The Google Opportunity

By James B. Stewart
February 7, 2006
GOOGLE SHARES FELL to earth last week, singed by earnings that fell short of wildly optimistic expectations and higher-than-expected tax rates.

You knew this day was coming, didn't you? No party goes on forever.

The plunge was swift. Google (GOOG1) shares were trading at $475 just a few weeks ago. After the earnings were announced last week, they dropped in after-hours trading to $379. This week, they dropped below $370. The thundering sound of fast money running for the exits was deafening.

My reaction: Good riddance. The higher Google shares climbed before some kind of correction, the harder they were going to fall. It's a relief to have this out of the way. And here's the silver lining: If Google is the company I think it is, this is almost certainly a buying opportunity for long-term investors.

Let's look briefly at the earnings that caused the havoc. Earnings were $372 million, up 83% from a year ago; revenue was $1.92 billion, up 86%. Margins, already above 60%, improved slightly. In other words, stellar results. "We actually think we had a strong quarter," said Google Chief Executive Eric Schmidt, seeming somewhat befuddled by the stock collapse.

All companies should have such problems. But good as they were, these results fell slightly short of Wall Street estimates, because analysts were using the wrong tax rate in their earnings models. The higher tax rate reported by Google accounted for all the shortfall and then some. Lost in the rush to sell was the fact that operating results were actually better than the consensus forecast.

Even so, the case for Google shouldn't be based on one quarter's results. Obviously the broad shift to Internet advertising is continuing to propel Google's earnings and revenues, and the margins suggest Google retains considerable pricing power. But Google isn't going to continue reporting 80-plus annual percentage gains indefinitely. No company does. But some companies have nonetheless done amazingly well over the years, turning their long-term investors who bought a hundred shares in the initial public offering into millionaires in the span of a decade. This is the kind of company I believe Google can be: an Intel (INTC2), Cisco Systems (CSCO3) or Microsoft (MSFT4) for this decade.

Take a look at the early trading patterns of Cisco and Microsoft after their IPOs (Intel's happened too long ago for the data to be available). Both are strikingly similar to Google's. Microsoft went public in March 1986. A year later, it had more than tripled. A year and a half later, it was up 450%. Then in 1987, it plunged along with the rest of the market on Oct. 19, losing more than half its value, a worse correction than Google has experienced thus far. Cisco went public in February 1990. A year later, it was up more than 150%. But then it lost more than a third of its value. Four months later it was up 250%. By comparison, Google was up 250% a year after its IPO, and 450% at its peak a few weeks ago.

These early corrections in Microsoft and Cisco were significant buying opportunities. At today's prices, Microsoft has risen 335 times, and Cisco is up nearly 300 times, from their initial offering prices. Of course there were no doubt companies with similar trading trajectories that ended up going nowhere. But it's only been a year and a half since Google went public. If Google does turn out to be another Cisco, it's still in its infancy, with plenty of gains ahead of it.

I still own my Google shares, and may well add to them. I've vowed to be the kind of investor Google's founders said they wanted at the time of the IPO: patient, supportive of management, not obsessed with quarterly earnings results, and not trading frantically in and out of the stock. In return, my hope is that Google turns into one those few companies that both transforms society and makes its investors wealthy. Opportunities like these don't happen very often.

Links in this article:
1http://www.smartmoney.com/cfscripts/Director.cfm?searchString=GOOG
2http://www.smartmoney.com/cfscripts/Director.cfm?searchString=INTC
3http://www.smartmoney.com/cfscripts/Director.cfm?searchString=CSCO
4http://www.smartmoney.com/cfscripts/Director.cfm?searchString=MSFT

URL for this article:
http://www.smartmoney.com/commonsense/index.cfm?story=20060207

Google Book Search: The Argument

Lessig

So there’s a corrected version of the Google Book Search video here on youTube. Very cool video sharing service, just ripe for CC licenses.

The essence of the argument here builds upon the “market failure” justification for fair use: We recognize fair use where there’s a prominent market failure. Here, the market failure is caused by the insanely inefficient property system copyright law is. Given that, the use Google makes is plainly “fair use.”

Update: This is an updated version that substitutes a photograph. I stupidly used a photo without checking the license. The substituted photo is a beautiful image by fuzzbabble on Flickr. My apologies to the very talented Andrea K. Gingerich.

posted by [ Lessig ] on [ Jan 14 06 at 8:07 PM ] to [ good law ] [ post diffusion: 1 trackback + technorati ]

The Option Strategist Weekly Updater

February 10, 2006

To receive the complete commentary plus reccomendations visit here:

Note: Use the following link to view this week's charts:


The market actually made its high for this year just a few days into the year. If you weren't looking at a chart, you might not believe that, for the bullish media and brokerage barrage has been heavy. But, with this week's $SPX close below 1260, that put the final cap on a series of negative technical developments, and we are therefore officially bearish now.

When $SPX closed below 1260, that made a lower low to go along with a lower high -- establishing a negative, down-trending channel (see Figure 1). While the market did bounce right back after that, the bounce is still within the confines of that down-trending channel. In other works, with the market being more volatile recently, it is possible that we will see these bullish bounces off of support (1260, 1245-1250) and off of the bottom of the channel. However, as long as the channel remains intact, the trend is down.

The equity-only put-call ratios rolled over to well-defined sell signals this week. This is a big part of our strong bearish opinion. While they had toyed with sell signals recently, they did not confirm them. However, this time they have. As you can see from the charts in Figures 2 and 3, there is no doubt that they have turned higher. A rising equity- only put-call ratio is negative for the broad market. Also note that the NYSE/NASD chart has both ratios presently on sell signals as well.

Market breadth has not been great for a couple of months, and the last two weeks fit right into that bearish pattern.

Finally, volatility indices ($VIX and $VXO) are in uptrends that began back in December. Despite some gyrating (the spike peak and subsequent drop in January), the uptrend ploddingly persists (see Figure 4). A rising $VIX is bearish -- at least in this environment -- and so this completes a full complement of negative technical indicators.

Could we be wrong? Of course, but when all the indicators are in agreement like this, we feel comfortable taking a stance (a bearish one, in this case). As we wrote in The Daily Strategist yesterday, if you can't agree with your own indicators, then what good are you/they? Obviously, if these trends -- downward in $SPX and upward in $VIX are violated, that would be our 'stop out' point.

Human head found in woman's luggage

here

Human head found in woman's luggage
A woman faces charges after a US baggage search found a human skull with teeth, hair and skin in her luggage at Fort Lauderdale-Hollywood International Airport, Florida officials have said.

Haitian Myrlene Severe, 30, a permanent US resident, arrived on Thursday afternoon from Cap Haitien, Haiti, aboard a Lynx International Airlines Flight, said US Immigration and Customs Enforcement in Miami.


Customs and Border Protection officials "found a human head with organic matter inside of her checked baggage", ICE Special Agent Erick Hernandez wrote in an affidavit.

Severe told officers "she had obtained the package, which contained the human head, from a male in Haiti for ... use as a part of her Voodoo beliefs. Severe also stated that the purpose of the package was to ward off evil spirits," Hernandez wrote.

"It still had teeth, hair and bits of skin and lots of dirt," Gonzalez said.

The charges filed include that Severe smuggled a human head into the US without proper documentation, as well as failure to declare the head and transporting hazardous material in air commerce.

She faces a maximum of 15 years in prison if convicted on all charges.

Severe remains in custody.

© Copyright Press Association Ltd 2006, All Rights Reserved.


This article: http://news.scotsman.com/latest.cfm?id=214792006

Last updated: 10-Feb-06 20:34 GMT

Deja voodoo all over again...

Don't Copy This Headline!

BNA

Friday, February 10, 2006
ISSN 1535-1610
News

Anaylsis & Perspective
Don't Copy This Headline!


The authors discuss the potential impact of a pending copyright infringement case that challenges Google's use of newspaper headlines to link to news stories.
Judge Gladys Kessler is poised to make summary judgment rulings in a case that has fleshed out yet another novel copyright issue wrought by the Internet. That case, Agence France-Presse v. Google Inc., D.D.C., No. 05-00546, pending in the U.S. District Court for the District of Columbia, presents the question of whether newspaper-article headlines are copyrightable. The court's decision on this issue of first impression could have far-reaching effects both for news-aggregators like Google and for your average blogger alike.

In this article, we outline the issues and arguments raised by the parties, and consider some possible outcomes. Following Judge Kessler's ruling on the summary judgment motion, we will analyze the possible consequences of the court's decision.


Background

The case arises in the context of Google's news service, Google News, which is described in papers filed by Google as a tool that helps users "identify and locate Web pages containing news stories and images on a given subject." Google News displays headlines to identify available news stories on a range of topics. To read a particular story, a user clicks on a headline, which whisks the user away from Google's Web site to the Web site where that particular story has been published. The Google News site that displays these headline-links is generated using Google's proprietary "Web crawlers" that search and organize information on the Internet.
Plaintiff Agence France-Presse is a wire service that, according to its court papers, supplies news stories, headlines, photographs, and graphics to, among others, newspapers, Web sites, and news aggregators. The gravamen of AFP's complaint (as it relates specifically to headlines) is that when Google News copies and displays headlines generated and supplied to news outlets by AFP, it is infringing on AFP's copyrights in those headlines.

The copyrightability of those headlines came to a head when Google filed its motion for partial summary judgment, arguing that AFP's headlines are not copyrightable as a matter of law.


Google: Headlines Are Short, Ordinary Titles
That Are Not Entitled to Copyright Protection


Google presses three arguments in support of its assertion that AFP's headlines are not copyrightable. First, Google argues that AFP's headlines are fact-based and too ordinary to merit protection. Second, Google argues that the AFP headlines are too short to merit protection, even if they are witty. Finally, Google argues that the headlines are equivalent to titles of works, which Copyright Office regulations and courts declare uncopyrightable.
Google contextualizes its first argument--that headlines are fact-based and ordinary--by citing to admissions by AFP that its headlines are typically factual, simple, and contain only one idea. AFP also admitted that headlines of AFP articles are typically not "hardened" or "jazzed up." From these admissions, Google argues that headlines of such a nature cannot be copyrighted because copyright law does not protect ordinary factual statements about news or ideas since they lack the requisite creativity to merit protection.

Citing Feist Publications Inc. v. Rural Telephone Service Co., 499 U.S. 340, 18 USPQ2d 1275 (1991), Google first notes that news of the day is typically not copyrightable and is in the public domain. Google then marshals case law holding that ordinary phrases are not entitled to copyright protection. Cast in light of these principles, Google argues, AFP's headlines cannot be copyrightable because they are admittedly nothing more than simple, factual statements about news that is in the public domain.

In pressing its argument that AFP's headlines are too short to merit protection, Google cites to AFP's admission that its headlines are typically short--fewer than ten words. Highlighting the reciprocal relationship between length and the required degree of creativity for copyright protection, Google argues that even if the headlines were not fact-based and ordinary, they would not be copyrightable because they are too short.

Google directs the court's attention to case law in which such phrases as Pepsi's "You Got The Right One, Uh-Huh" and a guidebook entitled "Eat Your Art Out, Chicago" were found to be unprotectable despite their non-factual nature. Measured against this case law, according to Google, even if AFP's headlines were considered highly creative, rather than fact-based at ten words or less, they would be too short to merit copyright protection. Thus, under the circumstances of a case where the headlines are both short and fact-based, they are even less deserving of protection.

Last, Google argues that AFP's news headlines are equivalent to titles, which have no protection under copyright law. Regulations from the Copyright Office and case law are in accord in holding that titles to works are categorically unworthy of copyright protection. Google argues that AFP's headlines are simply titles to its news stories and, therefore, fall within this categorical exclusion. In support of its argument, Google cites several dictionaries that define a headline as the title or caption of a news article.


AFP: Headlines Are the Heart of the News Story, And Must Be Afforded Copyright Protection

AFP meets Google's arguments with four central contentions. AFP first argues that its news headlines are protected as fact-based compilations. Second, AFP counters that headlines are not titles subject to categorical exclusion. Third, AFP argues that when Google copies its headlines, it is copying the most important part of its news stories, which as a whole certainly qualify for copyright protection. Last, AFP appears to appeal to the equities of the case by arguing that Google is copying for free the very material that AFP licenses for a fee to its subscribers.
In arguing that its headlines are protected as fact-based compilations, AFP notes that creating a news-headline is no simple, unskilled task. AFP states that the author must take account of a multitude of facts, distill and interpret them, and determine which facts to emphasize so as to capture the essence of the story in the headline while also enticing a reader to read the full article.

AFP argues that such a process is not a mechanical process but rather one that requires a great deal of creativity, producing a result that is worthy of copyright protection. Moreover, AFP asserts, its headlines often express wit and humor.

By way of example, AFP cites to such headlines as "Robot dog keeps over-eaters on tight leash" and "Poor-fitting bras leave Australian women feeling like boobs" and "Pop goes soda in U.S. schools in victory for health campaign."

AFP also takes issue with Google's characterization of news headlines as titles. First, AFP notes that its search of numerous dictionaries' definitions of title turned up none that included headlines in its definition of title.

AFP further argues that headlines are integral parts of news stories, not titles of them. Expounding on this point, AFP analogizes a headline to the overture of an opera, as opposed to the opera's title. Even though the opera's title may not warrant protection, its overture almost certainly would; so too, then, should the headline of a news story, an overture's analogical equivalent.

Related to this argument is AFP's third point, in which AFP argues that its headlines are imbedded within and an integral part of the news story itself, which as a whole merits copyright protection. Under this characterization, AFP claims that by copying the imbedded headline, Google takes the most important part of the copyrighted news article. Citing Harper & Row Publishers Inc. v. Nation Enterprises, 471 U.S. 539, 225 USPQ 1073 (1985), AFP argues that such copying by Google is not de minimis and is sufficient to be infringing.

Finally, AFP notes that it licenses to its subscribers for a fee the same stand-alone headlines that Google News copies. That copying, AFP argues, threatens the financial incentive for wire services such as AFP to provide such a service. AFP asks rhetorically why any wire service would go to the expense of creating headlines and a network for their distribution if the wire service knows that its headlines are not protected and may be duplicated and used in a similar fashion by any competitor.


A Decision With Consequence

Judge Kessler heard oral arguments from the parties on Jan. 11, and the court anticipates ruling on Google's motion prior to the next status conference in the case set for March 21. The stark alternatives facing the court--either headlines are copyrightable or they are not--come with practical implications. A holding that news headlines are capable of exhibiting the creativity and originality necessary to merit copyright protection comes with both positives and negatives. Similarly, a categorical exclusion of news headlines from copyright protection would come with its own set of benefits and burdens.
Should the court conclude that headlines exhibiting the requisite amount of creativity and originality are copyrightable, one can imagine certain benefits that would flow from such a decision. First, such a result would likely foster the production of witty, entertaining, or otherwise interesting and engaging headlines in newspapers and other periodicals. Such a result also seems to appeal to an ordinary sense of fairness and to the equities of the case. Why, after all, should Google News be able to unabashedly copy AFP's headlines, which undeniably took time and effort to craft, and profit from doing it? Something does seem unfair about that.

On the other hand, such a ruling from the court could spread considerable concern throughout the so-called blogosphere that has arisen in recent years. Many bloggers routinely use headlines to link to news articles.

One could imagine that the threat of infringement litigation for such linkage would substantially chill that activity or at least lead to the inconvenience of having to independently compose a description of the article being linked to. As stated by Howard J. Bashman, author of the Web log How Appealing: "It is more difficult and time-consuming to have to describe articles rather than providing a headline with a link, so it is also likely that if headline linking becomes impractical, the end result at my Web log would be that fewer articles would be mentioned."

Finally, such a ruling would prevent services like Google News from automatically linking to news stories through what is an easy and efficient manner. If such news aggregators still chose to link via headlines, they would be forced to make a headline-by-headline call on the headline's copyrightability and risk litigation on any close call and damages if they were wrong.

Under such a scenario, none but the most dry and boring headlines would likely find their way onto Google News or similar services. Those services could probably strike a licensing deal with the authors of the headlines, but given the large number of news outlets searched and linked to, such an effort would likely be costly and time-consuming.

A decision from the court that news headlines are categorically uncopyrightable would of course be a bright-line rule that would eliminate these concerns. Such a rule, however, would not be without its costs. As noted above, it could disincentivize creativity and originality in crafting headlines. It would also be subject to the same criticism as the categorical rule against copyright protection for titles--overbreadth. Precluding copyright protection for all headlines might very well deprive creative and original expression of protection simply because of its location at the top of a news article.

Should the court settle on a rule denying copyright protection to headlines, one would expect such a ruling to be expressly limited to the factual, news-story context, leaving for another day the question of whether fictional headlines that poke fun and parody (such as those found in the popular newspaper spoof, The Onion, which currently displays headlines like "Black Box Records Last 90 Minutes of Hot-Air Balloon Crash" and "President Creates Cabinet-Level Position to Coordinate Scandals") merit at least the possibility of protection. Undoubtedly, however the court rules, its decision will receive due scrutiny as the first to decide an interesting and important copyright question with possibly far-reaching consequences. The decision will be of interest to both scholars and practitioners alike, with commentary, analysis, and debate likely to ensue.

Stay tuned.

Martin J. Bishop and Thomas K. Anderson are attorneys with Foley & Lardner, Chicago.


By Martin J. Bishop and Thomas K. Anderson


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Gunning For Google

Forbes

On My Mind
Gunning For Google
Dennis Kneale, 02.03.06, 11:00 AM ET


LONDON - The Google guys must be wondering what the hell hit them. For a year or two now, Sergey Brin and Larry Page have been hailed by Wall Street and the press, adored by fiendishly avid users and devoted investors, and all but worshipped by Silicon Valley colleagues and advertisers.

Now comes the backlash: Google (nasdaq: GOOG - news - people ) as spineless hypocrite willing to sell out a billion users yearning to breathe free behind the Great Firewall of China; Google as violator of copyrights, reviled by book publishers and newspapers that accuse it of pirating their precious prose; Google as flawed financial manipulator, unable to manage its tax rates to avoid a mild earnings disappointment and a jarring market reaction.

Newsflash: Google is on the side of right in most of this Sturm und Drang. This onslaught isn’t really about the issues at hand. It is driven by fear, envy and greed, and it is an inevitable part of the life cycle in Silicon Valley. Upstarts climb up from nothing to the applause of all, and then--just when you start believing your own planted PR--the best ones must be taken down. Admiration turns into wariness and jealousy, and what first struck everyone as perky and plucky now seems potent and threatening. High-tech heroes, once renowned for their boldness, suddenly are resented as arrogant and imperious (by perception or reality; in the Valley they are one and same).

Bill Gates and Steve Ballmer of Microsoft (nasdaq: MSFT - news - people ) endured this in the late 1990s. Tom Siebel and Siebel Systems went through it in the aftermath of the tech crash of 2000; so did Larry Ellison of Oracle (nasdaq: ORCL - news - people ). See also Carly Fiorina of Hewlett-Packard (nyse: HPQ - news - people ).

And now it is Google’s turn.

The gloating is palpable, some of it from people who had celebrated Google’s startling rise. When the China flap broke last week at the World Economic Forum in Davos, Switzerland--the company will follow Chinese law and restrict search phrases that could yield entries on dissent and suppression--it got more play than the news that the Palestinians had elected Hamas militants intent on destroying Israel (business trumps geopolitics, even at WEF). Bill Gates was ready for comment, reportedly teasing Google Chief Executive Eric Schmidt about the company motto (“Don’t be evil”) and later holding forth sagely on the matter.

Now the bloggers are on the company’s case. “I wonder if they’ve banned ‘spineless,’ hypocritical’ and ‘cowards,’ ” said one wag quoted in the Financial Times. Another diatribe, posted on the blogspot.com site that Google itself owns, lamented “that giant sucking sound” of “Google’s soul getting sucked out to make room for cash.”

Please stop the madness. Users will find a way dodge the search restrictions. No company is above the laws of the country where it wants to compete, and shareholders will fare better by having Google stay in the booming market and wait for it to loosen up. Eventually China will.

The World Association of Newspapers, meanwhile, accuses the Google guys of building their business “on the back of kleptomania,” demanding recompense. (Even though many publications throw up their content online free of charge anyway.) Book publishers have questioned Google’s plan to put online 15 million titles in ten years, including the entire contents of the libraries at Stanford University and the University of Michigan.

And the stock market went haywire when Google’s per-share net came in 22 cents below the $1.76 that analysts had expected. For want of two dimes, each share lost up to $56 in trading that day. Never mind that sales rose 86% and earnings, even better, doubled. On Thursday, The Independent in London had Google’s one-day loss in market value on page one in a headline six inches high: $13,000,000,000, puckishly putting the digits in blue, red, yellow, then green to mock the Google logo.

Google was headed for a fall, if only because, damn it, we’re all so jealous. It went public at $85 in August 2004. At over $400 lately, it has created four billionaires, and according to the company, one in five of its employees are now multimillionaires. (The investor relations chief, who has got to be younger than I am, is said to have recently retired.) Sergey Brin and Larry Page, each now barely into their 30s, founded Google in 1999 after landing a $100,000 check at lunch from Sun Microsystems (nasdaq: SUNW - news - people ) co-founder Andrew Bechtolsheim. Now Brin and Page are worth $16 billion apiece. Isn’t that reason enough to hate them?

Worse: In sharp contrast to the storied nerdiness of Bill Gates 20 years ago, these guys are close to cool. They wear black, travel in attractive company and work the room. They were on prominent display at myriad Davos parties. “Ooh, he just took off his sweater!” an admiring young woman at the Forbes party said when Sergey shucked his jumper to reveal sculpted biceps framed by a tight, black T-shirt. (Sorry, Sergey; too rich a moment to go unmentioned.)

But Google aggravates the matter with its own pretensions. It wraps itself in the pious pursuit of truth and access and free-flowing information. It applies a famously difficult intelligence test that requires recruits to know arcane things they will never use on the job. At the Google party in Davos, the flow of expensive vintage wines stopped at 11:15 P.M. so a few hundred people could sit in a sweltering museum room to hear Brin and a venture capitalist do an onstage interview with Shimon Peres, the former Israeli prime minister--all of it off the record, of course. As they chatted, an Israeli cartoonist in a corduroy suit entertained the audience by using squeaky, fat felt-tip markers to draw cruel caricatures of the men onstage. Even a couple of Googlers cringed.

A bigger driver of this backlash, though, may be fear. Google now poses a direct threat to Microsoft--and to Yahoo! (nasdaq: YHOO - news - people ), and eBay (nasdaq: EBAY - news - people ), and cable channels and broadcast networks, and radio, and telecom carriers and still more. “Each company is focused solely on Google as the main threat, but Google has to fight off all of them at once. How are they supposed to do that?” asks Richard Stromback, chief of nanotech shop Ecology Coatings in Akron, Ohio, who watched the Google drama play out in Davos.

Google execs, sharpie sandbaggers that they are, insist the search engine threatens few of these outlets. Yet the company imperils Microsoft because, while the latter sells software, Google essentially gives it away free to get you to look at ads on its site, notes John Sviokla, vice chairman at consulting firm DiamondCluster International (nasdaq: DTPI - news - people ). Google threatens travel sites, too: Some 30% of the private-jet bookings at easyJet last summer came not through Travelocity and other sites but through Google.

Ever insatiable, Google now offers satellite-mapping and news searches and price-discount shopping and local pizza referrals and Internet phone service; it just bought a radio ad delivery firm and touts plans to distribute TV shows and movies over the Internet. Yet at bottom, Google really is little more than an advertising medium, albeit one of the most powerful ad machines ever invented. Sviokla says more than a trillion dollars, 10% of U.S. gross domestic product, is spent on advertising and marketing, and most of this is utterly inefficient, pitching the wrong product to people who aren’t even shopping--they are planted on the sofa at home.

What was it the old retailer John Wanamaker said? He knew that half of his ad budget was wasted; he just didn’t know which half. At long last, Google offers a way to pitch just the right product to a consumer who is shopping for it at just that moment and can buy it on the spot. Google doesn’t have to save the world or free China or stamp out evil, its own earnest inclinations aside. It just has to provide a venue for ads that truly work, and huge riches will follow.

GREAT LITERARY TAUNTS

Dear Book Club Members. To all of us, who are Great Readers and so
understanding of human nature and do not wish to hurt anyone's feelings,
outright. Thought you would enjoy the following taunts.


"I feel so miserable without you, it's almost like having you here." --
Stephen Bishop

"A modest little person, with much to be modest about." -- Winston Churchill
(about Clement Atlee)

"I've just learned about his illness. Let's hope it's nothing trivial." --
Irvin S. Cobb

"I have never killed a man, but I have read many obituaries with great
pleasure." -- Clarence Darrow

"He has never been known to use a word that might send a reader to the
dictionary." -- William Faulkner (about Ernest Hemingway)

"He is not only dull himself, he is the cause of dullness in others." --
Samuel Johnson

"He had delusions of adequacy." -- Walter Kerr

"I've had a perfectly wonderful evening. But this wasn't it." -- Groucho
Marx

"They never open their mouths without subtracting from the sum of human
knowledge." -- Thomas Brackett Reed

"He loves nature in spite of what it did to him." -- Forrest Tucker

"I didn't attend the funeral, but I sent a nice letter saying I approved of
it." -- Mark Twain

"His mother should have thrown him away and kept the stork." - Mae West

"Some cause happiness wherever they go; others whenever they go." -- Oscar
Wilde

"He has no enemies, but is intensely disliked by his friends." Oscar Wilde

"He has Van Gogh's ear for music." -- Billy Wilder

Starting out

By Widget Finn (Filed: 28/01/2006)


Writing on the wall for unwanted tattoos

When businessman Richard Simpson-Birks attended an annual tattoo convention in Derby dressed in T-shirt and jeans he says "I stuck out like a sore thumb. I was the only person without any tattoos."

He was there to do some market research after his wife Barbara, a beauty therapist, had received emails from a German tattooist offering a franchise to use his patented chemical method of removing tattoos.


Mr Simpson-Birks says: "One in eight people in the UK have tattoos and the number is increasing rapidly.

"Like all fashions it's bound to wane, and I saw tattoo removal as an interesting business opportunity."

The German tattooist spent 20 years developing his method that, unlike the conventional approach, didn't involve lasers - and he wanted €1.3m for the UK master franchise. "I went to see the procedure in Switzerland and persuaded him that his price was nonsense because of the amount and investment required to get it off the ground. Eventually we agreed a very small selling price plus a profit share on the basis that he had no involvement with the commercial side."

Mr Simpson-Birks discovered that the whole area of tattoo removal is currently unregulated, though the EU is planning to move in. "I decided that it was an opportunity to redesign the tattoo industry. Any legislation would affect me so if I could influence it this would benefit my business. I got on to a consultancy which advises the government in this area."

A key step was to establish through the environmental health department that tattooing and its removal is a cosmetic rather than a medical procedure, so that it can be carried out by qualified beauty therapists and medical clinics. Mr Simpson-Birk says: "I also had to redesign the tattoo gun, since hygiene would be a major issue.

"A Swiss company developed the single-use gun for me while a UK electronics company produced a recordable controller to stop unauthorised people from carrying out the procedure. I invented my own standards which would influence others in the industry."

The Simpson-Birks started using the procedure in Barbara's Derby beauty salon to test the market. After an article in the local paper asking for volunteers to have their tattoos removed the switchboard was jammed.

But Mr Simpson-Birks knew that franchising was the way forward. He says: "I contacted the British Franchise Organisation for advice then we engaged a franchise lawyer to ensure that we offered a watertight agreement."

Coverage in the beauty press brought in more inquiries. "Initially I thought I could sell franchises to anyone, then I realised that the image must be clinical and that we should target established salons and clinics."

They were about to sell the first franchises when the Simpson-Birks were invited to appear on the BBC programme Dragons' Den. "It was the most stressful situation I've experienced. I had a full business plan, forecasts and cash flows, but these were ignored and we were grilled for over two hours without any paperwork. We'd asked for £250,000 and one 'Dragon' offered half, but I didn't take it because I couldn't work with someone looking over my shoulder." The first three five-year franchises were sold for £15,000 each, "a giveaway, for it's the royalty on each removal session which brings in the turnover".

Mr Simpson-Birks is currently negotiating franchises in three branches of Selfridges - with a tattoo company. "I said that I wouldn't sell the process to the opposition but these people share the same standards, and the chance to get into Selfridges is irresistible."

The cost of removing a small tattoo starts at £500, and with all those fashion victims who change their mind, that's an awful lot of royalties for Tattoo Erase.


© Copyright of Telegraph Group Limited 2006

IP and email sources

One of the IR reference staff. Bob McCarthy, suggested using: http://www.abika.com/Reports/verifyemail.htm. Neither of us have used it before and the IRC does not have a subscription.

There are only a few website that I know of where public record info can be looked up by e-mail address, none of them produced any results.

I was able to find IP address info using IP Address Directory, see below.

E-mail Directories: (reverse look-up, searched but did not locate any info)

http://www.411locate.com/email.htm

http://emailsearch.addresses.com/email.php

http://www.theultimates.com/email/

http://www.infospace.com/home/white-pages/reverse-email

http://www.arin.net/whois/index.html

http://www.worldemail.com/index.htm

http://www.icq.com/whitepages/

http://email.iaf.net/email-search.html

http://email.people.yahoo.com/py/psAdvSearch.py



IP Address Directory:

Reverse IP Lookup: http://psacake.com/web/eg.asp

"All Who Is" IP Look up: http://www.arin.net/whois/index.html

- both produced the results below:


Search results for: 4.154.225.151


OrgName: Level 3 Communications, Inc.
OrgID: LVLT
Address: 1025 Eldorado Blvd.
City: Broomfield
StateProv: CO
PostalCode: 80021
Country: US...

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