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World Business Quick Take

■SOFTWARE

Ballmer sees weak growth

Microsoft CEO Steve Ballmer yesterday said that corporate spending on information technology would not recover to levels seen in recent years before the global economic slowdown. “The economy went through a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime,” Ballmer told a meeting of South Korean executives in Seoul. Spending on information technology, which accounted for about half of capital expenditures in developed countries before the crisis, was unlikely to rebound fully because capital was more scarce these days, he said. “While we will see growth, we will not see recovery,” he said. Ballmer was in Seoul to tout Microsoft’s new Windows 7 operating system. He said company purchases of PCs and servers were down about 15 percent globally. “It reflects the fact that CEOs have much more tightly constrained IT budgets,” he said.



■AVIATION

Ryanair warns of losses

Irish low-cost airline Ryanair yesterday reported that its net profit nearly quadrupled in the first half of the year, but warned a fall in fares would make for losses in the second half. “Ryanair’s ability to grow both traffic and profits during the half year is a testament to the strength of Ryanair’s lowest fare model, and our relentless cost discipline,” Ryanair CEO Michael O’Leary said in a statement. “However, these results are heavily distorted by a 42 percent fall in fuel costs, which has masked a significant 17 percent decline in average fares,” he said. “We expect average fares to decline by up to 20 percent during quarters 3 and 4, which will result in both these quarters being loss making,” he added.



■FINANCE

Firm offers bags for loans

A Hong Kong firm has launched a series of TV commercials offering personal loans in exchange for ladies’ luxury handbags, the South China Morning Post reported yesterday. Yes Lady Finance will pay cash-strapped socialites up to 70 percent of the bag’s value with 28 percent annualized interest, the report said. A Louis Vuitton handbag valued at US$2,600 in the second-hand market would fetch a US$1,800 three-month loan, the paper said, adding that owners would lose the bags if they failed to settle the debt on time. “It is a good fund-raising option for some tai tais,” company cofounder Wallace Tung was quoted as saying, referring to the wives of wealthy Hong Kong businessmen. “They may not want to sell their handbags, which may be a gift from husbands and mean a lot to them.”



■TIRES

No more F-1 for Bridgestone

Bridgestone Corp, the world’s largest tiremaker, will stop supplying tires for the Formula One racing championship series as it aims to cut costs and streamline research and development efforts. The company won’t renew its current contract, set to expire at the end of the 2010 season, the Tokyo-based company said in a statement yesterday. The company is the sole supplier of tires to F-1 racing teams. Bridgestone spends as much as US$100 million a year on Formula One-related costs, the company said. Honda Motor Co, Japan’s second-largest carmaker, and Bayerische Motoren Werke AG have also announced their withdrawal from the championship in the past year as the global recession cuts automobile sales. Bridgestone forecasts net income will drop 42 percent to ¥6 billion (US$67 million) this year.


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