Microsoft CEO defends its innovation record, financial results

BELLEVUE, Washington (Reuters) - Microsoft Corp Chief Executive Steve Ballmer defended his company's record on innovation and financial performance at the annual shareholders' meeting, but conceded that he should have moved faster to get into the booming tablet market dominated by Apple Inc's iPad.

Bill Gates, co-founder and now chairman of the world's largest software company, was one of the first to champion tablet-sized devices more than 10 years ago, but Microsoft failed to come up with a product that worked as well as the iPad. Gates was silent throughout the meeting, attended by about 450 shareholders.

"We're innovating on the seam between software and hardware," said Ballmer, asked why his company had fallen behind rival Apple. "Maybe we should have done that earlier."

A month ago, Microsoft launched the Surface tablet - its first own-brand computer - but has not revealed sales figures.

In the tablet market, "we see nothing but a sea of upside," Ballmer said, an acknowledgement that until now Microsoft has effectively had zero presence in the tablet market.

"I feel pretty good about our level of innovation," he added.

Ballmer said smartphones running Microsoft's new Windows software were selling four times as much as they did at this time last year. Microsoft has never given sales numbers of Windows phones, primarily made by Nokia, Samsung and HTC.

Windows currently has 2 to 4 percent of the global smartphone market, according to various independent data providers. Its overall market share will not likely grow in proportion to its own sales, given that sales of other smartphones - mostly running Google's Android system - are also growing quickly.

Ballmer, flanked by Gates and Chief Financial Officer Peter Klein, was asked by several shareholders to explain Microsoft's lackluster share price, which has been stuck for a decade, and has been outperformed by Apple and Google Inc stock in recent years.

"I understand your comment," he told one shareholder. He went on to explain that Microsoft had "done a phenomenal job of driving product volumes" and was focusing on profiting from that growth.

He suggested that whether investors recognized that value at any given time was out of his hands.

"The stock market's kind of a funny thing," he said, adding that Microsoft had handed back $10 billion in dividends and share buybacks to investors in the last fiscal year.

Several shareholders at the meeting in Bellevue, an upscale suburb of Seattle, complimented the executives on how they had grown and managed the company.

Microsoft's shares rose almost 18 percent during fiscal 2012, which ended in June of this year, compared with a 3 percent rise in the Standard & Poor's 500.

Despite such fluctuations, Microsoft's shares stand around the same level they did 10 years ago.

To see a graphic on U.S. tech share price performance, 1990 to present, click on http://link.reuters.com/rug53t

(Reporting by Bill Rigby; Editing by Gary Hill)

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Bonds, Clemens, Sosa on Hall ballot for first time

NEW YORK (AP) — The most polarizing Hall of Fame debate since Pete Rose will now be decided by the baseball shrine's voters: Do Barry Bonds, Roger Clemens and Sammy Sosa belong in Cooperstown despite drug allegations that tainted their huge numbers?

In a monthlong election sure to become a referendum on the Steroids Era, the Hall ballot was released Wednesday, and Bonds, Clemens and Sosa are on it for the first time.

Bonds is the all-time home run champion with 762 and won a record seven MVP awards. Clemens took home a record seven Cy Young trophies and is ninth with 354 victories. Sosa ranks eighth on the homer chart with 609.

Yet for all their HRs, RBIs and Ws, the shadow of PEDs looms large.

"You could see for years that this particular ballot was going to be controversial and divisive to an unprecedented extent," Larry Stone of The Seattle Times wrote in an email. "My hope is that some clarity begins to emerge over the Hall of Fame status of those linked to performance-enhancing drugs. But I doubt it."

More than 600 longtime members of the Baseball Writers' Association of America will vote on the 37-player ballot. Candidates require 75 percent for induction, and the results will be announced Jan. 9.

Craig Biggio, Mike Piazza and Curt Schilling also are among the 24 first-time eligibles. Jack Morris, Jeff Bagwell and Tim Raines are the top holdover candidates.

If recent history is any indication, the odds are solidly stacked against Bonds, Clemens and Sosa. Mark McGwire and Rafael Palmeiro both posted Cooperstown-caliber stats, too, but drug clouds doomed them in Hall voting.

Some who favor Bonds and Clemens claim the bulk of their accomplishments came before baseball got wrapped up in drug scandals. They add that PED use was so prevalent in the 1980s, 1990s and early 2000s that it's unfair to exclude anyone because so many who-did-and-who-didn't questions remain.

Many fans on the other side say drug cheats — suspected or otherwise — should never be afforded the game's highest individual honor.

Either way, this election is baseball's newest hot button, generating the most fervent Hall arguments since Rose. The discussion about Rose was moot, however — the game's career hits leader agreed to a lifetime ban in 1989 after an investigation concluded he bet on games while managing the Cincinnati Reds, and that barred him from the BBWAA ballot.

The BBWAA election rules allow voters to pick up to 10 candidates. As for criteria, this is the only instruction: "Voting shall be based upon the player's record, playing ability, integrity, sportsmanship, character, and contributions to the team(s) on which the player played."

That leaves a lot of room for interpretation.

Bonds, Clemens and Sosa won't get a vote from Mike Klis of The Denver Post.

"Nay on all three. I think in all three cases, their performances were artificially enhanced. Especially in the cases of Bonds and Clemens, their production went up abnormally late in their careers," he wrote in an email.

They'll do better with Bob Dutton of The Kansas City Star.

"I plan to vote for all three. I understand the steroid/PED questions surrounding each one, and I've wrestled with the implications," he wrote in an email.

"My view is these guys played and posted Hall of Fame-type numbers against the competition of their time. That will be my sole yardstick. If Major League Baseball took no action against a player during his career for alleged or suspected steroid/PED use, I'm not going to do so in assessing their career for the Hall of Fame," he said.

San Jose Mercury News columnist Mark Purdy will reserve judgment.

"At the beginning of all this, I made up my mind I had to adopt a consistent policy on the steroid social club. So, my policy has been, with the brilliance in the way they set up the Hall of Fame vote where these guys have a 15-year window, I'm not going to vote for any of those guys until I get the best picture possible of what was happening then," he wrote in an email.

"We learn a little bit more each year. We learned a lot during the Bonds trial. We learned a lot during the Clemens trial. I don't want to say I'm never going to vote for any of them. I want to wait until the end of their eligibility window and have my best idea of what was really going on," he said.

Clemens was acquitted this summer in federal court on six counts that he lied and obstructed Congress when he denied using performance-enhancing drugs.

Bonds was found guilty in 2011 by a federal court jury on one count of obstruction of justice, ruling he gave an evasive answer in 2003 to a grand jury looking into the distribution of illegal steroids. Bonds is appealing the verdict.

McGwire is 10th on the career home run list with 583, but has never received even 24 percent in his six Hall tries. Big Mac has admitted to using steroids and human growth hormone.

Palmeiro is among only four players with 500 homers and 3,000 hits, yet has gotten a high of just 12.6 percent in his two years on the ballot. He drew a 10-day suspension in 2005 after a positive test for PEDs, and said the result was due to a vitamin vial given to him by teammate Miguel Tejada.

Biggio topped the 3,000-hit mark — which always has been considered an automatic credential for Cooperstown — and spent his entire career with the Houston Astros.

"Hopefully, the writers feel strongly that they liked what they saw, and we'll see what happens," Biggio said last week.

Schilling was 216-146 and won three World Series championships, including his "bloody sock" performance for the Boston Red Sox in 2004.

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AP Baseball Writer Janie McCauley and AP Sports Writers Arnie Stapleton and Dave Skretta contributed to this report.

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Simple measures cut infections caught in hospitals

CHICAGO (AP) — Preventing surgery-linked infections is a major concern for hospitals and it turns out some simple measures can make a big difference.

A project at seven big hospitals reduced infections after colorectal surgeries by nearly one-third. It prevented an estimated 135 infections, saving almost $4 million, the Joint Commission hospital regulating group and the American College of Surgeons announced Wednesday. The two groups directed the 2 1/2-year project.

Solutions included having patients shower with special germ-fighting soap before surgery, and having surgery teams change gowns, gloves and instruments during operations to prevent spreading germs picked up during the procedures.

Some hospitals used special wound-protecting devices on surgery openings to keep intestine germs from reaching the skin.

The average rate of infections linked with colorectal operations at the seven hospitals dropped from about 16 percent of patients during a 10-month phase when hospitals started adopting changes to almost 11 percent once all the changes had been made.

Hospital stays for patients who got infections dropped from an average of 15 days to 13 days, which helped cut costs.

"The improvements translate into safer patient care," said Dr. Mark Chassin, president of the Joint Commission. "Now it's our job to spread these effective interventions to all hospitals."

Almost 2 million health care-related infections occur each year nationwide; more than 90,000 of these are fatal.

Besides wanting to keep patients healthy, hospitals have a monetary incentive to prevent these infections. Medicare cuts payments to hospitals that have lots of certain health care-related infections, and those cuts are expected to increase under the new health care law.

The project involved surgeries for cancer and other colorectal problems. Infections linked with colorectal surgery are particularly common because intestinal tract bacteria are so abundant.

To succeed at reducing infection rates requires hospitals to commit to changing habits, "to really look in the mirror and identify these things," said Dr. Clifford Ko of the American College of Surgeons.

The hospitals involved were Cedars-Sinai Medical Center in Los Angeles; Cleveland Clinic in Ohio; Mayo Clinic-Rochester Methodist Hospital in Rochester, Minn.; North Shore-Long Island Jewish Health System in Great Neck, NY; Northwestern Memorial Hospital in Chicago; OSF Saint Francis Medical Center in Peoria, Ill.; and Stanford Hospital & Clinics in Palo Alto, Calif.

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Online:

Joint Commission: http://www.jointcommission.org

American College of Surgeons: http://www.facs.org

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Oh, Yoko! Ono's fashion line gropes for Lennon

NEW YORK (AP) — You remember that Beatles classic "I Wanna Hold Your Hand"? Turns out Yoko Ono had other things in mind.

Ono's new menswear collection inspired by John Lennon includes pants with large handprints on the crotch, tank tops with nipple cutouts and even a flashing LED bra.

The collection of menswear for Opening Ceremony is based on a series of drawings she sketched as a gift for Lennon for their wedding day in 1969. Ono said she the illustrations were designs for clothing and accessories to celebrate Lennon's "hot bod."

Also in the collection are a "butt hoodie" with an outline suggesting its name, pants with cutouts at the behind, a jock strap with an LED light, open-toed boots and a transparent chest plaque with bells and a leather neck strap.

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Groupon CEO Mason offers to step down

Groupon Inc Chief Executive Andrew Mason, under fire for a plunging share price and tapering growth, declared on Wednesday he would fire himself if he ever thought he was the wrong man for the job.

Mason, whose performance at the helm will come under scrutiny from his board of directors during a regular board meeting Thursday, said it would be "weird" if they did not. But he said he believed the board was comfortable with his strategy.

Shares in the company, once touted as innovating local business advertising t hrough the marketing of Internet discounts on everything from spa treatments to dining, surged 8 percent to $4.25 i n the afternoon.

"It would be more noteworthy if the board wasn't discussing whether I'm the right guy for the job," Mason said in an interview from a Business Insider conference in New York. "If I ever thought I wasn't the right guy for the job, I'd be the first person to fire myself."

"As the founder and creator of Groupon, as a large shareholder ... I care far more about the success of the business than I do about my role as CEO," he said.

Groupon has shed four-fifths of its value since its public trading debut as an investor favorite during last year's consumer dotcom IPO boom, and Mason himself has presided over a string of high-profile executive departures.

Wall Street has grown uneasy about the viability of its business as fever for daily deals has cooled among consumers and merchants, hurting its growth rate.

In the interview broadcast from the conference, the outspoken and sometimes-zany co-founder argued his company was going through a period of volatility but believed it was on the right path. Groupon's efforts to reduce its reliance on plain vanilla deals include bumping up its "Goods" retail business, increasing the selection of "persistent" or long-running deals, and allowing users to search for such deals on demand.

Shares in Groupon spiked after the interview and were up 8 p ercent at $4.2 6, still way below its $20 market debut price.

Groupon and rivals in the daily deals business, like Amazon.com-backed LivingSocial, were supposed to change the very nature of small-business advertising. Instead, they were forced to revamp their business models as evidence mounts that their strategy was flawed.

This month, Groupon reported another quarter of disappointing earnings, and its stock went as low as $2.60 on Nov. 12.

Europe has been a particular problem for Groupon, partly because the sovereign debt crisis has sapped demand for higher-priced deals. Groupon was also offering steeper discounts, turning off some European merchants.

International revenue, which includes Europe, grew just 3 percent to $277 million in the third quarter, while North American revenue surged 80 percent to $292 million.

Adding to its difficulties, the U.S. Securities and Exchange Commission is looking into Groupon's accounting and disclosures, areas that raised questions among some analysts during its IPO.

But Mason shrugged off speculation that the company might run into a cash crunch and go bankrupt. The company has said it had $1.2 billion in cash and equivalents with no long-term debt.

"There was a period when those stories started that I'd go to my CFO and say: 'How would that happen, walk me through what would be required for us to actually go bankrupt'," Mason said. "And it's like an end of days, apocalyptic scenario. The business would have to go into severe negative growth for something like this. The scenario is so absurd there's no evidence for it."

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Evanston mural mistaken for graffiti, painted over

Theodore Boggs was upset to learn the mural he helped paint 10 years ago on an Evanston wall was apparently mistaken for graffiti and illicitly removed.

“I think it’s a crime what the guy did,” Boggs said.

As an Evanston Township High School senior in 2002, Boggs and several classmates painted “A Loose History of Evanston” on the Metra-owned retention wall on Green Bay Road, near Emerson Street. The 110-foot mural, a class project, depicted famous and historically significant residents as part of a timeline.

Recently, and without seeking permission, the owner of an adjacent building paid to have the mural covered, according to Jeff Cory, the city’s cultural arts/arts council director.

“He just wanted to have what he considered to be a clean, fresh wall for the new tenant,” Cory said. A Hertz car rental business recently moved to the site at 1901 Green Bay Road.

Boggs, now a preparator at a Columbia College art and design gallery in Chicago, said he expected the mural to last at least 10 years.

“It was a nice wall,” he said. “It was good paint. We prepared it really well.” 

Cory and Hertz employees were to unable to provide information about the landlord, who could not be reached for comment.

“It’s certainly a loss, and I think the community is quite disappointed that the mural was painted over, particularly because it spoke to the history of Evanston,” Cory said. “There were a lot of people in the community who appreciated the content of that mural.”

One of those is Hecky Powell, owner of Hecky’s Barbecue, across the street from the mural site. He remembers feeding the high school students while they worked, and was particularly proud of the portion of the mural that highlighted Evanston’s work to desegregate its schools.

“That’s what Evanston stands for,” Powell said. “That’s why we moved to this community. That’s what it’s about.”

He doesn’t buy the argument that the building owner mistook the mural, or portions of it, for graffiti.

“You know what graffiti looks like,” Powell said. “Graffiti does not say desegregation of schools. These kids did a beautiful job over there.”

The mural did include some artistic components that are similar to “tagging,” Cory said.

“The property owner may have misunderstood or mistook that for graffiti tags,” he said.

While Boggs said the mural can’t be restored, he said he’s energized about the prospects of creating new public art in Evanston.  He’s even been in touch with some of his fellow painters.

“Everyone’s on board for a push to do a bunch of murals,” Boggs said. “We’ll make something new and better.”

Boggs and his group will present a concept and tentative budget to the city’s Public Art Committee, Cory said, and would likely require approval from the Arts Council, Human Services Committee and possibly the City Council. The group also would need consent from Metra, which owns the retention wall.

There are six sites in Evanston that are ready for new murals, either in the spring or summer, Cory said. The landlord has said “that he would be willing to make a financial contribution toward that as well,” he said.

Powell took it even further.

“He should be responsible for paying to have this redone, and also pay the kids to do it. And also pay me to feed them,” Powell said.

jhuston@tribune.com

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Microsoft sold 40 million Windows 8 licenses in month: exec

SEATTLE (Reuters) - Microsoft Corp has sold 40 million Windows 8 licenses in the month since the launch, according to one of the new co-heads of the Windows unit, setting a faster pace than Windows 7 three years ago.

The sales number represents a solid but unspectacular start for the touch-friendly operating system designed to combat Apple Inc's and Google Inc's domination of mobile computing, which has shunted aside PCs in favor of iPads and smartphones.

Tami Reller, finance and marketing head of the Windows business, did not give a precise comparison, but sales of 40 million licenses for Windows 8, launched on October 26, appear to be ahead of Windows 7, which sold just over 60 million units in the first 10 weeks on sale at the end of 2009.

Reller did not break down the Windows 8 license sales between relatively cheap upgrades and purchases of new machines running the new software, but suggested much of the growth was coming from upgrades.

"Windows 8 upgrade momentum is outpacing that of Windows 7," said Reller, speaking at an investor conference held by Credit Suisse. Upgrading to Windows 8 costs $40, compared to $70 for the full software package or hundreds of dollars for a new PC.

The latest figure does not mean that 40 million users have adopted Windows 8. Many of the sales are to PC manufacturers, who in turn sell a large number of machines to companies, very few of which are using Windows 8 yet.

According to tech research firm StatCounter, about 1 percent of the world's 1.5 billion or so personal computers - making a total of around 15 million - are actually running Windows 8.

Reller did not disclose sales of Microsoft's new Surface tablet, its first-ever own-brand PC, designed to challenge the iPad head on.

The first Surface, based on a chip designed by ARM Holdings Plc, does not run old versions of Microsoft programs. A slightly bigger version based on an Intel Corp chip that will run the full Windows 8 Pro operating system and be fully compatible with the Office suite of applications will be available in January, Reller said.

The investor conference was the first public appearance for Reller since she was named as one of two executives to run the Windows unit after president Steven Sinofsky unexpectedly left two weeks ago. Julie Larson-Green heads the engineering side of Windows.

Reller said the Windows unit had survived Sinofsky's surprise departure.

"The team holistically is in great, great shape. And the product is in great shape," she said, responding to a question from a Credit Suisse analyst. "I think transitions are always somewhat of a challenge, but I think that timing-wise it is a reasonable time, and the team is busy."

Earlier in the day, Microsoft said it had sold more than 750,000 Xbox game consoles in the United States last week, including the day after Thanksgiving, one of the country's biggest shopping days.

That is down from 960,000 sales in the same week a year ago, in line with reduced computer game spending across the board this year, as gamers hold off on purchases in the tight economy and move toward free online games.

(Reporting by Bill Rigby; Editing by Gary Hill, Andre Grenon and Bernard Orr)

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Phils' Ruiz suspended 25 games after positive test

PHILADELPHIA (AP) — Add catcher to the Philadelphia Phillies' needs this offseason.

All-Star Carlos Ruiz was suspended Tuesday for the first 25 games of next season following a positive test for an amphetamine. The 33-year-old catcher had a career year in 2012, hitting .325 with 16 homers and 68 RBIs in 114 games.

"I am sincerely regretful for my mistake in taking a prohibited stimulant," Ruiz said in a statement issued by the Major League Baseball Players Association. "I apologize to my teammates, the Phillies organization and the Philadelphia fans. I will serve the imposed 25-game suspension to begin the season and I look forward to returning to the field and working toward bringing a championship back to Philadelphia in 2013."

Ruiz will be eligible to participate in spring training, including exhibition games.

"The Phillies fully support Major League Baseball's drug program," the team said. "We are disappointed by the news of this violation of the program. We will support Carlos in an appropriate manner and move forward to achieve our goal to play championship-caliber baseball in 2013."

Erik Kratz will likely begin the 2013 season as Philadelphia's starting catcher while Ruiz serves his suspension. Kratz, a career minor-leaguer, filled in nicely when he finally got a chance after Ruiz went down with a foot injury. Kratz hit .248, but had nine doubles, nine homers and 26 RBIs in only 141 at-bats. Kratz also threw out 45 percent of base-stealers (15 of 33).

Still, losing Ruiz hurts a lineup that struggled mightily last year. Ruiz moved up from his usual No. 8 spot and took over for an injured Ryan Howard as the team's cleanup hitter for a chunk of the season. He batted fifth after Howard returned in July.

The Phillies, who finished 81-81 after winning five straight NL East titles, have several holes to fill. Only Howard, Chase Utley and Jimmy Rollins are certain regulars. Utley, though, didn't play until late May in 2011 and late June in 2012 because of chronic knee injuries.

General manager Ruben Amaro Jr. hopes to add a starting center fielder, another starting outfielder and a third baseman either through free agency or trades. Now he'll also need a backup catcher for Kratz for the first month. Brian Schneider served as the team's primary backup the last three seasons, but only batted .212 in 122 games.

The Phillies have two top prospects catching in the minors. Sebastian Valle hit .253 with 17 homers and 58 RBIs in 80 games at Double-A Reading and Triple-A Lehigh Valley. Tommy Joseph, acquired in the trade that sent Hunter Pence to San Francisco, hit .257 with 11 homers and 48 RBIs for the Giants' and Phillies' Double-A affiliates.

Ruiz became the eighth player suspended this year under the major league testing program, the second for amphetamines following Baltimore shortstop Ryan Adams. The eight suspensions are the most since 2007.

This had to be Ruiz's second positive test for a stimulant. An initial positive for a stimulant does not trigger a suspension, only that the player must undergo follow-up testing.

There have been 102 suspensions this year under the minor league testing program.

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Follow Rob Maaddi on Twitter: https://twitter.com/RobMaaddi

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CDC: HIV spread high in young gay males

NEW YORK (AP) — Health officials say 1 in 5 new HIV infections occur in a tiny segment of the population — young men who are gay or bisexual.

The government on Tuesday released new numbers that spotlight how the spread of the AIDS virus is heavily concentrated in young males who have sex with other males. Only about a quarter of new infections in the 13-to-24 age group are from injecting drugs or heterosexual sex.

The Centers for Disease Control and Prevention said blacks represented more than half of new infections in youths. The estimates are based on 2010 figures.

Overall, new U.S. HIV infections have held steady at around 50,000 annually. About 12,000 are in teens and young adults, and most youth with HIV haven't been tested.

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Online:

CDC report: http://www.cdc.gov/vitalsigns

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Judge bows out of 'pink slime' suit over ABC ties

SIOUX FALLS, S.D. (AP) — A federal judge has recused himself from presiding over a $1.2 billion defamation lawsuit against ABC because his daughter-in-law works as a producer on one of the network's morning shows.

Judge Lawrence L. Piersol recused himself from hearing the defamation lawsuit filed by South Dakota-based Beef Products Inc. against ABC because his daughter-in-law works as a producer on "Good Morning America."

The case has been reassigned to Chief Judge Karen Schreier.

Beef Products Inc. sued ABC in September over its coverage of a meat product called lean, finely textured beef. Critics have dubbed the product "pink slime." The meat processor claims the network damaged the company by misleading consumers into believing the product is unhealthy and unsafe.

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