Cloud opens up for your data

Google’s new file syncing service, Google Drive, was launched last week, and it immediately stirred up discussions around existing cloud storage services. In simple words, cloud storage refers to the ability to upload and access your files or data on any device connected to the internet. The jury is still out on whether you should discard those flash drives and sign up for cloud storage services, since Indian users are still in the early stages of getting the most out of their internet devices. If you haven’t yet signed on to any cloud service, begin with evaluating how each service integrates with your device, or requirements.
Not all users and businesses will be comfortable using an online backup service provided by a search and advertising company. Users or businesses that have data or files already on Google Docs, Google Drive does make the sense. For others, there is the Dropbox. Microsoft Office users will find it easy to migrate their data to Microsoft SkyDrive, and Apple device owners are likely to stay with iCloud simply because it is efficiently integrated with the platform.
Google Drive
Google’s latest cloud service mirrors Google Docs; the difference being that users can create files, folders, search through files, and then upload them by a simple drag-and-drop onto the browser window. But, unlike Docs, Google will also enable user’s entire drive from their desktop once they have installed the Google Drive application.

To get started, log on to drive.google.com and select “Download Google Drive”. A “Google Drive” folder is added to your desktop once installed and synced with Google Drive (online). Thus, any changes you make on your desktop, Google Drive would reflect on the Web interface or vice versa. In other words, as you add files or folders to Google Drive, they would be simultaneously be uploaded to your web drive (provided you have an active internet connection at all times)
Image files, movies, documents, powerpoint, PDFs — you name it and Google Drive supports the storage and viewing of nearly 30 popular file types. So, if you upload a movie or soap series onto your Drive, it will allow you to play it back on your browser as long as you get a steady internet connection. Drive’s search puts Google’s Optical Character Recognition (OCR) and Google Images database to use, allowing users to find images and scanned document using text search terms. For example, if you have a scanned document, then Drive’s search can find it by words in the document or if you have a picture of Taj Mahal in your Drive then it will bring up the same. The new service promises to work cross-platform, with apps for Windows, Mac, Android and iOS (iPhone app hasn't been launched yet)
Maximum size of files that can be uploaded on Google Drive is 10GB. If you are a data hoarder, then you can choose from paid plans (once you exceed the free 5GB storage limit) that start from an affordable $2.50 a month for 25GB to $800 a month for 16TB.
Why would Google wants to have an independent cloud storage system? Google Docs already allows uploading different file types and you have all kinds of files in your Gmail account. Also, there are tools that can map a Google account as a network drive. We all know how Google works – by displaying targeted ads from information collected through Gmail, Google+ and Google searches. So, do we know for sure that they won’t go through the files on Drive?
Dropbox
Dropbox allows users to share files for collaboration, store and share photo and video galleries, and the data is also kept in backup on Dropbox’s secure servers. To start using it, install the app on a PC and Mac from its website. You can begin with the free service that offers 2GB storage or sign up for paid service that starts at $9.99 for 50GB storage or $19.99 for 100GB storage. Since Dropbox offers 2GB of free storage it will feel the pressure from users as Google is giving away 5GB of free space.
What tilts the scales in its favour is the ability to upload files of up to 300MB in size via the web or unlimited size via the desktop app. Dropbox enables you to work on any file in your Dropbox folder regardless of whether you are connected to the internet or not, and whenever you are connected again, the files sync across the devices where the app is accessed. Dropbox also keeps 30 days of history for your files, such as documents that you updated, and even includes access to files deleted from your local drive.
Google’s price tag of $2.49 a month for 25GB option scores over Dropbox. But Dropbox has been able to strike successful deals with mobile device makers to include free storage with new tablets and smartphones.
SkyDrive
SkyDrive is powered by Microsoft, that gives 25GB of free storage space. But Microsoft has now changed the free space for new users from 25GB to 7GB along with an update of the service with clients for Windows and OS X, which means users can connect to their storage space from any where.
Skydrive accounts can be accessed from anywhere, including mobile device, and any type of file can be stored in private, public or shared folders. Publicly shared files do not require a Windows Live login for access. It integrates seamlessly with Hotmail, Office Web Apps and Office Desktop versions, making it a must-have for Microsoft users. SkyDrive offers in-browser Microsoft Office document editing and creating capabilities.
iCloud
For Apple users, iCloud is the most logical way for users to back up and sync pictures, videos, music and documents on their iOS devices. How it works? If you take a photo on your iPhone, it will end up in all your other devices. When you purchase an app on iTunes store on your Macbook, you can access it on your iPad without having to plug in and sync.
Now, Apple gives 5GB of free space that can easily back-up your mail, contacts, calendar entries, office documents, bookmarks, and notes. If you want more space, then upgrade up to 50GB for $100. Apple’s iCloud includes iTunes in the Cloud, Photo Stream, Documents in the Cloud, Apps, Books and Backup, Calendar, Mail and Contacts, Find My Friends and Find My iPhone. Since iOS versions of Pages, Keynote and Numbers are now iCloud enabled, which means Apple users can move their documents around easily. Again, iCloud.com doesn't let you view documents like Google Docs does, but it will let you upload documents from your computer so that you can then access them through the iOS apps. Similarly, if you create a document on your iOS device, once synced with iCloud, you can login and download to your PC to continue working.
While Dropbox app brings almost the same features to Apple users, too, iCloud is carved into the iOS platform and, hence, works smoothly.

Telenor sets stage for likely India pull-out

Norwegian telecom major Telenor today wrote off its remaining fixed and intangible assets in India worth 3.9 billion Norwegian krone (Rs 3,583 crore). And, the company said it was likely to quit the country if the Telecom Regulatory Authority of India (Trai) recommendations of a steep base price for re-auction of 2G band spectrum were accepted by the government.
With this, Telenor, which holds 67 per cent stake in Unitech Wireless, has written down investments to the tune of 8.1 billion NOK (Rs 7,403 crore) in two tranches in its Indian mobile arm. following the Supreme Court's order cancelling 122 of the 2G licences in February this year. Earlier, it had written down 4.2 billion NOK.
Blaming its decision on the uncertainty clouding the sector after the cancellation of licences by the SC and subsequent re-auction recommendations of Trai, it said, in a statement: “As a precautionary measure, Telenor ASA has decided to write down the remaining fixed and intangible assets in India, amounting to NOK 3.9 billion (NOK 2.6 billion after non-controlling interests).”

Though Siggve Brekke, the Asia head of Telenor, said the move did not mean the company “is exiting India,” he said if things did not improve, they would eventually have to take such as decision. “If the Trai recommendation becomes policy, then the government is forcing us to leave. It's quite clear that it will not work for us,” Brekke told reporters.
After the write downs,Telenor has no further accounting exposure related to India as of March 31.
In its statement, the company added: “Following the Supreme Court's ruling in February to cancel Uninor's licenses and the recent recommendation from the Telecom Regulatory Authority of India regarding the 2G license re-auction, the uncertainty has increased significantly.”
If the recommendation from Trai in its current form should be approved by the department of telecommunications, it would be almost impossible, says Telenor, to participate in the auction. It was working actively towards Indian authorities bringing forward an acceptable framework for continued operations, it added.
The telecom regulator has suggested the government start the auction with a base price of Rs 3,600 crore per MHz.
Brekke said there were three reasons why the recommendations do not make a business case. “Auction of 5MHz spectrum is not an auction. It's a trial balloon and the government is only trying to set the price level for future rounds. We can't do with so little spectrum,” he said.
Second, he said the reserve price of Rs 3,600 crore was too high. Brekke added the rollout obligations — mandating each operator set up infrastructure in villages with a population of at least 2,000 — was also not acceptable.
“It isn't logical to ask each operator to set up its own tower in every village when this is done (in a ) smarter (way) through collaboration and sharing between operators,” he said.

Facebook To Release Tool To 'Save Lives'

Facebook CEO Mark Zuckerberg will make an appearance on network television Tuesday to flog a new tool his company is introducing that it says "has the power to save lives."

At the moment, what the tool will be is still a mystery, but Zuckerberg's schedule is not. He'll appear in a "Good Morning America" segment aired from Facebook headquarters in Menlo Park, California, where he'll be interviewed by Robin Roberts.
Later in the day, the COO of Facebook, Sheryl Sandberg, will appear on ABC's evening news program to be interviewed by Diane Sawyer about the new life-saving initiative by the social network.
Portions of the interviews will also be featured Tuesday on “Nightline" and ABC News and Yahoo’s “Newsmakers" series as well as ABCNews.com, ABC News Radio and ABC NewsOne, ABC said.

Topic of New Tool?

The new tool could be something along the lines of some Facebook offerings introduced in recent months that could be said to "save lives." For example, in December Facebook announced "Lifeline," which allows people to alert the social network to a potential suicide attempt.
Last March, Facebook introduced a suite of tools aimed at curbing cyberbullying on the service. In addition to Facebook's efforts, some countries have advanced their own programs to squash cyberbullying on the social network.

Puppet Masters of the Internet

Nearly everyone on the Internet knows about Larry Page, Sergey Brin, Mark Zuckerberg, and Jeff Bezos. Savvy geeks might even recognize Internet pioneers like Vint Cerf and Marc Andreessen.
But among the most powerful people on the Net are individuals whose names are unknown to the teeming masses on the InterWebs.

 Some of them control vital pieces of Internet infrastructure. Others decide which companies get funded, which websites get the lion's share of the traffic, or whether sites will live to see another day.
Who really rules the Net? Read on. Just don't get on the bad side of any of these ten power gurus.

Matt Cutts

Matt CuttsOfficial title: Principal engineer at Google
Secret identity: Search ninja
As head of Google's Search Quality (anti-Web-spam) team, Cutts is the guy who decides whether your website gets chucked down into the basement of Google page rankings for being too "spammy." Over the past two years, Google has changed its search algorithms several times to lower the position of content farms, scrapers, ad-heavy pages, and other less worthy sites in Google's search results.
Why you shouldn't mess with him: One day you're king of the Google hill; the next day your site's holding a one-way ticket to Palookaville--and all it takes is a tweak of an algorithm.

Lawrence E. Strickling

Lawrence E. Strickling--Photo: Courtesy of the NTIAOfficial title: Assistant Secretary of Commerce for Communications and Information
Secret identity: The root master
Strickling may look like a typical federal bureaucrat, but as chief of the National Telecommunications and Information Administration (NTIA) he wields ultimate authority over the 13 DNS Root Servers that direct all of the Internet's traffic. Type www.pcworld.com into your browser, and these machines translate it into an Internet protocol address (70.42.185.10) that Web servers can understand.

Microsoft's Office Live Small Business Closing Today

Microsoft is sticking to its plan to shut down its Office Live Small Business (OLSB) suite of cloud-based services on Monday, even though it seems many customers are either unaware of the deadline or are having difficulties migrating.

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Many OLSB customers are still posting questions and reporting problems related to the migration in discussion forums, social media sites and blogs, as the clock ticks.
It's unclear how many OLSB customers remain oblivious to the suite's impending shutdown. OLSB is used primarily for email communications and website hosting.

Microsoft still plans to start dismantling OLSB after midnight U.S. Pacific Time on Tuesday, when it will start taking down OLSB-hosted websites, a Microsoft spokeswoman confirmed.
However, Microsoft will keep operational the Windows Live Hotmail custom email addresses hosted by the service for six months, she said via email.
Microsoft will also provide an online form that OLSB customers who miss today's deadline can fill out to recover lost website data, she said.
It's not clear when Microsoft decided to keep the email accounts active for six more months and to offer the website data-recovery form. The decisions may be a sign that Microsoft is aware that a significant number of OLSB customers will not transition in time.
Microsoft declined to estimate what percentage of the OLSB customer base has migrated away from the service already and what percentage remains on the service.
Microsoft first announced its intention to close OLSB about 18 months ago and launched the suite's replacement, Office 365, in June of last year. Customers also have the option to migrate to non-Microsoft email and website hosting providers such as GoDaddy.
"We're communicating directly with OLSB users via email, the OLSB community, the OLSB website and through notifications in the service to help them transition to Office 365 or another provider," the Microsoft spokeswoman wrote.
Microsoft has an online transition center for OLSB, where it published, among other things, a transition guide for customers willing to do the migration manually.
Several Microsoft partners are also providing migration services and tools. One of them is Lucid Pointe, based in Stamford, Connecticut.
Lucid Pointe has been providing OLSB migration services since the launch of Office 365, on whose implementations it specializes, said Robert Clark, managing principal at the company.
However, the demand for OLSB migration services began to pick up considerably at the beginning of March of this year, he said via email.
So far, Lucid Pointe has provided migration services to "dozens" of OLSB customers, all of them transferred to Office 365, he said. Lucid Pointe fees vary depending on the nature of the services provided and the complexity of the migration.
Asked whether it was still getting requests for OLSB migration services as of Monday, Clark said: "Yes, we are."
"We offer a complete migration service that includes setting up an Office 365 account and users, rebuilding the client website in Office 365, and managing the redirection of Web and email traffic to Office 365, working with the domain registrar as necessary. Clients may also retain us to perform specific aspects of the migration," he said.
The extent of the fallout will become clearer on Tuesday and on the days after. If the number of affected customers is significant, the consequences for them and for Microsoft could be very costly.
Even if their email continues to work for six more months, small businesses that find their website is suddenly offline will inevitably be harmed by the situation, since websites have become essential in sales and marketing efforts.
For Microsoft, it would be a black eye as it battles Google and others providers of cloud-based communication and collaboration suites with its new Office 365.
The complaints from OLSB customers about the decision to close the service began many months ago and have grown in intensity as the deadline approached.
Many OLSB customers have argued that the transition to Office 365 or to another third-party email/website hosting provider is too complicated technically for them to carry out.
Some have suggested that Microsoft could have closed OLSB to new signups while keeping the service operational for existing customers.
Many have said that Microsoft could have made the transition to Office 365 easier. A specific issue that has drawn many complaints is that the work of migrating an OLSB website to Office 365 is arduous and erratic, because the Web hosting platforms are different. As a result, some functionality and design features have to be manually re-done in Office 365.
Thus, many users are reporting formatting problems in the transition, especially if the websites have custom design features.
Recently, some Microsoft partners developed automated tools to transfer websites from OLSB to Office 365, including CloudVisors. However, Microsoft never developed its own tool to do this.
OLSB customers have also complained that Office 365 is generally more expensive, and that having to hire a Microsoft partner to carry out the transition adds to the cost. OLSB is free, with optional fee-based add-ons. In comparison, the Office 365 plan for small businesses, called P1, costs US$6 per user, per month, and more if customers add the option of Office Professional Plus, an upgrade over the standard Office Web Apps.
While Office 365 is more feature-rich than OLSB, the question for OLSB customers is whether they will use the additional features they're paying more for.
"OLSB appealed to a lot of different people, especially because of the free website. Office 365 is targeted at meeting the needs of small business owners and professionals. Many OLSB customers won't see Office 365 as a good fit, especially since Office 365 isn't free," reads a Web page on the official OLSB website.

Symantec: Flashback Malware Netted Upwards of $10,000 a Day

Symantec said on Tuesday the Flashback malware that attacked Apple Mac computers could have netted its authors up to US$10,000 a day.

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The company reverse engineered one version of the malware, called "Flashback.K," which it said deprives Google of advertising revenue. Flashback is believed to be the largest-ever malware campaign that has targeted Apple's operating system so far.

"Flashback specifically targets search queries made on Google and, depending on the search query, may redirect users to another page of the attacker's choosing, where they receive revenue from the click," according to a Symantec blog post.
When a person using an infected computer clicks on a Google advertisement, Flashback analyzes the request and substitutes the web site paying for the advertisement with its own.
Flashback also uses a specially crafted user-agent string, which comprises information about a computer accessing a website, in "an effort to thwart 'unknown' parties from investigating the URL with unrecognized user agents," Symantec wrote.
The company looked at what happened when a user clicked on an ad for toys. The click for the ad, worth $.08, is redirected to the a website affiliated with the attackers.
"This ultimately results in lost revenue for Google and untold sums of money for the Flashback gang," Symantec wrote. Since Flashback infected hundreds of thousands of users, "this figure could sharply rise to the order of $10,000 per day," Symantec wrote.
Flashback infected Apple computers using a critical vulnerability in Java, which Apple patched in early April about seven weeks after the issue was disclosed. In the interim, upwards of 800,000 computers were believed to have been infected. Apple released a special Flashback removal tool on April 13.

Skype Investigates Tool That Reveals Users' IP Addresses

Skype said Tuesday it is investigating a new tool that collects a person's last known IP address, a potential privacy-compromising issue.

Instructions posted on Pastebin on Thursday showed how a person's IP address could be shown without adding the targeted user as a contact by looking at the person's general information and log files.
Skype, which is owned by Microsoft, said in an e-mail statement that "this is an ongoing, industry-wide issue faced by all peer-to-peer software companies. We are committed to the safety and security of our customers and we are taking measures to help protect them."
In October, Skype acknowledged a research paper that showed how a Skype user's IP address can be determined without that user knowing. It also demonstrated that more than half the time the IP address could be accurately linked to sharing content using the BitTorrent file-sharing protocol.
An IP address is an important piece of information that can be used to track the approximate location of a user and their service provider. But the information is not necessarily accurate, as a person could be using a VPN, whose data center may be located in a different country than the actual user.
Another way to broadcast inaccurate IP addresses is browsing the internet using The Onion Router (TOR), an anonymizing service that routes a person's internet traffic through a network of worldwide servers in a fashion that is difficult to trace. An IP address also just identifies a computer and not the person sitting behind a keyboard.
Skype uses a peer-to-peer system to route its data traffic, which is also encrypted. But its encryption system is proprietary and not been open for scrutiny, which has prompted caution from security experts.

Microsoft and Barnes & Noble Create E-Book Partnership

Microsoft and Barnes & Noble announced Monday that the companies are joining forces to bolster the Nook's competitive edge against Amazon's Kindle and Apple's iBooks platforms. One of the first benefits of the new agreement will be a Metro-style Nook e-reader app for Windows 8 that will be available to users in the U.S. and internationally.
Amazon already offers a version of its Kindle reader app for Windows 8. The new e-book duo also plans to create Nook-based textbooks to compete with a similar platform from Apple announced in January as part of iBooks 2.

As part of the new partnership, Microsoft will invest $300 million in a new, and as yet unnamed, B&N subsidiary, which will give the software giant a 17.6 percent equity stake in the new company. The two companies also said they have settled their ongoing patent litigation, which includes an agreement where Microsoft will get royalties from Nook e-readers and tablets. It's not clear if the agreement to form the new company was also part of the patent settlement.

Android or Windows 8 Operating System?

Currently, Barnes & Noble relies on a customized version of Google's Android operating system for products such as the Nook Color. It's not clear if the new B&N company might opt to use Microsoft software going forward given the new partnership. There was also no suggestion of what kind of Nook products the company might offer in the future or whether a Nook app for Windows Phone was in the works. Currently, Barnes & Noble offers Nook reader apps for Android, iOS, Mac, and traditional Windows desktop PCs, as well as e-readers and tablets that include the Nook Simple Touch, Nook Color and Nook tablet.
E-books are fast becoming a popular way for people to consume books. Amazon, the world's largest online retailer, routinely reports that Kindle readers and tablets are its most popular selling products. And as of February, about 21 percent of American adults reported reading an e-book during the previous 12 months, a four-percentage-point increase from December, according to a study by the Pew Research Center's Internet and American Life project.

Obama’s Vow to Tax Rich Alarms Some Business-Friendly Democrats

Four years ago, the country was falling to pieces and Democrats were, electorally speaking, thrilled about it. For many, winning was as easy as not being associated with a deeply unpopular president, George W. Bush, and his party.
Today, the economy has only marginally improved, and now it’s the Democrats who will be held culpable. If voters base their decision on the proverbial question -- “Am I better off than I was four years ago?” -- President Barack Obama might not win another term.

The central question for his campaign, and his party, is what should they talk about instead? In recent weeks, they seem to have settled on an answer: Taxing the rich, Bloomberg Businessweek reports in its April 30 issue.
Though Senate Republicans blocked Democrats’ efforts to pass the Buffett Rule, which would have required the highest earners to pay a minimum tax rate of 30 percent, Democratic leaders haven’t let the subject drop. The president continues to argue for tax increases on the wealthy at every turn.
Most Democrats are on board, yet the issue has inflamed old divisions between liberal and moderate Democrats. They disagree on why raising taxes is important --- is it about fairness or about reducing deficits? --- and over how the president should make his case for them with the public.
“Without a doubt, the old debate is re-emerging,” says Jonathan Cowan, president of the Democratic research group Third Way. “It’s like locusts; it always comes back.”

Matter of Justice

Liberals view a highly progressive tax rate as a matter of social justice necessary for the government to fulfill its commitment to programs like Medicare, Social Security and education.
“Tax policy will define whether the country is run on behalf of the 99 percent or the 1 percent,” says Damon Silvers, policy director for the AFL-CIO, the largest U.S. labor federation. “As long as we have the essentially corrupt tax system we have today, where people with power and influence get away with paying so much less as a percentage of their incomes than the rest of us do, there’s not enough money in the system to do what we need to as a country to be competitive.”
The AFL-CIO advocates repealing the high-end Bush-era tax cuts, eliminating lower rates for capital gains, and imposing a financial-transactions tax.

Traumatizing Tax Talk

That kind of language alarms business-friendly Democrats, many of whom remain traumatized by Democratic losses going back a generation that they attribute to cavalier talk about tax increases.
“Never start off a political conversation with the T-word,” warns Democratic Representative Jim Cooper of Tennessee. “Walter Mondale tried that against Ronald Reagan, and it didn’t work. America is an aspirational society. Every labor union member is a would-be yacht owner.”
An April 9 Third Way poll found that independent voters, on whom the election will likely turn, are most receptive to higher taxes when paired with a desirable policy outcome like deficit reduction.
“If the rationale is fairness,” Cowan says, “it’s much less compelling than if the rationale is fiscal responsibility and growth. On the traditional left, ‘fairness’ has become shorthand for raising taxes to solve the fiscal crisis without cutting spending.”

Choose a Side

One reason for the tension is that Obama will have to choose a side, and his decision will frame the public debate and could inform what happens after the election.
Lately, he has emphasized fairness, hammering home the theme in the run-up to Tax Day, when income-tax returns are due to the federal government. Polls show he’s on the winning side of the issue: A recent CNN/ORC International poll showed 67 percent of independents agreeing that the tax system “benefits the rich and is unfair to the ordinary working man or woman.”
That doesn’t necessarily make it a winning electoral strategy. Voters could agree that the current system is unbalanced yet fail to be persuaded that Obama’s prescription for fixing it would produce jobs or do enough to lift the economy.
Recent polls suggest that this might be the greatest threat to Obama’s chances of winning a second term: Though voters generally endorse his critique of the tax system, they say Mitt Romney, the presumptive Republican presidential nominee, is the better choice to manage the economy.

6 Tips on Stopping Mobile Spam

Some 4.5 billion spam text messages were sent in the U.S. last year. The surge is costing carriers money and frustrating users, who must pay for the messages and deal with the influx of potentially fraudulent texts.

To reduce the number of SMS spam you receive, here are six easy steps:

1. Report spam texts to your carrier by forwarding them to “7726.” AT&T Inc., Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA support this service.
2. Register your mobile number with the Federal Trade Commission’s Do Not Call Registry at www.donotcall.gov. Phones registered with the list should become off limits to marketers within a month of your registration. After that time, you can file complaints against abusers on the same site.
3. Reply to unwanted messages with “STOP” in the body of the response to prevent future messages from that short code.
4. Adjust settings on your carrier’s website to block specific numbers from which you receive spam.
5. Consider using special apps to cope with spam. “Mr. Number” for Android devices can block communication from unwanted numbers. The McAfee Mobile Security app for Android, BlackBerry and Symbian comes with an SMS filter.
6. Call your carrier’s customer service.

Aussie Dollar Slides on RBA Rate Cut; Japan Shares Drop

Australia’s dollar weakened, bond yields fell to record lows and domestic shares rallied after the central bank cut interest rates by more than forecast. Japan’s stocks slid the most in two weeks as companies predicted profits that will trail analyst estimates.
The so-called Aussie depreciated 1 percent to $1.0329 as of 2:14 p.m. in Tokyo. The nation’s S&P/ASX 200 Index jumped 1 percent and 10-year note yields declined as much as 14 basis points to 3.53 percent. Japan’s Nikkei 225 Stock Average (NKY) slumped 1.7 percent, while Standard & Poor’s 500 Index futures climbed 0.1 percent. Copper retreated 0.3 percent.

The Reserve Bank of Australia lowered its key rate to 3.75 percent from 4.25 percent, the biggest reduction in three years, as data today showed the nation’s home prices declined in the first quarter and a manufacturing gauge slid to a seven-month low in April. For the first time since the start of 2008, bonds were the only global investments to provide positive returns last month amid renewed concern the global economy is slowing.
“It’s a nice surprise and it was the right move,” said Nader Naeimi, a Sydney-based strategist at AMP Capital Investors Ltd., which manages almost $100 billion. “Given the weakness that we’ve seen across the board in manufacturing and retail, a quarter point cut wasn’t going to be enough. They have done the right thing.”

Aussie Weakens

The Aussie weakened against all of its 16 major counterparts. An index measuring prices for established houses in eight major Australian cities dropped 1.1 percent last quarter from the previous three months, the government said today. A gauge of the country’s factory output fell 5.6 points to 43.9 last month, according to a survey by the Australian Industry Group and PricewaterhouseCoopers.
Markets in China, Hong Kong, India, South Korea and Singapore were among those closed today for a holiday. The MSCI Asia Pacific Index slid for a second month in April, losing 1 percent.
Sharp Corp. (6753) tumbled 9.1 percent for the steepest drop in the Nikkei 225. Japan’s biggest maker of liquid-crystal displays forecast a wider-than-estimated annual loss. Tokyo Electron Ltd. (8035), which produces semiconductor manufacturing equipment, sank 8.4 percent after its earnings estimate trailed analysts’ projections.
“Investors can’t get optimistic about the Japanese economy,” said Koji Toda, chief fund manager at Resona Bank Ltd. in Tokyo. “The number of companies where earnings are improving as much as investors’ expectations is relatively small.”

China Manufacturing

China’s manufacturing grew for a fifth month in April, hurting the case for policy makers to ease monetary policy. The Purchasing Managers’ Index rose to 53.3 from 53.1 in March, the nation’s statistics bureau and logistics federation said. The median forecast by economists in a Bloomberg survey was for a reading of 53.6. Results above 50 indicate expansion.
Investors will also get data on U.S. factories today. The Institute for Supply Management Inc.’s manufacturing gauge fell to 53 this month from 53.4 in March, according to the Bloomberg survey median ahead of the data today. Pfizer Inc., Archer Daniels Midland Co. and Legg Mason Inc. are among S&P 500 companies scheduled to report earnings.
Brent oil for June settlement retreated 0.2 percent to $119.25 a barrel on the London-based ICE Futures Europe exchange. Oil in New York traded near the lowest close in two days before a government report that may show crude inventories rose to a 21-year high in the U.S., the world’s biggest consumer of the commodity.
Fixed-income assets -- from Australian government debt to U.S. Treasuries to global junk bonds -- gained 0.7 percent last month including reinvested interest, according to Bank of America Merrill Lynch index data. The MSCI All-Country World Index of stocks lost 1.1 percent including dividends while the Standard & Poor’s GSCI Total Return Index of metals, fuels and agricultural products fell 0.5 percent. The U.S. Dollar Index (DXY) dropped 0.29 percent.
To contact the reporters on this story: Lynn Thomasson in Hong Kong at

Benchmark Capital Scores With Instagram, Demandforce and IPOs

The hits keep coming for Benchmark Capital.
Following Facebook’s $1 billion acquisition of Instagram earlier this month, the venture firm scored again today after Intuit agreed to buy e-mail marketer Demandforce for $423.5 million. Benchmark, the Silicon Valley firm that gained fame from its early investment in EBay, was the biggest institutional investor in Instagram and Demandforce.

It’s not just acquisitions. Benchmark owns a $56 million stake in software maker Proofpoint, which sold shares to the public last week, marking the firm’s fifth IPO in the past 13 months. Adding in the others — Yelp, Servicesource, Zillow and Zipcar — Benchmark owns about $500 million of stock in newly-public companies.
Like any venture firm, Benchmark has had its share of duds. It famously invested in Friendster, the social-networking site that beat Facebook to the market only to get trounced by the now $100 billion juggernaut. The firm also bought a stake in solar panel maker Nanosolar, which is struggling to compete with low-cost Asian manufacturers.
For obvious reasons, the partners prefer to talk about what’s working. Bill Gurley, a 13-year veteran at Benchmark, sounded off on the public market wins at a conference on April 4 in Menlo Park. He said the firm is having its best run in the IPO market in more than a decade.
“It’s becoming acceptable and interesting again for entrepreneurs to be public,” he said. “We’ve had a long period where there was almost a complete lack of interest in being public.”
And with the dollars being shelled out for Instagram and Demandforce, he’ll take that too.

Amazon Was More Investor than Retailer in the First Quarter

Amazon.com is the world’s largest online retailer, but its outside investments contributed more money to the company’s bottom line in the first quarter than its e-commerce operations.

In the three months ended March 31, Amazon made more than half its $130 million in net income from something called equity-method investments, which give the company “the ability to exercise significant influence, but not control, over an investee,” according to a filing with the Securities and Exchange Commission.
That may mean the company’s investing savvy is improving — the $89 million Amazon attributed to equity-method stakes is the most it’s reaped in at least three years. Quarterly results from those investments have ranged from a loss of $17 million to a gain of $18 million since the beginning of 2009, data compiled by Bloomberg show.
The company only discloses one investment included in that group — its 29 percent stake in LivingSocial.com, the second-largest daily deal site. LivingSocial reported more net income than Amazon in the first quarter at $156 million, up from a $60 million loss in the year-ago period.

U.S. small business hiring takes step back in April

U.S. small business hiring slowed considerably in the April and employees saw a reduction in their hours, an independent survey showed on Monday, adding to signs of weakening in labor market conditions.

Businesses added 40,000 new jobs, a step back from the 75,000 positions created in March, according to Intuit, a payrolls processing firm. The average workweek for small business employees dipped 0.14 percent.
The pull back in hiring by small businesses is the latest indication that job growth is losing some momentum. Nonfarm employment increased 120,000 in March, the least amount in five months, with the jobless rate dropping to 8.2 percent -- largely as some unemployed people gave up the search for work.
The weak payrolls number last month was largely seen as payback after an abnormally warm winter. Payroll growth had averaged 246,000 a month between December and February.
The government's closely monitored employment report due on Friday is expected to show that payrolls increased 170,000 in April, according to a Reuters survey.
But with first-time applications for state unemployment benefits not backing away from the lofty levels scaled in recent weeks, this forecast could prove somewhat too optimistic.
The Intuit survey is based on responses from about 72,000 small businesses with fewer than 20 employees that use the Intuit Online Payroll system. It covered the period from March 24 to April 23.
The survey showed wages for small business employees edged up 0.1 percent or $3 to $2,680. However, that is equivalent to an annual salary of $33,200, meaning that many of the small business employees are working part-time.

Exclusive: CME readies round-the-clock grains trade: sources

CME Group Inc will extend trading hours for its hallmark grain contracts, two sources close to the matter said on Monday, as the Chicago exchange moves to defend its turf against rival ICE's bid for nearly round-the-clock transactions.
The board of the CME, which has a stranglehold on grains trading through the Chicago Board of Trade, the world's largest grain exchange that it acquired in 2007, has agreed to extend trading hours, but has not decided on how many hours to add to its trading day or when to implement them, the sources said.
Chicago traders had earlier cited widespread talk that the CME was planning to extend the trading day to 22 hours, matching the trading period unveiled several weeks ago by the Atlanta-based IntercontinentalExchange as it announced plans to launch look-alike grains contracts.

Currently CME grains trade a 13-hour stretch overnight and nearly four hours during the day.
The shift to a nearly continuous cycle would be the latest step-change for the tradition-bound Chicago institution, which has struggled to balance demands from new hedge funds and institutional investors against the floor traders, farmers and other smaller dealers who have been wary of change.
"I don't think this is about either exchange caring about how long peoples' trading days are. This is about competition and holding market share and maximizing return to shareholders," said Rich Feltes, vice president for research with futures merchant R.J. O'Brien.
A source said the extended trading hours could possibly go into effect after May 23, which marks the end of a five-year period during which five people, including three CBOT directors, had veto rights over rule changes at the exchange.
The group was given the veto power in 2007 as part of revised terms for the CME-CBOT merger agreement to provide additional value to all CBOT Holdings shareholders.
Traders cited a widespread rumor that the CME was planning for grains to be traded from 6 p.m. CDT (2300 GMT) to 4 p.m. CDT (2100 GMT) -- allowing for the exchange to be open during times when price-sensitive data is released from the U.S. Department of Agriculture.
The Chicago Board of Trade has been the unchallenged global benchmark for grains prices from Paris to Sydney to Singapore, extending its trading hours in the past to allow traders in Asia and Europe to participate and expand its business.
But ICE is now encroaching, offering contracts that will trade from 8 p.m. to 6 p.m. Eastern Time (2400-2200 GMT).
"The board has approved to extend trading hours," one source said. The sources said a plan by ICE to launch look-alike corn, wheat and soybean contracts was a key reason behind the move.
Asked to comment on the apparent board decision, a CME spokesman referred to an earlier comment: "At CME Group, we regularly engage with industry participants to discuss ways to enhance our markets. We will keep our customers and industry participants abreast of any planned changes, but have nothing formal to announce at this time."
LARGE SPECULATORS COULD BENEFIT
Expanded trading hours could give an extra advantage to large, speculative traders who have instant access to USDA data and the available capital to immediately trade on it, said Alan Brugler, president of Brugler Marketing & Management.
Until now, almost all major U.S. agricultural data -- including weekly crop progress reports issued on Monday afternoon, weekly export sales numbers on Thursday morning, and monthly supply-demand reports -- have been released outside of current CBOT trading hours.
An analyst, who declined to be named, said the CME had not intended to expand its trading hours -- until the ICE challenge -- because there was not demand from customers. "The commercial crowd has never really been in favor of that because they would have to put on extra coverage in case something happens.
'I WISH THE MARKET WAS OPEN NOW'
"Also, how many afternoons have we seen any market-moving news that had people saying 'I wish the market was open now'," the analyst said, adding that monthly USDA livestock reports hardly ever affect the grains markets.
CBOT grain futures currently trade electronically on the exchange's Globex platform from 6 p.m. to 7:15 a.m. Central time, while side-by-side trade on Globex and the open-outcry pits runs from 9:30 a.m. to 1:15 p.m.
CME Group last widened its trading hours in grains in 2009, expanding the early Globex session to 7:15 a.m., from 6 a.m. previously. The CME's New York Mercantile Exchange (NYMEX) already trades nearly around-the-clock.
Grain analysts said the launch of the ICE contracts would pressure CME to either match its trading hours, or risk losing business when market-moving news occurs outside of CME's trading schedule.
The weekly U.S. crop progress updates, which are released at 3 p.m. Central time on Mondays between April and November, can often impact the grain markets when CME electronic trade resumes three hours later.
"Especially when we get into (crop) ratings and we are hanging on every percentage change in the ratings on a weekly basis -- I question whether the CME is going to remain closed and let ICE drain off all that volume," said Feltes.

Shareholder sues Google to block stock split

Google Inc and its board were sued on Monday by a shareholder who wants to block the company's stock split plan because it entrenches the Web search company's co-founders Larry Page and Sergey Brin, according to court documents.
Google announced the surprise stock split plan earlier this month, in which shareholders would get one new share of non-voting "Class C" stock for each existing "Class A" share.

As a result, Google will be able to issue new shares for acquisitions and employee compensation without diluting the 56.3 percent voting stake enjoyed by Page and Brin or diminishing their "iron-clad grip" on Google, according to the complaint.
Google did not immediately respond to a request for comment.
The purported class action lawsuit by the Brockton Retirement Board accused the co-founders and Google's board of breaching their fiduciary duty to the company's shareholders.
Page and Brin "wish to retain this power, while selling off large amounts of their stockholdings, and reaping billions of dollars in proceeds," said the complaint, which was filed in the Court of Chancery in Delaware, where Mountain View, California-based Google is incorporated.
The lawsuit said the stock split will essentially grant billions of dollars of equity to the co-founders for nothing.
The lawsuit also said the "special committee" of Google directors that approved the stock split did not seek a fairness opinion of its financial advisor and never extracted an agreement that the founders would continue working for the company.
The case is Brockton Retirement Board v Larry Page et al, Delaware Court of Chancery

Microsoft buys Nook stake, Barnes & Noble shares soar

Microsoft Corp is jumping into the fast-growing e-books market by investing $605 million over five years in Barnes & Noble Inc's Nook e-reader and college business, as it looks to unlock Amazon.com and Apple Inc's grip on the exploding tablet computer market.
The move comes just six months before the world's largest software maker is due to launch its new touch-enabled Windows 8 operating system, and the inclusion of a Nook app on Windows tablets should allow them to compete with Apple's iPad and Amazon's Kindle Fire.
It also gives Microsoft a direct interest in electronic publishing just as the market for downloadable college textbooks starts to take off and the publishing industry undergoes a radical shift toward electronic distribution.

"It's a good strategic deal," said Sid Parakh, an analyst at fund firm McAdams Wright Ragen. "It gets Microsoft in the game for e-readers, and gives them access to a market that has been growing nicely and they've basically sat out of. It also makes Windows 8 a more compelling platform from an e-readers perspective."
In turn, Barnes & Noble gets a much-needed capital injection and a way to enter the digital books market outside the United States. The new unit will be run and majority owned by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores.
Shares of Barnes & Noble soared as much as 90 percent in early trading, before sliding back and ending with a 52 percent gain at $20.75. Microsoft shares, which recently hit a four-year high, edged up 0.1 percent to close at $32.015.
Microsoft's initial investment of $300 million, which will give it a 17.6 percent stake in the newly created Barnes & Noble subsidiary, values the new unit at $1.7 billion. Over the next five years, Microsoft has committed to invest another $305 million.
The deal - initially worth only 0.5 percent of Microsoft's cash hoard - is financially small, but strategically important for both companies.
Microsoft's Windows software still runs on more than 90 percent of the world's personal computers, but the company has been left behind in the mobile revolution as millions of people do more computing on smartphones and tablets running Apple or Google's Android software. Microsoft has also struggled to make its mark on internet-based commerce, which is dominated by Amazon, or rival Apple and Google's online app stores.
"The deal brings Microsoft technology and engineers into the Nook business - that talent will be tapped to make the Nook even better," said Albert Greco, a book industry expert at the business school of Fordham University in New York. "It gives Microsoft a tablet already, and Barnes & Noble global reach for the Nook platform, through Windows 8."
Barnes & Noble Chief Executive William Lynch told Reuters that the investment would go primarily to fund the international rollout of the Nook's digital bookstores and new reading software for the Windows platform.
MICROSOFT BACKS ANDROID
Under the deal announced early on Monday, Microsoft will get a 17.6 percent stake in a new Barnes & Noble unit combining the bookseller's college bookstore and Nook businesses. Those areas made up just over $1 billion in sales last quarter, about 40 percent of Barnes & Noble's total.
Microsoft, which will get an unspecified share of the new unit's sales, will pay $25 million a year for the first five years to help with development costs and acquiring content, and will make an upfront payment of $60 million a year for the first three years after the launch of Windows 8, essentially guaranteeing minimum sales of that amount to Barnes & Noble.
That means Microsoft's total outlay will be at least $605 million.
As part of the deal, Microsoft has dropped a patent lawsuit against Barnes & Noble over the Nook, which runs on Google's Android system, and will get royalties on those patents. There is a possibility that future Nook models will be based on the Windows operating system, but executives would not comment on that in a call with analysts.
Barnes & Noble gets a much-needed capital injection and a way to enter the digital books market outside the United States. The new unit will be run by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores.
Barnes & Noble's Nook has found a strong following, allowing it to garner some 27 percent of the U.S. e-books market in the 2-1/2 years since the device was launched, compared with Amazon's 60 percent and Apple's 10 percent. But battling Amazon's market-leading Kindle has proved expensive.
"It gives them a much larger partner with deeper pockets, it gives them increased reach," said Morningstar analyst Peter Wahlstrom. "In the last two years they've had their backs against the wall."
Last year, Barnes & Noble suspended its dividend to direct more cash into developing Nook, which resulted in a well-reviewed glow in the dark Nook introduced last month.
In January, however, it lowered its sales and profit forecasts as it faces pressure from Amazon's aggressive pricing strategy which has prompted it repeatedly to lower the prices on its own devices.
NOOK TO GO GLOBAL
Barnes & Noble has poured tens of millions of dollars into developing the Nook. The first version hit the market in 2009, two years after the Kindle.
The company's e-readers, tablets and electronic book sales have helped it offset a broader decline in book sales. Same-store sales of books at its brick-and-mortar stores have edged up again largely thanks to the bankruptcy last year of Borders Group.
But the Nook has been available only in the United States and the company said last year it wanted to take its digital business to new markets. Lynch told Reuters that deals to sell Nook through retailers abroad were "coming soon."
Barnes & Noble said in January that it might spin off its digital business, which includes the Nook, arguing that investors were not giving the company enough credit for that growth.
The company did not say on Monday if it would take the new venture public.
Barnes & Noble put itself up for sale in 2010 but attracted only one firm offer - a bid for $17 per share, or $1 billion, last May, from Liberty Media, which was drawn by the Nook's growth.
Liberty ultimately decided to invest $204 million rather than buy the company outright. It now has preferred shares it can convert into a 16.6 percent stake in Barnes & Noble at a strike price of $17.

Fed officials, hawk and dove, agree: no more easing

Two top Federal Reserve officials - one with a dovish, employment-focused bent, and the other a self-avowed inflation hawk - on Monday both said they see no need for the central bank to ease monetary policy any further.
But the comments, from San Francisco Fed President John Williams and Dallas Fed President Richard Fisher, do not mean they believe the central bank should quickly move to raise rates, which it has kept near zero for more than three years.

The economy grew at a 2.2 percent pace last quarter, down from its 3 percent growth rate in the final three months of the year. Recent economic data, including a gauge of business activity in the Midwest, signal growth may slow further this quarter.
"I don't think we are ready to exit yet," Fisher, an inflation hawk, told Reuters at the Milken Institute Global Conference in Los Angeles.
Fisher said he would oppose the extension of Operation Twist, the Fed bond-buying program that is set to end in June, but stopped short of calling for outright monetary tightening.
"We'll have to see how the year works out," he said.
Speaking to the German financial daily Handelsblatt, San Francisco Fed's Williams suggested the Fed might need to push rates still lower if the U.S. unemployment rose substantially and growth slowed.
"But I'm today more optimistic about the economy than in January," Williams, a voter this year on the Fed's policy-setting panel, was quoted as saying.
"So far there is no need for further monetary measures," he said, pointing to an improvement in U.S. consumption and available income as well as positive signs in the property market.
Fed policymakers have been at odds for months over whether continued high unemployment - which registered 8.2 percent in March - and a moderate pace of economic growth should force them to try to push rates down further in hopes of boosting the recovery.
Doves like Chicago Fed President Charles Evans have called for further action, while hawks like Richmond Fed President Jeffrey Lacker have opposed it.
Last week, the Fed held its policy line, reiterating its expectation that it will need to keep rates low through late 2014. And while Fed Chairman Ben Bernanke held the door open to further easing, he did not suggest it was imminent.
'EAT YOUR VEGETABLES'
Fisher's opposition to further easing is rooted less in a conviction that the recovery has strengthened than in his long-held view that lower rates are doing little to boost jobs and may simply be giving Congress an excuse not to tackle the difficult job of reining in deficits and the national debt.
"By providing monetary accommodation, we are saying, in essence, 'Congress, you better eat your vegetables, or we are going to serve you a big plate of monetary cookies,'" Fisher said at a panel on job creation at the Global Conference.
The Fed's program of bond purchases is pushing down the price of debt, interfering with a pricing mechanism that would otherwise force Congress to come to terms with its "fiscal misfeasance," he said.
"We have children in Congress," he said. "They need to be disciplined.
Williams is due to speak to the conference on Tuesday, along with fellow doves Chicago Fed's Evans and Atlanta Fed President Dennis Lockhart.
Philadelphia Fed President Charles Plosser, an opponent of further easing, is also scheduled to speak on Tuesday in Southern California.

China PMI helps Aussie shares amid US, Europe worries

Asian shares inched up on Tuesday as Chinese factory data lent support to Australian stocks, but concerns about the U.S. economy and the euro zone capped prices.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2 percent, after posting just a 0.4 percent gain in April.
Japan's Nikkei stock average .N225 extended losses from Friday to fall 1.1 percent as a stronger yen hurt exporters. The market was closed on Monday for a public holiday. .T
Australian shares .AXJO extended gains to a rise on the day of 0.5 percent after data showing China's official purchasing managers' index (PMI) rose to a 13-month high of 53.3 in April. The market had been up 0.2 percent before the data was released.

The PMI indicated a further expansion in the vast factory sector, which could mean more demand for Australian resources, but the index also came in below expectations of 53.6.
Beyond Australian shares, there was no specific market reaction. Most markets in Asia and Europe are closed on Tuesday to mark May Day holidays.
The Australian dollar was little changed at $1.0411 ahead of a policy decision by the Reserve Bank of Australia due later in the session. Many market players expect the central bank to cut its policy rate by 25 basis points to 4.00 percent.
"The Chinese PMI was better than last month but weaker than expectations, so the impact to markets was neutral," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo.
"Market focus is on a slew of developments in Europe this week and key U.S. data. The dollar looks top-heavy against the yen but I don't get a sense that it's headed for a further drop," he said.
DOLLAR/YEN PRESSURED
Investor sentiment this week is likely to be shaped by U.S. data and the EU debt crisis.
The U.S. ISM manufacturing index on Tuesday and non-farm payrolls figures on Friday will offer investors clues on the shape of the U.S. economy and whether the Federal Reserve will have to lean towards offering more support.
The European Central Bank's policy meeting on Thursday precedes weekend elections in France and Greece that could determine future progress in the euro zone's austerity efforts, and may prompt the euro to break out of recent ranges.
The dollar recovered against a basket of major currencies .DXY to 78.784 after falling to a two-month low of 78.638 on Monday.
The yen edged back to 79.90 yen against the dollar after touching 79.73 yen on Monday, its highest in more than two months. The current rate represents roughly a 50 percent retracement of the dollar's climb from this year's low near 76 yen in early February to a peak around 84 yen hit in mid-March.
The dollar was down 3.6 percent against the yen in April, its weakest monthly performance since July 2011.
The euro was at $1.3237, near one-month high of $1.3270 hit on Friday.
SPAIN IN RECESSION
Global stocks fell, the dollar and the euro weakened and the yen rose on Monday as investors shunned risk after data raised questions about the health of the U.S. economy and on concerns austerity measures could further undermine the euro zone's vulnerable economies after Spain's economy sank into recession in the first quarter.
After last week's softer-than-expected first-quarter GDP, data on Monday showed consumers increasing their spending only modestly in March and a gauge of business activity in the Midwest falling sharply in April.
For Spain, economists said spending cuts aimed at meeting strict European Union deficit limits, together with a reeling bank sector, would delay any return to growth until late this year or beyond.
Oil stayed pressured by sluggish demand outlook, with U.S. crude futures down 0.1 percent at $104.72 a barrel and Brent futures falling 0.2 percent at $119.28 a barrel.

Exclusive: Bo's wife dressed as Chinese army general after Heywood death: source

A woman at the centre of China's biggest political scandal in two decades, wife of deposed political leader Bo Xilai, had once dressed as a military commander last year in a bizarre episode that shines new light on the collapse of Bo's inner circle.
Bo, ambitious former leader of China's biggest municipality Chongqing, was sacked in March after police began investigating his wife, Gu Kailai, on suspicion of murdering a former family friend, British businessman Neil Heywood, in a row over money.

News of Bo's removal and the murder allegation against his wife, who is a lawyer and businesswoman, emerged only a month ago, but new details uncovered by Reuters show the house of Bo was already in chaotic decline at the time of Heywood's death.
The new details, provided by sources with knowledge of the police case against Gu, include that she is alleged to have poisoned Heywood after the Briton demanded a 10 percent cut for his role in organizing a large, illicit money transfer for her.
A few days after Heywood was killed in Chongqing, southwest China in November, Gu strode into a meeting of police officials wearing a military uniform and gave a rambling speech in which she told the startled officials that she was on a mission to protect the city's police chief, Wang Lijun, the source said.
"First she said that she was under secret orders from the Ministry of Public Security to effectively protect Comrade Wang Lijun's personal safety in Chongqing," said the source, adding that she wore a green People's Liberation Army (PLA) uniform with a major-general's insignia and bristling with decorations.
"It was a mess," he said of Gu's speech, which circulated among some police and officials. "I reached the conclusion that she would be trouble."
It was not clear to those present why Gu, who had never served in the military, had put on a PLA uniform or what she was trying to convey with her vow to protect Wang, the source said. The incident, on or about November 20, left the officials even more bewildered about her mental state, he added.
At that time, Heywood's family had been told that there were no suspicious circumstances and that he had died of a heart attack brought on by excessive alcohol consumption.
Only later did Wang begin probing Heywood's death, treating it as a poisoning and identifying Gu as chief suspect. He revealed his suspicions to Bo at an explosive meeting in January, sources said. The police chief then fled to a U.S. consulate in February, hiding inside for more than 24 hours before leaving into the custody of central government officials.
Wang had been the spearhead of Bo's anti-corruption drive in Chongqing, a plank in the politician's barely concealed campaign to enter the topmost ranks of the ruling Communist Party.
HEYWOOD 'DEMANDED 10 PCT'
Gu's appearance in PLA uniform was part of a cascade of extraordinary events that have led to China's worst leadership crisis since the 1989 Tiananmen Square crackdown, months before the party anoints a new generation of top leaders.
There had been rumors circulating in elite circles that Gu had been assigned a military rank, but officials dismissed them as an attempt to brandish her authority and background.
Her uniform was of the same rank as her father's, a PLA leader who fought the Japanese occupation in the 1930s and 1940s, and might have been given to her out of "respect for her father", said a second source with knowledge of the incident.
Even if Gu was somehow entitled to the uniform, which the sources doubted, the civilian setting in which she showed her apparent military rank made her performance disturbing and politically troublesome, they said.
"That was clearly a violation of disciplinary rules, a serious one," said the first source with ties to Bo and his family, referring to talk among officials that Gu had assumed a military title. "Even her background gives her no right to do anything like that."
Gu and the family's 32-year-old aide, Zhang Xiaojun, have been named as the main suspects in the murder of Heywood, whose body was found in a Chongqing hotel room on November 15. Chinese authorities say he was poisoned.
Bo, who was suspended from the elite Politburo last month, could later face a police investigation as well.
Neither Bo nor Gu has been allowed to answer the accusations in public. Heywood's family has also declined to comment.
Chinese government ministries have not responded to written questions about the case against Gu.
A source citing details from Wang's testimony to investigators said Gu became angry and increasingly distrustful with Heywood after he demanded "at least 10 percent" to move a large sum abroad for her.
Sources had previously said Heywood demanded an unspecified proportion of the deal that Gu considered too large.
"It was a large amount, probably from a dirty deal, and Heywood was also nervous about handling it," said the source. He said he did not know the size of the offshore transaction.
It remains unclear how Heywood might have helped Gu shift money offshore. Chinese citizens are only allowed to transfer $50,000 out of the country each year.
BO'S MISGIVINGS
Long before Gu's alleged falling out with Heywood, Bo voiced misgivings about her involvement in business, according to another British businessman who had dealt with Gu and Heywood.
"He hated what she was doing," said Giles Hall who dined with Heywood and the Bo family on a visit to China a decade ago, recalling a heated conversation overheard between Bo and Gu.
"There was an agitated conversation going on. There were a few threats being made. We were a bit nervous. We were in this restaurant. We said (to the interpreter) 'What's the problem?' and the interpreter said 'Her husband does not like her business dealings'. So he wasn't happy with it."
Hall, who was trying to tempt Bo to set up a tourism venture involving a hotair balloon, said Gu showed a ruthless streak.
"You couldn't cut her up (cross her) that was for certain. She said to me 'You cross me - never come to China, you'll never get out of jail'. There was no mucking about."

Fed officials, hawk and dove, agree: no more easing

Two top Federal Reserve officials - one with a dovish, employment-focused bent, and the other a self-avowed inflation hawk - on Monday both said they see no need for the central bank to ease monetary policy any further.
But the comments, from San Francisco Fed President John Williams and Dallas Fed President Richard Fisher, do not mean they believe the central bank should quickly move to raise rates, which it has kept near zero for more than three years.

The economy grew at a 2.2 percent pace last quarter, down from its 3 percent growth rate in the final three months of the year. Recent economic data, including a gauge of business activity in the Midwest, signal growth may slow further this quarter.
"I don't think we are ready to exit yet," Fisher, an inflation hawk, told Reuters at the Milken Institute Global Conference in Los Angeles.
Fisher said he would oppose the extension of Operation Twist, the Fed bond-buying program that is set to end in June, but stopped short of calling for outright monetary tightening.
"We'll have to see how the year works out," he said.
Speaking to the German financial daily Handelsblatt, San Francisco Fed's Williams suggested the Fed might need to push rates still lower if the U.S. unemployment rose substantially and growth slowed.
"But I'm today more optimistic about the economy than in January," Williams, a voter this year on the Fed's policy-setting panel, was quoted as saying.
"So far there is no need for further monetary measures," he said, pointing to an improvement in U.S. consumption and available income as well as positive signs in the property market.
Fed policymakers have been at odds for months over whether continued high unemployment - which registered 8.2 percent in March - and a moderate pace of economic growth should force them to try to push rates down further in hopes of boosting the recovery.
Doves like Chicago Fed President Charles Evans have called for further action, while hawks like Richmond Fed President Jeffrey Lacker have opposed it.
Last week, the Fed held its policy line, reiterating its expectation that it will need to keep rates low through late 2014. And while Fed Chairman Ben Bernanke held the door open to further easing, he did not suggest it was imminent.
'EAT YOUR VEGETABLES'
Fisher's opposition to further easing is rooted less in a conviction that the recovery has strengthened than in his long-held view that lower rates are doing little to boost jobs and may simply be giving Congress an excuse not to tackle the difficult job of reining in deficits and the national debt.
"By providing monetary accommodation, we are saying, in essence, 'Congress, you better eat your vegetables, or we are going to serve you a big plate of monetary cookies,'" Fisher said at a panel on job creation at the Global Conference.
The Fed's program of bond purchases is pushing down the price of debt, interfering with a pricing mechanism that would otherwise force Congress to come to terms with its "fiscal misfeasance," he said.
"We have children in Congress," he said. "They need to be disciplined.
Williams is due to speak to the conference on Tuesday, along with fellow doves Chicago Fed's Evans and Atlanta Fed President Dennis Lockhart.
Philadelphia Fed President Charles Plosser, an opponent of further easing, is also scheduled to speak on Tuesday in Southern California.

China manufacturing activity expands for fifth month

China's manufacturing activity has expanded for the fifth month in a row, easing concerns about a sharp slowdown in the world's second-largest economy.

The official Purchasing Manager's Index (PMI) rose to 53.3 in April from 53.1 in March, the statistics bureau said.
China relies heavily on its manufacturing and export sector for growth.
There have been fears that a slowdown in key markets such as the US and Europe might hurt China's economy.

The PMI is a key indicator of manufacturing activity and a reading above 50 shows expansion.
"The message is that Chinese manufacturing is growing, not as fast as in years past but faster than in the fourth quarter last year and enough to achieve the government's growth target for the year," said Dariusz Kowalczyk of Credit Agricole CIB.
'Signs of life'

Continue reading the main story

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China has, thus far, avoided the much-feared hard landing. Expect no major property meltdown or construction bust. Expect no deflationary spiral or banking crunch”

Ren Xianfeng IHS Global Insight

The concerns of a global slowdown and its impact on China's economy have seen Beijing take steps to ease monetary policy in order to boost growth.

China's central bank has cut the amount of money that banks need to hold in reserves twice in the past few months, to try and stimulate lending in the country.
The move saw Chinese banks extend 1.01tn yuan ($160bn; £100bn) in new loans in March, much more than the forecast of 800bn yuan.
Analysts said the increased availability of credit had started to have a positive impact on the economy.
"There are signs of life in the economy and things should improve, all underpinned by an easing credit climate," said Ren Xianfeng of IHS Global Insight in Beijing.
China has set a target of 7.5% growth for its economy for this year.
Further growth? Along with fears of a slowdown in the manufacturing and export sector, there have also been concerns about the health of China's property market.
China's robust growth in recent years has seen house prices soar. There had been worries that as growth slows, prices may fall sharply, hurting its economy.
However, so far there have been no signs of that happening.
"China has, thus far, avoided the much-feared hard landing," said IHS Global's Ren Xianfeng.
"Expect no major property meltdown or construction bust. Expect no deflationary spiral or banking crunch."
Analysts said that given the steadiness of the property market, policymakers were likely to continue to ease their policies to boost growth.
Ting Liu of Bank of America-Merrill Lynch forecast that China's economy was likely to grow at an annual rate on 8.5% in the second quarter, up from 8.1% in the first three months of the year.