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"It will become an expectation like electricity or phone service." -- Craig Mathias of Farpoint Group, about big cities providing municipal Wi-Fi soon, to CNET

Crazy about the guitar Jack Black strummed in School of Rock? You're in luck. New Web services make it easier than ever for shoppers to track down products they saw placed in films and TV shows. Just type "guitar" or "School of Rock" into's search engine. It supplies the model (a Gibson SG Special Faded Electric) and links to manufacturer and vendor sites, then shows an image from the film, for those who need a memory jog. E-tailers such as (AMZN) and Bang & Olufsen pay commissions to eVisure.

Broadcasters are jumping in, too. ABC's (DIS) online store sells apparel worn by Desperate Housewives characters (Edie's Dolce & Gabbana pumps, Lynette's Armani pants). And coming in the spring is GET magazine, a kind of Lucky for TV product placement. By letting companies advertise products without flashing logos or disrupting storylines, the services may lead to more subtle plugs. But they're not likely to stamp out complaints from the Writers Guild of America and Screen Actors Guild that placements blur the distinction between advertising and entertainment.

Fast Money. Bloated trading volumes. Soaring prices. Has Japan's stock market returned to the roaring '80s? U.S. investors apparently think so. The "Buy Japan" cry from funds and stockpicking newsletters is downright deafening. Foreigners have spent more than $78 billion on Japanese stocks this year, a wave of capital not seen since 1999. The Nikkei 225 index hit a five-year high of 15,778 on Dec. 13, up 37% year-to-date.

But a bit of caution may be in order. Japanese stocks sport p-e ratios of 26 times forecast 2006 earnings, vs. 16.5 for the S&P 500. On Dec. 9, Credit Suisse First Boston urged clients to cut their Japan weighting, citing lofty valuations that suggest the market is overbought. To be sure, Japan's turnaround is real: Banks have shed most of their bad debt, and the Bank of Japan is unlikely to boost interest rates prematurely, as it did in 2000. But Japan Inc. is still wound up in red tape and burdened with high fixed costs. Japanese companies have burned off a lot of excess debt and capacity, but they're still behind rivals in the U.S. and Europe. And their profit growth is slowing. If foreign money dries up, this rally could end as painfully as earlier ones.

As the year of Katrina, Google (GOOG), and $70 oil draws to a quiet (we hope) close, let's stop to reflect on the biggest forecasting misses. Here are our picks in reverse order:

10. "If Microsoft (MSFT) gets serious about search -- and there is every reason to believe that it will -- Google will need brilliant strategy and flawless execution simply to survive." -- Charles H. Ferguson, author, Technology Review, Jan. 1, 2005

>> REALITY: Google didn't just survive in 2005. It ruled. In the most recent quarter, profits soared 633%, and revenues almost doubled. Microsoft? Profits gained 24%, revenue rose 6%.

9. "The big, big story of 2005 could be the collapse of the dollar." -- Peter Schiff, founder of Euro Pacific Capital in Newport Beach, Calif., Jan. 2, 2005

>> REALITY: Collapse? The dollar surged 14% against the Japanese yen and 13% against the euro from the start of the year through mid-December.

8. Chinese Internet stock (NTES) -- "organic and innovative" -- will outperform the market. -- Richard Ji, Jenny Wu, and Mary Meeker, Morgan Stanley (MWD) tech analysts, initiating coverage on Sept. 12, 2005

>> REALITY: In the first three months after Meeker's team recommended NetEase, the company's shares fell 25%. Oops.

7. Calpine, the big electricity generator, "is making progress with a big financial restructuring. If they just liquidated the company, you'd get $6 a share." -- David J. Williams, portfolio manager of the Excelsior Value & Restructuring Fund at U.S. Trust, Dec. 27, 2004

>> REALITY: Calpine's shares were trading around $3.50 when Williams made them one of his top picks for 2005. They're trading now for 31 cents -- down 91%.

6. Overproduction by OPEC could cause a steep decline in oil prices: "We are concerned about the future. We are concerned about a new severe drop in price like we have witnessed in recent days." -- Iranian Minister of Petroleum Bijan Zanganeh, Nov. 22, 2004

>> REALITY: Oil prices were about $50 a barrel when Zanganeh fretted about a severe drop. They hit a record of $70 a barrel in the summer before easing back to "only" around $60 by yearend.

5. Sales of gold by central banks could seal its fate as an economic relic of the Old World. "The pillars of the market are crumbling." -- Andy Smith, a gold analyst at Mitsui Global Precious Metals in London, May 3, 2004

>> REALITY: Those golden pillars didn't crumble in 2005. They turned into rocket boosters. Gold rose 16% to a 22-year high in mid-December.

4. Mechanics at Northwest Airlines (NWA) will win a strike because other workers will stand up for them. "We know we're not in this alone." -- Ted Ludwig, president of Local 33, Aircraft Mechanics Fraternal Assn., Aug. 9, 2005

>> REALITY: Northwest had little trouble finding replacements for the 4,100 strikers, and no other unions honored their picket line. The continuing strike is considered a near-total failure.

3. The Dow Jones industrial average will finish 2005 at 8,000 points. -- Bernie Schaeffer, Schaeffer's Investment Research, Dec. 27, 2004

>> REALITY: Technically speaking, this prediction could still come true, but it would require the Dow industrials to plummet 26% in the next two weeks. Anyone willing to predict that?

2. 2005 will be "a year of economic difficulty." -- A majority of the American people; 54% of respondents to a Gallup poll, Dec. 17-19, 2004

>> REALITY: For many, it was a difficult year. But the unemployment rate is just 5%, well below its 30-year average. The economy is growing rapidly. And household wealth is at an all-time high. If 2005 was "difficult," then what would you call a recession?

1. The U.S. will have fewer hurricanes in 2005 than in 2004. -- Tropical Meteorology Project of Colorado State University, Dec. 3, 2004

>> REALITY: 2005 broke all hurricane records. Including Katrina and Rita, there were 14 Atlantic hurricanes, 7 of them classified as "intense." The Coloradans had predicted six -- only three intense. Granted, predicting hurricane season half a year before it warms up is no easy task. But guys, come on.

Two years ago, Bill Gates confidently predicted that junk e-mail would be "a thing of the past" within two years. Wrong! Today more than half of e-mail sent worldwide is spam -- mostly advertising drugs, pornography, and dating services. "Spam continues to be a major plague to businesses and home users," says Carole Theriault, a senior consultant for security firm Sophos. In fact, brace yourself for a really nasty deluge. Security experts expect a global e-mail blitz of Nazi propaganda on Jan. 6. They believe the Sober-Z virus, which has been attacking PCs worldwide for months, left many open to send pro-Nazi spam.

Microsoft (MSFT) says it has no cause to be embarrassed by Gates's prediction. "It was a call to action for us and the industry," says Ryan Hamlin, general manager for technology care and safety. Since then, software makers have launched anti-spam products, and Microsoft has built defenses into its Outlook e-mail software. Now if PC owners would just use them -- or, better yet, stop buying from spammers.

It's getting harder than ever to wheedle a raise out of the boss. So maybe at this year's annual review you should ask for more Web browsing time instead. Several employers are turning to a software program from Websense in San Diego that puts workers on the clock for their personal Net use. Kozy Shack Enterprises, a Hicksville (N.Y.) maker of ready-to-eat pudding, uses the "quota time" feature in Websense Enterprise to give employees one hour each day to shop, chat, and otherwise browse.

Info-tech managers can choose what sites are available during that time and adjust access depending on job titles. "We have sales people who travel extensively, so we give them much more access to travel sites," says Kozy's IT director, Richard Lehan. At Bates County Memorial Hospital in Butler, Mo., staff get 20 minutes a day for personal Internet use; department managers get 40.

For some companies, that's just too Big Brother-esque. Employees at London-based high-end retailer Harvey Nichols sign an honor code stating that personal Web use will be limited to their lunch break or after hours. The chain uses Websense to block gambling, pornography, and other inappropriate sites, but it doesn't limit time. "We have quite a bit of trust in people in the company," says Lee Smith, technology business systems manager. And most tech outfits figure they can't be Web innovators while restricting its use. Says Microsoft (MSFT) spokesman Lou Gellos: "We expect all employees to exercise common sense and good judgment and shop on MSN shopping -- and I say that kind of tongue in cheek."

The Good Business Issue
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