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"We sincerely regret that there were instances in which certain of our Internet sector research analysts expressed views that at certain points may have appeared inconsistent with Merrill Lynch's published recommendations." -- Merrill Lynch, on its $100 million settlement with New York's attorney general Enron isn't the only company that has caused trouble for California. Add Oracle to the list. The famously aggressive software maker is accused of persuading California to blow $95 million on high-end business software, much of which the state doesn't need.

Compounding the scandal, dubbed Oraclegate, is that California signed the deal without taking bids--and that an Oracle lobbyist contributed $25,000 to Governor Gray Davis' reelection campaign just two weeks later. Davis says he'll return the money; his opponent, Bill Simon, is making it a major election issue. Oracle (ORCL) says it has done no wrong, but is negotiating with the state to cancel the contract. A state official who failed to figure out the state's needs resigned, and another was suspended.

Software consultants interviewed by BusinessWeek say California at least got a huge volume discount. Problem is, it doesn't need all that volume. The cost of the excess software: $41 million, according to a state auditor's report. Yet this is a common mistake, the consultants say. "Companies write bad contracts with software vendors all day long," says Joshua Greenbaum at Enterprise Applications Consulting. "Why should the state be any different?" Tell that to the taxpayers. Here's a good gross-out statistic--your desktop is 400 times dirtier than a toilet seat. And your phone is even worse. That's according to Chuck Gerba, a professor of microbiology at the University of Arizona who wanted to find out just how dirty our offices really are. He took 7,000 samples from several hundred workstations in New York, San Francisco, Tucson, and Tampa last summer.

Even he was surprised at the results. The phone receiver: an average 25,000 bacteria per square inch. "People slobber on that," says Gerba. The desktop: 21,000 bacteria per square inch. "People spill coffee and eat their meals there, and nobody cleans it. Or they just use a wet towel that spreads things around," he says. The keyboard: 3,000. And the average office toilet seat? Just 50. "People use disinfectant to clean that," he explains. New York offices, where workers tend to eat at their desks, are the worst.

Receptionists' desks, where lots of people pause daily, are the worst areas of all. "People need to think about cleaning," says Gerba, "or they end up with a bacteria cafeteria on their desks." As China became the workshop of the world, it earned a more dubious honor: global center of counterfeiting. When it came to prospering from others' patents, few could top China's manufacturers of DVD players. Its factories exported more than 10 million of them in 2001 without paying royalties to the companies that own the intellectual-property rights. That left the likes of Sony (SNE), Philips Electronics (PHG), and AOL Time Warner (AOL) fuming. But it's been good news for consumers, as prices of DVD players dropped as low as $70.

Now, there are signs that the Chinese are relenting--and that means prices could creep back up. After years of negotiations, Beijing tentatively agreed in April to pay six companies--Mitsubishi Electric, JVC, Toshiba, Hitachi (HIT), Matsushita, and AOL Time Warner--royalties of several dollars per exported DVD player. The biggest distributor of Chinese-made machines, Apex Digital, also agreed to pay a few dollars per machine to Sony, Philips, and Pioneer. China's recent joining of the World Trade Organization may have been an impetus.

Consumers can expect higher prices by Christmas. Patches and Chelsea are two golden retrievers set for life. They'll inherit $10,000 a year if their 50ish Florida owners Bobbie and John Ford die before them. The Fords created a trust fund to care for their beloved dogs under a law passed this May by Florida legislators.

Florida is following seven other states, including New York and California, that let pet owners create caretaking trusts for their animals. The idea is so hot that Representative Earl Blumenauer (D-Ore.) has introduced a bill to make the trusts legal nationwide. (There's no Senate sponsor yet.)

Blumenauer wants to legitimize what many pet owners--including celebrities such as Oprah Winfrey, Betty White, and the late Doris Duke--have already done. In most states, leaving money to pets is not enforceable under law, so other heirs can challenge it.

Nearly 30% of the nation's 64 million pet owners mention animals in their wills anyway, according to Blumenauer's research. "People see pets as part of the family," says estate attorney Barbara Buxton, who set up the Fords' trust. Earning trust money, it seems, is a walk in the park. When Venture Reporter magazine wanted to celebrate publication of its annual list of the top 100 venture capitalists on May 14, it sought an appropriate venue. Champagne would flow as it did at the dot-com bashes of a bygone era, but the locale needed to reflect the more chastened mood and the party's "back to reality" theme.

That's how hundreds of VCs and high-tech CEOs (what's left of them, anyway) found themselves at a rented McDonald's in Midtown Manhattan. There, they scarfed down Quarter Pounders and bellied up to a bar near the drive-through window. Champagne cocktails commemorated infamous dot-com icons, such as the McKozmo, named after defunct delivery service kozmo.com ("delivered in under an hour," the menu said), and the McBlodget, named for bullish analyst Henry ("a strong buy recommendation"). "Starting a business is not about $600 Aeron chairs and Nobu anymore," said Venture Reporter founder and party host Jason McCabe Calacanis. "It's plywood desks and McDonald's."

But the VCs in attendance weren't drowning their sorrows. Instead, they talked up how it's a great time to be investing in startups that can be had for a McBargain. A Manhattan high-rise recently became the first U.S. residence to ban smoking by new owners. But New Yorkers live with an array of other restrictions that may seem bizarre elsewhere. About 82% of privately owned Manhattan apartments are co-ops, where dwellers buy a share in a property, giving owners remarkable power over who else gets to buy in and how the buildings are run. Corcoran Group, a leading New York real estate company, has compiled the more unusual rules at some co-ops. Among them:

-- Dog owners must submit a pooch's obedience-school certificate with application.

-- Owners can use the elevator, but renters must use the stairs.

-- Nannies may only use the elevator if children in their care are with them.

-- Musicians must soundproof a practice room before moving in.

-- Bathtubs cannot be replaced, even if the rest of the bathroom is being renovated. And no whirlpools.

Chairman Barbara Corcoran explains that crowded living makes New Yorkers--especially on the Upper East Side--extra fussy and that co-op life is "much closer to joining a country club than getting a deed."


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