Just Economic Info

Apple Inc's new version of its iPhone and iPad software will not include a pre-loaded app for Google Inc's popular video website, YouTube, Apple said on Monday.

It was the latest sign of the growing rivalry between the technology companies the once were closely aligned but now are vying for supremacy in the fast-growing mobile computing market.

Earlier this year, Apple said it would dump Google's mapping software from its mobile devices.

"Apple and Google are the mobile operating systems for the future and this is where the battleground is going to lie," said Needham & Co analyst Kerry Rice.

"If it's going to be a two-horse race, you certainly don't want to give the other horse any kind of lead," he said.

Google, the world's No.1 Web search engine, is also the maker of the most popular smartphone software with its Android operating system. In May, Google closed the $12.5 billion acquisition of Motorola Mobility, setting the stage for Google to more tightly integrate its smartphone software and hardware and mount a more direct challenge to Apple's iPhone.

Apple said in a statement on Monday that its license to include the YouTube app in the iOS operating system "has ended." Apple noted that "customers can use YouTube in the Safari browser and Google is working on a new YouTube app to be on the app store."

An Apple spokeswoman declined to comment on whether the company's YouTube license included any financial terms, or on whether Apple planned to replace YouTube with another pre-installed online video app from a different company.

YouTube has been among a handful of apps that come pre-loaded onto the screens of Apple's mobile devices since the original iPhone was introduced in 2007.

But the app, which was actually built by Apple using YouTube's standards, did not appear to be as full-featured as YouTube's own website: the YouTube app does not appear to feature any advertising, and the catalog of available music videos lacks many of the titles found on the website.

Analysts said Google was unlikely to take much of a financial hit from the move, though it could complicate Google's efforts to expand online services to the growing ranks of mobile users.

"It's a risk to Google's overall mobile approach and strategy, in that their services are not going to be as easy to find as they used to be," said ThinkEquity analyst Ronald Josey. "They need to be everywhere that users are."

More worrisome, said Josey, is what the move could mean for Google's deal with Apple to be the default search engine on the iPhone.

"The writing's on the wall that when search is up for renewal, there's a significant chance that Google may not be the default," said Josey.

Analysts believe Google generates a significant portion of mobile advertising revenue from iPhone users.

Former Google CEO Eric Schmidt once sat on Apple's board of directors, but the relationship between the two companies has frayed. Apple's co-founder, the late Steve Jobs, was quoted as saying he was willing to go "thermonuclear" on the search leader, after it decided to position Android against the iPhone.

News of YouTube's disappearance from Apple's mobile software came as Apple released a new test version on Monday of the iOS 6 software, which for the first time did not include the YouTube app. The final version of iOS 6 is due for release sometime in the Fall.

YouTube is one of the most popular destinations on the Internet, with more than 800 million unique monthly visitors who stream 4 billion videos a day.

Google said in a statement that it was working with Apple to ensure that it has "the best possible YouTube experience for iOS users."

Shares of Google finished Monday's regular session up 1 percent at $622.19. Apple shares were up 1.1 percent at $622.55.

Facebook Inc will allow users in Britain to wager real money on its service, opening its doors to gambling for the first time as revenue growth slows at the world's No. 1 social network.

On Tuesday, Gamesys, an independent gaming company, launched a version of online Bingo for Facebook users in Britain who are at least 18, and which the company said will pay winners real money. Gamesys also announced plans to offer virtual slots gambling on Facebook.

Facebook confirmed that it is partnering with Gamesys to allow gambling on its service.

"Real money gaming is a popular and well-regulated activity in the UK and we are allowing a partner to offer their games to adult users on the Facebook platform in a safe and controlled manner," Facebook said in a statement.

Facebook spokeswoman Linda Griffin said there are no current plans to offer gambling in any other countries or with any other partners besides Gamesys.

She declined to disclose what portion of the revenue Facebook would take from the gambling on the Gamesys games, but acknowledged that there was a revenue sharing agreement between Facebook and Gamesys.

Facebook takes a 30 percent share of revenue for transactions on non-gambling games on its service, such as when users purchase virtual tractors and seeds in Zynga Inc's popular Farmville game.

Facebook, which makes the majority of its money from online advertising, has seen its revenue growth slow sharply during the past year. In the second quarter, Facebook reported revenue growth of 32 percent, down sharply from more than 100 percent growth it delivered at the same time last year.

Shares of Facebook were down 3 percent at $21.26 on Tuesday afternoon on the Nasdaq.

(Reuters) - U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rate-rigging scandal.

Federal prosecutors in Washington, D.C., have recently contacted lawyers representing some of the individuals under suspicion to notify them that criminal charges and arrests could be imminent, said two of those sources who asked not to be identified because the investigation is ongoing.

Defense lawyers, some of whom represent individuals under suspicion, said prosecutors have indicated they plan to begin making arrests and filing criminal charges in the next few weeks. In long-running financial investigations it is not uncommon for prosecutors to contact defense lawyers for individuals before filing charges to offer them a chance to cooperate or take a plea, these lawyer said.

The prospect of charges and arrests of individuals means that prosecutors are getting a fuller picture of how traders at major banks allegedly sought to influence the London Interbank Offered Rate, or Libor, and other global rates that underpin hundreds of trillions of dollars in assets. The criminal charges would come alongside efforts by regulators to punish major banks with fines, and could show that the alleged activity was not rampant in the banks.

"The individual criminal charges have no impact on the regulatory moves against the banks," said a European source familiar with the matter. "But banks are hoping that at least regulators will see that the scandal was mainly due to individual misbehavior of a gang of traders."

In Europe, financial regulators are focusing on a ring of traders from several European banks who allegedly sought to rig benchmark interest rates such as Libor, said the European source familiar with the investigation in Europe.

The source, who did not want to be identified because the investigation is ongoing, said regulators are checking through emails among a group of traders and believe they are now close to piecing together a picture of how they allegedly conspired to make money by manipulating the rates. The rates are set daily based on an average of estimates supplied by a panel of banks.

"More than a handful of traders at different banks are involved," said the source familiar with the investigation by European regulators.

There are also probes in Europe concerning Euribor, the Euro Interbank Offered Rate.

It is not clear what individuals and banks federal prosecutors are most focused on. A top U.S. Department of Justice lawyer overseeing the investigation did not respond to a request for a comment.

Reuters previously reported that more than a dozen current and former employees of several large banks are under investigation, including Barclays Plc, UBS and Citigroup, and have hired defense lawyers over the past year as a federal grand jury in Washington, D.C., continues to gather evidence.

The activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay $453 million in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009.

Barclays, which signed a non-prosecution agreement with U.S. prosecutors, is the first major bank to reach a settlement in the investigation, which also is looking at the activities of employees at HSBC, Deutsche Bank and other major banks.

The Barclays settlement sparked outrage and a series of public hearings in Britain, after which Barclays Chief Executive Bob Diamond announced his resignation from the big British bank.

The revelations have raised questions about the integrity of Libor, which is used as benchmark in setting prices for loans, mortgages and derivative contracts.

Adding to concerns are documents released by the New York Federal Reserve Bank this month that show bank regulators in the United States and England had some knowledge that bankers were submitting misleading Libor bids during the 2008 financial crisis to make their financial institutions appear stronger than they really were.

Among other details, the Fed documents included the transcript of an April 2008 phone call between a Barclays trader in New York and Fed official Fabiola Ravazzolo, in which the unidentified trader said: "So, we know that we're not posting um, an honest LIBOR."

The source familiar with the regulatory investigation in Europe said two traders who have been suspended from Deutsche Bank were among those being investigated. A Deutsche Bank spokesman declined to comment.

The Financial Times reported on Wednesday that regulators we're looking at suspected communication among four traders who had worked at Barclays, Credit Agricole, HSBC and Deutsche Bank.

Credit Agricole said it had not been accused of any wrongdoing related to the attempted manipulation of Libor by Barclays, but had responded to requests for information for various authorities related to the matter.

Beyond regulatory penalties and criminal charges, banks face a growing number of civil lawsuits from cities, companies and financial institutions claiming they were harmed by rate manipulation. Morgan Stanley recently estimated that the 11 global banks linked to the Libor scandal may face $14 billion in regulatory and legal settlement costs through 2014.

In the United States, the regulatory investigation is being led by the Commodity Futures Trading Commission, which has made the Libor probe one of its top priorities.

LONDON (Reuters) - Michael Rake, deputy chairman of Barclays Plc (BARC.L), has ruled himself out of contention to be its new chairman, striking a blow to the UK bank as it hunts for new leadership to steer it through its interest rate-rigging scandal.

Rake, who was considered favorite for the job, is not interested in the role, three people familiar with the matter said on Sunday.

The next Barclays chairman faces a stiff challenge. The bank was fined $450 million three weeks ago for manipulating Libor interest rates, and the scandal has unearthed deep problems in its relations with regulators, who have accused the bank of frequently being too aggressive.

The job will also attract intense scrutiny -- and possibly interference -- from UK authorities, who have been criticized for not doing more earlier to rein the bank in.

Rake would have been forced to give up his chairmanship roles at telecoms firm BT Group (BT) and budget airline easyJet (EZJ.L) to take the job.

He could not immediately be reached for comment.

Marcus Agius, chairman for 5-1/2 years, will step down once a replacement is found.

Barclays is also searching for a chief executive. Bob Diamond, who was CEO from the start of 2011, quit with immediate effect a week after the Libor settlement, following a political and public backlash. When he left, Agius took on the top executive responsibilities.

The fallout from the scandal is expected to overshadow the bank's half-year results on Friday, which should show it made an underlying profit of 3.8 billion pounds ($5.94 billion), according to the average of analysts polled by the bank.

Rich Ricci, head of Barclays' investment banks, is not interested in being chief executive, a person familiar with him said. He was not seen as a likely replacement for Diamond anyway, as he had been his key lieutenant for many years.

Barclays is expected to look for external candidates to fill both roles.

Headhunter Spencer Stuart is helping Agius in the search for a CEO and Ana Mann's MW is helping John Sunderland, a non-executive director at the bank, run the chairman search.

CEO candidates include former Barclays finance director and a current advisor Naguib Kheraj; Antony Jenkins, head of its retail business; and Bill Winters, former co-head of J.P.Morgan's (JPM) investment bank.

Candidates for chairman include former top civil servant Gus O'Donnell and Glen Moreno, the former Lloyds Banking Group (LLOY.L) deputy chairman who runs Pearson, the Sunday Times reported.

Anthony Sal, a veteran city lawyer, is expected to be picked this week to lead an investigation into the Libor scandal that the bank has pledged to conduct as it seeks to rebuild its reputation.

(Reporting by Steve Slater, Kate Holton and Rhys Jones; Editing by Mike Nesbit)

WASHINGTON (Reuters) - Two companies involved on the ground level of an expensive Pentagon effort to embrace biofuels have used familiar strategies in building their profiles in Washington, using hefty campaign contributions and aggressive lobbying to secure support.

One company, Solazyme Inc, a subcontractor on a $12 million alternative fuels contract from the Navy, also has raised its Washington profile by hiring as strategic advisers former senior Clinton administration officials with close ties to the Pentagon or Department of Energy, according to corporate records.

Solazyme and Gevo Inc, a Colorado company that won a small Air Force biofuels contract, are on the cutting edge of a $510 million Pentagon effort to switch to biofuels to curb reliance on foreign oil. But the high per-gallon cost of the biofuels has spurred controversy on Capitol Hill, where some Republicans have branded the program as wasteful and raised questions about political ties.

The Navy is paying $26 a gallon for the fuel it is using to test its "green fleet" concept. The prime contractor is Dynamic Fuels, a Louisiana-based company that is a joint venture of Arkansas-based Tyson Foods and Oklahoma-based Syntroleum Corp. Solazyme, which makes its biofuel from algae, is a subcontractor. Dynamic Fuels makes some of it fuel from animal fats.

The Air Force is paying Gevo $59 per gallon. Gevo makes its fuel by converting sugar into isobutanol.

Proponents of the program - as well as the Pentagon - argue that costs per gallon will dramatically drop after production ramps up and will eventually be competitive with fossil fuels.

Even as the biofuel companies work to build revenues in an emerging field, their investors and employees have worked the political system, campaign finance records show. Investors, officers and employees at Solazyme and Gevo have contributed hundreds of thousands of dollars to political campaigns in recent years, primarily to Democrats.

Both companies have relied on extensive lobbying to help them win modest contracts.

Solazyme relies on in-house lobbyist Drew Littman, a former staffer to Democratic Senators Al Franken of Minnesota and Barbara Boxer of California. This year, it also hired McBee Strategic Consulting L.L.C., which represented Solyndra, the solar panel maker that went bankrupt after receiving more than $500 million in federal loans.

Solazyme also solicits strategic advice from two prominent Clinton administration officials - former CIA director R. James Woolsey, who has served in other administrations as well, and former Deputy Energy Secretary T.J. Glauthier.

Glauthier also served for five years in the Clinton White House at the Office of Management and Budget. He was on President Barack Obama's transition staff and worked on the energy portion of the stimulus bill.

"I had no contact with any agencies or others in the administration about Solazyme's bids or contracts for biofuels," Glauthier told Reuters.

Jonathan Wolfson, chief executive officer of Solazyme, said the company needs a strong Washington presence to counter the entrenched interests of rivals, including the oil industry. Shareholders of the publicly traded company deserve to know about legislative and administrative developments in Washington that might affect biofuels, Wolfson said.

Biofuels lobbying pales in comparison to the lobbying budgets of the oil and gas industries, he said.

Wolfson said campaign contributions by people associated with Solazyme had nothing to do with the company's Washington agenda. Most came from one person - board chairman Jerry Fiddler, who has given $358,000, mostly to Democrats. Fiddler, long active in Democratic politics, made his fortune selling his software company to Intel.

"Jerry's political donations are Jerry's private, personal business," said Wolfson. "I can absolutely guarantee you there are not discussions with management or with the board about what Jerry does with respect to his political donations. The fact that Jerry donated a lot of money is accurate. The fact that T.J. (Glauthier) had a relationship in DoE (Department of Energy) is accurate. But people are drawing lines to things that are not reality."

Fiddler could not be reached for comment.

Gevo spent $360,000 over three years for the services of Green Capitol LLC, according to lobbying records. The principals of the firm are a former Capitol Hill aide who worked on energy programs and a former official of the Air Transport Association, the major airlines' trade organization, who pushed the Air Force to experiment with biofuels.

Gevo's Air Force contract was worth $639,000.

A key Gevo investor is venture capitalist Vinod Khosla, who co-founded Sun Microsystems and has given $474,000 in campaign contributions since 1996, mostly to Democrats, according to a Reuters' compilation of campaign finance data on opensecrets.org.

Khosla told Reuters through a spokesman that he had no knowledge of the Air Force contract and declined further comment.

Of the companies helping provide biofuels to the Navy and Air Force, Tyson Foods has by far the highest profile in Washington.

Its political action committee has given $1.9 million in contributions since 1990 to candidates of both parties. Its president, John Tyson, has made $225,000 in contributions to both parties in the past six years. The company has spent $10.7 million on lobbying in the past five years, according to opensecrets.org.

Formed in 2005, Gevo seeks to retrofit ethanol plants to make isobutanol, which is more powerful and less damaging than ethanol to the machines that burn it, including cars. Gevo reported revenues of $64 million in 2011.

Solazyme, founded in 2004, creates oil from microalgae grown in fermentation tanks. Solazyme reported $39 million in revenues in 2011.

(Reporting by Marcus Stern; Editing by Marilyn W. Thompson; Desking by Vicki Allen)