The May Report: 10/21/2010: Rolling Meadows-based Adesso Solutions gets $6MM from Seneca Partners; Groupon forms partnership with Ning; Entrepreneur Jim Frey says it is time to move his firm to another state; Is the fix in for CEC’s call for consultant partners?; Layton Olson on Quinn and jobs; Tarkus Murphy on OLED lighting panels; Len Bland tells of an entrepreneur who turned down a $20MM letter of intent

Editor and publisher: ron@themayreport.com, ronaldmay@aol.com, www.themayreport.com , 773-525-3944.

Assistant editor: Melanie Adcock, iPHONE: 312-259-0610, melanie_adcock@msn.com

If you missed an article, go here: www.tmronline.com/A55951/tmrarticles.nsf/vwFullNewsletter
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TABLE OF CONTENTS

The Scoop section:

– Seneca Partners has provided another $6 million to Adesso Solutions, a
Rolling Meadows, Ill.-based provider of technology solutions for the
consumer goods industry
– Groupon and Ning are launching an affiliate beta program today
– Jim Frey: Looks like it’s time to move my tech company to another state.
– John P. Katsantonis: Can you say “contribution to the Quinn For Governor campaign from Groupon and/or its principals???”
– Matt Moog invites Ron May and others to join BuiltInChicago.org
– City of Chicago Inspector General Joe Ferguson files a report on his recent findings
– Layton E. Olson: Gov. Quinn’s systematic investment in Job-creation through Tech Centers and Internet extension in Chicago and across Illinois
– Tuesday, November 9: ASP Chicago: Join us to Hear Executives from Redbox Talk About Their Successful Strategy
– Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
– Fans Vote on Fate of Facebook and Privacy Issues
– Tarkus Murphy: Moser Baer opens office on top of Information Superglacier(TM) for Organic Light Emitting Diode (“OLED”) lighting panels

[Editor's note: Ron May here.

* I watched the Quinn/Brady debate last night at 10:35pm and although I might have dozed off for part of it, I did hear Governor Quinn refer to the Groupon deal at least three times and he also referred to some firm in Rochelle tied to railroad tracks, I believe he said, that was brought here from Wisconsin if I heard correctly. It is obvious that the timing of this announcement is at the very least political.

* Now, I have heard that the CEC without David Weinstein is just about the same as it was with David Weinstein -- a clique for insiders.
+++++++++++++++++++++++
Subject: CEC RFP
Date: 10/14/2010 4:45:25 P.M. Central Daylight Time
From: Name withheld upon request
To: ronaldmay@aol.com

Hey Ron:
See if you can shed some light on this opportunity. My question is why the short application window, only 11 days from 10/11 to 10/22. Cynical me thinks it might be wired for someone tipped off well in advance. Please leave my name out since I might be part of a team that applies ... thanks.

cecconsulting.wordpress.com/

++++++++++++++++++++++++++++

I talked to Jason Jacobsohn about this at the Tech Pitch meeting Tuesday evening and he said he thought they gave about two weeks' notice, but whether it is ten days or two weeks, it is short notice, we would all have to agree on that and it is entirely likely based on the past history of the way the CEC operates and the way the i2A fund has been run, the fix is in, so to speak.

* Len Bland told me yesterday when I called him to complain about how the Tech Pitch meeting was run fairly loosey goosey by Dave Carman that he recently delivered a letter of intent to an entrepreneur for $20MM in funding and the entrepreneur refused to sign it. Len said that is when he realized that the guy was flaky and he decided to distance himself from the guy. Now this entrepreneur has not presented at BNC Venture Capital Group, Len told me, since that group focuses on deals below $5MM. But Len did say that this was the best idea he has seen in a long time. Nonetheless, as Bill Weaver was wont to say frequently, the worst thing for an investor is a megalomaniacal entrepreneur who won't listen to advice.

* Tuesday night, I asked Mike Rhodes at Tech Pitch how the fundraising for Ed Domain has been going. Mike just said "not from me." That is open to quite a bit of interpretation. It could mean that someone else funded him. It could mean that the process is continuing, but you would figure that if the process were continuing, Mike would have indicated that. Time will tell.

I know Ed thinks that Melanie and I are toxic but that just puts me at least in some very good company. I really don't feel that Melanie has earned the toxic appellation -- yet, and she may never earn it. Melanie is just now leaving SES at 6:30pm. She said she conducted some good interviews and that does not count running into Dalka who told her that "the people in Chicago are idiots." Dave, how stupid can you be? Melanie is a reporter now. Melanie is headed over to see Troy Henikoff's talk as this goes out. [Editor's note: Ron May here. It is 11:25pm on Saturday, February 26, 2011. As the publisher and editor of TMR, I have to exercise my best judgement in a situation like this. David Dalka has been claiming repeatedly since this first appeared in the report that he did not say that and that Melanie was misquoting him. Melanie had been secretly taping her conversations at SES with her iPhone but the phone got fouled up and she could not retrieve the tape. Too bad, because that would have settled the dispute. But Melanie has repeatedly told me that David did say what she quoted him as saying. David Dalka maintains that Melanie asked him about why he was not speaking at SES and he responded, "I don't know, why don't you ask the people in Chicago?" The actual word idiots does not appear anywhere in Dalka's version of the conversation. Futthermore, Dalka maintains that Steve Lundin set Melanie up to tell me this about what Dalka said. I don't buy that at all. Dalka says that Lundin was trying to get him to say something like the comment that Melanie reported to me, but he had refused to do so. In fact, Lundin admits that he tried to get Dalka to say this, but Dalka refused and it is true that Lundin wrote an article about Dalka in his BIGFrontier newsletter. Dalka has told me that in the last year or more, he has consciously withdrawn from attending Chicago technology events and that he has deliberately tried to change his image and his so-called brand. He wants to be viewed as more amenable to the Chicago tech community and less as a critic. He also has attempted to to focus on higher level business connections and mostly outside of Chicagoland. Dalka has made an effort, I have noticed, to curtail his remarks about the Chicago tech world and he has tried to modify his reputation. I agree that Dalka's association with me and with other well-known critics has possibly hurt his attempt at branding himself as a serious person rather than as a gadfly. But Dalka was talking to Melanie here and he did not know her, although he may have seen her at some previous tech events. This is a tempest in a teapot but I refuse to just remove the comment. But in fairness to Dalka, I am registering his objections to what Melanie reported directly to me.]

Dan Miller who has recently retired from the Heartland Institute nancyjthorner.wordpress.com/2010/07/12/heartland-institute-toasts-stellar-journalist-dan-miller-on-his-retirement/ said the same thing about moi a few years back and Steve Miller of Origin Ventures (www.originventures.com/principals.html) has often said in the past (going back ten years) that The May Report is one of the big reasons that Chicago has failed to take off as a tech center. Hey, you can’t buy that kind of publicity! You have to earn it by being mean and vicious.

* Lastly, two plus weeks ago Lundin told me how he had been thinking that Tony Curtis would die soon — a day before he died. Well, it has happened again. Yesterday, Lundin came across a picture of Bob Guccione with him from twenty years ago and he was thinking that Bob did not have much time and guess what? Bob Guccione who founded Penthouse Magazine died today. www.independent.co.uk/news/people/news/the-naked-ambition-of-bob-guccione-2113337.html

Lundin, I hope you don’t come across any pictures of me in the near future.

Enough for today.]
_________________________________
The Scoop section:
_____________________
Seneca Partners has provided another $6 million to Adesso Solutions, a
Rolling Meadows, Ill.-based provider of technology solutions for the
consumer goods industry

Seneca Partners has provided another $6 million to Adesso Solutions, a
Rolling Meadows, Ill.-based provider of technology solutions for the
consumer goods industry. Seneca, of Birmingham, Mich., is a private
investment firm.

PRESS RELEASE

Adesso Solutions, the leader in integrated technology solutions for the
Consumer Goods industry, today announced an incremental multi-million dollar
support by its original investors to accelerate the company’s growth,
enhance service to customers, and expand its product offering over the next
12-18 months.

This financial support is further evidence that investors are confident
Adesso Solutions will develop into a much more significant enterprise, and
their optimism toward the TPM solutions industry and the company’s ability
to continue as the predominant provider.

“Having completed the migration of the Gelco customers to the
TradeAdvantage SaaS platform, we believe Adesso Solutions is ideally
positioned for tremendous growth and continued success” said Ron Reed of
Seneca Partners, Chairman of the company’s Board. “Our Trade Promotion
Management solution and related products now combine the best of Adesso
Solutions and its acquired company, Gelco Trade Management Group. Our
offering is a rich solution set that provides customers robust performance,
platform flexibility and excellent value. The breadth of business processes
that our solutions touch has created leadership opportunities in attractive
segments including Food, Beverage, Packaged Goods, Health and Beauty,
Pharmaceuticals, and Food Service.”

Jill Natzke, Adesso Solutions’ EVP of Product Management added, “We will
use this financial support to strengthen and enhance our leadership and
customer service teams, strengthen our delivery infrastructure, and launch
our next-generation product set scheduled for introduction early next
year.”

About Adesso Solutions

Adesso Solutions is a leading integrated technology solutions provider
primarily serving the Consumer Goods industry. Our solution suite is the
best of the Adesso Solutions’ TradeAdvantage and Gelco TMG product
offerings delivered on a state-of-the-art, secure Microsoft platform. We
proudly support 120+ customers managing over 300,000 trade promotions
annually across all verticals of Consumer Goods.

For more information or to schedule a product demonstration, visit:
www.AdessoSolutions.com or contact us at 847.342.1095.

About Seneca Partners

Seneca Partners is a private investment and investment banking firm serving
middle market companies in the healthcare, technology, business service and
high‐value manufacturing industries. Drawing on its management, investment
and transaction experience, Seneca Partners provides the guidance and
resources necessary to navigate the complexities of managing growth and
executing acquisitions, divestitures and other strategic initiatives. In
select situations, Seneca Partners provides debt, mezzanine or equity
capital directly, or with its partners, to fund growth financings,
acquisitions or change of control transactions for companies serving
Seneca’s target industries.
_____________________________________
Groupon and Ning are launching an affiliate beta program today

topicfire.com/Ning-Gets-Its-Groupon-On-15830996.html

Here come the Groupon partnerships. In what may be the first of several big
distribution deals aimed at cementing its lead in social commerce, Groupon
and Ning are launching an affiliate beta program today. Anyone who runs a
Ning social network can now add a Groupon widget with geo-targeted daily
deals. They will get a cut of any Groupon deals purchased through their Ning
sites, and Groupon will extend its reach potentially to tens of thousands of
new sites with strong communities who perhaps would like to start buying
things together. The program is in limited beta now, and will be rolled out
as an option for all Ning sites by early next year.

Besides Ning, Groupon may soon strike similar deals with Yahoo, eBay and
Citysearch. The goal is to become the de facto brand for daily deals.

As we’ve noted before, there is a lot of competition in the daily deal space
and there is a real danger that margins could one day collapse. Although,
it’s hard to say what the saturation point is for these types of offers. One
of the best things Groupon has going for it is its first-mover advantage,
amazing economics, and its growing brand. These types of partnerships are
all about blowing out distribution even bigger than Groupon can do on its
own. The margins will be smaller, just as with all affiliate networks, but
it is the same strategy Amazon pursued successfully with its affiliate
program, or even Google with AdSense.
______________________________________
Jim Frey: Looks like it’s time to move my tech company to another state.

From: Jim Frey
Subject: Re: The May Report: 10/20/2010: What’s with the broke State of Illinois giving $3.5MM to Groupon for the creation of 250 jobs?; The first meeting of Tech Pitch, a new SIG inside BNC; Uki Lucas and a share a cab Android app; Software alerting you when they are there when you’ve been put on hold; Kimberly Chulis of Core Analytics tells attendees asking perfectly reasonable & logical questions that she’s “not here to be hauled on the carpet”; The falcon cannot hear the falconer and the center cannot hold at The Trib.
Date: Thu, 21 Oct 2010 09:18:43 -0700 (PDT)
To: The May Report

The State is just giving away money, $3.5MM is cheap for 250 jobs, they’re paying this Japanese company $12MM for 250 jobs too –

www.chicagotribune.com/news/chi-ap-il-railcarmaker,0,4059913.story

Looks like it’s time to move my tech company to another state.
- Jim
__________________________________
Ron May here. The State of Illinois might want to check out some of the findings of and tenets of the field of behavioral economics which show that economic behavior is often far from “rational” in strictly probabilistic or mathematical terms. People respond heavily to their innate sense of fairness in economic decision making. Hence, although the funding of Groupon may make sense on many levels, there are plenty of small entrepreneurs growing their firms who will feel resentment and they may be saying to themselves, “Hey, wait, what about me?” Professor Steve Levitt discussed this issue in some detail in his keynote talk at the LES convention on September 27th.
__________________________________
John P. Katsantonis: Can you say “contribution to the Quinn For Governor campaign from Groupon and/or its principals???”

From: “John P. Katsantonis”
Subject: Re: The May Report: 10/20/2010: What’s with the broke State of Illinois giving $3.5MM to Groupon for the creation of 250 jobs?; The first meeting of Tech Pitch, a new SIG inside BNC; Uki Lucas and a share a cab Android app; Software alerting you when they are there when you’ve been put on hold; Kimberly Chulis of Core Analytics tells attendees asking perfectly reasonable & logical questions that she’s “not here to be hauled on the carpet”; The falcon cannot hear the falconer and the center cannot hold at The Trib.
Date: Thu, 21 Oct 2010 15:15:42 -0500
To: The May Report

Can you say “contribution to the Quinn For Governor campaign from Groupon and/or its principals???”

DUHHHHhhhhhhhhhhhhh~jk

John P. Katsantonis
Chief Reality Officer
847-526-3622
___________________________________
Matt Moog invites Ron May and others to join BuiltInChicago.org

Subject: Invitation to BuiltInChicago.org
Date: 10/21/2010 4:21:55 P.M. Central Daylight Time
From: member@linkedin.com
Reply To: matt@viewpoints.com
To: ronaldmay@aol.com
CC: mike@maddockdouglas.com, rwmaher@hotmail.com, jmalackowski@oceantomo.com, lmalhotra@cars.com, matt@grubhub.com, kevin@malover.com, dave@semaphoremedia.com, scott@scottjmanley.com, mermann69@msn.com, mickey.mantas@gmail.com

LinkedIn
Matt Moog has sent you a message.

Date: 10/21/2010

Subject: Invitation to BuiltInChicago.org

We recently launched BuiltInChicago.org as a resource for the Chicago “digital” community to connect, learn and promote the city of Chicago. We are forming groups around specific interests such as User Experience design, Social Media, SaaS, Venture Capital, Mobile etc.

Click on the link below to register and automatically be connected to me

www.builtinchicago.org/?xgi=0u7xMZ5OCxhJGF

____________________________________
City of Chicago Inspector General Joe Ferguson files a report on his recent findings

Subject: Chicago inspector general outlines irregularities – 247 South State $8M TIF
Date: 10/18/2010 1:36:53 P.M. Central Daylight Time
From: tomrbennett@yahoo.com
To: RONALDMAY@aol.com

Ron:

Surprisingly, there is no mention in today’s release of the Inspector General’s investigative report related to the non-performance matters involving the $8,000,000 TIF awarded to 247 South State Street.

Sincerely,

Tom Bennett 773.658.4830 (mobile)

www.suntimes.com/news/cityhall/2812428,chicago-inspector-outlines-irregularities-101810.article

Chicago inspector general outlines irregularities

October 18, 2010
By FRAN SPIELMAN City Hall Reporter

A Chicago Department of Streets and Sanitation foreman, who resigned after being caught spending several hours a day surfing the Internet and leering at porn sites.

City Health Department nurses and medical assistants, who were suspended or fired after being accused of improperly swiping in and out of work, shortening their work days or charging the city for commuting time.

An assistant city aviation commissioner, who was forced to resign after allegedly manipulating the awarding of a “large” contract to a company with whose executives he or she had golfed or vacationed with or solicited for campaign contributions.

City of Chicago Inspector General Joe Ferguson had a full plate again in the past few months, and those investigations – outlined in a report Monday – were among the reasons why.

One of the most troubling irregularities Ferguson uncovered: contract irregularities at the city’s Office of Emergency Management and Communications that pose a “significant risk to the city’s emergency preparedness.” OEMC was accused of improperly routing a $23 million sole-source contract to a company – identified by City Hall sources as Schaumburg-based Motorola – when the deal should have been competitively bid.

To justify the no-bid contract, OEMC officials cited an earlier, $2 million deal with Motorola for similar technology. In fact, the earlier expenditure was $350,000. And that, too, was spent “without any contract or procurement process whatsoever,” Ferguson wrote.

“As a result, the city is now committed to a digital radio system that has never been the subject of any competitive procurement process,” Ferguson wrote.

The inspector general noted that his investigation was “ultimately frustrated” by the “debilitating combination” of “high turnover, endemic finger-pointing, poor or non-existent internal controls and missing paperwork.”

“OEMC’s long-running failure to effectively manage the procurement and contract process presents a significant risk to the city’s emergency preparedness, fiscal security and grant compliance,” the report states.

“The IGO is not suggesting that the city’s current emergency preparedness is substandard. We did not evaluate that. We merely note that bypasses of competitive bidding and purchase and contract protocols increases the risk of substandard outcomes in his critical realm.”

As always, the quarterly report withholds the names of the city employees and contractors involved, as required by law. But here’s a sampling:

* The former executive director of a city-funded agency allegedly stole more than $250,000 in Head Start funds provided to the agency in 2005 by depositing the money into personal bank accounts and using it for personal expenses. The case was referred to the U.S. Attorney’s Office and the Illinois Attorney General’s Office, both which declined to prosecute, citing statute of limitations issues and a lack of resources. The city has not yet taken action to recover those costs.

* A former employee in the internal audit section of the city’s Office of Compliance who allegedly accepted more than $3,500 in gifts – including meals and sports tickets – from three vendors over whom that worker had contract-management authority.

During the course of the investigation, one of the vendors was accused of providing “false and misleading responses” to an IGO subpoena.

Ferguson recommended that: the former employee be placed on the city’s do-not-rehire list, the three vendors be fined and placed on “deferred debarment for two years” and that four individual partners of the city vendors be permanently barred from doing business with the city.

* A “senior official” and two certification officers in the city’s Department of Procurement Services were suspended after it was found they “mistakenly certified” a construction company as a woman-owned-business enterprise, even though company revenues topped $36 million – $5 million more than what the city allows to get the certification.

The company in question got $120 million in city contracts after “improperly receiving WBE certification.”

“The error resulted because the … employees repeatedly applied the wrong standards, made basic math errors and appeared to have little to no understanding of the rules and regulations,” the inspector general wrote.

* A hoisting engineer assigned to the city Department of Water Management served a three-day suspension after being accused of using a city backhoe 10 times over a one-hour period to plow the snow in front of his or her home without authorization, on city time.

* A “delegate agency” and its president allegedly defrauded the city by falsely claiming to be current on its payroll-tax obligations. In fact, Ferguson’s investigation determined that the agency used the funding it got from the city for payroll taxes to mask its “chronic cash-flow” problems.

* Careless record-keeping by employees at Chicago’s Commission on Animal Care and Control resulted in an “unprocessed citation that never received an administrative hearing date.” An animal control officer was accused of lying to investigators, falsifying and misrepresenting city documents and adding an “after the fact” signature to a carbon copy of the citation to create the appearance that it had been properly executed. Ferguson recommended a 30-day suspension. Instead, the animal control officer was suspended for seven days.

The inspector general also recommended policy changes after discovering that the city was still paying the salaries and benefits of employees found guilty of of alleged building and zoning shakedowns in the joint city-federal investigation known as Operation Crooked Code.
____________________________________
Layton E. Olson: Gov. Quinn’s systematic investment in Job-creation through Tech Centers and Internet extension in Chicago and across Illinois

Subject: Gov. Quinn’s systematic investment in Job-creation through Tech Centers and Internet extension in Chicago and across Illinois
Date: 10/21/2010 11:08:06 A.M. Central Daylight Time
From: leo@howehutton.com
To: RONALDMAY@aol.com

Ron,

See my letter to the editor to the Tribune today (see at bottom) which links interestingly with your coverage of Groupon press event of Gov. Quinn, and which prompted my “short history” of Quinn’s practical good government “return on investment” approach to supporting a couple dozen more job-creating tech parks across Illinois – including in some underinvested parts of Chicago.

Question: were you there to ask questions?

Plaudits — and Brief History of Investment (and visibility and non-visibility) in Advanced Communication and Economic Development in Illinois

Meanwhile, thanks to May Report and Chicago Sun-Times for providing visibility for one Chicago “job-creating tech center” and “return on investment” success story in Governor Quinn’s 5 year leading edge efforts (begun while Lt. Governor) of public-private Broadband Deployment Council now working in Broadband Opportunity Partnership in 4-6 regions across the state. The BDC, whose members include several contributors of information to May Report, is “unique in the nation” in 2 ways – first, it involves a Top Public Official Champion who “gets it” that our state’s economic future is linked with investment in advanced communication (fiber + 4G & 5G towers in every rural community or urban tract of 500 to 2,500, and that ALL citizens (not today’s 60-65%), businesses and public agencies and community enterprises need Digital Skills and Regular Internet Access (whether at home, work or community location) to compete in world economic environment. Second, that successful investment means the development of systematic and personal working relations among “supply,” “demand” and “policy” parties, in every region of our state, and eventually in every Local Area Project area of 50,000 (in rural and exurban areas) to 150,000 to 300,000 (in urban and suburban areas).

The Governor’s Broadband Deployment Council, led initially by top tech advisors recruited by Pat Quinn, and now assisted by our state’s new public-private Partnership for a Connected Illinois, chaired by Charles Benton and led by Springfield-based executive director Drew Clark since February 2010 (recruited as nationally known founder of Broadband Census headquartered in D.C.), since the initial Executive Order in 2005 has strengthened inclusive personal and institutional relations among 3 diverse constituencies which must cooperate to secure basic goals, such as increasing Illinois’ 8 Tech Parks today (normally next to major universities) to 28 or more Tech Parks in many parts of Chicago area, and in top-priority economic development “nodes” around the state, similar to major offramps on the Information Highway. The 3 constituencies are: Advanced Communication “supply” companies (like major incumbents, competitors, wireless and cable providers), universities (like NIU, SIU, UIUC, Northwestern’s ICAIR, UIC, WIU, EIU, UIS, ISU) and agencies (like CMS, Illinois Century Network, IDOT, regional and state libraries and education agencies), “consumer demand” parties including public computing & community technology center, digital workforce skill training and Internet extension outreach parties (like Lumity, Digital Workforce Education Society, Illinois Clicks, One Economy, Community Life Initiative (network I’m involved with), Illinois Association of Regional Councils (a multi-county regional planning organization which former NIPC head Ron Thomas and I have worked with), MyWay Village (a senior housing project Don Samuelson’s involved in, and which recently got ARRA project funding announced in September 27-28 events at Abraham Lincoln Presidential Library in Springfield) and “advanced communication policy” parties, which have helped Illinois encourage broadband extension through simplification of regulation, encouraging competition among landline, cable, wireless and satellite private and community enterprise parties, and achieving “dig once” state legislation earlier this year in which every state-supported construction or utility project of any kind must install “conduit” through which fiber can be run (at a later time), and state legislation to require simplified sharing of public right of way towers (without years-long negotiation). The “trenching costs” are often 90% of fiber to the home or business premises costs, and state and local governments as well as communication companies “reduce the burdens” of government by not digging up the streets separate times for water, sewer, electricity, communication, natural gas and street/highway paving purposes.

The announcement at Groupon this past week as an important “big return on public investment” was really born at a cutting edge Digital Illinois hearing in July 2008 at the Thompson Center in Chicago, convened by Illinois House of Representatives Computer Technology Committee, Reps. Constance Howard, Julie Hamos and their Republican counterparts, facilitated by then-Lt. Governor’s BDC technology staff, and featuring the CIO’s of State of Illinois Greg Wass, City of Chicago Hardik Bhatt, and Cook County Tony Hylton, and the release of the 3 BDC committee reports on Benefits of Broadband and Recommendations for Action. As a result of that hearing, there was a consensus that Illinois General Assembly leaders needed to concentrate on securing major Federal funds by allocating state matching funds then currently sitting unused in Illinois treasury and coming from legislatively-negotiated payments from telecommunication companies in formulas from 2002 (I believe) Telecommunication Rewrite law which generated $15 million payments (over 3 years) into Illinois Eliminate the Digital Divide Grant Program (for digital literacy training, now by over 100 centers across the state) and EDD Infrastructure Program (for middle and last mile infrastructure programs, primarily in underinvested rural areas). As a result, in January 2009, during the Blagoyevich to Quinn transition process, the Illinois General Assembly allocated $5 million to match Federal funds, on a 7 to 1 basis ($2 million matched $14 million in FCC rural health network fiber + wireless funds led by NIU) and $3 million for 15 pilot programs in every region of Illinois (which investment contributed substantially to $18 million Federal healthcare IT announced this year, and linked with Illinois health and family services agency, now led by then-Rep. Julie Hamos. As well, in summer 2009, Gov. Quinn, working with bipartisan leaders Sen. Cullerton, Sen. Radogno, Speaker Madigan, House Ranking Republican Cross on Illinois first capital bill in a decade. Given, as we all know, Illinois is in severe financial condition, Gov. Quinn and Assembly leaders allocated $50 million for “broadband capital” which was essentially to be used to match Federal funds on a 4 or 5 (or sometimes 10) to 1 “return on investment” basis for projects themselves which will return job-creating and skill-building through lower cost, higher quality advanced communications. Including, enabling real estate parcels in Illinois (access through on-line Location service of DCEO) to showcase when they have fiber or other advanced communications, which enables them to be considered in daily searches by national and international “site selection” companies. Such advanced communication-based “return on investment” strategies are paralleled by employer workforce training and other employer incentives developed and coordinated also through DCEO, as was the case with the Groupon job-creation, tech center-expansion project in the old Montgomery Wards facility along the Chicago River.

Ron, as you know a century ago Chicago was known for companies like Sears and Wards as railroad-based catalog-order mass market companies, followed by similar Chicago mail-order companies like Spiegel (and many others which your readers might describe) and recently Lands End as a Chicago-Wisconsin story. And, today a western suburban Darkstrand Inc is the business reseller of up to 50% of Federally-financed fiber (of 12,000 mile? Lambda Rail network among research labs like Argonne across the country, with Chicago being – perhaps still – the Internet transmission volume crossroads of the world) to companies needing advanced video and health-linked transmission services.

See my long-letter to Tribune for note on how Gov. Quinn’s leadership and Illinois Century Network was key to gaining $245 million in Federal awards to Illinois companies, institutions and nonprofit organizations and state agencies (including $61 million for ICN) to match state, local and private investments by 17 ARRA-supported projects in 4 + 2 regions around the state, totaling $351 million over the next 2 years. You can get more info on these from DCEO, PCI and others.

In working to communicate that Groupon (and other companies as promoted by Illinois Technology Association and many other technology-linked chambers of commerce) is building Chicago – and Great Lakes – identity as Digital Content (sales & service & logistics) Crossroads of the World, it’s great to get your attention and that of other technology, business and – eventually – entertainment and cultural media writers. For example, did you get a chance to cover last week’s TEDxMidwest couple of days of great stuff at Chicago’s Museum of Contemporary Art? The parties who put together Groupon (and linked investments in Echo Global logistics and a printing intermediary and a serial tech investment company) are part of the leadership for that, and have plans for a bigger TED (technology, entertainment, design) Ideas week next year — sort of a Chicago Humanities Festival on steroids, that they’re importing from the Silicon Valley model of network-strengthening and cross-fertilization which leads, yes, to eventual job creation through new industries coming along in a series of 5 year cycles, but which can all benefit from Chicago’s make-no-small-plans culture.

(Another story down the line –) Including, perhaps, a green tech university-community-related job-generating complex as part of sale of Childrens Memorial Hospital site in Lincoln Park, as CHM moves downtown in 2012. I’m very interested in this area, as I attend St. Pauls Church which is right across the street. You might want to check with US Equities which I understand is handling the sale for CHM, with (retiring) Ald. Vi Daley and a widespread network of community parties that would like to see a LEED-level, historic renovation (of old brick buildings) with workforce/senior housing and a calm community walk-through park on the premises (not a movie complex), across from DePaul University campus.

I will be away from tomorrow through the 30th,and in the meantime – best for the conversation.

Chicago Tribune

Voice of the People, Oct. 21
Job creation

I endorse Gov. Pat Quinn for achieving job creation and for reducing the costs of government through Digital Age services and budget cost-cutting.

He has led Illinois’ economic engine via job-creating tech centers with advanced communication in all 102 counties, with enterprises at 48 community colleges, regional universities, libraries and health institutions.

With Quinn we will steadily achieve the adoption of the building blocks of our middle-class living standard – smart library cards, digital textbooks, job-application profiles, electronic health cards, Internet TV, mobile devices, information kiosks and electronic town halls.

- Layton Olson, Chicago

_______________________________________

200 word letter to editor of Chicago Tribune — from which 95 word edited version appeared in October 21 Voice of the People section – was submitted in response to Tribune’s request on October 13 for letters supporting candidates for Governor. The first letters appeared Sunday October 17 in a batch, and other letters have appeared in daily Voice of the People letters section. A similar set of letters for candidates for US Senate are set to begin Sunday October 24.

From: Layton E. Olson
Sent: Wednesday, October 13, 2010 1:15 PM
To: ‘ctc-tribletter@tribune.com‘
Subject: Gov. Quinn — for Digital Age Illinois at Internet Crossroads of the World

I endorse Gov. Quinn for achieving job-creation, and for reducing the costs of government through Digital Age services and budget cost-cutting.

He has led Illinois economic engine, including via job-creating Tech Centers with advanced communication in all 102 counties, with enterprises at 48 community colleges, regional universities, libraries and health institutions. As recognized in the Nobel prize for economics, such Career Centers are key to faster matching of applicants with jobs, for retraining and starting new ventures, and support services.

A success story in Chicago lies in the old Montgomery Wards facility, with worldwide tech sales and service companies like fast growing Groupon launched in 2008, now with market share in 29 countries.

Illinois recently won $245 million in Federal broadband awards, matched by state and private funds totaling $350 million. Including for five Smart Chicago communities and 79 Chicago libraries for Internet for an added 20-30 percent of businesses and residents.

With Gov. Quinn, we will steadily achieve the adoption of the building blocks of our middle class living standard — smart library cards, digital textbooks, job-application profiles, electronic health cards, Internet TV, mobile devices, Information kiosks and Electronic Town Halls..

(Note: As a party who has worked with statewide Broadband initiatives since at least 2005, I would also be pleased to send you a longer (500 word) draft. I would encourage you to ask Gov. Quinn, Sen. Brady and other candidates what they will do to Create Digital Age Economy and Standard of Living for Illinois. Perhaps challenge each of them to host or participate in a Digital Town Hall with a representative cross-section of citizens and businesses at a community college or university of their choice. Thank you for convening your Digital Age letters to the editor, endorsement edition! I look forward to the responses.)

Layton Olson

2335 N. Commonwealth Avenue, #3G

Chicago, IL. 60614

773-348-2739 h

312-26303001 o
_______________________________________
Tuesday, November 9: ASP Chicago: Join us to Hear Executives from Redbox Talk About Their Successful Strategy

From: “ASP-Chicago”
Subject: Nov 9th — Join us to Hear Executives from Redbox Talk About Their Successful Strategy
Date: Thu, 21 Oct 2010 14:14:51 -0500
To: ron@themayreport.com

If you’re having trouble viewing this email, you may see it online.
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ASP – Chicago
Presents

“Strategic Planning for a Disruptive Innovator”
with Brian Rady and Andrew Tarman

Dear Colleague,

On behalf of ASP – Chicago, we extend a special invitation to join us for what we know will be an interesting presentation and conversation with Brian Rady of Redbox Automated Retail and Andrew Tarman of Redbox Automated Retail.

Register Now

Thank you. We look forward to meeting you on Tuesday, November 9th 2010.

Rick Kaufmann, President

Beginning with eight locations in 2002, Redbox now has over 25,000 kiosks nationwide. Revenues this year are expected to exceed $1 Billion. In the process of driving the extraordinary growth and success, Redbox has fundamentally reshaped the DVD rental market. While the Blockbusters and Hollywood Videos of the world have declared Chapter 11 bankruptcy (Chapter 11 and Chapter 7, respectively), Redbox is capturing rapidly growing market share.

Redbox’ concept is simple. Over 25,000 fully automated kiosks each hold roughly 630 DVDs, representing up to 200 of the newest movie releases. Consumers use a simple touch screen to select and rent their favorite movies for $1/night ($1.50/night for Blu-ray). They keep the movie as long as they like and return the movie to any Redbox kiosk when they are done.

The company originated in 2002 out of McDonald’s Corporation which was looking for ways to drive traffic to McDonald’s restaurants. Following successful test marketing in 2003-2004 and market expansion in 2005, Redbox demonstrated the power of its business model. Coinstar, Inc. then bought a 47% share in the company in November of 2005 – expanding that investment to full ownership in January 2009.

This is an exceptional, real world case study in disruptive innovation. Brian Rady and Andrew Tarman will share Redbox’ strategic planning process with us. They will provide insights for how we can apply these same innovation and strategy development techniques to our own businesses and our own industries – helping us to capture similar growth and defend against the disruptive innovators working to target our customers and our markets today.
Registration

Advanced Registration Registration Onsite
Member $40.00 $50.00
Non-member $60.00 $70.00
Student $30.00 $40.00
Affiliate $40.00 $50.00
Agenda
05:15 PM to 06:00 PM Registration and Networking
06:00 PM to 06:15 PM 1-1-15 Presentation
06:15 PM to 07:00 PM Presentation
07:00 PM to 07:30 PM Questions/Discussion/Adjournment

* Advanced registration ends at midnight Monday, November 8.

* For more information contact: Christine Glatz – 815-806-4908

“Strategic Planning for a Disruptive Innovator”

Tuesday, November 9th 2010
5:15 pm to 7:30 pm

The Metropolitan Club
233 S. Wacker
Chicago, IL 60606
312.993.2500

Register Now

eventling.com/index.php?file=event_details&companyId=7&event_id=506

________________________________________
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
By Jesse Drucker – Oct 21, 2010 5:00 AM CT

Google Inc. European Headquarters in Dublin

The Dublin subsidiary, which employs almost 2,000 people and sells advertising across Europe, the Middle East and Africa, has more than tripled its workforce since 2006 and is credited with almost 90 percent of Google’s overseas sales, which totaled $12.5 billion in 2008. Photographer: Paul McErlane/Bloomberg
Google Uses Loopholes to Cut Taxes by $3.1 Billion

Play Video

Oct. 21 (Bloomberg) — Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. Google’s income shifting helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization. Bloomberg’s Melissa Long reports. (Source: Bloomberg)
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

The Google Inc. European headquarters Dublin. Photographer: Paul McErlane/Bloomberg
Google Inc. European Headquarters in Dublin

The Google Inc. European headquarters are seen in Barrow Street, Dublin. Photographer: Paul McErlane/Bloomberg
Google Inc. European Headquarters in Dublin

The Google Inc. company logo sits at their European headquarters in Barrow Street, Dublin. Photographer: Paul McErlane/Bloomberg
Google Shows How $60 Billion Is Lost to Tax Loopholes

Pedestrians walk past the offices of the Conyers, Dill & Pearman law firm in Clarendon House located on Church Street in Hamilton, Bermuda. Photographer: Mark Tatem/Bloomberg

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

“It’s remarkable that Google’s effective rate is that low,” said Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”

The U.S. corporate income-tax rate is 35 percent. In the U.K., Google’s second-biggest market by revenue, it’s 28 percent.

Google, the owner of the world’s most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. (See an interactive graphic on Google’s tax strategy here.)

The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros.

Countless Companies

Google, the third-largest U.S. technology company by market capitalization, hasn’t been accused of breaking tax laws. “Google’s practices are very similar to those at countless other global companies operating across a wide range of industries,” said Jane Penner, a spokeswoman for the Mountain View, California-based company. Penner declined to address the particulars of its tax strategies.

Facebook, the world’s biggest social network, is preparing a structure similar to Google’s that will send earnings from Ireland to the Cayman Islands, according to the company’s filings in Ireland and the Caymans and to a person familiar with its plans. A spokesman for the Palo Alto, California-based company declined to comment.

Transfer Pricing

The tactics of Google and Facebook depend on “transfer pricing,” paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries. Such income shifting costs the U.S. government as much as $60 billion in annual revenue, according to Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.

U.S. Representative Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee, and other politicians say the 35 percent U.S. statutory rate is too high relative to foreign countries. International income-shifting, which helped cut Google’s overall effective tax rate to 22.2 percent last year, shows one way that loopholes undermine that top U.S. rate.

Two thousand U.S. companies paid a median effective cash rate of 28.3 percent in federal, state and foreign income taxes in a 2005 study by academics at the University of Michigan and the University of North Carolina. The combined national-local statutory rate is 34.4 percent in France, 30.2 percent in Germany and 39.5 percent in Japan, according to the Paris-based Organization for Economic Cooperation and Development.

The Double Irish

As a strategy for limiting taxes, the Double Irish method is “very common at the moment, particularly with companies with intellectual property,” said Richard Murphy, director of U.K.- based Tax Research LLP. Murphy, who has worked on similar transactions, estimates that hundreds of multinationals use some version of the method.

The high corporate tax rate in the U.S. motivates companies to move activities and related income to lower-tax countries, said Irving H. Plotkin, a senior managing director at PricewaterhouseCoopers LLP’s national tax practice in Boston. He delivered a presentation in Washington, D.C. this year titled “Transfer Pricing is Not a Four Letter Word.”

“A company’s obligation to its shareholders is to try to minimize its taxes and all costs, but to do so legally,” Plotkin said in an interview.

Boosting Earnings

Google’s transfer pricing contributed to international tax benefits that boosted its earnings by 26 percent last year, company filings show. Based on a rough analysis, if the company paid taxes at the 35 percent rate on all its earnings, its share price might be reduced by about $100, said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida. He recommends buying Google stock, which closed yesterday at $607.98.

The company, which tells employees “don’t be evil” in its code of conduct, has cut its effective tax rate abroad more than its peers in the technology sector: Apple Inc., the maker of the iPhone; Microsoft, the largest software company; International Business Machines Corp., the biggest computer-services provider; and Oracle Corp., the second-biggest software company. Those companies reported rates that ranged between 4.5 percent and 25.8 percent for 2007 through 2009.

Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures.

“Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”

Taxpayer Funding

The U.S. National Science Foundation funded the mid-1990s research at Stanford University that helped lead to Google’s creation. Taxpayers also paid for a scholarship for the company’s cofounder, Sergey Brin, while he worked on that research. Google now has a stock market value of $194.2 billion.

Google’s annual reports from 2007 to 2009 ascribe a cumulative $3.1 billion tax savings to the “foreign rate differential.” Such entries typically describe how much tax U.S. companies save from profits earned overseas.

In February, the Obama administration proposed measures to curb shifting profits offshore, part of a package intended to raise $12 billion a year over the coming decade. While the key proposals largely haven’t advanced in Congress, the IRS said in April it would devote additional agents and lawyers to focus on five large transfer pricing arrangements.

Arm’s Length

Income shifting commonly begins when companies like Google sell or license the foreign rights to intellectual property developed in the U.S. to a subsidiary in a low-tax country. That means foreign profits based on the technology get attributed to the offshore unit, not the parent. Under U.S. tax rules, subsidiaries must pay “arm’s length” prices for the rights — or the amount an unrelated company would.

Because the payments contribute to taxable income, the parent company has an incentive to set them as low as possible. Cutting the foreign subsidiary’s expenses effectively shifts profits overseas.

After three years of negotiations, Google received approval from the IRS in 2006 for its transfer pricing arrangement, according to filings with the Securities and Exchange Commission.

The IRS gave its consent in a secret pact known as an advanced pricing agreement. Google wouldn’t discuss the price set under the arrangement, which licensed the rights to its search and advertising technology and other intangible property for Europe, the Middle East and Africa to a unit called Google Ireland Holdings, according to a person familiar with the matter.

Dublin Office

That licensee in turn owns Google Ireland Limited, which employs almost 2,000 people in a silvery glass office building in central Dublin, a block from the city’s Grand Canal. The Dublin subsidiary sells advertising globally and was credited by Google with 88 percent of its $12.5 billion in non-U.S. sales in 2009.

Allocating the revenue to Ireland helps Google avoid income taxes in the U.S., where most of its technology was developed. The arrangement also reduces the company’s liabilities in relatively high-tax European countries where many of its customers are located.

The profits don’t stay with the Dublin subsidiary, which reported pretax income of less than 1 percent of sales in 2008, according to Irish records. That’s largely because it paid $5.4 billion in royalties to Google Ireland Holdings, which has its “effective centre of management” in Bermuda, according to company filings.

Law Firm Directors

This Bermuda-managed entity is owned by a pair of Google subsidiaries that list as their directors two attorneys and a manager at Conyers Dill & Pearman, a Hamilton, Bermuda law firm.

Tax planners call such an arrangement a Double Irish because it relies on two Irish companies. One pays royalties to use intellectual property, generating expenses that reduce Irish taxable income. The second collects the royalties in a tax haven like Bermuda, avoiding Irish taxes.

To steer clear of an Irish withholding tax, payments from Google’s Dublin unit don’t go directly to Bermuda. A brief detour to the Netherlands avoids that liability, because Irish tax law exempts certain royalties to companies in other EU- member nations. The fees first go to a Dutch unit, Google Netherlands Holdings B.V., which pays out about 99.8 percent of what it collects to the Bermuda entity, company filings show. The Amsterdam-based subsidiary lists no employees.

The Dutch Sandwich

Inserting the Netherlands stopover between two other units gives rise to the “Dutch Sandwich” nickname.

“The sandwich leaves no tax behind to taste,” said Murphy of Tax Research LLP.

Microsoft, based in Redmond, Washington, has also used a Double Irish structure, according to company filings overseas. Forest Laboratories Inc., maker of the antidepressant Lexapro, does as well, Bloomberg News reported in May. The New York-based drug manufacturer claims that most of its profits are earned overseas even though its sales are almost entirely in the U.S. Forest later disclosed that its transfer pricing was being audited by the IRS.

Since the 1960s, Ireland has pursued a strategy of offering tax incentives to attract multinationals. A lesser-appreciated aspect of Ireland’s appeal is that it allows companies to shift income out of the country with minimal tax consequences, said Jim Stewart, a senior lecturer in finance at Trinity College’s school of business in Dublin.

Getting Profits Out

“You accumulate profits within Ireland, but then you get them out of the country relatively easily,” Stewart said. “And you do it by using Bermuda.”

Eoin Dorgan, a spokesman for the Irish Department of Finance, declined to comment on Google’s strategies specifically. “Ireland always seeks to ensure that the profits charged in Ireland fully reflect the functions, assets and risks located here by multinational groups,” he said.

Once Google’s non-U.S. profits hit Bermuda, they become difficult to track. The subsidiary managed there changed its legal form of organization in 2006 to become a so-called unlimited liability company. Under Irish rules, that means it’s not required to disclose such financial information as income statements or balance sheets.

“Sticking an unlimited company in the group structure has become more common in Ireland, largely to prevent disclosure,” Stewart said.

Deferred Indefinitely

Technically, multinationals that shift profits overseas are deferring U.S. income taxes, not avoiding them permanently. The deferral lasts until companies decide to bring the earnings back to the U.S. In practice, they rarely repatriate significant portions, thus avoiding the taxes indefinitely, said Michelle Hanlon, an accounting professor at the Massachusetts Institute of Technology.

U.S. policy makers, meanwhile, have taken halting steps to address concerns about transfer pricing. In 2009, the Treasury Department proposed levying taxes on certain payments between U.S. companies’ foreign subsidiaries.

Treasury officials, who estimated the policy change would raise $86.5 billion in new revenue over the next decade, dropped it after Congress and Treasury were lobbied by companies, including manufacturing and media conglomerate General Electric Co., health-product maker Johnson & Johnson and coffee giant Starbucks Corp., according to federal disclosures compiled by the non-profit Center for Responsive Politics.

Administration Concerned

While the administration “remains concerned” about potential abuses, officials decided “to defer consideration of how to reform those rules until they can be studied more broadly,” said Sandra Salstrom, a Treasury spokeswoman. The White House still proposes to tax excessive profits of offshore subsidiaries as a curb on income shifting, she said.

The rules for transfer pricing should be replaced with a system that allocates profits among countries the way most U.S. states with a corporate income tax do — based on such aspects as sales or number of employees in each jurisdiction, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan Law School.

“The system is broken and I think it needs to be scrapped,” said Avi-Yonah, also a special counsel at law firm Steptoe & Johnson LLP in Washington D.C. “Companies are getting away with murder.”

See additional stories about corporate tax avoidance:

To contact the reporter on this story: Jesse Drucker in New York at jdrucker4@bloomberg.net.

To contact the editor responsible for this story: Gary Putka at gputka@bloomberg.net.
____________________________________
Fans Vote on Fate of Facebook and Privacy Issues

From: “Aileen Brody”
Subject: Fans Vote on Fate of Facebook and Privacy Issues
Date: Thu, 21 Oct 2010 12:06:11 -0400
To: “Aileen Brody”

Fans Vote on Fate of Facebook and Privacy Issues

Its been an exciting year for Facebook, but not necessarily in a good way. With The Social Network Premiere portraying CEO Zuckerburg in a bad light, not even $100 million dollars could completely erase his tainted image. Now, in light of the recent information leaks compounded by Facebook’s increasingly frequent criticism from users about privacy, many are wondering what will be determined at the pending congressional hearing regarding online privacy and how they will effect Facebook. At this point, a big change in the system is inevitable as it is clear that it cannot continue the way it is and it’s anyone’s guess where all of these issues will conclude.

As such, Facebook users are weighing via Predicto Mobile, the leading paid mobile subscriber community boasting over 2 million active users, on some of the hottest issues regarding the social media site in the news today. According to the polls, a congressional hearing will be held just barely before November elections, Apple will make a bid to buy Facebook, and Facebook will surpass internet giant Google as the most visited website in the US.

After Facebook’s recent info leaks, will a congressional hearing about online privacy be held before Nov. elections?

No – 43%

Yes – 57%

www.predicto.com/images/site/comments_support.gif 132 Comments

After the CEOs of both companies were seen dining together, will Apple make a bid to buy Facebook by 1/15?

No – 41%

Yes – 59%

www.predicto.com/images/site/comments_support.gif 68 Comments

Is Facebook going to surpass Google as the most-visited Web site in the US this year?

No – 31%

Yes – 69%

www.predicto.com/images/site/comments_support.gif 552 Comments

To speak with Managing Editor of Predicto Mobile, Kirthana Ramisetti, who has appeared on E! News, CNN.com, CBS-TV, CW-TV, and more about these Facebook dedicated surveys or any other surveys on the Predicto site, please contact me at: 212.584.4328 or Abrody@5wpr.com.

Thanks and look forward to hearing from you!

Aileen

About Predicto

Predicto.com(TM) is a market-leading interactive SMS service that engages members on pop culture and current events. Predicto offers a game that’s on the pulse of entertainment and world affairs, and is the largest premium mobile service in the U.S. The Predicto Mobile Community is made up of nearly two million users who stay in the know and vote on the go with Predicto. Follow the company’s updates on the Predicto Twitter page and latest videos at Predicto TV.

Aileen Brody | 5w Public Relations

1120 Avenue of the Americas | 7th Floor

New York, NY 10036

Main: 212.584.4328 | Fax: 646.328.1711

Twitter: Aileen5w

www.5wpr.com
_________________________________________
Tarkus Murphy: Moser Baer opens office on top of Information Superglacier(TM) for Organic Light Emitting Diode (“OLED”) lighting panels

From: “Tarkus”
Subject: Moser Baer opens office on top of Information Superglacier(TM) for Organic Light Emitting Diode (“OLED”) lighting panels
Date: Fri, 15 Oct 2010 14:34:17 -0400
To: “‘The May Report’” ,
Cc: “‘Tarkus’”

Hey Ron,

I will not be making it to 4G World in Chicago, next week. I am happy to
report that Verizon is bringing 4G (700 MHz LTE) to this region to
compliment the offerings of Clear (Sprint, Clearwire, Time Warner – 2.5
GHz). One of the reasons that we were chosen for 4G service was the
presence of the Axcess Ontario fiber project that I have mentioned in past
reports. The potential 50 – 70 Mbps service will require a robust hybrid
fiber/wireless infrastructure and the County network runs straight to the
towers.

I also thought I would give you another concrete example of the things
happening up on the Information Superglacier(TM). While news has been slow
with the Electronic Health Records / Healthcare Information Exchange and the
Photonics company, Seamless Communications (servicing both of the other
companies) may work with a Canandaigua company, a telecommunications design
firm, Axcess Ontario, several regional FCC Rural Pilot Programs to engage in
telemedicine & interactive learning from the fiber optic head end at the
newly branded STC (was Infotonics).

Our neighbors (Moser Baer) were smart enough to move quickly in order to
take advantage of the space available at the STC, back when it was
Infotonics. Several companies have been negotiating for space since
November of last year, but Moser Baer kept increasing the size of their
plans. I think it is OK to cover the Moser Baer story (below) in the May
Report, I saw that The Wall Street Journal gave it a quick mention.

Dr. G. Rajeswaran and I have made presentations to the regional State
delegation about the growth of technical business. His company made the
commitments to move when the time was right and is very well timed with the
change in management at STC (the rebranding was obvious at the news
conference and in the press release, below).

One funny incident at yesterday’s press event, the Moser Baer sign crashed
to the stage when it was unveiled. Dennis Mullen, the State’s Economic
Development Chief picked up the sign and held it aloft behind the STC’s CEO
who had no idea that Dennis was behind him throughout a long introduction.

I had an opportunity to discuss some of the public safety, Homeland
Security, telecommunications, alternative energy and energy conservation
with Dennis after the event. We’ll have to get some of the glasses that the
Chilean miners were using, I don’t think all the people from “Planet Albany”
are used to the lighting conditions on the Information Superglacier(TM).
With today’s release, there may be significant changes ahead. How ironic
that this was another technology started by Kodak that had to journey to
Asia before it came back to New York.

Fall colors are just about to peak around the Finger Lakes Vineyards but it
looks like there is more growing than apples, grapes, wheat and corn on the
Information Superglacier(TM). Thar’s real science in them thar hills!

Given the number of companies in this region coming in from Asia, we might
want to start a TIE chapter up on Information Superglacier(TM)!

Here is the press release:

Moser Baer Technologies and CNSE’S Smart System Technology &
Commercialization Center Launch Global Partnership to Establish Pioneering
Clean Energy Facility

Oct 14, 2010

$20M public-private investment will enable development of world’s first
pilot production line for Organic LEDs and create more than 50 high-tech
jobs at CNSE’s STC in Canandaigua

Canandaigua, New York – Moser Baer Technologies, Inc. (“MBT”), the U.S.
division of Moser Baer India, Ltd., Universal Display Corporation (“UDC”),
and the College of Nanoscale Science and Engineering’s (“CNSE”) Smart System
Technology & Commercialization Center (“STC”) today announced a partnership
to establish the world’s first pilot production facility for Organic Light
Emitting Diode (“OLED”) lighting panels at STC’s Canandaigua location, which
will create more than 50 high-tech jobs by 2012 while further building New
York’s world-class resources to support clean and environmentally friendly
technologies.

MBT will invest $11.5 million to acquire state-of-the-art equipment for the
pilot manufacturing line. This capability will play a critical role in the
development and deployment of OLED solid state lighting (“SSL”) technology,
which offers increased energy efficiency, decreased power consumption, and
an environmentally friendly alternative to traditional incandescent and
compact fluorescent light bulbs.

The initiative is supported by a $4 million grant, through the American
Recovery and Reinvestment Act, from the U.S. Department of Energy awarded to
MBT’s partner, UDC, a world leader in the development of innovative OLED
technology for use in flat panel displays, lighting and organic electronics.
During this program, UDC will demonstrate the scalability of its proprietary
UniversalPHOLEDTM technology and materials for the manufacture of white OLED
lighting panels that meet commercial lighting targets.

In addition, Empire State Development (“ESD”) will provide access to
business incentives, including low-interest loans, and STC will contribute
funding from an Economic Development Administration grant to construct
advanced cleanroom space required by MBT to manufacture OLED lighting
panels. Moser Baer is eligible to receive a Qualified Emerging Technology
Credit (“QETC”), as well as Empire Zone benefits. Entry into the Empire Zone
program was significantly aided by both the City of Geneva and Ontario
County.

MBT CEO Dr. G. Rajeswaran said, “OLEDs were invented in Rochester, and we’re
taking advantage of the significant intellectual assets that exist here.
That, in addition to the support from STC and CNSE, was a major reason for
the decision to locate here. We feel strongly that this investment will
place Rochester and the Finger Lakes region on the global map as the center
for OLED lighting technology development and manufacturing. OLED lighting
products will require new manufacturing technologies which will be developed
and deployed in this very first OLED pilot production line in the world.
Moser Baer Technologies and its partner companies are pleased to locate this
clean technology project of global relevance in New York State.”

“We are very pleased to be part of this groundbreaking effort to bring high
technology OLED manufacturing for energy efficient lighting to the United
States,” said Steven V. Abramson, President and Chief Executive Officer of
Universal Display. “Our proprietary high efficiency phosphorescent OLED
technology and materials, together with Moser Baer Technologies high volume
manufacturing expertise, promises a bright future for OLED lighting here in
the U.S. We are extremely pleased to be the leader of the team selected by
the Department of Energy to help move the U.S. into the 21st century for the
production of energy efficient, and environmentally friendly, solid state
OLED lighting.”

Empire State Development Chairman & CEO Dennis M. Mullen said, “Moser Baer’s
decision to locate their first U.S. operations at the recently created Smart
Systems Technology Center is a tremendous example of the attraction
capability New York State’s Centers of Excellence have in the world of new
and emerging technologies. The recently merged resources of the Smart
System Tech Center under CNSE have brought the state’s R&D capabilities in
nano and micro technology to a new level. Moser Baer is a world-class
manufacturer that chose to locate operations in New York State because our
technology infrastructure, skilled workforce and strong partnerships between
industry and higher education make New York unparalleled to any other
location. Moser Baer will develop their technology to introduce
highly-efficient, innovative lighting solutions at STC, which has the
potential to generate $20 billion in savings of electricity costs worldwide
and save over nine million metric tons of carbon emissions from the U.S.
alone by 2016. Moser Baer’s investment gives New York State an enormous
competitive advantage in the field of advance manufacturing and high
technology, further strengthening our leadership in the world’s innovative
economy.”

CNSE Senior Vice President and CEO Dr. Alain Kaloyeros said, “We are
delighted to engage in this pioneering partnership with Moser Baer
Technologies, a recognized global technology leader, to establish a
first-of-its-kind pilot production facility that will enable nanotechnology
innovations for energy efficient and environmentally friendly lighting.
Under the leadership of CNSE Vice President Paul Tolley, we look forward to
building on the advanced capabilities at CNSE’s Smart System Technology and
Commercialization Center in Canandaigua, further accelerating critical
technologies to address the needs of industry while attracting
nanotechnology jobs, companies and investment to Western New York.”

CNSE Vice President for Disruptive Technologies and STC Executive Director
Paul Tolley said, “This public-private partnership will enable unparalleled
capabilities at CNSE’s Smart System Technology & Commercialization Center
and place New York State at the forefront of innovation in OLED lighting
technology. We are excited to work with Moser Baer Technologies and
Universal Display Corporation on this important initiative, which will have
far-reaching impacts on technology development and economic growth, while
helping the transition to a more efficient and environmentally friendly
lighting technology.”

The announcement marks the first major development since the September 20
establishment of CNSE’s STC, created through a merger of two of New York
State’s Centers of Excellence – the Infotonics Technology Center (“ITC”) in
Canandaigua and the Center of Excellence in Nanoelectronics and
Nanotechnology (“CENN”) at CNSE.

The OLED pilot production facility at CNSE’s STC will be supported by
leading-edge research and development and world-class technological
capabilities at CNSE’s $6.5 billion Albany NanoTech Complex, the most
advanced research enterprise of its kind at any university in the world.

Additionally, as part of the collaboration, CNSE’s STC and MBT will jointly
develop solid state lighting technologies, which offer further improvements
in energy efficiency and performance as compared to current technologies.

About Moser Baer Technologies, Inc. – MBT is the U.S.-based subsidiary of
Moser Baer India, Ltd., headquartered in New Delhi, and one of India’s
leading technology companies. Established in 1983, Moser Baer India is the
world’s second largest manufacturer of Optical Storage media like CDs, DVDs
and BluRay discs. They are also a major producer of solar photovoltaic
technologies, IT peripherals, consumer electronics, and home entertainment.
Moser Baer has a presence in over 92 countries, and services through six
marketing offices in India, the US, Europe and Japan. MBT is the company’s
first U.S. based manufacturing operation and will be the first OLED
manufacturing line for lighting in the United States. Moser Baer currently
has over 6,000 full-time employees worldwide. For more information, visit
www.moserbaer.com/.

About CNSE. The UAlbany CNSE is the first college in the world dedicated to
education, research, development, and deployment in the emerging disciplines
of nanoscience, nanoengineering, nanobioscience, and nanoeconomics. CNSE’s
Albany NanoTech Complex is the most advanced research enterprise of its kind
at any university in the world. With over $6.5 billion in high-tech
investments, the 800,000-square-foot complex attracts corporate partners
from around the world and offers students a one-of-a-kind academic
experience. The UAlbany NanoCollege houses the only fully-integrated, 300mm
wafer, computer chip pilot prototyping and demonstration line within 80,000
square feet of Class 1 capable cleanrooms. More than 2,500 scientists,
researchers, engineers, students, and faculty work on site, from companies
including IBM, AMD, GlobalFoundries, SEMATECH, Toshiba, Applied Materials,
Tokyo Electron, ASML, Novellus Systems, Vistec Lithography and Atotech. An
expansion currently in the planning stages is projected to increase the size
of CNSE’s Albany NanoTech Complex to over 1,250,000 square feet of
next-generation infrastructure housing over 105,000 square feet of Class 1
capable cleanrooms and more than 3,750 scientists, researchers and engineers
from CNSE and global corporations. For information, visit
www.cnse.albany.edu/.

About CNSE’s STC. The College of Nanoscale Science and Engineering’s Smart
System Technology & Commercialization Center assists small and large
companies transition new technologies from concept to manufacturing. STC
maintains a 140,000-square-foot facility with over 25,000 square feet of
cleanrooms for micro electromechanical systems (MEMS) fabrication and
packaging, and works with large and medium-sized companies to help them
bring new technologies to market; with small companies ready to transition
from prototype and low-volume manufacturing to scalable manufacturing; and
with various federal agencies to develop technology solutions to areas of
critical national need, including smart prosthetics and improvised explosive
device (IED) detection. For more information, visit
www.stcmems.com/.

The following statements were provided in support of today’s announcement:

U.S. Senator Charles Schumer said, “When I first started working with STC
just after arriving in the Senate 11 years ago, it was our hope for the
Center to be a hub in the creation of new, high-paying, high-tech jobs for
the region. This announcement from Moser Baer is a major step in
transforming that vision into reality. I am extremely excited to see this
new high-tech industry locate and grow in New York State.”

New York State Assembly Minority Leader Brian Kolb (R-Canandaigua), whose
district includes CNSE’s STC, said, “Not only does this project bring
high-tech manufacturing jobs to this region, but the spin-off benefits are
far flung. These are very high paying jobs, and this will ultimately result
in positive benefits to the whole community. Moser Baer has already started
to engage local service and raw materials suppliers who will also benefit
from their being located here.”

Barry Young, Managing Director of the OLED Association, an industry wide
organization promoting the benefits of OLED technology, said, “OLEDs, which
have been very successful in smart phone displays, show great promise as an
efficient, diffuse and ecologically friendly light source. The establishment
of the world’s first OLED pilot manufacturing line at STC’s facility
provides an opportunity for New York State to be a leader in reducing the
energy consumed by lighting while creating new high paying jobs in the
manufacturing sector.”

Ontario County IDA Director Michael Manikowski said, “A number of
organizations came together to make this happen. The City of Geneva, Town
of Canandaigua, the IDA and STC all worked together to assemble a package of
incentives that led to Moser Baer deciding this was the place to locate this
new industry. I am extremely excited at the prospect of future development
at the site for additional manufacturing jobs.”

CNSE Contact:
Steve Janack, CNSE Vice President for Marketing and Communications (phone)
518-956-7322 (cell) 518-312- (e-mail) sjanack@uamail.albany.edu
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