If you want to have a say in the only group that can lay claim to governing the Internet, you’re going to have to do a little homework. The subject: ICANN for Dummies. The Internet Corporation for Assigned Names and Numbers, or ICANN, is planning to hold an online election before Nov. 1 for five seats on its governing board. The winners will represent the interests of ordinary Internet users in the group, which oversees the assignment of Web addresses. But before you start printing up campaign fliers, you should know that some of ICANN’s current board members aren’t too excited about sharing their power with ordinary folks like you and me. Specifically, they’re worried we’d be a little, well… how can I put this gently? Maybe I’ll just let Esther Dyson, the board’s chairwoman, speak for herself. “I am concerned about capture (of the seats) by people who don’t know what they are doing,” she was quoted by The New York Times as saying during ICANN’s most recent meeting. “People who are stupid, individually.” Dyson and her fellow brainiacs were so worried about our sub-par IQ that they wanted to deny Net users a chance to vote directly for representatives on the board. But their plans were scuttled by public interest lobbyists who argued that we deserve a real voice in the process even if that voice is barely capable of forming a complete sentence. Thinking deep thoughts More than 6,000 Net users have applied to join the pool of Net users who will elect board members. With any luck, evolutionary forces will soon reward more of us with the opposable thumbs and click-capable index fingers necessary to join them in this budding democratic process. Dyson believes most simple folk don’t understand the intricacies of the domain name business. And I must admit, she’s got a point. She and other ICANN board members spend a lot of time thinking deep thoughts about vexing issues like copyright enforcement, global dispute resolution and intergovernmental relations. Meanwhile, the biggest domain name problem most of us mouth-breathers have is remembering whether we were looking for sex.com, sexx.com or sexxx.com But our own United States Congress is ample proof that democratically elected representatives need not be especially erudite. So long as new members of ICANN’s board adequately represent the interests of their intellectually challenged constituents, they’ll do just fine. With that in mind, I’d like to suggest a platform for would-be candidates to adopt. While it might not be as brilliant as the ideas current board members have come up with including closed-door board meetings and a proposed $1 surcharge on every domain name it’s sure to be more popular. In the interest of holding onto the limited attention span of today’s Net user, my platform is limited to just one issue: free domain names for nonprofit sites. After all, who ever said the domain name business was supposed to be a business? Though ICANN was charged with bringing competition into the domain name market, it also wouldn’t hurt to introduce a little fairness. In the Web’s early days, the federal government chose a little-known company named Network Solutions as the sole distributor of addresses ending in .com, .net and .org. What started as a ministerial task was transformed into a lucrative monopoly built on exorbitant registration fees that have endured even as competition arrived. Give it away The incremental cost of adding an address to the domain registry isn’t even a penny. The real cost isn’t much more. But the going rate for a domain name is now $35 a year, and hundreds of companies are lining up for a chance to charge it. ICANN’s board members consider this a sign that competition is working. We simpletons just figure it’s proof we’re getting screwed. Why not force domain name registrars to give away addresses for free or, at most, a drastically reduced rate to people who don’t plan to profit from their sites? Why should individuals have to pay $35 a year for the right to post a Web site under their own name? The money made from business sites would be more than enough to cover the cost of providing this common-sense service to ordinary Net users. I have a feeling ICANN’s current board members would consider this to be a pretty stupid idea. Of course, they have a lot of personal experience with the very businesses that hope to make a killing in the domain name market. So you know, maybe they’d be right. When it comes down to it, this free domain name plan sounds like just the sort of pandering Dyson might expect from board members elected by a direct public vote. To me, though, it also sounds a lot like democracy. That, and a pretty good reason to get some “stupid” people on ICANN’s board as soon as possible. To contact Joe Salkowski, e-mail him at [email protected] or write to him c/o Tribune Media Services Inc., 435 N. Michigan Ave., Suite 1400, Chicago, Ill., 60611.

When GenesisIntermedia.com Inc. went public in August, it looked like the initial offering was a bust. The stock opened at $8.50 a share, but promptly dropped to $5 and hovered there for several months. But what a difference a few weeks can make for stocks traded on the red-hot Nasdaq. Since early February, the Van Nuys company has seen its share price rocket to $35 before settling back down to $19.25 on March 17. A $5,000 investment in the company a few weeks ago would be worth $19,000 today. “It’s great. People are finally noticing what we’re building,” said Ramy El-Batrawi, the company’s chairman and chief executive. “There’s a lot of room on the upside.” Genesis, which was founded by El-Batrawi in 1993, markets a number of consumer products through infomercials and print advertising, everything from exercise equipment to audio and video tapes based on the book, “Men are From Mars, Women are From Venus.” But what has been stirring investor interest is the company’s transition from straight marking firm to an Internet marketing company. El-Batrawi is building a string of kiosks at shopping malls, called the Centerlinq network, that allows shoppers to learn about sales going on in the mall and connect to the Web sites of retailers and other companies that pay to be on the system. Genesis has several of the kiosks deployed in each of 21 malls across the United States, and El-Batrawi has launched an aggressive expansion plan that calls for placement of the kiosks in 80 to 100 malls by the end of the year. The network boasts 20 million page views a month, about 1 million per mall, according to company officials. As the network expands, Centerlinq could be getting as many as 100 million hits a month by the end of the year, said El-Batrawi. “A lot of people have never used the Internet before, and this is right there, in the public’s face,” he said. And unlike other e-commerce companies, “we don’t have to spend millions to build brand loyalty,” he added. Here’s how the system works: As shoppers enter a mall, they can go to one of several of the kiosks (which have 40-inch, flat-panel screens) to view a directory of stores and learn about sales or other events going on in the mall that day. Shoppers who sign up for a rewards program and provide personal information about themselves receive points for using the system, earning prizes such as clocks or other trinkets. Discount coupons for merchandise sold at the mall are printed out at the kiosks. Meanwhile, the mall operator, tenants and Genesis can use the information about customers to mount their own direct-marketing programs. Genesis derives its revenue from fees it charges the malls, as well as from advertisers. The company has signed up American Express and ValueClick Inc. as sponsors, and has an agreement with VentureDirect Worldwide to sell Internet advertising on the Centerlinq network. So far, Genesis has flown too far beneath Wall Street’s radar to warrant coverage by financial analysts, so it is difficult to get an outside take on the company’s prospects. Courtney Smith, chief investment officer of Courtney Smith & Co., has touted the company in a column he writes for CBS.MarketWatch.com, but Smith concedes his company has a position in Gensis. Smith says that, if the projections for the number of page views on Centerlinq hold true, the company could become one of the top portals on the Internet. Smith applauded El-Batrawi’s expansion plan, but said the downside is that the company will likely lose money through most of this year as it incurs installation costs. For the third quarter ended Sept. 30, Genesis reported a net loss of $2.3 million (43 cents per diluted share), vs. net income of $68,965 (2 cents) for the like quarter in 1998. Third-quarter revenue was $8.8 million vs. $1.4 million. The company doesn’t expect to release fourth-quarter results until the end of March. “Once they’re up and running (with the planned installations), you’re going to see their revenue skyrocket,” said Smith. “I’ve already said I think the stock could hit $30 by the end of the year.” When one considers the huge market caps of other e-commerce companies, El-Batrawi said, it’s not unreasonable to think that GenesisIntermedia.com could hit a similar stratospheric share price. “Fast as we’re growing, we’re still just starting out,” he said. “This is not the end by any means.

There you are, driving along the freeway. Not a care in the world. You know exactly where you’re going. Just then, with one wrong exit, you’re hopelessly lost. No need to panic. You simply flip on your car’s electronic mapping device, punch in your destination and voil & #341;, directions appear. You’re back in the driver’s seat, not only sure of where you’re going, but which way to turn at every intersection along the way. Fortunately, similar technology exists to help business executives follow a road map in identifying and prioritizing implementable decisions and actions. One aspect of this important new technology is its forced-decision feature that provides the ability to help management understand the relative significance of issues. Another is its ability to map out the corresponding decision and communication process required for implementation. The combination of these two technologies represents a critical advance in management know-how. For the first time, management has access to an effective and systematic method for identifying and prioritizing key issues, and then, merging and managing the processes and the activities needed to address them. The Old Way Modern management philosophy emphasizes the importance of group participation in the decision-making process. Traditionally, however, this process is time consuming. With so many different people, ideas and concepts of what needs to be decided, you can quickly get into analysis paralysis. Particularly when there are a lot of issues, the process becomes unwieldy. So you might start out with a group process, but ultimately upper management gets inpatient and overrides the group process to make a decision unilaterally. What happens? The group members think their opinions are no longer valued, and their cooperation and enthusiasm are lost. Alternatively with the group process, you could have a couple of hot wires or really resistive people. Either way, that can become the thorn in one’s side so that when a decision is reached, the group decides it’s not the right one after all. Their motivation then is to see the decision fail, and you have lost any real commitment to its execution. What’s left? The autocratic approach that often fails because the decision-maker may not know all the relevant information. It’s just not realistic to think any one individual could consider all the consequences and factors involved in every decision. The biggest problem, however, with the conventional way of making decisions is the process may depend on perception, not fact. What often happens is that you might use a very sophisticated model to make a decision, but if the original perceptions used to make decisions were invalid, the consequence is inappropriate. Also, there is no assurance the right questions were ever asked or answered. The Decision-Making Process In order to improve the ability to identify priorities and implement them, it’s important to identify the four fundamental processes that go into decision-making. 1. Identify the knowledgeable and impacted participants in any decision-making process. 2. Separate perception from fact. 3. Establish a method for ranking priorities where there are generally multiple and simultaneous alternatives. 4. Manage the change process. Unfortunately, the first two are generally skipped, and management decisions begin with the third. This process is complex and often involves a broad spectrum of people who might have the appropriate knowledge, but don’t understand the process or aren’t committed to it. Technology at Work The newest decision-making technology enables participants to identify the issues and rank their significance. It also provides an “organizational process mapping” to help individuals involved in the decision-making process merge and manage the processes and activities needed to address them. First, information from an organization is captured using a data collection instrument to identify the issues and the people who are likely to be impacted by or involved in decisions around those issues. Each of these individuals is then asked to fill out a data question form on which they check off the people with whom they interact, they identify the frequency of the interaction, the important of what’s being attached to it, the impact that it has on decisions, etc. This information is processed by computer and solutions and resolutions suggested. This technology works regardless of the size, type or organization of a company. A multi-national high technology company recently wanted to move from thinking of themselves as primarily a manufacturer of technology intensive equipment to a technology and knowledge asset based enterprise, i.e., a fundamental shift in thinking within the organization. First, the decision-making technology of CoNexus software was used to bring the group to an understanding of the critical elements, ones that needed immediate attention. This process accomplished in a matter of days instead of months. Then, a second technology, Blue Marble’s EnCompass was used to create a map for merging and managing the processes and activities needed to address these issues. Progress could not only be charted all along the way, but projected five years into the future as well to make sure this company was on, and stayed on, the right track. With this technology, the company was able to attain an important, multinational strategy needed to encompass and integrate its enormous corporate growth over the last four years. The management team was also able to identify and institutionalize vital knowledge within the organization so that even with personnel turnover the knowledge wasn’t lost. An East Coast-based specialty food company used the same technology to seamlessly integrate a recent acquisition into their core business. A large Midwest-based chemical products company had a serious problem in translating successful research results into new products. Needing to understand how the organization’s structure could link the research and development side of the business with business planning and exploration, this technology mapped the process. The Future In education, institutions, government, manufacturing, construction, retail and service companies, technology is being used to manage knowledge better. Along with established companies, it is also helpful in the conceptual phase of a new venture. In addition to reducing the development cycle, this technology helps avoid costly mistakes and having to play catch-up. As more and more individuals and management teams use decision-making technology that merges the human spirit and intelligence, the more effective companies will be in setting and implementing priorities. Michael Mann is a certified management consultant (CMC) and a member of the Institute of Management Consultants (imcusa.org). He is also Chairman and CEO of The Blue Marble Companies. For more information, visit the company Web site at (www.bluemarblecorp.com).

One and a half years after being acquired by a new owner, Shoppingtown at Woodland Hills Promenade is beginning to take shape. The mall has struck a deal to bring in a major tenant, Jillian’s, which has committed to opening a 65,000-square-foot mega-plex of bars, restaurants, interactive video games and bowling lanes. The Jillian’s complex will take over much of the center’s lower level when it opens next year. Westfield America, which acquired the ailing shopping center in 1998, has also signed a lease with P.F. Chang’s, a restaurant chain that will replace Bob Burns just outside the mall’s entrance. “The intent has been to reposition the center into a more lifestyle, entertainment destination,” said Catharine Dickey, a spokeswoman for Westfield America. Residents and real estate experts have been expecting a remake of the Promenade since Westfield acquired the 600,000-square-foot property in 1998. The mall has had a number of anchors through the years, including I. Magnin and Saks Fifth Avenue. But efforts to create a luxury shopping center were unsuccessful and the anchor positions have since been taken over by Macy’s and an AMC 16-screen movie theater. Jillian’s, which currently has 32 locations across the country, features at least six different rooms containing entertainment and restaurants. The company is opening its first Southern California location at Universal CityWalk next month a scaled-down version of the mega-plex that will include bowling lanes, a video cafe and game room. But the center in Woodland Hills, planned to open in the first quarter of 2001, will offer a full complement of activities, said Steven Foster, founder and CEO of the Louisville-based company. “We’ve done some independent surveys and over 35 percent of our guests return once a week, and 40 percent return once a month,” Foster said. “That’s due to the fact that there are so many things to do.” While the Jillian’s deal may be the mall’s most significant move, possibly a sadder one for longtime patrons was the shuttering of the venerable Bob Burns restaurant, and its pending replacement with P.F. Chang’s. A national chain with 39 restaurants, P.F. Chang’s caters to affluent diners with a formula that combines Chinese food and a bistro-like atmosphere. Sauces are prepared at the table, the wine list is extensive, and the desserts, including cheesecake and macadamia-nut torte, are drawn from a variety of culinary influences. End of an era Bob Burns had become a tradition for its diehard customers. Some came for the restaurant’s old-school ambiance and meat and potatoes fare. Many diners celebrated birthdays and anniversaries there. Hal Fishman, the KTLA television news anchor, showed up regularly to hear a Scottish folk group that performed there. But tradition doesn’t count for much in the restaurant business, and on New Year’s Eve 1999, after more than 25 years at its location just outside the mall, Bob Burns closed its doors. “I think the people who had come to us for many years were regulars and kept coming,” said Beth Burns, who with her siblings Bobby and Bonnie, own Bob Burns restaurants and Marmalade Restaurant Co. “But I think for the younger generation, the 25- to 35-year-olds, it wasn’t a restaurant that appealed to a lot of them.” Westfield America, which owns the mall, would not comment on the reasons for not renewing the restaurant’s lease, but others point out that Bob Burns’ loyal following could not compensate for the one draw that it lacked something new. “Most of our clients on the real estate side are looking for those concepts that are different than what they’ve seen, that are glitzy and splashy and will be a competitive point of difference from the mall that’s down the street,” said Ed Engoron, president and chief executive of Perspectives/The Consulting Group, which specializes in restaurants. Founded in North Hollywood in 1957 by Bob and Elizabeth Burns, Bob Burns became a bustling place to meet for the Valley’s film industry. “In the early ’60s, we had all the studio business, and we were open 24 hours a day,” said Beth Burns, the founders’ daughter. The restaurant served up a menu of steakhouse selections, Caesar salad and ample sandwiches on white tablecloths against a living-room backdrop with a crackling fireplace and cozy booths. But while the regulars piad the restaurant’s bills, the business was not drawing new customers, particularly younger generations, Burns said. “It was hard for them to come in the door the first time,” Burns said. “Maybe because we didn’t have that trendy image, although when most people did (try it) they were blown away and thought it was a great place to bring a date.” Shrinking chain Bob Burns had grown to a chain of six restaurants, but as leases expired, all but two were closed. With fewer restaurants, costs per location increased. “It’s definitely harder to survive because of the overhead and the cost of running a business,” Burns said. In an attempt to satisfy such rapidly changing tastes, some chains are spinning off new restaurant concepts and others have begun to revise their menus regularly. Indeed, some years back the Burns family began working on a new restaurant concept, Marmalade Cafe, and has since opened five locations in Calabasas, Westlake Village, Santa Monica, Malibu and Sherman Oaks. “Our concept (at Marmalade Cafe) has been much more away from the red meat and potatoes that Bob Burns is known for,” said Burns. “Many things on the menu are meatless, not because we’re trying to be (vegetarians), that’s just the way people like to eat. There are trends in eating habits and a restaurant has to keep up.”

Electronic communication, due to its speed and broadcasting ability, is fundamentally different from paper-based communication such as letters and memos. Because the other person’s response time capability is so fast, e-mail is more “conversational” than traditional methods of communication. In a paper document, it is absolutely essential to make everything completely clear and unambiguous because your audience may not have a chance to ask for clarification. With e-mail documents, your recipient can ask questions immediately. E-mail, therefore, like conversational speech, tends to be much sloppier and more ambiguous. This is not always bad. It might not be a worthwhile expenditure of energy to slave over a message, making sure that your spelling is faultless, your words eloquent, your grammar and punctuation are beyond reproach, if the point of the message is simply to inform the recipient that you are ready to go to lunch. Granted, you should put some effort into ensuring that your subjects agree with your verbs, words are spelled correctly, avoid the mixing of metaphors, and so on. However, if “The Rules” laid down in your ninth-grade English class get in the way of effective communication, throw them out. Due to the lack of vocal inflection, gestures, and a shared environment, e-mail is not as rich a communication method as a face-to-face or even a telephone conversation. Your recipient may have difficulty telling if you are being serious or kidding, happy or sad, frustrated or euphoric. Thus, your e-mail compositions should be different from both your speech and paper compositions. There are a number of documents on electronic e-mail commercially available, but they mostly address the “nuts and bolts” of how to get text from your fingers to your correspondent’s screen. Those that do discuss e-mail content tend to be really brief on the subject of e-mail style, and provide little motivation for why its so important that the style be different. With e-mail, you cannot assume anything about your correspondent’s location, time, frame of mind, mood, health, marital status, affluence, age, or gender. This means, among other things, that you need to be very, very careful in phrasing your communications in order to prevent misunderstandings. Spelling Counts The first important point to remember is that spelling counts, grammar counts, pretty counts, in fact, everything counts. An e-mail represents you, your message, your point of view, your ethics and your very integrity in your physical absence. What the recipient receives says a lot about you. The question you need to ask yourself is is this how I would want the reader to perceive me if we were meeting face-to-face? If the image is wrong, change your e-mail. Also, remember that, while some mailer programs have spelling checkers, they detect only misspelled words. They are of no value if you use the wrong word. Never forget that there is a real person on the other end reading and reacting to what you have written. Just as in a face-to-face meeting, first impressions are important. Useful Subject Lines A subject line that directly relates to the e-mail body is the fastest way to let people know what your e-mail message is about. The subject line should be brief because many mailers will truncate long subject lines. It does not need to be a complete sentence, but should obviously pertain to the information in your e-mail. If you are responding to an -mail, your mailer program should preface the subject line with “Re:” or “RE:” (for Regarding). If your mailer program does not automatically do this, it is considered good form to insert “RE:” into the subject line. If you are sending non-urgent information that requires no response from the other person, prefacing the subject line with “FYI:” (For Your Information) will immediately inform the recipient that no action is required. For time-critical messages, starting the subject line with “URGENT:” is probably the best way to get the recipient’s attention , especially if you know that person receives a lot of e-mail. When you are requesting information or anything else, starting the subject line with “REQ:” (Request) will inform the recipient that some action is probably required on his or her part. Quoting Documents If you are referring to a previously received e-mail, you should explicitly quote that document to provide context. For example, instead of sending an e-mail that says: ” Yes” Say: Are you available to meet with the auditors next Friday? Yes Page Layout Displays on a computer screen will very often look different than on paper, and people generally find it harder to read anything on a screen than on when printed on paper. In fact, many people actually print out their e-mail so they can read it. The screen’s resolution is not as good as paper, oftentimes there is a flicker, the screen’s font may be smaller (or ugly) or the color combinations may be absolutely atrocious. Your recipient’s mail reader may also impose certain constraints on the formatting of received e-mail messages. All of these items lead to the conclusion that a “good” e-mail page layout is different from a good paper document page layout. Write Shorter Paragraphs In addition to the above-mentioned problems, frequently the e-mail message will be read in a document window using scrollbars. While scrollbars are great, it makes it harder to visually track long paragraphs. Consider breaking up your paragraphs to include only two or three sentences in each. It will make reading much easier for the recipient. Trim Line Length Several of the software packages currently used to read e-mail do not automatically wrap words (i.e., adjust line and word spacing). This means that if the software you use to send e-mail wraps your words for you and your recipient’s does not, your recipient may end up with a message that is highly fragmented and extremely difficult to read – even when printed out. It is even worse with some e-mail readers in that they truncate everything past the 80th character. This is certainly not the way to win friends and influence people. A good “rule of thumb” is to keep your lines under 75 characters long. Why 75 and not 80? Because you should leave some room for indentation or quote marks for your correspondent in case he or she is going to quote a piece of your original e-mail in a reply. Be Terse With Your Prose We spend anywhere from 12 to 20 years being rewarded for being verbose in our written communications. Unfortunately, this is not appropriate for e-mail. While your message should be as clear as possible, remember that if they want more information, they can always ask for it. Also, remember that in some places, users are charged by the byte and/or have limits on how much disk space their e-mail can use. If you become verbose, you are quite possibly costing your recipient money – and that is never appreciated. One Page, Please It’s also a good “rule of thumb” to try to keep everything on one “page” whenever possible. In most cases, this means about twenty-five lines of text. “Attach” Longer Messages Some mailer programs support “attachments,” where you can specify a document or even a file to send along with your e-mail. If the recipient has a e-mail reader that can handle attachments, this is an excellent tool as a long attachment can be looked at later off-line. However, if the recipient’s e-mail reader cannot handle attachments, and you send a non-ASCII file (e.g., a Word document, a binary file, a picture, compressed text, etc.), be advised that it will be displayed as garbage. Intonation While you cannot make your voice higher or lower, louder or softer to denote emphasis, there are techniques used by many people to convey vocal inflection. For example, you can indicate: Light Emphasis – If you want to give something mild emphasis, you can enclose it in asterisks. This is the moral equivalent of italics in a paper document. (Example: I will finish by this *Friday*.) Another techniques is to capitalize the first letter only of words to give light emphasis. (Example: While we try to avoid that scenario, it is not Cast In Stone.) Strong Emphasis – If you want to indicate stronger emphasis, use all capital letters and toss in some extra exclamation marks. (Example: Be sure to disconnect the battery or it might EXPLODE!!!) Note that you should use capital letters sparingly as the world e-mail community has come to understand such usage indicates that you are shouting. It is totally inappropriate, and considered to be quite rude, to use all capital letters in a situation when you are calm. (Example: WHEN YOU GET TO JACKSON BE SURE TO GIVE ME A CALL OR DROP BY AS I AM ALWAYS AT HOME.) Gestures – While you are unable to accompany your words with hand or facial gestures, there are several ASCII stand-ins for gestures. Smileys – A facial gestures can be represented with “smiley”: an ASCII drawing of a facial expression. The three most commonly used are: 🙂 😉 and 🙁 To understand these symbols, turn your head counter-clockwise and look at them sideways. After a while, they actually begin to make sense. There are a wide range of ASCII gestures available to you, from ill %^P to angry &gtl;:-< to astonished :-o, and limited only by your imagination. In fact, some budding entrepreneur has created an entire “Smiley Dictionary” just in case you feel uncreative. Creative Punctuation Instead of writing: I am very confused and a little upset. Why did you give my report to Jack instead of Jill? You could write: ???!??! Why did you give my report to Jack instead of Jill?!? The question mark is shorthand for a furrowed brow or a “huh?”. The exclamation mark is shorthand for amazement and possibly a scowl. The two together are taken to mean astonishment. There is also a long and proud tradition of using punctuation as a placeholder for “venting steam,” e.g., #%

Question: When I left my previous company, I rolled my $400,000 401(k) into a Merrill Lynch IRA with the broker who represented the 401(k) plan. He wants me to put the money with one or more money managers who would charge a 2 percent fee, and he has given me information on six available money managers with whom I could place $100,000 or more. I’m just not comfortable with money managers. I’ve never heard anything good about them. I’ve always been more comfortable with equity mutual funds (I’ve had money in Mutual Shares Z for 15 years). To compound the problem, I have another IRA from a previous 401(k) rollover in a broker-managed account. He’s almost doubled the account in just more than two years. However, he invested only half of the account in equities. Out of 10 stocks he has picked to date, four have been losers and 50 percent of the value of the account is in three stocks. This account has grown from $218,000 (in October 1997) to $395,000 today. This $800,000 is my retirement fund. What is your opinion of my situation? I know you like the couch potato approach, but I would prefer to be more aggressive. A.R., Dallas Answer: The argument that routinely comes from the sell side of money management is a macho, “What do you care about a 2 percent annual fee if you’re getting top returns with top managers?” It’s a question that inexperienced investors have trouble answering, particularly since they’ll be afraid of sounding cheap. The problem is that most people, including those who sell investment services, don’t like to think in terms of probabilities. I personally would be happy to pay management fees of 5 percent if I were certain it would net me superior long-term results. Unfortunately, I have seen no evidence suggesting that high fees will buy superior performance. But I have seen a great deal of evidence indicating that high fees hinder performance. Worse, the longer the period of investment, the higher the odds that high fees will take your performance down materially perhaps from the top 25 percent to the bottom 25 percent of comparable investments. So let me suggest an alternative. First, manage the bulk of your money through mutual funds and do it in low-cost, passive vehicles. Pick an asset allocation the proportion of stocks, bonds and cash you want to hold. Then hold it. Second, keep a portion of your money in a portfolio of individual stocks. Unlike your current individual stocks, have it be no less than five but no more than 15. Then track your brokers’ selections and measure the performance of that portfolio against a universe of comparable mutual funds. Suppose, for instance, that you wanted to take more risk. You could do this by adding a $100,000 technology portfolio of 10 stocks to your more conservative portfolio of index funds. Think of it as an aggressive couch potato. Q: I am 50 years old and earn about $60,000 a year. Here are my assets: real estate, $136,000 (including my own home, no mortgage); an investment fund of $500,000 with my former employer; $12,000 in savings bonds; $134,622 in mutual funds; $52,000 in an IRA account; $100,000 in a money market account; and $7,000 in checking. I also have rental income of $12,000 a year. I am considering investing $50,000 in four different stocks. Looking at my current situation, do you think this is a good idea? Or should I invest more money in mutual funds? R.M., San Antonio A: I think you’re a little ahead of yourself, on the way to creating great confusion and uncertainty. With $800,000 in financial assets, you need to start thinking about an overall plan for how the money is invested rather than thinking about $50,000 in four stocks. What counts is what all the money does over the course of several years. How, for instance, is the $500,000 with your former employer invested? Stocks? Bonds? Cash? Ditto the $134,622 in mutual funds and the $52,000 in the IRA account. Where is it invested? You can start figuring this out with a single sheet of paper that lists each of your accounts and identifies how much is invested in each category. When you have completed a list like this, you total the amounts in each column and find the percentage of your financial assets in equities, bonds and cash. Then you will be ready to think about changes in your investments. Q: I am 27 years old. My income is $25,000 a year. When I was younger I was foolish with credit cards and incurred a lot of debts. I have consolidated all my debts, including car payments. I also put away $200 a month in a savings account. What I want to know is whether that’s a sufficient amount since I am trying to save for a house. S.M., by e-mail A: Your timetable for buying a house will be determined by several things beyond having a down payment. It is possible to have a down payment but not qualify for the mortgage that you need. That’s why you see those house signs that read, “Contract pending” a buyer has agreed to buy a house but has not secured financing. So let’s take a close look at what you’ll need to buy a house: First, you’ll need to find a house priced so that you can afford the mortgage that will be necessary after your down payment. Mortgage lenders usually limit the monthly cost of the mortgage, taxes and insurance to 28 percent of your gross monthly income. Second, you’ll need to qualify on your “back-end ratio” the total of your front-end (housing) expenses plus your other obligations. That’s usually limited to 36 percent of your monthly income. In other words, if your consumer and auto loan payments are more than 8 percent of monthly income, the difference will be subtracted from the 28 percent limit on housing. Many people learn that the amount of their mortgage is limited by the amount of consumer debt they have. On $25,000 a year, for instance, your “back-end” debt would be limited to $167 a month. That’s a lot less than most car payments. Add a few credit cards and a possible student loan, and suddenly you can’t get a mortgage large enough to buy the house you want. Third, your credit record can put you into a higher-risk loan group. You’ll still be able to borrow money, but you’ll have to pay more for it. The higher the interest rate you have to pay, the higher your mortgage payment. As a consequence, the amount of house you can buy goes down. Put those three factors together and the first-time homebuyer can be closed out of the market pretty easily. Finally, your down payment will need to be at least 5 percent. That means you can start thinking about buying any house that costs no more than 20 times what you have in your savings account, provided that you also have cash to cover closing costs. Questions about personal finance and investments may be sent to Scott Burns, The Dallas Morning News, P.O. Box 655237, Dallas, Texas, 75265; or by fax: (214) 977-8776; or by e-mail: [email protected].

Ready for April 15? With tax time fast approaching, people now have to decide whether to give up weekends to prepare their taxes at home or hand it all off to a professional. Either way, the most dreaded day of the year, April 15, is just around the corner. So the San Fernando Valley Business Journal asks: Have you done your taxes yet, or are you waiting until the last minute? Bruce Ackerman CEO Economic Alliance of the San Fernando Valley I’ve got a corporation and those taxes are done and have been sent in, but my personal taxes, unfortunately, are not done just yet. This is how it usually is. I have all of the best of intentions but I get totally buried and end up filing for an extension. I can’t remember the last time I got my taxes in by April 15. I’m trying to this year, but I’ll probably end up filing for an extension. Jerry Fisher Owner Jerry A. Fisher & Associates I haven’t done my taxes yet, but I’m not waiting for the last minute. I do my taxes myself and I bought the computer program yesterday. I was planning to do my taxes this weekend, but I had some business things come up, so it’ll have to wait until the next weekend. I won’t file them until the 15th, though, because I owe money. I always owe money, so I never file until the 15th. Bryan Morrell General Manager Pinnacle One I’ve already done my taxes. I sent them in a few weeks ago. If I think I owe money, then I put it off until the last minute. But if I think I’m going to get a big refund like this year, then I do them as soon as possible. Marc Smitham Story Time Music No, I haven’t done my taxes yet. We just finished relocating our business this week, so I’ve been a little busy. I don’t plan on waiting until the last minute. I just haven’t been able to get to them yet. I usually try to do my taxes by the end of March. And I’ll probably do the same this year. Jeffrey Sommer Owner Now Messenger Service They’re long done. For our type of company, the major clients are financial companies and others, and business just jumps around this time, so if we don’t have our taxes done by now, we’ll never have time to get them done. We got ours finished about three weeks ago. We always try to get them done early. Carolyn Nelson Capital Office Products Inc. They’re done. Our business taxes are due on the 15th of March and we’re an S-Corporation, so we have to do our personal taxes by the same date. So we always do our taxes early and before everyone else. Melanie Moses Project Director Field Dynamics Marketing Research I’ve done my taxes. I usually do them early, especially if I’m getting money back like I am this year. Otherwise, I put it off. Rick Kusnier Assistant Manager Las Vegas Golf & Tennis I have not done mine yet. Hopefully I’ll get them done before April 15. I usually don’t. I’m always filing extensions and putting it off. But I’m hoping to get them done on time this year so I can get my money back sooner. I always get money.

Development Deal Struck Tejon Ranch Co. signed a definitive agreement with three major real estate developers to create a 4,000-acre master-planned community in north Los Angeles County near Interstate 5, State Highway 138, and Quail Lake. Tejon Ranch has agreed to partner with Pardee Construction Co., Lewis Investment Co. LLC and Standard Pacific Corp. to plan and build the as-yet-unnamed community. “With the limited amount of land now available in Los Angeles County, we are very excited to embark on a major residential community development with three of the finest homebuilders and real estate developers in Southern California,” Robert A. Stine, president and CEO of Tejon Ranch Co., said in a statement. Master-planning and predevelopment environmental studies for the project are underway and expected to be completed by the end of the year. In addition to the residential development, Tejon Ranch Co. is currently developing phase one of its Tejon Industrial Complex, a multi-phase project planned for 3.5 million square feet of building space spread across 350 acres. Radio Empire Expanding Camarillo-based Salem Communications Corp. has agreed to pay $185.6 million in cash to expand its radio empire with five new stations, two in Southern California. The religious broadcaster is buying two Anaheim stations, as well as operations in Cleveland, Cincinnati, Dallas and Denver. Selling the stations is Clear Channel Communications Inc., the nation’s largest radio company. Clear Channel must sell 72 of its radio stations as part of its pending merger with AMFM Inc. The additional stations bring the total number operated by Salem to 70. Salem already owns six stations in Southern California, including three in Glendale KLTZ-AM 1390, KLTH-AM 1240 and KKLA-FM 99.5. Insurer Seized The California Department of Insurance seized Calabasas-based Superior National Insurance Group over concerns that the insurer lacked the financial reserves to pay its claims. Centre Insurance Co. of New York will take over Superior’s reinsurance obligations and pay off claims for the insurer if it runs out of money. Insurance Commissioner Chuck Quackenbush was granted indefinite control of Superior and four of its companies by a Sacramento Superior Court judge in early March. The agreement by Centre Insurance to cover Superior’s claims will help in the state’s efforts to rehabilitate the company and make it attractive to a potential buyer, the Department of Insurance says. Superior is California’s largest workers’ compensation insurer. The company had reported assets of $730 million in 1999 and premium income of $240 million. Promotional Hand Allowed In the ongoing saga between a car-wash owner and residents, the L.A. City Council agreed to allow the owner of Studio City Hand Car Wash to keep a giant fiberglass hand in front of the business, so long as it is moved 10 feet away from the street. The Ventura Boulevard car wash has been fighting with homeowners, who claim the hand is a distraction and was put up without a required permit. To win council approval, owner Ben Forat agreed to move the hand 10 feet back from the street and lower it so it takes up 50 square feet rather than 86 square feet. Lights on the sign will be turned off by 11 p.m. And Forat will pay $6,000 into the Ventura Boulevard Beautification Fund. Apartment Proposal Advances A Metropolitan Transportation Authority panel pushed forward a plan by the National Academy of Recording Arts and Sciences to build an apartment complex for retirees across from the North Hollywood subway station. The $20 million Encore Hall would be a six-story apartment complex with a ground floor of retail shops on a plot of land on Lankershim Boulevard now owned by the MTA. More than half the apartments would be reserved for music-industry retirees in need of assisted living and reduced rent. It would be developed by MusiCares, the academy’s charitable division, and for-profit developer Emeritus Assisted Living. The MTA board must still give the project final approval.

A boarded-up office building sandwiched between the glossy glass high-rises of Warner Center may finally be coming down. The owners of the building at 6150 Canoga Ave. have hung a for-sale sign on the property, which is actually entitled for a much larger facility than the 38,000-square-foot garden office building that now sits on the site. “The lot is zoned for a building four times as big and it can go up to nine stories,” said Dick Aronoff, a co-owner and manager of the project. The building, which was badly damaged and made uninhabitable by the Northridge earthquake, was due to be renovated, but a dispute with the insurance company delayed the project. Ultimately, Aronoff and the other investors figured it made more sense to demolish the building and construct a facility of 150,000 square feet. At that point, the owners decided to sell rather than invest in the new development themselves. “Realistically, it’s a $20 million construction project,” said Aronoff. “I’m not a developer at the level that I want to take that risk, so the logical choice is to sell it to someone who does.” Aronoff said that over the past two years he has received over 100 unsolicited offers on the property, ranging from $4 million in 1998 to $4.25 million most recently, although he did not follow up on any of the offers. He has not set an asking price, but expects future bids to be higher than those he has received so far. The investors have hired Don Manning, a broker with CB Richard Ellis Inc., to represent the property. Aronoff plans to market the site to corporate users as well as developers. Homestore Goes All the Way Homestore.com, an online real estate brokerage, has been shopping the Conejo Valley real estate market for two years, adding bits and pieces of space as the company has grown. It seems that its latest deal would satisfy even the most rapidly growing company for awhile. Homestore.com has leased a 137,000-square-foot office facility in the Westlake North Business Park, sources said. The company will relocate its corporate headquarters to the new facility, which is located in a 326,400-square-foot business campus currently under construction. Developer of the campus is Investment Development Services. Homestore, which has been located at 225 W. Hillcrest Drive in Thousand Oaks, has expanded its offices three times since it moved there in December 1998. Sources said Homestore will retain some of its Thousand Oaks space and sublet the rest when it moves to Westlake Village. Conexant Expands Conexant has leased a 60,000-square-foot facility in Newbury Park to accommodate the company’s expansion. Conexant, which makes semiconductors for the wireless communications industry, will use the facility at 649 Lawrence Drive to house its engineering staff. The company, which was spun off from Rockwell Semiconductor Systems in January 1999, has been expanding its facilities over the past five years to make room for its growing manufacturing operation. The engineering facility is the latest in a series of deals designed to move all non-manufacturing services out of the company’s main plant, also in Newbury Park. Conexant last summer leased a 50,000-square-foot facility at 730 Lawrence Drive to add to its manufacturing and testing space. The $1.4 billion company with headquarters in Newport Beach now has four locations in the Newbury Park area. John DeGrinis and Mike Tingus at Colliers Seeley represented Conexant in the deal. Ken Ashen and Nick Gregg of CB Richard Ellis represented the landlord of the 649 Lawrence Drive site, Realty Bancorp Equities. Camarillo or Bust Megaware Inc. of California, a West Los Angeles distributor of containers, is relocating to Camarillo. The company has leased a 32,110-square-foot industrial building at 1230 Calle Suerte for its executive offices, warehousing and distribution operations. Tim Foutz of NAI Capital Commercial represented the landlord, George DeRado, in the transaction, valued at $1.1 million over five years. Extreme Move Extreme Networks Inc., a computer networking systems firm, has leased 10,027 square feet of space at North Ranch Corporate Center in Westlake Village. The company will be relocating its corporate offices from Agoura Hills. Corbett Richmond and Cheryl Richmond of NAI Capital Commercial represented the landlord, Scheu Development Co. Tom Specker of Charles Dunn & Associates represented the tenant. Canoga Park Lease Eggology Inc., a maker of egg-white-based food products, leased a 6,600-square-foot manufacturing facility in Canoga Park to expand its operation. Ron Feder at R.J. Feder & Associates represented Eggology in the transaction, valued at $193,000 over three years. Wired in Valencia Newhall Land and Farming Co. has reached an agreement with SBC Communications Inc. to wire all of the residential and commercial properties in Valencia with high-speed direct Internet access. Under the agreement, SBC’s subsidiary, Pacific Bell, will install the DSL service to more than 30,000 homes and thousands of businesses by the end of this year. About 70 percent of the community currently has DSL access, the companies said. Staff reporter Shelly Garcia can be reached at (818) 710-2731, ext. 4316, or at [email protected].

Fueled by a boost in donations from their first radio campaign against Washington Mutual Inc., foes of the huge Ahmanson Ranch housing development are planning a second campaign attacking the Seattle bank’s environmental record. This time, they plan to attack on the company’s home turf. Save Open Spaces Santa Monica Mountains will begin airing a round of radio ads in Seattle this month, hoping to both tarnish the bank’s image and boost its own coffers. “There’s some billionaires there (in Seattle) that are environmentalists,” said Mary Weisbrock, president of SOS. “We’re hoping they’ll hear the ads and join our cause and put pressure on Washington Mutual.” So far the ads, which aired over a month-long period in the L.A. market, have had little effect on Washington Mutual’s plans for Ahmanson Ranch. “There’s been no measurable impact on our operations,” said spokesman Adrian Rodriguez. “We don’t foresee that consumers would be moved by that in the Seattle market.” Washington Mutual owns Ahmanson Land Co., developer of the proposed project on Ventura County’s eastern border. Ahmanson Ranch is a planned community designed to feature 3,000 homes, two golf courses, a country club and 300-room hotel. SOS has spent $7,000 on advertisements that ran through February on KNX-AM 1070. The ads assert that Washington Mutual is “America’s environmental enemy” and urge customers to withdraw money from the thrift in protest. Rodriguez said the company hasn’t seen a decline in deposits or customers as a result of the ads. Meanwhile, donations to SOS have risen 10 percent over last year’s intake since the ads started running, according to Pepper Hernandez, associate director of Malibu-based Social Environmental Entrepreneurs, a worldwide nonprofit environmental group that is the parent organization of SOS. Hernandez declined to provide more specific financial information. The organization plans to use donations it has received since the ads began airing to pay for the campaign in Seattle and other future campaigns, Weisbrock said. In the coming months, SOS plans to expand the fight to other states where Washington Mutual does business, including the Northwest and Florida. “We’ve been filing lawsuits for a decade,” Weisbrock said. “That doesn’t seem to be working.” SOS wants Washington Mutual to turn the 2,800 acres of rolling hills and oaks in the Conejo Valley into a park. Hernandez of SEE said the use of radio and print ads is a common strategy used by opponents of development projects. “It’s a pretty common tactic because you’re trying to get word out to a lot of people,” Hernandez said. “Most (of the campaigns) receive a good response. We get calls from people who want more information and donations.” The ads come at a pivotal time for Ahmanson Ranch. The proposed project is still at least two years away from construction, and the process would be delayed even further if Washington Mutual is required to perform another environmental impact report something SOS has long been calling for. There are a number of federal and local agencies that have yet to sign off on the development. The Army Corps of Engineers held hearings in late February to determine whether Washington Mutual should be required to do a new EIR in order to get a permit to build on wetlands. The developer has proposed filling in several streams on the land. Critics of the project have charged that the 1992 EIR is outdated because of an increase in traffic through the Ventura (101) Freeway corridor and the discovery last spring of endangered frogs and the “extinct” San Fernando spineflower on a portion of the land slated for development. The Army Corps is expected to rule in the coming months. Later this month, the L.A. County Planning Commission will hold a hearing on the removal of nine oaks from a portion of the property. And in April, the first phase of the project will go before the Ventura County Board of Supervisors, which will determine what updates to the original EIR are needed. Guy Gniadek, project manager and vice president of Ahmanson Land, said he expects the county to require updated information on the endangered frogs and flower, as well as anything else supervisors feel wasn’t properly addressed in the 1992 EIR. The company is hoping to process the supplemental EIR by year’s end, Gniadek said. Ahmanson Land also must get approval later this year from the Army Corps for its mitigation efforts with the frogs and spineflower. The company has proposed moving the frogs and flowers to other locations not planned for development, and creating an endowment for the species. Ahmanson Land expects to spend next year fighting lawsuits filed against the supplemental EIR. If all goes well, Gniadek hopes to begin construction in early 2002. “We’re moving ahead,” he said. If Ahmanson Land is allowed to move forward with development, all sides agree the project would have a large impact on the San Fernando Valley. Environmentalists fear development would kill the last holdouts of the red-legged frog and the San Fernando Valley spineflower, eat up open space and add pollution and traffic to the San Fernando Valley. Ahmanson Ranch is expected to result in an additional 45,000 cars on the 101 Freeway each day, most flowing into Los Angeles County. But supporters say the project will ease the county’s impending housing crunch and boost sales for Valley businesses. The Valley Industry and Commerce Association has come out in favor of the development, saying it is needed to meet the Valley’s housing needs and that the expected 10,000 residents would be a boon to Valley business. Weisbrock said her group will continue to sue and fight the planned development for as long as it takes. Residents of the Conejo Valley are also continuing efforts against the project.