asianculturalfestival.org

Intel Monday unveiled the third generation of its “Core” family of microprocessors, code-named “Ivy Bridge,” which will offer a 20% performance upgrade over the prior generation.

More importantly, Intel (INTC) chief executive Paul Otellini tells Barrons.com, these new chips will combine with Microsoft’s new generation of Windows to usher in a new generation of “hybrids” that will combine the attributes of tablets, “ultrabook” laptops and phones. That could help offset waning growth in traditional personal computers.

“Ivy Bridge” chips will be built using a new manufacturing process offering cutting-edge features, such as 3-D transistors, each measuring just 22 billionths of a meter, finer than any of Intel’s competitors currently offer. The benefits of the new manufacturing will flow across Intel’s product line this year, from server to desktop to notebook computer chips.

Dow Jones’s Shara Tibken has filed an excellent report on how Otellini views the competition in mobile device chips. Intel’s mobile chips will start to see the benefits of the “Ivy Bridge” manufacturing change in about a year from now.

For the moment, Intel’s Otellini is focused on the benefits to the PC market. That market rose just 0.5% last year to 352.8 million units, according to Gartner. This year, growth is expected to rebound but remain “weak,” Gartner said last month, rising by perhaps 4.4%.

Sales to consumers in developed markets remain a drag on PCs, as smartphones and tablets command more of their attention and dollars.

Intel is moving from using just two factories, or “fabs,” to build its processors to four for “Ivy Bridge,” at a cost of $10.8 billion in capital spending last year, and a projected $12.5 billion this year. The company is pouring a lot of concrete, not just installing equipment, to press its manufacturing advantage with “Ivy Bridge.”

An interesting question for Otellini is whether these new chips, and the slim, sleek new laptops they are supposed to power, called “ultrabooks,” can actually expand the rate of growth of PCs.

On that score, Otellini says the jury is still out.

“Will it impact the rate of growth? That’s still to be decided,” says Otellini. For the moment, Intel’s investment in factories — it is building three new ones to make “Ivy Bridge” chips — is a bet on existing rates of growth in PCs.

Consumers, the sore spot, actually upgraded PCs during the depths of the recession, as the PC effectively became some individuals’ home offices, Otellini observes. Then, as effects of recession took hold, sales slowed, and tablets, especially Apple’s iPad, stole some of the thunder from PCs.

But Microsoft (MSFT) will introduce a new version of Windows, Windows 8, later this year, which will dovetail with Intel’s hopes for the ultrabook and for “Ivy Bridge.”

“The real question is, ‘Does Windows 8, being compatible with everything you’ve got already, change the equation?’” Otellini remarks.

Otellini says he’s “very optimistic about these hybrids,” referring to all manner of combinations between notebooks, tablets, phones and anything else you can imagine that will proliferate this year and next.

“I’m meeting all the time with these [original design manufacturers], and they’ve all got their own ideas,” including things that are like tablets with pull-out keyboards, and laptops with screens that swivel.

Whether ultrabooks expand the market, or even defray money lost to stand-alone tablets, Otellini sees the advent of Intel’s new, more sophisticated chips as further extending the company’s overall lead versus chip competitors.

“The thing to really think about is, ‘Do the gaps get wider or smaller over time?’” between old chip-manufacturing technology and the new stuff, says Otellini.

“They are getting wider,” he concludes, and Intel is one of the few companies with the capital and the acquired know-how to stay at the forefront of that.

If there is one company that reflects Otellini’s greatest challenge as a vendor of microprocessors, it is Qualcomm (QCOM), which doesn’t actually make its own chips but contracts with others to fabricate its designs.

Intel’s healthy 21% growth in chip revenue last year is surpassed only by that of Qualcomm, which makes its money from smartphones, not PC processors, and which saw 39% growth in revenue.

Asked about Qualcomm, Otellini remarks “This is a situation where you’ve got two very competent companies.”

Qualcomm “certainly [has] wanted to come into computing,” muses Otellini, whereas Intel has “wanted to be in communications.”

“I always want to have a competitor I can really respect,” says Otellini, and that is the case with Qualcomm, adding that CEO Paul Jacobs had “brought some adult supervision” to Qualcomm, which impresses him.

Intel shares were down 15 cents, or 0.4%, at $27.35 Tuesday.

Tiernan Ray can be reached at tiernan.ray@barrons.com or at blogs.barrons.com/techtraderdaily or www.twitter.com/barronstechblog

By DIANA RANSOM

From smSmallBusiness.com

MANY SOCIAL VENTURES—even the ones that eventually become self-sustaining—may never yield enough of a financial return to attract traditional backers or investors. As a result, a social entrepreneur’s task of raising financing poses unique challenges.

For one thing, social ventures are often structured as nonprofits, which means they can’t offer an ownership stake in exchange for capital, like a traditional business might. After all, “a nonprofit doesn’t have equity,” says Rick Aubry, a social entrepreneurship professor at Stanford University’s Graduate School of Business. However, some social enterprises are mimicking equity-like structures to work around the ownership issue, he says.

That’s what Scojo Foundation intends to do. Since 2001, the New York nonprofit has sought to reduce poverty through the sale of affordable reading glasses in poor communities. Today, Scojo is changing its name to VisionSpring and — much like a company going public might do — releasing a prospectus to attract philanthropic investors.

According to the prospectus, VisionSpring wants to raise $5 million by the end of the year to deliver almost 650,000 pairs of glasses to people in Asia, Latin America and Africa. The company also plans to train more than 5,000 village-based entrepreneurs on the sale of those glasses. Similar to a Wall Street prospectus, the document outlines risk factors, from currency fluctuations to natural disasters. Investors will receive quarterly reports. But unlike a traditional offering, VisionSpring’s investors are only promised a “social” return on investment rather than lucrative financial returns.

VisionSpring co-founder Jordan Kassalow, a practicing optometrist, says the prospectus was borne out of frustration. He decided “enough is enough” after watching “everyone work so hard cobbling together funding throughout the year, rather than doing what we should be doing (helping disadvantaged individuals see better).” The company worked with the Nonprofit Finance Fund, a community development financial institution that helps nonprofits secure funding, on the prospectus.

VisionSpring’s story illustrates the difficulties that a nonprofit social enterprise can face when it comes to funding. But even for-profit social businesses have trouble, too. For starters, such companies typically don’t have the potential for market-rate returns, as they often cater to impoverished communities within developing nations. Not to mention, many social ventures have long incubation periods — meaning that years can go by before they will become profitable, let alone sustainable.

Despite these challenges, there are a number of like-minded investors willing to consider the social as well as the financial impact of a business. And, in exchange for that support, some investors may accept little or no compensation. Here’s a look at some of your funding options.

Social Investment Funds

Social investment funds, like the Nonprofit Finance Fund, pool together various sources of funding, such as donations from wealthy individuals, foundations, financial institutions and corporations. These funds differ from regular investment funds as they generally anticipate lower than market-rate returns. Their larger motive tends to be advancing social causes instead.

Additionally, some investment funds are aimed at specific disadvantaged regions or populations. For example, the Acumen Fund, a nonprofit global venture fund based in New York, trains its funding eyes on locations in India, Pakistan and East Africa. Yasmina Zaidman, a spokeswoman at Acumen, says that the fund’s social investors are less interested in reaping financial rewards. Instead, she says, “they are looking to invest in philanthropic ventures; the return they’re looking for is the social impact.”

Foundations

A number of foundations including Ashoka and Skoll Foundation provide seed-stage and growth-stage grants (that don’t need to be paid back) to social ventures. The Draper Richards Foundation for Social Entrepreneurship, for example, provides early-stage grants of $300,000 over three years to social entrepreneurs.

Grants can be tough for for-profit social enterprises to secure. However, foundations also can give loans though “program-related investing” or PRI. These type of investments are legally considered charitable although the foundation doesn’t have to accept below-market rates. A for-profit social enterprise can ask for a loan at little or no interest. “The expectation is that [the money] will be paid back at much more beneficial terms for the recipient” than regular lenders might require, says Aubry, the Stanford professor.

Banks and Corporations

Some community banks may loan you the money to get your social venture started. These banks typically earmark federally-backed funds to lend to ventures with community development or social missions. An example of a bank that offers such loans is ShoreBank based in Chicago.

Getty Images

Do-gooder corporations often have similar community development missions. For example, Deloitte & Touche and Pfizer both offer support to the Nonprofit Finance Fund. Typically, corporations block off a portion of their budgets to donate funds (or products or services) to socially responsible endeavors. Meanwhile, a number of corporations including Citigroup and Google have set up foundations, which also offer grant money or other aid to social ventures.

Angels and Venture Capitalists

For-profit social enterprises can seek out cash infusions from angel investors or venture capitalists that have a social bent. These investors typically want market-rate returns in exchange for their financial support. They’re partial to entrepreneurs with plans to do good in the world — and usually, they’re willing to wait a little longer (than traditional angels or VCs) to reap returns. For example, The Investors’ Circle, a network of angel investors and VCs, says it invests “patient” capital in companies that address social and environmental issues.

Of course, any entrepreneur who works with an angel or a VC gets more than money. Angels and VCs work closely with entrepreneurs to shape the company, sometimes taking board seats or management positions. A social angel or VC isn’t any different, but will work within your mission to eke out market-rate returns, says David Berge, founder and managing member of Underdog Ventures, a social venture capital firm in Island Pond, Vt. “A social VC is going to be predisposed to like what you’re doing,” he adds.

(“Starting Up,” a weekly column written by Diana Ransom for smSmallBiz.com, follows entrepreneurs through the early stages of launching a business. Write to her at dransom@smartmoney.com.)

Other recent Starting Up Columns

• Starting Up: Becoming a Social Entrepreneur
• Starting Up: Protecting Your Products

By SOPHIA HOLLANDER

In a blow to New York’s growing number of small beer crafters, the state has quietly ended tax and fee exemptions for in-state brewers after it was sued by an out-of-state distributor.

The announcement stunned local brewers, many of whom learned in an email that two treasured exemptions—worth hundreds of thousands of dollars to some breweries—had been declared unconstitutional by a state court on March 28 in response to a lawsuit by Shelton Brothers, a Massachusetts-based distribution company.

All beer sold in New York will now be subject to state and city excise taxes, ending the exemption for the first 200,000 barrels of production. In addition, each type of beer released by a brewery will be subject to an annual $150 registration fee. Previously, New York breweries were exempt if they produced fewer than 1,500 barrels.

Brewers across the state worried that the changes could dim one of New York’s brightest industries, even as they admitted the decision wasn’t entirely unfair.

“We were caught by surprise, but I don’t believe that the decision is necessarily wrong,” said David Katleski, president of the New York State Brewers Association, who also owns Empire Brewing Company in Syracuse.

But he warned that the new costs would have a “major impact” on the ability of companies to continue expanding, noting that prices of ingredients had also spiked in recent months.

“The margins are getting thinner and thinner,” he said.

New York’s brewing industry has experienced dramatic growth in recent years. When the brewers association was founded in 2003, there were 48 breweries, Mr. Katleski estimated. Today there are 89—with 42 more in the planning stages.

Now, distributors will be charged 14 cents per gallon in state taxes and an additional 12 cents per gallon for beer sold in New York City. “Distributor” is defined as the first person to sell the beer, meaning that if a brewery sells beer to a distributor based in New York state, it is responsible for the state tax.

If the distributor then sells to a retailer in New York City, the distributor is responsible for the city tax.

Combined with the new $150 fee per label, the new charges cast an unusual pall on an industry that had been singled out by Gov. Andrew Cuomo as a pride of the state. Many new breweries specialize in producing small batches of carefully crafted flavors, sometimes cultivating six or seven variations on a single style such as India Pale Ale. Now there will be a penalty for such creativity, brewers said.

Barrier Brewing Company, which began selling beer in 2010, now produces 42 varieties, though it produces only 500 barrels of beer a year. “It’s potentially a tremendous charge,” said co-owner Evan Klein.

The excise tax “kind of makes sense” he said. “It’s unfortunate, but at least you’re being taxed on a certain production level.”

By contrast, the registration fee is “like you’re being punished for having diversity in your product,” he said. “It doesn’t make much sense.”

The State Liquor Authority has collected $584,550 in registration fees this year, said spokesman William Crowley. He defended the fee, saying it was designed “to protect public health and safety by ensuring the authenticity of the product; ensuring labels are not misleading or deceptive; to provide consumers with accurate information” and to fund the authority.

Many brewers blamed Shelton Brothers, which brought the suit. Initially, the company was contesting a ruling by the SLA outlawing a Christmas label that pictured Santa Claus, said company President Daniel Shelton.

During the course of the lawsuit, it added a claim that the registration fees were unfair, he said. “My goal was always just to get the label fees knocked out because there’s no reason for them,” he said, adding that his company works in 45 states and New York’s registration charges are the most onerous.

Mr. Shelton said he had been hoping to join with New York’s breweries to work to repeal the law. Instead, he said he received threats and was called the Antichrist in at least one email.

“We’re just saying, ‘Look, it’s only fair that we shouldn’t have to pay the tax while you don’t pay the tax.’ It’s that simple,” he said.

In three weeks, Barrier Brewing Company, based in Oceanside, is planning to open a new facility that will triple its capacity, Mr. Klein said. He estimated that the company could now be liable for $20,000 in additional taxes and fees.

The Captain Lawrence Brewing Company in Elmsford recently completed a $1.5 million expansion that increased capacity from about 9,000 barrels a year to more than 40,000, said owner and head brewer Scott Vaccaro. “Then we get hit with this,” he said, calling himself “disappointed.”

If the new brewery produces 20,000 barrels of beer next year, Mr. Vaccaro estimated the company’s liability at $87,000.

He criticized state officials for not alerting brewers earlier and working to have a program in place to ameliorate its effects.

“It’s a growing industry that’s adding jobs continually,” he said. “This is no way to keep it on the right track.”

Write to Sophia Hollander at sophia.hollander@wsj.com

A version of this article appeared April 26, 2012, on page A17 in some U.S. editions of The Wall Street Journal, with the headline: State Taps Into Brewers.

By DANA MATTIOLI And MIGUEL BUSTILLO

Retailers are trying to make smartphones work for them instead of against them.

Take Maurices. The women’s clothing chain last month started sending promotions to the phones of people who come within a few hundred yards of its stores. Consumers who opt in to the service are sent messages about in-store sales. There is little evidence that sort of marketing actually works, but Maurices wants to give it a shot, in hopes of drawing people to the chain’s bricks and mortar locations.

Some retailers are hoping that “geofencing”–when a customer who has signed up gets within a certain distance of a store, promotions pop into their smartphones–can help slow “showrooming.” Andrew Dowell has details on The News Hub. Photo: Bloomberg.

“If you don’t try, you don’t know,” says David Jaffe, CEO of Ascena Retail Group Inc.,

the parent company of Maurices.

Retailers desperately hope the technology—called “geofencing”—can be at least one successful response to the dreaded “showrooming,” where a shopper comes into a store to see an item but then makes the purchase online after finding a better price via smartphone.

The idea behind geofencing is to target consumers when they are nearby—and the promotions can get hyper-local, like beaming a special on umbrellas to people within a 10-mile radius during a rainstorm, or touting a markdown on aisle 6 when a customer is walking down aisle 3.

But adoption by shoppers has been spotty, retailers report, underscoring a fundamental imbalance of power when it comes to mobile. While consumers have figured out to use smartphones to retailers’ disadvantage by checking the prices elsewhere, chains are still fumbling around for a way to use mobile phones to boost sales.

Some 15% of respondents to a recent survey said they use their mobile phones in stores to compare prices to online-only rivals, according to market research firm Forrester Research. But fewer consumers use their devices in ways that could be beneficial to brick-and-mortar retailers: 8% of respondents said they used their phones to “check in” to stores, and 7% said they used phones to learn about in-store promotions or events.

Customers are becoming more comfortable with using coupons that arrive on their phones. More than 3.4 billion mobile coupons were redeemed in 2011 globally, according to Juniper Research.

Meijer Inc., a Midwestern chain of supermarkets, now uses sensors in its stores to offer customized information and virtual coupons via mobile phone. Customers who prepare shopping lists online can open up the retailer’s app inside the store, and the app reorders their list based on their location in the aisles, speeding up the shopping process. Coupons and weekly specials also appear, said Josh Marti, chief executive of Point Inside, a company that helped develop the technology.

“The question, beyond trying to get a defensive scheme against showrooming, is how can these retailers capitalize on that mobile activity?” says Mr. Marti, who said numerous larger retailers are working on similar programs. “What you have to do is engage with those customers in the physical domain.”

North Face, the maker of parkas, has been using geofences since 2010 through an app called Shopalert produced by mobile-commerce company Placecast. North Face has put geofences not only around its stores, but around parks and ski resorts, says Aaron Carpenter, vice president of global marketing for the clothing line, owned by VF Corp.

In the two years that North Face has had geofences, though, it has enrolled just 8,000 people. “These programs are all in their infancy,” Mr. Carpenter said about geofencing, social media programs and other experimental initiatives. “But they keep people connected to the brand.”

Some companies are expanding their experiments. Kiehl’s began a geofencing trial last July at its 44 free-standing stores but made the trial permanent this year, says Tory Diamond, director of customer relation management for the skin-care label, owned by L’Oréal

SA. The company is now exploring geofencing for Kiehl’s kiosks located in department stores, she says.

The company’s fences range from half a mile in New York and other big cities to two miles in more suburban areas. So far thousands of customers have signed up for alerts, which Kiehl’s advertises at its cash register, social media pages and through its email list. In November, it offered customers a free lip balm for enrolling, causing its numbers to spike, she says.

Kiehl’s limits its texts to three per month, says Ms. Diamond, adding, “Texting is a very personal medium and it can annoy people.”

Yamilky Vincente, a 23-year-old banker visiting a New York store, was keen to sign up. She says she’s a newfound fan of the brand and text alerts would make it easier to find locations.

Write to Dana Mattioli at dana.mattioli@wsj.com and Miguel Bustillo at miguel.bustillo@wsj.com

A version of this article appeared May 9, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: Can Texting Save Stores?.

By ANDREW GROSSMAN

WASHINGTON—Roger Clemens never used steroids and is the victim of a greedy former trainer and overzealous prosecutors, his lawyer told a U.S. District Court jury Tuesday as opening statements concluded in the former major-league pitcher’s perjury trial.

Mr. Clemens’s lawyer, Rusty Hardin, told jurors a “tale of two men.” One was his client, a hardworking, seven-time Cy Young Award winner who, Mr. Hardin said, spent Friday nights in high school running from foul pole to foul pole with weights strapped to his arms and legs to build up his strength.

The other was Brian McNamee, Mr. Clemens’s former strength trainer and the witness on whom the prosecution’s case could hinge. He has said he injected Mr. Clemens with banned performance-enhancing drugs on multiple occasions.

Mr. Clemens is charged with lying about those injections when, in 2008, he told a congressional committee investigating steroid use in Major League Baseball that he had never used steroids. He faces about a year and a half in prison if he is found guilty.

Mr. Hardin said Tuesday that his client was telling the truth and that Mr. McNamee was the liar, suggesting that the trainer had implicated his star client to boost his own fame and fortune.

“There’s never going to be any physical evidence from any source except Brian McNamee suggesting that Roger Clemens used steroids,” Mr. Hardin said.

The defense lawyer painted Mr. McNamee as a money-grubbing opportunist who once sold advertising space on his tie before appearing in front of cameras. He showed pictures of a clownish-looking Mr. McNamee laughing on the couch of “The Howard Stern Show” and giving a thumbs-up next to a woman’s chest. No one would have invited Mr. McNamee on the popular show or signed him to a book deal if he hadn’t been the man who claimed to have helped one of baseball’s greatest pitchers cheat, Mr. Hardin said.

Assistant U.S. Attorney Steven Durham anticipated the attacks on Mr. McNamee’s character in his opening statement Monday afternoon, saying that the trainer had made mistakes but had acknowledged them, unlike Mr. Clemens.

Prosecutors are trying for a second time to convict Mr. Clemens. Their first attempt ended in a mistrial after prosecutors showed jurors a tape that included a congressman reading from an affidavit signed by Laura Pettitte, the wife of Mr. Clemens’s former teammate Andy Pettitte. The judge had said Ms. Pettitte’s testimony was inadmissible.

Prosecutors on Monday afternoon displayed a picture of their key physical evidence, a set of needles and cotton balls that Mr. McNamee said he used to inject steroids into Mr. Clemens. The materials were found to contain both Mr. Clemens’s DNA and banned substances.

Mr. Hardin said that evidence was tainted. In contrast with the sterile-looking photograph used by prosecutors, he showed an image of the evidence next to the empty Miller Lite beer can where Mr. McNamee had stored it. Mr. McNamee injected Mr. Clemens with legal substances and then added traces of steroids to the needles to frame the pitcher, Mr. Hardin said.

It was Mr. McNamee’s lies, Mr. Hardin said, that spurred Mr. Clemens to go before Congress and say under oath that he hadn’t used banned performance-enhancing drugs. That, he said, shouldn’t be the cause for a federal prosecution.

“Our government should never punish somebody for trying to clear his name, and our government should never, ever prosecute somebody for saying ‘I did not do it,’ ” Mr. Hardin quietly told jurors at the end of his presentation. “The man has a right to his name. He has a right to be listened to. He has a right to deny allegations.”

Write to Andrew Grossman at andrew.grossman@wsj.com

A version of this article appeared April 25, 2012, on page A6 in some U.S. editions of The Wall Street Journal, with the headline: Clemens Lawyer Says Trainer Lied.