Bond markets get electronics trading system next year

KARACHI: Governor State Bank Salim Raza said electronics trading for bonds markets would start working from next year.

Addressing the inaugural function of round table organized by South Asian Federation of Stock Exchanges and Karachi Stock Exchange, governor State Bank said the volume of our bond market is less than regional markets and its expansion is needed. He said Pakistani economy is traveling in a right direction and Pakistan will soon overcome economic challenges.

Salim Raza said although Pakistan is an agricultural state, development of agriculture sector is only 5 percent of GDP. He said agri business and size of national commodity exchange should be increase.


http://www.geo.tv/12-17-2009/54934.htm

Brian Moynihan to succeed Ken Lewis as BofA CEO

By IEVA M. AUGSTUMS, AP Business Writer Ieva M. Augstums, Ap Business Writer – 3 mins ago

CHARLOTTE, N.C. – Bank of America's new CEO says he doesn't expect to lead a major shift in strategy at the nation's largest bank when he takes over from Ken Lewis on Jan. 1. But with loan losses continuing to mount amid double-digit unemployment rates, it remains to be seen whether investors will embrace staying the course.

Bank of America's board late Wednesday named its 50-year-old consumer and small business banking chief, Brian Moynihan, as president and CEO. The promotion ended a months-long search complicated by pay restrictions imposed by government pay czar Kenneth Feinberg before the bank repaid $45 billion of federal bailout loans needed to prevent its failure over the past year.

"I am pleased that it's finally over," said Nancy Bush, managing member of NAB Research LLC in Annandale, N.J. Bush said there will be divergent opinions both on Wall Street and within the bank about Moynihan, but overall, she feels it was the smart move.

"My concern about bringing in an external candidate was that somebody would come in and feel the need to put their stamp on the company through a restructuring or through a period of turbulence," she said. "The bank just doesn't need that right now. An internal candidate who knows the players and who knows what needs to be done ... is probably a wiser choice at this point."

Analysts have said outside candidates likely would have wanted to break up the company, something Bank of America's board reportedly is reluctant to do.

"Brian's wide range of experience, his relationships inside and outside of the company, and his demonstrated ability to understand business dynamics and effect constructive change made him the best person for the position," said Bank of America Chairman Walter E. Massey, who led the CEO search. Massey said that while the bank did consider external candidates, the board decided that Moynihan's experience was as good or better, "and he offered the advantage of a smooth transition."

Bank of America didn't immediately return messages left seeking comment. But Moynihan told The Wall Street Journal Wednesday night that he doesn't plan to exit any current businesses, nor does he foresee making any major changes to the bank's strategy.

"Clearly, customers and clients have benefited from the franchise Ken Lewis, Hugh McColl and others have built over the decades. Our business model has also worked for shareholders," he said in a statement. "What we need to do now is very simple. We need to execute."

Moynihan joined the Charlotte, N.C.-based bank as part of its 2004 purchase of FleetBoston Financial Corp., where he led global wealth and investment management. Over the past year he has served as BofA general counsel, head of global corporate and investment banking and consumer banking chief. He will now join the bank's board of directors.

As the new CEO, Moynihan faces many daunting tasks. He must juggle regulatory investigations into the bank's 2008 acquisition of Merrill Lynch while trying to repair relationship with regulators and members of Congress who sharply criticized Lewis after the bank required billions in aid. Some of those lawmakers, including Maryland Democrat Rep. Elijah Cummings, had also questioned Moynihan's leadership skills during a hearing on the Merrill takeover.

Moynihan takes over at time when the bank faces continued loan losses in the billions of dollars. It lost more than $2.2 billion in the third quarter as bad debt kept rising as consumers still struggled to pay their bills. Bank of America, which has about 53 million consumer and small business customers, is considered particularly vulnerable to unemployment, which remains at double-digit levels.

Bank of America told the Treasury Department of its decision before making the announcement, and Treasury raised no objections, according to industry officials familiar with the matter. They spoke on condition of anonymity because the bank's discussions were private.

The Treasury Department declined to comment Wednesday evening.

Lewis, 62, announced his departure in September in a move that surprised Bank of America's board and left it scrambling for a replacement with no clear succession plan in place. Before then, Lewis had promised he would remain as CEO until the bank cleared up its financial problems. But the heavy regulatory scrutiny and shareholder fury that accompanied the Merrill deal drove Lewis to decide to step down early.

Lewis said Wednesday he believes Moynihan "is the right person to lead our company forward."

Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform, said he hopes Moynihan "appreciates the debt Bank of America owes to U.S. taxpayers, and is prepared to increase lending to consumers and small businesses in order to create jobs and grow the economy."

One thing Moynihan doesn't have to worry about is repaying the government loans. The bank received $25 billion from the government's Troubled Asset Relief Program, or TARP, as part of the initial round of investments into hundreds of financial institutions when the credit crisis peaked last fall. It then received an additional $20 billion shortly after it acquired Merrill Lynch in what was a heavily scrutinized deal.

Bank of America repaid the money it received from TARP on Dec. 8. That freed the bank from the government restrictions that had hampered its search for a new CEO, including executive pay limitations. However, its negotiations with outside candidates continued to falter.

Bank of New York Mellon Corp.'s CEO Robert Kelly told employees Monday that he wasn't going anywhere, leaving BofA with one less candidate for its top job. Media reports had listed Kelly among the top choices to lead the bank.

Other candidates reportedly had included: Bob Diamond, president of British bank Barclays PLC; Larry Fink, CEO of asset manager BlackRock Inc.; and New Jersey Gov. Jon Corzine, a former Goldman Sachs chairman and CEO. Bank of America's chief risk officer, Gregory Curl, was also a top internal candidate for Lewis' job. It wasn't clear Wednesday night if Curl, 61, would remain at the bank.

By picking someone from within, "you express an ability to create a culture that can produce leaders and that's very important," said Keith Springer, president of Sacramento, Calif.-based Capital Financial Advisory Services, which owns financial stocks.

"It's important for these companies to show they have longevity," he said. "And if you can't breed leaders, then you can't survive."

http://news.yahoo.com/s/ap/20091217/ap_on_bi_ge/us_bank_of_america_ceo;_ylt=Aj8GKbbqW9tbMm05GMFRui6yBhIF;_ylu=X3oDMTJuZjhsbWI1BGFzc2V0A2FwLzIwMDkxMjE3L3VzX2Jhbmtfb2ZfYW1lcmljYV9jZW8EY3BvcwMxBHBvcwMyBHNlYwN5bl90b3Bfc3RvcnkEc2xrA2JyaWFubW95bmloYQ--

Treasury backs out of plans to sell Citi stake

By SARA LEPRO and DANIEL WAGNER, AP Business Writers Sara Lepro And Daniel Wagner, Ap Business Writers – 38 mins ago

WASHINGTON – In a striking reversal of its attempts to unwind the government's financial stakes in big banks, the Treasury Department has backed out of plans to sell its 34 percent stake in Citigroup Inc.

The move came after investors responded tepidly to a massive stock offer by the New York-based bank. Citi said Wednesday it will sell 5.4 million common shares at a steep discount to raise the cash it needs to repay $20 billion of the $45 billion in government support it received to weather the financial crisis.

Citi is the last remaining Wall Street bank in which the government still owns a major stake. Treasury's move underscores the Obama administration's halting progress in drawing back the tens of billions of dollars it invested to stabilize the banking sector.

In what it called the largest equity offering in history, Citi is selling the common stock at $3.15 apiece, an 8.7 percent discount to Wednesday's closing stock price. The bank also is selling 35 million tangible equity units, which can be converted into common stock at a later date, for $100 each.

The government converted $25 billion of its Citi bailout into a 34 percent equity ownership stake in the bank earlier this year. The government paid $3.25 a share for its stake, which means it would have lost 10 cents a share in the offering.

"Based on today's offering price, Treasury has decided not to participate in the equity offering," said a department official familiar with the matter who spoke on condition of anonymity because she wasn't authorized to discuss it.

Citigroup's shares dropped 24 cents, or nearly 7 percent, to $3.21 in after-hours trading after closing at $3.45.

The discount reflected investors' continued uncertainty about Citi's financial strength. Analysts believe the bank has benefited from one-time sales and government subsidies but may not yet have repaired its balance sheet and returned to profitability.

The Treasury Department agreed to wait 90 days after the completion of the offering to sell any of the 7.7 billion common shares that it owns. The government has said it plans to sell the entire stake next year.

Treasury Secretary Geithner reiterated this week that the U.S. does not want to be a shareholder in companies. But Treasury's decision to hold its stake shows that the government, too, believes Citi may not be strong enough to stand on its own. It also preserves one of the administration's few remaining bits of leverage in negotiations with the banks.

President Barack Obama called the CEOs of major banks to the White House Monday to press them to lend more and support his overhaul of financial regulation. He said the banks benefited from taxpayer bailouts, and should do their part to support economic recovery.

Obama and the bankers called the meeting productive, but Obama failed to extract any concrete promises on the issues he raised. A day earlier, he had gone on TV to call the bankers "fat cats" who "don't get it."

Citi was the only one of the 12 banks whose CEO did not attend the meeting. It said CEO Vikram Pandit was tied up with the announcement about repaying the first $20 billion of its bailout. Chairman Richard Parsons was to attend the meeting, but ended up dialing in from New York because of inclement weather.

Citigroup announced the offering on Monday, shortly before Wells Fargo & Co. announced plans to raise capital through a public stock offering to pay back its own government bailout loan. The San Francisco-based bank priced a $12.25 billion offering of common stock on Tuesday.

The offerings followed a share sale by Bank of America Corp. earlier this month. The Charlotte, N.C.-based bank, which named its consumer banking chief as CEO Wednesday evening, raised $19.29 billion to help pay back $45 billion in government bailout funds.

Citigroup said once the offerings are complete and it repays the $20 billion, it will no longer be deemed a recipient of "exceptional financial assistance" under TARP, and therefore won't be subject to some of the strict executive compensation rules attached to its bailout.

The repayment may boost Citigroup's image. It also will save the bank $1.7 billion a year in dividend payments. However, the capital raise significantly dilutes current shareholders' stakes.

The Washington Post reported late Tuesday that Citi had received a special tax break to help it exit the bailout. The tax change saved Citi $38 billion.

__

Lepro reported from New York.

http://news.yahoo.com/s/ap/20091217/ap_on_bi_ge/us_citigroup_stock_offering

Flight attendant caught wayward pilots unaware

By JOAN LOWY and JOSHUA FREED, Associated Press Writers Joan Lowy And Joshua Freed, Associated Press Writers – Wed Dec 16, 9:41 pm ET

WASHINGTON – A call from a flight attendant to the pilots of the Northwest Airlines plane that overshot Minneapolis catapulted the cockpit crew from complacency to confusion.

Interviews with the flight crew and other documents released Wednesday by the National Transportation Safety Board indicate the pilots were completely unaware of their predicament until the moment the intercom rang. They were unaware that they had flown their Airbus A320 with 144 passenger more than 100 miles past their destination, that air traffic controllers and their airline's dispatchers had been struggling to reach them for more than an hour, or that the military was at that moment readying fighter jets for an intercept mission.

Timothy Cheney, the captain of Flight 188, said he looked up from his laptop to discover there was no longer any flight information programmed into the Airbus A320's computer. He said his navigation system showed Duluth, Minnesota, off to his left and Eau Claire, Wisconsin, ahead on the right.

The plane had been out of radio contact for 77 minutes as it flew across a broad swath of the country on Oct. 21, raising national security concerns.

Cheney, 54, and First Officer Richard Cole, 54, told investigators they had taken out their laptops and were absorbed in working on a complicated crew scheduling program that they were required to learn following Delta Air Lines' acquisition of Northwest a year earlier. Cole told investigators they became distracted as they "got deeper and deeper into it."

Cheney said he was "blown away" by how long the conversation — which was only supposed to take about 10 minutes — went on. Investigators wrote that Cheney felt embarrassed. Their report quotes him saying "I was wrong" and that he "let another force come from the outside and distract me."

The tension of the moment the pilots became aware of their predicament was evident in the crew interviews.

According to a statement signed by flight attendant Barbara Logan, she called the cockpit around 8:15 p.m. CDT to find out when they would be landing. She was told they would land around 12 Greenwich Mean Time. "I said I did not know the time — he said I was hosed and hung up."

The lead flight attendant called to get gate information and was apparently also hung up on, according to Logan's report. That flight attendant later got through to the cockpit.

Investigators' interviews with Cheney and Cole also hint at tension between the pilots. The pair were flying together for the first time. Cheney characterized Cole's piloting skills as "OK, but I've flown with better." He complained that Cole had missed some steps when they were readying for takeoff because he apparently was still learning Delta's procedures.

Both pilots are appealing the FAA's revocation of their licenses. Cole has cited his reliance on Cheney as the pilot in charge as a mitigating factor in his case.

Delta spokesman Anthony Black said the two pilots remain suspended while Delta investigates the incident.

Flight 188 wasn't the only Northwest operation that was hard to reach that night. A controller who called Northwest's dispatchers to ask them to contact the plane first encountered a recording telling him the phone number had been changed. He dialed the new number, but the phone rang 10 to 20 times without being answered, he told investigators. He hung up, then redialed.

This time, someone at the dispatch office answered the phone — and put him on hold.

The Federal Aviation Administration has since said the phone numbers controllers had for Northwest predated its acquisition by Delta and have now been updated.

Northwest dispatchers ultimately sent 15 text messages to the cockpit asking pilots to contact controllers, but there was no response. The pilots said they didn't notice the messages until after they re-established contact. Cole said he later inadvertently pushed the "delete all" button, erasing the messages.

The first controllers the pilots spoke to after becoming aware of their situation turned out to be in Winnipeg, Canada. They had failed to switch their radio frequency from one used by controllers in Denver to one used by Minneapolis controllers. They were still using the Denver frequency — which is the same as the Winnipeg frequency — when they tried to reach air traffic control.

The NTSB's investigation into the incident has also exposed weaknesses in communications between controllers and the Domestic Events Network, or DEN, which is essentially a running conference call between air traffic controllers, military commanders, and other authorities involved in aviation security that was established after the terrorist attacks of Sept. 11, 2001.

The manager on duty at the Minneapolis air traffic control facility that evening couldn't be reached by the network at one point. The network's speaker is at her desk, but her duties overseeing controllers take her away from the desk.

The same manager also told investigators she asked someone on network to call her by phone to discuss the possible need for fighters to intercept the plane because she wasn't sure the network's communications were secure. Only later did she realize the network had been setup in part to provide secure communications.

http://news.yahoo.com/s/ap/20091217/ap_on_bi_ge/us_northwest_flight_overflown

US to expand eyes in the sky over Afghanistan

By LOLITA C. BALDOR, Associated Press Writer Lolita C. Baldor, Associated Press Writer – Wed Dec 16, 9:41 pm ET

WASHINGTON – The U.S. military is adding more drones and expanding its video surveillance in the skies over Afghanistan to meet the needs of American forces as 30,000 more troops head into the war zone, a top Air Force general said Wednesday.

The bolstered eyes in the sky will come from a mix of manned and unmanned aircraft and added technology that allows each MQ-9 Reaper drone to collect 10 video transmissions and beam them back to 10 different users on the ground, Air Force Lt. Gen. David Deptula, deputy chief of staff for intelligence, surveillance and reconnaissance, told reporters.

Deptula's comments came as Defense Secretary Robert Gates continues to press the Air Force to find ways to more rapidly provide better intelligence to the U.S. and its allies in Afghanistan.

The first troop units of the surge ordered by President Barack Obama have begun to arrive in Afghanistan, a Pentagon official said Wednesday, adding to the 68,000 U.S. forces already deployed to counter emboldened insurgents.

Pentagon spokesman Geoff Morrell said a Marine battalion ordered to move in earlier this month already has "some boots on the ground," with the rest to be flown in before Christmas. "So the surge has begun in earnest," he said.

Deptula provided the most detailed assessment to date of the Air Force plans to meet ground troops' needs for more intelligence and surveillance data. He said the expanded air capabilities would be added over the next eight months.

He would not provide any details on the operation of the Air Force's latest model of its stealth reconnaissance drones, known as the Beast of Kandahar. And he would not specify how many other drones were being sent to Afghanistan.

The aircraft reportedly resembles the much larger, swept-wing B-2 Stealth bomber, and officials confirmed this month that the military has begun using the classified, unarmed drone in Afghanistan.

According to Deptula, the Air Force also will be sending its first MC-12W piloted surveillance plane to Afghanistan this month. Six of the turboprop aircraft are operating in Iraq, and he said the Air Force plans to have a total of 30 in Iraq and Afghanistan by late summer.

In addition, he said new, high-tech video sensors, called the Gorgon Stare, are being installed on Reaper unmanned drones and will be in Afghanistan by late summer.

The new sensors will allow the Reaper to cover a much broader area, estimated at 2 1/2 square miles, and send 10 video streams to 10 different receivers with troops on the ground.

Larger ground stations would be able to receive as many as 50 video streams.

Deptula said four of the Gorgon Stare sets will be deployed in the late summer, followed by three more sets in September or October. Those three sets would have the ability to send 30 video streams to troops on the ground.

Sensor sets with even greater capabilities — as many as 65 video streams — are planned for 2014.

Because Afghanistan is such a large country, even the expanded vision of the missile-armed Reapers won't be enough.

He said officials have not yet determined how many additional surveillance aircraft to send to the war zone.

Deptula also downplayed the difficulties in processing the expected spike in surveillance data, saying officials will shift the workload to analysis units in Korea, Hawaii, California, Virginia and Germany, and add more if needed. At the same time, he said technical changes will also help, including the use of classified computer Web sites to provide easy access to the data.

He added that the Air Force has placed liaison officers with Army brigades to help them figure out what data need.

Often, he said, combat units will say they want a high-tech surveillance drone such as a Predator or Reaper, when a much smaller Raven will do.

In other comments, Deptula told reporters that the Air Force is looking toward developing unmanned, long-range surveillance aircraft that also can carry warheads so they can be used during combat.

The Reaper is built by California-based General Atomics Aeronautical Systems Inc. and the MC-12W is built by Hawker Beechcraft in Kansas, with sensors from L-3 Integrated Systems in Texas..

http://news.yahoo.com/s/ap/20091217/ap_on_go_ca_st_pe/us_us_afghanistan_drones

House narrowly approves year-end jobs

By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – 2 hrs 28 mins ago

WASHINGTON – Democrats in the House Wednesday muscled through a year-end plan to create jobs, mixing about $50 billion for public works projects with another almost $50 billion for cash-strapped state and local governments.

The unemployed would get continued benefits. But conspicuously absent from the plan were President Barack Obama's recently announced proposals to give Social Security recipients $250 payments, a tax credit for small businesses that create jobs and a program awarding tax credits to people who make their homes more energy efficient.

In a statement, Obama said the House measure offers "productive ideas to respond to this great need" for jobs across the country, while urging lawmakers to do more.

"Some may think standing by and taking no action is the right approach, but for the millions of Americans still out of work, inaction is unacceptable," Obama said.

Not a single Republican voted for the plan, which passed on a 217-212 vote after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour. The measure now goes to the Senate, which won't consider the measure until next year and which generally has a smaller appetite for such deficit-financed economic stimulus measures.

Given increasing anxiety among Democrats over massive budget deficits and the party's poor marks with voters for its free-spending ways, the measure could face a tough road. Some 38 Democrats voted against the plan, mostly moderates and junior members elected from swing districts.

According to documents released by Democrats, the measure would cost $154 billion. But there's also another $20 billion from the federal treasury to keep the highway trust fund afloat.

The measure blends a familiar mix of money for highway, transit and water projects and aid to help communities retain teachers and firefighters. There's also $41 billion for a six-month extension of more generous unemployment benefits and $12 billion to renew health insurance subsidies.

Many of the ideas are renewals of programs started in February's $787 billion economic stimulus bill, which has earned mixed reviews from the public as unemployment has hit 10 percent.

The idea behind the "Jobs for Main Street Act" was to enact fast-acting steps that would quickly boost employment. The bill also reflects concerns among rank-and-file Democrats that the original stimulus measure didn't have enough money for infrastructure projects.

But infrastructure spending is notoriously slow to spend out as projects need to be planned and can require a lengthy contracting process. Many of the so-called shovel ready projects have already been funded.

According to the Congressional Budget Office, less than half of the $39 billion in the measure for transportation and housing projects would be spent over the next decade, with just $1.7 billion being spent through next September.

Democrats claimed $75 billion of the measure is "paid for" with unused money from the Wall Street bailout. Republicans countered that the bill is really financed with red ink since the bailout money would otherwise revert to the Treasury to lower the deficit.

Republicans branded the new bill "Son of Stimulus" and were withering in their assessments.

"More spending, more debt. Same lousy policies that haven't produced jobs all year," said House Minority Leader John Boehner, R-Ohio.

Democrats also say that economists largely credit the earlier stimulus measure for the fledgling economic recovery and the improving unemployment picture.

"The situation is worse than we thought and getting better more slowly than we hoped but it's clearly getting better," said Rep. Barney Frank, D-Mass.

Democrats said that the measure would prevent a double-dip recession by giving state and local governments $23 billion to retain teachers and lesser amounts to keep firefighters and police officers. And it would help prevent tax increases by state governments by giving them $23.5 billion for the Medicaid program for the poor and disabled.

Republicans also distributed a chart showing that roughly half the money goes into accounts brimming with cash from the earlier stimulus bill.

"The agencies are awash with money coming through the pipeline," said Rep. Jerry Lewis, R-Calif.

But Appropriations Committee Chairman David Obey, D-Wis., countered that most of the earlier stimulus money has been committed if not actually spent.

The measure also includes money for Amtrak construction, school renovation and job training. There's also $1.1 billion for part-time college jobs, summer employment for low-income teenagers and money for workers in national parks and forests.

The bill also allows very poor people with as little as no income to claim a $1,000-per-child tax credit in what Republicans charged was simply a welfare payment to 16 million poor families.

The bill also would extend federal surface transportation programs through the end of next September.

Democratic leaders had to scramble to find the votes for the measure, which came up right after the House approved a $290 billion increase in the government's ability to borrow. That 218-214 vote reflected unhappiness by moderate Democrats about adding to the nation's red ink. The timing made the jobs bill vote a "heavy lift," Pelosi said.

Heading into the roll call, Pelosi was about two dozen votes short, spokesman Brendan Daly confirmed. But she lobbied indefatigably to almost single-handedly turn the tide.

"I looked at her with doubt on my face and in my eyes and she gave me that steely look and said, 'Let's call the vote,'" said party whip Jim Clyburn, D-S.C.

http://news.yahoo.com/s/ap/20091217/ap_on_bi_ge/us_congress_jobs

Europeans to pick browsers after Microsoft deal

By AOIFE WHITE, AP Business Writer Aoife White, Ap Business Writer – 50 mins ago

BRUSSELS – More than 100 million Europeans will get to pick a Web browser after Microsoft agreed to offer Internet users a choice to avoid fresh fines — a move that could represent a real thawing of long-standing tensions between the software company and the European Union.

In a deal with regulators Wednesday, Microsoft Corp. will from March provide a pop-up screen to all users of its Windows operating system, asking them to choose one or more of five major browsers — including Microsoft's Internet Explorer, Google's Chrome and Apple's Safari — and seven smaller rivals.

In return, the European Commission will drop charges it filed against Microsoft in January, when it said tying Internet Explorer to Windows — already-installed on most computers — gave the browser an unfair advantage. That was the latest in a long list of concerns — in more than a decade of EU antitrust action, Microsoft has been fined euro1.7 billion.

Neelie Kroes, the EU's competition commissioner, said the deal resolves "a serious competition concern" for a key market in the development of the Internet.

"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," she said. "What we are saying today is that all the brands should be on the shelf."

Microsoft is not totally out of the woods yet, as it can still be fined up to 10 percent of yearly global turnover without regulators having to prove their case if it doesn't stick to its commitment for the next five years.

The EU is also still investigating a complaint that Microsoft isn't sharing enough technical information that would help developers make compatible products; regulators reacted coolly to Microsoft's offer Wednesday to provide developers more information to make their products compatible, saying they would check to see if it does help rivals.

The U.S. Department of Justice welcomed the deal which it said could enhance competition. It investigated Microsoft during the 1990s for trying to squeeze browser rival Netscape and settled the case in 2002 in a deal ordering the company to share some data with rivals.

However, U.S. regulators did not follow up more recent complaints, leaving the EU as the most active global antitrust enforcer probing Microsoft's move into server, media and Web software.

Google said more competition among browsers would boost innovation and promote a shift to "cloud computing" where people use Internet-based applications to perform tasks that they now do offline — often using Microsoft programs for word processing or bookkeeping.

Meanwhile Mozilla — the maker of Internet Explorer's nearest challenger, Firefox — said it was happy to see that the EU deal would stop Microsoft repeatedly prompting users to switch from other browsers to Internet Explorer

Internet Explorer has some 64 percent of the global browser market, followed by Firefox at nearly 25 percent, Apple's Safari at 4 percent and Google's Chrome at 3.9 percent, according to figures from Net Applications.

Opera, the Norwegian browser company that made the initial complaint to the EU, said it thought the browser screen would help it attract more users even though it will be competing against major brand names. Opera's share is just over 2 percent.

Most European users of Windows XP, Vista or 7 will get the new choice screen from Microsoft's automatic updates if they have Internet Explorer installed as their default browser. Users outside the 30 countries in the European economic area — the 27-nation EU plus Norway, Iceland and Liechtenstein — won't get the update.

Users will see a box that asks them to find out more about browsers before they click to download one or more of them. They can close the box to keep Internet Explorer if they want.

The EU says some 100 million computers will get the update by mid-March and another 30 million new computers will see it over the next five years. The choice of browsers will be updated every six months based on new market share information.

Microsoft must also report back to regulators in six month's time to check how the program is working — and could make changes in the EU asks. The EU is also able to review the entire deal at the end of 2011.

Microsoft's general counsel Brad Smith said he was pleased to resolve long-standing competition law issues.

Microsoft also pledged Wednesday to offer far more technical documentation on its most popular products to makers of rival software — including open source developers — and support some industry standards.

"We believe it represents the most comprehensive commitment to the promotion of interoperability in the history of the software industry," he said in statement.

Thomas Vinje, a lawyer for the group of companies that complained about Microsoft's interoperability, said it was "not yet clear" if Microsoft's offer would tackle competitive problems in the industry.

http://news.yahoo.com/s/ap/20091216/ap_on_bi_ge/eu_eu_microsoft