Midday Business Report
RICK BABSON
March 20, 2006

Adknowledge Inc., a Kansas City technology firm that helps small businesses market to online consumers, today said it has sold a minority ownership interest to Technology Crossover Ventures for $48 million.
As part of the investment, two TCV partners, Henry Feinberg and Will Griffith, will join the Adknowledge board of directors.
Adknowledge, founded in January 2004, said in a news release that it will use the funding to help it meet increasing demand for online advertising. Jupiter Research predicts online advertising will experience a compound annual growth rate of 9.6 percent during the next five years, generating $18.9 billion in 2010.
“Out of all the firms we considered, TCV was our number one choice because of its specific focus and proven track record in late-stage technology company investments,” Scott Lynn, chief executive officer, said in a statement. “Throughout the diligence process, TCV began lining up several multi-million dollar relationships and discussing our strategic plans for 2006. The TCV team’s insight and industry connections already are playing an important role in helping us to evolve our business for accelerated growth and market expansion.”
Lynn previously founded Virtumundo in Kansas City. In 2004, he split the company in two and launched Adknowledge.
Adknowledge recently hired Brett Brewer as president and a member of board of directors. Brewer formerly was president of Intermix Media, the publicly traded parent of Myspace.com, which was sold last year to News Corp. for $673 million.
TVC, founded in 1995, is a provider of growth capital to technology companies. It has its headquarters in Palo Alto, Calif.
To reach Rick Babson, real time news editor, call (816) 234-4880 , or send e-mail to rbabson@kcstar.com

STAR BUSINESS ROUNDUP
American Century hires CIO for international equity
American Century Investments today said it has hired Enrique Chang, 43, as senior vice president and chief investment officer, international equity.
Chang, who started today, joined Kansas City-based American Century from Munder Capital Management, where he served as president and chief investment officer.
“Enrique is a great addition to American Century’s International Equity team,” Mark Mallon, American Century’s chief investment officer, said in a statement. “His strong investment management background, coupled with his proven leadership skills, will be invaluable as we continue to provide consistent, value-adding investment performance for our clients.”
Established in 1991, American Century’s international equity discipline consists of five growth strategies: international growth, global growth, international small-mid cap and international small cap and emerging markets.
Chang joined Munder Capital Management in 2000, serving as chief investment officer over equities. He was appointed president and chief investment officer in 2002. Prior to that, he worked at Vantage Global Advisors, J. & W. Seligman and Co., and General Reinsurance Corp.
Wal-Mart to hire up to 150,000 in China expansion
Wal-Mart Stores Inc. plans to hire up to 150,000 employees in China over the next five years, five times its current work force there, as it expands its number of stores, the company said today.
Wal-Mart has targeted China, which has long been a major supplier of its products, as a key region for its international store growth. It now has 56 stores in China with about 30,000 employees and plans to open 20 more stores this year.
Wal-Mart spokeswoman Amy Wyatt declined to say how many stores the Bentonville, Ark.-based retailer will add longer term. Wal-Mart generally only makes public projections one year at a time for its new store plans in the U.S. and internationally.
“We could hire as many as 150,000 (new employees) in the next five years,” Wyatt said.
The news comes less than a week after Wal-Mart moved to expand in another fast-growing region, Central America, by taking a majority stake in a local retail chain that it first bought into last September. Wal-Mart took over Central American Retail Holding Co., also known as CARHCO, for an undisclosed price.
Delphi delays year-end filing as talks continue
The auto parts supplier Delphi Corp. has delayed filing its year-end financial statement with the government until it concludes its discussions with General Motors Corp. and the United Auto Workers on a restructuring plan.
Delphi, in a filing Friday with the Securities and Exchange Commission, said discussions with the parties were ongoing but “the outcome is uncertain and may have a significant impact on the company’s Dec. 31, 2005 financial statements.”
John D. Sheehan, Delphi’s vice president, chief restructuring officer and chief accounting officer, told federal regulators that the company could not make the filing “until the outcome of the current discussions is better understood.”
Negotiators for GM, Delphi and the UAW talked through the weekend about a complex attrition program that would reduce GM’s hourly work force, but a GM spokesman would not say Monday whether the sides were close to an agreement.
The talks focused on GM’s already stated plan to reduce the number of hourly employees by 30,000 between now and 2008, which could open slots for Delphi workers to return to GM, spokesman Jerry Dubrowski said. Other labor issues could be part of the discussions, he said.
Dubrowski said the talks were related to, but separate from, talks about Delphi’s overall restructuring plan.
“If we can also include in that Delphi, help to create opportunities for Delphi employees to return to GM as part of the larger discussion on Delphi reorganization, that’s advantageous as well,” he said.
Dubrowski said the parties “won’t be announcing a comprehensive Delphi agreement soon.”
A UAW spokesman had no comment on the talks, and a message was left this morning with a Delphi spokesman.
Supreme Court won’t review tobacco judgment
The Supreme Court refused to consider tossing out a $50 million damage award to the family of a two-pack-a-day smoker who died of cancer.
Philip Morris USA, which controls about half the U.S. cigarette market, had asked the justices to declare the award unconstitutionally excessive and to rule that the company should have been shielded from some of the smoker’s claims.
Justices declined, without comment.
Richard Boeken, who initially won $3 billion in punitive damages, was 57 when he died in 2002, a year after a California jury found the tobacco company guilty of negligence, misrepresentation, fraud and selling a defective product.
The damage award was reduced to $100 million, and then cut in half by an appeals court.
Lawyers for Boeken’s family had asked justices to consider “Philip Morris’s immensely reprehensible, immensely profitable fraud scheme perpetuated for decades.”
Attorneys for the tobacco company, a unit of Altria Group Inc., asked the high court to use the case to clarify the formula for deciding punitive damages.
Three years ago the Supreme Court said that punitive damage awards should be “reasonable and proportionate to the amount of harm” someone suffers. Justices did not give a specific formula, and lower courts have been conflicted in handling follow-up cases.
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Oneida Ltd. enters bankruptcy with plan
Oneida Ltd., which was once the world’s largest maker of stainless steel flatware, has filed a pre-negotiated plan to reorganize under Chapter 11 bankruptcy protection that calls for the company to shed about $100 million in debt.
Oneida filed its plan Sunday in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan, said Richard Mahony, speaking on behalf of the 126-year-old company.
The announcement comes a year after the flatware company closed its factories to concentrate on distributing and marketing imported flatware.
It had announced earlier this month it would file for bankruptcy protection after agreeing to a debt-for-equity deal with its lenders.
According to court papers, the company listed assets of $305 million and debts of $332 million. Oneida said it lost more than $157 million between January 2003 and October 2005.
In a pre-negotiated petition, the debtor company finalizes its plan of reorganization with the support of creditors before filing with the court.
The company expects to be out of Chapter 11 in 90 days, Mahony said, adding the filing will not affect employment. Oneida Ltd. has 936 employees/
Oil prices drop after OPEC lowers 2006 demand forecast
Oil prices slid in response to lower demand forecasts and growing U.S. crude oil inventories.
With stocks plentiful and growth demand expectations down, some analysts suggested that prices would move downward over the coming months, despite supply concerns because of violence in Nigeria and from Iran, the focus of international concerns about its nuclear program.
A barrel of light crude was quoted at $62.20, down 57 cents, on the New York Mercantile Exchange. Brent crude slipped 26 cents on London’s ICE Futures exchange, selling for $63 a barrel.
Nymex gasoline futures fell by nearly 2 cents to $1.8412 per gallon (3.8 liters). Heating oil futures were down by less than a cent at $1.7739 a gallon, while natural gas futures fell more than 7 cents to $6.980 per 1,000 cubic feet.
The Organization of Petroleum Exporting Countries lowered its forecast Friday for global oil demand growth in 2006 by 110,000 barrels a day. OPEC, which cited lower consumption in the U.S. and Asia, said its prediction comes after signs of larger oil inventories in the U.S., along with higher demand in January and February.
OPEC set oil demand growth for this year at 1.46 million barrels a day and demand for the year at 84.5 million barrels a day. This brings its estimate in line with recent revisions by agencies such as the International Energy Agency and the Energy Information Administration.
Despite the lowered forecast, Algeria’s Oil Minister Chakib Khalil said Monday he expected OPEC to leave its current output policy unchanged when it meets next in Caracas June 1.
Newmont suspends gold and copper exploration after attack
One of the world’s largest gold mining companies suspended exploration on Indonesia’s Sumbawa Island after unidentified people torched a camp for its workers, officials said today.
No one was injured in the attack Sunday on a remote Newmont Mining Corp. camp. But the incident underscores the difficulties facing foreign companies working in remote corners of Indonesia and comes amid rising anger at Western mining and energy interests in the country.
Newmont’s local subsidiary said the “unlawful and violent action” by around 50 people had forced it close the Elang camp and suspend exploration activities in the area.
It said the attackers did not come with any demands.
However, police spokesman Maj. Tribudi Pangastuti said the assailants were demanding unspecified amounts of “compensation” for the exploration activity. She said no arrests had been made.
The Denver-based company already operates a massive gold and copper mine on the island. It said operations there were unaffected by the violence.
Newmont faces other problems elsewhere in Indonesia.
On Sulawesi island, one of its top American executives, Richard Ness, is facing criminal charges over allegations that waste from a now-closed gold mine polluted the bay and sickened villagers. The company denies the allegations.
Financial reports of interest
■ Home furnishing retailer Williams-Sonoma Inc., which owns the Pottery Barn and West Elm brands, said fourth-quarter net income grew to $120.8 million, or $1.02 a share, in the three months ended Jan. 29 from $113.7 million, or 95 cents, a year ago. Revenue rose to $1.21 billion from $1.08 billion .
Dell to double staff in India to 20,000 in three years
Dell Inc. plans to double the number of its employees in India to 20,000 in three years, Chairman Michael Dell said today, in what appeared to be moves by the world’s largest personal computer maker to beef up its presence in one of the world’s fastest growing markets.
Although most of the new hiring will be made at the company’s call centers, there will also be substantial recruitment at its product testing center and a possible manufacturing plant.
The Round Rock, Texas-based company currently operates four call centers in India, a product testing center for corporate customers and a global software development center. Some 10,000 people are employed at these facilities.
“We will double our staff from the current level over the next three years,” Dell told reporters during a visit to Bangalore, India’s technology hub.
The company is also looking to set up a manufacturing center in India, a move that could help boost the sale of Dell computers here.
“We have been in discussions with a number of state governments in terms of infrastructure and logistics. We are yet to make a decision on the location of the plant,” Dell said. He declined to give any timeframe for a decision.
Michaels Stores considers possible sale
Michaels Stores Inc., an arts and crafts retail chain, put itself up for sale today and said its longtime president and chief executive, R. Michael Rouleau, is retiring.
Michaels said its decision to put itself up for sale as part of its broader exploration of its strategic options was driven by a desire to boost shareholder value and improve its financial performance.
The retailer said it would leave the CEO post vacant, and selected Jeffrey N. Boyer and Gregory A. Sandfort as co-presidents to succeed Rouleau in that position. The company said Rouleau was leaving “after a decade of exemplary service.”
Boyer was previously executive vice president and chief financial officer, while Sandfort was formerly executive vice president and general merchandise manager.
Boyer will continue to hold the finance chief’s post, while Sandfort will take on the role of chief operating officer. Both co-presidents will report to Charles J. Wyly Jr., chairman of the board.
Bradesco paying $490 million for Brazilian American Express unit
Bradesco, Brazil’s largest private sector bank, will buy the Brazilian credit-card operations of American Express for $490 million, the companies said today.
Banco Bradesco SA said the deal represents an important strategic move to boost its share of the thriving and competitive Brazilian credit-card market.
Bradesco also will get American Express Co.’s Brazilian insurance and travel agency businesses, but the company’s Travelers Cheques operation is not included, the companies said in a statement.
With the deal, Bradesco closes in on its biggest rival in Brazil, Banco Itau Holding Financeira SA, the nation’s credit-card leader with 11 million clients.
The deal will add American Express’ 1.2 million credit-card clients in Brazil to Bradesco’s client roster of 8.7 million.
Norske Skog forces CEO to resign over papermaker’s poor earnings
The board of the world’s largest newsprint maker, Norske Skog of Norway, forced the resignation today of the company’s chief executive in the wake of weak economic results.
At a news conference, Chief Executive Jan Oksum said he disagreed with the board’s decision, but accepted it and resigned immediately.
Oskum joined the company in 1979, and was appointed chief executive two years ago.
Senior Vice President Vidar Lerstad becomes acting CEO, with board chairman Lars Wilhelm Groeholt assuming a working role until a successor is found.
The company reported a net loss of 997 million kroner ($149 million) for the fourth quarter, compared to a net profit of 545 million kroner a year earlier.
The fourth-quarter accounts reflect Norske Skog completing its takeover of South Korean newsprint maker PanAsia Paper Co. by buying the 50 percent it did not already own.

MONEYWISE CONSUMER NEWS
Chrysler recalls 268,800 vehicles to replace wiper motor
DaimlerChrysler AG’s Chrysler Group is recalling 268,800 vehicles from the 2005-2006 model years to replace a faulty front windshield wiper motor, the company said today.
The wiper motor armature shaft on the vehicles, which include the Dodge Durango, Dodge Caravan and Grand Caravan, and Chrysler Town & Country, can break and disable the wipers, Chrysler said.
The company said it had notified the National Highway Traffic Safety Administration of the voluntary recall. Owners will be notified when parts are available.

ECONOMIC NEWS
Leading economic indicators fall in February
A closely watched gauge of future economic activity declined slightly in February following a sharp rise in January, a private research group said today.
The decline suggested to some economists that the nation’s economic growth will slow in the second half of the year.
The Conference Board said its Index of Leading Economic Indicators fell 0.2 percent in February, following a revised 0.5 percent rise in January. The January increase had initially been reported at 1.1 percent.
Economists on Wall Street had expected the index to have declined 0.3 percent in February.
The Conference Board said its coincident index, a measure of the current economy, rose 0.3 percent in February, following no change in January and a 0.4 percent increase in December.
In the latest report, the largest negative components were consumer expectations, building permits and stock prices. The positive components included manufacturers’ new orders for non-defense capital goods and orders for consumer goods and materials.
“Essentially the story is we have got moderate growth through the first quarter. We may tick up in the second quarter and we may tick down in the third quarter,” Ken Goldstein, economist at The Conference Board told The Associated Press. “Growth is going to be a little slower second half of the year.”
Frank Nothaft, chief economist at the mortgage consolidator Freddie Mac, said some of the growth anticipated for the first half of the year is related to reconstruction efforts amid regions hurt by hurricanes last year.
“This pumps more money into the economy, spurring growth,” he said, adding that the slowdown in the later half of 2006 would reflect the series of interest rate increases engineered by the Federal Reserve.
Britain to boost minimum wage 6 percent in October
Britain’s minimum wage for workers 22 and older will increase by 30 pence, or nearly 6 percent, to 5.35 pounds ($9.40) per hour in October, the government said today.
The minimum for workers aged 18 to 21 will rise 20 pence to 4.45 pounds ($7.82), while 16- and 17-year-olds will get a 30 pence raise to 3.30 pounds ($5.80).
The increases, in line with recommendations of the Low Pay Commission, are likely to please trade unionists, an important force within the governing Labour Party. But they will dismay some corporate leaders who say rising wages are bad for business.
Treasury chief Gordon Brown is expected to announce his annual budget on Wednesday, and as Prime Minister Tony Blair’s government faces allegations of sleaze connected to undeclared loans from rich supporters.
Taiwan pushes India as alternative to rival China
Taiwan’s creation of a business council to promote commercial ties with India is part of the government’s effort to reduce the island’s growing economic dependence on rival China, experts said today.
Last month Taiwan announced the formation of a Taiwan-India Cooperation Council to push trade and investment with the booming South Asian nation.
The head of the new body is former Taiwanese Premier Yu Shyi-kun, who is now chairman of the ruling Democratic Progressive Party.
The DPP seeks to distance the self-governing island of 23 million people from the communist colossus 100 miles to its west, and fears that closer economic ties will reduce its room for political maneuvering.
“China is now employing a policy of ‘using business to encircle Taiwan,’ ” said Hung Chin-tan, executive secretary of the Ministry of Economic Affairs’ Investment Council.
Lin Wen-cheng, a China expert at Kaohsiung’s National Sun Yat-sen University, says Taiwan has to find good alternatives to its commercial relations with China because of the tense political situation between the sides.
“I don’t understand why Taiwan should invest in a country that threatens force,” he said.
Taiwan and the mainland split amid civil war in 1949.
Taiwanese investment in India is still small — about $200 million — and at $2 billion its 2005 trade with the South Asian nation is only a fraction of its China commercial exchanges.
Taiwanese analysts say that Taiwan’s sophisticated information technology industry has a lot to offer to India, which is developing rapidly as a major producer of high tech goods and services.

MARKET NEWS
Stocks mixed as rally loses momentum
Wall Street’s four-day rally stalled today, with the major indexes mixed as investors weighed whether the Federal Reserve’s string of interest rate hikes might actually be coming to an end.
With slowing economic growth and little evidence of inflation, the market is getting more optimistic that the Fed, which meets next Tuesday, would stop raising rates by May. Stocks also rose ahead of Fed Chairman Ben Bernanke’s tonight speech to the Economic Club of New York.
However, with stocks up for four straight sessions and the Dow Jones industrials and Standard & Poor’s 500 index at highs not seen since May 2001, confidence in the market’s ability to keep advancing could be faltering. And the impetus to lock in profits ahead of the Fed meeting could prove tempting for cautious investors.
“There’s really not a lot of information here to work with, and I think the market’s taking a rest,” said Jack Ablin, chief investment officer at Harris Private Bank. “We’re still a few weeks away from first-quarter earnings, so all you have to focus on is a slowing economy and interest rates.”
In midday trading, the Dow rose 1.52, or 0.01 percent, to 11,281.17. The S&P lost 0.63, or 0.05 percent, to 1,306.62, and the Nasdaq composite index rose 5.50, or 0.24 percent, to 2,311.98.
Bonds also were higher, with the yield on the 10-year Treasury note falling to 4.64 percent from 4.67 percent late Friday. The dollar rose against most major currencies, while gold prices also moved higher.
Oil prices edged lower, with a barrel of light crude quoted at $62.20, down 57 cents, on the New York Mercantile Exchange.
The Conference Board’s index of leading economic indicators slipped in February, falling 0.2 percent after January’s 0.5 percent rise. The January figure was revised from 1 percent as well — a signal that the economy could be slowing down. While a slowing economy bodes well for fewer rate hikes, it also shows that economic growth has already begun to slow, which could affect future corporate earnings.
In company news, Wal-Mart Stores Inc. gained 97 cents to $47.66 after media reports of the retailer’s ambitious plan to add 150,000 new employees in China over the next five years in a push to grab market share in that country’s rapidly expanding economy.
Fellow Dow industrial General Motors Corp. saw a modest recovery despite media reports that said the company’s board of directors were demanding answers from top executives after Friday’s disclosure of a $2 billion earnings restatement. GM rose 32 cents to $21.45.
Williams-Sonoma Inc. rose 29 cents to $42.75 after the home and kitchen retailer saw profits rise 6 percent for the fourth quarter, on par with Wall Street’s expectations. The owner of the Pottery Barn and West Elm brands also initiated its first quarterly dividend.
Garmin Ltd. shares roared past Friday’s record high of $77.97 to another high of $78.71. At middy, shares of the Olathe company were at $78.24, up $1.15, or 1.49 percent, on the Nasdaq.

Coming from The Star
■ Tomorrow in Star Business Weekly: Pet-based businesses are sniffing out a potential for success.