Microsoft's Surface tablet has "modest" start: Ballmer

PARIS (Reuters) - Microsoft Corp's new Surface tablet - its challenger to Apple's iPad - had a "modest" start to sales because of limited availability, Microsoft Chief Executive Steve Ballmer told French daily Le Parisien.


The world's largest software company put the Surface tablet center stage at its Windows 8 launch event last month in its fightback against Apple and Google in the exploding mobile computing market.


"We've had a modest start because Surface is only available on our online retail sites and a few Microsoft stores in the United States," Ballmer was quoted as saying.


The new device, which runs a limited version of Windows and Office with a thin, click-on keyboard cover, is being positioned by Microsoft as the ideal combination of PC and tablet that is good for work as well as entertainment.


Ballmer also said 4 million upgrades to Windows 8 were sold in the three days following the system's launch.


ECONOMIC CRISIS


Asked what he thought of the re-election of U.S. President Barack Obama, Ballmer told the newspaper the $242.7 billion company would work with the president and with governments around the world on issues like data privacy, immigration of qualified engineers and patent litigation.


The launch of Windows 8 has already raised the hackles of European Union regulators, who warned Microsoft not to repeat the mistake of denying consumers a choice of rival Web browsers in its new operating system, in a dispute that has already cost the software giant more than $1.3 billion in fines.


Commenting on the outlook for the U.S. economy, Ballmer exhorted politicians to take action on the deficit, though he stopped short of saying whether more emphasis should be placed on spending cutbacks or tax increases.


"It's not about spending more or less, it's about balancing spending and income...The elections are over, it's time to get back to work," Ballmer, who took over the day-to-day running of Microsoft from its billionaire co-founder Bill Gates just over a decade ago.


(Reporting by Lionel Laurent; Editing by David Cowell)


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Lakers hire Mike D'Antoni as new coach

LOS ANGELES (AP) — The Los Angeles Lakers hired Mike D'Antoni late Sunday night, signing the former coach of the Suns and Knicks to replace Mike Brown.

The Lakers and D'Antoni's agent, Warren LeGarie, confirmed the deal two days after the Lakers fired Brown five games into the season.

D'Antoni agreed to a three-year deal worth $12 million, with a team option for a fourth season.

D'Antoni got the high-profile job running the 16-time NBA champions only after the club's top brass extensively discussed the job with former Lakers coach Phil Jackson.

The 11-time NBA champion coach met with Lakers owners Jerry and Jim Buss and general manager Mitch Kupchak on Saturday to weigh a return for a third stint on Los Angeles' bench.

The Lakers instead went with D'Antoni, a respected offensive strategist who coached Lakers point guard Steve Nash in Phoenix during the best years of their respective careers. D'Antoni was less successful during four seasons in New York, but at least restored the once-moribund Knicks to competence before resigning last March.

"Dr. (Jerry) Buss, Jim Buss and Mitch Kupchak unanimously agreed that Mike was the best coach for this roster at this time," Lakers spokesman John Black said.

The 61-year-old D'Antoni underwent knee replacement surgery earlier this month, and could be physically limited early in his tenure. Black said the Lakers aren't certain when D'Antoni will travel to Los Angeles to begin work.

Interim coach Bernie Bickerstaff will continue running the Lakers until D'Antoni arrives. Los Angeles beat Sacramento 103-90 on Sunday night, improving to 2-0 under Bickerstaff after a 1-4 start under Brown.

The Lakers' next game is Tuesday night against San Antonio at Staples Center.

After Brown's dismissal, Nash and Kobe Bryant both expressed enthusiasm about the prospect of playing for D'Antoni, although Bryant also campaigned eagerly for Jackson.

Bryant idolized D'Antoni while growing up in Italy, where D'Antoni was a star player for Olimpia Milano in the Italian pro league. D'Antoni also has been an assistant coach on various U.S. national teams featuring Bryant, including the gold medal-winning squad at the London Olympics.

Nash won two MVP awards while running D'Antoni's signature up-tempo offense for the final four seasons of the coach's five-year tenure with the Suns.

Nash and D'Antoni won at least 54 games each season and reached two Western Conference finals — and they eliminated Bryant's Lakers from the first round of the playoffs in 2006 and 2007, still the only first-round exits of Kobe's 17-year career.

D'Antoni then coached New York to just one playoff appearance and no postseason victories. He also coached the Denver Nuggets during the lockout-shortened 1998-99 season.

But his NBA accomplishments can't measure up to Jackson, who won five titles and reached seven NBA finals during two stints totaling 11 seasons with Los Angeles.

Jackson walked away from the club 18 months ago after a second-round playoff sweep by Dallas, and Brown led Los Angeles to a 41-25 mark followed by another second-round playoff defeat last summer.

The Lakers then traded for Nash and Dwight Howard, setting up a season of enormous expectations for Brown — but the Lakers struggled to learn his new, Princeton-influenced offense while playing mediocre defense.

After the Lakers stumbled out of the gate while Howard and Bryant missed preseason games to preserve their health, Nash incurred a small fracture in his leg during the Lakers' second regular-season game, keeping him out of the lineup for their past five games and for at least another week.

The Lakers have improved to 3-4 under Bickerstaff after following up their winless preseason with four losses in their first five regular-season games, the club's worst start since 1993.

Despite his reputation for offensive acumen, D'Antoni's NBA teams typically have played fairly solid defense, statistically speaking — and they never had the imposing Howard or defensive stopper Metta World Peace in their lineups.

Nash had his best NBA seasons as the versatile quarterback of the Suns' offense under D'Antoni, and point guard Jeremy Lin became a star on the Knicks last season while filling much the same role.

D'Antoni resigned late last season following a six-game losing streak, surprising many observers, and former assistant coach Mike Woodson led the Knicks to the playoffs.

Phoenix visits Staples Center on Friday.

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Elmo puppeteer accused of underage relationship

NEW YORK (AP) — The puppeteer who performs as Elmo on "Sesame Street" is taking a leave of absence from the popular kids' show in the wake of allegations that he had a relationship with a 16-year-old boy.

Sesame Workshop said puppeteer Kevin Clash denies the charges, which were first made in June by the alleged partner, who by then was 23.

"We took the allegation very seriously and took immediate action," Sesame Workshop said in a statement issued Monday. "We met with the accuser twice and had repeated communications with him. We met with Kevin, who denied the accusation."

The organization described the relationship as personal and "unrelated to the workplace." Its investigation found the allegation of underage conduct to be unsubstantiated. But it said Clash exercised "poor judgment" and was disciplined for violating company policy regarding Internet usage. It offered no details.

"I had a relationship with (the accuser)," Clash told TMZ. "It was between two consenting adults and I am deeply saddened that he is trying to make it into something it was not."

At his request, Clash has been granted a leave of absence in order to "protect his reputation," Sesame Workshop said.

No further explanation was provided, nor was the duration of his leave specified.

"Elmo is bigger than any one person and will continue to be an integral part of 'Sesame Street' to engage, educate and inspire children around the world, as it has for 40 years," Sesame Workshop said in its statement.

"Sesame Street" is currently in production, but other puppeteers are prepared to fill in for Clash during his absence, according to a person close to the show who spoke on condition of anonymity because that person was not authorized to publicly discuss details about the show's production.

"Elmo will still be a part of the shows being produced," that person said.

The 52-year-old Clash, the divorced father of a grown daughter, has been a puppeteer for "Sesame Street" since 1984. It was then that he was handed the fuzzy red puppet named Elmo and asked to come up with a voice for him. Clash transformed the character, which had been a marginal member of the Muppets troupe for a number of years, into a major star rivaling Big Bird as the face of "Sesame Street."

In 2006, Clash published an autobiography, "My Life as a Furry Red Monster," and was the subject of the 2011 documentary "Being Elmo: A Puppeteer's Journey."

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United returning $5.6M in tax incentives









United Continental Holdings, parent of United Airlines, is giving back $5.6 million in City of Chicago tax incentives.

The incentive money is tied to United's 2007 move to its corporate headquarters at 77 W. Wacker Drive, along the Chicago River.

Because of United's recent plans to move out of that building and consolidate its headquarters into Willis Tower where it has other operations, the airline said it was "appropriate" to return the money. However, it wasn't necessary.

City officials said United had so far fulfilled its obligations for receiving the money, such as maintaining a minimum employment level in the 77 W. Wacker Drive building, and that the incentives would have traveled with the company as it moved several blocks down Wacker Drive to Willis Tower.

"I commend United Airlines on an incredible act of corporate citizenship that speaks to the unique role Chicago's business community plays in the future of the city," Mayor Rahm Emanuel said in a statement.

United said it will give back $5.6 million it already received in Tax Increment Financing, or TIF, a funding tool used by Chicago to promote investment in the city.

United will also forgo up to $9.7 million more in TIF money that the city would have paid the airline, for a total of $15.3 million. However, United probably wouldn't have received the remaining $9.7 million because the money was tied to its fuel consumption at O'Hare International Airport.

"We were unlikely to ever realize the incremental $9.7 million anyway because of our improving fuel efficiency and reduced capacity," United spokeswoman Christen David said, referring to the airline's business strategy of reducing its overall flying by operating fuller planes.

The giveback does not include $35.9 million in TIF money tied to a separate 2009 incentive agreement that involved moving 2,500 workers from Elk Grove Village to Willis Tower.

"Since we are vacating 77 W. Wacker, which we redeveloped with the help of city economic incentives, we feel it is appropriate to return the funds we used for that redevelopment," David said.

The airline decided it should not combine the incentive agreements for the two locations. "This decision does not have any impact on the agreement for Willis Tower," she said.

The move to return money might seem surprising, coming from a company with thin profit margins in an industry that has struggled. Flight cancellations during superstorm Sandy caused a financial setback of $90 million in revenue and $35 million in profit for the month of October, United said last week.

"I do think this is rare," Joe Schwieterman, a professor in the school of public service at DePaul University, said of giving back incentive money. But in general, companies like to maintain their flexibility and can be hamstrung by a requirement for a minimum employment level at a certain location, he said. United's TIF agreement called for a minimum employment of 315 over 10 years, starting in 2007 at 77 W. Wacker. A 10-year commitment "is an eternity in the topsy-turvy world" of business, he said. "And employment guarantees can be an albatross around senior management's neck."

When United finishes the move, it will have more than 4,000 employees in Willis Tower, far more than the approximately 2,800 they were required to have for both TIF agreements.

United CEO Jeff Smisek said in a letter to Emanuel last week that the airline will consolidate into Willis because it "will be a critical factor in building a common company culture and greater operational efficiency, which we view as keys to our success."

He said United has met the commitments in its incentive agreements on the headquarters building. "However, now that we are relocating co-workers to Willis Tower, we believe it is appropriate to terminate those agreements and repay the city funds we have received," Smisek said in the letter.

United currently leases about 625,000 square feet in Willis. The airline secured another 205,000 square feet in the building and extended the term of its lease through 2028, according to Smisek. The airline expects to finish building out the additional space by the second quarter of next year, according to Smisek's letter.

The mayor's office called United's Willis expansion "one of the largest office space commitments in Chicago's history."

United is the fourth company to return TIF funds recently, according to the mayor's office. The others are CME Group, CNA Group and Bank of America, which together returned some $34 million in TIF money last year. CNA and Bank of America fell short of the 2,700 or so jobs each was required to keep in exchange for the tax breaks, which helped them update buildings. However, they returned the money earlier than they had to, a city spokesman said.

The returned money goes back into the TIF program and will be used for other projects.

gkarp@tribune.com



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Indianapolis explosion: Two dead, hundreds forced from homes

At least two people are dead after a late-night explosion in an Indianapolis neighborhood.









Two people were killed and hundreds were displaced Saturday night when a powerful explosion leveled two homes and sparked an extra-alarm fire on the south side of Indianapolis, a fire department spokeswoman said.

The cause of the blast was not immediately known.

Two homes exploded just after 11 p.m. Saturday, sparking fires in two others and damaging at least two dozen homes, said Lt. Bonnie Hensley, a spokeswoman for the Indianapolis Fire Department.








"It looks like a war zone here right now," Hensley said.

Fire officials confirmed two fatalities early Sunday morning, and four people were taken to the hospital with minor injuries, Hensley said.

It was not immediately clear whether anyone else was missing, but officials combed the area before calling off their search efforts until daylight, Hensley said.

More than 100 firefighters responded to the two-alarm fire, according to a fire department statement.

Officials evacuated about 200 people to a nearby elementary school, where the Red Cross was sheltering about 20 of them for the night. Others spent the night in the homes of friends or family, and officials planned to take the remainder to the Southport Presbyterian Church.

Firefighters had brought the fire under control by 12:30 a.m. Sunday but were still putting out hotspots afterward, Hensley said.

The blast originated near 8415 Fieldfare Way, according to the fire department release.

From his bedroom a block away, 47-year-old software engineer Chris Patterson felt the walls of his home shake. The force of the explosion shattered a glass sliding door in his home, he said.

"It felt like something had hit our house,” Patterson said.

Patterson and his wife stepped outside, where they found other neighbors in the street and an orange glow in the distance.

As fire officials shut off gas to the neighborhood, police came by soon after to evacuate residents to the elementary school staging area, where first responders had established a triage area. There, after checking in with authorities, stunned neighbors sat on bleachers and waited for more information.

"You had a bunch of sleepy kids and nervous-looking parents," Patterson said.

Patterson and his wife ultimately spent the night at his mother's home.

As search and investigation efforts continue today, the Department of Code Enforcement of Indianapolis will be assessing the safety of homes affected by the explosion.

asege@tribune.com

Twitter: @AdamSege





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Apple and HTC settle global patent battle

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Manziel, No. 15 Texas A&M stun No. 1 Bama, 29-24

TUSCALOOSA, Ala. (AP) — Johnny Football and Southern Conference newbies Texas A&M took down the biggest bully in their new neighborhood and left No. 1 Alabama with badly bruised national championship hopes.

Johnny Manziel, better known around Texas as Johnny Football, staked the 15th-ranked Aggies to a three-touchdown lead in the first quarter, and Texas A&M held on to beat the Crimson Tide 29-24 on Saturday.

The Aggies (8-2, 5-2), playing in the SEC for the first season after ditching the Big 12, also might have ended the league's run of BCS titles at six years.

The defending national champion Crimson Tide (9-1, 6-1), who have been No. 1 almost all season, didn't go quietly.

AJ McCarron nearly pulled off a second straight scintillating comeback. He threw one touchdown pass and motored the ball downfield before Deshazor Everett stepped in front of his fourth-down pass at the goal line with 1:36 left.

Manziel passed for 253 yards and rushed for 92 and led the Aggies to a 20-0 first quarter lead.

"No moment is too big for him," coach Kevin Sumlin said of his remarkable redshirt freshman.

The Aggies had been 1-10 against top-ranked teams with the only previous win coming 30-26 over Oklahoma in 2002, but Manziel and Sumlin have entered the SEC with speed and swagger — and fit right in.

Alabama managed a second-shot national title after losing to LSU just over a year ago in the regular season but seems a longshot to do it again. Alabama would have secured a spot in the SEC championship game with a victory and only Western Carolina and Auburn remaining.

"Two of the three national championship teams that I coached lost a game," Tide coach Nick Saban said, counting one at LSU. "This team still has an opportunity to win the West and go to the SEC championship game and win a championship. There's still a lot for this team to play for."

Now, the Tide will have to beat the Tigers to clinch the West and get into the SEC title game. As for the national title, Alabama will have to hope for another shakeup in the form of losses by Kansas State, Oregon and Notre Dame. If the Tide wins out, and two of those teams go down, a third national championship in four seasons is still in play — along with a seventh straight for the SEC.

For now though, the SEC is on the outside looking in at the BCS title race.

Alabama kept coming back, but never caught up with Manziel and Texas A&M.

The nation's top scoring defense, forced a punt with less than a minute left, but A&M never had to kick it away. The Tide was penalized for offisides, giving Texas A&M a first down and a chance to kneel out the clock.

McCarron breathed life into Alabama with a 54-yard touchdown pass down the left sideline to freshman Amari Cooper to make it 29-24 with 4:29 left.

A quick three-and-out by the Aggies put the ball in McCarron's hands again. He opened at the 40 with a 54-yarder to speedster Kenny Bell down to the 6. Two scrambles and an Eddy Lacy run left one final shot from the 2 against a Texas A&M defense often overshadowed by its potent offense.

He had some time on third down, rolling left but finding Lacy well covered and having to try running it, a la Manziel, before Dustin Harris stopped him at the 2.

McCarron had rescued the Tide's national title hopes with a 28-yard screen pass in the final minute for a 21-17 win over No. 9 LSU. The Aggies, nearly two-touchdown underdogs, didn't let him do it again. Everett made the play on a pass toward the front corner of the end zone.

McCarron completed 21 of 34 passes for 309 yard but also was intercepted twice, ending his streak without getting picked off at 291 passes.

Eddie Lacy had 16 carries for 92 yards for Auburn and added 35 yards on four catches. Cooper had six catches for 136 yards a week after missing much the second half of the LSU game with an ankle injury, and failing to make a reception.

The Aggies had already lost to top-10 teams LSU and Florida by a combined eight points, proving they're already challengers in the powerhouse SEC.

Manziel completed 24 of 31 passes with two touchdowns and ran 18 times, including four sacks.

He kept finding Ryan Swope. They hooked up 11 times for 111 yards and a 10-yard touchdown where Manziel bobbled the ball as defenders swarmed him, reversed field and spotted Swope alone in the back of the end zone.

Manziel led three first-quarter touchdown drives for a 20-0 lead to stun the Bryant-Denny Stadium crowd of 101,821. Christine Michael had a pair of 1-yard touchdown runs in the quarter along with Swope's catch.

The rest of the game was an emotional roller-coaster ride for fans who might have thought LSU was the toughest test on the road to another championship.

Then Alabama flexed its own muscle to counter Manziel's speed, sticking with power runs to set up 2-yard touchdown runs by T.J. Yeldon and Lacy.

McCarron also converted a fourth-and-4 with a pass to Lacy to set up the first score. Alabama marched back down the field after C.J. Mosley pushed Manziel out of bounds a yard shy on fourth-and-6.

The Tide ran out all but 19 seconds with a methodical drive right back into the game.

It was still the first time Alabama had trailed at halftime since a loss at South Carolina in 2010.

Jeremy Shelley kicked a 28-yard field goal with 4:49 in the third quarter to cut it to 20-17 and Taylor Bertolet answered with a short one to start the fourth.

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Bond soars with record $87.8M 'Skyfall' debut

LOS ANGELES (AP) — The sky's the limit for James Bond's "Skyfall."

The 23rd Bond film hauled in a franchise-record $87.8 million in its first weekend at U.S. theaters.

According to distributor Sony, adding $2.2 million from Thursday night previews at large-format theaters, "Skyfall" has taken in $90 million domestically.

That lifts the worldwide total for "Skyfall" to around half a billion dollars once its weekend haul is counted overseas, where the film began rolling out in late October. As of last Thursday, "Skyfall" had rung up nearly $350 million internationally.

The third installment starring Daniel Craig as British super-spy Bond, "Skyfall" outdid the $67.5 million U.S. debut of 2008's "Quantum of Solace," the franchise's previous best opening.

"Skyfall" more than doubled the $40.8 million debut of Craig's first Bond film, 2006's "Casino Royale."

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Phil Rosenthal: Forming a Bond with brands








On the big screen, a hero's mettle is established by showing how much punishment the star can withstand and how daunting the obstacles are while ultimately getting the job done.

Early in the latest James Bond movie, "Skyfall," an assassin seeks to escape on a train speeding through the Turkish countryside. His tireless pursuer is pelted with bullets, swats away bugs and, when the bad guy disconnects the trailing car, extends an arm to literally hold on to the rest of the train so the chase can continue.

And the pursuer is, in fact, tireless because it is a modified Caterpillar 320D L excavator that Daniel Craig's Bond has commandeered. The bullets are bullets, but the bugs are Volkswagen Beetles, some swept off the train, others crushed. The logo-covered excavator's arm not only holds onto the rest of the train but provides Bond a perch from which to leap into the carriage, fixing the cuffs in his Tom Ford suit as he goes after the villain.






"For (the filmmakers), it wasn't an excavator, it wasn't what they would in the U.K. call a digger — it was for them a 'hero machine' because it was something that actually saves Bond," said Robert Woodley, the marketing executive for Peoria-based Caterpillar Inc., from his office in Geneva.

Woodley arranged and oversaw Cat's "Skyfall" star turn. "It's not just having the brand out there. It's seeing what light it's going to be viewed in."

"Skyfall" is practically "Skymall," what with all the brands and products mentioned and showcased.

The practice is neither new nor isolated. Yet even by the license-to-shill standards of increasingly commercialized James Bond movies, this one has an awful lot of brand exposure. All that's missing are the NASCAR-style logo patches for Bond, no slouch behind the wheel.

Especially now that the fictional covert operator is the focal point of an extremely overt ad campaign for beer, albeit Heineken.

Never mind the other products basking in the superspy's aura, such as Sony mobile phones and Vaio laptop computers, Macallan single-malt Scotch, Honda cycles, Bollinger Champagne, Globe-Trotter suitcases, Crockett & Jones footwear, Walther guns, Aston Martin cars, Swarovski jewelry, Omega watches, OPI nail polish, Land Rovers and Range Rovers and all the rest.

Some pay for the privilege, some make other arrangements. Some, like the new James Bond fragrance hawked by Procter & Gamble, aren't in the film. But all told, sponsorship and other ancillary deals for "Skyfall" are said to have brought in $45 million, about a third of what it cost to produce the film, one of the best in the Bond series.

"We have relationships with a number of companies so that we can make this movie," Craig told Moviefone on the "Skyfall" set this spring. "The simple fact is that, without them, we couldn't do it. It's unfortunate, but that's how it is."

The 007 tradition of brand integration, brand cameos, product placement or whatever you want to call it dates back to the original Ian Fleming stories. Some would say it's in the name of verisimilitude. But it's said Bond, originally a reader exclusively of The Times of London, also began reading the rival Daily Express when that paper began serializing Fleming's work.

Through a half-century of 007 films, the practice has grown as producers realized the potential economic windfall and marketers recognized the unique opportunity of association with the 007 franchise — as well as other entertainment.

"The challenge with product placement is it has to fit," said Timothy Calkins, a marketing professor at Northwestern University's Kellogg School of Management. "When it works, there's a natural connection between the brand and the story and when it doesn't work, there's an inconsistency, and both parties are worse for the deal."

Today's sophisticated media consumer expects to see brands in TV shows, movies and even video games, according to Tom Weeks, senior vice president at LiquidThread (formerly known as Starcom Entertainment), the branded entertainment and content development operation within Chicago's Starcom MediaVest Group. But proper context — proper casting — is a must.

"Brands are stars, too," Weeks said. "They've got their own Twitter accounts. They've got their own Facebook pages. And they're invited into content as part of the experience. But it has to be done right, in a way that's not obtrusive and doesn't interrupt the digestion of that content."

Some Bond aficionados scoff at the Heineken tie-in, preferring to think of their man as a martini and Dom Perignon man. But there was Red Stripe beer in 1962's "Dr. No." And besides the familiar green-bottled Heineken (whose logo also is emblazoned on an unlikely wooden crate toppled in an early chase scene) and a lightly sipped martini, there is a memorable scene built around 50-year-aged Macallan.

"When I was at Kraft, there were times when a film would come out and our brands would be in the film and we'd be delighted … or not," he said. "I never saw a time when one of our brands was used in a way that made us cringe, but it could happen."

Case in point: the VW Beetles, out-of-stock models, crushed in "Skyfall." "While we always look for opportunities for exposure in the form of product placement, we were not involved with this placement," Corey Proffitt, who handles product communications for Volkswagen of America, told the Tribune by email.

Caterpillar, which first tied up with 007 in 1999's "The World is Not Enough," hopes the "Skyfall" connection boosts brand awareness, particularly in emerging markets like China, which seems a manageable goal.

A theme of "Skyfall" is that today's world is changing faster than ever, which is as true of advertising as it is of espionage. That's why you're only going to see more brand cameos, a la the Bond films.

"The traditional tools of advertising are fading and marketers are looking for new things to do," Calkins said. "Product placement becomes one of those things that can engage people where other methods have no effect."

Talk about daunting obstacles to overcome while ultimately getting the job done.

philrosenthal@tribune.com

Twitter @phil_rosenthal






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Petraeus resignation as CIA chief brings sudden halt to career









The resignation of CIA Director David Petraeus has brought a sudden and unexpected end to the public career of a four-star general who led U.S. troops in Afghanistan and Iraq and was thought to be a potential candidate for president.

Petraeus admitted to an extramarital affair in tendering his resignation, which President Barack Obama accepted Friday.

Petraeus carried on the affair with his biographer Paula Broadwell, a reserve Army officer, according to several U.S. officials with knowledge of the situation. They spoke anonymously because they were not authorized to discuss publicly the investigation that led to the resignation.











The FBI discovered the relationship by monitoring Petraeus' emails, after being alerted Broadwell may have had access to his personal email account, two of the officials said.

Broadwell did not respond to voice mail or email messages seeking comment. Broadwell's biography, "All In: The Education of General David Petraeus," was written with Vernon Loeb, a Washington Post editor, and published in January.

Lawmakers from both parties joined Obama in praising Petraeus. Obama said in a statement that Petraeus had provided "extraordinary service to the United States for decades" and had given a lifetime of service that "made our country safer and stronger."

CIA Deputy Director Michael Morell will serve as acting director, Obama said. Morell was the key CIA aide in the White House to President George W. Bush during the Sept. 11, 2001, terror attacks.

"I am completely confident that the CIA will continue to thrive and carry out its essential mission," Obama said.

The resignation comes at a sensitive time. The administration and the CIA have struggled to defend security and intelligence lapses before the attack that killed the U.S. ambassador to Libya and three others. It was an issue during the presidential campaign that ended with Obama's re-election Tuesday.

The CIA has come under intense scrutiny for providing the White House and other administration officials with talking points that led them to say the Benghazi attack was a result of a film protest, not a militant terror attack. It has become clear that the CIA was aware the attack was distinct from the film protests roiling across other parts of the Muslim world.

Morell rather than Petraeus now is expected to testify at closed congressional briefings next week on the assault on the consulate in Benghazi, which occurred on the 11th anniversary of the 9/11 attacks.

Petraeus, who turned 60 on Wednesday, has been married for 38 years to Holly Petraeus, whom he met when he was a cadet at the U.S. Military Academy at West Point, N.Y. She was the daughter of the academy superintendent. They have two children, and their son led an infantry platoon in Afghanistan.

The retired general told his staffers in a statement that he was guilty of "extremely poor judgment" in engaging in the affair. "Such behavior is unacceptable, both as a husband and as the leader of an organization such as ours." He said he had offered his resignation to Obama on Thursday and the president accepted it Friday.

Administration officials said the White House was first notified about the Petraeus affair on Wednesday, the day after the election. Obama, who returned to the White House that evening after spending Election Day in Chicago, wasn't informed until Thursday morning.

For the director of the CIA, being engaged in an extramarital affair is considered a serious breach of security and a counterintelligence threat. If a foreign government had learned of the affair, the reasoning goes, Petraeus or Broadwell could have been blackmailed or otherwise compromised. Military justice considers conduct such as an extramarital affair to be possible grounds for court-martial.

Failure to resign also could create the perception for the rank and file that such behavior is acceptable.

At FBI headquarters, spokesman Paul Bresson declined to comment on the information that the affair had been discovered in the course of an investigation by the bureau.

Holly Petraeus is known for her work helping military families. She joined the new Consumer Financial Protection Bureau to set up an office dedicated to helping service members with financial issues.

Though Obama made no direct mention of Petraeus' reason for resigning, he offered his thoughts and prayers to the general and his wife, saying that Holly Petraeus had "done so much to help military families through her own work. I wish them the very best at this difficult time."

Petraeus, who became CIA director in September 2011, was known as a shrewd thinker and hard-charging competitor. His management style was recently lauded in a Newsweek article by Broadwell.





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