World financial news

Financially troubled San Francisco streaming music service imeem Inc. has been acquired by MySpace, according to numerous reports.

CNET News quoted sources valuing the deal at $8 million, with a $1 million payment in cash together with earn outs and accounts receivable. The company had raised more than $30 million in venture funding, according to CNET.

At least half of the company's 55 employees will lose their jobs as as a result of the acquisition, sources told CNET cashadvance. MySpace is owned by Rupert Murdoch's News Corp.

Imeem is the fourth ad-supported streaming music site to go bust or sell for peanuts, CNET said.

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Funds specializing in niche assets such as art and wine, long the preserve of ultra-rich hobbyists, are seeing a spike in interest from more mainstream investors seeking an antidote to the complexity of hedge funds.

As economies recover, interest has revived among traditional wealthy clients, but managers also tell of growing interest from institutions who have tended to avoided such illiquid assets.. Some have become confident enough in the trend to launch new funds.

“Attitudes are starting to change and we’re talking to large institutions which have the ability to write some large, meaningful cheques,” said Geordie Manolas, managing director at First State Media Group, which runs a fund that invests in music publishing rights and recently bought the catalog of singer Sheryl Crow.

Solid returns throughout the crisis as other asset classes crashed, and a lengthening track record for some funds, are translating into increased acceptance among investors, though figures are difficult to come by.

Investing in art has precedents for institutions: the British Rail Pension Fund achieved 11 percent annualized returns on art assets from the late 1970s until the late 1990s, but most existing funds are less than 10 years old.

The Fine Art Group, established in 2001, recently bought a work by David Hockney for around $850,000 and has notched up an average annualized return on assets sold at its funds of 30 percent.

On the back of this, institutional investors now make up around 20 percent of the assets and the group is targeting $100 million for a new venture by year-end, according to Philip Hoffman, chief executive payday loan.

“The institutions wanted to see a five-year track record and properly structured teams,” he said, adding that money invested in art funds would be around $350 million by year-end, up from around $200 million at the beginning of the year.

Another relative veteran investing in fine wines, The Wine Investment Fund which dates back to 2003, paid out an annualized return of 13 percent in the five years to August 2009.

Andrew della Casa, director and co-founder of The Wine Investment Fund, said the proportion of institutional investors in the fund is around one-third and rising.

The trend marks a significant shift in attitude. A common perk offered by art funds is to loan paintings, sometimes valued in millions, to investors to hang in their homes - a feature frowned upon by cost-conscious institutions unhappy with additional insurance charges.

HEDGE FUND BACKLASH

The performance of some of the funds contrasts with that of hedge fund industry which suffered its worst year on record in 2008, when the average hedge fund lost 20 percent.

Bernard Duffy, managing director at Emotional Assets Management and Research said the sector is also benefiting from a backlash against hedge funds’ sometimes impenetrable complexity.

“These are tangible assets. You can touch them, you can feel them,” he said. 

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Internet security and naming services provider VeriSign Inc sees near-term pricing pressure in its online security certificates business, but expects to grow margins in 2010 by controlling costs, its top executive said.

The company has been hit by a slowdown in its SSL business — which enables secure e-commerce and communication on the Internet — where the annualized average unit revenue for VeriSign, GeoTrust and Thawte-branded certificates for the third quarter was $234, down 3 percent from the prior quarter.

“We will continue to see some ASP pressure for a while,” CEO Mark McLaughlin said in an interview with Reuters. “With the economy improving, that would start to abate.”

The authentication services business, which includes SSL, forms about 39 percent of VeriSign’s revenue. Naming services — VeriSign serves as the global registry for .com, .net, .tv, .cc, .name and .jobs domain names — makes up most of the rest.

The company was offering discounts for long-term customers to preserve the relationships, he said.

“We haven’t cut our prices, but we’re willing to have discussions around giving discounts,” McLaughlin said online cash advances. VeriSign’s rivals in the SSL business include GoDaddy.

“This is sort of a mixed blessing where the low end of the market is growing faster than the high end of the market,” McLaughlin said.

McLaughlin sees an improvement in margins in 2010.

“Into next year, we’ll continue with this tight expense control. We think that we should be able to continue to get some incremental improvement into next year.”

VeriSign has said it expects fourth-quarter operating margins to be in line with that of the third quarter, when it recorded operating margins, excluding items, of 38.6 percent.

The company, which has been implementing a restructuring strategy to sell its slower growing businesses, expects to sell its last remaining unit to be divested by the end of the year, McLaughlin said.

On November 5, VeriSign swung to a third-quarter profit, but its fourth-quarter revenue forecast fell short of Wall Street estimates.

(Editing by Anil D’Silva)

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Although U.S. President Barack Obama has never set foot there, China cast a long shadow in the Pacific region where he grew up.

Obama, who will visit Shanghai and Beijing for the first time on November 15-18, spent much of his childhood in Hawaii, five time zones away from Washington, D.C.; and beginning in 1967, when he was six years old, he lived in Jakarta for four years.

At the time, China was in the throes of Chairman Mao Zedong’s bloody Cultural Revolution. Abroad, the nation was less interested in selling widgets than in promoting Mao’s brand of radical communism — a force the U.S. saw behind communist movements and political upheaval in Vietnam, Indonesia and elsewhere in Southeast Asia.

In 1979, Obama’s senior year at Punahou school in Honolulu, China and the United States normalized diplomatic relations, launching a three-decade period in which ties between the two grew inexorably tighter and deeper — and complicated.

“Think of what China was in 1979: It was an autarkic, insular, inward-looking country that was preoccupied with its own internal things,” said a senior U.S. official. “Even 10 years ago … there was still a sort of sense of ‘We’re not a part of these global rules, we’re not doing this stuff.’ Now they see themselves as sitting at the table.”

If there were any doubts that China would have a seat at the table from now on, Obama dispelled those when he sent Secretary of State Hillary Clinton there on her first official trip abroad — not Pakistan, Afghanistan or any other foreign policy hot spot.

“That the first major visit (was) to China, and to Asia as well, is symbolic of where the locus of international economic activity — and to some degree the locus of international activity, period — is going to be in the coming years,” said economist and author Zachary Karabell, whose new book “Superfusion” posits that the U.S. and Chinese economies have effectively merged.

Beijing, once considered a wallflower on global affairs, is in turn warming to its more prominent role, though it’s unclear that will translate into greater cooperation with Washington on issues like climate change and the nuclear disputes with Iran and North Korea — not to mention human rights differences.

U.S. Deputy Secretary of State James Steinberg highlighted the tension at the heart of the relationship in a speech in September. “Given China’s growing capabilities and influence, we have an especially compelling need to work with China to meet global challenges,” he said.

But Steinberg added that there was a tacit bargain in which the United States expects China to reassure the rest of the world that its growing role “will not come at the expense of security and wellbeing of others.”

That of course includes America’s.

“The big challenge there is going to be to maintain a competitive U.S. economy, and at the same time to maintain a high degree of stability and equanimity in the U.S.-China relationship,” said Clyde Prestowitz, president of the Economic Strategy Institute think tank.

Indeed, even as the United States and China have grown closer diplomatically, their economic and trade ties have deepened to the point of mutual dependence. Not only does China depend on the U.S. export market to fuel its highflying economic growth rates, the United States relies on China’s vast savings to help finance its burgeoning budget deficits.

“It is clearly unsustainable. This relationship helped give rise to global economic imbalances,” said Ben Simpfendorfer, an economist with Royal Bank of Scotland in Hong Kong. “If we are ever going to free ourselves of these imbalances, we need to reverse this relationship, get China to buy things in the U.S. and the U.S. to invest in China.”

“STAKEHOLDER” STRATEGY 

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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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Computer maker Dell announced on Wednesday that it will close a plant in Winston-Salem, N.C., and will cut 905 jobs as a result.

Dell said that 600 plant workers will be laid off in November, and the remaining 305 employees will be cut by January 2010, when the plant is scheduled to close. The cuts represent about 1% of the company’s 78,900 employees.

"This is a difficult decision, especially for our North Carolina colleagues, but a necessary one for Dell customers and our company," said Frank Miller, vice president of Dell, in a statement. "The efforts of our team members there have been significant and we’re committed to helping them through their transition."

The Winston-Salem plant was used to make desktop computers. The company said the plant closing is part of a larger effort to simplify Dell’s operations and improve its efficiency. Dell began cutting back staff and closing plants in January, but a company spokeswoman wouldn’t comment on the total number of job cuts the company has made so far cheap pay day loans.

In late September, Dell bought tech services provider Perot Systems (PER) for $3.9 billion as part of an effort to seek an additional source of revenue. Until the Perot deal, Dell has strictly been a hardware company, selling PCs and servers to its customers.

But businesses have relied less on hardware recently, buying fewer computers and outsourcing their servers during the recent economic recession.

Consumers also made fewer desktop and laptop purchases during the downturn. That cut into Dell’s sales and profit in recent quarters and sent the stock down to an 11-year low in March before rebounding in recent months.

Shares of Dell (DELL, Fortune 500) fell more than 1% Wednesday. 

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The end of the government’s popular Cash for Clunkers program and low inventories of vehicles led to a 40% plunge in U.S. auto sales in September compared with August, although year-over-year declines were more modest and generally in line with forecasts.

"The month never felt strong," said Mark LaNeve, vice president of U.S. sales for GM, in a call with analysts. "I think we’re feeling the effects of a post-Clunkers hangover."

Overall industry sales came in at 745,997 vehicles in September according to sales tracker Autodata, down 23% from a year ago. That makes it the worst month since February in what has been a terrible year for auto sales, even with the four-week lift the industry received from the Clunkers program.

Cash for Clunkers, which paid buyers up to $4,500 for their used cars when they purchased more fuel efficient models, spurred strong sales from late July through the end of the program on Aug. 24.

But it likely pulled ahead sales that might have taken place in September and left dealers with limited supplies of vehicles to sell coming into the fall. With low inventories, automakers also scaled back on incentive offers to buyers.

"There were a lot of things working against sales in September, and very little wind at their back," said Jeff Schuster, director of global forecasting for auto consultant J.D. Power & Associates.

Ford Motor (F, Fortune 500) reported the best results of Detroit’s Big Three Thursday. Its sales slipped only 5% from a year earlier, although they were off 37% from the rush it got from Cash for Clunkers program in August.

Still Ford’s results were better than the 10% year-over-year drop forecast by sales tracker Edmunds.com.

Rival General Motors reported a 45% drop in sales compared to a year ago, and a 37% drop from August. Edmunds.com had forecast a 46% decline for the nation’s largest automaker.

Mike DiGiovanni, GM’s head of sales analysis, said that the negative impact from Clunkers on future sales would diminish in the next few months though. He estimated that only about 30,000 vehicle sales would be lost industrywide in the fourth quarter due to the impact of Clunkers.

DiGiovanni added that, despite a growing belief among economists that the recession has ended, it will take a much bigger rebound in the economy before auto sales truly bounce back.

"We’re not going to be completely out of the woods until the job market improves," he said.

Toyota Motor (TM), which had the largest number of Clunkers-related sales, posted a 13% drop in sales compared to a year ago, but that was a 44% plunge from August. Toyota’s sales were a bit worse than Edmunds.com’s forecast of a 10% drop, but Toyota said that it believes sales should be stronger in the fourth quarter.

It did better than Japanese rival Honda Motor (HMC), which reported a 20% drop from a year earlier and a 52% plunge compared to August, more than twice as bad as the 8% drop in year-over-year sales forecast by Edmunds.com.

Nissan (NSANY) reported only a 7% slide in sales compared to a year earlier, but that was worse than Edmunds.com’s prediction of a 1% drop. Nissan’s September sales were also off 47% from August.

The one major automaker to post improved sales in September was Korea’s Hyundai, which reported a 27% gain from a year ago. Still, Hyundai’s sales were 48% lower than August’s levels.

Chrysler’s sales plunged 42% from a year ago, and 33% from August. Chrysler, with a heavier reliance on trucks than other automakers, did not get as much of a sales lift from the Clunkers program. But Edmunds.com had expected an even worse year-over-year drop of 48%.

"We believe the remainder of 2009 will continue to be a challenge for the U.S. automotive market," said Peter Fong, the lead sales executive for the Chrysler Group in a statement. "Credit markets have thawed slightly, but still remain tight, and consumer confidence, as we saw in September, is tenuous."

Ford and other automakers have ramped up production to try to replenish supplies, but inventories remained low throughout September.

George Pipas, director of sales analysis for Ford, said the company had an inventory of about 300,000 vehicles at the end of the month, up about 60,000 from the end of August. But he added that was an historic low and that some of those vehicles are still in transit to dealerships.  

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Koenigsegg’s chief executive said on Saturday the Swedish luxury sports car maker still aimed to finalize a deal to buy Saab Automobile from General Motors by the end of October.

Koenigsegg Chief Executive and part owner Christian von Koenigsegg also told Reuters that there was good progress in talks to secure Swedish state guarantees for billions of crowns of loans from the European Investment Bank (EIB).

“Our deadline for the deal still remains the end of October as we have previously said,” he said.

One of Koenigsegg’s main owners was quoted by a newspaper on Saturday as saying the company could pull out of its planned purchase unless steps to secure loans were in place by Wednesday.

Norwegian businessman Bard Eker, who owns part of Koenigsegg through his holding company, told Swedish business daily Dagens Industri that progress was needed on the EIB loans that Koenigsegg needs to finalize the Saab deal.

“If everything is not in place before Wednesday we are out. We give up,” Eker was quoted as saying.

Von Koenigsegg played down the comments, saying he saw no risk the deal would fall through and that there was no crucial deadline for the negotiations in the coming days faxless cash advances.

The Swedish government has not yet said if it will pledge the state guarantees needed in order for the EIB to approve loans to Saab Automobile. The debt office is handling the negotiations on the guarantees on behalf of the government.

“It feels like we are taking positive steps week by week,” von Koenigsegg said. “We are getting closer all the time.”

Koenigsegg, backed by U.S. and Norwegian investors, struck a deal this year to buy GM’s loss-making Saab Automobile business, but its ability to finance the purchase had remained in question.

This month, Koenigsegg said state-run Beijing Automotive Industry Holdings would take a minority stake in the luxury carmaker as part of its planned purchase of Saab, potentially solving some of the financing issues.

The two companies had gone through most of the points in the due diligence process, von Koenigsegg said.

(Reporting by Niklas Pollard; editing by Sue Thomas)

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Stocks tumbled Wednesday, retreating from one-year highs, as investors took a sell-the-news reaction to the Fed’s decision to hold interest rates steady and keep its economic outlook relatively unchanged.

The Dow Jones industrial average (INDU) lost 81 points, or 0.8%. The Dow ended the previous session at the highest point since Oct. 6, 2008. The S&P 500 (SPX) index fell 10 points, or 1%, after ending the previous session at the highest level since Oct. 3.

The Nasdaq composite (COMP) fell 14 points, or 0.7%, after finishing the previous session at the highest mark since last Sept. 26.

The major indexes have repeatedly closed at near 1-year highs over the past two weeks. Stocks are likely to keep batting up against those levels until the start of the third-quarter financial reporting period late next month, said Jeff Kleintop, chief market strategist at LPL Financial.

"I think there will be a lot of upside surprises," Kleintop said. "In the second-quarter, we saw better-than-expected earnings mostly on cost cutting and little revenue growth. This time we’ll still see the impact of cost cutting but I think we’ll also see revenue growth."

He said that this fundamental improvement in Corporate America should give the rally another push.

Stocks initially rallied after the Fed announcement Wednesday, but failed to hold gains as investors used the latest nearly one-year milestone for the market as a reason to sell. A milder-than-expected response to a government auction of $40 billion in five-year notes also contributed to the late declines.

There wasn’t much in the statement that had market-moving potential, said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. "The outlook was consistent with the reports we’ve seen recently and with what the Fed has been saying."

Thursday brings the weekly jobless claims report from the Labor Department and the existing home sales report from the National Association of Realtors (NAR).

Also, the G-20 summit in Pittsburgh begins. The Group of 20 leading developed and emerging countries will discuss the ongoing efforts to stabilize economies after the financial market meltdown.

Fed: The Federal Reserve kept the fed funds rate, a key short-term bank lending rate, at a level near zero, as expected. The announcement was made at the end of its two-day policy meeting.

In the statement, the bankers said that "economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased."

But the bankers also noted that consumer spending has remained under pressure due to the rough jobs market and still-tight credit conditions. Last week, Federal Reserve chief Ben Bernanke said the recession was very likely over, but the labor market still has a long way to go.

In light of the continued challenges, the Fed reiterated Wednesday that it was likely to keep the fed funds rate at the historic lows for the foreseeable future.

Investors were also looking for more on how the Fed plans to eventually wind down programs that have pumped as much as $1 trillion into the economy to cushion the blow of the recession.

To that end, the Fed said it will stretch its purchases of $1.25 trillion of mortgage-backed securities from Freddie Mac and Fannie Mae through the end of the first quarter of 2010. Previously, the program was set to end through Dec. 31. The program has so far succeeded in helping to lower mortgage rates.

Shapiro said that this change was the most interesting detail in the statement. "In terms of buying mortgage-backed securities, the Fed is the only game in town and so maybe they hope that in six months, the world will have had enough time to heal so that someone else can jump in."

One-year highs: The major gauges are back near levels not seen since shortly after the collapse of Lehman Bros. last September.

Despite rampant calls for a fall selloff, investors have used any modest pullback this month as an opportunity to get back into stocks at a slightly lower level. Analysts say fears of having missed the boat on the rally have driven the latest spate of gains.

Since bottoming at a 12-year low March 9, the S&P 500 has gained 56.8% and the Dow has gained 48.9%, as of Wednesday’s close. After hitting a six-year low, the Nasdaq has gained 68%.

Stocks have risen during this period on signs that the economy is slowly starting to recover, and on extraordinary amounts of fiscal and monetary stimulus.

Company news: American Airlines and US Airways Group both slipped after announcing plans to raise cash, dragging down the whole airline sector.

American said it has priced its offering of 48.5 million shares of common stock, as well as $400 million in 5-year notes, with both offerings due to close Monday. The two sales should give American about $770.5 million after fees and expenses. American parent AMR (AMR, Fortune 500) fell 7.8%.

US Airways Group (LCC, Fortune 500) said it will sell 26.3 million shares of its common stock to Citigroup, the offering’s underwriter, with the sale due to close Monday. US Airways fell 13.6%.

The NYSE Arca Airline (XAL) index lost 2%.

General Mills (GIS, Fortune 500) reported higher quarterly earnings that topped forecasts and boosted its full-year outlook, due to strong sales of Cheerios, Trix and its other cereal brands. Shares rose over 4%.

Washington: Treasury Secretary Timothy Geithner told a House committee that U.S. economic growth appears to be picking up, but that reforms must be enacted to fix a broken system. He was testifying at a House Financial Services committee hearing on regulatory reform.

At least one million people could be eligible for an additional 13 weeks of unemployment benefits, following a House of Representatives bill approved Tuesday night. The Senate is expected to take up the issue soon, although it faces some questions about how it should be funded.

World markets: Global markets were mostly higher. In Europe, London’s FTSE 100, France’s CAC 40 and Germany’s DAX all ended lower, giving up gains. In Asia, the Hong Kong Hang Seng fell 0.5%, while Japan’s market was closed for a holiday.

Currency and commodities: The dollar held on to gains versus the yen and euro following the Fed announcement. The greenback had touched a fresh one-year low against a basket of currencies in the morning.

The strength in the dollar dragged on dollar-traded oil and gold prices.

U.S. light crude oil for October delivery fell $2.79 to settle at $68.97 a barrel on the New York Mercantile Exchange, dropping after a government report showed a big jump in weekly crude supplies.

COMEX gold for December delivery fell $1.10 to settle at $1,014.40 an ounce. Gold closed at a record high of $1,020.20 last week.

Bonds: Treasury prices rose, lowering the yield on the benchmark 10-year note to 3.41% from 3.44% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was positive. On the New York Stock Exchange, winners narrowly topped losers three to two on volume of 1.32 billion shares. On the Nasdaq, advancers topped decliners eight to five on volume of 2.72 billion shares.  

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Throughout history, people have complained about the companies they do business with. Until the Internet came along, those gripes were directed at small groups of family, friends and co-workers.

But e-mail, discussion forums, blogs and social networks have created a world where a once relatively harmless rant can do serious damage to a company and its reputation. Unhappy customers can, quite literally, broadcast their irritation to the world. It’s a fact that’s forcing some rather significant changes in the way many companies — including Dell, Coca Cola, Starbucks, Southwest Airlines and Charter Communications — are approaching customer service.

No longer is it enough to staff a call center and wait for customers to complain or ask for help. The smart companies, experts say, are the ones using social media to reach out to customers — particularly those who are unhappy and vocal about it.

"Those who wish it away and who think it’s just a fad — those are the ones who are going to be caught flat-footed and run over," said Steve Rosa, chief executive officer of (add)ventures, a Providence, R.I.-based marketing firm.
Of particular interest these days to companies is Twitter, the fast-growing microblogging site that allows users to communicate instantly, on their computers or cell phones, in 140-character messages, referred to as Tweets.

In August of last year, the service had 2.3 million unique visitors. A year later, the number had surged to 24.6 million, according to Nielsen Online.

And although Twitter itself hasn’t yet found a way to turn a profit, companies both large and small are finding uses for it. Some of them even make money. Dell, for example, announced earlier this summer that it has raked in some $3 million in sales directly related to its Twitter efforts. That’s not a lot for one of the world’s top computer makers — with more than $12 billion in annual revenue — but it does demonstrate potential.

Others, such as Progress West HealthCare Center in O’Fallon, Mo. are using it to communicate quickly with customers or, in this case, patients. The facility’s emergency room tweeted every couple of hours with updates on expected wait times. Emergency room staffers also use the Twitter feed to send notes to patients and are starting to answer questions. But the emphasis, at least for now, is on managing patient expectations, said Paula Szwargulski, manager of the emergency department.

"People expect to wait. But if they know how long they’ll have to wait and why they’ll have to wait, it’s not as painful," Szwargulski said.

More companies, however, are employing Twitter to put out fires before they have a chance to spread.

That’s what Michael Tomko of St. Louis learned earlier this summer when he complained on Twitter about a bill from Town and Country-based Charter for his phone service. He was annoyed by a range of fees and regulatory charges.

The brief rant caught the attention of Charter’s social media team, a group of five men charged with monitoring Internet traffic — Twitter, Facebook, blogs, discussion forums and consumer sites — for just that sort of thing. A rapid response quickly blunted Tomko’s anger.

"They could have gotten defensive. Instead, they wanted to know what was going on," Tomko said. "It felt like a real person talking to me."

The encounter offered Tomko a way to vent fast payday loan. He still canceled the phone service. But it turned him into a fan of Charter’s social media initiative, which has eliminated a source of irritation — the phone call-in center. Now he says all of his dealings with the company start with Twitter and the Umatter2Charter group.

"I’m not proclaiming that Charter is fixed," Tomko said. "But I’m saying there is a team of like five guys who are doing it right."

The company is quick to point out that the social media approach won’t subtract anything from other service avenues. And it should be noted that the five teammates — they’ve assisted some 7,000 customers this year — represent a tiny piece of Charter’s customer service operation, which deals with millions of calls annually.

But one thing it does seem to do is provide some customers with a more personalized touch. Each of the five social media guys has his own Twitter page, complete with name and photo.

Customers can essentially decide whom they’d like to talk to. That’s the thing that makes it work for Alexander Chow-Stuart, an author and screenwriter who lives in Woodland Hills, Calif.

"We’re on a first-name basis," Chow-Stuart said. "But when you call, you get a different person every time."

Although Charter has been increasing its involvement in social media — the company hired its first team member in January — it certainly wasn’t the first to go this route. But in recent months, the team has noticed a shift in customer attitude that should probably scare any company not active in this sphere.

In the early days, a customer ranting about Charter on his Twitter feed would express surprise when someone from Charter reached out to help. But those reactions are growing rare, said Eric Ketzer, communication manager for the social media team.

"We don’t have the shock-and-awe responses we used to get," Ketzer said. "So many companies are on Twitter now that they’re just kind of used to it."

That raises a couple of issues for companies who haven’t spent much time thinking about their online reputations.

The first is simply a lost opportunity, said Lorrie Thomas, a Web marketing expert who teaches social media at the University of California, Berkley.

She compares Twitter to a focus group. It’s just a lot bigger and free: "You are getting truly authentic messages. You can watch real, live conversations happening."

More importantly, she said, those companies aren’t doing enough to protect their image in an arena where attendance is expected.

"There are organizations that are completely behind," she said. "If you don’t build your brand, someone else will do it for you."

The challenge facing some companies, however, is convincing profit-oriented chief executives to invest money in an area without being able to promise a monetary return, said Chad Mitchell, a senior analyst at Forrester Research. It doesn’t help that the companies having the most success aren’t eager to share their expertise, out of fear of helping competitors, he said.

"How are you making money with this? That’s hard to measure," Mitchell said.

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