Mahindra Satyam profit rises 17 percent, meets estimates

Satyam Computer Services Ltd(SATY.NS), in the process of a merger with parent Tech Mahindra Ltd (TEML.NS), met expectations with a 17 percent rise in second-quarter profit, as customers, aiming to cut IT costs, gave it more orders.

Profits for the September quarter rose to 2.78 billion rupees from 2.38 billion rupees in the year-earlier period, Satyam said in a statement on Tuesday. That compares with analysts' estimate of 2.73 billion rupees, according to Thomson Reuters I/B/E/S.

India's $100 billion-a-year software services industry earns about three quarters of its revenue from the United States and Europe. Australia is also an increasingly important market for the sector.

Billionaire Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based company admitted to one of India's largest accounting frauds.

Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra, which provides software services to clients such as BT Group Plc (BT.L) and SAAB AB.

Tech Mahindra owns close to 43 percent of Satyam, now called Mahindra Satyam. It is offering one share in itself for every 8.5 shares of Satyam to absorb the company.

Satyam shares have gained about 39 percent in value since March 21, when the company announced its plans to merge with Tech Mahindra. The stock closed up 0.65 percent on Tuesday ahead of the earnings report.

The NSE's sectoral index lagged the broader market this year, but has rallied about 9 percent since a July low as investors became more optimistic about some stability in the global economic environment.

Satyam's quarterly sales rose 22.8 percent to 19.38 billion rupees. Analysts were expecting sales of 19.24 billion rupees.

Earlier this month, top-ranked Tata Consultancy Services (TCS.NS) and fourth-ranked HCL Technologies (HCLT.NS) beat expectations for second-quarter earnings. TCS reiterated it would beat the 11-14 percent estimate for exports growth made by the National Association of Software and Services Companies, an industry lobby.

Second-ranked Infosys (INFY.NS) retained its July outlook for the current fiscal year ending March 2013. Infosys was yet to include revenue from the acquisition of a Swiss consultancy Lodestone Holding. Wipro (WIPR.NS), the No. 3 provider, will report second quarter earnings on Friday.

Samsung Sold Twice as Many Smartphones as Apple Last Quarter

Samsung trounced Apple in smartphone sales last quarter, flooding the market with twice as many smartphones as its rival, according to one researcher.

Samsung, which reported record third-quarter earnings on Friday, does not outline its smartphone shipment figures. However, IDC released a report showing that Samsung shipped 56.3 million smartphones during the quarter. Apple, meanwhile, said it sold 26.9 million iPhones during its fiscal fourth quarter, which coincided with the calendar third quarter. An IDC rep says both Apple and Samsung’s figures are comparable. “Since the sales figures of both Apple and Samsung represent ‘sales in’ to the channel as opposed to ‘sales out’ meaning sales to consumers or enterprises we presented them as such in our release as it fits with our methodology,” the rep says.

The fact that Samsung bested Apple in unit sales comes as little surprise since Samsung has been beating Apple by that measure for more than a year. Samsung’s shipments are up an impressive 100.4% from last year, according to IDC. The researcher’s estimates are in line with ABI Research, another market research firm, which reported that Samsung shipped 55.5 million smartphones in the quarter.

The strong sales — particularly for Samsung’s Galaxy S III — propelled the company into a record quarter. Samsung recorded a net profit of $6 billion for the September quarter on revenues of about $47 billion. Although the results came in higher than what analysts had estimated, Samsung’s stock price fell about 2% after the announcement in part because the company cited increasing competition in the mobile phone space, lackluster semiconductor sales and sluggish PC demand in the fourth quarter, despite the introduction of Microsoft’s Windows 8 OS.

The Making of the New Main Street in NYC

In an age of shopping malls and big-box stores, the traditional American "Main Street" can seem like a relic of the past. As small business owners lose customers to big chains that can undercut their prices, it's becoming ever more difficult to find a center of commerce focused around small, independent shops in much of the country.

But that's not the case in New York City, thanks in large part to the work of the real estate development firm YOUNGWOO & ASSOCIATES (YWA), led by partners Young Woo, Margarette Lee, and Gregory Carney. For several years, YWA has focused their efforts on turning abandoned spaces around New York into public markets and community gathering places, with assistance from the specialty retail management firm UrbanSpace.

Two years ago, YWA launched Dekalb Market in an empty lot in Brooklyn. The open-air market featured a center-stage area for performances, farming plots for urban gardeners, and vendor booths created from salvaged shipping crates. Before the market was there, "it was a desolate place," says YWA principal Margarette Lee. "People were afraid to walk by it."

But the market's creation soon helped to reinvigorate the community. Lee and her partners worked to find merchants who represented the best that Brooklyn had to offer, sampling crafts and tasting pastries and coffee all over town to find vendors who would best fit the space. They ultimately ended up with 46 permanent vendors, representing a wide mix of products: cupcakes with unique toppings like fried chicken, Aussie-style meat pies, bicycle accessories, and vintage-style swimwear, just to name a few. 

On weekends, would-be entrepreneurs could rent booths for less than $100 a day to see how well their products sold. Many of them became full-time vendors, too.

Markets like Dekalb help to foster entrepreneurship, says Lee. "Traditionally, vendors have to pay high security deposits and commit to long leases," she says. "It takes a lot of effort and financial security to start a business." At these markets, however, merchants can launch their products in an affordable and collaborative environment.

Stacey Ford is a designer who works with artisans in Bali and Thailand to manufacture her beautiful jewelry. She moved her shop, Amaya Designs, into a permanent storefront at Dekalb a year ago. "I love the sense of community," she says. "It feels like a compound where you can merge ideas with different artists."

Nearby is the Nile Valley Eco-Juice and Salad Bar, run by partners Melicia Crichton and Brian David. The couple had never operated a food business together before, but were able to take the risk thanks to the low overhead costs and supportive community. "Every day, people tell us that they're so thankful that we're here," says Crichton.

At the end of September, Youngwoo's short-term lease came to an end, and Dekalb closed for the season. The market will reopen in the spring, although Lee and her partners are still scouting for the right location.

In the meantime, YWA has been developing other innovative projects around New York City. The development firm is in the process of realizing one of its most ambitious visions: a huge cultural hub at historic Pier 57 that features a large open-air market, a rooftop film venue, and a "Contemporary Culture Center" with art exhibitions and entertainment.

The firm is also vying for the chance to bring new life to the Kingsbridge Armory, a beautiful abandoned military armory in the Bronx that covers nearly an entire city block. If the proposal is successful, YWA will be able to bring 1,500 new jobs to the Bronx.

 "When you go into a neighborhood that isn't well-developed, but you know there is big potential, you can build these markets and get the community involved," says Lee. "It quickens the pace of the development of the neighborhood."

"We are trying to turn the neighborhoods into 'destination' locations," she says.

Buffett says global economy slowing, wants more deals

Warren Buffett sees clear signs that the global economy is slowing, although the U.S. economy is "inching ahead" as other regions decline, the Berkshire Hathaway chief executive officer said on Wednesday.

Yet despite the weakness, Buffett said he was "salivating" to make another major acquisition, adding that two deals of around $20 billion each had fallen through this year.

In an interview on CNBC, Buffett said the rate of decline was larger in Asia than in Europe, although the Asian economies are declining off a higher base.

At the same time, he said Berkshire's U.S. housing-related businesses were growing at double-digit percentage rates of late.

Buffett has maintained that the economy will not truly start to turn around until the housing market improves, and he said Wednesday that housing had clearly started to turn.

Berkshire is heavily exposed to housing construction, as it owns a brick maker, a carpet maker, a realtor and the largest builder of manufactured homes.

Yet even with growth from its existing portfolio companies, Berkshire is always on the hunt to expand by acquisition.

Buffett told CNBC: "I'm salivating" to spend some of Berkshire's $40 billion cash pile on a deal. At Berkshire's annual meeting in May, he said a $20 billion deal had recently fallen through, and on Wednesday he acknowledged a second one had come apart as well.

He did not give any indication as to what kinds of companies were involved.

In a wide-ranging interview from an event in Ohio, Buffett also said the best thing for the economy would be for U.S. Federal Reserve Chairman Ben Bernanke to stay on for a third term.

With the presidential race running neck-and-neck, there has been speculation of late that Republican candidate Mitt Romney, if elected, would seek a new Fed chairman when Bernanke's term expires in 2014. Buffett disagreed with the idea.

"I would vote for Bernanke again, and I'd get my kids out and everybody else to vote for him," he said.

5 College Degrees Every Entrepreneur Should Consider

If you are an entrepreneur or planning to be one, you must choose a college degree that will help you improve your entrepreneurial skills and achieve sustainable success in your business. The following are five of the best college degrees that you might want to consider:

Management
If you are planning to put up your own business, take up any management courses in college. This is to ensure that you will be fully equipped with the skills on managing not just the money but as well as the people in your business. You need nto have enough knowledge in communicating with different kinds of people involved in your business. A marketing degree will also provide you the know-how on delegating tasks and decisions in a very efficient manner.

Accounting
Earning a degree in accounting gives you an edge against any other entrepreneurs who do not have educational backgrounds in accounting. It helps you understand and manage better your assets and liabilities. Besides, you will also gain enough knowledge about cash flows, inventories and everything in those balance sheets. An accounting degree will certainly give you a broader view about your finances.

Economics
An economics degree will give you a better understanding on the production, supply, demand, consumption of goods and everything about your consumers and suppliers. This knowledge is very useful if you are to succeed in your business and other forms of financial investment. The weakening of dollar, consumer’s spending habits, erroneous lending practices are just few of the many things that would mean a lot more different to you once you have obtained an economics degree. In studying economics, you will be taught where your money must be heading to. You will also be taught some skills on determining the best investment to prevent you from being a victim of bad investment.

Marketing
Once you study about marketing, you will become more aware that marketing is not about selling per se. A marketing degree will improve your chances of promoting the right product to the right consumer. You will have an idea where to find your target market and the means to identify their needs and wants. This knowledge is crucial in every business. It is through effective marketing strategies that companies are able to reach out to their consumers. It is also through different marketing approaches that business owners will be able to figure out whether a considerable number of people exist for that certain product.

Finance
Graduates of any finance related course are aware of the fact that receiving a refund check from the office of the IRS is not something that calls for a celebration. As a finance graduate, you will realize that IRS was putting your money on hold and return it to you whenever they want without giving you any interest. They had your money for so long and just left it there to be used for other purposes when you could have saved it in a bank for an interest. This is just one of the many important things that you will learn should you choose to take up a degree on finance.

How to Persuade Your Boss to Fund Your Business Idea

Shara Senderoff dreamed up Intern Sushi in 2005, when she was a college sophomore. Lacking the cash to launch a startup, she finished school and took a job in the film and TV world as assistant to mega-producer Mark Gordon. By 2010, Senderoff was developing feature films and web series for The Mark Gordon Co. But her idea for a website that would connect interns and employers still beckoned. In late 2010, she dusted off her old business plan and pitched her boss the idea.

Gordon gave her the green light to develop the site internally, on his company’s time, dime and payroll.

The initial plan was for Senderoff to split her Intern Sushi and film-production duties 50-50. But by September 2011, she says, her site had become “a machine of its own.” Senderoff left The Mark Gordon Co. to run Intern Sushi full time, and Gordon, who’s billed as a co-founder (along with Senderoff and ad man Richard Gelb), became one of the startup’s earliest investors, sinking six figures into the venture.

Today 20,000 interns and 2,600 companies use Intern Sushi, which officially launched this fall and features 5,000 open positions in 11 industries. The company, which initially drew $800,000 in funding, is currently completing its second investment round.

For Senderoff, having the support of a boss who believed in her was windfall enough. “I was fortunate to be a salaried employee before I took the big risk of being a startup,” she says. “It’s an incredible gift to be able to focus on getting your business off of the ground without having to worry about how you’ll pay your rent.”

You don’t have to work for a Hollywood mogul to sell your startup idea to your employer. More companies, in a variety of sectors, are recognizing that the key to competing in today’s warp-speed marketplace is encouraging entrepreneurial thinking from within–otherwise known as “intrapreneurship.”

“We are in a time that’s calling for a lot of innovation,” says Gifford Pinchot, a Fortune 100 consultant who has written several books on intrapreneurship. “Companies that are supportive of entrepreneurship are in more of a position to thrive.”

That’s why innovators like Google and 3M famously implemented policies to let employees spend a percentage of each week on their passion projects. It’s also why consulting firms such as Ernst & Young and PwC have begun holding in-house entrepreneur contests.

But it’s not just a matter of quashing the competition. It’s also about keeping employees happy. “Companies are kind of forced into it,” says Dan Schawbel, founder of Gen Y consulting and research firm Millennial Branding, because “retention rates are terrible.” A recent study commissioned by Schawbel’s firm found that nearly one-third of employers look for entrepreneurial experience when recruiting entry-level candidates. “A decade ago that wouldn’t have happened,” he says.

Making Your Pitch

To use your employer’s hunger for innovation to support your own projects, start with ideas that feed the company business model. “Those are the types of projects that are the easiest for anyone to talk about within the company and get funded,” says Ikhlaq Sidhu, founder of theUniversity of California, Berkeley’s Fung Institute for Engineering Leadership, a fast-track entrepreneurial program for engineers.

That’s what Dr. Lisa Tseng did. In March 2011, while working as chief of staff for UnitedHealthcare’s public programs, she pitched the insurance company’s upper management on a way to make hearing aids–which often cost $6,000 to $8,000 per pair–more affordable. Because her idea fit with her employer’s mission of improving healthcare, it was a slam-dunk.

“We were told to move forward right after the presentation,” says Tseng, who immediately became CEO of hi HealthInnovations, the startup she proposed. Today hi HealthInnovations sells high-tech hearing aids for a retail price of $749 per ear.

Intrapreneur Michael Kestenbaum of Crowded Room. Photography by Axel Dupeux

Researching the heck out of your idea is another must. “Know your market really, really broadly and your consumers really, really narrowly,” says Michael Kestenbaum, CEO of Crowded Room, a location-based mobile app that his employer, internet company IAC, funded and let him develop in 2010. “If you’re creating a baseball app, know what the baseball fan looks like. Know how many times a year they go to the game. Know how they get to the game. What they eat when they’re at the game. But at the same time, know the sports and live events market.”

Even if it’s a long shot, your pitch needs to offer information with value. “If you’re going to sit in a meeting with the CEO of your company, make sure they get something out of it,” adds Kestenbaum, who was in mergers and acquisitions at IAC before running Crowded Room. They may shoot down your first idea, he says, but that’s how you get invited to pitch again.

Knowing what you’ll say in your pitch is only half the battle, because how you say it is just as important. “The last thing you want to do is start with a super-detailed slide presentation to a CEO who doesn’t like being presented to via PowerPoint,” Kestenbaum says.

Senderoff agrees. When she proposed Intern Sushi to her time-strapped boss, she knew the key would be getting to the point in the first 60 seconds–much like a Hollywood script pitch. Because Gordon is “a very visual guy,” Senderoff relied heavily on charts and graphics to illustrate her business concept, market and revenue model, rather than plonking a 30- to 50-page business plan on his desk.

Juggling Two Jobs

It can be a balancing act to double as an entrepreneur and an employee. You want to pour your heart and soul into your baby and show management they were right to invest in you; at the same time, you have to do your day job justice.

Jamie Pritscher knows this juggle all too well. In 2009 she convinced her employer, Chicago-area business caterer Tasty Catering, to expand its modest corporate gifts division into a full-blown e-commerce company, with her at the helm. The result was That’s Caring, which sells environmentally friendly gift baskets. Pritscher received $50,000 in seed money from her bosses, along with their blessing to work on That’s Caring during business hours if needed, as long as she could keep up with her duties as Tasty Catering’s full-time logistics director.

That fall and winter involved a lot of scrambling. During the holiday season, when That’s Caring does 75 percent of its business, Pritscher regularly pulled 80-hour workweeks. “Your first year in business, you’re not really sure what to expect,” she says. “People wait last-minute to order. And I wasn’t used to that. The second year was much easier.”

On the plus side, birthing a startup as an employee means that good mentors are in the cubicle next door. Having the ear of Tasty Catering’s sales team and executives was a boon for Pritscher, who’d never run her own operation before.

“Being able to walk up to the desk of someone who has been in business for 40 years and talk out business problems and walk away with a solution in 20 minutes instead of trying to figure it out on your own–it’s priceless,” says Pritscher, who left her gig as logistics director in 2010, when That’s Caring began making enough money to pay her salary.

Free access to on-site support services is another bonus of intrapreneurship, says Michael Paladino, director of technology activation at Rockfish, a digital agency based in Rogers, Ark.

“We don’t have to worry about some of the infrastructure that startups do,” explains Paladino, who as a newly hired web developer in 2009 spearheaded Rockfish’s development of TidyTweet, a Twitter application that filters out spam. “We have billing in place. We have hosting in place. I have access to our legal team. I have access to our creative team.”

Shared risks, shared rewards

For the risk-averse or cash-strapped, having an employer incubate your startup can be a happy medium. No, you won’t fully own your creation, but you won’t have to fork up the seed money, either.

Pete Balistreri was all too happy to make this trade-off. An executive chef at the San Diego location of Tender Greens, a California restaurant chain specializing in sustainable food, Balistreri taught himself to make cured meats on the job. Soon the menu began featuring his salumi, and his bosses invested in a $5,000 professional curing chamber.

This August, with the help of Tender Greens’ owners, Balistreri launched his own line of packaged meats, P. Balistreri Salumi, which the restaurant will sell in its seven locations. Plans include distribution to other eateries and artisan food retailers. The company is a partnership between Balistreri and Tender Greens’ three owners, who footed all the startup costs.

“It’s a big deal for me to have made a 35-pound batch of salami and then to see a 500-pound batch of it made,” Balistreri says. “I would never have been able to make this product and sell it on my own.”

But your intrapreneurial efforts don’t need to result in an eponymous product label, swanky new title or co-ownership to give your career a boost. Just pitching and attempting to start a new venture will earn you a reputation as a trailblazer, says innovation consultant Pinchot. “And in companies where that’s important, innovators move ahead of their peers,” he says.

What if, despite your best efforts, your baby falls flat on its face? If nothing else, it’s a learning experience, for you and your employer, says Crowded Room’s Kestenbaum. “The knowledge that you’re going to gain is tremendous,” he says. “Getting to know a market, getting to know consumers, getting to know technologies–that stuff is valuable regardless of whether your startup succeeds.”

Intern Sushi’s Senderoff concurs: “The experience that I’ve gained from taking a company that was just me to 25 employees–I would pay to have that experience.”

Sowing the seeds of autonomy

Want the keys to the entrepreneurial kingdom at work? Start laying the groundwork now.

Earn your boss’s trust. Before you polish your pitch, make sure your rapport with your manager is up to snuff. If your boss doesn’t have faith in your work, judgment or time-management skills, he or she is not going to let you launch a new product, service or company division.

Broaden your skill set. Don’t know diddly about marketing? Never met a spreadsheet you could decipher? As an employee, you have an entire company of people, projects and training resources at your fingertips. Use them to shine light on as many blind spots as you can.

Stay aboveboard. Going rogue is a bad idea, says Ikhlaq Sidhu, who teaches entrepreneurship to engineers at UC Berkeley. “You don’t want to do anything that your boss might be completely surprised about,” he says. Instead, win your manager’s support for your idea early on. You’ll get further with him or her on your side.

Build stakeholder support over time. Take the time to amass a network of influencers who are as invested in your idea as you are, Sidhu says. The more customers, partners, co-workers and managers you have onboard, the more likely you’ll be to get your idea funded

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Concerns rise as more U.S. audit work moves to India

Auditing of U.S. corporations' financial books, a vital underpinning of investor confidence, increasingly relies on work carried out in India, where there is no clear system of oversight.

U.S. audit regulators do not conduct regular physical inspections of offshore centers in India where U.S. audit work is performed..

The U.S. arms of the Big Four audit firms - Deloitte Touche Tohmatsu Ltd, KPMG, PricewaterhouseCoopers and Ernst & Young Global Ltd - said that work handled by Indian employees is routine and systematically sent back for review to the United States.

But some audit firms are layering on more complex tasks in the offshore centers and Indian workers are rising to senior positions in the auditing ranks, said Big Four firm employees and others in the accounting industry in India.

Given the failures of U.S. auditors so alarmingly displayed in recent accounting problems - for instance, February's $2 million penalty against Ernst & Young over its past Medicis Pharmaceutical Corp (MRX.N) audits - some experts said having more Indian auditors on the job may result in better audits.

Yet concern is growing that no coherent regulatory system exists to closely police the work in India, to gauge its quality, and to take action if problems should develop.

Perhaps as much as 5 percent of U.S. audit work is presently done in India, said M.G. Fennema, an accounting professor at Florida State University who has researched offshoring.

That is up from an estimated 1 to 2 percent about five years ago when the firms launched offshoring pilot projects.

"If it's done properly, it would be OK, but the risks are that work will be offshored that is beyond the training, skills and experience of the people that it's offshored to," said Douglas Carmichael, former chief auditor of the Public Company Accounting Oversight Board, or PCAOB, a U.S. watchdog group.

Graphic-U.S. vs Indian accountants: link.reuters.

CRUNCHING THE NUMBERS

Auditing is labor-intensive. In offshore centers scattered from Mumbai to Bangalore, swarms of entry-level workers review piles of documents and cross-check numbers on balance sheets.

In India, many rookie accountants consider $10,000 a generous annual salary; their U.S. peers earn five times that.

Attracted by wage savings and Indians' command of English, the U.S. arms of the Big Four have opened offices or joint ventures in India and hired thousands of local workers to do a range of tasks, including tax, consulting and audit work.

PCAOB Chairman James Doty said offshoring helps large firms be efficient. He added: "We have to watch, to be alert for, when efficiency becomes an enemy of quality."

The firms said that their offshored audit work meets the same quality standards as work done in the United States.

A PwC executive said about 4 percent of its U.S. corporate audit work is conducted at "alternate delivery centers," located both inside and outside the United States.

"The work performed at these delivery centers is limited to specified standardized tasks, none of which involves auditor judgment, and is reviewed and supervised by U.S. firm employees," said Michael Gallagher, a PwC managing partner.

PwC's goal is to send about 20 percent of audit work to the delivery centers, said the firm's global chairman, Dennis Nally.

Deloitte said audit workers in India "receive training consistent with their U.S. colleagues, and their work is reviewed and supervised by professionals in the United States."

Viral Thakker is a Mumbai-based partner at KPMG. Its offshore centers in India handle audit, tax and advisory work. He said offshoring gives the firm's overseas clients low-cost "access to a ton of really smart, talented individuals."

Ernst & Young did not respond to requests for comment.

TOUGH SELL FOR SOME

The Big Four started offshoring work to India about a decade ago, at first primarily to prepare tax returns. Today, the firms together employ about 22,000 people in India for offshore operations, mostly in tax and consulting, said industry sources.

Bill Gradison, a PCAOB member until early 2011, said audit firms told him they were moving slowly into offshoring, but that some firms' partners were concerned about control.

"I had a sense that there was some pushback in the United States within firms to some of this," he said.

Communication was another concern. "It is tough to supervise on a remote basis," said Carmichael, the former PCAOB chief auditor.

"You can look at the work papers, but looking the person in the eye and having them respond to spontaneous questions is where you can really assess their capabilities," he said.

With offices around the world, there is little to stop the Big Four from moving more work to countries where they can do it cheaply, said Bruce Pounder, director of professional programs for SmartPros, a firm that provides education for accountants.

In the United States, the PCAOB oversees corporate auditing. The board was set up a decade ago after the book-cooking scandals at Enron Corp and a slew of other big U.S. businesses.

Under law, any firm that audits or plays a major role in the audit of a public U.S. company must register with the PCAOB. Hundreds of firms from more than 85 countries are registered.

NO PACT WITH INDIA

In practice, this has meant the PCAOB has had to forge working relationships with national audit regulators around the world, and it has done so with at least a dozen nations, including the United Kingdom, Germany and Japan.

The PCAOB is struggling to work out a cooperative pact with China, where dozens of accounting scandals have erupted at companies listed on U.S. exchanges. The PCAOB has been barred from inspecting audit firms in China - an issue so serious the PCAOB is considering de-registering Chinese audit firms.

No country hosts more U.S. auditing work than India. No audit failures have been traced to offshore work there, and audit work done in India is routinely sent back to the United States where the PCAOB can review it.

But there is no formal agreement on offshoring with India, which allows the PCAOB unfettered access to inspect audit firms.

The PCAOB's Indian counterpart, the Institute of Chartered Accountants of India, has no oversight of the Indian offshore centers doing audit work on U.S. companies' books.

PCAOB Deputy Chief Auditor Greg Scates told Reuters: "There are no standards that limit what you can do" in the area of Indian offshoring.

He added, "The key question here is, are the staff that's doing the work properly trained and supervised?"

The PCAOB would be concerned if firms offshored audit work involving high risk and judgment, he added.

The PCAOB is considering making auditors disclose in audit reports when major parts of an audit are performed overseas. The proposal comes after PCAOB inspectors turned up numerous problems in overseas audits.

In April 2011, the PCAOB fined an Indian affiliate of PwC $1.5 million for audits of software company Satyam Computer Services (SATY.NS).

In response to the PCAOB's disclosure proposal, some audit firms have asked to be exempted from disclosure in cases where Indian offshore workers are supporting a U.S.-based audit team, which remains in control of the audit.

Like other U.S. companies, audit firms are not required by law to publicly disclose offshore hiring. Audit firms said they disclose offshoring in engagement letters - essentially contracts with their clients - but those letters are private.

Anne Simpson, corporate governance director for the California Public Employees Retirement System, the largest U.S. public pension fund and a major institutional investor, said: "If firms are fully convinced that the decisions they're making about offshoring are sensible, then it should simply be disclosed."

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Apple drops Java after experts warn Mac users on its security

Apple, which has previously included Java with installations of Mac OS X, announced the move on its support site. It said that customers need to obtain Java directly from Oracle if they want to access web content written the widely used programming language. (support.apple.com/kb/DL1572)

Apple did not provide a reason for the change and both companies declined to comment.

Java is a computer language that enables programmers to write one set of code to run on virtually any type of machine. It is widely used on the Internet so that Web developers can make their sites accessible from multiple browsers running on Macs or Microsoft (MSFT.O) Windows PCs.

Two years ago both companies said they had agreed that Apple would one day stop providing Java software to Mac customers and that would Oracle to take on that responsibility. They did not provide a date for that transition.

Apple is implementing that change in the wake of a Java security scare that prompted some security experts to caution computer users to only use Java on an as-needed basis.

Security experts in Europe discovered Java bugs in late August that hackers had exploited to launch attacks. It took Oracle several days to release an update to Java to correct those flaws.

Adam Gowdiak, a researcher with Polish security firm Security Explorations, said on Friday that he has since found two new security bugs in Java that continue to make computers vulnerable to attack.

Gowdiak said that removing Java from Mac browsers reduces the risks of an attack.



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Russia's Yandex targets Google with expansion abroad

Russia's leading internet search engine, Yandex, will take the fight to Google in emerging markets like Turkey in a bid to offset the inroads made by the U.S. giant in its home market.

Yandex founder and chief executive Arkady Volozh told Reuters on Friday the firm was likely to use its own experts to expand into new countries, but would not rule out acquisitions or partnership deals.

"We are focusing on the markets with Google dominance in search ... where they have 90-plus percent market share," Volozh said in an interview in Dublin, adding Yandex would stress to consumers the dangers of one firm dominating the internet.

Yandex is currently focusing on Turkey, where it has eked out a 1 percent market share since it entered the market last year. It describes this as a base for a significant expansion and says it will look to other large markets where it sees no real competition to Google, though Volozh refused to name them.

Yandex, which raised $1.4 billion in an initial public offering (IPO) in New York last year, has seen its share of the Russian search market fall to 60 percent in the second quarter from 64 percent a year earlier, according to LiveInternet.

That is partly due to inroads made by Google.

"We'll be growing 30 percent or something next year, but it's not doubling every year as we used to have four or five years ago. We need to find some new markets, new opportunities ... it could improve our revenues dramatically," Volozh said.

Yandex posted revenues of 20 billion roubleslast year and has a market capitalisation of $7.2 billion.

Google is also under pressure from slowing revenue, shocking analysts on Thursday by reporting quarterly revenue growth of 17 percent year-over-year, the first time its growth has fallen below 20 percent since 2009.

DEFENDING ITS LEAD

Despite the drive to expand abroad, Yandex will defend its market share at home against rivals like Google and Microsoft (MSFT.O), which use proprietary browser and operating systems to encourage users onto their search products, Volozh said.

Last month Yandex launched a browser to compete with Google's Chrome. Norwegian mobile internet browser maker Opera (OPERA.OL) has signed a licensing deal with Yandex to share its browser technology.

The Russian search engine has no plans to follow Google into the hardware market, where it builds mobile phones and tablets, but it would consider it if necessary.

"We will see where we will need to go. Whatever we need to preserve our market share we will do," Volozh said.

While Yandex is building a platform of applications to work on its browser, it expects most revenue to continue to come from search rather than display ads or paid-for services.

Apple (AAPL.O) has blazed a trail selling applications, music and video through its iTunes store. But that market is only a fraction of the size of the tens of billions earned every year in search, Volozh said.

Yandex would not rule out deals to help its expansion abroad, he added.

"It may be one of the models to buy somebody or partner with someone or just to build something from scratch," he said.

The key was to persuade consumers of the importance of maintaining choice and competition.

"We have ended up with these platforms where you are gardened in ... you can't step out of it. This is completely contrary to the initial idea of the internet," Volozh said.


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Retiring Ratan Tata makes bid for hotel group

Two months before he relinquishes the reins at India's largest business house, the Tata Group's Indian Hotels Co Ltd (IHTL.NS) has made an unsolicited and unexpected $1.2 billion bid for luxury hotel group Orient-Express Hotels Ltd (OEH.N).

The offer, priced at a 40 percent premium, may prove the final bold move for Tata, who has built the software-to-steel conglomerate into the country's biggest business house through a series of large overseas deals, not all of them successful.

Investors greeted the Orient-Express offer with wariness, pushing Indian Hotels shares down 5.5 percent on Friday. Indian Hotels would also assume Orient-Express debt, which stood at $530 million on June 30.

Shares in Bermuda-headquartered Orient-Express fell back 0.7 percent in New York on Friday to $10.90, well shy of Indian Hotels' bid of $12.63 per share.

The shares rose as much as 41 percent on Thursday after the bid was announced, closing at $11.05, up 22.5 percent.

Indian Hotels was rebuffed in an attempt to strike an alliance with Orient-Express in 2007, and again in August.

"Generally, acquisitions for Indian Hotels have not been rewarding for the company," said Niraj Mansingka, an analyst with Edelweiss Capital in Mumbai.

Indian Hotels has bought several overseas properties, including the Pierre in New York, but they have not tended to perform as well as its domestic operations, which include its flagship Taj Mahal Palace in Mumbai.

Orient-Express' global portfolio includes the Hotel Cipriani in Venice and the 21 Club in New York, but its heavy exposure to the sluggish European economy has crimped growth.

Indian Hotels rejected the characterisation of Thursday's bid as hostile, even though it was uninvited and Orient-Express had as recently as August rejected an approach for what Indian Hotels said was a "significant" stake in the company.

"If it was a hostile offer it would have been made to the shareholders. It is a friendly, constructive offer," Indian Hotels Vice Chairman R. K. Krishna Kumar told reporters.

He said the company expects a reply within three weeks.

"If this does not go through then we will look at other options. We are open," Kumar told Reuters.

Orient-Express, which has a dual share structure that would make a hostile takeover hard to pull off, has said it will evaluate Tata's approach.

Indian Hotels has the backing of the former CEO of Orient-Express, Paul White, and Luca Cordero di Montezemolo, chairman of Italian sports car maker Ferrari and a close friend of Ratan Tata.

SHOPPING SPREE

Under the silver-haired Tata, a bachelor and car enthusiast who turns 75 in December, the Tata group has been at the forefront of an overseas acquisition binge by Indian companies.

Tata Motors Ltd (TAMO.NS) made one of India's signature buys when it paid $2.3 billion in 2008 for British luxury car maker Jaguar Land Rover, a heavily leveraged deal whose wisdom was questioned at the time but has proven to be a winner.

Tata Steel Ltd's (TISC.NS) $12.7 billion takeover in 2007 of Anglo-Dutch steelmaker Corus, India's largest outbound deal, has been less successful, with the European steel sector plagued by overcapacity, high costs and broader economic troubles.

"Those acquisitions have created very anxious moments in shareholders," said Jagannadham Thunuguntla, head of research at SMC Investments and Advisors Ltd in New Delhi.

"Considering that, (it) needs to be seen how far Indian Hotels group would like to stretch themselves," he said.

Tata, whose titles include non-executive chairman of Indian Hotels, will be succeeded at the helm of the conglomerate by Cyrus Mistry, 44, who is related by marriage and whose father is the biggest shareholder in the Tata Sons holding company.

TRY, TRY AGAIN

Under the proposed deal, the Charme II Fund, managed by the Ferrari chairman's Montezemolo and Partners S.p.A, would invest $100 million for a minority stake in the newly combined group.

Indian Hotels would pay $650 million in cash while the rest would be funded by other Tata entities and debt from ICICI Bank (ICBK.NS), Standard Chartered Bank (STAN.L) and Bank of America-Merrill Lynch (BAC.N), which is also advising the bidder.

Indian Hotels bought a 10 percent stake in Orient-Express in 2007, and now owns about 7 percent.

One analyst at a Mumbai brokerage who tracks Indian Hotels and declined to be identified said the proposal does not look attractive for the Mumbai-based company's shareholders, partly because of the debt that Indian Hotels is already carrying.

Indian Hotels, with a market value of $1 billion, had net debt of 35.7 billion rupees at the end of March.

"It will be earnings-dilutive and worsen the debt profile in a troubled business environment. Orient-Express gets a third of its revenue from Europe, which is facing problems," the analyst said. "Paying 40 percent premium for a property in a low-growth region is probably not a great idea in this environment."



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Govt suspends Kingfisher Airlines' licence

Kingfisher Airlines' licence to operate was suspended on Saturday after the debt-laden Indian carrier failed to address the regulator's concerns about its operations.

Controlled by Vijay Mallya - the self-styled "King of Good Times" - and seven months behind on salary payments among other missed bills, Kingfisher's fleet has been grounded since the start of the month when a staff protest turned violent.

The airline, which has never made a profit since being founded in 2004 and reeling under $1.4 billion of debt, will have its licence reinstated if it provides a plan that satisfies the aviation regulator, a government source told Reuters.

A complete cancellation of the licence was unlikely, said the source, who declined to be named as he is not permitted to speak to the media. A Kingfisher spokesman would not comment.

The company's steep decline underlined the problems of operating in India's airline sector, where players grappling with rising fuel costs face aggressive pricing caused by overcapacity.

Mallya, a liquor baron who owns a Formula 1 motor-racing team, is famous for lavish parties at his $16 million beachside villa in Goa and also his company's annual swimsuit calendar.

The licence suspension, until further notice, was announced by Arun Mishra, director general of Civil Aviation.

The move had been widely expected after Kingfisher failed to respond properly to queries from the regulator regarding its ability to provide a "safe, efficient and reliable service".

"The writing is on the wall," Amber Dubey, director, aerospace and defence at KPMG India, told the ET Now television channel. "It was a matter of when ... the moment is now."

The airline had said on Friday it expected to begin flying again on November 6 if the government approved its plan to resume operations.

The Centre for Asia Pacific Aviation has said a fully funded turnaround for Kingfisher would cost at least $1 billion.