TOKYO: Nissan Motor, Japans third-largest carmaker, posted a 27 percent decline in quarterly net profit Friday after rising global sales failed to compensate for a higher tax bill.

The comparative quarter last year included extraordinary gains from the sale of shares in its truck affiliate, Nissan Diesel Motor, to Volvo. Net profit for the fiscal second quarter totaled 120.1 billion, or $1.05 billion, down from 164 billion the previous year.

But operating profits at Nissan rose 12 percent year on year to 218.71 billion, as a pickup in its global car sales outweighed rising commodity prices, and it kept its full-year forecasts unchanged.

Sales surged 13 percent to 2.618 trillion as dealerships moved more vehicles in the United States, Europe, Russia and China. Nissan sold 941,000 vehicles worldwide, up 6.6 percent compared with a year ago. Revenue grew 13 percent to 2.618 trillion.

Nissans chief executive, Carlos Ghosn, said the company is coming out of a lull to start its next stage of growth as it expands in emerging markets and introduces models, and better results can be expected soon.

“With many further exciting products to come, Nissan is back on track towards sustainable profitable growth,” he said. “You can expect more in the second half.”

Ghosn said he did not anticipate any negative impact on Nissans sales plans from a weakening U.S. car market this year, noting that he had projected soft overall demand from the beginning of the year.

“We feel good about our 3.7 million-car forecast for record global sales this year,” Ghosn told a news conference.

He repeated, however, that he was not optimistic about demand in the United States next year, partly - but not only - due to the subprime mortgage issue.

Nissan this week also unveiled a new incarnation of its iconic GT-R sports car at the Tokyo Motor Show, hoping to boost its brand image and increase showroom traffic to sell other, mainstay products.

Many analysts have said that they expected Nissan to fall short of its full-year targets, partly due to the yens recent resilience against the dollar and soaring commodity prices.

Ghosn said that he did not expect the yen to strengthen much beyond current levels, around 114 yen to the dollar, in the second-half of the business year.

Nissans assumption for the year to March remains at 117 yen, and the first-half average was 119 yen.

“I dont see the yen strengthening much more,” Ghosn told a news conference, noting that a 114 yen average for the second half would shield it from any currency negatives.

Japanese automakers earnings are under the spotlight following a powerful earthquake in northern Japan at the beginning of the July-September quarter, which disrupted production at all of the countrys automakers.

Nissans larger rival, Honda Motor, reported a 48 percent jump in second-quarter operating profit a day earlier on brisk sales of its fuel-efficient CR-V crossover. Toyota Motor, GMs rival as the worlds biggest automaker, is to report Nov. 7.

FISH traders are set to launch legal action against the Scottish Executive amid claims that authorities failed to prevent their livelihoods from being ruined by the illegal trade in “black” fish landings, The Scotsman can reveal.

The 14-strong group of fish merchants, buyers and a haulier have accused the Executive’s Scottish Fishery Protection Agency of failing to crack down on the clandestine trade throughout the 1980s and 1990s when many of the group’s businesses went to the wall.

They claim that alleged failure allowed up to 80 million a year in illegal landings to flood the industry - which effectively destroyed the legitimate quayside auction system.

The merchants and buyers formed the Fish Trade Equal Opportunities Group 11 years ago in a failed attempt to persuade the Office of Fair Trading to stamp out clandestine landings.

George Hosie, an Aberdeen fish merchant who is co-chairman of the group, said: “Businesses went to the wall because the enforcement agency didn’t do its job. They ignored what we were telling them.

“Ten years ago there were nearly 400 processors in Aberdeen and now there are only 30 left.”

Mr Hosie said that the members of the group had been treated as “pariahs” after blowing the whistle on the extent of the illegal trade.

He added: “Because of our constant pressure new regulations were brought into force in September 2005 where you have to report every fish sale within 24 hours, whether it is bought on the market or sold privately. But it was too late for our members.

“If those regulations had been brought into force ten years ago there wouldn’t have been the crisis in the North Sea that presently exists and a lot of our members would still be in business today.”

The group is set to lodge an action against the Executive in the European Court of Justice.

Mr Hosie said: “We are seeking redress for members who lost their homes and businesses. It will run into many millions because people have lost millions.”

Martin Milne, the co-chairman of the group, said: “We were deprived of a business through matters that were outwith our control. I blame the Executive ultimately because they were the paymasters of the SFPA and they did little or nothing to stop what was happening.”

Mr Milne’s company, Scot Products, which he had set up in 1986 to buy fish for wholesalers in the Humber, was wound up four years ago after his company’s annual turnover went from 1.9 million to 300,000.

He claimed the trade in clandestine landings was responsible for the demise of his company. Mr Milne, who is now working as a driver for an oil company in Aberdeen, said that small companies like his were sidelined by the flourishing trade in black fish involving the larger merchants and processors.

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Give Rupert Murdoch his due. When the News Corp. ( ) chairman approved a $580 million deal to acquire MySpace in the summer of 2005, he was way ahead of the pack. Today, hundreds of millions of people around the globe have embraced these digital water coolers, using them as a means of self-expression or as a way to keep in touch with friends. But now the pressure is building for MySpace to prove it can be the cash cow that Murdoch and others are betting on. MySpace, still by far the largest social network, has lost some of its mojo lately as competing networks spring up like dandelions after a rain shower, crimping its growth.

Most important, social networks have yet to figure out a business model. Advertisers, for instance, aren’t sure that social networks can become a great platform for their pitches. “Social-network advertising is still a work in progress,” says Debra Aho Williamson, a senior analyst with research firm eMarketer.

Murdoch’s challenge is to transform the Web phenom into a digital media powerhouse capable of richly monetizing eyeballs without driving off the very users who made it popular. Even MySpace executives concede they’re winging it. “I don’t think our monetization strategy will be a prize-winning Harvard Business School study,” says Jeff Berman, general manager of a new MySpace TV unit.

The race to wring money out of MySpace’s giant audience is all the more urgent because Facebook, the fast-gaining No. 2 network, is expected on Nov. 6 to unveil its own advertising strategy. On Oct. 24, Microsoft said it would invest $240 million in Facebook, reportedly beating out Google and giving the site a staggering $15 billion valuation.

Besides the big social networks like Facebook, hi5.com, and Bebo, new niche efforts are emerging. These outfits, with names like Geni and Dogster, are less about keeping in touch with friends than connecting with family or communing over mutual interests. Venture capitalists this year alone have poured about $250 million into 34 different social networks. And all kinds of places, from USA Today to Dwell magazine, are integrating social-networking techniques into their sites.

STOP BY, STAY A WHILE
That surge in new networks is one reason Bear Stearns analyst Spencer Wang sliced his first-quarter earnings estimates for News Corp. on Oct. 18. Wang noted that in the third quarter, MySpace’s U.S. audience showed its first-ever quarterly decline, after peaking at 70.5 million in June. “We are not fully convinced that MySpace can maintain its lead,” says Wang. Moreover, MySpace users are not lollygagging on the site the way they used to–a key metric for advertisers. MySpace users spent an average of 3 hours and 13 minutes a month on the site in the third quarter, down 26% from a year earlier. Meanwhile, users spent 3 hours and 33 minutes on Facebook, up 23% for the year.

Social networks have put most of their faith in advertising. But people don’t go to MySpace to find products or information. Users are so engrossed with talking to friends and posting party pictures that they pay little or no attention to the ads. So ad rates on social networks are much lower than prices for search keywords or traditional ads–$1.86 per thousand views for MySpace, Merrill Lynch says. That compares with as much as $30 per thousand for prime-time TV. “Standard display ads–and I don’t care how much targeting you do–it’s not working well,” says Ian Schafer, president of online ad firm Deep Focus.

Media giants such as Warner Bros. and NBC have set up sites on MySpace to promote their content. But ad providers say some big consumer brands are leery of running ads beside material created by users. “Almost every single client we have says, ‘Do not run my ad on a social network,” says Tim Vanderhook, CEO of ad network Specific Media.

MySpace is working to change that perception. It is rolling out a new system with computer algorithms that glean data about its users. That should produce ads that are more closely targeted to users’ interests and make advertisers more eager to spend money on the site. “We’re very excited about the prospects of this,” says Peter Levinsohn, president of MySpace parent Fox Interactive Media. That project is crucial if Fox Interactive is to generate a third of News Corp.’s earnings growth in the current fiscal year, ending next June. Merrill analyst Jessica Reif Cohen expects Fox Interactive–of which MySpace is the largest part–to earn $239 million on operations, up from $33 million last year.

Loading up on ads can backfire, though. MySpace already turns off some members by putting as many as nine ads on a page. “I really hate it,” says Vinh Pham, a 24-year-old Web developer who now spends more time on Facebook than MySpace because of the ad deluge. “You have to see, like, 100 ads just to do anything on MySpace.”

GOING HOLLYWOOD
Meanwhile, MySpace co-founders Chris DeWolfe and Tom Anderson are spending big money to turn MySpace into a digital media juggernaut. In late October, MySpace announced the creation of a gaming site, as well as a deal with Sony BMG Music Entertainment to share revenues generated from Sony content displayed on MySpace’s music pages. The most prominent effort came in June when it launched MySpace TV, which has gained traction by adding professionally produced video. MySpace also has plans to create a version of the video site for cell phones. “In some senses, we’re becoming Hollywood’s digital playground,” says Berman.

But many analysts and technologists question how many users want this type of content and how much money MySpace can make from its investment. Yahoo! recently retreated from its strategy to produce more original programming. “The Hollywood playbook has not adapted well to the Web,” says Reid Hoffman, CEO of professional network LinkedIn and an investor in Facebook.

For now, MySpace’s biggest revenue source is a three-year, $900 million deal signed last summer that makes Google the site’s exclusive ad provider. MySpace has to deliver a minimum amount of traffic. Some ad experts say Google is losing money on the deal; MySpace says both sides are happy. Still, Google acknowledges it’s going to be hard to make money on networks. “These social networks are going to require different kinds of targeting,” said Sergey Brin, Google co-founder and president, in an Oct. 18 analyst call. “It is obviously a challenge because there is so much inventory, and people can be distracted by many different things.”
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