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John Deere doesn't expect it to be a happy new year

Wed, 2014-11-26 11:00

Deere & Company, the maker of John Deere farm equipment, said today that 2015 will be a tough year. The firm predicts it will sell fewer big machines to farmers thanks to a slump in crop prices. 

The price tags for the company’s farming equipment can reach well into the $200,000 to $300,000 range, and sales had been good. Net income attributable to Deere & Company in fiscal year 2013 was $3.5 billion (up from $3 billion in 2012), as the company rode a boom cycle in soybean and corn prices. 

“A lot of farmers were flush with cash and they traded for new equipment,” says John Hawkins of the Illinois Farm Bureau. Farmers were aiming to meet increasing demand from an industry boom in corn and soybean prices. 

“Farmers really geared up and spent a lot on their capacity to farm,” says Lawrence De Maria, co-group-head of global industrial infrastructure for William Blair & Co. 

The boom cycle, which began in the early 2000s, was fueled by demand from emerging markets and fuel-emission standards that required more corn for ethanol. 

“We’ve seen corn that’s dedicated to ethanol go from under 10 percent to almost 40 percent of the most recent crop, so that’s led to a tremendous boom,” says Morningstar Analyst Kwame Webb. 

But the EPA is now considering lowering the amount of ethanol that was supposed to be required for 2015. When it announced the idea earlier in 2014, the news began to dampen ethanol demand.  

“So the reality is you did have an industry sort of build itself up for greater ethanol consumption than what materialized,” Webb says. 

Add to that favorable weather this year, and the supply of corn – as well as soybean – is exceeding demand. Corn prices have dropped by 50 percent, and farmers are getting more conservative with their equipment purchases, Hawkins says. “They’re going to keep that combine or tractor a year or two longer than they probably thought they would.”

In addition, a tax deduction known as Section 179 expired in 2014 (along with many others). It had allowed farmers to deduct equipment purchase expenses. Whether those deductions will be extended for the 2014 tax year is now in limbo, but it’s already had the effect of making farmers less willing to take the risk on new equipment, says Hawkins. 

“I’ve been hearing, personally, from implement dealers that that’s the first thing the farmer will say is: Well, I don’t have that Section 179 expensing available, so I’m not willing to trade in right now for a new combine or a new tractor,” Hawkins says. 

The oversupply of crops and the decreased demand for them and for farm equipment spells trouble for John Deere, which reported a 20 percent fiscal fourth-quarter drop in profit from a year ago. The company believes industry sales for agricultural machinery in the U.S.  and Canada could decline 25 to 30 percent in 2015. 

"The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models,” Samuel R. Allen, company chairman and chief executive officer, said in a news release about the company’s fourth-quarter earnings.

“If you say that this is a bust, then they believe the forecast they’ve put out there represents pretty much the worst of the bust,” Webb says. 

The decline in sales also highlights John Deere’s previous successes in building up during the boom cycle, says De Maria, who adds that the company will have little choice but to wait out the downturn. 

“Certainly when it is a cyclical company, and the farm economy is cyclical … they’re susceptible to those declines as well,” De Maria says. 

The decline could last a long time, says De Maria. He points to the late 1990s and a downturn he says lasted six to seven years. 

“There’s only two ways to get out of a supply situation like we are in now, and that’s an upward increase in demand or a supply event, such as a weather event. And neither one of which we see right now” De Maria says. 

Low crop prices mean a tough outlook for John Deere

Wed, 2014-11-26 11:00

Deere & Company, the maker of John Deere farm equipment, said today that 2015 will be a tough year. The firm predicts it will sell fewer big machines to farmers thanks to a slump in crop prices. 

The price tags for the company’s farming equipment can reach well into the $200,000 to $300,000 range, and sales had been good. Net income attributable to Deere & Company in fiscal year 2013 was $3.5 billion (up from $3 billion in 2012), as the company rode a boom cycle in soybean and corn prices. 

“A lot of farmers were flush with cash and they traded for new equipment,” says John Hawkins of the Illinois Farm Bureau. Farmers were aiming to meet increasing demand from an industry boom in corn and soybean prices. 

“Farmers really geared up and spent a lot on their capacity to farm,” says Lawrence De Maria, co-group-head of global industrial infrastructure for William Blair & Company. 

The boom cycle, which began in the early 2000s, was fueled by demand from emerging markets and fuel emission standards that required more corn for ethanol. 

“We’ve seen corn that’s dedicated to ethanol go from under 10 percent to almost 40 percent of the most recent crop, so that’s led to a tremendous boom,” says Morningstar Analyst Kwame Webb. 

But the EPA is now considering lowering the amount of ethanol that was supposed to be required for 2015. When it announced the idea earlier in 2014, the news began to dampen ethanol demand.  

“So the reality is you did have an industry sort of build itself up for greater ethanol consumption than what materialized,” Webb says. 

Add to that favorable weather this year, and the supply of corn—as well as soybean—is exceeding demand. Corn prices have dropped by 50 percent, and farmers are getting more conservative with their equipment purchases, says Hawkins. “They’re going to keep that combine or tractor a year or two longer than they probably thought they would.”

In addition, a tax deduction known as Section 179 expired in 2014 (along with many others). It had allowed farmers to deduct equipment purchase expenses. Whether those deductions will be extended for the 2014 tax year is now in limbo, but it’s already had the effect of making farmers less willing to take the risk on new equipment, says Hawkins. 

“I’ve been hearing, personally, from implement dealers that that’s the first thing the farmer will say is: well, I don’t have that Section 179 expensing available, so I’m not willing to trade in right now for a new combine or a new tractor,” Hawkins says. 

The oversupply of crops and the decreased demand for them and for farm equipment has all spelled trouble for John Deere, which reported a 20 percent fiscal fourth-quarter drop in profit from a year ago. The company believes industry sales for agricultural machinery in the U.S.  and Canada could decline 25 to 30 percent in 2015. 

"The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models,” Samuel R. Allen, company chairman and chief executive officer, said in a news release about the company’s fourth-quarter earnings.

“If you say that this is a bust, then they believe the forecast they’ve put out there represents pretty much the worst of the bust,” says Webb. 

The decline in sales also highlights John Deere’s previous successes in building up during the boom cycle, says De Maria, who adds that the company will have little choice but to wait out the downturn. 

“Certainly when it is a cyclical company, and the farm economy is cyclical…they’re susceptible to those declines as well,” De Maria says. 

The decline could last a long time, according to De Maria who points to the late 1990s and to a downturn he says lasted six to seven years. 

“There’s only two ways to get out of a supply situation like we are in now, and that’s an upward increase in demand or a supply event, such as a weather event. And neither one of which we see right now” De Maria says. 

The government is literally buying tons of cranberries

Wed, 2014-11-26 11:00

The Department of Agriculture says it's buying $55 million worth of cranberries to reduce a huge market surplus and falling prices. They're facing pressure from the Congressional Cranberry Caucus, which is a real thing.

The agency will get 68 million pounds of cranberries and cranberry-related products, which will go to food pantries and other low-income food programs. 

We covered this very same cranberry crisis about a year ago, so if nothing else it's nice to get some closure.

The lingering cost of rioting

Wed, 2014-11-26 11:00

As Ferguson, Missouri, begins to quiet, there is a lot of work to be done to rebuild trust between citizens and law enforcement and to physically rebuild businesses that were damaged in the protests.

When those businesses reopen, some questions will linger: Will life in Ferguson ever be the same? How will these months of civil unrest and anger affect the area's economy, not just during this holiday shopping season but a year from now, five years, 10 years from now.

On a recent morning, I stopped by a park in South Central Los Angeles, a neighborhood that has its own history of unrest. It was just after sunrise when I met Fred Tarvin. He was starting his shift as a security guard at the Watts Towers, an otherworldly sculpture made of ornate spires that shoot up nearly 100 feet into the sky.

Tarvin grew up in this neighborhood.

"When I first saw the towers, being a young man fresh out of the service, I thought it was just a piece of junk," he remembers. Today he has a different opinion. He calls these spires a mighty work.

But most people familiar with the name Watts know it not because of these towers, but because of riots that burned much of the area nearly 50 years ago.

"A lot of people didn't want to come over because they figured Watts is just bad, because it's got a bad name," Tarvin says.

Watts struggled to recover economically after the riots, and it wasn't alone. Severe rioting erupted in poor black neighborhoods in Newark, Detroit, Washington, D.C. and other cities in the 1960s.

Two economic historians, William Collins and Robert Margo, studied owner-occupied housing data to see how much of those cities' economic declines could be attributed specifically to riots.

In places where severe rioting occurred, property values fell, Collins says, "by about 10 percent relative to where we think they would have been in absence of a riot, or in comparison to places with that had much less severe or no riots." Property owned by blacks saw values drop by as much as 15 percent.

But what was most surprising was that these losses lasted through the 20 years they studied. Some cities still haven't recovered.

"So a question that is especially relevant in the wake of an event like a riot," Collins says, "is 'Does a place bounce back quickly from this, and if it doesn't bounce back quickly, why not?'"

The reasons are complex. Many of these neighborhoods were poor before the riots, and each place has its own circumstances. But there are some common experiences after a riot. Insurance rates go up, cities tend to spend more on police and fire protection, and people who can afford to move away often do.

"So if your tax base is being diminished at the same time that you're increasing demands for police and fire, this is the sort of stuff investors might think of as potentially weakening the fiscal position of cities," Collins says. This makes it harder for to raise money for revitalization projects. It's harder to attract businesses and developers, and news coverage can paint a negative picture of a place.

The 1960s riots were dramatic and catastrophic.

"The events in Ferguson don't rise to the same level of severity that we saw in the 1960s," says Margo, "so that would lead you to suspect that they wouldn't have any long-run effect."

On the other hand the riots of the 1960s lasted only days, Margo points out, while the unrest in Ferguson has gone on for months.

Your Wallet: Gentrification and your finances

Wed, 2014-11-26 09:52

Next week, Marketplace is taking a special look at gentrification and neighborhood transformation from a pop-up bureau established by the Wealth and Poverty desk in Los Angeles' Highland Park neighborhood. 

We want to know what gentrification means for your wallet. Maybe higher rent? Or more kinds of stores? How has your changing neighborhood impacted your personal finances?

We want to hear your stories. Tell us by visiting our website, or tweet us, we're @MarketplaceWKND.

Supreme Court to hear case on plant emission rules

Wed, 2014-11-26 03:00

In a victory for coal-fired power plants, the Supreme Court has accepted a case challenging plant emission rules. At issue: emissions of mercury and other toxic pollutants. 

There are about 600 power plants that burn coal or oil and send such toxins up their smokestacks. The EPA rule, expected to take effect next year, limits how much. Plants have to install expensive equipment to comply, or shut down.

It costs an estimated $10 billion dollars a year. Industry groups and more than 10 states argue EPA did not appropriately consider those costs during the regulatory process. They counter that they did, and that benefits to society in lives saved and illness averted outweigh the costs by at least 4:1.

If EPA wins, observers say it may embolden the agency to pursue more ambitious air quality rules in the future. If industry prevails, the implications may be less clear. More than 6 in 10 plants already have installed pollution controls that would comply with the rules.

And the bigger threat to coal plants is not the government, but cheaper natural gas.

“The fundamental challenge is just this massive supply of natural gas now coming out of the ground in the U.S affecting the price of electricity,” Bloomberg New Energy Finance analyst Ethan Zindler says. “That is the overriding trend that will be impossible of the coal industry to escape from.”

An industry win may have significant legal effect, potentially exposing all EPA pollution rules on pollutants such as soot, sulfur and carbon dioxide.

“Other air rules will be challengeable based on EPA’s process being improper,” says Brandon Barnes of Bloomberg Intelligence. “And utilities challenging these rules will be able to go back to the courts on existing rules and proposed rules.”

Separately, on Wednesday, the EPA issues new, more aggressive limits on ozone emissions, also known as smog. The coming year may bring CO2 limits on existing and future plants. Put together, EPA’s air pollution standards are considered a signature environmental initiative for this administration.

 

PODCAST: Turkey-to-go

Wed, 2014-11-26 03:00

First up on today's show, Fannie Mae and Freddie Mac, the quasi-federal mortgage companies, are making it easier to buy back their houses after a foreclosure. The news is some homeowners will be able to buy the house back not at the original pre-real estate crisis high price but at the new, presumably lower market price. And amid ongoing intense debate about President Obama's executive order to stop millions of deportations of unauthorized immigrants, there's a new focus on the future of authorized immigration, from more skilled workers or entrepreneurs from abroad. Plus, what once seemed odd is becoming commonplace in our less-connected society:  Thanksgiving dinner in a restaurant. The holiday has become one of the busiest days of the year for dining out. 

Making a statement by spending – or not

Wed, 2014-11-26 02:00
2.17

After the St. Louis County grand jury declined to charge a officer Darren Wilson for shooting and killing teenage Michael Brown, two social media campaigns began to take shape: "Donate to Ferguson's Public Library" and #BoycottBlackFriday. Both have financial implications, but how much? If you look at multipliers, which measure how much money spent and invested stays local, giving money to local government (think: funding for the public library) leads to a sales multiplier of 2.17. Spending money at stores typically frequented on Black Friday (such as big department stores) has a lower sales multiplier of 1.97.

17

At least that many major Canadian newspapers put the grand jury decision in Ferguson and the protests that followed on their front page Thursday. Quartz has a roundup of reaction abroad to the protests, from heavy coverage in Britain and Canada to thinly veiled criticism in China and Russia.

109

That's how many children died during last flu season due to complications. Yet the Centers for Disease Controls estimates that fewer than half of Americans get a flu shot. The reason? Some say it's because we don't think of the flu as being all that scary.

$32.9 million

That's the amount of budget shortfall projected for the Golden Gate Bridge Highway and Transportation District over the next five years. One proposed solution involves a toll for pedestrians and bikers to cross the Golden Gate Bridge

7

The number of potential Twitter acquisitions identified by Re/Code after CFO accidentally tweeted a private message about buying another company. The most likely contender is Shots, a selfie-sharing app backed by Justin Bieber and used by many high-profile users of the Twitter-owned video app Vine.

$40 billion

That's where Uber's valuation could top out after a new round of funding, sources told Bloomberg. The ride-sharing app would not only double its current valuation, but exceed Twitter's capitalization, putting Uber in the same neighborhood as Delta and Kraft Foods. 

 

Making a statement through spending

Wed, 2014-11-26 02:00
2.17

After the Ferguson, MO grand jury decided not to indict a white cop for shooting and killing Michael Brown, a black teenager, two social media campaigns began to take shape: "Donate to Ferguson's Public Library" and #BoycottBlackFriday. Both have financial implications, but by how much? If you look at multipliers, which measure how much money spent and invested stays local, giving money to local government (think: funding for the public library) leads to a sales multiplier of 2.17. Spending money at stores typically frequented on Black Friday (i.e. Supercenters) has a lower sales multiplier of 1.97.

17

At least that many major Canadian newspapers put the grand jury decision in Ferguson and the protests that followed on their front page Thursday. Quartz has a roundup of reaction abroad to the protests, from heavy coverage in Britain and Canada to thinly veiled criticism in China and Russia.

109

That's how many children died during last flu season due to complications. Yet, the Centers for Disease Controls estimate that fewer than half of Americans get a flu shot. The reason? Some say it's because we don't think of the flu as being all that scary.

7

The number of potential Twitter acquisitions identified by Re/Code, after CFO accidentally tweeted a private message about buying another company. The most likely contender is Shots, a selfie-sharing app backed by Justin Bieber and used by many high-profile users of the Twitter-owned video app Vine.

$40 billion

That's where Uber's valuation could top out after a new round of funding, sources told Bloomberg. The ride-sharing app would not only double its current valuation, but exceed Twitter's capitalization, putting Uber in the same neighborhood as Delta and Kraft Foods. 

$32.9 million

That's the amount of budget shortfall projected for the Golden Gate Bridge Highway and Transportation District over the next five years. One proposed solution involves a toll for pedestrians and bikers to cross the Golden Gate Bridge

Forget Grandma's house. Hit a Thanksgiving restaurant.

Wed, 2014-11-26 02:00

It was a busy Wednesday morning on the week before Thanksgiving for Tom Meyer, president of Clyde’s Restaurant Group in Washington.  

He’s just had a Thanksgiving planning meeting, telling his chefs to be sure to order enough turkey.

“There’s nothing worse than to run out turkey on Thanksgiving,” he says.

That actually happened to Meyer one year. 

Clyde’s has been serving Thanksgiving dinner continuously since the 90s, getting busier every year.

“I would say it’s probably tripled. It’s gone from being not busy to packed,” Meyer says.

Why? We’re all time-strapped.

“We just haven’t been able to pull it together,” says Mary Chapman, senior director of product innovation at the food industry research and consulting firm Technomic., whose family, yes, is going out for Thanksgiving.  

But, she says, some consumers are splitting the difference — buying a prepared turkey but making the sides.

“They’re doing some from Grandma’s recipe and some from the Krogers,” Chapman says.

What about Christmas dinner? Nobody wants to cook then, either. But so far, Meyer has refused to open his restaurants on Christmas Day. This in spite of growing demand.  

 

 

 

 

 

Why don't more people get flu shots?

Wed, 2014-11-26 02:00

Ebola seems so scary, even when there's little to no chance of an American outbreak. But what about the flu? It kills children, puts thousands of adults in the hospital, and sickens 10 percent of us every year. Yet lots of Americans don’t get flu shots.

Rick Monier is standing right outside a grocery store; the kind of place where you can get a flu shot in two minutes for $28, even less if you have insurance.

And Monier is a senior citizen — a group for whom the flu can be fatal.

But Monier says he while he gets all the rest of his vaccinations, he does not get the flu shot.

““I don’t believe in it because we’re injecting something into our body that necessarily I don’t need," he says. "So I try to stay away from people that have it. Or if I get it, we’ll just go through the motions.”

Tina Dale makes sure her kids get the shots … but she doesn’t. “I got it once and got sick and now I will never get it again,” says Dale.

Fewer than half of all Americans actually get the flu shot, according to the Centers for Disease Control. That’s despite the fact that flu shot does not contain a live virus or anything else that can give you the flu.

Last flu season, 109 kids died from complications.

But let’s say you’re a healthy adult, you don’t have kids. Do you really need the flu shot?

"The more people that get shots, the safer the group will be," says Andrew Maynard, a professor and the director of the University of Michigan's Risk Science Center. He says even if you don’t care about getting sick, getting the flu shot protects others.

“Especially those kids that haven't got shots, they're the one who are really vulnerable," he says. "So this is really a social duty."

Maynard says our brains just aren't built to be smart about risk. We're way more scared of the unfamiliar, like Ebola. But something so common, like the flu? It’s tough to be scared of that.

"That doesn't make sense on an emotional level," he says. "So at the end of the day, we just have to make the plunge, and we just have to trust somebody that this is going to be good for us."

Still, public health experts agree that until flu shots are good for years, rather than something you have to get every 12 months, we’re just never going to get everybody to get that shot.

Would #BoycottBlackFriday help Ferguson, or Wal-Mart?

Wed, 2014-11-26 02:00

After the Ferguson, MO grand jury decided not to indict a white cop for shooting a black teenager, an idea for economic protest started circulating on Twitter: #BoycottBlackFriday. If lots of consumers decide to sit out what's traditionally the biggest shopping day of the year, what might the economic impacts be? It depends. 

A Black Friday Boycott could hurt low-income consumers more than anyone. Surveys show this group represents a disproportionate number of Black Friday shoppers, looking for deals.

"If people boycott these sales, I think it’s probably good for the retailers," says Georgetown University economist Kurt Carlson, who runs a survey of how shoppers plan their Thanksgiving-weekend shopping.

Assuming those shoppers don't toss out their shopping lists, retailers could just sell the same stuff later, at higher prices. 

"No big deal," he says. "Unless people say, 'I am not spending this holiday season.'"

And that is something they might do if they pay attention to another protest suggestion circulating on social media: Donate to Ferguson’s Public Library.

To run the numbers on that scenario, I talked with Rob Sentz from Economic Modeling Specialists, a company that looks at how dollars spent in different sectors benefit a local economy; the "ripple effect."

At first, he doubted the library would compare favorably to Wal-Mart. "I'm sure the retail 'ripple effect' is higher, from a sales and jobs perspective," he said.

But he humored me, and l0oked up a key number called a "multiplier" — how much of the money spent on a given enterprise stays local.

First, he looked at the multiplier for big-box retail in the St. Louis area.

Then he looked at local government, like the library. The number popped: "Whoops!" he said. "There, you got a higher multiplier. So, all the money’s going to stay in the region."

He also looked at how much workers got paid, and how many jobs got created. Advantage: Ferguson library.  

"You've got a decent argument that it does have a better local impact," he said.

Data from Economic Modeling Specialists shows the \"multiplier\" effects of dollars spent at super-center stores like Wal-Mart.

Economic Modeling Specialists, 2014

EMSI data show higher mulitpliers for local government spending.

Economic Modeling Specialists, 2014

 

Social networks head to the office

Tue, 2014-11-25 13:01

Facebook is said to be testing an alternate version of its social network called “Facebook at Work,” targeted to people at their jobs, complete with file sharing and company-specific instant messaging, according to a report by the Financial Times. Business Insider notes that Facebook has already been using the service for its own employees. 

The idea of providing business-friendly social networking and collaborative tools is not new, but it has gathered urgency as employees increasingly adapt their own mobile devices, apps and social networking habits into the workplace. “Workforces have become much more virtualized,” says David Seimer, a managing partner at the tech venture capital firm Wavemaker, who has investments in enterprise technologies. “Having just a network drive or whatnot, used to be considered kind of collaboration, and now you need a lot better tools.” 

With a lack of such tools, a lot of employees have been using consumer-oriented networks, such as texting apps and cloud-based shared drives. That brings security pitfalls in open online communications, says Kabrina Chang, who researches business law and ethics at Boston University. 

“People posting on Facebook or saying on some sort of social media platform things as seemingly innocuous as my boss is at a meeting in Switzerland … doesn’t seem very meaningful … but to competitors … that actually might be an indication of something cooking,” Chang says, adding that the SEC might pay extra scrutiny to such communications.

With the need to re-secure enterprise networks, there are hundreds of companies now seeing new opportunities -- from start-ups to Internet giants.

“Part of this is a big land-grab. These vendors are really struggling with each other to sort of capture your content,” says Trevor Hellebuyck, Chief Technology Officer at Metalogix Software, which helps companies with Microsoft cloud computing. Helleybuck says it is important to capture businesses initially, as they are transitioning to cloud-based systems, because switching between systems later would be onerous. 

He also says the number of players are actually few, when considering which companies have multiple tools in one platform and thus may be most attractive for enterprise customers. “Enterprise social, file sync and share, team-based collab … there’s really only a couple players that have that out there. And it's Microsoft. It’s Google. It’s potentially IBM,” says Hellebuyck.

In fact, IBM added another player to the competition this past summer, when it signed an enterprise deal with one of the biggest players of them all: Apple.

Encyclopaedia Britannica takes stock of a new strategy

Tue, 2014-11-25 11:54

As 2014 comes to a close, the almost 250-year-old Encyclopaedia Britannica is taking measure of a 2-year experiment that saw the end of its printed volumes of books and the three-fold audience growth of its Internet-based encyclopedia. 

 

Britannica announced the end of its books in 2012, after a 96 percent fall in the number of books sold from its publishing peak in 1990. The private company, which says it makes a vast majority of its income from educational products for K-12 schools, also began transitioning some of its online encyclopedia content outside of its paywall.

 

Britannica is aiming for its online encyclopedia to make up as much as 50 percent of its business within three to five years. 

 

"If you were to find Britannica in the past, you would actually click on the link of Britannica and you would find that... instead of giving you the answer, [the site] was asking you for a credit card number,” says Jorge Cauz, president of Britannica. 

 

Offering content for free has reduced that obstacle. As much as half of Britannica’s online encyclopedia content now rests outside its paywall, so that online users can find it more easily.

 

The result: Viewership has tripled. Britannica's site racked up 102 million visitors from January to November this year, compared to 33.5 million visitors for the same period in 2012, according to figures supplied by the company. 

 

In October, the company achieved a first – more than 1 million page views – and has since replicated that feat, according to Tom Panelas, Britannica's director of communications.The company has also seen an increase in the number of paid subscriptions, Cauz says.

 

The bigger audience means Britannica can generate more revenue from digital advertising, which is Cauz’s goal. 

 

"The capacity for advertising dollars of our database, it’s about $4.5 to $5.5 billion,” says Cauz, referring to the amount of ad revenue they have calculated that other websites are making with content similar to Britannica’s. 

 

Cauz says Britannica’s product – professionally written and edited – stands out in a marketplace where one of its main competitors is Wikipedia, the vast online encyclopedia that relies on user-generated and -edited content. 

 

But Britannica has been adapting some of its content for online audiences, too, with shorter articles, online quizzes and listicles.

 

John Cunningham, Britannica’s reader’s editor (a kind of ombudsman), says there’s been a cultural shift at the institution. They are paying more attention to what people are searching for online. He gives the example of the Malaysian Airlines Flight 370 disappearance last spring.

 

"We have a lot of coverage of the geography of the region, and people were coming and wanting to find out: OK, where is Malaysia, where is the Indian Ocean, where is that point that they’re talking about on the news?” Cunningham  says. 

 

The goal is to become a destination for popular Internet search topics by offering relevant, curated content. 

 

Britannica wants to build its audience up, because of the tough economics of digital advertising. An online display ad costs an average of just $10.87 for every thousand times it is viewed, according to eMarketer.

 

That means Britannica still has a long way to go to reach Cauz’s goal of capturing some of the billions in ad revenue from reference-related searches.

A new high-tech shopping helper: Dressing room mirrors

Tue, 2014-11-25 11:07

You can learn a lot by taking a long, hard look in the mirror. But here's a question: What can a mirror learn about you? If it's the right mirror, the answer is quite a bit.

Rebecca Minkoff, a fashion designer, is opening a new “connected” boutique in San Francisco. It has big mirror touch screens customers can use to browse products and request a dressing room. If you enter your phone number, the system can communicate with you via text messages. It can tell you when your dressing room is ready, or help you download the store's app.

When you walk back into the dressing room, what looks like an average mirror suddenly lights up with text and pictures. It knows what items you brought in because a hidden antenna scanned the tags when you came into the room. 

Tracking what you try on is a valuable data point retailers have traditionally failed to capture, says Healey Cypher, head of retail innovation at eBay, which developed the mirror. The mirror can tell stores about your preferences and buying habits.

He says  there is more data to collect through brick-and-mortar shopping than there is online. “Where online is a very binary kind of black and white,” he says “the physical world is all the beautiful shades of gray that are truly useful information.”

It becomes even more beautiful for retailers if they can connect what a customer looks at online with what they buy and try on in a store – which is what happens if you download and use the Rebecca Minkoff app. The data helps the company advertise, display items in its stores and make customized recommendations.

There's a major push in retail to connect online activity to offline activity. Companies like Macy's and American Eagle are tracking your smartphone as you move through their stores, so they can see where you go and what you look at. Sinan Aral, a professor at MIT, says the touchscreens and apps of a “connected store” are currently expensive, but he expects that to change soon.

“In the near future,” he says, stores “are going to get quite smart quite fast.”

For now, most dressing room mirrors don't know who you are or what you might like to wear. They will only show you what you look like. 

That mirror in the dressing room knows a lot about you

Tue, 2014-11-25 11:07

You can learn a lot by taking a long, hard look in the mirror. But here's a question: What can a mirror learn about you? If it's the right mirror, the answer is quite a bit.

Rebecca Minkoff, a fashion designer, is opening a new “connected” boutique in San Francisco. It has big mirror touch screens customers can use to browse products and request a dressing room. If you enter your phone number, the system can communicate with you via text messages. It can tell you when your dressing room is ready, or help you download the store's app.

When you walk back into the dressing room, what looks like a normal mirror suddenly lights up with text and pictures. It knows what items you brought in because a hidden antenna scanned the tags when you came into the room. 

Healey Cypher is the head of retail innovation at eBay, which developed the mirror.  He says tracking what you try on is a valuable data point retailers have traditionally failed to capture. It can tell stores about your preferences and buying habits.

He says  there is more data to collect in the real life than there is online. “Where online is a very binary kind of black and white,” he says “the physical world is all the beautiful shades of gray that are truly useful information.”

It gets even more beautiful for retailers if they can connect what a customer looks at online with what they buy and try on in a store—which is what happens if you download and use the Rebecca Minkoff app. It makes a rich profile of everything you've tried on in the store and browsed online.  The data helps the company advertise, display items in its stores, and make personally tailored recommendations.

There's a major push now in retail to connect online activity to offline activity. Companies like Macy's and American Eagle are tracking your smartphone as you move through their stores, so they can see where you go and what you look at. Sinan Aral, a professor at MIT, says the touch screens and apps of a “connected store” are currently expensive, but he expects that to change soon.

“In the near future,” he says, stores “are going to get quite smart quite fast.”

For now, most dressing room mirrors don't know who you are or what you might like to wear. They will only show you what you look like. 

How restaurants calculate calorie counts

Tue, 2014-11-25 11:01

When you go into a convenience store, you might find hot dogs spinning on a roller grill or an egg salad sandwich in a cold case. Just how many calories do those items have?

For some of us, ignorance is bliss, but not the Food and Drug Administration. It's out with new rules today on posting calorie counts. It’ll affect anything from chain restaurants and vending machines with more than 20 locations to prepared foods at the grocery store. Some places, like Starbucks and New York City are already posting this information. But for everyone else, how do you actually count a calorie?

Lyle Beckwith, with the National Association of Convenience Stores, isn’t yet sure how to answer that question.

“We’ve not been in this business before,” he says. “I’m assuming there are labs that we’ll have to send various products out for testing. The cost and time to be determined."

In fact, there are private companies that do this work. James McKnight works at one of them, QC Laboratories in Pennsylvania.

“All they have to do is pretty much send us a sample, you know, via UPS, FedEx, give us a serving size and off we go,” says McKnight.

The FDA estimates these new rules will cost the restaurant industry $85 million over 20 years. QC Laboratories charges $700 per sample for full nutritional information or $150-$200 if it's simply using a database of ingredients to calculate the tally.

Most companies do use the database method, says Jim Painter, a professor at Eastern Illinois University.

For a slice of pizza, Painter says “you’d have the flour, you have a little bit of sugar, you have the salt, tomato sauce. You have whatever ingredients you put on the top and you’d add up all those, you’d divide it by what a portion would be, and then that is the calories for that slice of pizza.”

It’s generally pretty easy, according to Painter, unless the items change frequently or involve a great deal of customization.

However, he notes that because the databases are built on averages, they’re not entirely accurate.

“But at least it gives you a comparison when you’re looking at one food compared to the other,” he says.

That way customers can compare that slice of pizza to a hot dog, or the egg salad. Or maybe opt for an apple instead.

Flight school: JetBlue to offer educational videos

Tue, 2014-11-25 11:00

Good news for frequent flyers looking for another excuse not to talk to the person sitting next to them.

JetBlue and Coursera, one of the companies developing massive open online courses, are partnering up to offer educational videos in the sky. It gives new meaning to higher education.

Content will come from the University of Edinburgh, the Wharton School at the University of Pennsylvania and the Berklee School of Music. The videos will be available on all JetBlue flights by the end of the year, so get ready to learn.

Or, come to think of it, you could just read a book.

Flight school: Jet Blue to offer educational videos

Tue, 2014-11-25 11:00

Good news for frequent flyers looking for another excuse not to talk to the person sitting next to them.

JetBlue and Coursera, one of the companies developing massive open online courses, are partnering up to offer educational videos in the sky. It gives new meaning to higher education.

Content will come from the University of Edinburgh, the Wharton School at the University of Pennsylvania and the Berklee School of Music. The videos will be available on all JetBlue flights by the end of the year, so get ready to learn.

Or, come to think of it, you could just read a book.

On-the-ground coverage from protests in Ferguson

Tue, 2014-11-25 10:54

Marketplace's Adam Allington is in Ferguson, Missouri reporting on the grand jury decision Monday not to charge officer Darren Wilson in the death of teenager Michael Brown. Here is his live coverage of the protests that followed.

[<a href="//storify.com/Marketplace/on-the-ground-coverage-in-ferguson" target="_blank">View the story "On-the-ground coverage in Ferguson" on Storify</a>]

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