Enzymes from Palo Alto lab to help produce ethanol

DuPont and a Danish food company will use enzymes developed in a Palo Alto lab to produce ethanol from crop waste, the businesses announced Wednesday.

DuPont, one of the world’s largest chemical companies, and biotech firm Genencor have formed a joint venture to develop cellulosic ethanol, one of the hottest fields in the burgeoning green tech industry.

Genencor, which has offices in Palo Alto and Rochester, N.Y., is owned by Danisco, a Danish company that makes food ingredients. Together, Danisco and DuPont will spend $140 million on the effort.

Cellulosic ethanol can be made from a wide range of grasses and woody plants, but it costs more than ethanol made from corn. The new joint venture, DuPont Danisco Cellulosic Ethanol, will use enzymes developed by Genencor to break down plants and lower the cost of production. The joint venture will use corn stalks and crushed sugarcane stalks as sources of fuel and may use wheat straw in the future.

The joint venture plans to open a pilot biorefinery in the United States next year.

- David R. Baker United, Continental discuss alliance

United Airlines and Continental Airlines Inc. are talking about forming an alliance to gain some benefits of working together without going through a merger, which Continental rejected last month, a person close to the talks said Wednesday.

United is pushing ahead with negotiations aimed at a merger with US Airways Group Inc. but would not pursue both deals, said the source, who was not authorized to speak about the matter and requested anonymity.

United is expected to take up the matter today at a meeting of parent UAL Corp.’s board of directors. No vote is expected, and the sources said a decision is not imminent on which of three options United will pursue: consolidating with US Airways, forming an alliance with Continental, or remaining a stand-alone carrier.

An alliance, in which the companies would work together in many ways but not merge their operations, would provide a way for them to raise revenue without the integration problems that come with formal consolidation. It could set pricing and schedules and have U.S. antitrust immunity.

Associated Press $115 million financing for Oakland solar firm

An Oakland company developing large solar power plants in the Mojave Desert has secured $115 million in its latest private financing round, with investors including Google Inc. and three major oil companies.

BrightSource Energy Inc. secured funding from divisions of BP, Chevron Corp. and Norway’s StatoilHydro, as well as venture capital firms DBL Investors and Draper Fisher Jurvetson.

In March, Pacific Gas and Electric Co. agreed to buy power from three big solar thermal plants that BrightSource plans to build in Southern California. Fields of mirrors at each plant will focus sunlight on central towers, boiling water within the towers, creating steam and turning turbines to generate electricity.

- David R. Baker U.S. found to keep competitive edge

The United States topped world competitiveness rankings for the 15th straight year, but its economy is showing the same signs of weakness that sank booming Japan in the early 1990s, according to an annual survey released Thursday.

Asian economies Singapore and Hong Kong ranked just behind the United States, as they did last year. Switzerland jumped two places to fourth, while Luxembourg rounded out the top five most competitive national economies, said Switzerland’s IMD business school, publisher of the World Competitiveness Yearbook.

“The big question is whether the United States will be No. 1 after this year,” project director Stephane Garelli said, adding that the report was based on 2007 data that do not reflect all of the problems in U.S. financial markets.

The study lists 55 economies according to 331 criteria that measure how the nations create and maintain conditions favorable to businesses.

The U.S. position was cemented by its domestic economy, which is the world’s strongest, topping all others in its amount of investments, stock purchases and commercial service exports. The United States also ranks as the easiest place to secure venture capital for business development and dominates all other economies in key technology criteria such as computers in use, according to the report.

Associated Press

(05-15) 16:31 PDT New York (AP) —

CBS Corp. is acquiring a big online reach with its acquisition of CNet Networks Inc. but also a company that’s faced heavy criticism from investors. Those concerns as well as the hefty $1.8 billion price tag helped send CBS’s shares down after the deal was announced Thursday.

CNet was an early player in the dot-com boom and survived the subsequent crash with a steady focus on technology news, reviews and entertainment. But its stock, which once traded as high as $79 during the bubble, has slumped over the last two years, leading to an investor rebellion that was gathering steam just as the CBS deal was announced.

The $11.50 per-share price CBS is paying represents a huge premium of 45 percent over CNet’s stock price the day before and seemed likely to resolve a looming proxy battle with its biggest investor, the hedge fund Jana Partners LLC, which has pressed for action to raise CNet’s stock price. Jana declined to comment.

Like other media companies CBS has been working quickly to expand its online audience as more viewers and advertisers go there. The CNet acquisition is the largest since the company brought on the technology executive Quincy Smith in late 2006 to lead its digital strategy. Last year CBS bought the music-focused online social network Last.fm for $280 million.

Speaking on a conference call with reporters, CBS’s chief executive, Leslie Moonves, said acquiring CNet would lift CBS into the top 10 online audience companies in the United States, giving CBS new ways to distribute its news, entertainment and other programming.

CNet receives about 32 million unique visitors per month and CBS gets about 25 million, according to data from comScore Inc.

Moonves predicted that the combined online revenues of CNet and CBS’s own online properties would reach $1 billion by 2010 or 2011. Last year CNet alone posted revenue of just over $400 million.

CNet investors cheered the deal, sending the company’s shares up $3.46, or 43.5 percent, to $11.41. CBS shareholders were less optimistic, and pushed that company’s shares down 59 cents, or 2.4 percent, to $24.23. Citigroup analyst Jason Bazinet said in a note that the “pricing risk is high” for CBS.

The high premium CBS is paying reflected both the urgent desire of media companies to build online audiences for their programming as their viewers and advertisers go there but also the relative scarcity of potential acquisition targets that can offer such reach. Acquiring online audiences was a main goal behind Microsoft Corp.’s recently failed bid to acquire Yahoo Inc.

Jefferies & Co. analyst Youssef Squali wrote in a note to investors that CBS’s purchase of CNet could spark another round of deal activity in the sector, with personal finance site Bankrate Inc. and online advertising company ValueClick Inc. the most likely candidates.

CNet has faced harsh criticism from dissident investors in recent months who say the company should be doing more to restore the $1 billion in shareholder value that has disappeared since December 2005.

CNet is known for technology reviews but has also expanded into entertainment areas with sites that include ZDNet, GameSpot.com and mp3.com. It also owns the highly valuable Internet domains names TV.com, Radio.com and News.com Д names that would have clear associations with CBS’s television, radio and news businesses.

Allen Weiner, a research analyst at Gartner Inc., said CNet had made a strong brand name for itself in technology news but had stumbled in previous efforts to expand that franchise into other media outlets such as TV and radio, a shortfall that could be fixed under ownership by CBS with its a large array of TV and radio properties.

Steve Weinstein, an analyst with Pacific Crest Securities, said CBS will have some work to do in order to get the most out of CNet’s businesses, which he said have been “underperforming the market for quite a while.”

“CNet has a lot of great brands but the growth hasn’t really been there,” Weinstein said. “I think there’s a lot of work to be done behind the scenes. It will be interesting to see if they have the know-how to do it.”

CNet was founded in 1992 by Shelby Bonnie and Halsey Minor. Bonnie was chief executive until 2006, when he resigned amid an accounting scandal related to the timing of stock option grants.

To clean up that mess, CNet took non-cash charges of $105.7 million during the 10 years ended in 2005 and restated its financial statements. Bonnie, one of the company’s largest holders, still owns about 10.1 million shares and stands to get a windfall of $116.2 million from the sale.

___

AP Business Writers Jeremy Herron and Rachel Metz in New York contributed to this report.

The U.S. military is looking for a few good geeks. “This building will be attacked 3 million times today,” announces the commentator as the Pentagon appears on an ad available on the popular video site YouTube («www.businessweek.com»). “Who is going to protect it? Meet Staff Sergeant Lee Jones, Air Force Cyber Command, a member of America’s only cyber command protecting us from millions of cyber threats every day.”

The YouTube recruitment video is part of a high-profile ad campaign running on TV, in print, and on the Web. In the ads, the Air Force boasts of its ability to protect the nation from a potentially devastating cyber attack. The «www.businessweek.com» (BusinessWeek, 4/10/08), but they underscore a new sense of urgency: As computer networks play increasingly vital roles in the U.S. military—and expose it to new dangers from skilled information warriors trained by other nations—the U.S. needs a new type of 21st century soldier.

“How do you tap into the intellect of a completely different kind of Air Force warrior?” asks General William T. Lord, the chief of the nascent Air Force Cyber Command—«feedroom.businessweek.com». Techies on Patrol

General Lord thinks the answer may be to encourage U.S. hackers to enlist. In an interview with techie forum Slashdot in early March, he was asked if hackers with checkered pasts, and overweight geeks who couldn’t pass a physical training test, were candidates to join the growing ranks of cyber soldiers. “I believe even the most unlikely candidate, when working for a cause bigger than himself, turns out to be a most loyal ally,” the general wrote.

The next James Bond or GI Jane may well be a hacker—routinely peering and probing computer networks to further his country’s industrial or military edge. Instead of tense confrontations and close calls in far-off places, the digital warrior will telecommute. Simply tapping at a keyboard, she’ll connect with electronic moles that will pass on gigabytes of valuable data stored in the networks of prime targets half a world away.

«images.businessweek.com» and exponentially more efficient, and, given some due diligence, cunning, and a knack for social engineering, the path leads to just about any computer’s soft interior. League of Electronic Nations

There are some surprising indications that this future has arrived in an abundance of ways. The U.S., China, and Russia are building up their cyber forces. “For the Chinese, info war is the next realm. They are never going to go tank to tank with the U.S.,” says Matthew G. Devost, a former Pentagon network security tester and chief executive officer of Total Intelligence Solutions in Alexandria, Va. The Chinese military offers prizes to its best computer hackers, and according to a January, 2006, white paper by the Chinese military, it has a three-stage strategy between now and 2050 to win an “informationized war,” one that is fast-paced and mostly digital.

The superpowers are hardly alone. The league of electronically prying, prodding, and posturing nations now numbers well into the dozens—by some tallies, closer to 100. A «www.ncix.gov», by the office of Joel F. Brenner, counterintelligence executive for the director of national intelligence, noted that his office discovered at least 108 countries engaged in “collection efforts against sensitive and protected U.S. technologies,” up from 37 a decade ago. The report doesn’t name many names, though it identifies China and Russia as among “the most aggressive” in targeting the U.S.

«www.businessweek.com» (BusinessWeek.com, 4/10/08) and says it, too, is a victim, “frequently intruded [upon] and attacked by hackers from certain countries.”