Google chairman Schmidt to woo TV elite (Reuters)

LONDON (Reuters) – Google's Eric Schmidt faces a wary audience of British television professionals on Friday following a major acquisition that could turn Google TV into a real competitor for TV advertising dollars.

Google's chairman will be the first person from outside the TV industry to give the Edinburgh television festival's keynote MacTaggart lecture in its 35-year history.

So far Google's relations with the TV establishment have been rocky.

"There is still a general wariness within the TV business, broadly understood, about what Google is there to do," says analyst Dan Cryan of UK media research firm IHS Screen Digest.

"The thing that really scares any TV company is the potential for Google coming into their space and selling ads to their customers."

Google has long held ambitions in the television arena, hoping to extend its online advertising business, which made $28 billion for the company last year, to the big screens that still command the lion's share of global advertising budgets.

So far, it has had little success, despite its ownership of the world's most popular online video site, YouTube.

Google TV, which allows viewers to get Web content on their television screens via a browser, was launched last October in the United States.

It was quickly blocked by three of the top U.S. broadcasters -- NBC, CBS and ABC -- as well as online video site Hulu, which is backed by major media companies, and received poor reviews.

In July, Logitech slashed the price of its Revue set-top boxes for Google TV to $99 from an initial $299.

Last week, however, Google's deal to buy Motorola Mobility for $12.5 billion handed it the world's leading set top box business which delivers content for many of the top cable TV companies in the United States.

The headline attraction of the deal was Motorola's huge portfolio of wireless patents but the set top box business and Motorola's cellphone unit may give Google useful footholds to expand into new markets.

Google has not spelled out its plans for the set top box business, and many analysts expect it to divest the unit at the first opportunity.

But some, like New York-based Nomura analyst Stuart Jeffrey, say it may use the chance to gain insights into pay-TV.

"Google describes itself as an opportunistic company. So while it may not have wanted to buy Motorola's operations, it may now assess whether retaining these assets can compensate for the risk of owning them," Jeffrey wrote in a note this week.

The acquisition has raised the hackles of U.S. cable TV companies who will now be working with a partner with whom they have clashed on issues from rationing content delivery to piracy.

Back under the leadership of Larry Page -- Google's co-founder took the reins back from Schmidt in April -- the company may be expected to make bold moves in areas like mobile and TV.

Page has already launched a social network to compete with Facebook, Google+, which has picked up more than 25 million users since it started in June, promising valuable insights to help Google target advertising more accurately.

A foothold in the living room via a set top box powered by Google's mobile operating system, Android, could provide rich data on how online purchases are driven by TV ads.

"The distance between an ad and the transaction is much smaller than before -- before, you'd go out and buy it but now you can stay in and buy it," says Paul Lee, author of a report on the television industry published this week by Deloitte.

"The ability for television to drive ecommerce is greater than ever. But understanding how that happens is very important," he says.

Owning a set top box business may allow Google to reapproach the television industry in a different way from the flawed Google TV consumer product.

"It may not materialize in you seeing Google TV via a Motorola set-top box," says Paul Erickson, analyst with Texas-based consumer-electronics research firm IMS research. "The overarching effects of this deal are going to be more subtle."

Erickson believes Google could even win over the television industry by offering a common development platform, saving content providers and television manufacturers the trouble of making multiple versions of applications for Web-connected TVs.

Schmidt, whose remit now includes reaching out to governments and other organisations, will need all his powers of persuasion to convince the Edinburgh audience that Google TV could be a partner, not a threat.

(Additional reporting by Alexei Oreskovic in San Francisco; Editing by David Cowell)

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Ex-Taylor, Bean chairman gets 30 years in prison (Reuters)

ALEXANDRIA, Virginia (Reuters) – Taylor, Bean & Whitaker Mortgage Corp's former chairman, convicted of masterminding a $2.9 billion fraud scheme before the company collapsed, was sentenced on Thursday to 30 years in prison.

Lee Farkas, 58, was convicted in April on 14 counts of conspiracy, bank, securities and wire fraud that brought down one of the largest private mortgage firms in 2009 as well as contributed to the implosion of one of the top U.S. banks, Colonial BancGroup Inc's Colonial Bank.

He was the last to be sentenced in the fraud case, which represents a victory for the Obama administration because it has been criticized for prosecuting few senior executives over the housing market collapse and subsequent financial crisis.

Farkas was convicted for a scheme that ran from 2002 until 2009 in which he and others hid massive losses by shuffling money between Colonial Bank accounts, as well as by selling mortgages that either didn't exist, had already been sold or worthless.

Before being sentenced, Farkas read a brief statement in which he said he "strived to be a good person" and that he believed the employees of the mortgage firm and the bank were "acting together in good faith" rather than greed.

While he said he was remorseful, Judge Leonie Brinkema said that she did not detect any remorse in his statement -- rather "you regret getting caught." She imposed the 30-year sentence and also ordered him to forfeit more than $38.5 million.

"This was a very serious series of crimes," Brinkema said.

Farkas and other executives at the mortgage company were also accused of misappropriating money from one of its multi-billion dollar funding mechanisms that had two big investors, Deutsche Bank AG and BNP Paribas SA.

After the 90-minute hearing, Justice Department officials called Farkas' statement refusing to take the blame for masterminding the scheme "truly astounding."

"Lee Farkas perpetrated an absolutely staggering fraud," Lanny Breuer, assistant attorney general for the Justice Department's criminal division, told reporters afterward. "This was a man who lived the life of a prince."

Prosecutors sought an order that Farkas be required to forfeit at least 11 properties in Florida and Maine as well as 11 luxury and antique vehicles, including a 1929 Ford Model A Woody and a 1965 Shelby Cobra.

PROSECUTORS WANTED AT LEAST 50 YEARS

Prosecutors had sought at least 50 years in prison so that Farkas would be sure to spend the rest of his life there and serve as a deterrent. Farkas' lawyer had requested that the sentence be limited to no more than 15 years.

"I think 30 years is a very powerful deterrent message," Breuer said, adding that anyone who didn't think so was "brain dead."

Before the sentencing, Farkas' lawyer Bruce Rogow tried to lay much of the blame on Colonial Bank, which was struggling on its own, and said those involved in the fraud scheme were "delusional" because they thought "it will all work out."

During much of the hearing Farkas, thinner than when he was first arrested a year ago, sat silently in a green prison jumpsuit looking straight ahead with his hands clasped together, occasionally rocking back and forth in his chair.

Farkas had also attempted to help Colonial Bank obtain a $553 million loan from the federal bank bailout program, but the money was never disbursed. The bank was shut down by regulators and most of its assets were sold to BB&T Corp.

Colonial Bank's collapse was the sixth-largest bank failure and the third largest during the financial crisis which began in 2007. Hundreds of workers lost their jobs from the collapse of both firms.

Half a dozen other executives from Taylor, Bean & Whitaker and Colonial Bank pleaded guilty after cooperating with investigators. Prosecutors have said that the investigation into Taylor, Bean and Colonial Bank was continuing.

Farkas' main contact at the bank, Catherine Kissick, was sentenced to eight years in prison while the former chief executive at Taylor, Bean, Paul Allen, was sentenced to 40 months. The shortest sentence handed out was three months in prison.

(Editing by Lisa Von Ahn and Gerald E. McCormick)

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