Posts Tagged ‘real estate’

Judge throws out Trump lawsuit over his net worth

July 16th, 2009 admin No comments

PHILADELPHIA (Reuters) – A New Jersey judge on Wednesday dismissed a lawsuit for defamation filed by Donald Trump against an author whose book gave an estimate of the real estate developer’s wealth much lower than Trump’s own.

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LendingTree Wants To Be Your Financial Advisor And Your Mortgage Marketplace

July 15th, 2009 admin No comments

The online mortgage industry is chock full of online platforms that match buyers and lenders. Although lending has slowed and credit is tight, sites like LendingTree, Bankrate, SmartHippo and other sites still provide a valuable marketplace for finding mortgages for those who still qualify. LendingTree, which was spun off from parent company IAC in 2007, is overhauling its site to offer more than just mortgages; the site is also trying to be a personal finance guide for consumers, sort of along the lines of what does, but targeted towards real estate.

The new site is adding a bunch of new tools to help potential buyers improve and monitor their financial health. The site’s MoneyRight feature helps you create a budget, offers tips on how to reduce expenses, calculates your financial health and categorizes your spending. MyCredit will monitor your credit reports and alert you when your score changes. Ask the Tree is a personal finance question and answer tool where you can get any money questions answered by a professional. Though Ask the Tree isn’t really the most reassuring name for a personal finance information source.

The site is also adding several mortgage and loan-focused tools such as a Refinance Payment Calculator, which will determine if you should refinance your current home or consider buying a new one; and a Lender Scorecard, which give you detailed rankings of LendingTree lenders with customer reviews.

It’s not surprising that LendingTree is making a move towards becoming more than just a mortgage marketplace. Now more than ever, consumers are looking to improve their financial health and educate themselves on the best practices. But I’m not sure if consumers will know to look to LendingTree for advice and resources on financial health considering its brand as a mortgage marketplace. It may be tough to become the new

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Caveat Emptor: iBidcondo Auctions Off Real Estate At Massive Discounts, But There’s A Catch

July 15th, 2009 admin No comments

In the down economy, the housing market has taken a turn for the worst, with landlords struggling to fill apartments and developers having trouble offloading new properties. iBidCondo is a new site launching this summer that’s looking to help: the site offers an auction system that gives property owners an alternative method to sell their real estate (and make a profit doing it), while also giving users a chance to acquire real estate at very, very low prices. The site just held a test auction in May that sold off a $690,000 condo for only $86,840, and it’s going to begin another auction later this month.

The auction strategy is one that reminds me of Swoopo, a controversial auction site we recently covered that allows users to buy inexpensive ‘tokens’ that they use to make bids (even if you don’t win the item, you’re still out the cost of those tokens). With iBidcondo, the site requires potential bidders to pay for a $100 ’seat’ to have the right to bid on the real estate auction. The auction itself has no reserve and often sells for much lower than its normal price, and over half of the final auction price goes towards the charity of your choice. If you don’t win, you’re still out the $100 seat fee.

It almost sounds too good to be true, but a look at the details reveals how iBidCondo manages to pull it off. The site recoups the costs of the real estate through the seat prices — if it’s looking to sell a property worth $280,000, it will sell a maximum of 2,800 seats which will pay for the entire price of the property before the auction even starts (developers can choose if they’d like to wait until the maximum is reached or if they’re comfortable starting with fewer purchased seats). The developer who owns the property takes this money, as well as half of the final auction price (the other half goes to charity), with iBidcondo taking a 5% cut.

It’s definitely going to confuse some people, and it isn’t hard to forecast some problems. The auction is time-limited (sometimes as short as 7 minutes), and price increments are limited by which stage you’re in: first you can only increase your bid by $10, then $100, then $1000. In effect, the only time period that actually matters is the last minute or so, when every bid coming in is going to be $1000 and anyone seriously interested in buying the property is going to be clicking furiously. There’s no limit to how many times you can bid, so if you wind up in a horse race with a few dozen people the price can easily increase very quickly, perhaps far beyond those magical low price points the site is currently advertising. An iBidcondo spokesman says that the company can typically guess how high these bids will go and sets the time limits accordingly, but I’m wondering how effective that will be. After all, it would only take a 30-person horserace with each one bidding 30 times in the last minute to add $900,000 to the final auction price.

That said, there’s at least a chance that you’ll walk away from an iBidcondo auction with a new condo in tow for 15% of its list price, which may well be enough to entice people to try their luck. If you’d like to try it out for yourself, use the code iBidTC, which will get you $25 off the $100 fee.

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Nancy Tilghman: Life After Wall Street

July 14th, 2009 admin No comments

It’s no secret that thousands of former Masters/Mistresses of the Universe have left Wall Street since last year’s meltdown. Some have landed at boutique firms or with competitors who are taking the opportunity to upgrade talent. Many others are still looking for their next job but a few have made the transition to a new industry and role, creating the kind of life for themselves and their families that may not have been allowed by the all-consuming 24/7 world of Wall Street. Not that their new work life is a walk in the park, given that we are talking about very smart people who are ambitious to achieve goals, driven to deliver results and are taking on a significant learning curve in their new organizations.

John McGeehan left Morgan Stanley as a Managing Director after a 25 year career that included a ten year stint in Japan. “When I left Morgan Stanley, I understood that I had the chance to rethink my “second act.” My dreams for the future focused on an organization with a mission and culture that would inspire me and serve others.” John and his wife have five kids and all are in service-oriented roles, so there was great support in his family for him to move to the less glamorous and lucrative world of not-for-profits.

John landed as Managing Director of Common Impact, a nonprofit organization that is helping global companies and local nonprofits build stronger communities through employee engagement programs. The nonprofit currently delivers high-impact skills-based volunteering programs to more than 120 nonprofits, drawing on the strength of nearly 20 corporate partners in the Boston, New York and Richmond, Virginia metropolitan areas.

His leadership and management skills and ability to market and sell services were a great fit with Common Impact’s needs and their volunteer base of corporate employees. He also had experience as a long-time board member of the Orpheus Chamber Orchestra and experience as a volunteer in Japanese education institutions. These experiences after 6:00 p.m. and weekends made him well-aware of the meager resources and constant need for fund-raising in the not-for-profit worlds.

What’s the big change for him? “The mission and culture are so meaningful…I know that we are making a huge difference. People are more collaborative and find ways to do a great deal with a little.” The challenge that he didn’t anticipate has to do with the need to coordinate with and satisfy so many different stakeholders and that ongoing need to find income in the face of rapidly increasing needs for service. There’s another thing – the loss of affiliation with a well-recognized organization and senior title. “People used to call me back when I was with Morgan Stanley…I was surprised when people didn’t call me back as John McGeehan from Common Impact. The surprise for me was how closely I identified with being an MD at a prestigious firm. But I wouldn’t trade that in for feeling good about myself and how I spend my time when I pull the covers up at night. “

Chris Matthews is a seasoned, fifty-something marketing executive who has worked in a variety of industries and companies such as Coca-Cola, GE, MasterCard and WAMU, where he served as Chief Marketing Officer just before the market meltdown. Chris is taking the route that many people dream about, becoming an entrepreneur helping to monetize the rapid growth of social media.

Chris found himself on the market at a time when demand for his marketing and branding skill set are contracting, forcing him to be more creative and to look at the entrepreneurial option more closely. So he and two partners are raising money for their venture, Twiquet that uses the new distribution channels of social media such as Twitter and Facebook to make it easier and less expensive for people to buy tickets to live events. The business is a distribution platform between live event ticket suppliers and uses of social media. He’s the “suit” in the mix and his much-younger partners are technologists.

Sports and entertainment events help to sell brands, so Chris was exposed to sports teams and live entertainment events at earlier stages of his career, making him no stranger to some of their needs and opportunities. He became an investor in a minor league hockey team, the Syracuse Crunch, part of the American Hockey league, motivated by fun. But this investor relationship has helped him to understand the flow of tickets, the controlling players and the need for a new distribution model. And his core competence of “how to identify markets and push product through” have helped him to create the business plan for Twiquet that is now being reviewed by angel investors and venture capitalists.

“The idea that you can start a business with little capital is very exciting…and new technologies accelerate the process whereas brick and mortar are usually variations on a theme, thus taking longer to build. The intellectual engagement that you get from these new technologies is exhilarating. All of it’s risky and when you have kids, mortgages, college tuitions – all that you’re facing – you understand the risks better.”

Chris’s wife recently asked him why he missed the first internet boom and why now? “Ten to fifteen years ago I was in the middle of creating my career and building my knowledge and skill sets. Now I have so much behind me and I can more easily see the dynamics of a venture and the opportunity in front of me. And investors usually want to see three key things: a balanced team at the top, a new differentiated idea and the potential for huge communities around your website. I am the experienced hand who can keep our business on the rails as we build it.”

Lisa Fitzig was Deputy Head of the Global Industrial Group, Investment Banking for Citigroup, where she managed a 150-plus team that called on industrial and infrastructure clients worldwide for investment banking services, including mergers and acquisitions, equity and debt. She has also held positions as Chief Operating / Administrative Officer for the Mergers & Acquisitions Group and Managing Director for the Public Finance Department. After close to 30 years in the investment banking industry, she became a real estate sales person with the Corcoran Group in November of 2008, as mortgage rates were falling and the New York residential property market was deteriorating.

Lisa raised her hand to leave early in 2008 when Citi began to cut heads before the crisis conditions later in the year. “I saw the handwriting on the wall…and I was lucky to get out relatively early. I wanted to go into something entrepreneurial,” she explains. “I wanted to be accountable to myself and do the work itself versus managing an organization.”

Lisa has a rolodex full of colleagues and clients who valued her advice on the banking side and who will undoubtedly value her advice for their real estate transactions. She also brings seasoned business and negotiation skills, financial insight, and client service expertise. So the transition to residential property sales has required some learning but in many ways leverages her strengths from banking.

Why real estate? “This is a place where I can use a lot of what I enjoyed in investment banking, particularly helping people and their organizations and solving problems. I also love living in Manhattan and truly enjoy making people as happy with their home as I am with mine.” Lisa also enjoys the financial analysis required for complex deals and finds that easier to do than many of her colleagues. Another huge advantage is the lack of travel required for the job: “I was constantly on planes as a banker and in this role a heavy travel day might mean leaving the Upper East Side to go to Tribeca!”

Lisa used her broad network to meet people in the industry and landed with Corcoran through her contacts. There are relatively low barriers to entry to a career in real estate, but the current market has seen many real estate professionals flee to other kinds of jobs. According to Lisa, “you have to be prepared to really work at it, gut it out and market yourself…there is still room for success in spite of the market.” Of course compensation is very different animal – commissions only, very unlike the base salary and discretionary bonus characteristic of banking. “Be prepared to work really hard for awhile before you can show evidence of success. But the happiness that comes from doing something you love makes it all worth the hard work.”

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Tallulah Morehead: Big Brother 11: Meet the Fockers.

July 11th, 2009 admin No comments

Over the last decade, CBS’s perennial summer-filler voyeurism-fest Big Brother has lowered its rock-bottom contestant standards into the lowest depths of Hell in search of ever-more-intellectually-challenged narcissists to fill the Big Brother House. This is why every year there has seemed to be increasingly-greater numbers of the religiously-deluded: lots of Bibles, and praying to Jesus to decide who gets evicted. Consequently, the house has come increasingly to seem like a societal-safety net. As long as the Big Brother houseguests were locked in the Big Brother House or The Sequester House, they were removed from society, and we were all safe from them for three months.

But this year, I was envying the “Houseguests,” for they are locked securely away from all coverage of the ongoing Michael Jackson Death Circus. Lucky Houseguests. Poor us. This summer the BB walls seem to be in place not to keep them in, but to keep us out. If I’d known in January that Michael Jackson would die in June, I’d have applied to be a Houseguest myself. (For more on my reaction to the recent Death Circus, read my pervious column, We All Killed Karl Malden.)

As usual, Big Brother is on 37 times a week, plus the no-lifers out there can watch the live feeds online, and can also watch Big Brother After Dark, where an additional fee allows you to watch them snoring in bed at 4 AM. Adults Only! However, as I have a life, I will only be watching the CBS broadcast shows, and will comment here only once a week, on Fridays, after the Thursday Night eviction.

I groused a lot here during Survivor, but watching this summer’s train wreck I’m a Celebrity; Get me Out of Here which, ironically, had no actual celebrities on it, just notorious wanna-bes, has left me with an increased respect for Big Brother and Survivor; they are The Olympics next to that trash. Even the all-time worst BB houseguests pale for sheer, horrific narcissism next to Speidi or Janice Dickenson.

We will also be watching for certain typical BB behavior, such as:

1. Screaming like a banshee at any stimulus whatever. (The Chenbot: “Houseguests, sit up straight.” Houseguests: “[SCREAMING WITH ECSTASY!]“)

2. Shouting “I knew it!” about stuff they didn’t know. (The Chenbot: “The loser of this challenge will be loaded into a missile, and fired into the Sun.” Houseguest: “I knew it!”)

3. Praying. (Houseguest with drawl: “Dear Jesus, please eliminate the homo and keep me here another week.”)

4. Being proud of their own hypocrisy. (Houseguest A to houseguest B: “You’re my best friend. I’m your ally.” Houseguest A in confession room: “I hate Houseguest B’s guts, and the little bitch thinks I’m her pal. Ha, ha! What a fool! I’m great.”)

The gimmick theme this season is “Return to High school,” like someone would want to. The 12 houseguests were separated into 4 “cliques”:

The Popular Kids: These would be the pretty kids who were popular with themselves. No one else could ever stand the little snots. They grow up to marry money and have pretend “careers.” Their Goddess Emeritus? Julie Chen.

The Outcasts: These kids would “grow up” (well, age anyway) to be the people weeping outside The Staples Center back on Tuesday.

The Brains: The smart kids. Since these would be people too smart to go on Big Brother, they’ve had to fudge it, and have instead used “The Least Stupid”.

The Athletes: The jocks, obviously. How well I remember our golden afternoons together underneath the bleachers after practice.

In high school I was in the Drama Club Clique. Where were they? I felt left out. Then a competition was held to determine which clique got an additional member who would be Head of Household and thus keep all clique-members safe from eviction this week.

But the first show was all about meeting this year’s batch of losers, and setting the game in motion. So let’s meet them, and then I can hit the bar. In no order, they are:

Jeff: A Chicago advertising salesman. Imagine being locked up with an advertising salesman for three months! Great quote: “I’m definitely not an arithmetic type person; or reading books, you know?” I likes me sum sports, not all that thar fancy book-larnin’. I’m guessing Jeff’s Mensa membership hasn’t come through yet, or maybe it has, but he doesn’t know it, because it would require his reading it. He has no girlfriend, despite being one of the better looking guys. Or maybe he has, but he can’t read her love letters. Clique: Athletes. (The other cliques must have been full.)

Ronnie: a 30 year old computer-gamer nerd apparently still living in his room in his parent’s house. His parents were seen tearfully hugging him goodbye. (First time he’s ever left the house?) My guess is that they’ve rented out his room already. He squealed (Behavior #1) like a 10-year-old girl on a rollercoaster when he got his house key. He called his room in the BB House “Posh.” He clearly doesn’t know what actual posh is. He also said, “I plan on having kids someday.” How? Mail order? Additionally he said, “I’m definitely the smartest person inside this house,” while unaware that the woman sitting next to him has a PhD and is a “neuroscientist,” not to mention that most of the guests (not Braden) have real jobs. Ronnie is undoubtedly still a virgin and will probably die that way. Clique: Brains.

Jordan: Pretty, not-too-bright southern girl first seen bowling. She gave her profession thus: “I work in a hair salon, and I serve at night.” Serve what? Drinks? Tennis balls? A strict dominatrix? Satan? Be specific, Jordan darling. Normally she’d be right at the top of my “I Hate Her” list, but given the rabble of crazy creeps assembled here, I actually found her not obnoxious so far, and tentatively like her. She calls sex “Boogers.” Maybe she’s not that likable after all. Clique: Popular.

Natalie: She’s a tough little Tai Kwon Do enthusiast. At the meet-and-greet, she told everyone she was 18. The other houseguests politely didn’t laugh in her face, although Kevin let her know he wasn’t fooled. To be fair, there are probably several people still alive who were also alive back when she actually was 18, but only blind houseguests would buy her outright lie, and none of them are visually blind. (Moral Blindness on the other hand, is at epidemic levels in the house.) Clique: Athletes.

Kevin: “29,” a “graphic designer.” (I hope he’s not too “graphic”!) They always have a token gay guy in the house. Often they have been nice, personable, witty, and fun to be around. Unfortunately, this time they went for an affected, effeminate attitude queen stereotype that makes Perez Hilton look butch. I’m usually rooting for the gay contestant, but the sooner this guy gets evicted, the better. He says he is “Blasian: half-black and half-Japanese.” Fortunately for black people and for Japanese people, he doesn’t look remotely like either. Unfortunately for Hispanics, he does look quite Latino. Did his Mother have an Hispanic gardener? Clique: Outcasts. (Duh.)

Chima: “Freelance Journalist.” A formerly-beautiful black woman, she refused to give her age, which means that she is, of course, the oldest person in the house. My guess? 50 at least. She’s had tons of very bad facial work done. Her face has been lifted right off her head, and so recently that the swelling hasn’t gone down yet, so her poor eyes can barely be glimpsed past the swollen cheeks and brow. Her face is botoxed so taught she looks like she was attacked by bees, and her lips have been inflated to about 56 psi. Really. Her lips are larger than my feet! I’d suspect she was bald, except who would ever actually buy that wig? Anyway, she wants us to know she’s not “Ghetto.” I believe her, as she has clearly spent tens of thousands of dollars destroying what was once undoubtedly a lovely face. Self-mutilation on her scale isn’t cheap. Ask Joan Rivers. (Whom Chima now resembles) She also thinks she’s funny. Really funny. Joan is. She isn’t. Clique: Brains. (No, really.)

Braden: Surfer dude. He calls surfing his “business.” What kind of surfer spends a summer locked away from the ocean? He said his name is easy to remember (it is) because “it’s like a braid in your hair.” Does he ever misspell his name as “Braidin”? Let’s hope he doesn’t get confused when flustered, and start calling himself “Ponytail” or “Weave.” He gave this quote: “Surfing is better than sex; at least Mother Nature doesn’t talk back.” Apparently he’s never tried to surf in a hurricane, and I guess his ideal woman is a deaf mute. So that’s who fathered Johnny Belina’s child! Braden, you left out a couple words. Try this: “Surfing is better than sex with you!” Casey described him as “real surfer doody.” Well, he’s half right. Braden packed a blue stuffed plush elephant to take along. Outside he’s a hot male surfer. Inside, he’s a tween girl mooning over Twilight. Clique: Well he has no brain, so “Brains” is out, no one takes surfing seriously as a “sport,” so “Athletes” is out too. He loves himself though, so he’s popular with himself, thus: Popular. (When I was in high school, surfers would have been in the Outcasts.)

Michelle: “27,” Married, a “neuroscientist,” whatever that means. Smart, sort of pretty in a “no I’m not” way. Thinks she’s witty. She’s not. Looks like she’d be on the yearbook staff. Clique: Brains.

Laura: A gigantic pair of artificially-created boobs and their life-support system. Her job is listed as “Bikini Model.” It’s a more-challenging job than it sounds, given that each one of her huge breasts is larger than her head. (No joke. They’re bigger than her head! Look for yourself.) Although she looks like a floatation device big enough to keep the Titanic bobbing on the surface, those poor puppies are so filled with silicone (the substance rocks are made from) that she would probably sink like a boulder. On the show, she called herself a “sweet bitch,” but I doubt she’s actually all that sweet. Clique: Popular.

Russell: “24.” “I’m Russell, and I won’t go down without a fight.” Perhaps, but I will. Russell, a feisty little skin-headed pugilist and real estate broker, is the hottest of the men. Although I have nothing but contempt for the “sport” of beating up people, Russell at least is some genuine eye-candy. He calls himself “Russell the Love Muscle.” Oh dear. He’s so cute, but I may have to watch him with the sound off. Clique: Athletes.

Lydia: “24.” In an homage to Groucho Marx, we have Lydia the Tattooed Lady. Covered in tattoos, with a pierced tongue (And who doesn’t love encountering a knob of cold chrome when French-kissing someone? Oh right. Me.), Lydia was nonetheless immediately appealing. I breathlessly await finding out if it’s true that “When her muscles start relaxin’/Up the hill comes Andrew Jackson.” Lydia is a “special-effects make-up artist,” which leaves me wondering if Chima’s face is one of her creations. Lydia declared she’s open to showmancing a guy or a girl. I’m starting to like her. Clique: Outcasts.

Casey: “Teacher by day, DJ by night.” Casey is a 40 year old 5th grade teacher who thinks he’s quirky. He may find CBS has a more sophisticated audience than a room full of ten year olds. Then again, he may not. He thinks he’s the oldest, but that’s just because Chima won’t give her age. Casey has a son who turned 1 the day Casey went into the house. Who would sequester themself away from their own 1-year-old? Does he think his son will stay that age forever? Daddy loves you, son, but he loves being on TV more. Oh, and he’s also a “white rapper.” Maybe his son is getting off easy. Anyway, I don’t hate him – yet. Clique: Outcasts. (Because of his age, or because of his being a “White Rapper”?)

Four “Mystery” contestants were given the chance to be the 13th housguest. I was expecting one of them to be Sarah Palin, as it would finally explain why she quit her job as Alaskan Mayor or Governor, or whatever the idiot woman was. But no. Even Big Brother hasn’t yet stooped that low.

The four “Mystery” contestants, all former BB-losers, were:

“Cowboy” Ellis from BB 5. I remember Cowboy vividly. A total moron. No chin; no brain. He learned in season 5 that another houseguest was the sister he never knew he had, and she (Nikomis, Daughter of the Moon, Nikomis) learned he was the brother she didn’t know she had. Nikomis also learned that sometimes ignorance is bliss, as she found her new brother to be an idiot. One suspects they haven’t seen each other since the show ended. Cowboy explained that he would have won season 5 if he hadn’t lost. I knew that. Clique: Outcasts.

Jessica from BB 8. She feels she was sunk by a showmance. I hated her then. Please don’t bring her back. Clique: Popular.

Brian from BB 10. This smooth-talking egomaniac arrived last year already brimming with overconfidence, and proved to be such an obvious liar and would-be manipulator that he was last summer’s first eviction. I don’t want him back.

Jessie from BB 10. The ultimate, over-the-top exhibitionist, deeply in lust with himself. My guess is that he doesn’t even masturbate, because he thinks that even he isn’t good enough for him. Jessie has a magnificent, awe-inspiring body, as he will be the first to tell you, and the second, and the third, and the millionth, and all the numbers in between. He introduces himself in measurements: “I’m Jessie from Big Brother 10. Due to my 18-inch arms, rock-hard abs, and widest, most-insane shoulders … I’m bigger than last year by 20 el bees, and almost a whole inch on my ‘guns’. [Oogles himself for a moment] Ooh yea, that’s nice.” He actually said “El Bees” instead of “pounds.” This is what passes for “Banter” in Jessie’s mind. Also, however insane his shoulders are, his head is crazier. He is really impressed by himself. He also said, “I don’t think my ego got in the way of my season last year,” so he’s incapable of learning. Jessie, you lost last year. Narcissus once said of Jessie: “My God, he’s way too self-involved!” Clique: Athletes.

Needless to say, I wanted Jessie back. Eye candy, he’s entertainingly egomaniacal, plus he thinks he’s smart, when he’s actually dumber than bacteria.. He lost on Are You Smarter Than a Fetus?

The competition was a simple endurance contestant based on giving wedgies. This isn’t merely setting the bar low; this is burying the bar in a deep pit. It depended entirely on athletic endurance, plus, since it involved testicular torture, ‘rioded-up athletes have an additional advantage, as their joybags have all shriveled up and retreated to behind the pelvic bone. Surprise! The Athletes won it, and Jessie is in the house. Wake me for the So You Think You Can Dance elimination show.

Till next week, Cheers darlings.

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Barbara Corcoran, The Jim Cramer Of The Real Estate Business

July 11th, 2009 admin No comments

It’s pouring rain outside, but in a green room at the “Today” show’s Rockefeller Center studios, the sun is shining in the form of Barbara Corcoran. Cue cards? Check. Coffee with cream and copious amounts of sugar? Check. Almost every Friday, the pixieish real estate queen with the short blonde hair comes here in her shiny, fluorescent suits and delivers her ebullient shtick about what a great time it is to buy a home, recession be damned.

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New General Motors expected to exit Chapter 11

July 10th, 2009 admin No comments

DETROIT — After a night spent signing mounds of paperwork authorizing the transfer of cash, real estate, technology and other property, GM attorneys are expected to officially usher the new General Motors out of bankruptcy protection on Friday and onto a path toward a hopefully profitable future. Once the world’s largest and most powerful automaker, the troubled company is expected to emerge cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. Spurr

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GM Expected To Exit Chapter 11

July 10th, 2009 admin No comments

DETROIT — After a night spent signing mounds of paperwork authorizing the transfer of cash, real estate, technology and other property, GM attorneys are expected to officially usher the new General Motors out of bankruptcy protection on Friday and onto a path toward a hopefully profitable future.

Once the world’s largest and most powerful automaker, the troubled company is expected to emerge cleansed of massive debt and burdensome contracts that would have sunk it without federal loans. Spurred on by the Obama administration’s support, the process took just 40 days, even slightly quicker than crosstown rival Chrysler Group LLC’s 42-day timeframe.

On Thursday, a bankruptcy court order allowing GM to sell most of its assets to a new company went into effect. The new GM, 61 percent owned by the U.S. government, will face a brutally competitive global automotive market in the middle of the worst sales slump in a quarter-century.

At a 9 a.m. press conference Friday, CEO Fritz Henderson will announce that GM will cut another 4,000 white-collar jobs, including 450 top executives. The company still employs 88,000 people in the U.S. and 235,000 worldwide.

Henderson also is expected to describe how GM will streamline its bureaucratic management structure to become profitable again. GM has said it will be able to make money even if the U.S. auto market stays at a depressed level of 10 million to 10.5 million vehicles sold.

Yet despite massive cost reductions, experts say GM must produce vehicles that people want to buy, and change its image to one on the cutting edge of efficiency and quality.

“It is the smaller, leaner, tougher, better cost-focused GM,” said George Magliano, an automotive analyst with the consulting firm IHS Global Insight. “But they still have to deal with the problems that they faced longer-term.”

Rep. Gary Peters, whose Michigan district is home to three GM factories, said the company’s emergence signals a new era for the domestic auto industry and the thousands of people it employs.

“With bankruptcy in the rearview mirror, U.S. auto companies will even more aggressively pursue new technologies, become more globally competitive,” he said. “Decades from now, our nation will be glad we did not let a global credit crisis put an end to the American automobile.”

“I’m very much looking forward to a point where we’re operating in clear air, and the name of the company not being associated with bankruptcy and loans and these things,” said Mark LaNeve, GM’s North American marketing chief.

GM ranked as the top global automaker in terms of sales for 77 years before Japan’s Toyota Motor Corp. snatched its crown in 2008. The company sold nearly 8.4 million cars and trucks around the world in 2008, falling short of Toyota’s nearly 9 million.

Once the largest corporation in America, GM held the top spot in the Fortune 500 ranking for 20 years before being pushed out of the top spot in 1973 by Exxon Mobil Corp. It reclaimed No. 1 status in 1985 and held it for another 15 years.

Experts say GM’s future success will depend largely on its ability to persuade consumers that it’s a different company, one that builds cars that will equal or outlast Japanese models. To illustrate the change, GM is considering a new name.

Turning a profit will not be easy. GM lost more than $80 billion in the last four years and survives only because it expects to receive $50 billion in U.S. government loans. Without the loans, its executives have said the company would have been sold off in pieces.

The Obama administration has said it does not plan to interfere with day-to-day operations, though it ousted ex-CEO Rick Wagoner and has been involved in picking the new company’s board.

Most of GM’s model lineup is expected to stay unchanged for now. But the company on Friday will probably show off its newer, more efficient models, as well as plans for a U.S.-made subcompact and rechargeable electric vehicles.

Also on Friday, Henderson is expected to announce that Bob Lutz, GM’s product guru, will remain as a special adviser. Lutz, 77, announced in February that he would retire at year’s end.

In addition to the U.S. government’s controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company.

The parts of GM not moving to the new company will become part of “old GM,” a collection of assets and liabilities that will be sold to pay creditors.

Almost immediately, GM will try to show how it’s a different company, perhaps by changing its familiar square logo from blue to green, to reflect its environmental focus.

“I think that as a corporate identity the color change could well be a smart move,” said Tony Spaeth, president of Tony Spaeth/Identity, a Rye, N.Y., firm that helps companies craft identities. “It lends a little bit more reality and sincerity of intention to ‘We want to change the way we do things.’”

Today’s consumers are sophisticated and will seek out environmental information to help make shopping choices, said Allen Adamson, managing director at branding firm Landor Associates.

“They have to do this just to stay in the game and to win on that dimension. To win on green, this is a very big challenge,” he said.

Toyota, for instance, is known for its breakthrough hybrid gas-electric technology, and GM could accomplish the same thing with its Chevrolet Volt rechargeable electric car due in showrooms by late 2010.


Fredrix reported from Milwaukee. Associated Press writers Bree Fowler in New York and Stephen Manning and Ken Thomas in Washington, D.C., contributed to this report.

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Redfin Turns Profitable, Real Estate Industry Shudders

July 10th, 2009 admin No comments

An interesting tidbit from today’s Naked Truth event in Seattle: Redfin CEO Glenn Kelman said his company just turned profitable. Since I was sitting next to him on the panel, I asked him off microphone what revenues were. He said the run rate is around $15 million. 2007 revenues were $5 million, 2006 revenues were $1 million.

That’s great news for everyone except the real estate industry. The Seattle-based startup represents buyers and sellers in home real estate transactions for far less than the entrenched industry rates that take 5%-6% of the sale price of a home and split it between buy and sell brokers. On the buy side they reimburse 50% of the fee they receive back to the buyer. On the sell side they charge a $5,000 – $7,000 flat fee. The normal broker fees on a million dollar house are up to $60,000, so the savings are obvious.

The company was profiled favorably by 60 Minutes in 2007, but real estate agents and brokers have known about the company for far longer. Even as far back as 2006, Kelman told me, they’ve had to deal with “threats, stalkings and other disturbing behavior towards their employees and some customers from, apparently, angry real estate professionals.” Now that Redfin has shown that their model works profitably those threats will likely become worse.

Disruption is never fun for those being disrupted. The DOJ is hitting the real estate industry from one side, and Redfin is hitting them from the other. The result? A better deal for the rest of us.

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The Naked Truth 2009 Slides: Show Me The Money

July 10th, 2009 admin No comments

638653-20090622194016-21709-8214860Taking place tonight in Seattle is The Naked Truth 2009, a Redfin-hosted conference to give entrepreneurs advice. Michael is there participating as an expert to discuss industry trends. This year’s topic is revenue models for consumer Internet startups. The four presenting startups, Redfin, UrbanSpoon, Picnik and Animoto have some interesting information to share via their slides, which we’re posting below, pointing out a few of the highlights.

For those who want to follow along live, you can find the video of the event here.

First up, restaurant recommendation service UrbanSpoon, which was recently bought by IAC. Some highlights of their slide:

  • Of their visitors on the web, 74% come from Google.
  • Of their visitors through mobile devices, 99% come through the Apple’s Iphone (they have one of the more popular apps).
  • They’re seeing more than double the revenue off of those mobile users versus web users.
  • When they were featured in an Apple’s Iphone commercial, they saw 300% growth.


Next up, online imaging editing service, Picnik (which has a partnership with Yahoo to edit Flickr pictures).

  • 80% of their revenues come from paid subscriptions, the other 20% from advertising.
  • About half of their subscribers do so on the first visit to the site, 75% of those do within 4 visits.
  • “Partnerships are not nirvana” — obviously a shot at Yahoo.


Video slideshow maker Animoto (which recently raised a new round of funding):

  • They have 700 paid users per 100,000 users, but are already cash-flow positive with that.
  • They say their hybrid model (freemium + virtual goods) is working


And finally, online real estate company, Redfin:


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