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Despite signs that the real estate market might be lurching forward, prices are expected to fall further this year and next.

The average home price in the United States will fall by about 6% by September 2011, according to a joint report between Fiserv and Moody’s Economy.com. And that’s after plunging more than 27% in the past three years.

Most of the projected home price decline will occur during the usually slow summer months of 2010. After that, prices should begin to stabilize, according to Fiserv, and stay almost flat through fall of 2011.

The main reason for continued decline, according to Mark Zandi, economist and co-founder of Economy.com, is foreclosures — the same thing that’s plagued markets for the past three years.

"Foreclosure sales will pick up this spring as mortgage servicers figure out who can qualify for a modification and who can’t," said Zandi.

He figures there are at least 4.5 million mortgage loans either in foreclosure or clearly headed in that direction. When that additional inventory hits the market, it will provide numerous choices for buyers and encourage sellers to drop their listing prices.

The end of two federal programs, which have been propping up markets, will also tamp down prices.

The Federal Reserve has been purchasing mortgage-backed securities since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the securities. But the Fed’s program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates.

Any resulting rise in rates will cause some buyers to withdraw from the market and others to look for lower priced homes guaranteed online payday loans. Either way, demand for homes drops and so do prices.

A month after the Fed bows out of the mortgage-buying market, the homebuyer tax credit will start to expire. To qualify for the $8,000 credit, homebuyers must sign a contract before April 30 and close by June 30. When the first date passes, many buyers are expected to vacate the market, weakening the demand for homes.

In a broader sense, home prices are ultimately decided by employment. "If [the job market] improvement is stronger than expected, prices will get better. If it’s weaker than expected, prices will be worse," Zandi said.

Worst of the worst

The worst performing market will be Miami, Fla. Moody’s projects prices there to drop a heart-stopping 29.2% by Sept. 30. That follows a 47.7% decline the metro area recorded in the past three years. Grand total: 64% drop.

Other disastrous performances will be turned in by the Hanford, Calif., metro area, where prices are projected to plummet 27.2% through Sept. 30, 2010 following their 36.9% drop for the previous 36 months. Ft. Lauderdale and West Palm will also register steep drops.

There’s some good price news coming out of California’s Central Valley for a change; prices will begin to emerge from their free fall toward the end of this year.

In Merced, for example, which crashed and burned by 71.8% in the past three years (through last September), they’ll only fall only another 6.2% in the next six months before bouncing back with a rise of 10.1% by Sept. 30, 2011. 

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Senate Democrats are expected to take up President Obama’s call and start rolling out their employment creation package by week’s end.

With the balance of power shifted in the Senate, Democrats have moved away from introducing a comprehensive bill similar to the $154 billion legislation passed by the House in December. Instead, the Democrats will likely push through smaller measures in stages.

"First of all, we do not have a jobs bill," said Senate Majority Leader Harry Reid, D-Nevada, on Tuesday. "We have a jobs agenda that we’re working on."

At the top of the list: Renewing existing highway legislation for a year, which is expected to result in one million jobs, Reid said. Also, enacting small business and job creation tax credits. And extending Build America Bonds, a stimulus measure that helps states and municipalities fund capital construction projects.

The president’s fiscal 2011 budget, unveiled Monday, would direct $50 billion to job creation measures, including clean energy initiatives and road projects.

"Infrastructure is where the jobs are, and we need to move in that direction rapidly," Reid said.

Coming next: Enacting the president’s Cash for Caulkers proposal, which would subsidize making homes and buildings more energy efficient, and extending the stimulus grants for surface transportation.

The first job creation bill was unveiled on Wednesday. The measure, promoted by Sens. Charles Schumer, D-N.Y., and Orrin Hatch, R-Utah, would absolve any private-sector employer who hires a worker who’s been unemployed for at least 60 days of paying the 6.2% share of the employee’s Social Security payroll tax for the rest of 2010.

Also, employers who keep these workers on the payroll continuously for a year would be eligible for a non-refundable $1,000 tax credit on their 2011 tax returns.

"This proposal isn’t about more and more government spending; it’s about tax relief to get employers hiring again," Hatch said.

Democrats’ other measures, however, aren’t likely to get as warm a reception from the GOP. Already, several Republican senators have come out against using TARP bank bailout funds to jumpstart lending to small businesses and raising taxes on the wealthy.

"If you’re in business now and you’re trying to figure out what the future is, you’re looking at health care taxes, you’re looking at capital gains taxes going up, dividend taxes going up," Senate Republican Leader Mitch McConnell of Kentucky said on CNN’s State of the Union on Sunday. "If you are a small business and pay taxes as an individual taxpayer, your taxes are going up. So, is that a great environment in which to expand employment? I think the answer is no."

Since Obama outlined his job creation push in his State of the Union speech last week, he has traveled up and down the East Coast promoting his small business initiatives. These include jumpstarting small business lending by giving $30 billion in TARP funds to banks and providing these firms with a $5,000 tax credit for each addition to their payrolls.

"Today, one in 10 Americans still can’t find work," Obama said in Nashua, N.H., on Tuesday. "That’s why jobs has to be our number one focus in 2010. And we’re going to start where most new jobs start — with small businesses." 

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In the aftermath of a severe earthquake in Haiti late Tuesday, Twitter is playing a critical role in collecting donations to help disaster victims.

Fundraising efforts by the American Red Cross and rapper Wyclef Jean were two of the top 10 trending topics on Twitter early Wednesday. Both organizations asked Twitter users to text a number to make a donation that would be added to their cell phone bills.

The International Federation of the Red Cross estimated that 3 million people were affected by the 7.0-magnitude quake, the center of which was located near capital city Port-au-Prince.

Twitter lit up with posts from around the globe, including some tweets from Haitians who had no other way to communicate amid the chaos. Donation efforts on the site mobilized quickly amid the first natural disaster to strike since the social media site took off.

At about 6:30 p.m. ET Tuesday, the American Cross tweeted that it was pledging an initial $200,000 to assist those affected.

Shortly after midnight, @RedCross updated: "You can text "HAITI" to 90999 to donate $10 to Red Cross relief efforts in #haiti." The "hashtags" denote topics, and users can search the Twitterverse for keywords.

Wyclef Jean, a musician formerly of the popular group The Fugees, used his account @Wyclef to post news updates and quickly raise funds low interest rate personal loans.

Jean, who is from Haiti, founded Yéle Haiti in 2005 to build global awareness for the country, the poorest in the Western Hemisphere. At about 6:30 p.m. ET, he tweeted: "Please text "Yele" to 501501 to donate $5 to YELE HAITI.Your money will help with relief efforts. They need our help..please help if you can."

About an hour later, it seemed the system had been overwhelmed with people looking to give aid. @Wyclef posted a message: "Our 501501 Yele donation system is down. It will be fixed shortly please standby."

As the day progressed, more celebrities tweeted to urge their followers to donate. Actor Rainn Wilson of "The Office" posted on his Twitter account to support the organization Planting Peace, which works primarily with orphanages in Haiti.

"House" star Olivia Wilde tweeted that she will send personalized videos to those who donate $100 or more if they email her their electronic receipts.

To follow CNN’s Twitter feed devoted to breaking news in Haiti, click: http://twitter.com/cnnbrk/haiti  

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I’ve been writing about investing for nearly a quarter of a century. And if I’ve learned one thing after counseling Money readers through three recessions, three stock market crashes, and two derivatives debacles (yes, two: 14 years before the recent flare-up with mortgage-backed securities, derivatives tripped up several government income and money-market funds), it’s this: Savvy investing need not be complicated. Just focus on what’s most important to stay on the path to financial success and filter out all the noise along the way.

To do just that, follow this four-step program:

1. Don’t obsess over the "best" investments.

Cable-TV investing shows may make you feel like a slouch if you’re not constantly searching for hot new investments. But I’ve seen too many Next Big Things turn into the Next Big Letdowns — limited partnerships in the ’80s and, recently, mutual funds that replicate hedge fund strategies, to name two.

In reality, smart investing is more about assembling a group of tried-and-true assets that give you diversification than trying to predict tomorrow’s top gainers. "I’d rather have mediocre funds in the right mix of categories than great funds without an underlying allocation strategy," says Charlottesville, Va., financial planner David Marotta.

The reason is that asset classes, more than individual picks, drive your long-term returns. Creating a well-rounded portfolio isn’t that hard. Marotta figures you need only five or six funds that cover key assets such as large and small U.S. stocks, foreign shares, and bonds — plus maybe another that invests in natural resources, real estate, or other inflation hedges.

2. Think long term, not year to year.

Birthdays and anniversaries are the milestones of our lives. So it’s not surprising that we tend to think in annual terms when gauging our portfolios. Yet it’s dangerous to think of investing as a sprint rather than a marathon.

Why? If you’re seeking the best gains over the next 12 months, you’ll naturally gravitate toward more volatile investments because they’ll give you a better shot at big short-term gains. But your odds of picking those winners year in and year out are extremely slim.

"It’s like someone on a hot streak at the roulette wheel," says York University finance professor Moshe Milevsky. "You know it’s not going to last." What’s more likely to happen is that you’ll end up in investments that go down just as quickly as they went up.

3. Keep a tight rein on costs.

When was the last time you heard someone brag about his razor-thin mutual fund expenses? Probably never. That’s because high returns are a lot sexier than low fees.

Still, you’re better off paying as much attention, if not more, to what your funds charge than to past performance. "The probability of a manager outperforming going forward is small," says Financial Engines chief investment officer Christopher Jones. "But fees are far more predictable." And remember that every dollar you pay in fees reduces the returns you get to keep — and that can add up over the long haul.

To gauge the effect of costs, I used Morningstar’s database to sort all large-cap stock funds with 15-year records into four groups, based on expenses. I then compared each group’s average annualized 15-year returns. Result: The higher a group’s fees, the lower its average return. This mirrors an analysis that Burton Malkiel and Charles Ellis (two heavyweights in the investing world) include in their new book, The Elements of Investing.

4. Keep a tighter rein on yourself.

During my career at Money, I’ve seen stock prices fall more than 20% in a single day (Oct. 19, 1987) and twice drop by roughly half over longer periods (March 2000 to October 2002 and October 2007 to March 2009).

But if those crashes led to similarly steep losses in your portfolio, you can’t blame the market entirely for your misfortune. More often than not, to paraphrase Shakespeare, the fault is not in the markets, but in ourselves. When things are going well we tend to get overconfident and plow more money than we should into risky assets, making us overly vulnerable to downturns. And when a setback inevitably arrives, says Santa Clara University economist Hersh Shefrin, "We bail out and focus so much on safety that we’re not positioned to capture gains when the market turns around, which it typically does very quickly."

Rather than swinging between euphoria in up markets and depression in down ones, you’re better off keeping your emotions — and strategy — on an even keel. Granted, achieving that Zen-like outlook is easier said than done. But the more you can maintain your equanimity and resist Wall Street’s entreaties to fiddle with your investments, the fewer mistakes you’ll make — and the more wealth you’ll end up with in the long run.  

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A group of General Motors of Canada dealers is suing the auto giant for millions in damages for alleged contract breaches and is seeking a court injunction to stop GM from terminating their franchises.

Eleven long-time southern Ontario dealers and one from Prince Edward Island filed a statement of claim in Ontario court on Thursday alleging that GM ended their franchise agreements in a "highhanded, oppressive and patently unfair" manner.

The dealers, including owners of Giles Chevrolet in Stouffville, Robinson Pontiac Buick in Guelph and Robert Slessor Pontiac Buick in Grimsby, say they want a permanent injunction to prohibit GM from ending their agreements and a declaration entitling them to remain open for at least another five years.

The claim says that unless the court rules in favour of an injunction and renewal of the agreements, the dealers "shall be destroyed."

The claim, which must still be proved in the Superior Court of Justice, is also seeking unspecified compensatory damages for loss of profit, goodwill, reputation, market share and business opportunities because of the alleged breaches, plus $1.5 million in punitive damages for each dealer.

Tony La Rocca, GM’s manager of communications, said he had not seen the 24-page claim and therefore could not comment.

The claim follows GM’s announcement in May that the company would close between 240 and 250 dealerships, or more than one-third of its Canadian store network, by the end of October 2010, when franchise agreements expire.

GM is also planning to trim its network by another 50 stores through attrition.

The moves are part of GM’s massive restructuring plan to cut costs and stay alive.

But critics have questioned the amount of savings and the damage to GM, which is still the industry leader here.

The federal and Ontario governments had pressed GM to reduce its dealer network as a cost-cutting measure before a deadline last May 31 so the company could qualify for more than $10.5 billion in loans.

The dealers’ claim says their franchise agreements state GM assured them that when the current deals expire next year they would have the opportunity to enter into new ones for another five years if the company found they fulfilled their obligations.

The claim says GM acknowledged that the 12 dealers, which have up to 54 years of service in their communities and poured millions of dollars into store upgrades in recent years, met all their obligations low fee payday loans.

GM introduced a "wind down agreement" that would pay most closing dealerships anywhere from a few hundred thousand dollars to more than $1.5 million under a formula related to 2008 retail sales.

Dealers who accepted the terms and compensation could not sue GM.

The claim says the wind down agreement is lengthy and complex and took months to prepare, but GM told dealers to accept or reject it within four business days.

"GM deliberately created an atmosphere of fear and oppression and denied the plaintiffs the opportunity to receive fair and meaningful legal advice and financial consultation to permit them to evaluate the purported termination," the claim says.

"It did so for the improper purpose of pressuring them into accepting a proposal which it knew was substantially less than they were entitled to and to engineer a release from its contractual, statutory and equitable obligations."

The claim adds the termination and wind down agreement "expropriates" the customer bases and local markets that the dealers built and provides them with no compensation for the breaches and loss of their livelihoods.

Furthermore, the claim says that even with a renewal option next year, the dealers will suffer irreparable damage to their operations, reputations and market share.

The claim says GM also refused to fill car orders for some dealers who face closure and encouraged customers to take their business to other store owners.

The claim says GM has also refused to provide the affected dealers with compensation for the discontinued Pontiac brand, but the company is doing it for remaining store owners.

The dealers say they also requested management reviews of the termination decisions but GM has dragged out the process without explanation.

More than 200 dealers have accepted the agreements and closed up shop, while GM and Chrysler dealer groups are still pressing lawmakers in the U.S. to pass legislation to reverse more than 2,100 terminations.

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Canadian auto parts maker Magna wants Herbert Demel, the head of its Austrian car development and assembly plant, to become head of Opel, a German magazine said, citing sources.

Carl-Peter Forster, the current head GM Europe, had been touted to become the head of Opel’s operating business with Demel assuming management of the Opel holding company, WirtschaftsWoche said on Sunday.

The magazine said Forster wants to leave the company bad credit payday loans.

Demel presently heads Magna-Steyr Fahrzeugtechnik in Graz, Austria.

Top officials from Magna and Opel said last week they were confident General Motors GM.UL would go through with the sale of Opel to Magna despite being held up by last-minute EU competition concerns.

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Just as federal officials seek to wind down many bailout programs, the Obama administration announced Monday yet another initiative to prop up the housing market.

Administration officials unveiled a plan to aid state and local housing finance agencies, which provide mortgages to first-time and lower-income homebuyers and enable the development or rehabilitation of rental properties. Officials declined to put a pricetag on the program, but said there would be no cost to taxpayers.

"This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times," said Treasury Secretary Tim Geithner.

Under the initiative, the Treasury Department, along with Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), will purchase housing bonds issued by the finance agencies. This will give the groups the funding needed to make new loans. Also, the government will provide a temporary credit program to allow the agencies to refinance their existing bonds to more favorable terms.

The measure will enable housing agencies to lend to hundreds of thousands of families and enable the development or rehabilitation of tens of thousands of rental units, administration officials said. The agencies operate in all 50 states and in many cities.

The agencies will pay fees to participate in the program, which officials say will cover its cost. They are still working with the agencies to determine the extent of support needed. Earlier news reports said the initiative could cost as much as $35 billion no fax no teletrack payday loan.

The finance agencies have had a tough time funding mortgages since the bond markets went haywire last year. As a whole, they are operating at only 20% to 25% of their usual capacity, with some groups halting their lending completely, said Susan Dewey, president of the National Council of State Housing Agencies.

While the administration says the program comes at no cost to taxpayers, the Treasury Department is ultimately responsible if an agency defaults on its debt payments.

The agencies have a good track record. They generally make 30-year, fixed-rate mortgages and require full documentation. The delinquency rate on agency mortgages is comparable to that of prime loans given to homeowners with good credit backgrounds, according to administration officials.

While the government is starting to pull back its support of the banking industry, officials said it is too early to tell when it will withdraw from the housing market. Congress is considering extending an $8,000 tax credit for first-time homebuyers, which ends next month.

The credit will have been used by 1.8 million homebuyers, at least 355,000 of whom would not have bought a house without the tax break, by the end of November, according to estimates by the National Association of Realtors. 

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Dell Inc plans to buy Perot Systems Corp for about $3.9 billion, paying a steep 67.5 percent premium to expand its technology services business and compete with Hewlett-Packard Co and IBM.

Perot Systems, a computer services provider founded in 1988 by former U.S. presidential candidate Ross Perot, would be the largest ever acquisition by Dell and comes after extended speculation about its M&A strategy.

Dell, which lags far behind HP and IBM in the services arena, is looking to buy a company with a strong focus on serving healthcare and federal government customers. It expects the deal to add to earnings in fiscal 2012, but some analysts thought the price tag may have been too high.

Dell said it would pay $30 per share for Perot Systems. Its Friday’s closing price was $17.91 on the New York Stock Exchange.

J.P. Morgan analyst Mark Moskowitz said the price is 1.4 times Perot Systems’ sales, compared to HP’s purchase of EDS for 0.6 times sales last year. That would make the acquisition a little expensive, although it was good for Dell to lessen its dependence on personal computers, he said.

“We do see the building block as being compelling, but the purchase price seems relatively rich,” Moskowitz wrote in a research note.

Perot shares jumped 65 percent to close at $29.56 while Dell shares fell 4.1 percent to $16.01.

The deal comes as large technology companies expand into higher margin IT services to secure stable and recurring revenues as computer hardware becomes cheaper allied insurance.

Dell is the world’s No. 2 maker of PCs, with roughly 60 percent of its revenue coming from that market. The company has been trying to diversify its range of offerings, and services currently comprise only around one-tenth of sales.

HP made a splashy foray into the services segment with last year’s $13.2 billion purchase of EDS, founded by Ross Perot in 1962. HP is the world’s No. 1 PC maker and No. 2 IT services player, behind IBM.

Kaufman Bros analyst Shaw Wu said Dell is finally taking a step to address some of its weaknesses, but it remains to be seen how much impact the deal will have as Dell’s combined services offering would still be much smaller than its rivals.

“This still doesn’t have quite the scale to compete … but it’s also not so outrageous it will be difficult to integrate,” Wu said.

FOCUSED ON HEALTHCARE, GOVERNMENT

Perot specializes in providing business processes and technology consulting services, with a strong client base among healthcare, government and other commercial segments. More than a third of its 23,000 employees are based in India.

Perot Systems estimates it is the largest provider of IT services to hospitals, operating in roughly 1,000 around the world. Around half its sales come in the healthcare sector, with another quarter in government services. 

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In the largely unregulated world of extended auto-service contracts, there’s one bedrock consumer safeguard: Customers canceling those vehicle-protection plans are refunded for the coverage they don’t use.

In most states, including Missouri and Illinois, it’s the law.

Yet St. Louis area companies have found a way around this rule by selling a different type of vehicle protection — warranties tied to oil additives, transmission fluids and other products that promise to keep cars running longer.

Here’s how the product warranties work: Consumers are sold an automotive additive — a bottle of liquid, or some tablets. Companies selling the additive say that if the product fails to prevent a breakdown, the warranty on the additive will cover repair bills — or at least some portion of them.

With traditional auto service contracts, the consumer is purchasing a promise that the seller will cover repair bills. The difference? First, with the additive, the consumer is buying a product, not a contract. Second, the consumer is entitled to a refund if a service contract is canceled early. That’s not the case with a product warranty.

And many consumers don’t understand that difference.

"I didn’t know I was buying any $2,000 bottle of additive," said Jeanette Franklin, of Houston, Texas, who bought a product warranty from Wentzville-based US Fidelis in November. "If they told me that’s what it was, I never would have bought it."

Franklin’s complaint is consistent with many that the St. Louis Better Business Bureau has received. The BBB has shared more than 80 complaints involving additives with the Post-Dispatch.

But the companies say they’re helping consumers by offering vehicle-protection plans for older, high-mileage vehicles.

US Fidelis Chief Executive Chris Riley said in a statement that the product warranties help consumers keep their vehicles on the road longer: "Customers who have purchased this product have had more than $5 million in product warranty claims paid," he said.

The company would not answer questions about its product warranties that were

e-mailed to a spokesman.

An attorney for St. Louis-based National Dealers Warranty said the company trained sales agents to be honest about some drawbacks of product warranties, including the fact that they can’t be refunded. Other firms did not return calls seeking comment for this story.

Thousands of consumers have complained to the BBB about auto-protection plans sold by St. Louis companies. Its crusade against the service-contract industry has focused on allegations of telemarketing abuses, deceptive direct-mail literature and high-pressure sales tactics. BBB officials said they knew little about the product-warranty side of the industry until asked about it by a reporter.

As a result, the BBB hasn’t specifically tracked whether consumers’ complaints were over a service contract or product warranty.

Critics — including some inside the industry — say the marketing of these product warranties confuses many consumers, leaving them trapped in coverage they no longer want. The warranted additives also allow service-contract brokers to sell in California, where they’re otherwise prohibited from doing business.

Franklin said she believed the two bottles of AutoLifeXtend oil and transmission additive were product samples, or maybe a thank-you gift from US Fidelis for buying a service contract. She said the company told her to activate her coverage by using the products, which she did.

She discovered just how much her protection plan differed from a service contract when she called the company on Aug. 18 to cancel the $2,060 purchase, which was to be financed over 24 months.

Franklin said the company initially wouldn’t refund any of the $800 she had paid because she had used the product as instructed. In other words, US Fidelis couldn’t give her a refund because she couldn’t return the additives. Days later, the company refunded $375 after Franklin threatened to contact the Texas attorney general, she said.

With service contracts, cancellations are common. Sometimes customers are dissatisfied; often they cancel only because they’ve sold their vehicle or the cars have broken beyond repair car loans for people with bad credit. Depending on how much of the service contracts they’ve used, these consumers can qualify for refunds of several hundred dollars.

With the product warranties, they’re generally entitled to nothing.

Mary Lobdell, an assistant attorney general in Washington state, is spearheading a 43-state investigation into the service-contract industry. She wouldn’t say whether product warranties were part of that investigation, but she said many of those protection plans were "grossly misrepresented" to the point that "consumers truly don’t understand what they’re buying."

Larry Hecker heads the Vehicle Protection Association, a trade group for companies that sell auto-service contracts. He said the product warranties were sold primarily to avoid California regulations that allow only auto dealers to sell service contracts.

Hecker acknowledged that the widespread sale of no-refund warranties could be problematic for an industry struggling to get past allegations that it frequently takes advantage of consumers.

"We haven’t addressed (product warranties) yet, but I’m sure we will down the road," he said, adding that it will probably be discussed by industry leaders when they meet for an annual conference next month in Orlando, Fla.

One industry veteran who plans to attend that meeting is Bill Rosenbach, who once ran a subsidiary of Wentzville-based US Fidelis and now works as a consultant for companies that sell both service contracts and product warranties.

Rosenbach said the quality of the additives and the warranties tied to them varied considerably from company to company.

Some of the additives may be beneficial to vehicles, but most don’t have any significant impact on how a car runs, he said.

Michael Carter, the general counsel for St. Peters-based National Dealers Warranty, says the additive that company sells — dubbed "The Choice" — improves auto longevity by lowering vehicles’ operating temperature. Carter said consumers typically needed to use the product only once to be covered by the warranty.

Carter said product warranties could be a good buy for consumers who didn’t qualify for traditional service contracts because their vehicles were too old or their mileage was too high. He defended the non-refundable nature of the coverage, but he said the company could make exceptions. National Dealers Warranty, he said, will "err to the side of good faith and good will" in some cases.

For companies such as US Fidelis and National Dealers Warranty, product warranties offer at least one big advantage over traditional service contracts.

"There’s a lot more profit," said Rosenbach, of Lincoln, Neb. "But the worst part about product warranties is consumers think they’re getting a service contract."

Many consumers have complained to the BBB that they couldn’t get a refund because they used the product. But others complained about the reverse: They didn’t use the product — either because they believed it unnecessary and threw it away, or their mechanics advised against using it — and later found out this was grounds for denying any claims made on the warranties.

The 10 St. Louis area businesses named in those BBB complaints include some of the country’s biggest service-contract brokers, including US Fidelis; National Dealers Warranty; Dealers Warranty, of St. Charles, which does business as Mogi; Carhill Enterprises, of St. Louis, which does business as Consumer Protection Services; and TXEN Partners, of St. Louis, which does business as Protection Direct.

Several of those firms sell product warranties tied to additives made by Dura Lube, which also sells its additive products directly, through its website, for as little as $11.99.

In 2000, the company that made Dura Lube paid $2 million to settle a Federal Trade Commission lawsuit alleging that claims about the product’s effectiveness were misleading and unsubstantiated. Dura Lube did not return calls seeking comment.

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Microsoft and Yahoo reached a long-awaited partnership Wednesday in a bid to challenge Google’s dominance in online search.

Under the 10-year deal, Yahoo.com and Bing.com will maintain their own branding but search results on Yahoo.com will say "powered by Bing." Yahoo, in turn, will be responsible for attracting premium advertisers.

Microsoft will pay Yahoo 88% of the revenue it gains from searches on Yahoo’s sites. Microsoft will also have the rights to integrate Yahoo’s search technology into its own existing Web search platforms.

Yahoo said the agreement will modestly decrease its overall revenue but increase its operating income by about $500 million annually.

Shares of Yahoo (YHOO, Fortune 500) tanked 12% on the news, as investors expected Microsoft to pay the company up to $1 billion in cash up front for the deal, albeit with a more modest revenue-sharing figure. Microsoft’s (MSFT, Fortune 500) shares rose about 1%, and search leader Google’s (GOOG, Fortune 500) stock price fell 1%.

The deal is expected to close in early 2010. U.S. users will start to see the change three months later and users around the world will see the full effect within two years.

"This deal is really about scale," said Yahoo Chief Executive Carol Bartz on a conference call. "By combining the … technology of both companies, we can create a real, viable alternative for advertisers."

Microsoft said the transition will cost the company "several hundreds of millions of dollars," but it will benefit in the long run from the ability to charge advertisers more for its service, because the deal will improve the relevance of search results. Microsoft said it also expects to benefit from Yahoo’s expertise, acknowledging that its new partner has more ad sales experience.

"This really is a win-win agreement both for Microsoft and for Yahoo," said Microsoft chief Steve Ballmer. "Consumers will get better products, and it will help the industry as a whole to prosper through our shared vision and shared values."

Bartz said that some Yahoo employees will eventually move over to Microsoft and that some search personnel would be laid off. But she added that the transition will occur over time, so virtually nothing will change at least until the deal is inked next year.

Google. Both Microsoft and Yahoo — but especially Microsoft’s Ballmer — used their joint statement and conference call to offer several digs at search market leader Google.

In a joint statement, the companies said that "advertisers no longer have to rely on one company that dominates more than 70% of all search."

Ballmer argued that the search advertising market, as it is currently constructed, unfairly favors Google because of its dominance fast cash advance. He said many advertisers choose to enter into exclusive deals with leader Google to avoid the laborious process of entering into negotiations with three different companies.

But the new partnership will simplify that process, and "advertisers will know now that is is clearly the second place to work," said Ballmer.

He said he fully anticipates Google will launch an antitrust complaint against the partnership. "We’ll likely face issues from ‘the’ competitor who may not like the competition," said Ballmer. "But our argument is we’ll provide more competition, not less."

Google disagreed, saying in an emailed statement that, "There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users. We’re interested to learn more about the deal."

Microsoft and Yahoo will head to Capitol Hill and Brussels next week to begin the American and European regulatory processes for the deal.

An 18-month odyssey. It was a partnership that was a long time in the making. Microsoft’s search market share has been slipping for more than two years, and the company has struggled to make its online advertising unit profitable. Meanwhile, Yahoo, once the search market leader, dropped to a distant second place behind leader Google by 2007.

The dealings between the two companies began Feb. 1, 2008, when Microsoft made an unsolicited $44.6 billion cash and stock bid for Yahoo. A week later, Yahoo rejected the bid, saying the offer "massively undervalues" the company.

In June of last year, Microsoft said it was no longer interested in acquiring Yahoo outright, but would like to enter a deal for Yahoo’s search advertisement business.

Bartz and Ballmer said those preliminary discussions involved more cash up front for Yahoo but a less revenue sharing. Bartz said Yahoo insisted on a higher revenue number so it could invest in its long-term projects like its core online media businesses.

Though many analysts speculated that Microsoft’s immediate success with its Bing search engine, unveiled last month, was the final nail in the coffin, Bartz said there was no one thing that pushed the deal through.

"It was the understanding and trust that we could have a partnership, and that takes time," said Bartz. "Finally the comfort level was there, and the proverbial snowball went down the hill. Once we reached a point in which it was clear that a deal was advantageous to both companies, we moved forward."

Ballmer said, for Microsoft, the deal wasn’t better than the original revenue-sharing proposal, "just different." 

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