As Weather Channel Buys Wunderground, Storm Clouds Brew Among Fans

The announcement on Monday that the Weather Channel Companies, owners of television’s Weather Channel and weather.com, would buy one of its rivals, Weather Underground, set off howls of displeasure on social media platforms and around water coolers across the nation. The purchase price was not disclosed.

In the eyes of Weather Underground’s ardent fans, the Weather Channel appears to represent the wrong kind of weather information: personality-driven sunniness and hype, they say, rather than the pure science of data. As Mike Tucker, a computer professional in New Hampshire, put it on Facebook, reacting to news of the deal: “Nooooooooooooooooo! Waaaaaaaaaaaaaaaaaaah!”

The controversy illustrates the deep national divide between those people who just want to know if it’s going to rain, and people who really, really, care about the data underlying the weather. Christopher Maxwell, a manager at a solar energy company in Richmond, Va., is in the really-really-cares-about-the-weather camp. He said he saw the Weather Channel deal as a sad sellout for Weather Underground.

“It seems to happen all the time,” he said. “Something great gets invented and sold in the United States, and it gets bought up and destroyed.”

Weather Underground was founded in 1995 in Ann Arbor, where it grew out of the University of Michigan’s online weather database. The name was a winking reference to the radical group that also had its roots in Ann Arbor. Mr. Maxwell said he appreciated Weather Underground’s fanatical devotion to data, and how it drew information from so many thousands of weather stations run by users that he is able to determine “microclimates” of variation that can prove important in getting the most out of a new solar installation.

In other words, as he put it on Facebook, “I liked that Wunderground was indy and for weather geeks and not so much ‘normies.’ ”

For Mr. Tucker, the “Nooooooooooooooooo!” response was a reaction to what he sees as the Weather Channel’s penchant for the commercialization of weather. In a telephone interview, he said: “I’m looking at the site right now, and it’s laden with ads, and promotional things for their shows. I don’t really care about all that stuff. I only care what the weather is.”

Mr. Tucker called the Weather Underground site “simple and somewhat elegant” by comparison.

Paul Baginski, a visiting assistant professor of mathematics at Smith College, said that when he assigned his students to run their hometown temperature data through a series of calculus functions, he pointed them toward Weather Underground instead of Weather.com because it was so much easier to track down historical data on the independent site. “It seemed with every update to their Web site, weather.com added another obstacle” with advertisements and extra tabs and clicks, he said.

Weather Underground’s devotion to weather data has brought the site about 10 million unique visitors a month, according to the measurement firm ComScore, and has helped it to remain an independent company for the better part of two decades. A similar site, WeatherBug, draws 21 million visitors a month. (WeatherBug is owned by Earth Networks.)

Both sites, however, are dwarfed by Weather.com and the other properties owned by the Weather Channel, which is owned by a consortium that includes Comcast, Bain Capital and the Blackstone Group. The Weather Channel sites draw almost 50 million visitors a month. But only half of Weather Underground’s users also use Weather.com in a given month, which might be considered a silent protest of sorts.

Every so often one of the bosses of the Weather Channel had tried to buy Weather Underground, company officials said, and every so often the site politely declined. But this time was different.

“In the past three years, we’ve gotten our act together and become a mature company,” Weather Underground’s president, Alan Steremberg, said in a telephone interview. “We’ve had amazing growth.” Now, he said, it was time to get help from a bigger company.

Which very well may be. But why would the Weather Channel want to acquire a site loved by people who hate the Weather Channel?

When a reporter asked this very question on Monday, the newly acquired Mr. Steremberg, on a conference call interview with David Kenny, the chairman and chief executive of the Weather Channel Companies, tried to be a good corporate citizen. In what might best be described as aspirational thinking, he began to say, “I don’t know if anyone hates the Weather Channel.”

Mr. Kenny brightly contradicted him. “Oh, they do!” he said.

Mr. Kenny explained that he and his colleagues had been reading the angry online reactions to the acquisition. But, he added, “I think that once they see that we’re only investing in the product, not changing it or dumbing it down or altering it in some way, then I think that will go away.”

Mr. Steremberg insisted, “This will be a better change, a good change.” Weather Underground will have more money to build weather models and to invest in Web design improvements. It will stay online as its own brand, he said, one that will be complementary to the Weather Channel’s.

A small but vocal minority of people, he said glumly, are “resistant to change in general.” They should know, he said, that “change is inevitable.”

If nothing else, the weather teaches us that much.

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The Haggler: Alan Alda and the Customer-Service Headache - Haggler

Most ended with a variation of “I’m never buying another H.P. [fill in the blank] again.” Only one e-mailer, Robert John Bennett of Düsseldorf, Germany, managed to pivot from this unhappy sentiment to a pretty good punch line: “I gave up and bought a Toshiba laptop, which has worked like a charm for three years, and put the H.P. in my storeroom in the basement of my apartment building. The storeroom was later broken into and the laptop stolen. The police investigated, and the excellent German insurance policy covering household effects reimbursed me for the full price of a brand-new computer.”

Then the kicker: “I, of course, feel sorry for the thief.”

That rare mix of frustration and comedy – the Haggler’s favorite cocktail. Which brings us to a new letter:

Q. McAfee can’t seem to resist messing around with my e-mail. Here’s the story: I had been using McAfee, which sells antivirus software, on a PC for a while, but I stopped when I switched to a Mac. Months later, thanks to McAfee’s murky opt-out policy, I realized that the company was still charging me for a subscription. Or trying to. My credit card had expired, and I ignored McAfee’s entreaties to post new credit card information, thinking that would end the subscription.

Unfortunately, McAfee continues to monitor my e-mail, providing daily reports of messages it has intercepted and quarantined. Some of the quarantined e-mails are come-hithers from Russian women, who are apparently very lonely and would feel much better if I just clicked on their link. But others are important to me, so I’ve contacted McAfee several times, requesting that it stop performing this service that I don’t pay for and don’t want.

I haven’t received a reply. I tried chatting online with a McAfee rep, an exchange which could be described as occasionally hilarious but unhelpful. A job for the Haggler?

Alan Alda

Manhattan

A. Whatever the flaws of its response to this modest imbroglio, no one can accuse McAfee of coddling a celebrity. Yes, our writer this week is that Alan Alda. He sent a transcript of his online exchange with a McAfee agent, who, it turns out, was typing from an office in Chennai, India. In this excerpt, which has been condensed a bit, Mr. Alda is trying to persuade this rep to cease the alerts about the quarantining of some e-mails and to put an end to the quarantines themselves:

Mr. Alda: This week several e-mails sent to me that were important were quarantined. I didn’t know about it until I got the alert. I would like to stop the quarantining. Not just the e-mails telling me about it.

Rep: I have successfully canceled the auto renewal feature for your McAfee account so you will not receive any renewal notices to your e-mail address.

Mr. Alda: Good. But will that also stop the quarantining?

Rep: You need to contact our technical support. But in order to contact technical support you need to have a valid McAfee account.

Mr. Alda: I am now in the land of Kafka.

Rep: Do you have any valid McAfee product?

Mr. Alda: No, I don’t. I haven’t used McAfee for years. I’m willing to pay for a service I have not used for years, but I don’t like the idea of paying to stop using it.It’s Samuel Beckett meets offshore Internet customer service. At the root of this problem is a bit of confusion, and the Haggler will summarize it here:

Mr. Alda thought he’d ditched McAfee’s spam protection when he switched to a Mac, but the company that runs his e-mail domain, Tangonet, subscribes to MX Logic, a spam filter product owned by McAfee. To cancel MX Logic would require that this company get in touch with McAfee, because it’s the one paying for MX Logic. In other words, Mr. Alda should have been talking to Tangonet.

But because he once had a McAfee subscription with a different computer, and because he was still getting renewal requests from the company, Mr. Alda figured that this issue was his to fix.

So it’s a simple misunderstanding. The confounding part, and what McAfee executives say they find embarrassing, is that the Haggler’s intervention was needed. Referring to the online chat, Jason Grier, who runs the global support team, said: “The question is what do you do when you don’t know what to do. The first thing you do is raise your hand and get a supervisor involved. And clearly that didn’t happen here.”

Mr. Grier was also concerned that nobody returned the e-mail that Mr. Alda sent. Mr. Grier said that was because the guy who heads the team that handles such issues was out of town, dealing with a family emergency. The Haggler suggested that any system that grinds to a halt when one person takes a leave is a system badly in need of some tinkering.

He agreed: “This will cause a thorough review of our process and we will fill any hole we find.”

Tangonet, in the meantime, has made some adjustments to the filtering of Mr. Alda’s e-mail, and it seems to be working fine. Let’s give Mr. Alda the last word:

“Once we cleared up the misunderstanding of which software was quarantining my messages, I was able to stop that feature and still keep the function that blocked e-mails from Olga in Russia. Although, I kind of miss those e-mails. I think she really liked me.”

E-mail: haggler@nytimes.com. Keep it brief and family-friendly, include your hometown and go easy on the caps-lock key. Letters may be edited for clarity and length.

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Apple's Retail Expansion Falls Short in China

SHANGHAI — Apple has more retail stores in Pennsylvania than in all of China — where it earns a fifth of its revenue — and a slow pace of expansion may cost the firm more than just sales.

Apple’s six stores in China are routinely packed, and customers often wait in long lines for iPhone repairs. Scalpers are known to camp out to be first in line for new products, which they then resell for a tidy profit.

The California company is notoriously fastidious when it comes to its flagship stores, and has said it is taking its time in China to ensure that it secures the right locations. But its retail expansion has fallen well short of its own goals.

In 2010, Ron Johnson, then Apple’s retail head, forecast that the company would have 25 stores in China by this year.

“There’s certainly more demand than Apple can serve with their store footprint currently,” said Torsten Stocker, a partner at Monitor Group, a business strategy firm.

The clamor for Apple products has spawned a bustling gray market where smuggled goods are peddled by unauthorized resellers. Copycat Apple stores have popped up in smaller mainland Chinese cities.

The Apple frenzy will only intensify now that the company has agreed to pay Proview Technology $60 million to settle a lawsuit over the iPad trademark, freeing it to sell its latest tablet computer in mainland China.

Apple has two retail stores in Beijing, three in Shanghai, and one in Hong Kong. Chinese government officials said last month that the company is looking to open two more in the major cities of Chengdu and Shenzhen.

In Pennsylvania, a state with a population of 12.7 million, Apple has eight stores, including three in the city of Pittsburgh alone. The population of China is 1.3 billion.

Apple declined to comment for this story.

The shortage of retail stores and authorized resellers leaves ample room for unlicensed resellers to move in. Bad consumer experiences at unauthorized shops are common, and they run the risk of eventually eroding confidence in Apple’s products, said David Wolf, chief executive of the Beijing-based consulting firm Wolf Group Asia.

If Apple does not expand its network of stores and authorized resellers, it “loses not only near-term sales, it also endangers the sustainability of its success in China,” he said.

Apple products can also be bought online in China, but many consumers prefer to buy at the store after testing the product.

Apple’s flagship stores in China are packed with people tinkering with the company’s latest gadgets, even on weekdays. Last October, Apple’s chief financial officer, Peter Oppenheimer, said the China branches were the highest trafficked stores, and among those with the highest revenue, for the company.

Demand for new Apple products is so high that scalpers lined up outside a Beijing store this year for the latest iPhone, only to pelt the store with eggs after Apple decided against selling the phone there over security concerns.

Apple competes with Samsung as well as the homegrown Chinese technology firms Huawei and ZTE in China’s fast-growing smartphone sector.

The pace of retail expansion may not be dictated entirely by Apple. Red tape often hampers foreign companies’ expansion plans in China, and that may be holding back growth.

“There are complications around opening stores in China that you don’t get in Western countries,” said Andrew Milroy, vice president of information and communications technology research for the Asia-Pacific region at Frost & Sullivan in Singapore.

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Megaupload Founder Goes From Arrest to Cult Hero

He asked whether “you guys just drive around in modified electric vehicles and pose for photos,” referring to an image Mr. Dotcom, 38, had just posted showing three of his associates with golf buggies and a Segway. “I could live like that,” Mr. Gracewood wrote.

Twenty minutes later he got a surprising response: “Come over now!” So he took a friend and went to the most expensive house in the country — a mansion worth 30 million New Zealand dollars, or $24 million, rented by Mr. Dotcom, a German citizen — for a swim and some cupcakes. Twitter users across New Zealand watched with fascination as the group posted updates and photos of the visit.

That evening, which was followed on Twitter under #swimatkims , was just the latest in a series of at times bizarre developments in a case that has turned Mr. Dotcom into something of a cult hero since his arrest.

In January, two police helicopters landed on his lawn to raid the property just north of Auckland. At that time, most of the country had never heard of Mr. Dotcom, despite his flamboyance and wealth. He had kept a low profile in the two years he had been living in this country of about 4.4 million people.

The police operation — carried out under New Zealand’s extradition treaty with the United States — seemed designed to attract attention. It was accompanied by uncharacteristically detailed news releases describing the operation, including how officers had cut their way into a panic room to arrest Mr. Dotcom, who, they said, was found sitting near a shotgun.

Mr. Dotcom — born Kim Schmitz and also known as Kimble and Kim Tim Jim Vestor — and three others connected with Megaupload were arrested in connection with U.S. indictments on charges involving copyright infringement and money laundering. At the time, the U.S. Department of Justice said that in all, seven people had been arrested around the world in connection with an investigation into online piracy of numerous copyrighted works, including music and films.

The Justice Department said the individuals and two companies — Megaupload and Vestor — had been charged with “engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement.”

This month, Mr. Dotcom’s U.S. lawyers are set to appear before a Virginia judge in a bid to have the criminal case against the company dismissed. According to a document on his lawyers’ Web site, they will argue, among other points, that the indictments are invalid because they must be submitted to a company’s U.S. office, which Megaupload has never had.

Even if it is successful, the case against Mr. Dotcom and the other defendants would proceed.

The four men arrested in New Zealand are still free on bail, awaiting an extradition hearing, which is scheduled to begin Aug. 6.

Mr. Dotcom has had other brushes with the law. He was convicted of insider trading in Germany in 2002 in what was at the time the largest such case.

Among the items seized by the police in the January raids were 18 luxury vehicles worth 6 million dollars — including a Rolls Royce Phantom Drophead Coupe and a 1959 pink Cadillac — computers and as much as 11 million dollars in cash.

Mr. Dotcom said in an e-mail interview that he had been treated badly by the New Zealand police and the government, which he said he believed was simply kowtowing to U.S. requests.

“Two helicopters and 76 heavily armed officers to arrest a man alleged of copyright crimes — think about that,” he wrote. “Hollywood is importing their movie scripts into the real world and sends armed forces to protect their outdated business model.”

In February, the New Zealand police defended the operation, saying it had been in line with a risk assessment and there had been only “20 or 30” officers involved in the raid on the mansion.

After a month of prison, Mr. Dotcom was eventually granted bail, despite prosecutors’ arguments that he was a serious flight risk. Over the following months his lawyers won a series of hearings to loosen the bail conditions and free up some of his confiscated cash to cover expenses.

The biggest victory came last Thursday, when a High Court judge ruled the New Zealand police had used the wrong type of search warrant, so the entire raid had been illegal. Mr. Dotcom’s lawyers are due back in the Auckland High Court on Wednesday, seeking the return of seized assets and data.

Gavin Ellis, a senior political studies lecturer at the University of Auckland, said that over time the public had become less supportive of the police operation.

This article has been revised to reflect the following correction:

Correction: July 3, 2012

An earlier version of this article gave an incorrect value for the house that Kim Dotcom rents in New Zealand. It is $24 million, not $30.7 million.

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Apple Is the Heavyweight in Many Mutual Fund Portfolios

There’s a catch, though: One stock alone accounts for the overwhelming bulk of that increase. In fact, of that $282 billion, some 83 percent of it comes from gains in shares of Apple Inc., now the highest-valued company in the world.

Many mutual fund managers can attribute most of their recent success to large positions in Apple. But is a large current stake a ticket to further outsized gains? Or is it an increasingly risky bet that could quickly sour?

Apple is the most widely held stock among the 465 growth funds followed by FactSet Research, said Michael Amenta, an analyst at the firm. And that poses pressing issues for many fund managers.

“We’re sensitive to letting a mutual fund get too outsized a position,” said Ryan Jacob, manager of the Jacob Internet fund. When his fund’s Apple holdings neared 9 percent of assets, Mr. Jacob decided to “trim a little bit.”

Until quite recently, selling Apple often led to remorse. “Every sale has been a bad sale,” Mr. Jacob lamented. “Up until a couple of months ago,” he added, referring to Apple’s decline from an April high. Today, fund managers must weigh Apple’s distinct performance and potential against some equally distinct risks.

On the positive side, Apple is a sales juggernaut seemingly immune to the slowing growth that often afflicts giant enterprises. In its fiscal year ended Sept. 24, revenue grew by a remarkable 66 percent, to $108 billion. Sales in the quarter ended March 31 soared again — by nearly 59 percent from the year-ago period. Apple shipped more than 35 million iPhones during the quarter, accounting for 58 percent of revenue. And Apple has consistently vaulted expectations.

“Over the last 30 quarters, Apple earnings have exceeded analyst estimates in all but one of the quarters,” marveled Scott Callahan, manager of the Icon Information Technology fund.

FURTHERMORE, Apple never has been about the numbers only. As the leading purveyor of techno-chic, Apple has a branding history that would please Don Draper.

Early on, Apple pitched itself as the anti-establishment alternative to I.B.M. Now it is pouring ad dollars into convincing a gadget-loving public that it’s cool to chat with Siri, the iPhone cyber-assistant. Among those delivering its pitch is the actor John Malkovich.

But Siri does have doubters. A new report issued by a Piper Jaffray analyst said that in many hundreds of inquiries delivered on a noisy street, Siri could accurately answer just 62 percent, and that even in a quiet room, it could accurately handle just 68 percent.

Apple has backed up its slick branding with striking design, technical innovation and strategic ingenuity — and the company’s creativity seems to make its customers feel creative, too. It was once said that nobody was fired for buying I.B.M. Today it can be said that nobody ever lost self-esteem by buying Apple.

But the company’s success has produced a gaping vulnerability for investors. Stellar sales performance has lifted its share price and market capitalization, swelling its weighting in indexes like the S.& P. 500 and the Nasdaq 100. In late June, it represented a remarkable 18.9 percent of that Nasdaq benchmark.

Why is this important? It matters because a host of index funds and exchange-traded funds mimic such benchmarks. As investors plow more money into these funds, the E.T.F.’s have had to add Apple shares — pushing share prices still higher, and in turn prompting even more buying.

This circularity works great in a rising market. But what if Apple stock — or even the broad market — were to suffer a sharp decline?

Index funds recently held 9.6 percent of Apple’s outstanding shares, according to FactSet. Five of Apple’s seven top shareholders were E.T.F.’s or index-style funds. One of these, the PowerShares QQQ Trust, had almost 19 percent of its portfolio in Apple shares.

This kind of situation poses two threats. A sharp decline in Apple’s share price would lead to reduced index weighting, setting off E.T.F. and index fund sales of the company’s shares. A broad market decline could also spur redemptions, requiring funds to raise cash. With their heavy weighting, Apple shares would have to be unloaded.

Just as Apple’s rise was accelerated by its growing weighting in market indexes, its decline would be amplified by that weighting.

“You can get a cyclical thing that feeds on itself,” said Kevin Landis, manager of the Firsthand Technology Opportunities fund, where Apple is the leading stock holding.

“It’s a potential risk,” allowed Mr. Callahan, the Icon fund manager.

Even companies enjoying outstanding growth can see their stock tumble when profit margins erode. Apple is not immune to margin pressure, reasons Edward Zabitsky, chief executive of ACI Research in Toronto. Though many analysts see Apple continuing its ascent, Mr. Zabitsky is far less sanguine. “It can go to about $460” within the next six months, he said of Apple shares, which ended the second quarter at $584. He has a longer-term target of $270.

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