to expand. Zagat currently offers reviews and ratings on restaurants in more than 100 cities around the world, based largely on surveys of diners.
Google plans to integrate New York-based Zagat with its search and mapping products, where users are already invited to write reviews of businesses and services.
In a blog post Thursday announcing the purchase, Marissa Mayer, Google’s vice president of local, maps and location services, said Zagat “will be a cornerstone of our local offering.”
Google and other companies are trying to improve their local offerings as a way to sell more ads to local merchants.
BGC Partners analyst Colin Gillis said the purchase was smart. He said Zagat is like the little brother of Yelp, the leading online review site and a pioneer in a space that was founded in 2004. Google had attempted to buy Yelp in 2009, at one point offering about $500 million for the San Francisco-based company, according to numerous published reports.
Terms of the acquisition were not disclosed. It is likely a windfall for Zagat’s founders, who tried to sell the company in 2008.
CALIFORNIA
Twitter expands number of ads shown to users
SAN FRANCISCO — If you’re on Twitter, expect to see more ads flowing through your stream of tweets in the next few months.
The ads will show up even if the promotion is from a company that a person hasn’t chosen to follow. Until now, Twitter had only displayed ads that users were tracking.
As has been the case since Twitter began showing ads last year, the promotions must comply with the online messaging service’s 140-character limit.
The ad expansion marks a major step in Twitter’s attempt to make more money from its more than 100 million actively users. Twitter says the audience is now sending about 230 million tweets a day.
Twitter CEO Dick Costolo told reporters that the 5-year-old company still hasn’t set a timetable to go public.
From wire dispatches and staff reports
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