Obama goes against McCain after historic win over Clinton - Yahoo! News

WASHINGTON (AFP) - Democrat Barack Obama plunged Wednesday into a five-month election battle with Republican John McCain after making history by becoming the first black presidential nominee of a major US party.

The Illinois senator's giant-killing win over Hillary Clinton came at the climax late Tuesday of the longest, most expensive and spellbinding nominating epic ever.

Clinton has not yet conceded the race, but on Wednesday she held out an olive branch to Obama after he clinched the number of delegates needed to be the Democratic party's presidential nominee in the November elections.

"Let me be very clear, I know that Senator Obama will be a good friend to Israel," she told a powerful pro-Israel lobby group.

But the former first lady stopped short of formally abandoning her quest to be the first woman elected to the Oval Office, and although they both addressed the gathering within minutes of each other they had no plans to meet.

Instead as President George W. Bush joined worldwide plaudits of Obama's stunning success, Clinton's supporters strove to coax the new Democratic standard-bearer into choosing her as his running mate.

Together, they would be "unstoppable," the New York senator's campaign chairman, Terry McAuliffe, told MSNBC television. "I think we would have the White House for 16 years."

In a speech that was splashed across newspaper front-pages across the world, Obama declared to 19,000 baying supporters in St. Paul, Minnesota late Tuesday: "America, this is our moment.

"This is our time. Our time to turn the page on the policies of the past," he said in an address in the same spot where Republicans are set to anoint McCain their presidential candidate at a September convention.

Obama's momentous victory , five months since his shock win over Clinton in the very first nominating contest in Iowa, sets up an intriguing general election clash with Republican Arizona senator McCain.

On November 4, voters must pick between Obama, 46, a freshman senator and charismatic mixed-race standard-bearer of a new political generation, and McCain, 71, a wounded Vietnam war hero asking for one final call to service.

White House spokeswoman Dana Perino said: "President Bush congratulates Senator Obama."

Bush "knows from personal experience that the presidential nominating process is a grueling one, and Senator Obama came a long way in becoming his party's nominee," she told reporters.

Secretary of State Condoleezza Rice, the first black woman to be the nation's top diplomat, hailed Obama's victory as a sign that America was "an extraordinary country."

"I think that what we're seeing is an extraordinary expression of the fact that 'We the people,' is beginning to mean all of us," she told reporters.

Obama meanwhile was laying out the contours of his presidential program, insisting Jerusalem must remain the undivided capital of Israel, and saying he would work to "eliminate" the threat posed by Iran.

The Illinois senator also heaped poured more praise on his Democratic rival saying again that she had made "history." "I want to acknowledge Hillary Clinton ... for the extraordinary race that she has run," he said.

Clinton has said she will now consult with supporters and party leaders on the way forward.

Failing an outright concession from the New York senator, the Democratic Party's seniormost figures are reportedly set to go public with an appeal to the last undeclared "superdelegates" to declare their preferred candidate.

House of Representatives Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and Democratic National Committee chairman Howard Dean were to release a statement Wednesday urging the party to close ranks against McCain, the Huffington Post website and CNN reported.

Obama captured the final primary in Montana, after a flood of endorsements from Democratic superdelegates during the day, and vaulted over the winning post of 2,118 delegates needed at the party's August nominating convention.

Clinton snapped up a consolation victory in South Dakota's primary. According to RealClearPolitics.com, Obama now has 2,165 delegates to the former first lady's 1,923.

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Google Rebrands, Enhances Google Site Search [SearchEngineWatch]

Google Rebrands, Enhances Google Site Search

Google has announced today some nice enhancements to their Site Search solution. Originally announced as Custom Search Business Edition, this product has now been rebranded as Google Site Search. The focus on site search solutions for web sites has been huge, with thousands of sites using it. In addition to the rebranding of the solution there are four product enhancements that Google is announcing:

1. Synonym support - Google Site Search allows you to specify a custom list of synonyms. For example, if you are General Electric, you might want to let the search engine know that "GE" = General Electric. This is something that allows publishers using Google Site Search to notify the search engines of synonyms that Google Web Search does not know about.
2. Date Biasing - With date biasing a publisher can tell Google Site Search to place great emphasis on "recency" than it would otherwise do. Publishers can specify Low, Medium, or High, where high is essentially a directive to base the results on recency as the most significant factor.
3. Top Results Biasing - With top results biasing, a publisher can place great emphasis on a certain section of their site. For example, a site with a lot of different sections, including forums for example, might want to specify a higher priority for the product pages of the site to make them more likely to show up.
4. Improved Indexing - This allows publishers to include in their site search pages from their site that Google knows about (i.e Google has crawled these pages), but for one reason or another does not include them in their web search index. Of course, with a site map file you can use this mechanism to make sure that your Google Site Search includes every page from your site.

I spoke earlier this evening with Nitin Mangtani, the Lead Product Manager for Google Enterprise Search. He provide me with some examples of how people were using Google Site Search today. For Example, EMC implemented Google Site Search on http://EMCInsignia.com, a site that previously had no site search solution.

The results were outstanding. EMC experienced a 20% increase in e-commerce sales on the site, and an 85% reduction in customer returns. In addition, by the end of the first week, 10% of site visitors were using site search.

Nitin also was duty bound to emphasize that implementing the new Google Site Search, including the enhanced features, would have no impact on Google's web search results. That said, this represents a nice set of incremental improvements to an already solid product.

Posted by Eric Enge at June 3, 2008 12:00 AM

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Bloomberg.com: Worldwide

June 3 (Bloomberg) -- General Motors Corp., struggling to return to profit amid record gasoline prices, said it will close four truck plants, make more small cars, and may drop its Hummer brand of large sport-utility vehicles.

Gasoline exceeding $4 a gallon represents ``a structural change, not just a cyclical change,'' Rick Wagoner, the largest U.S. automaker's chief executive officer, told reporters today before its annual shareholders' meeting in Wilmington, Delaware.

The four plant closings will save $1 billion a year and cut North American capacity by 700,000 for trucks and, with added shifts at car factories, by 500,000 overall, he said. At Hummer, ``we're considering all options from a complete revamp to a partial or complete sale of the brand,'' Wagoner said.

A doubling of U.S. gasoline prices since 2004, including a 31 percent surge this year, is forcing Wagoner to accelerate production of more fuel-efficient vehicles as he tries to end three years of losses. GM today reported a 37 percent plunge in May U.S. sales of pickups, SUVs and vans. Cars will account for 60 percent of Detroit-based GM's North American production in three years, up from about 50 percent now, Wagoner said.

``It is significant, but this is a late reaction to changing market dynamics,'' said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. ``The plans really should have been in place a number of years ago.''

GM's total U.S. sales in May slid 28 percent from a year earlier, as it also sold 14 percent fewer cars.

Ford Motor Co. last month said it was slashing truck production while trying to boost output of small cars. Ford also abandoned a target of returning to profit in 2009. The company relied on large pickups and sport-utility vehicles for the bulk of its earnings in the 1990s.

New Models

GM also approved the production version of the Chevrolet Volt electric car. Wagoner said at the meeting that 18 of GM's next 19 vehicle introductions will be cars or crossover wagons.

The automaker lost $38.7 billion last year, its largest deficit ever, after writing down $39 billion of future tax benefits. GM hasn't had an annual profit since 2004.

GM rose 14 cents to $17.58 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have declined 59 percent since Oct. 12, 2007, when they reached their highest point in the past two years after the automaker's U.S. union workers approved a cost-cutting four-year contract.

The company's 8.375 percent note due July 2033 rose 0.25 cent to 67.75 cents on the dollar, yielding 12.65 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Plant Closings

Truck output will end at plants in Oshawa, Ontario; Moraine, Ohio; Janesville, Wisconsin; and Toluca, Mexico. The factories produce models such as the Chevrolet Silverado and GMC Sierra large pickups, TrailBlazer and Envoy SUVs and medium-duty trucks.

The plants will close in 2009 and 2010 and probably won't reopen, Wagoner said. They employ a total of 7,590 hourly and 676 salaried employees, the company said.

Buzz Hargrove, president of the Toronto-based Canadian Auto Workers union, said closing Oshawa would violate the three-year contract reached with GM last month.

````We are not going to allow this to happen,'' he said at a news conference, declining to specify how the union will respond.

GM said that starting in September it will add a third shift at a factory in Orion Township, Michigan, that makes Chevrolet Malibu mid-size cars and a Lordstown, Ohio, plant that builds Chevrolet Cobalt small cars.

Wagoner also said GM's board approved a new Chevrolet compact car for U.S. and international markets and a successor to the current Chevrolet Aveo small car. The new Aveo will be produced in Lordstown starting in 2010, subject to talks with local and Ohio officials about incentives, GM said.

`Adapt and Evolve'

``It's a sign that Detroit continues to adapt and evolve,'' White House spokeswoman Dana Perino told reporters in Washington.

GM said April 28 that it would eliminate shifts at three truck plants and a factory that makes SUVs because of slack demand for models such as the Silverado pickup.

GM, which got 57 percent of its U.S. sales this year from light trucks, is scrambling to adjust to consumers turning away from such models. Trucks have outsold cars annually since 2001, reaching 56 percent of the U.S. market in 2004, when gasoline prices averaged $1.85 a gallon.

``The biggest issue we're dealing with now in profitability is how weak the truck market is,'' GM sales chief Mark LaNeve said last week in an interview in Los Angeles. ``We have better profits in trucks; everybody has better profits in trucks.''

Fuel Efficiency

GM now is emphasizing fuel efficiency, with the Volt as its centerpiece. The car can be charged from a home electrical outlet and uses an onboard engine to recharge the batteries once the initial charge is used up. GM has said the Volt will be able to travel 40 miles before having to the use the engine.

The company said today that its board approved funding for Volt production and tooling.

Chief Operating Officer Fritz Henderson also reiterated today that the automaker has no more funding obligations for GMAC LLC, the finance company GM owns 49 percent of, or GMAC's Residential Capital home-mortgage unit. GM paid GMAC $1 billion to compensate for subprime losses that occurred at ResCap in 2006, before the automaker completed the sale of a majority stake in the finance company Cerberus Capital Management LP.

GM in April recorded a $1.45 billion first-quarter impairment charge for its GMAC investment.

``I can't say all the charges are behind us, I can't say that today,'' Henderson said on a conference call.

Slowing U.S. sales may mean GM will cut its quarterly dividend of 25 cents a share to preserve cash and also add debt, Himanshu Patel, a JPMorgan Chase & Co. analyst in New York, wrote in a May 5 report.

Credit-default swaps on GM debt climbed 9 basis points today to 1,200 basis points, according to CMA Datavision in London. The contracts are designed to protect bondholders against default. A rise in the price indicates a decline in the perception of a company's credit quality.

To contact the reporters on this story: Jeff Green in Wilmington, Delaware, at jgreen16@bloomberg.net; Bill Koenig in Southfield, Michigan at wkoenig@bloomberg.net.

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Bloomberg.com: Europe

June 3 (Bloomberg) -- Banco Bilbao Vizcaya Argentaria SA, Spain's second-biggest bank, will double its stakes in units of China's state-owned Citic Group for 800 million euros ($1.24 billion) to increase revenue from the fastest-growing major economy.

BBVA will raise its holding in China Citic Bank Corp. to 10.1 percent from 5 percent, the Bilbao-based bank said in a filing to regulators. The Spanish bank has an option to increase that to 15 percent within two years, it said. BBVA's holding in Citic International Financial Holdings Ltd., also controlled by Citic Group, is being boosted to about 30 percent from 15 percent.

China's economy has expanded by more than 10 percent for nine straight quarters, driving consumer and corporate demand for loans and other financial services. In contrast, economic growth is slowing in Spain, Mexico and the U.S., where BBVA gets 80 percent of its profit.

``It's good to see banks diversifying their business away from the slowing Spanish economy,'' said Marta Campello, an investment manager at Abante Asesores in Madrid. ``This is going to be good news for the bank.''

From Citic International's point of view, the Spanish bank's increased investment is ``positive'' because the alliance adds products and clients, said Wong Kwok Wai, an analyst at BOC International Holdings Ltd.

BBVA will name three members to the board of Citic International and two to China Citic Bank, China's seventh- largest by assets, the Spanish company said. The units' parent, Citic Group, is China's biggest state-owned investment company.

BBVA advanced 0.6 percent to 14.16 euros in Madrid trading, for a market value of 53 billion euros. Citic Bank fell 1.8 percent in Hong Kong to HK$5.34, while those in Shanghai fell 1.9 percent to 6.37 yuan.

Planned Privatization

The increase in BBVA's holding in Citic International will follow a decision on the Hong Kong company's possible sale. Citic International's statement said the company's shares, which were suspended today, will remain so until it announces the details of a ``privatization proposal.''

BBVA bought its original stake in Citic Bank prior to the Chinese company's initial share sale in April last year.

Other foreign banks seeking to benefit from Chinese growth have also taken stakes in local banks. Bank of America Corp. agreed earlier this week to lift its share in China Construction Bank Corp. to 10.8 percent. HSBC Holdings Plc has an 18.6 percent stake in Bank of Communications Co. and also plans to hire 3,000 people there this year for its directly controlled unit.

More Branches

Standard Chartered Group Plc, which makes most of its profit in Asia, plans to increase its outlets to 60 this year from 38 and last year more than doubled its workforce in the country to 3,800.

Royal Bank of Scotland Group Plc bought a stake in Bank of China for $1.6 billion in 2005 and is offering wealth-management services in Shanghai and Beijing. It also has Chinese retail outlets from its acquisition of ABN Amro Holding NV.

Criteria CaixaCorp, the investment holding company of Spain's biggest savings bank, has an 8.89 percent stake in Bank of East Asia Ltd., Hong Kong's third-biggest by assets.

``This transaction places BBVA in an unbeatable position to leverage the tremendous growth potential inherent in the Chinese banking business,'' the bank said in a statement sent by e-mail.

``From a strategic point of view, we find it positive that BBVA continues to bet on Asia,'' said Diego Barron, an analyst at Fortis in Madrid.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net; Charles Penty in Madrid at cpenty@bloomberg.net

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Sector Snap: Homebuilders up after Toll's results - Forbes.com

NEW YORK -

Housing stocks increased Tuesday after luxury homebuilder Toll Brothers Inc. reported its second-quarter loss beat Wall Street's expectations.

Early Tuesday, Toll said it lost $93.7 million, or 59 cents per share, in the second quarter, compared with a year-ago profit of $36.7 million, or 22 cents per share. Analysts surveyed by Thomson Financial expected a loss of 89 cents per share.

The stock of the Horsham, Pa.-based builder climbed a dollar, or 4.8 percent, to $21.96 in late midday trading. Luxury builder Hovnanian Enterprises Inc. (nyse: HOV - news - people ) added 36 cents, or 4.5 percent, to $8.23.

However, Toll said demand remains weak in most markets as jittery buyers keep to the sidelines. Some analysts expect higher charges from the company in coming quarters because it hasn't written off as much as other builders.

The current quarter included a hefty $174.6 million charge to write down the value of land joint ventures.

Meanwhile, the mortgage lending unit of GMAC LLC (nyse: GJM - news - people ) said Tuesday it needs more than three times more cash to stay in business than it estimated just weeks ago, another signal of the continued disruption in the credit markets.

A lack of capital in the secondary market and stricter lending standards have made it more difficult for borrowers to obtain home loans.

Shares of Pulte Homes (nyse: PHM - news - people ) Inc. rose 36 cents, or 3 percent, to $12.55, while DR Horton Inc.'s stock increased 50 cents, or 4 percent, to $13.04. Centex Corp. (nyse: CTX - news - people ) gained 57 cents, or 3.1 percent, to $19.11, and KB Home (nyse: KBH - news - people ) shares rose 96 cents, or 4.7 percent, to $21.34.

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PIMCO's Gross: Bernanke injects dollar emphasis | Reuters

NEW YORK (Reuters) - U.S. Federal Reserve Chairman Ben Bernanke appears to have raised the issue of the dollar's value against other currencies as an important factor in future interest rate decisions, the manager of the world's largest bond fund said on Tuesday.

"By emphasizing the dollar, a role previously assigned to the Treasury secretary, (Bernanke) seems to have injected a new policy constraint that may increase in importance as a determinant of future interest rate changes," said Bill Gross, chief investment officer of the Pacific Investment Management Co., or Pimco. Pimco has about $812 billion in assets under management.

The Fed chairman on Tuesday issued a rare warning about the risk a weak dollar poses in fueling inflation.

"We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations," Bernanke said by satellite to a conference on monetary policy in Barcelona, Spain.

He added that the Fed and the U.S. Treasury were continuing to "carefully monitor" currency market developments.

U.S. officials usually defer on any comment on the value of the dollar to the Treasury secretary, and analysts said the central bank chairman's remarks were highly unusual.

Traders said his comments suggest the Fed has shifted its focus and now sees the weak dollar primarily as a threat to inflation rather than a helping hand for exporters and growth.

The dollar rose sharply against all the major currencies after Bernanke's remarks, with the euro at one point falling nearly full two cents against the U.S. currency.

Gross' comments were emailed to Reuters in response to Bernanke's speech on Tuesday.

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U.S. productivity remains healthy in first quarter, data show - MarketWatch

WASHINGTON (MarketWatch) -- Productivity in the U.S. economy remained at a healthy level in the first quarter and labor costs were contained, government data showed Wednesday.

Revised data showed productivity growth in the U.S. workplace increase at a slight faster pace during the first quarter -- a 2.6% annual growth rate, up from the 2.3% estimated a month ago -- as output accelerated in line with the recent upward revision to growth in the nation's gross domestic product during the first three months of the year.

Productivity in the nonfarm business sector is up 3.3% over the past four quarters, marking the fastest pace since the final three months of 2004.

Meanwhile, first-quarter unit labor costs -- a key gauge of inflationary pressures spawned by labor markets -- were revised lower, down to a 2.2% annualized rate from 2.3% earlier.

Unit labor costs are up 0.7% in the past year, the slowest pace since the fourth quarter of 2004.

The Labor Department's revisions were close to expectations of Wall Street economists. See Economic Calendar.

Doves on the Federal Reserve have pointed to low labor costs as one bright spot among a backdrop marked by higher prices for gasoline and food.

But hawks among the central bank's policymakers have recently argued that labor costs are a lagging indicator and may begin to rise sharply in coming quarters.

Productivity increased 1.8%, unrevised, in the fourth quarter, while unit labor costs were revised up to 4.7%, reflecting prior government upward revisions to compensation.

Fewer hours worked

In the first quarter, output rose 0.7% at an annualized pace, while hours worked slipped 1.8% and inflation-adjusted, or real, hourly compensation rose by 0.6%. Read the full report.

The drop in hours worked was the key factor keeping productivity healthy despite the slowdown in the economy since last fall, economists said.

"While the pace of activity has cooled noticeably, the labor market deterioration has been even more dramatic, so that the productivity figures have not shown any cyclical slowdown," said Michelle Girard, strategist at RBS Greenwich Capital.

Productivity in the nonfinancial sector increased even more, growing by 4.6% in the first quarter and by 3.0% over the past four quarters.

Nonfinancial productivity is considered by policymakers to be the cleanest "read" on productivity, because productivity in financial services appears impossible to measure.

Also in the nonfinancial sector, unit labor costs rose by 1.2% for the first quarter and by 1.1% over the past four quarters. Real hourly compensation is up 1.5% in the first quarter but flat over the past year.

Output in nonfinancial sector was up 3.2%, while hours worked fell 1.4%.

Key to higher living standards

Productivity, a concept that's simple in theory but elusive in practice, represents output divided by hours worked. Productivity gains are central to the achievement of better living standards, higher wages, increased profits and low inflation.

High productivity growth means the economy can grow rapidly without incurring inflation, thus raising living standards and theoretically allowing workers to get big raises without hurting the boss's profits.

But a low rate of productivity growth can mean a sluggish economy and increased inflationary pressures.

Unfortunately for those who want easy answers, in practice productivity is extremely difficult to measure, particularly in the services.

Most economists focus on the longer trend, rather than on the volatile quarterly numbers.

In the manufacturing sector, productivity increased 3.6% in the first quarter. Unit labor costs jumped 4.2%.

In a separate economic report Thursday, the Institute for Supply Management said its services index stayed above 50% for the second straight month in May. See full story.

In addition, a sampling of Automated Data Processing Inc. data indicated that payrolls in the U.S. private sector expanded by 40,000 in May -- potentially a good sign going into Friday's employment report from the Labor Department. See full story.

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Free Preview - WSJ.com

Declining Sales, Higher Costs Hurt Williams-Sonoma's Net

By Donna Kardos

Word Count: 551  |  Companies Featured in This Article: Williams-Sonoma

Williams-Sonoma Inc. reported a 42% drop in fiscal first-quarter net income amid same-store sales drops at all its segments.

In addition, the home-goods retailer lowered its revenue guidance for the current quarter and year as Chairman and Chief Executive Howard Lester said the company is looking at the rest of the year "with a more cautious outlook" based on continued economic weakness and "industrywide sales declines."

For the quarter ended May 4, the operator of its namesake, Pottery Barn and West Elm stores reported net income of $10.4 million, or 10 cents a share, down from $18.2 million, or 16 ...

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Yahoo unveils ad deals, still talking to Microsoft | Entertainment | Industry | Reuters

NEW YORK (Reuters) - Yahoo Inc trumpeted a series of new advertising deals on Wednesday in a bid to alleviate shareholder pressure, even as the company continues "engaged" discussions over a deal with Microsoft Corp.

Yahoo President Susan Decker unveiled the new advertising partners ranging from Wal-Mart Stores Inc to CBS Corp as the Internet company faces pressure from billionaire investor Carl Icahn and other shareholders over its failed talks for a $47.5 billion buyout from Microsoft.

She also suggested that some form of deal with Microsoft could still come about. Shares of Yahoo rose more than 3 percent in morning trade.

"There are ongoing, engaged conversations," Decker said at the Advertising 2.0 conference in New York. "There are many ways in which a combination with Microsoft could be very beneficial."

Decker stopped short of saying whether those talks were about a full merger or a partial deal. She said previous talks, which broke down in early May, had failed to address issues beyond price, such as ensuring a deal could close.

"What we're doing now is completely rewiring Yahoo," Decker said, referring to the new ad partnerships and hinting at additional ways to rouse what she said was "the largest latent social network" of visitors and e-mail users on Yahoo sites.

Icahn has launched a proxy battle against Yahoo, accusing its board of driving Microsoft away, ahead of an August 1 shareholder meeting.

He cited details from a shareholder lawsuit released this week that showed Yahoo had arranged a costly severance plan in the event of a takeover that critics say could thwart a deal.

WAL-MART'S EYEBALLS

The multiyear Wal-Mart deal makes Yahoo the primary ad sales channel for Walmart.com's display and video advertising. Yahoo will become the exclusive portal to resell the site's display inventory.

The agreement will also give Yahoo a major participant for its new AMP advertising management system, a linchpin of the company's strategy to reach outside its own base of users and increase its position as the "must buy" location for online advertisers.

AMP aims to simplify the process of buying and selling online ads for advertisers, ad agencies, fast-growing ad trading networks and Web site publishers.

Decker said the system, already in the works for months, should launch for its newspaper site partners toward the end of the third quarter or early in the fourth quarter.

In another deal, the digital unit of advertising holding company Havas will work with Yahoo globally on AMP.

A third agreement calls for Yahoo to carry CBS content, like clips from TV shows, as part of a broader plan by the media company to add new outlets for its television programs.

The deal would have Yahoo join the CBS Audience Network, which already includes Google's YouTube, Time Warner Inc's AOL and Microsoft's MSN, as well as sites like Joost, Veoh and Bebo.

Yahoo also said it reached agreements to expand its newspaper advertising consortium by 94 more properties, bringing the total number to 779. Among other things, Yahoo provides the technology to serve graphical display ads on the websites of the newspapers involved.

The deal would have Yahoo join the CBS Audience Network, which already includes Google's YouTube, Time Warner Inc's AOL and Microsoft's MSN, as well as sites like Joost, Veoh and Bebo.

Yahoo also said it reached agreements to expand its newspaper advertising consortium by 94 more properties, bringing the total number to 779. Among other things, Yahoo provides the technology to serve graphical display ads on the websites of the newspapers involved.

Yahoo has also been talking to Google about an advertising partnership in web search, although Decker declined to talk about any current negotiations on that front.

"We looked at that alternative," she said. "It did inform how the board responded to some of the past overtures" from Microsoft.

Shares of Yahoo were up 83 cents at $26.98.

(Editing by Lisa Von Ahn, Phil Berlowitz)

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The Associated Press: Oil falls after government says gas demand is down

NEW YORK (AP) — Oil prices fell to the $122 level Wednesday after the Energy Department said gasoline demand fell sharply last week while fuel inventories jumped more than expected.

Retail gas prices, meanwhile, rose to a new record above $3.98 a gallon and are likely to hit $4 in coming days although oil prices have retreated more than $10 from last month's record levels.

In its weekly inventory report, the department's Energy Information Administration said demand for gasoline fell by 1.4 percent over the last four weeks. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.

Concerns about demand have helped pull oil down from its May 22 high of $135.09. Those concerns were exacerbated Wednesday by the EIA report and by moves by India and Malaysia to cut fuel subsidies, effectively raising prices. Many investors believe subsidy cuts will choke off demand for fuel in the developing world.

"There's definitively smaller demand, (and) you have subsidies that are going to fall in energy consuming nations," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com. "The psychology is just changing."

Light, sweet crude for July delivery fell $1.86 to $122.45 barrel in morning trading on the New York Mercantile Exchange after earlier falling as low as $121.84. July gasoline futures plummeted 10.75 cents to $3.245 a gallon.

The EIA also said inventories of distillates, which include diesel and heating oil, rose by 2.3 million barrels. Investors shrugged off an unexpected decrease in crude oil inventories.

At the pump, meanwhile, the national average price of a gallon of regular gas rose half a cent overnight to $3.983, according to a survey of stations by AAA and the Oil Price Information Service. Prices are likely to reach $4 for the first time regardless of what happens with oil prices, said Fred Rozell, retail pricing director at the Oil Price Information Service in Wall, N.J.

"I think there's enough momentum that we'll hit it," Rozell said.

Prices are already higher than $4 in many parts of the country, and average more than that in 13 states and the District of Columbia.

While the cost of oil accounts for the vast majority of the price of a gallon of gas, other factors — including gasoline supplies and refining margins — can also affect the price. Refining margins are slim, due to the fact that oil prices have nearly doubled over the past year, while gas prices have risen only 27 percent.

While oil prices have retreated, refiners, gasoline wholesalers and retailers remain under pressure to raise prices to improve their margins, analysts say. That pressure could be enough to push gas prices a little higher.

Still, Rozell said, if gas prices get to $4 nationally, they aren't likely to stay there for long: "I think we've pretty much petered out unless there's an event that affects supply."

Even if oil prices remain where they are, gas prices will likely fall 5 to 7 cents over the next week, though they may first briefly hit $4, Cordier said.

Diesel prices are already falling; the average national price of a gallon of diesel slipped 0.2 cent overnight to $4.778, according to AAA and OPIS. Diesel prices peaked at a record $4.792 on May 30, and are averaging more than $5 in some areas.

While they may be falling now, sky-high diesel prices have boosted the price of food and other goods carried via truck, train and ship. Prices of other types of fuel, including jet fuel, have also spiked this year. On Wednesday, United Airlines said it would cut 1,100 jobs and cut 100 airplanes from its fleet due to high fuel prices.

In other Nymex trading, July heating oil futures fell 7.31 cents to $3.5665 a gallon, while July natural gas futures rose 7.6 cents to $12.297.

In London, July Brent crude futures fell $2.12 to $122.46 a barrel on the ICE Futures exchange.

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Your PS3 And 360 Are Killing Your Power Bills [Science]

Very serious, very respected Aussie consumer magazine Choice ran a little test recently. They plugged a bunch of electronic stuff in, turned them on, then let them run and added up how much each appliance would cost you to power for a year if you left them powered-up. The humble DVD player would run to AUD$34.42. A cordless telephone? AUD$2.87. A PlayStation 3? AUD$260. Egads. The 360's not much better, coming in at AUD$203, while the humble Wii uses a humble AUD$24.58. Sure, nobody ever leaves a console on for 365 days, so these are indicative, but still. They're indicatively reminding you to turn your consoles off when you're not using them.

Power usage [Choice]

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Time Warner Hitches Its Star To Turbine With $40 Million Investment [Big Bucks For Turbine]

Lord of the Rings Online developer Turbine has just snagged $40 million in equity financing primarily from Time Warner and GGV Capital, the company announced today.

The company's existing investors also helped out this funding round, and Time Warner said Turbine was "an important addition to [its] entertainment initiatives."

Both Time Warner and GGV look to be betting big on the growth of online worlds; full announcement follows the jump.

TURBINE SECURES $40 MILLION IN FINANCING

Time Warner Inc. and GGV Capital

Join Existing Partners in Fueling Online Game Leader’s Growth

WESTWOOD, MA — June 4, 2008 — Turbine, Inc. today announced that it has raised $40 million in equity financing. Time Warner Inc. (NYSE: TWX) and GGV Capital, a leader in expansion-stage venture capital investments in the U.S. and China, led the investment along with existing investors, Highland Capital Partners, Polaris Venture Partners, Tudor Ventures and Columbia Capital. The investment will be used to further accelerate Turbine’s growth as a global leader in online entertainment.

“This is truly an exciting time for Turbine. The addition of Time Warner, one of the world’s largest media companies, and GGV Capital, one of the financial community’s most sophisticated investors, adds a level of access, perspective and experience to Turbine that is singularly unique in the global online entertainment space,” said Jim Crowley, president and CEO of Turbine, Inc. “Turbine has an extraordinary team, incredible technology and a growing portfolio of games based on some of the most popular brands ever created. With this funding we are uniquely positioned to change the future of online entertainment as we bring new titles to market, expand the platforms we support and introduce new technologies to sustain self-evolving game worlds.”

An online entertainment veteran, Turbine is recognized globally for its industry-leading technology platform, groundbreaking game graphics and its exceptional ability to create and operate multiple massive, persistent online worlds that power hundreds of thousands of interactive social gaming experiences. The company currently operates three award-winning franchises around the globe and is one of the largest privately-held online gaming studios in North America.

“Our investment in Turbine is an important addition to Time Warner's entertainment initiatives,” said Rachel Lam, Senior Vice President and Group Managing Director of Time Warner Investments. “Online interactive entertainment is a huge growth market and we are very excited about Turbine, its unique capabilities and the obvious opportunities that exist with our own broad portfolio of IP.”

“The demand for massively multiplayer online worlds is exploding both geographically and in terms of platforms served,” said Hany Nada, managing partner, GGV Capital. “Turbine is a proven leader in massively interactive online entertainment and the incredible technology that supports it. We look forward to marrying our strengths both here and in Asia with Turbine’s unique capabilities.”

In April 2007, Turbine launched The Lord of the Rings Online™: Shadows of Angmar™, the first and only MMORPG based on the books of J.R.R. Tolkien, and has quickly established itself as an emerging leader. The Lord of the Rings Online was named PC Game of the Year 2007 at the 25th Annual Golden Joystick awards and The New York Times proclaimed it “a major achievement of interactive storytelling, the first game truly worthy of the 'Lord of the Rings' franchise and a must-play for just about anyone with an interest in Tolkien or the future of online entertainment.” Turbine also created and operates Dungeons & Dragons Online™, which was named Best Multiplayer Game of 2006 by the British Academy of Television & Arts, and Asheron’s Call®, which was named one of the Top 50 Games of All Time by GameSpy and is one of the longest running massively multiplayer online games in the industry.

About Turbine

Turbine, Inc. is the premier creator and operator of massive, persistent online worlds that foster powerful social gaming communities. Turbine has grown to become one of the largest privately-held online gaming studios in North America. Turbine has created some of the world’s most popular and award-winning online games, including The Lord of the Rings Online™: Shadows of Angmar™, Dungeons & Dragons Online™ and Asheron's Call®. For more information on Turbine, its products and services please visit www.turbine.com.

About Time Warner Investments

The Time Warner Investments group targets non-control strategic investments that have a clear impact on Time Warner's divisional operations and directly enhance the Company's ability to meet specific strategic goals. Time Warner Inc. is a leading media and entertainment company, whose businesses include interactive services, cable systems, filmed entertainment, television networks and publishing. For more information, please visit: www.timewarnerinvestments.com.

About GGV Capital

GGV CapitalTM is a leader in expansion-stage venture capital investments in the United States and Asia. Focused on driving expansion-stage innovation worldwide, GGV Capital’s highly diverse team manages over $1 billion from its offices in Silicon Valley, Shanghai, and Singapore. The firm invests across a range of sectors in information technology, services and healthcare, as well as the consumer growth sector in China. GGV Capital has provided capital and helped accelerate international expansion for its worldwide portfolio of high-growth companies, particularly in the U.S. and China. GGV Capital’s portfolio includes Alibaba (HKSE:1688), athenahealth (NASDAQ: ATHN), Boston-Power, BCD Semiconductor, Endeca, hiSoft, QuinStreet, SuccessFactors (NASDAQ: SFSF), and WildTangent. For more information, please visit www.ggvc.com.

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