The good news for online adverstising: It’s still growing, despite the economic downturn. The bad news: It’s growing a lot more slowly. Online ad revenues increased 10.8% in 2008, to $23.4 billion, according to a PricewaterhouseCoopers report. That’s the slowest rate of growth since 2002.

It’s no surprise that the growth rate showed the sharpest dip in the fourth quarter, after the downturn began in earnest. Online ad income in the quarter rose just 2.6% from the same perior a year earlier, down from a 24% increase in the fourth quarter of 2007. Researcher eMarketer now figures online ads will grow just 4.5% in 2009, about half the previous prediction.

Source: Wall Street Journal

Google Launches Music Service in China

The search giant, long an also-ran to Baidu in China, launched a free music download service that will only be available in that country. Users will be able to download or stream for free licensed music from 140 labels, including the world’s biggest. The service will make money by posting advertising on the site. Google has long been hobbled in China by its lack of a music service, because the dominant player, Baidu, generates traffic by making it easy for users to find and download unlicensed music on the Web.

Source: Wall Street Journal

Obama Reads the Riot Act to Chrysler and GM

He’s out. General Motors Chairman and CEO G. Richard Wagoner Jr. has been asked by President Barack Obama’s Administration to step down in advance of GM’s getting any further funds from the federal government. Treasury officials said Wagoner agreed to quit. Wagoner’s ouster will be the first in a series of moves that Treasury will make as it forces GM and Chrysler to restructure. In a news conference, Obama said: “While GM has made a good-faith effort to restructure over the past several months, the plan they have put forward is, in its current form, not strong enough.” He gave the company 60 days to come up with a better plan.The Administration was even more skeptical about Chrysler, saying that unless it finds a strategic partner, most likely Fiat, in the next 30 days, Washington will extend no more loans, and bankruptcy is a virtual certainty. U.S. stocks plunged in response to Obama’s moves, following the lead of markets in Asia and Europe, with the Dow down more than 300 points around 3 p.m., and GM down more than 25%.

Source: BusinessWeek, MarketWatch.com

Buffett’s Banker Quits Goldman

After 27 years at the firm, Byron Trott, the investment banker who’s a key adviser to Warren Buffett, is leaving Goldman Sachs to strike out on his own. Chicago-based Trott, vice-chairman of investment banking at Goldman, will start a merchant-banking fund that will invest in or advise companies controlled by families or entrepreneurs. Observers speculate that part of Trott’s reason for leaving is that firms that have received government bailout money are subject to much greater scrutiny than they were before.

Source: Bloomberg

Peugeot Citroen drops CEO Streiff

France’s biggest carmaker, PSA Peugeot Citroen, has sacked its chief executive just weeks after it reported big losses and job cuts. Christian Streiff was removed from his job because of the “extraordinary difficulties” the motor industry faces, the company said. He will be replaced by Philippe Varin, who is chief executive at Anglo-Dutch steel group Corus.

Source: BBC

Obama Calls for G20 Unity

U.S. President Barack Obama called on countries to “deliver a strong message of unity” on the eve of this week’s crucial G20 summit where leaders from the richest countries are expected to come up with a framework for economic recovery. Obama, who spoke to the Financial Times on the eve of what some observers consider the most important economic summit in decades, played down talk of a split between the U.S. and European countries led by Germany and France.

Source: Financial Times

Stocks Fall Globally on U.S. Auto Bankruptcy Fears

Asian and European stocks fell to a one-week low and government bonds gained, after a U.S. government-appointed task force rejected turnaround plans for automakers GM and Chrysler. The two U.S. automakers had pleaded for more public funds but the Obama administration warned both could be put through bankruptcy to slash debts. The auto industry woes are putting more pressure on Group of 20 leaders as they meet in London this week to discuss measures to tackle the crisis.

Source: Reuters

Treasury Sec Geithner: Some Banks Need ‘Large Amounts’ of Aid

U.S. Treasury Secretary Timothy Geithner said Sunday that some U.S. financial institutions will need “large amounts” of government assistance, and sought to lobby against policies that would tax investors who buy banks’ tainted assets under a government program. The Obama administration is attempting the most expensive rescue of the U.S. financial system in history, but is attempting to allay taxpayer worries that it’s bailing out Wall Street firms that took excessive risks.

Source: Bloomberg

U.S. Explores New Role for Fannie, Freddie

U.S. regulators are considering giving government-backed mortgage companies Fannie Mae and Freddie Mac a new role—that of helping small mortgage banks. A spokeswoman for the regulator, the Federal Housing Finance Agency, said it is examining how the two companies could boost the market for so-called warehouse loans, which are loans made to mortgage banks. It’s the latest sign of how regulators are exerting control over the government corporations, using them to carry out government policy rather than having them act like corporations whose goal is to maximize shareholder returns.

Source: Wall Street Journal

Smoke break gets more expensive with tax boost

Tobacco users will pay more for their fix as the single largest federal tobacco tax increase ever takes effect Wednesday. The higher taxes will help fund President Barack Obama’s expansion of health insurance for children. Obama signed that health initiative soon after taking office. Tobacco companies raised prices a couple of weeks ago, partly to offset any drop in profits once the per-pack tax climbs from 39 cents to $1.01. Prices of other products, such as chewing tobacco and cigars will also rise.

Source: Associated Press

Skype Brings Cheap Calls To Cellphones

For years, Internet calling service Skype has been trying to land its popular software where its customers are yakking most: on their mobile phones. After repeated experiments aimed at getting consumers to use Skype for cell phones, the eBay (EBAY) unit may have a winner. On Mar. 31, the company will release a version of Skype for Apple’s (AAPL) iPhone and iPod touch, as was previously speculated in the blog GigaOm. The deal would put Skype’s service in the hands of millions of potential new customers and give its 400 million current users new ways of logging more airtime.

Source: BusinessWeek

The Buffet Way: Time for a Rethink?

The past year has sometimes looked like a practical joke that the stock market is playing on value investors. Disciples of the value strategy, like Berkshire Hathaway’s Warren Buffett, focus on the long-term intrinsic value of a company, hoping to buy shares in good companies at reasonable prices. By focusing on value, they avoid fast-growing firms with expensive stocks, and, by thinking long term, they try not to worry about the fickle gyrations of the market from month to month or day to day. But amid a severe recession and financial crisis, true value has proven to be a slippery concept.

Source: BusinessWeek

Conversation of the Day: Toyota, Honda Heat Up the Hybrid War

Reader Uncle Sam writes: “Cheapest car to drive is the one that you currently driving, so keep driving what you driving right now. no point sending your current car into landfill just yet. For every car that rolls off the assembly line, almost one must go in landfill as well.”

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