Starbucks gets it right this time, partners with AT&T to provide Free Wi-Fi

AT&T Inc. (NYSE: T) and Starbucks (Nasdaq: SBUX) announced plans to deliver AT&T Wi-Fi(SM) service at more than 7,000 company-operated Starbucks locations across the United States. Starbucks and AT&T will offer a mix of free and paid Wi-Fi offerings at Starbucks stores to meet the needs of both frequent and occasional Starbucks Wi-Fi customers.

AT&T benefits because "the initiative further expands the AT&T Wi-Fi network to more than 17,000 U.S. hot spots and more than 70,000 globally" thereby entrenching AT&T as the leader in hot spots and making it the ever ubiquitous brand for Internet and mobility.

AT&T is one of the Top 20 Innovators of The Innovation Index. Starbucks was a Top 20 Innovator in 2007.

Starbucks benefits because millions of customers will now flock Starbucks for coffee and free Internet. Importantly, for the first time, a Starbucks Card holder gets an added benefit of two hours of free Wi-Fi service per day! According to the press release: "Beginning this spring, Starbucks Card holders can enjoy up to two hours of free Wi-Fi service per day at Starbucks locations offering Wi-Fi access, while more than 12 million qualifying AT&T broadband and AT&T U-verse(SM) Internet customers will have unlimited free access to the Wi-Fi service. In addition, more than 5 million of AT&T's remote access services business customers will be able to access Wi-Fi service at Starbucks locations."

Fringe revenue benefits: "In addition to the free Wi-Fi access for qualifying AT&T customers and any Starbucks Card holder, customers will be able to purchase tiered access to the AT&T Wi-Fi network at Starbucks at attractive price points. For a two-hour period, customers will pay just $3.99 per session. Monthly membership will also be available for $19.99 per month, and will include access to any of AT&T's 70,000 hot spots in 89 countries around the world."

Bottomline:

Rick Welday, AT&T chief marketing officer, Consumer emphasized: "Our work with Starbucks is collaborative innovation at its finest." Quite Possibly. What is Starbucks recipe for turnaround? Introduce $1 coffee, provide free coffee to loyal Starbucks customers who have a Starbucks card (coffee loyalty program), and offer free services such as the free Wi-fi to loyal customers. The new program will be a hit! As for AT&T, this is a huge marketing win, since it creates presence of AT&T in even more places and hot spots around the country and the world, provides AT&T customers nationwide Wi-Fi access and entrenches them further (not to mention increases customer loyalty), and has the potential upside of incremental revenue in the tens of millions.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index and returned 66% in 2007, and 174% in the previous five years. If you want to learn more about the Innovation Index Fund, fill out your contact information at the bottom of this form: http://www.innovationindexgroup.com/invest.html

The Innovation Index Reports:

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund
Introducing The Innovation Index Fund - Invest into The Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance
The Innovation Index gallops to 56% - Quarterly Report - Q3, 2007

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.

The Innovation Index Quarterly Earnings On a Roll

The Innovators of The Innovation Index have been on fire since last quarter. Even after returning a whopping 56% through the first three quarters of 2007, they have not cooled off. On the contrary, some of these Innovators are red-hot going into the fourth quarter. Here is a synopsis of their latest quarterly earnings report:

3M (NYSE: MMM)

MMM is up 12% in 2007, closing today at 85.93

"3M checked in with net income of $960 million, or $1.32 per share, compared to $894 million, or $1.18 a share, in the third quarter of 2006. If you back out a one-time item, the company earned $1.29 a share..."

Amazon.com Inc. (NASDAQ: AMZN)

AMZN is up 156% in 2007, closing today at 100.82

"The online retail giant reported earnings of $80 million, or 19 cents a share, for the quarter ended Sept. 30, compared with earnings of $19 million, or 5 cents a share, for the same period last year. Revenue grew 41% to $3.26 billion from $2.31 billion last year. Analysts had expected the company to report earnings per share of 18 cents on revenue of $3.14 billion, according to consensus forecasts from Thomson Financial. The company said operating earnings for the period came in at $123 million -- ahead of the $108 million expected by analysts. Last year's third quarter saw operating income of $40 million."- source MarketWatch

America Movil S.A.B de C.V. (ADR) (NYSE:AMX)

AMX is up 48% in 2007, closing today at 67.10.

"Revenue soared (in the latest quarter), operating results improved solidly and America Movil added more new customers than the 6 million extra clients in the previous quarter...Core earnings before interest, taxes, depreciation and amortization rose 44.6 percent to 31.9 billion pesos. Analysts in the Reuters survey had forecast a 43 percent leap."

Apple Inc. (NASDAQ: AAPL)

AAPL is up 119% in 2007, closing today at 186.16.

"Apple Inc.'s (AAPL) fourth-quarter net income improved to $904 million, or $1.01 a share, from a year-earlier profit of $542 million, or 62 cents a share. Sales rose to $6.22 billion from $4.84 billion. Analysts, according to Thomson Financial, expected a quarterly profit of 86 cents a share and revenue of $6.07 billion...Among the quarter's highlights were sales of 2.16 million Macintosh PCs and 1.11 million iPhones."

eBay Inc. (NASDAQ: EBAY)

EBAY is up 20% in 2007, closing today at 35.94.

"eBay reported a net loss of $935.6 million, or 69 cents a share, compared with earnings of $280.9 million, or 20 cents a share, for the same period last year. The results include a previously disclosed charge of $1.39 billion related to the company's acquisition of Skype, a provider of voice-over-IP, or VOIP, telephone services that was taken over by eBay in September of 2005. Also included are charges related to stock-option compensation and other items. Excluding the charges, eBay said earnings would have been $564 million, or 41 cents per share, for the quarter. Analysts were expecting earnings of 33 cents a share, according to consensus estimates from Thomson First Call. Revenue grew 30% to $1.89 billion for the quarter from $1.45 billion last year. Analysts had expected revenue of $1.83 billion for the period."

General Electric (NYSE: GE)

GE is up 9% in 2007, closing today at 40.48.

"General Electric Co.'s third-quarter profit rose 7.1 percent on higher sales of locomotives, jet engines and power-plant turbines. The world's second-biggest company by market value narrowed the range of its full-year earnings forecast....Profit from continuing operations climbed to $5.09 billion, or 50 cents a share, from $4.75 billion, or 46 cents, a year earlier, the Fairfield, Connecticut-based company said today in a statement. That matched the estimate of 11 analysts surveyed by Bloomberg. Revenue rose 12 percent to $42.5 billion as Chief Executive Officer Jeffrey Immelt targeted faster-growing markets and sold more equipment than services in booming economies including China and the Middle East."

Google Inc. (NASDAQ: GOOG)

GOOG is up 47% in 2007, closing today at 675.77.

"Google earned $1.07 billion, or $3.38 per share, for the three months ended in September. That was up from net income of $733.4 million, or $2.36 per share, at the same time last year.
If not for the cost of awarding stock to its steadily expanding work force, Google said it would have earned $3.91 per share. That topped the average estimate of $3.78 per share among analysts surveyed by Thomson Financial. Revenue for the period totaled $4.23 billion, a 57 percent increase from $2.69 billion last year. After subtracting commissions paid to its thousands of advertising partners, Google's revenue stood at $3.01 billion - about $70 million above the average analyst estimate."

Intel Corporation (NASDAQ: INTC)

INTC is up 33% in 2007, closing today at 26.80.

"Intel Corp.'s profit leaped 43 percent in the third quarter as cost-cutting, swelling microprocessor demand and a massive restructuring helped the world's largest semiconductor company glide past Wall Street's already-bullish expectations. The Santa Clara-based chipmaker said Tuesday it earned $1.86 billion, or 31 cents per share, in the three months ended in September. That beat by a penny the average estimate of analysts surveyed by Thomson Financial, and it's 43 percent higher than the $1.3 billion, or 22 cents per share, Intel earned in the year-ago period. Intel is profiting from robust worldwide PC sales that are driving up demand for microprocessors, which act as the brains of those computers. Higher sales of microprocessors helped the company offset flat average selling prices. Revenues for the period were $10.09 billion, a 15 percent jump from the $8.74 billion in sales rung up last year."

International Business Machines Corp. (NYSE: IBM)

IBM is up 18% in 2007, closing today at 114.68.

"Strength in services overcame a surprising slide in hardware and helped third-quarter earnings rise 6 percent at International Business Machines Corp., enough to narrowly beat Wall Street expectations Tuesday.From July through September, IBM (NYSE:IBM) earned $2.36 billion, $1.68 per share, surpassing the profit of $2.22 billion and $1.45 per share that the Armonk, N.Y.-based technology bellwether posted in the same quarter of 2006.Earnings per share rose at a much steeper rate than net profit because IBM's aggressive stock buyback plan has taken 130 million shares out of circulation in the past 12 months.Revenue in the third quarter rose 7 percent to $24.1 billion from $22.6 billion a year ago. However, IBM continued to benefit heavily from a weak dollar, because dips in the greenback inflate the dollar value of deals done in other currencies. If not for currency fluctuations, this quarter's rise in revenue would have been 3 percent."

Research In Motion Limited (NASDAQ: RIMM)

RIMM is up 192% in 2007, closing today at 124.53. This makes 2006's impressive Innovation Index leading gains of 94% appear small.

"RIM reported second-quarter earnings of 50 cents per share on revenue of $1.37 billion - slightly above estimates of analysts polled by Thomson Financial. For the third quarter, RIM predicted earnings between 59 cents and 63 cents per share on revenue of between $1.6 billion and $1.67 billion. The company also passed the 10-million subscriber mark during the period, ending the quarter with 10.5 million BlackBerry subscribers."

Southwest Airlines Co. (NYSE: LUV)

LUV is down 7% in 2007, closing today at 14.22.

"Southwest Airlines Co., the nation's biggest discount carrier, said its third-quarter profit rose because the airline packed planes amid strong demand. Net income for the three months ended Sept. 30 rose to $162 million, or 22 cents per share, compared with $48 million, or 6 cents per share, during the same period a year earlier. Analysts polled by Thomson Financial had been expecting earnings, on average, of 21 cents per share."

Yahoo Inc. (NASDAQ: YHOO)

YHOO is up 20% in 2007, closing today at 30.64.

"Still feeling the effects of a major reorganization, Yahoo officials Oct. 16 said third-quarter net income fell 5 percent, to $151.3 million, from $158.5 million in the same period a year earlier. Yahoo, which replaced Terry Semel as CEO with co-founder Jerry Yang and reorganized into three core business segments this year, said third-quarter revenue rose 12 percent to $1.77 billion, from $1.58 billion. Net sales excluding payments Yahoo makes to other sites to acquire traffic were $1.28 billion from $1.12 billion, slightly surpassing the $1.24 billion expected from analysts polled by Thomson Financial."

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index gallops to 56%, crushes major U.S. indices - Quarterly Report 09-28-07

The Innovation Index had a monster third quarter in 2007. The Innovation Index added 20% during the third quarter, and has now gained 56% for the year. The Innovation Index has already more than quadrupled the 2006 performance, and we still have one more quarter to go. Could this be another banner year for The Innovation Index? The Innovation Index easily crushes the major U.S. indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 added only 2% during the quarter, and is now up 8% for the year; NASDAQ was up 4% during the quarter, and is up to double-digit gains at 12% for the year; the Dow Jones Index also gained 4% during the quarter, and is now up 11% for the year.

The Innovation Index closed at 101.39 on September 28, 2007, up 20% from the closing price of 84.68 on June 29, 2007, and up 56% from the closing price of 65.05 on December 29, 2006.


(click to maximize The Innovation Index Performance)

What caused The Innovation Index to add a spectacular 20% during the last quarter? Four innovators caused the jump, the largest increase coming from Research In Motion Limited - (NASDAQ: RIMM) that went up 38% in one quarter, and is now up 131% for the year. Amazon.com, Inc. - (NASDAQ: AMZN) also rose to dizzying heights by gaining 36% for the quarter, and is now up 136% for the year. Not to be ignored is Apple Inc. - (NASDAQ: AAPL) that gained 26% during the quarter, and is now up 81% for the year. eBay Inc. - (NASDAQ: EBAY) had an impressive run up as well, by notching gains of 21% during the quarter, and growing to 30% gains for the year.

13 of the Top 20 Innovators showed positive gains during the quarter (8 out of the 13 had double-digit gains), only 4 of the Top 20 Innovators showed negative gains, and 3 Innovators were unchanged during the quarter.

The Innovation Index is on a roll!!

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) gained 36% during the quarter, and leads all innovators with a whopping 136% gains for the year. Research In Motion Limited - (NASDAQ: RIMM) is next up with massive 131% gains for the year. Apple Inc. (NASDAQ: AAPL) is next up with 81% appreciation for the year. There are twelve other innovators with double-digit gains for the year.

Starbucks Corporation (NASDAQ: SBUX) is the significant decliner, down 26% for the year; can Starbucks rally in the last quarter of the year?

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index races to 21%, crushes major U.S. indices - Weekly Report 05-25-07

The Innovation Index five-peats – five week of back-to-back gains. The Innovation Index added 3% last week, and is now up 21% for the year. The Innovation Index has already surpassed the 2006 performance, and we are just in May 2007. Could this be the banner year for The Innovation Index? The Innovation Index easily crushes the major U.S. indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 was unchanged, and is up 7% for the year; NASDAQ was unchanged, and is up 6% for the year; the Dow Jones Index lost a fraction, and is now up 8% for the year. This is the fifth week in 2007 where The Innovation Index is having double-digit gains.

The Innovation Index closed at 83.54 on May 25, 2007, up 21% from the closing price of 69.31 on December 29, 2006.



What caused The Innovation Index to add another 3% in one week? Five innovators caused the jump, the largest increase coming from Research In Motion Limited - (NASDAQ: RIMM) that went up 10% in just one week, and is now up 30% for the year.

“NetSuite Inc. (www.netsuite.com) and iEnterprises (www.ienterprises.com), announced that iEnterprises and NetSuite will be offering Mobile Edge for NetSuite(R), a wireless application designed specifically for NetSuite customers, so they can easily mobilize NetSuite for use on BlackBerry smartphones from Research In Motion (RIM).” – RIM can boast on-demand software suite on the BlackBerry. RIM also completed the status updates on its financials, and benefited from upgrades.

8 of the Top 20 Innovators showed positive gains (compared to 10 in the previous week), 8 of the Top 20 Innovators showed negative gains (compared to 7 in the previous week), and 4 Innovators were unchanged last week (compared to 3 in the previous week).

Can The Innovation Index six-peat, and have another week of gains? The Innovation Index is on a roll, and knows no stopping.

Weekly Advances

Google Inc. (NASDAQ: GOOG) was up 3% last week and is now up 5% for the year; Google increased the Search Market Share in the U.S. by 1.4% contributing to an additional 100 million additional searches. Google announced an innovative new Translation feature - Google Translate - that automatically provides the results of a search query in your own language from any other language (that Google supports).

Amazon.com, Inc. (NASDAQ: AMZN) was up another 8% in just one week, and is now up a whopping 74% for the year. New innovations, analyst upgrades and short squeeze contributed to the rise.

“Leading online retailer Amazon.com, Inc. (NASDAQ: AMZN) today announced it has acquired Brilliance Audio (www.brillianceaudio.com), the largest independent publisher of audiobooks in the United States. The acquisition will enable Amazon to work closely with the book publishing community to further expand the number of books produced in audio format and provide customers with an even greater selection of audiobooks to find, discover and buy.” “Amazon.com is also planning to launch DRM-Free MP3 music Download Store with songs and albums from EMI Music and more than 12,000 other labels.” “Amazon.com's grocery store launched new Subscribe & Save feature allowing automatic fulfillment of most popular items.” – Amazon is innovating on all cylinders, and these announced innovations will positively impact Amazon’s growth in 2007 and beyond. In particular, the millions of songs that Amazon.com will offer for MP3 music lovers.

Apple Inc. (NASDAQ: AAPL) was up 3% and is now up 34% for the year; there is a huge momentum building for the soon to be launched iPhone, including rampant speculation on the release date, and rollout frenzy. “Prudential reiterated overweight target for Apple, and raised their target on AAPL to $125 from $115 following meetings with the mgmt. The firm says mgmt appeared confident on a number of fronts including 1) its prospects for Mac share growth over time, 2) the potential for iPhone success, and 3) the viability of the iPod platform despite the impending launch of iPhone. The firm says their checks suggest 1) continued momentum for Mac sales, 2) a timely launch of iPhone, and 3) series of new iPod launches beginning as early as June, extending through September.” – All these timely innovations bode well for Apple and Apple investors.

Discount retailer Target Corp. (NYSE: TGT), amid innovations and strength in its credit-card business and better margins, reported an 18% jump in first-quarter profit on Wednesday. Target was up 4% in one week, and is now up 7% for the year.

On a conference call with analysts, Chief Executive Bob Ulrich called the results "excellent," adding that Target's (TGT) share of the market against competitors such as Wal-Mart Stores Inc. (NYSE: WMT), Costco Wholesale (NASDAQ: COST) and Sears (SHLD) climbed to 9%.

According to MarketWatch, for the quarter ended May 5, Target said it earned $651 million, or 75 cents a share, compared with last year's income of $554 million, or 63 cents a share.

Total sales for the Minneapolis-based discounter rose 9.2% to $14.04 billion from $12.86 billion a year ago. Revenues from operations climbed 9% to $13.62 billion while credit-card revenues were up 13% at $418 million. The most impressive data was: Sales at stores open longer than a year, which retailers use to measure growth, rose 4.3%.

The results outpaced Wall Street's expectations for a per-share profit of 71 cents but came up short of a forecast for $14.17 billion in sales.

Target said it still expects to post earnings of $3.60 a share for the full-year period, in line with the average forecast of analysts polled by Thomson Financial. And although quarterly guidance was not offered, CFO Scovanner called analysts' average estimates for the second, third and fourth quarters "respectable."

General Electric Co. - GE (NYSE: GE) introduced 11 new ecomagination products, services and projects, including the world's first hybrid locomotive and the ecomagination Homebuilder Program - a comprehensive package of energy efficient appliances, lighting, advanced building design and real-time energy management combined with a GE mortgage that rewards energy efficiency.

"Customer demand for the most advanced, most fuel-efficient and least emissive technologies is what sparked ecomagination," said GE Chairman and CEO Jeff Immelt. "Increasing demand from our customers is what is making it succeed beyond our expectations.

"Green is happening everywhere across GE," Immelt said. "From our transportation products to renewable energy to clean water to how we make television shows and movies to home building and mortgages, green is truly universal at GE." - GE was up 2% for the week, and importantly, is now in the black for the year – up 1%.

eBay Inc. (NASDAQ: EBAY) “announced an agreement with Sanook!, the leading online portal in Thailand, to launch an e-commerce site that will enable individuals and businesses in Thailand to participate in local trade as well as cross border trade through eBay's global Web sites. Under this revenue-sharing agreement, the co-branded site -- Sanook! eBay -- will be managed and operated under a newly formed Sanook! subsidiary. The Thai-language local site is expected to launch in approximately five to seven months. According to research firm IDC, Thailand currently has more than 16 million Internet users - a figure expected to grow at a compound annual growth rate of 25 percent through 2009. The agreement gives eBay the opportunity to participate and drive economic growth in the region. Once the site is launched, Thailand will be the 38th market where eBay has a local presence.” - Way to go global eBay! eBay was even last week, and is up 9% for the year. I attended TiEcon 2007 the previous weekend, and was inspired by Meg Whitman’s keynote presentation, President and CEO of eBay. Check out: Innovation and Leadership lessons from Meg Whitman, eBay CEO and President, and top Innovator

Weekly Declines

The news of the previous week was Microsoft’s (NASDAQ: MSFT) acquisition of AQuantive (NASDAQ: AQNT). Microsoft hits a walk-off home run with Aquantive acquisition. In last week’s announced innovations: “Microsoft Office SharePoint Server 2007 received U.S. Department of Defense 5015.2 Certification. 'Forza Motorsport 2' raced into living rooms on Xbox 360 worldwide.” – How hot is the Indian business for Microsoft? Ravi Venkatesan, chairman of Microsoft India, in his keynote presentation at TiEcon 2007 believes it is “absolutely red hot”. Opportunities abound everywhere. Microsoft was down 1%, however is up 2% for the year.

Yahoo Inc. (NASDAQ: YHOO) saw the biggest decline at 4% last week, however is still up 12% for the year; the rumors of a potential acquisition by Microsoft fizzled out upon Microsoft’s AQuantive acquisition and subsequent statements suggesting that Microsoft is set in the online ad business.

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) gained 8% last week and leads all innovators with 74% gains for the year. Apple Inc. (NASDAQ: AAPL) is next up with 34% appreciation for the year. America Movil (NYSE: AMX) stayed even last week to remain at 31% gains for the year. There are five other innovators with double-digit gains for the year, including: 3M Company (NYSE: MMM) at 13%, HP added 2% to grow to 11% (NYSE: HPQ), Intel Corporation (NYSE: INTC) at 10%, RIM (NASDAQ: RIMM) at 30% and Yahoo Inc. (NASDAQ: YHOO) at 12%.

Starbucks Corporation (NASDAQ: SBUX) is down 19% for the year; can Starbucks rally in the second half of the year?

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index edges up to 17%, maintains lead over major U.S. indices - Weekly Report 05-18-07

The Innovation Index four-peats – four week of back-to-back gains. The Innovation Index added 1% last week, and is now up 17% for the year. The Innovation Index has already surpassed the 2006 performance of 13.2%, and we are only in May 2007. The Innovation Index easily crushes the major U.S. indices including the S & P 500, NASDAQ and Dow Jones. S & P 500 added 1% point, and is now up 7% for the year; NASDAQ was unchanged, and is up 6% for the year; the Dow Jones Index gained 2% points, and is now up 9% for the year. This is the fourth week in 2007 where The Innovation Index is having double-digit gains.

The Innovation Index closed at 81.00 on May 18, 2007, up 17% from the closing price of 69.31 on December 29, 2006.

What caused The Innovation Index to add another 1% in one week? Three innovators caused the jump, the largest increase coming from America Movil (NYSE: AMX) that went up 7% in just one week on strong economic reports from Mexico and Brazil.

10 of the Top 20 Innovators showed positive gains (compared to 9 in the previous week), 7 of the Top 20 Innovators showed negative gains (compared to 9 in the previous week), and 3 Innovators were unchanged last week (compared to 1 in the previous week).

Can The Innovation Index five-peat, and have another week of gains? We will find out next week.

Weekly Advances

The news of the week was Microsoft’s (NASDAQ: MSFT) acquisition of AQuantive (NASDAQ: AQNT). Microsoft shares were unchanged last week, and are up 4% for the year. Microsoft hits a walk-off home run with Aquantive acquisition.

Besides America Movil, Amazon.com, Inc. (NASDAQ: AMZN) went up 3% last week, and is now up 60% for the year.

“Amazon.com (NASDAQ:AMZN) announced it will launch a digital music store later this year offering millions of songs in the DRM-free MP3 format from more than 12,000 record labels. EMI Music's digital catalog is the latest addition to the store. Every song and album in the Amazon.com digital music store will be available exclusively in the MP3 format without digital rights management (DRM) software. Amazon's DRM-free MP3s will free customers to play their music on virtually any of their personal devices -- including PCs, Macs(TM), iPods(TM), Zunes(TM), Zens(TM) -- and to burn songs to CDs for personal use.” – This will be in direct competition to the market leading iTunes music store. Several analysts and investors believe that Amazon will be successful in this endeavor based on its market leading online music sales (CD) and customer base.

Amazon.com (NASDAQ:AMZN) also announced “it has acquired www.dpreview.com, the web's most comprehensive site for digital camera information and reviews. Founded in 1998 by Phil Askey, dpreview.com provides unbiased reviews and original content regarding the latest in digital cameras, and offers a host of features and forums designed to make it easy for consumers to find the camera that's right for them. With its unique voice and in-depth technical reviews, dpreview.com draws millions of unique visitors each month.” – This acquisition will allow Amazon to lure more digital camera buyers to the electronics store, and will ultimately provide Amazon valuable reviews of digital cameras. This is a great example of marriage between online content and catalog. Expect Amazon to create more acquisitions along these lines.

The Board of Directors of The Procter & Gamble Company (NYSE: PG) announced “some business unit realignments and associated changes to its executive management structure effective July 1, 2007. The company's three global business units will be: Beauty Care, Global Health & Well Being, and Household Care.

"We are making these moves to realign our business units and top leadership structure to meet the changing needs of our larger, more diverse, faster-paced global business," said Mr. Lafley – Chairman and CEO of P&G. "These changes are designed to help P&G's businesses consistently win at both the first (in-store) and second (at-home) moments of truth with consumers.

"Our business has nearly doubled since 2000. We've had three major acquisitions including Clairol, Wella and Gillette. And, we have tripled the pace of our business initiatives over this same period," said Lafley.

P&G also announced full conversion of Liquid Laundry Detergent Portfolio to New 2X-Concentrated Formulation in North America in 2007-2008.

"Concentrated laundry products represent another example of how the cleaning product industry, through groundbreaking research, collaboration with ingredient and packaging suppliers, and innovative manufacturing practices, is living out its commitment to deliver valuable products to consumers while reducing their environmental impact," according to The Soap and Detergent Association (SDA).

P&G shares were up 3% last week, and are only down 1% for the year.

Weekly Declines

eBay India launched eBay Blogs and My World for the Indian market. These two new services would allow India users to express their personality and increase their engagement with each other according to TechWhack, India. eBay Inc. (NASDAQ: EBAY) was down 4% last week, and is now up 9% for the year. I attended TiEcon 2007 over the weekend, and was inspired by Meg Whitman’s keynote presentation, President and CEO of eBay. Check out: Innovation and Leadership lessons from Meg Whitman, eBay CEO and President, and top Innovator
Cisco Systems Inc. (NASDAQ: CSCO) declined 2% last week. Cisco announced that it has received foreign regulatory approvals for the WebEx acquisition (NASDAQ: WEBX).

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) gained 3% last week and leads all innovators with 60% gains for the year. Apple Inc. (NASDAQ: AAPL) is next with 30% appreciation for the year. America Movil (NYSE: AMX) notched 7% points to rise to 30% gains for the year. There are five other innovators with double-digit gains for the year, including: 3M Company (NYSE: MMM) at 10%, Intel Corporation (NYSE: INTC) at 13%, IBM (NYSE: IBM) at 11%, RIM (NASDAQ: RIMM) at 19% and Yahoo Inc. (NASDAQ: YHOO) at 16%.

Starbucks Corporation (NASDAQ: SBUX) is down 18% for the year.

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index zooms to 16%, widens lead over major U.S. indices - Weekly Report 05-11-07

The Innovation Index is on a tear. The Innovation Index added 3% last week, and is now up 16% for the year. The Innovation Index has already surpassed the 2006 performance of 13.2%, and we are only in May 2007. The Innovation Index easily crushes the major U.S. indices by more than 100%, including the S & P 500, NASDAQ and Dow Jones. S & P 500 was unchanged during the week, and is up 6% for the year; NASDAQ was also unchanged, and is up 6% for the year; the Dow Jones Index gained a fraction, and is now up 7% for the year. This is the third week in 2007 where The Innovation Index is having double-digit gains.

The Innovation Index closed at 80.15 on May 11, 2007, up 16% from the closing price of 69.31 on December 29, 2006.



What caused The Innovation Index to add another 3% in one week? Four innovators caused the jump, the largest increase coming from Research In Motion Limited (RIM) - (NASDAQ: RIMM) that went up 10% in just one week owing to key new innovation announcements, BUY rating with increased price target, and status update.

9 of the Top 20 Innovators showed positive gains (compared to 13 in the previous week), 9 of the Top 20 Innovators showed negative gains (compared to 6 in the previous week), and 2 Innovators were unchanged last week (compared to 1 in the previous week).

Can The Innovation Index four-peat, and have another week of gains? We will hold our breaths in anticipation.

Weekly Advances

RIM (NASDAQ: RIMM) was up 10% in one week owing to the following new innovations, and a status update and analyst upgrade. RIM is now up 19% for the year; can RIM match the 94% gain set in 2006 or come close to it? RIM introduced the BlackBerry Curve Smartphone, “the smallest and lightest full QWERTY BlackBerry smartphone. With its smooth and friendly design encompassing a large display, easy-to-use keyboard and intuitive trackball navigation system, this powerful new smartphone provides RIM's industry leading email and messaging capabilities, and consumer-friendly features including a 2 megapixel camera, enhanced media player and high-performance browser.” RIM also announced plans to introduce a new development tool that will enable developers to work within the familiar .NET programming environment to rapidly create rich client wireless applications for BlackBerry smartphones. Finally, RIM introduced the BlackBerry(R) Mobile Voice System (BlackBerry(R) MVS).

Besides RIM, Apple Inc. (NASDAQ: AAPL) went up 8% last week, and is now up 28% for the year. There is huge anticipation built into the market with Apple’s iPhone. The market for wireless phones is going to exceed 1 billion units in 2007; even if Apple gets 1% of the marketshare in the first year of launch, this will translate to 10 million iPhone sales. Nokia Oyj NOK1V.HE (NOK) hopes Apple’s highly anticipated iPhone will boost consumer appetite for pricier mobile phones with features such as music and video, Nokia's Chief Financial Officer said yesterday. S&P reiterated STRONG BUY opinion on shares of Apple.

Based on preliminary data, HP (NYSE: HPQ) expects to announce on May 16 -- when its second quarter results are scheduled to be released -- that it recorded revenue in the range of $25.50 billion to $25.55 billion, non-GAAP diluted earnings per share (EPS) in the range of $0.69 to $0.70, and GAAP EPS in the range of $0.64 to $0.65. The increase in second quarter revenue and EPS guidance was driven by strong operational results in the Personal Systems Group and in industry-standard servers. In addition, EPS benefited from higher levels of share repurchases during the quarter. The company stated previously that it anticipated revenue of approximately $24.5 billion, non-GAAP diluted EPS in the range of $0.63 to $0.64 and GAAP diluted EPS in the range of $0.57 to $0.58. HP estimates third quarter 2007 revenue of approximately $23.7 billion to $23.9 billion, non-GAAP EPS in the range of $0.63 to $0.65, and GAAP diluted EPS in the range of $0.59 to $0.61. HP also introduced “a wide range of mobile computing devices, services and infrastructure designed to significantly enhance the way individuals connect to the information, entertainment and people that matter most to them - wherever they are.” HP also announced “a prototype software suite and website to enable people to design, create and share location-based experiences, games and tours with friends, family and others, anywhere in the world. The site makes available a new HP Labs technology, code-named "mscape," that overlays digital sight, sounds and interactions on the physical world to create immersive and interactive experiences called mediascapes. Users equipped with a GPS-enabled mobile device running the mscape player can move through the physical world, triggering digital media - including images, text, sounds, audio and video - in response to physical events such as location, proximity, time and movement. Blending online information with gaming, storytelling and the outdoors, mediascapes can offer people of all ages a new way to experience their surroundings.” HP shares were up 3% on the pre-earnings announcement last week, and are now up 10% for the year.

IBM (NYSE: IBM) touted Blue Gene, the fastest supercomputer in the world and the descendent of Deep Blue, as using 131,000 processors to routinely handle 280 trillion operations every second. Blue Gene is also the world's most energy efficient computer, according to green500.org. IBM also announced it is redirecting $1 billion per year across its businesses, mobilizing the company's resources to dramatically increase the level of energy efficiency in IT. Called "Project Big Green," IBM's initiative targets corporate data centers where energy constraints and costs can limit their ability to grow. The initiative includes a new global "green team" of more than 850 energy efficiency architects from across IBM.

IBM Details "Project Big Green"

IBM is using its expertise and energy-smart technology innovations to outline a five-step approach for clients that is designed to dramatically improve energy efficiency:

1. DIAGNOSE: Evaluate existing facilities -- energy assessment,
virtual 3-D power management and thermal analytics
2. BUILD: Plan, build or update to an energy efficient data center
3. VIRTUALIZE: Virtualize IT infrastructures and special purpose
processors
4. MANAGE: Seize control with power management software
5. COOL: Exploit liquid cooling solutions -- inside and out of the
data center

IBM also launched its first-ever public "ThinkPlace Challenge," a three-week open forum designed to foster global collaboration on innovation opportunities and economic development issues facing the African continent. IBM shares were up 3% last week, and are now up 9% this year.

Weekly Declines

Cisco Systems Inc. (NASDAQ: CSCO) declined 5% on earnings report that did not excite the investors and the outlook that appeared soft – Cisco is now down 3% for the year. Cisco, said fiscal fourth-quarter revenue will increase 15 percent to 16 percent from a year earlier. Analysts on average expected growth of 16 percent to $9.23 billion, according to a Bloomberg survey. Net income in the third quarter jumped 34 percent to $1.87 billion, or 30 cents a share, from $1.4 billion, or 22 cents, a year earlier, Cisco said. Sales in the period ended April 28 gained 21 percent to $8.87 billion. The profit and revenue exceeded analysts' estimates. Starbucks Corporation (NASDAQ: SBUX) saw another week of decline at 4% and is now down 16% for the year. Yahoo Inc. (NASDAQ: YHOO) cooled off from the merger rumors with Microsoft Corporation - (NASDAQ: MSFT) and lost 3%; although Yahoo is still up 18% for the year. Finally, Southwest Airlines (NYSE: LUV) shed 3% last week on rising fuel costs; Southwest is having another down year at negative 7%.

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) dropped 3% last week; although leads all innovators with 56% gains for the year. Apple Inc. (NASDAQ: AAPL) is next with 28% appreciation for the year. America Movil (NYSE: AMX) notched another percentage to rise to 22% gains for the year. There are six innovators with double-digit gains for the year, including: 3M Company (NYSE: MMM) at 10%, eBay Inc. (NASDAQ: EBAY) at 14%, HP (NYSE: HPQ) at 10%, Intel Corporation (NYSE: INTC) at 11%, RIM (NASDAQ: RIMM) at 19% and Yahoo Inc. (NASDAQ: YHOO) at 18%.

Starbucks Corporation (NASDAQ: SBUX) is down 16% for the year.

The Innovation Index Annual Report

I posted The Innovation Index Annual Report earlier in the year that included three Chapters:

Chapter One - Total Innovation Activity at the Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index rises to 13%, doubles lead over major U.S. indices - Weekly Report 05-04-07

Another week, another increase in the lead for The Innovation Index. The Innovation Index added 2% last week, and is now up 13% for the year. The Innovation Index easily crushes the major U.S. indices by more than 100%, including the S & P 500, NASDAQ and Dow Jones. S & P 500 gained 1% during the week, and is up 6% for the year; NASDAQ gained 1%, and is also up 6% for the year; the Dow Jones Index gained another 1%, and is tied at 6% for the year. This is the second week in 2007 where The Innovation Index is up to double-digit gains.


The Innovation Index closed at 78.12 on May 4, 2007, up 13% from the closing price of 69.31 on December 29, 2006.

What caused The Innovation Index to add another 2% in one week? Four innovators caused the jump, the largest increase coming from Yahoo! Inc. (NASDAQ: YHOO) that went up 9% in just one week owing to buyout or merger rumors with Microsoft Corp (NASDAQ: MSFT), so as to compete against the search market leader Google Inc. (NASDAQ: GOOG). In post market action, the buyout rumors seem to have fizzled and it appears that Yahoo and Microsoft may be headed towards a strategic partnership instead.

13 of the Top 20 Innovators showed positive gains (compared to 15 in the previous week), 6 of the Top 20 Innovators showed negative gains (compared to 3 in the previous week), and 1 Innovator was unchanged last week (compared to 2 in the previous week).

Can The Innovation Index three-peat, and have another week of gains? We will find out next week.

Weekly Advances

Besides the large weekly gain for Yahoo, three other innovators gained 5% each in one week including 3M Company (NYSE: MMM), Cisco Systems, Inc. (NASDAQ: CSCO), and Microsoft Corporation (NASDAQ: MSFT). Yahoo stock is back in 20+% territory. 3M is still reverberating from the solid quarterly financial results and the stock buyback program. 3M is now up 9% for the year. Cisco gained owing to positive earnings anticipation (earnings are out next week), and is back in the black - +2% gains for the year. Finally, Microsoft is also back in positive territory owing to 5% jump in one week owing to a better than expected quarter. Microsoft is up 3% for the year now. General Electric Co. (NYSE: GE) made a comeback, notched 4% gain in one week, and is now unchanged for the year. GE had a solid quarter; however, investors have taken their time to reward GE’s performance.

Weekly Declines

Starbucks Corporation (NASDAQ: SBUX) had a good second quarter.

“Fiscal Second Quarter 2007 Highlights:

-- Consolidated net revenues of $2.3 billion, an increase of 20 percent
-- Net earnings of $151 million, an increase of 18 percent
-- Net earnings per share of $0.19, compared to $0.16 per share, an increase of 19 percent
-- 560 retail store openings
-- Comparable store sales growth of four percent, versus most difficult quarterly comparison this year
-- International segment revenue increased by 30 percent”

Starbucks reported an 18.5 percent rise in quarterly earnings “helped by hundreds of new stores and demand for new products including hot breakfast sandwiches and a sugar-free version of its popular Cinnamon Dolce latte.”

Starbucks even announced a new share buyback authorization of 25 million shares.

However, the unimpressed investors sold off, resulting in a loss of 4% in just one week, and the stock going down 13% for the year. The investors were apparently looking for higher same store sales growth in the U.S.

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) leads all innovators with 60% gains for the year. Amazon.com also announced that its board had approved a $500 million stock buyback over the next two years. Is stock buyback a good company strategy for creating new innovations? You decide. America Movil (NYSE: AMX) notched another percentage to rise to 21% gains for the year. Yahoo! Inc. (NASDAQ: YHOO) is also tied at 21% gains. Apple Inc. (NASDAQ: AAPL) gained 2% last week, and is up 19% for the year.

Starbucks Corporation (NASDAQ: SBUX) is down 13% for the year.

The Innovation Index Annual Report

I posted The Innovation Index Annual Report earlier in the year that included three Chapters:

Chapter One - Total Innovation Activity at the Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index as of December 31, 2001.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

Innovation Treasure Hunt by Michael J. Silverstein

Michael J. Silverstein in "Trading Up" conceptualized the "new luxury" paradigm shift driving today's consumer shopping habits - paying high prices for goods and services that are appealing, cool and emotionally satisfying including shoes, golf clubs, music, home, food at fancy restaurants, beauty products and more.

In his new book, "Treasure Hunt", Silverstein with John Butman shows that the same consumers are not only buying at Victoria's Secret and Panera, but also are going to Costco and Home Depot and getting the same emotional satisfaction. In essence, shopping has become fun and rewarding, an adventure, a "Treasure Hunt". One reason for this: the growth of both low-end and high-end consumer categories and innovations in goods, services, designs, marketing and selling.

Silverstein notes that on the one hand a consumer buys a venti latte at Starbucks (NASDAQ: SBUX) for $5, on the other brews coffee at home for 40 cents, and uses the savings to buy an Apple Nano (NASDAQ: AAPL). How can a business target both the high-end and low-end consumer? How do innovators such as eBay Inc. (NASDAQ: EBAY), Dollar General, H. E. Butt (H.E.B stores), Commerce Bank, Tchibo, Aldi, Bath and Body Works, McDonalds, and more cater to the "bifurcated consumer market"? It's a double-edged sword - the offering has to be exciting enough for "trading up", or enough of an emotional bargain to go "treasure hunt." Anything in the middle is a treacherous fall.

Silverstein provides a detailed process for continued consumer-driven innovation. The process requires a detailed prework that includes mapping the competitive landscape, determining the consumer dreams, dissatisfactions and anomalies, global patterning, cost structure breakdown, and moment of truth diagnostic. If this sounds too complex, Silverstein provides a simple yet ingenuous checklist of five questions whenever he is out shopping and looking for new products:

1. Does the product clearly have technical, functional and emotional benefits?

2. Is there a clear consumer target?

3. Is the product displayed in a store in such a way that consumer would describe it as "stunning"?

4. Is there a pattern of continuous innovation?

5. Is the consumer fundamentally engaged in such a way that she wants to say "Yes"?

Silverstein observes several changes contributing to the growth in bifurcation of consumer market – high-end and low-end – over the next decade. Finally, the author provides a six-step call to action for the innovators to lead, innovate and grow:

1. Don't wait for the market to move. Be ahead of the curve.

2. Engineer out dissatisfactions in your product.

3. Hunt for value in the trade-up and trade-down segments of your market.

4. Inspire a continuous search for cheaper, better, more value...and better, better, better.

5. Attack the category like an outsider who is looking at a blank sheet.

6. Pursue the market with energy and relentlessness.

Apple, Starbucks and eBay are 3 of the top 20 innovators of The Innovation Index.

References:

Treasure Hunt - Inside the Mind of the New Consumer - Michael J. Silverstein with John Butman

The Innovation Index races to 11%, crushes U.S. major indices – Weekly Report 04-26-07

The Innovation Index mounted a huge comeback last week, gained 6% in just one week, and is now up 11% for the year. The Innovation Index easily crushes the major U.S. indices, including the S & P 500, NASDAQ and Dow Jones. S & P 500 gained 2% during the week, and is up 5% for the year; NASDAQ gained 2%, and is up 6% for the year; the Dow Jones Index gained 2%, and is up 5% for the year. This is the first week of 2007 where The Innovation Index is up to double-digit gains.



The Innovation Index closed at 76.87 on April 26, 2007, up 11% from the closing price of 69.31 on December 29, 2006.

What caused The Innovation Index to have this steep rise? Four innovators caused the jump, the largest increase coming from Amazon.com, Inc. (NASDAQ: AMZN) that went up a dizzying 41% in just one week, and is up 59% for the year! WOW! Amazon.com is the first innovator to cross the venerable 50% stock performance gain in 2007.

15 of the Top 20 Innovators showed positive gains (compared to 8 in the previous week), only 3 of the Top 20 Innovators showed negative gains (compared to 7 in the previous week), and 2 Innovators were unchanged last week (compared to 5 in the previous week). What a difference a week makes!

Weekly Advances

The week belonged to Amazon.com for the stellar stock performance gain in one week: 41% in just one week, and 59% for the year.

“Amazon reported a profit of $111 million, or 26 cents a share, compared with $51 million, or 12 cents a share, in the year-earlier period. Sales rose 32% to $3.02 billion from $2.28 billion. Wall Street was expecting earnings of 15 cents a share on sales of $2.92 billion, according to analysts polled by Thomson Financial.” – Amazon has performed remarkably well in 2007 owing to the innovations introduced in 2006. Last week, I had reported: “Amazon.com analysts are bullish about the first quarter earnings and 2007 performance.” Perhaps some of the investors picked up on this, and invested into the Amazon.com earnings and profited.
Apple Inc. (NASDAQ: AAPL) had another strong performance for the quarter, and the shares jumped to a new all-time high after the company reported an 88% surge in second-quarter earnings. Whereas 2006 was the year of the iPod, 2007 is shaping up to be the year of the iMac and iPhone.

“For the quarter ended March 31, the company said earnings for the quarter came in at $770 million, or 87 cents a share, compared to earnings of $410 million, or 47 cents a share, for the same period last year. Sales for the quarter grew more than 20% to hit $5.26 billion for the period ended March 31. Analysts were expecting earnings of 64 cents a share on revenue of $5.17 billion for the quarter, according to estimates from Thomson Financial. During the quarter, the company said it shipped more than 10.5 million iPods, its popular digital music player. More than 1.5 million units of its Macintosh computer line were also shipped during the period.” – Some of the improvement in margins came from "very favorable" pricing for components - memory in particular. Absent from Apple’s earnings announcement was an update on Apple TV, and the initial sales. The consumers and investors alike are waiting for the launch of iPhone in June 2007.

Google is building its lead on Yahoo!, MSN and AOL. Google Inc. (NASDAQ: GOOG) reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google is on a tear. Google Non-GAAP net income in the first quarter of 2007 was $1.16 billion, up 69% compared to 2006. Google-owned sites generated the highest revenue growth, brought in $2.28 billion, growing 76% from last year – this means Google’s core business is strong. Google shares are now up 4% for the year. Google also announced acquisition of Marratech software.

IBM (NYSE: IBM) “announced first-quarter 2007 diluted earnings of $1.21 per share from continuing operations, an increase of 12 percent as reported, compared with diluted earnings of $1.08 per share in the first quarter of 2006. First-quarter income from continuing operations was $1.8 billion compared with $1.7 billion in the first quarter of 2006, an increase of 8 percent. Total revenues for the first quarter of 2007 of $22.0 billion increased 7 percent (4 percent, adjusting for currency) from the first quarter of 2006.” IBM had a solid quarter showing double-digit earnings growth. IBM innovations in service and delivery are taking hold.

“3M Company (NYSE: MMM) shares made their biggest one-day gain in about a year, growing 4.5%, owing to earnings that jumped 52% to $1.37 billion, or $1.85 a share, from $899 million, or $1.17 a share, in the year-earlier period. Although, the latest results reflect a net gain of $422 million, or 57 cents a share, from the January sale of its European branded drugs business, restructuring charges and environmental liabilities. The company said earnings excluding special items totaled $946 million, or $1.28 a share, easily topping analyst forecasts of $1.12 a share. Revenue at the St. Paul, Minn., company swelled 6.1% in the three months ended March 31 to $5.94 billion, also beating forecasts of $5.68 billion, as polled by Thomson Financial.” 3M is showing organic growth, and surprised the consumers and investors alike.

“Microsoft Corp. (NASDAQ: MSFT) fiscal third-quarter profit surged 65%, beating Wall Street estimates, as the company benefited from sales of heavily marketed new products including the Vista operating system and Office 2007. The world's biggest software maker reported earnings of $4.93 billion, or 50 cents a share, in the period ended March 31, compared with $2.98 billion, or 29 cents a share, during the year-earlier period. Revenue rose 32% to $14.4 billion. Analysts surveyed by Thomson Financial had expected Microsoft to post earnings of 46 cents a share on revenue of $13.89 billion.” – Microsoft had projected conservative growth for Vista and Office; however, the results show that the market has adopted them rather well, perhaps even surprising Microsoft. “Microsoft's Client division, which includes Vista, reported $5.27 billion in sales for the quarter, compared with $3.15 billion in the period a year earlier. The business division, which includes Office 2007, reported revenue of $4.83 billion for the third quarter, compared with $3.6 billion in the period a year earlier.” Microsoft also provided a healthy guidance for 2008. Microsoft shares are up in after hours trading today.

Weekly Declines

Southwest Airlines Co. - (NYSE: LUV) reported its first quarter 2007 results. “Net income for first quarter 2007 was $93 million, or $.12 per diluted share, compared to $61 million, or $.07 per diluted share, for first quarter 2006. Economic net income for first quarter 2007 was $33 million, or $.04 per diluted share, compared to $64 million, or $.08 per diluted share, for first quarter 2006. This economic net income result is in line with First Call's mean estimate of $.04 per diluted share for first quarter 2007. (Refer to the reconciliation in the accompanying tables for further information regarding economic results.)

First Quarter 2007 Financial Highlights:

-- Record first quarter revenues of $2.2 billion, up 8.9 percent
-- Economic net income of $33 million, down 48.4 percent
-- Economic net income per diluted share of $.04, down 50 percent…”
Although Southwest had a record quarter, and showed profits, the net income went down 48.4 percent owing to rising fuel costs. Southwest shares were down 6% on the news, and are now down 5% for the year.

Yearly Leaders and Laggards

Who sits on the top of The Innovation Index? Amazon.com, Inc. (NASDAQ: AMZN) leads all innovators with 59% gains for the year. America Movil (NYSE: AMX) is showing a strong 20% gains owing to another good quarter. “America Movil’s first-quarter net profit soared 52.5% year-on-year to 15.80 billion pesos ($1.45 billion), or MXN0.45 a share, on the back of strong revenue growth and higher margins. The market was expecting net profit of MXN11.50 billion, or MXN0.33 a share, according to the median forecast of 10 analysts surveyed by Dow Jones Newswires. America Movil added nearly 6.5 million wireless subscribers in the quarter, bringing its total to 131.2 million, of which 44.8 million were in Mexico.” Apple Inc. (NASDAQ: AAPL) is up 17% for the year.

Starbucks Corporation (NASDAQ: SBUX) is down 10% this year. Starbucks is announcing earnings next week.

The Innovation Index Annual Report

I posted The Innovation Index Annual Report earlier in the year that included three Chapters:

Chapter One - Total Innovation Activity at the Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.

The Innovation Index retreats to 4%, ties U.S. major indices – Weekly Report 04-19-07

The Innovation Index dropped 3% in the last two weeks, and is now up 4% for the year. The Innovation Index is tied with two major U.S. indices, including the S & P 500 and NASDAQ. S & P 500 gained 2% in the last two weeks, and is up 4% for the year; NASDAQ gained 1%, and is also up 4% for the year; the Dow Jones Index gained 2%, and is up 3% for the year. Has The Innovation Index cooled off after beating the U.S. major indices for several weeks?



The Innovation Index closed at 72.25 on April 19, 2007, up 4% from the closing price of 69.31 on December 29, 2006.

What caused The Innovation Index to drop freely? Three innovators caused the slide, the largest drop coming from Yahoo! Inc. (NASDAQ: YHOO) which shed a whopping 14%, followed by Research In Motion (RIM) (NASDAQ: RIMM) (TSX: RIM) which dropped 9%. Apple Inc. also went down 5%. Overall, only 8 of the Top 20 Innovators showed positive gains (compared to 16 in the first week), 7 of the Top 20 Innovators showed negative gains (compared to 1 in the first week), and 5 Innovators were unchanged last week (compared to 3 in the first week).

Weekly Advances

Were it not for innovators including Intel Corporation (NYSE: INTC) that had the best two weeks in over a year gaining 11% (and now up 8% for the year), Amazon.com, Inc. (NASDAQ: AMZN) that gained 7%, and Dell Inc. (NASDAQ: DELL) that climbed 6%, The Innovation Index may have lost further ground.

“Intel net earnings for the period rose to $1.61 billion, or 27 cents a share on a 1% decline in sales to $8.85 billion. Wall Street was looking for earnings of 22 cents a share on sales of $8.9 billion. Intel's gross margin was 50.1%, down from 55.1% a year ago.” Intel profit benefited from a one-time tax gain of 5 cents a share. Intel provided a healthy 2007 outlook. Intel rival AMD posted a huge loss of $611 million. Is Intel mounting a comeback versus AMD? Can Intel become the disruptor again?

Amazon.com analysts are bullish about the first quarter earnings and 2007 performance.

Dell was up to even territory, and is now only down 1% for the year. Is Dell back for good? Perhaps too soon to tell, but analysts are feeling comfortable with Dell turnaround. Although according to Gartner, HP (NYSE: HPQ) has widened the worldwide lead over Dell. HP’s first quarter PC shipments grew 29%, whereas Dell’s fell by 8%, giving HP 17.6% of the global market, compared to Dell’s 13.9%. How soon can Dell turnaround Dell?

Weekly Declines

Yahoo! Inc. led all innovators for the first quarter of 2007. As recently as the April 05 Innovation Index report, I had written: “Yahoo leads all innovators with 25% gains for the year, and we are only in April. At this rate, can Yahoo gain 50% in 2007? It is quite possible.” What happened to Yahoo? Yahoo profits for the first quarter fell short of analyst expectations as expenses rose, profits were down 11% from 2006, sales only grew 9%, and the outlook did not excite the analysts. All these led to 14% drop. The analysts and investors are not providing Yahoo! any time and room for Project Panama and the new search to show impact. Adding salt to the injury was Google Inc. (NASDAQ: GOOG), another top innovator, which just announced the earnings today after market close; Google profits were up 69% compared to 2006, and net sales up 66%. Google stock is up in after hours. More on Google earnings and comparison to Yahoo in next week’s report. I had written a column on “Can Yahoo! catch Google?” in March. The current quarterly reports show a widening gap between Google and Yahoo in revenue, profits, growth and outlook. Has Google delivered a knockout punch to Yahoo! with DoubleClick acquisition? Yahoo is still up 8% for the year.

Blackberry maker Research In Motion Limited (NASDAQ: RIMM) went down 9% despite a record quarterly earnings, surging revenue growth of 66% over 2006, and good outlook – RIM is suffering from too much of a good thing as the analysts are overly optimistic about its future. Blackberry service suffered an outage that raised more alarms.

Finally, Apple Inc. (NASDAQ: AAPL) was down 5% after deciding to hold off the release of Leopard until October 2007. Apple announced that it is trading off Leopard for iPhone for now. Analysts and Investors did not take this kindly. Sure revenue from Leopard versus potential revenue from iPhone? Could Apple have delivered a big blow to Windows Vista when Vista was vulnerable by the timely release of Leopard? Dell just announced that it will offer Windows XP to customers if they so decide.

Yearly Leaders and Laggards

We have a change in yearly leaders for the first time in 2007. Amazon.com, Inc. (NASDAQ: AMZN) and America Movil (NYSE: AMX) lead all innovators with 13% gains for the year. eBay Inc. (NASDAQ: EBAY) has a solid 10% gain for the year. eBay quarterly results beat estimates, earnings were up 59% from 2006, and the outlook was favorable. eBay's PayPal business showed strong growth. Can eBay grow on this results with new innovations?

Starbucks Corporation (NASDAQ: SBUX) is down 13% this year. Starbucks needs a good earnings report to halt the slide.

The Innovation Index Annual Report

I posted The Innovation Index Annual Report earlier in the year that included three Chapters:

Chapter One - Total Innovation Activity at the Top 20 Innovators
Chapter Two - The Top Innovator - The Innovator of Innovators
Chapter Three - The Innovation Insights and Roundup

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index has returned 119% over the last five years. This assumes an investment in each stock of The Innovation Index (buying each stock). An average of $100 invested in The Innovation Index on December 31, 2001 returned $219 as of December 29, 2006. By comparison, $100 invested in each of S & P 500, NASDAQ and Dow Jones Index returned $124. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by 77% over the last five years.

The Normalized Innovation Index has returned an impressive 174% over the last five years. This assumes equal investment in each stock of The Innovation Index.

Alphabetical list of the top 20 Innovators of The Innovation Index and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Dell Inc. - (NASDAQ: DELL)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Microsoft Corporation - (NASDAQ: MSFT)
Research In Motion Limited - (NASDAQ: RIMM)
Southwest Airlines Co. - (NYSE: LUV)
Starbucks Corporation - (NASDAQ: SBUX)
Target Corp. - (NYSE: TGT)
The Proctor & Gamble Company - (NYSE: PG)
Wal-Mart Stores, Inc. - (NYSE: WMT)
Yahoo! Inc. - (NASDAQ: YHOO)

The Innovation Index will analyze the positions and standings of the top 20 Innovators at the end of each year. For 2007, there will be no further changes in The Innovation Index.

Disclaimer: I invest in the stocks comprising The Innovation Index.