Google sees record $1.6bn profit

Google has reported its highest quarterly profit, suggesting that the internet advertising market is bouncing back from the recession.

Google reported net profit of $1.64bn (£1bn) for the third quarter, a 27% increase on the same period a year ago.

Revenue for the three-month period came in at $4.38bn, which was well ahead of analysts' expectations of $1.29bn.

"The worst of the recession is clearly behind us," said Google chief executive Eric Schmidt.

"Because of what we have seen, we now have the confidence to be optimistic about our future."

Google's shares rose $16.44, or 3.1%, to $546.35 in extended trading.

The internet search engine has weathered the recession better than other advertising-dependent companies, and it was widely expected to be one of the first beneficiaries of an economic recovery.

"Google has no competition. Yahoo is withering on the vine and [Microsoft's] Bing is too tiny now," said Coin Gillis, senior analyst at Brigantine Advisors.

"They did great on every single metric. We think this is sustainable."

AIG sells off its Taiwan business

Insurer AIG has said it is selling its Taiwanese life insurance business to an investor group for $2.15bn (£1.4bn).

AIG will transfer its 97.5% stake in Nan Shan, Taiwan's third-biggest life insurer, to a consortium led by Hong Kong's Primus Financial.

AIG is selling assets in an effort to repay US government aid. It was bailed out in 2008 at a cost of $182.5bn.

It made a $1.82bn profit in the three months to June, after a loss of $5.4bn in the same period of 2008.

It was the first quarterly profit since 2007 for AIG, which is now 80% state-owned.

Nan Shan has four million customers in Taiwan, giving it a market share of 10%.

Its current management team will remain in place after the deal and the firm's existing brand will be retained.

As well as Primus, the consortium also includes Hong Kong investment firm China Strategic Holdings.

Apple director quits Google board

Internet giant Google has announced the resignation of one of its directors, Arthur Levinson, who is also on the board of computer maker Apple.

It comes two months after Google chief executive Eric Schmidt quit the Apple board because Google's interests were increasingly competing with Apple's.

The move was welcomed by the US Federal Trade Commission (FTC) which has been probing overlapping board memberships.

The two firms used to be seen as allies against the dominance of Microsoft.

However, they have started competing directly in recent years in areas such as mobile phones.

First woman wins economics Nobel

Elinor Ostrom has become the first woman to win the Nobel prize for economics since it began in 1968.

Ms Ostrom won the prize with fellow American Oliver Williamson for their separate work in economic governance.

The Nobel Memorial Prize in Economic Sciences is the last of the six Nobel prizes announced this year. Since 1980, it has gone to Americans 24 times.

Last Friday, US President Barack Obama was awarded the Nobel Peace Prize - though this aroused some controversy.

Weak dollar improves US trade gap

The US trade deficit shrank unexpectedly in August as the weak dollar boosted exports, according to figures from the Commerce Department.

The deficit, which is the difference between US imports and exports, fell to $30.7bn (£19.3bn) from a revised estimate of $31.9bn in July.

Exports rose slightly on the back of the weak dollar while imports fell.

The dollar has slipped recently, with traders moving into other currencies as the global economy begins to recover.

"I would interpret a flattening out of the trade deficit showing a broader stability in the economy," said Keith Hembre at FAF Advisors.

Imports in August totalled $158.9bn, compared with $159.8bn in July. Exports totalled $128.2bn, compared with $128bn in July.

The slight fall in imports reflects a small reduction in demand for goods among US consumers.

When the US economy begins to grow more strongly, this demand should pick up and the deficit could grow again.

GM agrees Chinese sale of Hummer

General Motors (GM) has agreed to sell its iconic Hummer brand to Chinese firm Sichuan Tengzhong Heavy Industrial Machinery for an undisclosed fee.

The two parties had been in talks about the sale for a number of months.

GM is in the process of selling and winding up a number of brands as it looks to reorganise after emerging from bankruptcy protection in July.

At the start of this month, the troubled carmaker announced it would be winding down its Saturn brand.

This was after the proposed sale to Penske Automotive Group collapsed.

GM has already announced that it is discontinuing the Pontiac brand, and is close to finalising the sale of its European brands Saab, Opel and Vauxhall. GM plans to reinvent itself by concentrating on fewer brands following bankruptcy protection, made necessary after car sales plummeted during the downturn.

US President Barack Obama wins Nobel Peace Prize

United States President Barrack Obama was awarded the Nobel Peace Prize for "his extraordinary efforts to strengthen international diplomacy and cooperation between peoples," the Nobel Committee said in Oslo on Friday.

Obama has called for disarmament and worked to restart the stalled Middle East peace process since taking office in January. He scored another first of sorts by winning the Nobel Peace Prize while just a few months in office.

Barack Hussein Obama was born on 4th August, 1961 is the 44th and current President of the United States.

He is the first African American to hold the office, as well as the first born in Hawaii.

Obama is a graduate of Columbia University and Harvard Law School, where he was the president of the Harvard Law Review.

Obama is the third sitting U.S. President to be awarded the prize, following Theodore Roosevelt in 1906 and Woodrow Wilson in 1919. Former U.S. President Jimmy Carter won in 2002.

The prize worth 10 million Swedish crowns ($1.4 million) will be handed over in Oslo on 10th December.

US jobless rate at 26-year high

US employers cut 216,000 jobs in August, pushing the unemployment rate up to 9.7%, a 26-year high, official figures show.

The unemployment rate rose after dipping to 9.4% in July but the Labor Department said the job loss figure was the smallest in a year.

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said.

Jobs have been lost across manufacturing and service industries.

Total unemployment stands at 14.9 million.

eBay reaches deal to sell Skype

Online auction site eBay has agreed to sell the majority of internet phone company Skype for about $2bn (£1.2bn).

Skype is to be majority-owned by a group of private investors, including Netscape co-founder Marc Andreessen and private equity firms.

EBay will keep a 35% stake in the firm, which it has been trying to sell for some time. It has said that Skype had "limited synergies" with it.

The deal values Skype at $2.75bn. EBay bought Skype for $2.6bn in 2005.

The new owners are Andreessen Horowitz, Index Ventures - which originally invested in Skype - as well as private equity firm Silver Lake and the Canada Pension Plan Investment Board.

They will pay $1.9bn in cash, and give a $125m note to eBay, meaning that it promises to pay that amount on demand or at an agreed time.

For sale

Earlier this year, eBay had said that it planned to spin off Skype and list its shares in the first half of 2010, an announcement many took as a signal that the firm was for sale.

Ebay wrote down the value of the firm to $1.2bn a year after it was taken over.

Including payouts to Niklas Zennstrom and Janus Friis, who founded Skype in 2003, eBay paid over $3bn for the company.

Skype's software lets computer and mobile phone users talk to each other for free and make cut-price calls to mobiles and landlines.

Unlike traditional mobile calls, which are transmitted over a cellular network, Skype turns your voice into data and sends it over the internet.

Since being acquired, the number of registered Skype users has risen to 405 million from 53 million, though free user-to-user calls still dominate the service.

The deal should be finalised by the last three months of the year.

iPhone sales boost Apple results

US technology giant Apple has seen quarterly results beat forecasts, thanks to strong iPhone sales.

Net profits hit $1.23bn (£953m), or $1.35 a share, in the fiscal third quarter to 27 June, from $1.07bn, or $1.19 a share, a year earlier.

Apple sold more than 5.2 million iPhones in the quarter, seven times greater than the same period a year, before, boosted by a new iPhone model.

Analyst reacted positively to the news and shares rose in after-hours trade.

Shares of Apple ended at $151.60 before rising to $157.02 after the results.

'Advantages'

Andy Hargreaves, an analyst at Pacific Crest Securities described the the numbers as "great".

"Their gross profits continue to surprise people and there is a return to product momentum...a return to growth in the Mac business, and then the iPhone is doing tremendously well and that is a potent combination."

He added that forecast for the fourth quarter were strong relative to what he had expected.

Revenue for the period climbed 12% to $8.3bn, ahead of expectations of $8.2bn. Every region in the world saw revenue increase.

The number of Macs sold by Apple grew 4% year-on-year.

Shaw Wu, an analyst at Kaufman Bross said: "We think they are very uniquely positioned with their competitive advantages."

The one area to see a contraction was its iPod, where sales were 7% weaker year-on year.

The firm posted a conservative outlook for the current quarter, predicting earnings of $1.18 to $1.23 a share with revenue between $8.7bn to $8.9bn, but analysts highlighted that Apple is consistently conservative in its predictions.

Apple chief financial officer Peter Oppenheimer said: "We are very proud of this result, particularly given the economic climate around us."

Stanford charged with fraud in US

Texan billionaire Sir Allen Stanford has been charged in the US with fraud and obstruction.

Announcing the indictment, the justice department said it related to a $7bn ($4.2bn) scheme to defraud investors.

Soon after, the 59-year-old appeared in court in Virginia and was remanded in custody pending a full detention hearing to be held in Texas.

He already faces civil charges over an alleged fraud worth $8bn - charges he denies.

Sir Allen turned himself in to the FBI on Thursday after a warrant was issued for his arrest.

GM agrees Saab sale to Koenigsegg

General Motors has reached a tentative agreement to sell Saab to the Swedish sports car manufacturer Koenigsegg.

GM said that as part of the deal there would be $600m (£367m) of funding from the European Investment Bank (EIB), guaranteed by the Swedish government.

It is the latest part of GM's reorganisation, which is also set to see the Opel and Vauxhall brands going to Canada's Magna.

Saab filed for reorganisation under Swedish law on 20 February.

Koenigsegg produces 18 cars a year and employs 45 people, and there has been some doubt as to whether it has the expertise to run Saab, which sold 93,000 cars in 2008.

Saab employs about 3,400 people in Sweden and about 12,000 other jobs in the country are dependent on Saab and its suppliers.

But GM Europe's president Carl-Peter Forster said: "Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength... made it the right choice for Saab as well as for General Motors

GM ready to file for bankruptcy

Car giant General Motors is expected to file for bankruptcy protection later on Monday, marking the biggest failure of an industrial company in US history.

The stricken firm had until 1 June to present a viable revival plan in return for emergency government funding.

Reports say a majority of bondholders have now agreed to a deal giving them at least a 10% stake in what is likely to emerge as a much smaller company.

President Barack Obama is due to give full details at a news conference.

The BBC's Jonathan Beale, in Detroit, says Mr Obama is expected to announce $30bn (£18.5bn) in new funding for GM.

GM's sales have been hit hard by the financial crisis and the firm has received $20bn in state aid.

In return for more cash the federal government is reported to be receiving a stake of 60% in a new, leaner company due to be re-launched within 90 days.

Senior executives at General Motors have been making final preparations for completely restructuring what was once the world's largest car company, under judicial supervision.

A Chapter 11 bankruptcy filing by GM would rank as the third largest bankruptcy in US history following Lehman Brothers' collapse and the failure of telecoms giant WorldCom.

European deal

The restructuring is likely to drastically change General Motors, with some 20,000 workers thought likely to lose their jobs.Our correspondent says long-established subsidiaries Pontiac, Saturn and Hummer, as well as Saab, the remaining GM brand in Europe, are under threat as production plants are expected to close across the country.

GM's European arm is likely to be spared bankruptcy following a proposed deal by Canadian car parts maker Magna International to buy GM Europe's Vauxhall and Opel brands.

However, unions fear that jobs may be lost at Vauxhall plants in Luton and Ellesmere Port, which employ 5,500 people.

UK Business Secretary Lord Mandelson said he had received further assurance from GM Europe that Vauxhall production would remain in the UK.

Jobs may also go in Belgium, Poland and Spain.

GM, once the largest company in the world, has been losing market share since the early 1980s.It has been driven to bankruptcy because of high production costs and by the collapse in credit markets and consumer spending. It made losses of $30bn last year.

GM was also slow to move away from producing gas-guzzling SUVs when consumers were looking for more fuel-efficient vehicles.

Toyota sold more vehicles than GM in 2008, putting an end to the American company's 77-year reign as the world's biggest carmaker.

US begins GM bankruptcy planning

General Motors and the US Treasury have improved the offer to GM's bondholders, as they prepare for the firm's move into bankruptcy protection.

Bondholders with $27bn (£17bn) of GM debt are now being offered the option to buy an extra 15% of GM shares as part of a proposed bankruptcy deal.

This is on top of the 10% they had previously been offered.

If bondholders back the new offer, it will allow GM to exit bankruptcy protection more quickly.

The US car giant is expected to apply for bankruptcy protection by 1 June.

GM said it had already secured the backing for the new offer from bondholders representing 20% of the bond debt.

Under its plans to reorganising its share base, the US government will take a 72.5% stake.

Consumer confidence buoys market

US shares have risen after a survey suggested US consumer confidence was at its highest level since last September.

The Conference Board's Consumer Confidence Index jumped to 54.9 for May from 40.8 last month - well beyond the average 42.3 predicted by economists.

The indicator is being closely watched as a guide to whether consumers are likely to start shopping again.

The Dow Jones added 2.4%, despite other data showing record house price falls in the first quarter of 2009.

The Conference Board index suggested consumer confidence had hit its highest level since last September.

That was when the collapse of Lehman Brothers accelerated the global financial crisis.

No recovery signs

House prices fell by 19.1% in the first three months of the year from the same time last year, the Standard & Poor's/Case-Shiller National Home Price index suggested.

It also showed home prices had fallen 32.2% since peaking in the second quarter of 2006.

However, it suggested that the pace of month-on-month declines had slowed.

The housing index, which looks at 20 key cities, saw prices fall by 18.7% in March from the year before.

These declines were slightly better than February's falls, and it was the second straight month that indexes did not post record drops.

But there were still no signs that home prices had hit the bottom, said David M Blitzer, chairman of the S&P index committee.

"We see no evidence that a recovery in home prices has begun," he said.

Venezuela seizes US pasta company

Venezuelan officials accompanied by soldiers have seized "temporary" control of a US-owned pasta producer.

Venezuela says the plant, owned by the big US firm Cargill, had violated regulations on price controls intended to guarantee cheap food for the poor.

The move further increases President Hugo Chavez's hold on the economy, after a series of recent take-overs of private and foreign-owned businesses.

They include a Cargill rice plant, and services companies in the oil industry.

Deputy Food Minister Rafael Coronado said the government would run the factory for 90 days, and would reassess the situation after that.

He said it has not been producing sufficient quantities of a type of pasta sold at cheap, government-established prices.

Price control

A rice mill owned by Cargill was taken over earlier this year, on the grounds that it was not producing rice at government-set prices.

Cargill had said it did not break the government's pricing rules on rice because the mill did not produce the plain rice which is regulated.

Venezuela has set quotas and prices for 12 basic foods including rice, powdered milk, cheese and tomato sauce.

Under the measure, 80% of all rice produced must be basic white rice. The measure also includes 95% of all cooking oil, coffee and sugar.

Last week Mr Chavez sent troops to take over oil service companies including hundreds of supply boats, and two American owned gas facilities.

He nationalised Venezuela's oil reserves, one of the largest in the Americas, two years ago.

GM to close up to 1,100 dealers

General Motors (GM) has announced plans to close up to 1,100 of its dealerships in the US as it desperately tries to cut costs and stave off bankruptcy.

It also plans to cut ties with another 470 Saturn, Hummer and Saab dealers.

Closures announced today represent one quarter of the dealership network. GM plans to cut the total number of dealers by 42% by the end of 2010.

On Thursday, rival Chrysler said it would be closing 789 US dealers as part of a massive restructuring programme. GM is also in negotiations with unions to reduce wage costs.

Pace of US job losses is slowing

The US economy lost 539,000 jobs in April, fewer than in previous months, in a sign that the US jobs market might be beginning to improve.

April's figure was better than the 600,000 economists were expecting and below March's revised 699,000 jobs.

The Labor Department said that the unemployment rate rose to 8.9%, its highest level since 1983 and up from 8.5% in March.

Since December 2007, the US economy has lost 5.7 million jobs.

The data showed job losses across most sectors of the economy, although hiring picked up in education, health services and government. Chris Rupkey, an economist at Bank of Tokyo Mitsubishi said the economy may have reached a turning point and the labour market could begin to improve.

"The economy doesn't turn on a dime but it does look as if the pace of job losses is starting to slow from the turn of the year," Mr Rupkey said.

"You can make the case that the panic layoffs that we saw at the turn of the year are starting to ease."

There have been some signs that the worst of the recession in the US may be over.

Consumer spending, which plunged in the last half of 2008, grew in the first quarter of this year and some recent data on the housing market has been more upbeat.

The head of the US central bank, Ben Bernanke, has said he expects the recession to end this year unless there is a major financial setback.

But others are less optimistic and predict that unemployment will decline further.

"It's a terrible number but an improvement relative to the very terrible numbers we had before," said Jay Mueller, senior portfolio manager at Wells Capital Management.

"The big question is, has the peak in job losses hit? I am somewhat sceptical that we have seen the absolute worst of it."

Banks unveil cash-raising plans

US bank Wells Fargo has said it plans to raise $7.5bn (£4.9bn) from selling new shares, a day after the US Treasury said 10 banks needed to boost reserves.

Morgan Stanley is also hoping to raise $3.5bn from share sales.

Bank of America said it planned to sell assets and raise capital to secure the $33.9bn it needs.

On Thursday, the US Treasury said that 10 of America's 19 largest banks needed to raise a combined total of $74.6bn of extra funds.

That was the main finding of the so-called "stress tests" which were carried out to see if the banks had sufficient capital to cope should the recession worsen.

The banks that require extra capital have been given until 8 June to finalise their plans to do so, and get them approved by regulators.

Separately, Fannie Mae, the mortgage finance company, has said it needs an extra $19bn in government aid after reporting a loss of $23.2bn for the first quarter.

GM to cut a further 21,000 jobs

General Motors (GM) is to cut a further 21,000 US jobs this year and phase out its Pontiac brand, as it aims to meet a 1 June deadline to revamp its business.

GM has to complete its restructuring by that date to gain the extra multi-billion dollar government loans it needs to avoid bankruptcy protection.

The firm also said it hoped to halve its debts by persuading bondholders to swap $27bn (£19bn) of bonds for shares.

GM also wants the government to swap half its current loans for a 50% stake.

The government has so far given GM $15.4bn in loans.

Falling sales

GM said it also wants its main union, the United Auto Workers, to accept shares in the firm in exchange for cancelling 50% of the $20bn the firm must pay into a union-run healthcare trust. The carmaker said it would phase out the Pontiac brand by the end of the year in order to focus on four brands in the US - Chevrolet, Cadillac, Buick and GMC.

GM also said it would reduce the number of its US dealerships.

After all the proposed changes, existing GM shareholders would own only 1% of the firm.

GM has already cut 10,000 US jobs this year, announced in February. Following the completion of the latest 21,000 reductions, its American workforce will be reduced to 40,000.

'New path'

Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued.

The White House's car industry taskforce said it welcomed GM's latest announcements, but added that the government had yet to make a decision regarding the carmaker's proposal that it exchange half the current loans for a 50% stake in the firm.

"The interim plan that GM laid out in this filing reflects the work GM has done since 30 March to chart a new path to financial viability," it said in a statement.

"We will continue to work with GM's management as it refines and finalises this plan and with all of GM's stakeholders to help GM restructure consistent with the president's commitment to a strong, vibrant American auto industry."