Gates to speak at Harvard commencement

Microsoft Chairman Bill Gates will deliver Harvard University's main commencement speech June 7.

Gates dropped out of Harvard College, the school's primary undergraduate program, in 1975 to build Microsoft. He would have been a member of the class of 1977, the school in Cambridge, Mass., said in announcing the choice of Gates in an e-mail Wednesday.

"His contributions to the world of business and technology, and the great example he has set through his far-reaching philanthropy, will rightfully put him center stage in Harvard Yard," said Paul Finnegan, the president of the Harvard Alumni Association.

Boeing

New bids allowed on copter contract

The Air Force will allow Lockheed Martin and United Technologies to resubmit bids for a disputed $15 billion helicopter contract awarded to Boeing, an Air Force official said.

Lockheed and United Technologies' Sikorsky unit protested the award to Boeing, saying the Air Force had overlooked support costs for the search-and-rescue aircraft.

The Air Force reconsidered after the Government Accountability Office (GAO) supported the protests last month, the official said Wednesday, asking not to be identified.

The same bids will be resubmitted by all the companies with additional information on operation-support costs for their helicopters, the official said.

Vulcan Capital

Joint venture to focus on banks

Seattle-based Vulcan Capital, the private investment arm of Paul Allen's Vulcan Inc., said Wednesday it has agreed to form a joint venture with Bankers' Capital Group, of Atlanta, to look for investment opportunities.

The joint venture, Vulcan Bankers Group, will buy or invest in banks throughout the Southeastern United States and will be based in Atlanta, said David Capobianco, managing director of Vulcan Capital.

He said investments could range from $25 million into the hundreds of millions of dollars.

Pacific Northwest

Boeing

U.S. says Airbus got billions in subsidies

Europe's Airbus became the world's leading plane maker thanks to more than $100 billion in illegal state aid, the United States alleged Wednesday in testimony to the World Trade Organization (WTO) in its trade row with Europe over alleged aircraft industry subsidies.

In its submission to the WTO panel, also released Wednesday, the European Union accuses Washington of trying to "rewrite history" by ignoring a bilateral deal covering government support.

"European governments are not the Salvation Army: They lend money in the public interest, subject to close scrutiny and seek to secure an adequate return," the EU maintained.

The case before the WTO panel covers assistance given to Airbus by its European host nations, which Washington contends broke trade rules. The EU has hit back with a case of its own against alleged hidden U.S. subsidies, which it says were enjoyed by Boeing.

No ruling in the case against Airbus is expected before September, while a verdict in the other half of the wrangle will only come in early 2008.

Microsoft

No sign of Bungie, Xbox Live breach

Microsoft said Wednesday it found no evidence of a security breach on Bungie.net or its Xbox Live online video-game network following reports of fraudulent behavior and theft.

"We want to reassure all of our 6 million Xbox Live members that we have looked into the situation and found no evidence of any compromise of the security of Bungie.net or our Live network," Microsoft said in a statement.

The software maker said there have been a few isolated incidents where malicious users have attempted to get personal information from unsuspecting users and to use that information to get access to the victim's Live accounts.

Nation and World

Hollinger

Banker testifies on Black's role

A businessman who steered the big Hollinger newspaper empire through a storm of lawsuits and investigations testified Wednesday that former media mogul Conrad Black "was very knowledgeable" about the finances of the company he's accused of swindling out of $84 million.

Investment banker Gordon Paris, who took over command of Hollinger International from Black in November 2003, was first to take the stand at the trial of Black and three other former Hollinger executives.

Black, 62, born in Canada but now a full -ledged British baron, built Hollinger along with F. David Radler from a single paper into an international conglomerate that owned the Chicago Sun-Times, the Jerusalem Post and the Daily Telegraph of London.

Black is accused of selling off hundreds of community newspapers and pocketing fees from the buyers in return for agreements to not compete with the new owners in markets where the papers circulated.

FedEx

Economy, storms blamed for drop

FedEx reported a 2 percent drop in third-quarter earnings Wednesday, blaming the decline largely on an economic slowdown that tested the company's ability to quickly adjust costs.

The shipping company said it also will have to struggle to keep up with a long-range goal of 10 to 15 percent growth a year in per-share earnings.

But FedEx executives expressed confidence the economy would improve and said the company is well positioned to take advantage of it.

For the quarter ended Feb. 28, earnings slipped to $420 million, or $1.35 a share, from $428 million, or $1.38 a share, a year earlier.

FedEx said expenses for dealing with bad winter weather cut into profit by 6 cents a share, but that was offset by a gain of 8 cents a share related to a lower tax rate.

Motorola

Forecast slashed; CFO replaced

Motorola replaced its chief financial officer Wednesday as it slashed its first-quarter sales forecast, blaming weaker-than-expected revenue from its mobile-devices unit.

Thomas Meredith, 56, was named acting CFO, effective April 1. He replaces David Devonshire, 61, who will retire.

Motorola now expects first-quarter sales of $9.2 billion to $9.3 billion, down from a January forecast of $10.4 billion to $10.6 billion.

Analysts expect average first-quarter revenue of $10.46 billion, according to a Thomson Financial survey.

The company expects a first-quarter loss of 7 cents to 9 cents a share, including 9 cents a share in charges

Sirius Satellite Radio

Promise of merger increasing choice

Sirius Satellite Radio is promising more programming choices and lower pricing options as part of an effort to persuade federal regulators to approve its proposed acquisition of rival XM Satellite Radio.

The deal still faces opposition from several consumer groups and what's certain to be a tough regulatory review by antitrust authorities and the Federal Communications Commission.

In an application submitted Tuesday to the FCC and disclosed in a regulatory filing Wednesday, Sirius said the combined company would allow subscribers greater flexibility in choosing programming options, including a lower price if they elect to receive fewer channels.

Customers of both Sirius and XM already can block adult-themed channels such as Playboy, adult humor and urban music, but they don't receive any discount for doing so.

Morgan Stanley

Court reverses Perelman's win

Morgan Stanley on Wednesday won a reversal of a $1.58 billion verdict handed to billionaire Ron Perelman for misleading him in a deal to sell Coleman to Sunbeam.

The Florida Court of Appeal in West Palm Beach ruled the New York-based investment bank was punished unfairly for destroying e-mails involved in the transaction. The latest decision will be appealed in a case that could end up in the Florida Supreme Court.

Perelman, the chairman of cosmetics giant Revlon, accused Morgan Stanley of conspiring with client Sunbeam to mislead him about the company's financial health.

Because of this, he sold camping-supplies maker Coleman to Sunbeam in 1988, months before Sunbeam restated earnings and ahead of its 2001 bankruptcy.

Mall of America

Expansion project would double size

The Mall of America was the biggest indoor mall in the country when it opened in 1992.

Now the nation's third-largest by retail square footage, it plans an expansion that would more than double its size by adding a 6,000-seat music theater, hotels and an ice rink.

The $1.78 billion project would add new stores, too, including a Bass Pro outdoor retailer, and would connect the mall to the nearby Ikea home-furnishings store.

Compiled from Bloomberg News, Reuters, The Associated Press and Seattle Times business staff