URL: http://www.nytimes.com SUBJECT

1195 of 1258 DOCUMENTS

The New York Times
January 24, 2007 Wednesday

Late Edition - Final

Move Over Silicon Valley, Here Come European Start-Ups
BYLINE: By JOHN MARKOFF
SECTION: Section C; Column 3; Business/Financial Desk; Pg. 3
LENGTH: 1033 words
DATELINE: MUNICH, Jan. 23
A technology and media conference being held here this week provided ample evidence that Silicon Valley's dominance of Internet-style technology innovation is waning.

The gathering, Digital Life Design, has become a showcase for a range of European entrepreneurs who have taken the start-up culture pioneered in Silicon Valley as a template and are successfully transplanting it here.

The star of this year's event was Niklas Zennstrom, the Swedish co-founder of the file-sharing system Kazaa and the Internet telephony company Skype, which was sold to eBay for $2.6 billion in 2005. Mr. Zennstrom last week took the wraps off a previously secretive start-up, Joost, that intends to provide a peer-to-peer approach to distributing video online.

''We're trying to take the good things about television and the good things about the Internet and put them together,'' he said.

Like many participants here, Mr. Zennstrom voiced the opinion that Internet-based commerce would accelerate in its disruptive effect on traditional businesses. Skype, for example, now says that it carries 4.4 percent of all worldwide long-distance calling.

''We now have a pretty decent Internet infrastructure,'' Mr. Zennstrom said, noting in the future that it would give rise to ''many, many more disruptive industries.''

The invitation-only conference, which ended Tuesday, attracted 1,000 old- and new-media publishers this year, mixed in with Internet software and service start-ups and a smattering of American dot-com executives. It serves in part as an intelligence-gathering event for its sponsor, Hubert Burda, a German publisher trying to move his more than 250 magazines into the Internet era.

Several organizers noted that Silicon Valley's original success as an innovation center was largely because of business and social networks developed over several decades in a community of venture capitalists and technologists.

Now, they said, with the Internet supplementing and replacing traditional face-to-face social networks, Silicon Valley might be losing its competitive advantage.

''The epicenter was Silicon Valley, but that has created a wave of innovation that has now reached the entire world,'' said Yossi Vardi, an Israeli entrepreneur and investor who financed his son's development of ICQ, an early Internet chat program later sold to America Online.

Internet start-ups in Europe received a significant boost last month with the initial public offering of Open BC/Xing, a German Web site that is a competitor of the American site LinkedIn for social networking among businesses.

One of the best examples of the diffusion of Internet-style business creation is Tariq Krim, chief executive of Netvibes. His Paris-based company was a pioneer in the design of a Web service that allows users to personalize their start page, shifting the control away from the traditional Internet portal companies.

Netvibes, which received a $15.5 million investment from the Silicon Valley venture capital firm Accel Partners last year, now reports 10 million users. The company was an early practitioner of the so-called Web 2.0 approach, which is based on a system of hooking together Internet services provided by competing companies.

After growing up in Paris, Mr. Krim received practical business schooling in Silicon Valley, first as an intern at Sun Microsystems and then, in the late 1990s, as a reporter for a French business magazine based there.

In founding Netvibes in 2005, he said, he was inspired by the simplicity of Apple's Macintosh and was trying to offer that same ease of use to Internet users.

''Our digital life is fragmented into a wide number of services,'' he said.

Being based in Paris can sometimes be disorienting, he said, noting that when Netvibes began operating two years ago many people assumed that it was in Silicon Valley.

The company was able to use online collaboration among its users to rapidly translate the service into 80 languages, even though the firm had just four employees initially.

Netvibes recently opened a San Francisco office, and Mr. Krim acknowledged that he was fond of the Silicon Valley culture in which everyone seems to live and breathe computing and technology.

''I miss the fact you can start an interesting company just by talking to someone you meet while you are doing your laundry,'' he said.

Still, he says that while there are major cultural differences in the way start-up entrepreneurs are viewed in Europe -- failure is not viewed as a badge of honor, the way it is in Silicon Valley -- a native community is beginning to emerge.

He noted that an early investor in Netvibes was Martin Varsavsky, the Madrid-based investor who recently founded FON, a wireless-networking service based on subsidizing the cost of Wi-Fi modems and building communities of users around the world who freely share wireless access points.

Mr. Varsavsky argues that the new European start-ups are generally more sophisticated than their American competitors.

European Web video sites like Vpod and Sevenload are technically more advanced than YouTube, he said. Sevenload combines the features of Flickr, which allows sharing of still photos, and YouTube, the video sharing site.

Other European start-up companies whose executives attended the conference included Rebtel and Truphone, which are offering low-cost Internet calls to cellphone users. Another European start-up, JaJa, is also pursuing the market.

''We have built Wi-Fi infrastructure at home and in the office and we are still using our cellphones,'' said Alexander Straub, a German entrepreneur based in London who founded Truphone last year. He said the roaming charges levied by cellular companies were not sustainable. ''It's pure robbery,'' he said.

A number of participants at the conference contended that with the quick spread of ideas in an Internet age, Silicon Valley companies no longer have a first-mover advantage.

Gerald Haag, a former Amazon executive who is a founder of Dropshop, a Munich-based start-up for auction sellers, cited a case in which an idea from Silicon Valley was introduced in Europe. Two weeks later, he said, ''there was a German version.''

URL: http://www.nytimes.com
SUBJECT: INTERNET & WWW (90%); INITIAL PUBLIC OFFERINGS (89%); PRESS CONFERENCES (73%); INTERNET SOCIAL NETWORKING (89%); ENTREPRENEURSHIP (89%); STARTUPS (89%); MEDIA CONVERGENCE (78%); COMPUTER NETWORKS (78%); VENTURE CAPITAL (77%); CONFERENCES & CONVENTIONS (73%); TELEVISION INDUSTRY (73%); INTERNET TELEPHONY (73%); LONG DISTANCE TELEPHONE SERVICE (69%); PUBLISHING (78%); TRADE SHOWS (78%); INTERNATIONAL ECONOMIC ORGANIZATIONS (78%); COMPUTER TELEPHONY (70%); PRODUCT INNOVATION (89%); COMPUTER SOFTWARE (78%) Computers and the Internet; Trade Shows and Fairs; Computers and the Internet
COMPANY: AOL LLC (51%)
ORGANIZATION: EUROPEAN UNION (59%) European Union; Joost (Co)
PERSON: MICHAEL MCMAHON (56%) John Markoff
GEOGRAPHIC: CALIFORNIA, USA (79%) UNITED STATES (90%); GERMANY (88%); EUROPE (92%); EUROPEAN UNION (79%) Europe; Silicon Valley (Calif)
LOAD-DATE: January 24, 2007
LANGUAGE: ENGLISH
GRAPHIC: Photos: Joost users will download software to browse for channels and clips.

One company, Joost, wants to make it easier to watch TV on a computer. (Photographs by Joost, via Associated Press)

PUBLICATION-TYPE: Newspaper

Copyright 2007 The New York Times Company

1196 of 1258 DOCUMENTS

The New York Times
January 24, 2007 Wednesday

Correction Appended

Late Edition - Final
A Shift in Power, Starting With 'Madam Speaker'
BYLINE: By KATE ZERNIKE
SECTION: Section A; Column 3; National Desk; STATE OF THE UNION; Pg. 1
LENGTH: 1164 words
DATELINE: WASHINGTON, Jan. 23
The first two words of the evening on Tuesday were evidence of how much has changed here: ''Madam Speaker,'' boomed Congressional escorts, ''the president of the United States.''

Even Mr. Bush acknowledged the transformation, setting off a wave of applause. ''Tonight, I have the high privilege and distinct honor to begin a speech with the words 'Madam Speaker,' '' he said in a nod to Representative Nancy Pelosi, the first woman to be speaker of the House.

But all the courtesies and flourishes of the evening could not paper over the reminders of how power has flowed away from the president in the new Washington.

Not just because for the first time Mr. Bush delivered his address with a Democrat staring down his back. Not just because his poll numbers are dismal. Not just because the mayor of the nation's capital rejected the White House's invitation to sit with the first lady, Laura Bush, in her box and instead came as Ms. Pelosi's guest. Even Republicans, while noting that it was ''the president's day,'' as Senator John W. Warner of Virginia described it, yielded only a share of the spotlight.

Mr. Warner and others were working with Democrats, whom six months ago they derided as Defeatocrats, on resolutions opposing Mr. Bush's proposal to increase the number of troops in Iraq. They unveiled their resolutions in the days before the speech and were planning to take them up the morning after.

The boxes on either end of the chamber -- Ms. Pelosi's on one, the first lady's on the other -- were a tableau of change.

In some years past, Mr. Bush invited Iraqis to make his case for the war, including Ahmed Chalabi, the exile-turned-advocate for the war who has now fallen from favor, as well as ordinary Iraqis with ink-stained fingers to prove that they had cast their ballots in their first democratic elections. This year, the only reminders of Iraq were a few soldiers; the box was mostly filled with educators, entrepreneurs, an energy researcher and those with heartwarming 9/11 stories.

The Democrats, meanwhile, invited people who symbolized the legislation they have passed in their first two weeks in office: advocates of embryonic stem cell research, those who fought for national security reforms after the Sept. 11 attacks, and labor leaders who backed an increase in the minimum wage.

In preparation for the president's address, Ms. Pelosi of California had been coached by her staff to keep a neutral face. They warned that any raised eyebrow or pursed lip would be captured by the cameras trained on the president.

But while Ms. Pelosi emphasized that she would be ''respectful,'' her very choice of words earlier in the day signaled the new dynamic. ''We always give the president a warm welcome as our guest in the chamber,'' she said, with the operative word, ''guest.''

Democrats had decided it not in their interest to look churlish during the speech. Lawmakers were advised to take their cues on when to stand, sit down and applaud from Ms. Pelosi. She sat on the dais next to Mr. Cheney, her junior by several months, but an emblem of a generation of white male politicians. They exchanged few words as they waited for the parade of lawmakers to assemble. At some points during the speech, Ms. Pelosi beat Mr. Cheney in jumping to an ovation.

Her caucus said that they expected Ms. Pelosi to, in the words of Representative John B. Larson of Connecticut, show ''poise, dignity, comity.''

Appearances were obviously important to Ms. Pelosi, who changed from the brown suit she had worn earlier in the day to a soft green one, which offered more contrast to her dark leather speaker's chair.

The noise level in the chamber seemed more muted, as Democrats exercised their new majority by sitting on their hands and staying off their feet during many applause lines. Republicans, who had promised to be ''boisterous'' to make up for their diminished numbers, greeted Mr. Bush with a series of ''ho's!''

Democrats, in turn, shouted, ''Hey!'' and ''Yeah!'' when the president introduced Ms. Pelosi as the first female speaker. The president's congratulations to the ''Democrat majority'' won only polite applause from both sides. The chamber erupted most unanimously and loudly for Wesley Autrey, the man who leapt into the tracks of a New York subway to save a fellow passenger. (The only ones not clapping, it appeared, were Mr. Autrey's two young daughters, who napped beside him in their bubblegum-colored dresses.)

Democrats leapt to their feet with the Republicans when Mr. Bush said he wanted to balance the federal budget, provide affordable health care, leave medical decisions to doctors and patients rather than bureaucrats, reduce gasoline consumption and increase alternative fuels.

But the applause was more Republican-only when Mr. Bush said he could balance the budget without raising taxes. Almost no Democrats clapped when he said his candidates for federal judgeships should get quick ''up or down votes.''

And there were lines that got little support from Mr. Bush's own side of the aisle. When he pledged to uphold the ''tradition of the melting pot,'' the Republican House leader, Representative John A. Boehner of Ohio, grimaced and clapped just once. When Mr. Bush went further and vowed ''comprehensive immigration reform'' -- code words for the plan the House rejected the Senate approved last year -- two top House Republicans, Roy Blunt of Missouri and Adam Putnam of Florida, stayed seated, hands quiet.

And when the president addressed the issue that has dominated discussions on Capitol Hill in recent weeks, his proposed increase in troops in Iraq -- there was little unanimity between the parties, or within them. Most Democrats remained seated as the president urged the chamber to ''find our resolve.''

Senator Charles E. Schumer of New York cast a disapproving eye on those who stood, including Senators Joseph I. Lieberman and John Kerry. And while Secretary of State Condoleezza Rice sat forward in her seat and nodded as he described the increase in troops, Republicans who have criticized the plan, including Mr. Warner, stayed off their feet. Senator Olympia Snowe of Maine sat stone still. Across the aisle, Senator Tom Harkin of Iowa shuddered and shook his head, and Representative Charles B. Rangel of New York tipped his head back and stared at the ceiling.

Perhaps the most poignant commentary on the war and the plan to increase troops came in the Democratic response to the speech, given by Senator James Webb of Virginia. He had been chosen because, as Senator Harry Reid, the Democrats' leader, said, he understood what it meant to go to war. A former secretary of the Navy and ex-marine, his son is serving in Iraq.

In his speech, he held up a photograph of his father serving as an Air Force captain in Germany. He had carried it with him for most of his life, he said. And as a child, he had taken it to bed for three years as he prayed for his father's safe return.

URL: http://www.nytimes.com
SUBJECT: US DEMOCRATIC PARTY (90%); US PRESIDENTS (90%); POLITICAL PARTIES (88%); ELECTIONS (78%); LEGISLATIVE BODIES (78%); US REPUBLICAN PARTY (78%); CAMPAIGNS & ELECTIONS (78%); VOTERS & VOTING (77%); NATIONAL SECURITY (68%); ENTREPRENEURSHIP (68%); SEPTEMBER 11 ATTACK (67%); TERRORISM (60%); ENERGY DEVELOPMENT PROGRAMS (60%); STEM CELL RESEARCH (60%); WAGES & SALARIES (60%); MINIMUM WAGE (60%); BIOTECHNOLOGY & GENETIC SCIENCE (50%); IRAQ WAR (69%); CATHOLICS & CATHOLICISM (74%) Terms not available from NYTimes
ORGANIZATION: NATIONAL CENTER FOR MISSING & EXPLOITED CHILDREN (59%); US NAVY (59%); NATIONAL BASKETBALL ASSOCIATION (59%); HOUSTON ROCKETS (59%)
PERSON: JOHN WARNER (68%); NANCY PELOSI (84%)
GEOGRAPHIC: HOUSTON, TX, USA (79%); LOS ANGELES, CA, USA (79%) VIRGINIA, USA (93%); FLORIDA, USA (92%); PENNSYLVANIA, USA (79%); COLORADO, USA (79%); TEXAS, USA (79%); CALIFORNIA, USA (79%); NORTH CAROLINA, USA (79%); SOUTH CAROLINA, USA (79%); WYOMING, USA (79%); NEW YORK, USA (79%); INDIANA, USA (79%) UNITED STATES (95%); IRAQ (94%); AFRICA (79%); HUNGARY (67%)
LOAD-DATE: January 24, 2007
LANGUAGE: ENGLISH
CORRECTION-DATE: January 25, 2007

CORRECTION: A front-page article yesterday about events surrounding President Bush's State of the Union speech misquoted his opening remarks. He said, ''And tonight I have the high privilege and distinct honor of my own as the first president to begin the State of the Union Message with these words: 'Madam Speaker.' '' He did not say, ''Tonight, I have the high privilege and distinct honor to begin a speech with the words 'Madam Speaker.' ''
GRAPHIC: Photos: President Bush delivering the State of the Union address last night at a joint session of Congress. It was the first time in the Bush administration that Democrats controlled both the House of Representatives and the Senate. (Photo by Doug Mills/The New York Times)(pg. A15)Chart/Photo: ''The First Lady's Guests''FIRST ROW1 Nancy Brinker, former ambassador to Hungary, Palm Beach, Fla.

supports breast cancer research.2 Dr. Nancy Ho, scientist, West Lafayette, Ind.

researches ethanol.3 Dikembe Mutombo, Houston Rockets, Texas

spends his off-season as an N.B.A. ambassador for African causes.4 Laura Bush5 Lynne Cheney6 Sgt. Tommy Rieman, Army, Independence, Ky.

awarded the Silver Star for bravery during a firefight in Iraq.7, 8, 9 Wesley Autrey, construction worker, New York

saved a man who had fallen in a subway station. With his daughters, Shuqui and Syshe.SECOND ROW10 Duncan Smith, principal, Frankford Elementary School, Frankford, Del.11 Tech. Sgt. Michelle Barefield, Air Force, Goldsboro, N.C.

led 80 ordnance-disposal missions in Iraq.12 Alejandro Monteverde, film writer and director, Los Angeles

came to the United States on a student visa and is a new citizen.13 Julie Aigner-Clark, teacher, Centennial, Colo.

promotes safety and arts education for children.14 Sgt. Aubrey McDade Jr., Marine Corps, Parris Island, S.C.

received the Navy Cross medal for service in Iraq.15 Adm. Tim Ziemer, who is retired, President's Malaria Initiative, Springfield, Va.

creates and expands malaria control programs in Africa.THIRD ROW16 Ernie Allen, National Center for Missing and Exploited Children, McLean, Va.17 Petty Officer First Class Corey Firman, Navy, Alexandria, Va.

volunteered to participate in over 30 convoys in Iraq.18 Suzanne Lewis, Wyoming

directs Yellowstone National Park.19 Craig Cuccia, executive and case manager, New Orleans

provides training to young people.20 Candida Wolff, assistant to the president for legislative affairs21 Shannon Hickey, high school student, Lancaster, Pa.

works for homeless in memory of priest killed on Sept. 11, 2001.22 Petty Officer Second Class Nathan Thomas, Coast Guard, Hollywood, Fla.

designed training program and trained over 500 foreign military servicemen.23 The Rev. Michael Boland, Catholic Charities president, Chicago

leads organization providing care for veterans.Not all of Mrs. Bush's guests are identified.(Source by The White House)(pg. A15)
PUBLICATION-TYPE: Newspaper

Copyright 2007 The New York Times Company

1197 of 1258 DOCUMENTS

The New York Times
January 23, 2007 Tuesday

Late Edition - Final

Restatement By Take-Two Over Problems With Options
BYLINE: By Bloomberg News
SECTION: Section C; Column 4; Business/Financial Desk; Pg. 2
LENGTH: 427 words
Take-Two Interactive Software, maker of the Grand Theft Auto video games, said yesterday that it let its former chief executive, Ryan A. Brant, ''control and dominate'' improper options backdating that began when the company went public in 1997.

The compensation committee abdicated its responsibilities for the grants and failed to maintain proper controls, the company said in a regulatory filing. Take-Two will restate results from 1997 to 2003 to reflect options costs.

The restatement will be the second time Take-Two has revised earnings to fix accounting irregularities. In 2005, the company paid a $7.5 million fine in settling a Securities and Exchange Commission suit over how it booked sales. Take-Two is among at least 200 companies that are being investigated on suspicion of changing the date of options grants to inflate their value.

''They're very familiar with the S.E.C.,'' said Paul-Jon McNealy, an analyst with American Technology Research in Boston who rates the shares neutral. ''It's not finished yet.''

A significant number of grants were backdated from 1997 to August 2003, the company said, but it also said that it had not found any backdating since then.

Shares of Take-Two gained 5 cents, to $17.54, on Nasdaq. They had declined 5.7 percent this year before yesterday. The billionaire Carl C. Icahn owned 2.89 million shares, or 4 percent, as of September.

Three former executives declined to be interviewed for the option investigation, which was led by Kasowitz, Benson, Torres & Friedman and was completed last Wednesday, Take-Two said in yesterday's S.E.C. filing. They included a former controller who was fired in December and two chief financial officers, one of whom served from late January 1999 to early 2000 and the other from early April 2000 through 2001.

Mr. Brant founded the company in 1993 at age 21 and served as chief until 2001. In March 2004, as the company's sales accounting was under investigation, he gave up the title of chairman and became director of software publishing. He was a nonexecutive vice president until his departure in October.

Take-Two faces possible delisting from the Nasdaq after failing to report results on time. It said yesterday that it planned to file earnings for the quarter ended July 31 and the year ended Oct. 31 ''as soon as practicable.''

Take-Two also said that Nasdaq said the company could continue to be listed as long as it reported before March 19 on the quarter that ended July 31 and also held a combined 2005 and 2006 annual shareholders' meeting before March 27.

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