FCC recommends cross-ownership waivers for Tribune Co.

The staff of the Federal Communications Commission has recommended that the agency grant Tribune Co. waivers of so-called media ownership rules, paving the way for the company to emerge from its long-running bankruptcy.

The waivers -- the last major hurdle in the four-year case -- would take effect Friday as long as none of the five commissioners raise serious objections, according to a person at the FCC who wasn't authorized to speak and therefore did not want to be identified.

No vote is required for the waivers to take effect.

The waivers would set the wheels in motion to emerge from bankruptcy, something that can happen as soon as new ownership, a group led by senior creditors Oaktree Capital Management, Angelo Gordon & Co and JPMorgan Chase & Co., can complete the necessary paperwork.

The FCC staff is recommending that the agency grant a permanent waiver to Tribune's ownership of the Chicago Tribune and WGN radio and television stations and that it give  one-year waivers for the Los Angeles Times ownership of KTLA-TV Channel 5 and for similar arrangements in three other markets.

The FCC also is circulating among commissioners a proposal for new media ownership rules that would ease restrictions on consolidations among newspapers and TV and ratio stations, according to FCC Chairman Julius Genachowski. That proposal is expected to come up for an agency vote at the next regular meeting.

Once the new rules are in effect, Tribune's new owners could seek permanent waivers in the Los Angeles, New York, Hartford, Conn., and South Florida markets.

Tribune Vice President Shaun Sheehan declined to comment.

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Fla. socialite at center of scandal

If you were to diagram the increasingly tangled sex scandal involving former CIA Director David Petraeus, nearly all lines would lead back to one person: Jill Kelley, a 37-year-old Tampa socialite who hosted parties for the nation's top military brass.

Kelley's complaint about anonymous, threatening email triggered the FBI investigation that led to Petraeus' downfall. And now she is at the center of an investigation of the top U.S. commander in Afghanistan over alleged "inappropriate communications" between the two.

Kelley is a close friend of the Petraeus family, and photographs circulating in the media show the dark-haired woman at parties with Petraeus, his wife, and Kelley's husband, Scott, a cancer surgeon. She served as a sort of unofficial social ambassador for U.S. Central Command in Tampa, holding gatherings for the general when he was commander there from 2008 to 2010.

She also met Gen. John Allen while he was at Central Command, and now investigators are looking at 20,000-plus pages of documents and emails between Kelley and Allen, some of which have been described as "flirtatious." The general has denied any wrongdoing.

For her part, Kelley has taken a low profile since Petraeus' affair with his biographer, Paula Broadwell, became public. The Kelleys have retained high-powered Washington lawyer Abbe Lowell, who did not immediately return a call.

On Tuesday, Kelley could be seen through the large windows of her South Tampa home, a stately, two-story brick house with a half-dozen white columns. In the driveway was a silver Mercedes with a license plate marked "Honorary Counsel." Kelley's identical twin sister, Natalie Khawam, also lives there.

In the afternoon, Kelley, wearing dark sunglasses, left through the front door and ignored reporters' questions as she drove off in the Mercedes.

South Tampa is a conservative Southern community of big houses, big bank accounts, garden clubs and wives who pride themselves on volunteer work. A lot of the brass from MacDill Air Force Base, where Central Command is headquartered, lives or socializes in South Tampa, and helping members of the military is a major volunteer activity.

Former Mayor Pam Iorio said that she went to several parties to benefit the military at the Kelleys' home, and they drew MacDill's top brass, including Petraeus. But they were by far not the only parties held around the city for MacDill's officers.

"Our community's relationship with MacDill is just multi-faceted," said Iorio, who later invited the Petraeuses over to her own home for dinner. "It's something that is generational. People sincerely care about the military."

Petraeus aides said Kelley took it to another level, winning the title of "honorary ambassador" for her extensive entertaining. Petraeus even honored Kelley and her husband with an award in a special ceremony at the Pentagon.

The Kelleys invited then-Florida Gov. Charlie Crist to their home, but he never accepted. Instead, he had dinner with the Kelleys at a steakhouse in Tampa with Petraeus.

"Lovely people. I remember I had a nice dinner with she and her husband and the general and his wife," Crist said.

Ken Walters, a neighbor, said he went to a party the couple had to celebrate their first son's baptism. The Kelleys have two other children.

"Natalie and her sister, they're certainly not shrinking violets," Walters said. He recalled that when the sisters first entered the South Tampa social scene, they "rubbed people the wrong way. I think they probably stepped on a couple of toes."

Petraeus' affair with Broadwell was discovered after Kelley told an FBI agent friend that she had received email warning her to stay away from Petraeus. The email turned out to be from Broadwell, who apparently regarded Kelley as a rival for Petraeus' affections. Kelley's family and Petraeus aides have said Petraeus and Kelley were just friends.

In another strange footnote to the scandal, long before the case involving Petraeus got under way, the FBI agent sent Kelley shirtless photos of himself, according to a federal law enforcement official.

Kelley's brother, David Khawam, told WPVI-TV in Philadelphia on Monday night that the allegations have spilled out quickly.

"It's a shock. We're trying to figure out where the pieces are falling right now," he said in an interview at his law office in Westmont, N.J.

He said that his family left Lebanon for suburban Philadelphia's Huntingdon Valley in the 1970s to escape the turmoil in their homeland. His parents opened a Middle Eastern restaurant in Voorhees, N.J., called Sahara.

"My family is very patriotic; we came from Lebanon at a young age," he said.

Kelley later married and moved to Florida with her husband, who works at a cancer clinic.

Jill and Scott Kelley have been involved in at least nine legal actions since arriving in Tampa, according to court records. Most involve real estate transactions, including one foreclosure and an $11,000 judgment against the couple in a Pennsylvania case.

In another twist in the scandal, court records indicate that Petraeus and Allen intervened two months ago in a messy custody dispute on behalf of Jill Kelley's sister. Both four-star generals wrote letters supporting Natalie Khawam.

The judge in the case awarded Khawam's ex-husband custody last year of their son. He also called Khawam dishonest and lacking in integrity.

Khawam is a lawyer who works on health care fraud and whistleblower cases, according to her LinkedIn profile, which has been removed from the professional networking site. The sisters also competed in a cook-off filmed for a Food Network show called "Food Fight" in 2003.

___

Associated Press writers Kimberly Dozier and Pauline Jelinek in Washington, and Brendan Farrington in Tallahassee, Fla., contributed to this report.

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Exclusive: AMD hires bank to explore options - sources

NEW YORK/SAN FRANCISCO (Reuters) - Advanced Micro Devices has hired JPMorgan Chase & Co to explore options, which could include a sale, as the chipmaker struggles to find a role in an industry increasingly focused on mobile devices and away from traditional PCs, according to three sources familiar with the situation.

Sources told Reuters on Tuesday that an outright sale of the company is not the main option, and other choices could include a sale of its portfolio of patents.

The company's stock surged 18 percent on the news before ending up 5 percent at $2.09 on the New York Stock Exchange. The shares slipped further to $2.07 in extended trade after AMD said it was "not actively pursuing a sale of the company or significant assets at this time."

"AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD's highly-differentiated technology assets is the right approach to enhance shareholder value," spokesman Drew Prairie said in an email to Reuters.

When asked why AMD had hired JPMorgan, Prairie declined to confirm the engagement, saying the company does not comment on its relationship with investment banks.

A JPMorgan spokeswoman declined to comment.

One of Silicon Valley's oldest chipmakers, AMD is laying off engineers and some analysts are concerned it may not find new markets for its chips in time to reverse a declining cash reserve.

AMD's shares have fallen more than 60 percent this year, giving it a market value of about $1.4 billion. It also has long-term debt and capital lease obligations of about $2 billion.

Since the 1980s, AMD has competed with much larger Intel and at times has made inroads with its PC and server chips. But setbacks at AMD limited those gains and AMD now faces new competition from companies designing low-cost and power-efficient chips based on ARM Holdings' technology.

Like Intel, Sunnyvale, California-based AMD was caught flat-footed in recent years with the emergence and fast growth of mobile devices.

But while Intel has deep pockets to fund research on new products to catch up, AMD faces declining cash flows and a more modest balance sheet.

EMULATE APPLE

Some investors believe part or all of AMD could be bought by a technology company that might want to emulate Apple Inc's tight control of software and components, a strategy credited in part for the success of the iPad and iPhone.

One source described AMD as a "legacy company" and said it might prove difficult to sell because of its dependence on the PC industry and lack of strong mobile offerings.

Another source said AMD's game console chip and embedded chips businesses were growing and attractive.

Microsoft Corp, Google Inc, Samsung Electronics, Intel Corp and even Facebook Inc have been suggested by Wall Street analysts as potential suitors that could benefit from some of AMD's chip business, including its graphics division, PC processors and server chips.

Others say AMD's most valuable asset may be its deep bench of engineers or its patents.

Goldman Sachs analyst James Covello estimated in a recent note to clients the chances of AMD's PC processor business being sold are between 15 percent and 30 percent.

Rather than selling AMD, bankers could help the chipmaker strengthen its finances in order to acquire technology it believes it needs to tackle new markets, said Williams Financial analyst Cody Acree.

"Right now they don't have the currency on their balance sheet or their share price to make an acquisition (of another company) viable," Acree said.

UNDERESTIMATED CHANGE

Rory Read took over as AMD's CEO in 2011 promising to fix long-standing execution problems that have plagued the chipmaker. But AMD has continued to lose money as well as market share to Intel and graphic chip rival Nvidia.

AMD said last month it would slash 15 percent of its workforce, while devoting more resources to areas outside of its traditional PC business, including communications, industrial and gaming applications.

Last week, AMD said it added a second board member from its leading shareholder, Mubadala Development Co, which owns 15 percent of the chipmaker.

In October, Read told analysts on a conference call he had underestimated the speed of change in the PC industry and said AMD would move quickly to focus on selling chips for communications, industrial and gaming applications.

AMD recently announced it has licensed technology from ARM and will use it to build low-power chips for servers. But those products aren't expected to launch until 2014 and AMD is one of several companies vying for a microserver market that will be small compared to traditional servers that power most data centers.

With the company burning through cash, analysts have recently become concerned about future liquidity and say AMD needs to turn its business around sooner than later.

AMD's cash declined $279 million in the third quarter to $1.48 billion. AMD said it was reducing its "optimal" cash target to $1.1 billion from $1.5 billion due to the business' now smaller size.

(Reporting by Nadia Damouni and Noel Randewich; Editing by Paritosh Bansal, Gary Hill and Bernard Orr)

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AP source: Marlins trade 3 stars to Blue Jays

MIAMI (AP) — The Miami Marlins' spending spree a year ago didn't work, so now they're trying another payroll purge — shedding their biggest stars and their multimillion-dollar salaries in one blockbuster deal.

Rebranded in a new ballpark at the start of 2012, the Marlins were up to their old ways Tuesday, swapping high-priced talent for top prospects. Miami traded All-Star shortstop Jose Reyes, left-hander Mark Buehrle and ace right-hander Josh Johnson to the Toronto Blue Jays, a person familiar with the agreement said.

The person confirmed the trade to The Associated Press on condition of anonymity because the teams weren't officially commenting. The person said the trade sent several of the Blue Jays' best young players to Miami.

The stunning agreement came less than a year after the Marlins added Reyes, Buehrle and closer Heath Bell in an uncharacteristic $191 million spending binge as they moved into a new ballpark. The acquisitions raised high hopes, but the Marlins instead finished last in the NL East.

The latest paring of salary actually began in July, when the Marlins parted with former NL batting champion Hanley Ramirez, second baseman Omar Infante and right-hander Anibal Sanchez, among others. Bell, the team's high-profile bust, was traded to Arizona last month.

Under owner Jeffrey Loria, long the target of fan acrimony, the Marlins have usually been among baseball's thriftiest teams. Management pledged that would change with the new ballpark, but team officials were disappointed with attendance in 2012, and revenue fell far short of their projections.

Even so, the blockbuster deal came as a shock. The players involved must undergo physicals before the trade becomes final.

Giancarlo Stanton, the Marlins' precocious slugger, wasn't involved in the deal but wasn't happy about it.

Stanton said he was mad about the deal "Plain & Simple," he tweeted shortly after the news broke.

The housecleaning was also the subject of much mirth on Twitter.

"Good trade, I think we won it," tweeted FakeSamson, a site that mocks Marlins president David Samson.

The swap was easier for the Marlins to swing because of their longstanding policy of refusing to include no-trade clauses in contracts.

The deal gave an immediate boost to the Blue Jays, who have not reached the playoffs since winning their second consecutive World Series in 1993. Toronto went 73-89 this season and finished fourth in the AL East for the fourth straight year, again falling short in a division that includes big spenders.

The Marlins changed their name a year ago but failed to change their losing ways, and instead of contending for a playoff berth, they finished 69-93, their worst record since 1999.

The Marlins drew more than 2.2 million fans but had projected attendance of nearly 3 million. Team officials blamed the difference in part on manager Ozzie Guillen's laudatory comments early in the year about former Cuban leader Fidel Castro, which antagonized a large segment of an already-small fan base.

Guillen was fired after only one season with the team and replaced this month by the Marlins' former backup catcher, Mike Redmond.

President of baseball operations Larry Beinfest hinted at a big change in direction less than two weeks ago.

"We've kind of lost our Marlins way," he said. "The real Marlins way was we always outperformed our challenges. Whatever our challenges were, whether it was playing in a football stadium or weather or a lack of fans, or lack of revenue for that matter, we always found a way to out-perform our challenges."

It now appears management will field a team with the expectation players will out-perform their contracts, which was the franchise model for most of the past decade. The roster shake-up during the season reduced the payroll to $90.3 million from $112 million on opening day, and now could be dramatically lower next season.

Reyes has $96 million left on a deal expiring in 2018. Buehrle has $52 million remaining on a deal expiring in 2015.

While the team was a disappointment, newcomers Buehrle and Reyes played up to expectations. Buehrle went 13-13 with a 3.74 ERA and topped 200 innings for the 12th year in a row. Reyes hit .287 with 40 steals in 160 games.

Johnson, who led the NL in ERA in 2010, went 8-14 this year with a 3.81 ERA. He was limited to nine starts in 2011 because of right shoulder inflammation.

In their 20 seasons the Marlins have reached the postseason only twice, as wild-card teams in 1997 and 2003. Both times they won the World Series.

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Report: FDA wanted to close Mass pharmacy in 2003

WASHINGTON (AP) — Nearly a decade ago, federal health inspectors wanted to shut down the pharmacy linked to a recent deadly meningitis outbreak until it cleaned up its operations, according to congressional investigators.

About 440 people have been sickened by contaminated steroid shots distributed by New England Compounding Center, and more than 32 deaths have been reported since the outbreak began in September, according to the Centers for Disease Control and Prevention. That has put the Framingham, Mass.-based pharmacy at the center of congressional scrutiny and calls for greater regulation of compounding pharmacies, which make individualized medications for patients and have long operated in a legal gray area between state and federal laws.

The House Energy and Commerce Committee released a detailed history of NECC's regulatory troubles on Monday, ahead of a meeting Wednesday meeting to examine how the outbreak could have been prevented. The 25-page report summarizes and quotes from FDA and state inspection memos, though the committee declined to release the original documents.

The report shows that after several problematic incidents, Food and Drug Administration officials in 2003 suggested that the compounding pharmacy be "prohibited from manufacturing" until it improved its operations. But FDA regulators deferred to their counterparts in Massachusetts, who ultimately reached an agreement with the pharmacy to settle concerns about the quality of its prescription injections.

The congressional report also shows that in 2003 the FDA considered the company a pharmacy. That's significant because in recent weeks public health officials have charged that NECC was operating more as a manufacturer than a pharmacy, shipping thousands of doses of drugs to all 50 states instead of small batches of drugs to individual patients. Manufacturers are regulated by the FDA and are subject to stricter quality standards than pharmacies.

The report offers the most detailed account yet of the numerous regulatory complaints against the pharmacy, which nearly date back to its founding in 1998. Less than a year later, the company was cited by the state pharmacy board for providing doctors with blank prescription pads with NECC's information. Such promotional items are illegal in Massachusetts and the pharmacy's owner and director, Barry Cadden, received an informal reprimand, according to documents summarized by the committee.

Cadden was subject to several other complaints involving unprofessional conduct in coming years, but first came to the FDA's attention in 2002. Here are some key events from the report highlighting the company's early troubles with state and federal authorities:

__ In March of 2002 the FDA began investigating reports that five patients had become dizzy and short of breath after receiving NECC's compounded betamethasone repository injection, a steroid used to treat joint pain and arthritis that's different from the one linked to the current meningitis outbreak.

FDA inspectors visited NECC on April 9 and said Cadden was initially cooperative in turning over records about production of the drug. But during a second day of inspections, Cadden told officials "that he was no longer willing to provide us with any additional records," according to an FDA report cited by congressional investigators. The inspectors ultimately issued a report citing NECC for poor sterility and record-keeping practices but said that "this FDA investigation could not proceed to any definitive resolution," because of "problems/barriers that were encountered throughout the inspection."

__ In October of 2002, the FDA received new reports that two patients at a Rochester, N.Y., hospital came down with symptoms of bacterial meningitis after receiving a different NECC injection. The steroid, methylprednisolone acetate, is the same injectable linked to the current outbreak and is typically is used to treat back pain. Both patients were treated with antibiotics and eventually recovered, according to FDA documents cited by the committee.

When officials from the FDA and Massachusetts Board of Pharmacy visited NECC later in the month, Cadden said vials of the steroid returned by the hospital had tested negative for bacterial contamination. But when FDA scientists tested samples of the drug collected in New York they found bacterial contamination in four out of 14 vials sampled. It is not entirely clear whether FDA tested the same lot shipped to the Rochester hospital.

__ At a February 2003 meeting between state and federal officials, FDA staff emphasized "the potential for serious public consequences if NECC's compounding practices, in particular those relating to sterile products, are not improved." The agency issued a list of problems uncovered in its inspection to NECC, including a failure to verify if sterile drugs met safety standards.

But the agency decided to let Massachusetts officials take the lead in regulating the company, since pharmacies are typically regulated at the state level. It was decided that "the state would be in a better position to gain compliance or take regulatory action against NECC as necessary," according to a summary of the meeting quoted by investigators.

The FDA recommended the state subject NECC to a consent agreement, which would require the company to pass certain quality tests to continue operating. But congressional investigators say Massachusetts Board of Pharmacy did not take any action until "well over a year later."

__ In October 2004, the board sent a proposed consent agreement to Cadden, which would have included a formal reprimand and a three-year probationary period for the company's registration. The case ended without disciplinary action in 2006, when NECC agreed to a less severe consent decree with the state.

Massachusetts officials indicated Tuesday they are still investigating why NECC escaped the more severe penalty.

"I will not be satisfied until we know the full story behind this decision," the state's interim health commissioner Lauren Smith said in a transcript of her prepared testimony released a day ahead of delivery. Smith is one of several witnesses scheduled to testify Wednesday, including FDA Commissioner Margaret Hamburg.

The committee will also hear from the widow of 78-year-old Eddie C. Lovelace, a longtime circuit court judge in southern Kentucky. Autopsy results confirmed Lovelace received fungus-contaminated steroid injections that led to his death Sept. 17.

Joyce Lovelace will urge lawmakers to work together on legislation to stop future outbreaks caused by compounded drugs, according to a draft of her testimony.

"We now know that New England Compounding Pharmacy, Inc. killed Eddie. I have lost my soulmate and life's partner with whom I worked side by side, day after day for more than fifty years," Lovelace states.

Barry Cadden is also scheduled to appear at the hearing, after lawmakers issued a subpoena to compel him to attend.

The NECC has been closed since early last month, and Massachusetts officials have taken steps to permanently revoke its license. The pharmacy has recalled all the products it makes, including 17,700 single-dose vials of a steroid that tested positive for the fungus tied to the outbreak.

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Man who accused Elmo puppeteer of teen sex recants

NEW YORK (AP) — A man who accused Elmo puppeteer Kevin Clash of having sex with him when he was a teenage boy has recanted his story.

In a quick turnabout, the man on Tuesday described his sexual relationship with Clash as adult and consensual.

Clash responded with a statement of his own, saying he is "relieved that this painful allegation has been put to rest." He had no further comment.

The man, who has not identified himself, released his statement through the Harrisburg, Pa., law firm Andreozzi & Associates.

Sesame Workshop, which produces "Sesame Street" in New York, soon followed by saying, "We are happy that Kevin can move on from this unfortunate episode."

The whirlwind episode began Monday morning, when Sesame Workshop startled the world by announcing that Clash had taken a leave of absence from "Sesame Street" in the wake of allegations that he had had a relationship with a 16-year-old.

Clash, a 52-year-old divorced father of a grown daughter, swiftly denied the charges of his accuser, who is in his early 20s. In that statement Clash acknowledged that he is gay but said the relationship had been between two consenting adults.

Though it remained unclear where the relationship took place, sex with a person under 17 is a felony in New York if the perpetrator is at least 21.

Sesame Workshop, which said it was first contacted by the accuser in June, had launched an investigation that included meeting with the accuser twice and meeting with Clash. Its investigation found the charge of underage conduct to be unsubstantiated.

Clash said on Monday he would take a break from Sesame Workshop "to deal with this false and defamatory allegation."

Neither Clash nor Sesame Workshop indicated on Tuesday when he might return to the show, on which he has performed as Elmo since 1984.

Elmo had previously been a marginal character, but Clash, supplying the fuzzy red puppet with a high-pitched voice and a carefree, child-like personality, launched the character into major stardom. Elmo soon rivaled Big Bird as the face of "Sesame Street."

Though usually behind the scenes, Clash meanwhile achieved his own measure of fame. In 2006, he published an autobiography, "My Life as a Furry Red Monster," and he was the subject of the 2011 documentary "Being Elmo: A Puppeteer's Journey."

He has won 23 daytime Emmy awards and one prime-time Emmy.

___

Online:

http://www.sesamestreet.org

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Miscrosoft executive exits at a shaky time

Turns out Microsoft Corp.'s radical overhaul of its Windows operating system last month wasn't the only big change in store for the company.

The abrupt departure of Steven Sinofsky, president of Windows and Windows Live, is being called poor timing for the tech behemoth. It's also seen as a sign that longtime Chief Executive Steve Ballmer has no plans to step down anytime soon.

Sinofsky's exit, just weeks after the company rolled out the Windows 8 operating system, "doesn't necessarily reflect well on the company," said Kirk Materne, managing director at Evercore Partners.

"I think if you're Steve, having this happen right after creates a level of distraction that you don't want in the first place," he said. "It's never great when you've had this much turnover at the senior level of a company that is really trying to gain its footing in markets like tablet and mobile."

Shares of Microsoft slid 90 cents, or 3.2%, to $27.09 on Tuesday. Its stock has languished in the last decade — virtually unchanged — while shares of rival Apple Inc. have climbed more than 6,700%.

Microsoft is under pressure to impress consumers and investors with its latest offerings, which include Windows 8 and its new Surface device, a hybrid tablet-laptop that launched last month.

But both products have been met with lackluster interest. Windows 8 debuted to low investor expectations, and reviews for the revamped operating system have been mixed, with some users saying it's at times confusing to use.

The Surface, meanwhile, was buzz-worthy when it was first unveiled, but analysts seem unconvinced that it will make a dent in a market currently dominated by Apple's iPad. Although the hardware is sleek, the Surface lacks applications compared with the iPad, and its highly touted snap-on keyboard that doubles as a cover is difficult to accurately type on, reviewers have said.

The Windows 8 launch was said to be the biggest revamp of the operating system in nearly two decades. The latest update includes a new interface called the Start screen that was designed for tablets and touch-screen computers and features moving tiles similar to those on Windows Phone devices. Microsoft wants the new Start screen interface to be the future of Windows.

"The general conclusion of Win 8 is on the surface, it's a solid first start," Materne said. "It's not mind-blowing, it's not going to immediately recapture market share, but it gets them back in the ballgame to a certain degree."

Sinofsky, a 23-year Microsoft veteran, was in charge of the Windows 8 and Surface efforts at the Redmond, Wash., company. He was a polarizing figure in the office with a tough management style and was rumored to be in line to succeed Ballmer, who has been chief executive since 2000.

In an employee memo Monday, the day Microsoft announced his departure, Sinofsky said he had decided to leave to seek "new opportunities."

"With the general availability of Windows 8/RT and Surface, I have decided it is time for me to take a step back from my responsibilities at Microsoft," he said. "I've always advocated using the break between product cycles as an opportunity to reflect and to look ahead, and that applies to me too."

Now that Sinofsky has left, analysts — some of whom speculated there had been a rift between Sinofsky and Ballmer — say they expect a new direction for the Windows division.

"Sinofsky was a highly talented operator who hit product release dates, got delivery in Windows to be more reliable, and was pivotal to successful Office and Win 7 releases," Morgan Stanley analyst Adam Holt said in a note to investors. "While he is a loss for Microsoft, Windows has entered a different phase where cultivation of developers, collaboration between product groups, integration with the mobile operating system and a focus on applications become more important."

Sinofsky will be replaced by Julie Larson-Green, who has been with the company since 1993 and oversaw program management, user interface design and research for Windows 7 and 8. She will lead all Windows software and hardware engineering.

Tami Reller, Windows chief financial officer and chief marketing officer, also will assume responsibility for the business of Windows.

There could be a bit of a learning curve in the meantime, said equity analyst Angelo Zino of S&P Capital IQ.

"We are surprised by the announcement, given Sinofsky's recent success as well as a belief by many that he could eventually have been the successor to CEO Steve Ballmer," he said. "While we are confident in the abilities of both individuals, we see the change increasing product development risk to future Windows releases."

andrea.chang@latimes.com

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Abt, Coyote Logistics, iD Commerce top Chicago workplaces

The Chicago Tribune released its annual Top Workplaces survey Monday, with a broad cross section of companies -- and dozens of new names -- earning recognition as the best places to work in Chicago. 

Abt Electronics and Coyote Logistics repeated as the top large and midsize employers, respectively, with iD Commerce + Logistics making the list for the first time as the top-ranked small company.  

This is the third year the Tribune has partnered with Workplace Dynamics to rank the top 100 companies as judged by their own employees, using criteria ranging from clued-in managers to flexible work schedules. More than 1,600 companies were invited to participate, with a record 254 completing the survey.

Pennsylvania-based Workplace Dynamics partnered with 32 newspapers and surveyed 1.5 million employees nationwide last year as part of its research efforts into what environments are best for employees. 

"We all spend an awful lot of time at work," said Doug Claffey, CEO of Workplace Dynamics. "Creating a really great workplace for employees is something that I think businesses have an obligation to do.  In addition to making money, you need create an environment where your people want to be."

Beyond Glenview electronics retailer Abt,  the top five large companies were Hyatt Hotels, Baird & Warner, ATI Physical Therapy and FedEx -- all new to this category this year.

Chicago-based Coyote Logistics was followed by kCura, Slalom Consulting, Edward Jones and Mercy Home for Boys & Girls among companies with 250 to 999 employees.  

Wood Dale-based id Commerce topped Webster Dental, 2011 winner Red Frog Events, Assurance Agency and LeasePlan USA among small companies.

Full survey results and a variety of top workplace profiles will be published in a magazine insert included in Tuesday's Chicago Tribune.

rchannick@tribune.com | Twitter @RobertChannick

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

Microsoft CEO Steve Ballmer is silhouetted against a video screen during his presentation of the new Surface in Los Angeles, California, June 18, 2012. REUTERS\/David McNew","date":"Mon, Nov 12, 2012 2:59 PM EST","credit":"Reuters","byline":"DAVID MCNEW","provider":"Reuters","photo_title":"Microsoft CEO Steve Ballmer is silhouetted against a video screen during his presentation of the new Surface in Los Angeles","pivot_alias_id":"microsoft-ceo-steve-ballmer-silhouetted-against-video-screen-photo-152032509","plink":"\/photos\/microsoft-ceo-steve-ballmer-silhouetted-against-video-screen-photo-152032509.html","plink_vita":"http:\/\/news.yahoo.com\/photos\/microsoft-ceo-steve-ballmer-silhouetted-against-video-screen-photo-152032509.html","srchtrm":"Microsoft CEO Steve Ballmer is silhouetted against a video screen during his presentation of the new Surface in Los Angeles","revsp":"","rev":"6eef3b20-2d03-11e2-bdff-709ae6a204a5","surl":"http:\/\/l1.yimg.com\/bt\/api\/res\/1.2\/bX5F_NcjuYsNflWU1tSOZQ--\/YXBwaWQ9eW5ld3M7Zmk9aW5zZXQ7aD01NjtxPTc5O3c9ODg-\/http:\/\/media.zenfs.com\/en_us\/News\/Reuters\/2012-11-12T155843Z_3_CBRE8AB16MG00_RTROPTP_2_MICROSOFT-WINDOWS-TABLETS.JPG","swidth":88,"sheight":56},{"type":"image","url":"http:\/\/l2.yimg.com\/bt\/api\/res\/1.2\/hiPe47HXAYF3VY.lO4NZqQ--\/YXBwaWQ9eW5ld3M7Zmk9aW5zZXQ7aD00NTA7cT03OTt3PTM0Mg--\/http:\/\/media.zenfs.com\/en_us\/News\/Reuters\/2012-11-12T155843Z_3_CBRE8AB16MH00_RTROPTP_2_MICROSOFT-WINDOWS-TABLETS.JPG","width":342,"height":450,"uuid":"58f2934b-19c3-3535-bdb7-2ccf78d911ec","caption":"Microsoft CEO Steve Ballmer holds the new Surface as it is unveiled in Los Angeles, California, June 18, 2012. REUTERS\/David McNew","captionBakedHtml":"

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Lakers intrigued by chance to play for D'Antoni

EL SEGUNDO, Calif. (AP) — Pau Gasol got home from the game and read about it on Twitter, while Dwight Howard got a midnight message on his BlackBerry. They shared most Los Angeles Lakers fans' mix of surprise, trepidation and anticipation.

Just when everybody thought the Lakers were getting back together with Phil Jackson, they switched course in the middle of the night and went with Mike D'Antoni.

What a weekend in Hollywood — and the real drama isn't over yet.

The Lakers reacted with ample excitement and a little bewilderment Monday to their front office's surprising decision to hire D'Antoni as coach Mike Brown's replacement over Jackson, the 11-time champion who discussed the job at his home Saturday and apparently wanted to return. D'Antoni didn't even interview for the job in person, speaking to the Lakers over the phone.

"It has been crazy, but all this stuff will just make this team stronger," said Howard, who has been in a Lakers uniform for about six weeks. "Everything that we've been through so far, it's going to make us stronger, and we have to look at this as a positive situation."

The Lakers' third coach in four days won't take over the team until later in the week. D'Antoni still hadn't been cleared to travel Monday after undergoing knee replacement surgery earlier in the month, although the Lakers are optimistic the former Knicks and Suns coach will arrive in Los Angeles on Wednesday.

So interim coach Bernie Bickerstaff was still in charge Monday when the Lakers gathered for an informal workout ahead of Tuesday's game against San Antonio. Just two weeks into the regular season, the Lakers (3-4) are about to start over with a new offense and another coaching staff — and a renewed certainty they're expected to compete for a title this season.

"It's been a zoo," said forward Antawn Jamison, a 15-year NBA veteran who played for D'Antoni on a U.S. national team. "But as I was telling somebody, it's just a typical day here in L.A. It's interesting. ... It should be a lot easier to adjust to than the system we were trying to get adjusted to early on in the season. We've got Steve (Nash) that can help us out."

Two Lakers who supported both Brown and his two potential replacements weren't available in El Segundo to weigh in on the hire. Nash missed the workout while getting treatment on his injured leg, while Kobe Bryant left before it ended to share a helicopter ride back home to Orange County with point guard Steve Blake, who needed an exam on his abdominal injury.

And the tall, professorial coach with all the rings wasn't at the Lakers' training complex at all.

Just 24 hours after Jackson seemed headed back to his oversized chair on the Staples Center bench, D'Antoni had the job.

It's too soon to tell how the Buss family's latest counterintuitive move will sit with Lakers fans, who chanted "We want Phil!" during the club's weekend games, both victories after a 1-4 start.

"I think everybody had expectations about it, and they were all pretty high," Gasol said of Jackson's potential return. "We all understood what Phil brings to the table ... and what he means to the city and the franchise. It just couldn't work out for whatever reason."

Jackson issued a statement to a handful of media outlets Monday, implying he was essentially offered the job after meeting with Lakers owner Jim Buss and general manager Mitch Kupchak. Jackson thought he would be able to come back to the Lakers on Monday with his decision, but instead was awakened by a midnight phone call from Kupchak.

"The decision is of course theirs to make," Jackson said in his statement. "I am gratified by the groundswell of support from the Laker fans who endorsed my return, and it is the principal reason why I considered the possibility."

The Lakers largely echoed the thoughts of Howard, who was looking forward to playing for Jackson: "Management had to do what they felt is best for the team, and we as players have got to find a way to win."

The Lakers publicly offered no reason for passing over the coach with the most championships in NBA history. Although nobody could claim the Buss family is afraid of spending money, Brown is still owed well over $10 million for the remaining three seasons on his four-year, $18 million contract, while D'Antoni will make $4 million a season for the next three years — and their salaries together might be less than what Jackson would command.

The Lakers largely know what they would get with Jackson, but D'Antoni intrigues this older, top-heavy team with an urgency to contend for a title before Howard's free agency next summer and Bryant's possible retirement in a few years.

Howard and Gasol both believe D'Antoni's up-tempo style can work well for the Lakers. Howard would seem to be a natural to partner with Nash in the pick-and-roll attacks loved by D'Antoni and Nash, although Gasol doesn't immediately fit into the definition of a big man who can play on the perimeter and shoot 3-pointers.

"It's a great system, (but) I don't think he ever had a defender such as myself or a defender such as Dwight Howard on those teams," Metta World Peace said. "I don't think he ever coached those type of players, so his defense should be self-explanatory, and his offense is amazing, so it should be fun for Laker fans."

The rest of the NBA sat back and watched the Lakers' drama with amusement over the past two days, with Dallas owner Mark Cuban weighing in gleefully on the mess: "I hope they have to do it again and again and again."

Jackson's flirtation with the job is the strongest indication yet that he's interested in coaching again, which makes him a prime candidate for another franchise. Yet D'Antoni also received praise around the league — even from New York, where he resigned last March after failing to win a playoff game in four years with the Knicks.

"Despite all the hoopla ... that was going on about me and Mike, we actually have a pretty good relationship, especially behind closed doors," Carmelo Anthony said. "We actually talked a lot, talked basketball. Hopefully he brings some positive energy over there. Anytime guys are losing like that, there's always negativity, a lot of negative energy. So sometimes change is better."

Added Dwyane Wade, who has played for D'Antoni on the U.S. national team: "He has a tough job ahead of him, but I'm sure he's excited about the opportunity that he gets to be with America's team."

___

AP Sports Writers Brian Mahoney and Chris Duncan contributed to this report.

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