Google Said to Rethink Wallet Strategy Amid Slow Adoption

By Olga Kharif - Mar 22, 2012 12:53 AM GMT+0700

Google Inc. (GOOG) is weighing changes aimed at improving its Google Wallet mobile-payment system following slow adoption and the departure of two key managers, according to people with knowledge of the project.

The company is considering sharing revenue with carriers such as Verizon Wireless and AT&T Inc. (T) to get them to embrace the technology, which lets users pay for items at checkout by tapping phones on a reader device, said the people, who asked not to be named because the discussions are private.

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The Google Inc. Mobile Wallet application for cardless payment is displayed on a smartphone screen at the Mobile World Congress in Barcelona, Spain, on Feb. 29, 2012. Photographer: Chris Ratcliffe/Bloomberg

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Nov. 3 (Bloomberg) -- Bloomberg's Rich Jaroslovsky reviews Google Inc.'s Google Wallet mobile-payment application. It is one of the first systems in a push by companies like Visa Inc., Mastercard Inc. and the wireless carriers to encourage the use of smartphones to replace cash and credit cards in retail transactions. (Source: Bloomberg)

Google aims to spur demand for its Wallet app, which is designed to boost its share of the multibillion-dollar market for mobile advertising by letting it target shoppers with coupons and promotions. The challenge: Few phones have the right technology installed, and rivals are readying their own systems, including one called ISIS that’s backed by carriers.

“They are in a bit of a re-evaluation pattern right now,” said Rick Oglesby, an analyst at Boston-based research firm Aite Group. “It’s going much slower than anticipated.”

One of the two original creators of the Google Wallet software, Jonathan Wall, left Google this month to start his own company focused on mobile shopping, Tappmo Inc. Marc Freed- Finnegan, lead product manager for Google Wallet, also departed to join Tappmo.

Making Progress

Google said it’s enthusiastic about Google Wallet’s progress so far. The company is enlisting retailers such as the Pinkberry frozen-yogurt chain, which announced this week that it is using the system. Google Wallet relies on a system called near field communications, a wireless standard that works from within a few inches.

“We continue to work hard to develop Google Wallet and build the partner ecosystem to make it possible for everyone to pay with their phones and get great deals while shopping,” Nate Tyler, a spokesman for Mountain View, California-based Google, said in an e-mailed statement.

The mobile-payment market has drawn scads of competitors, including startups and more established companies such as Visa Inc. (V), all aiming to capitalize on the growth of smartphones. The idea is to free shoppers from having to carry credit cards or cash -- they just need their handsets. Mobile-payment transactions will top $170 billion by 2015, up from about $60 billion last year, according to Juniper Research.

ISIS System

As the owner of both the world’s most popular search engine and smartphone operating system, Google has an inside track with consumers. Still, it lacks the support of the two biggest U.S. carriers, Verizon and AT&T, which are backing the ISIS system. For now, Google Wallet’s NFC functions only work on two phones from Sprint Nextel Corp. (S), the third-largest U.S. carrier. While 50,000 to 100,000 people have downloaded the software, only a small percentage use it, Oglesby estimates.

“The reception has been lukewarm,” said Chetan Sharma, an independent consultant focused on the wireless industry.

Gaining a bigger foothold in the wireless-payment market would help solidify Google’s role as the leading seller of ads on phones and other mobile devices. That industry is projected to reach almost $11 billion in 2016, up from $2.61 billion this year, according to research firm EMarketer Inc.

The proposal to share revenue with carriers would involve the coupons and special offers that run on the Google Wallet app, the people familiar with the matter said. Carriers might get a cut of the proceeds when consumers accept the deals.

‘No Incentive’

“Today, the operators have no incentive to adopt Google Wallet, given that they have their own ambitions in this space,” said Sharma, who is based in Issaquah, Washington.

Verizon, AT&T and T-Mobile USA have joined forces to create ISIS, which is slated to roll out in the next few months. At the same time, carriers aren’t making it easy for their customers to use Google Wallet. In December, Verizon blocked the app from its new Galaxy Nexus smartphone, citing security concerns.

“We are continuing our commercial discussions with Google on this issue,” Brenda Raney, a Verizon spokeswoman, said in an e-mail. Mark Siegel, an AT&T spokesman, declined to comment on whether the carrier might offer the app in the future.

Another option Google is exploring: sidestepping the carriers altogether and relying more heavily on in-store terminals to complete mobile-payment transactions, the people said. This approach could involve additional hardware or software for the terminals, coupled with software that runs on Google’s servers, they said.

Work Around

So instead of requiring phones to authenticate payments -- something that needs assistance from carriers -- the system might send transactions to Google’s servers for approval and then clear it with the retailer.

Google currently works with VeriFone Systems Inc. (PAY), Ingenico (ING) and ViVOtech Inc., which make hardware and software for cash registers and other payment systems. Other Google Wallet partners include retailers such as Macy’s Inc. (M), Subway Restaurants and American Eagle Outfitters Inc. (AEO)

Google is adding more employees to the effort, seeking to fill eight Google Wallet positions. Last November, the company folded its Checkout service, which lets customers make online purchases, into Google Wallet.

Sprint will introduce as many as 12 new phones able to run the Wallet app this year. Even so, Google’s retail partners aren’t seeing much traffic for now.

“We knew from the get-go we won’t see a lot of volume,” said Robert Notte, chief technology officer at Jamba Juice (JMBA), which accepts Google Wallet NFC payments at 276 stores. “We are in very early stages of this.”

To contact the reporter on this story: Olga Kharif in Portland, Oregon, at okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles@bloomberg.net

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U.S. Stocks Fall as Energy Shares Drop on Profit Concern

By Rita Nazareth - Mar 22, 2012 3:38 AM GMT+0700

U.S. stocks fell, sending the Standard & Poor’s 500 Index down a second day, on concern the best first-quarter since 1998 has outpaced economic prospects and as Baker Hughes Inc. drove a selloff in energy shares.

Baker Hughes, the world’s third-largest oilfield-services provider, tumbled 5.8 percent after saying that a shift away from gas rigs will hurt earnings. Morgan Stanley (MS) and Fifth Third Bancorp dropped at least 1.7 percent to pace losses in financial companies. Hewlett-Packard Co. (HPQ) slumped 2.2 percent for the biggest decline in the Dow Jones Industrial Average.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/Bloomberg

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March 21 (Bloomberg) -- Bloomberg's Pimm Fox and Deborah Kostroun report on the performance of the U.S. equity market today. U.S. stocks fell, sending the Standard & Poor’s 500 Index down a second day, on concern the best first-quarter since 1998 has outpaced economic prospects and as Baker Hughes Inc. drove a selloff in energy shares. (Source: Bloomberg)

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March 21 (Bloomberg) -- Adam Parker, head of U.S. equity strategy at Morgan Stanley, talks about investment strategy and some of his industry picks. He speaks with Adam Johnson and Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

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March 21 (Bloomberg) -- Kate Moore, senior global equity strategist at Bank of America Merrill Lynch, talks about the outlook for stocks, investor sentiment and investment strategy. She speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

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Sales of previously owned homes probably rose in February to the highest in almost two years, a report at 10 a.m. in Washington may show. Photographer: Jim R. Bounds/Bloomberg

The S&P 500 slipped 0.2 percent to 1,402.89 at 4 p.m. New York time. The Dow retreated 45.57 points, or 0.4 percent, to 13,124.62. About 6.1 billion shares changed hands on U.S. exchanges, or 7.9 percent below the three-month average.

“People won’t play real hard at these levels,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, which oversees more than $300 billion. “I don’t think you should get bearish. Yet the market’s energy seems to be used up after the strong rally.”

The S&P 500 has rallied 12 percent this year amid better- than-estimated economic and corporate data. More than $3.6 trillion was restored to U.S. equity values since last year’s low for the benchmark gauge in October. The rally drove the index to about 14.6 times reported earnings this week, the highest valuation level since July.

Data today showed purchases of previously owned U.S. houses dropped 0.9 percent to a 4.59 million annual rate from a revised 4.63 million pace in January that was faster than previously estimated. The median forecast in a Bloomberg News survey called for a rise to 4.61 million.

‘One-Way Ride’

“The housing situation is not a quick turnaround,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion. “In addition, the stock market had an almost one-way ride. It’s due for a pause.”

Energy shares in the S&P 500 slumped 1 percent for the biggest decline among 10 groups.

Baker Hughes (BHI) tumbled 5.8 percent to $45.04. North American first-quarter profit margin will drop to as low as 13.2 percent from 18.7 percent because of lower prices, higher costs and supply shortages as U.S. operators shift rig locations, the company said. Companies are drilling for oil because it’s worth about eight times more on an energy-equivalent basis than gas on U.S. markets, according to data compiled by Bloomberg.

Financials Fall

A measure of financial shares in the S&P 500 lost 0.4 percent for the second-biggest decline among 10 industries. Morgan Stanley fell 1.7 percent to $20.06. Fifth Third retreated 1.8 percent to $14.24.

Hewlett-Packard slid 2.2 percent to $23.46. The company will combine its personal-computer unit with the division that sells printers into a group led by Todd Bradley, who ran the PC business, to help cut expenses amid declining sales and profit.

“Deeper issues will likely take more than management changes,” Maynard Um, an analyst with UBS AG in New York, said in a note to investors.

Hartford Financial Services Group Inc. (HIG) rose 1.4 percent to $22.02. Chief Executive Officer Liam McGee responded to billionaire John Paulson’s call for a breakup with plans to shut or sell parts of the 201-year-old insurer. Hartford will stop selling individual annuities and seek buyers for its individual life, Woodbury Financial Services and retirement-plan operations.

LinkedIn Corp. (LNKD) surged 6.5 percent to $97.78. The biggest professional-networking website was raised to buy from neutral at Goldman Sachs Group Inc.

Netflix Jumps

Netflix Inc. (NFLX) gained 4.4 percent to $120.10. The online and mail-order video-rental service said the mystery series “Hemlock Grove” will be available exclusively to its members for instant viewing early in 2013.

Stocks will probably begin a “steady upward trajectory” over the next few years because any declines in economic growth are already reflected in share prices, Goldman Sachs Group Inc. said. The MSCI World Index (MXWO) is trading at 13.2 times estimated earnings after falling 7.6 percent last year, data compiled by Bloomberg show.

“Given current valuations, we think it’s time to say a ‘long goodbye’ to bonds, and embrace the ‘long good buy’ for equities as we expect them to embark on an upward trend over the next few years,” Peter Oppenheimer, chief global equity strategist at Goldman Sachs in London, wrote in a report today.

The prospects for returns in equities versus bonds “are as good as they have been in a generation,” he wrote.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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Zynga Said to Pay $200 Million for ‘Draw Something’ Creator

By Douglas MacMillan - Mar 22, 2012 3:37 AM GMT+0700

Zynga Inc. (ZNGA) agreed to acquire OMGPOP Inc., adding the popular application “Draw Something” to its portfolio of games played on Facebook Inc. (FB) and Apple Inc. iPhones.

Zynga will pay about $200 million for the startup, said a person familiar with deal, who asked not to be identified because the terms weren’t made public. OMGPOP will remain headquartered in New York, the companies said in a statement, which didn’t disclose the purchase’s financial terms.

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Zynga Inc. employees through the "time tunnel" at the company's new headquarters in San Francisco on March 15, 2012. Photographer: David Paul Morris/Bloomberg

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Zynga Inc. headquarters in San Francisco on March 15, 2012. Photographer: David Paul Morris/Bloomberg

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Zynga Inc. signage and logo are displayed on the facade of the company's new headquarters in San Francisco. Photographer: David Paul Morris/Bloomberg

The biggest maker of social games is stepping up spending on acquisitions after paying a combined $147.2 million for 22 companies in 2010 and 2011. Zynga, which raised $1 billion in a December initial public offering, aims to lessen its reliance on Facebook, accounting for more than 90 percent of its sales.

“They have done a lot of acquisitions of small game companies along the way,” said Brian Blau, research director at Gartner Inc. “Most of those acquisitions were for talent rather than titles. This is a case where they are buying a title” already popular with users, he said.

OMGPOP’s “Draw Something,” a game where users take turns guessing what their friends draw, has 22.4 million monthly users on Facebook, according to the website AppData. A mobile version for iPhones and iPads released in February is currently the most popular program in Apple’s App Store.

Adam Isserlis, a spokesman for San Francisco-based Zynga, declined to comment on the price of the acquisition.

Facebook takes a 30 percent cut of virtual goods sold in Zynga’s games. Earlier this month, Zynga took the wraps off of Zynga.com, a game-playing hub separate from the social network.

In 2010, Zynga acquired Newtoy Inc., the developer of the mobile application “Words With Friends,” for $53.3 million, according to a company filing.

Zynga shares rose 2.5 percent to $13.72 at the close in New York. The stock has climbed 46 percent this year.

Technology blog TechCrunch reported earlier this week that Zynga could pay between $150 million and $250 million to acquire OMGPOP.

To contact the reporter on this story: Douglas Macmillan in San Francisco at dmacmillan3@bloomberg.net;

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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JPMorgan Joins BofA in Cutting Senior Mortgage Traders

By Hugh Son and Dawn Kopecki - Mar 22, 2012 4:48 AM GMT+0700

JPMorgan Chase & Co. (JPM) and Bank of America Corp., the two biggest U.S. banks, are cutting senior mortgage traders and salesmen amid a decline in the asset-backed securities market, people with knowledge of the moves said.

Raphael Gonzalez, JPMorgan’s co-head of trading in subprime mortgages, and John Angelica, a securitized-products salesman, resigned from the New York-based bank within the past four weeks in exchange for severance packages that included all their deferred stock awards, said the people, who declined to be identified because the terms are private. Roy Kim, who traded adjustable-rate mortgages, left on his own accord with a similar exit deal, the people said.

JPMorgan and Bank of America, based in Charlotte, North Carolina, are re-evaluating staffing on mortgage-trading desks amid pressure to cut expenses and stricter capital requirements tied to the assets. Some employees were offered severance packages allowing them to keep millions of dollars of deferred stock that otherwise may have been forfeited, the people said.

“When you start doing something like this, you’re making a forward statement about the mortgage-backed security market -- they are saying it isn’t going to be as active,” said Brad Hintz, an analyst covering banks at Sanford C. Bernstein & Co. in New York. “Firms are right-sizing for the fixed-income market of the future. We’ll probably be seeing this in a lot of other Wall Street businesses as the regulations become clear.”

Trading Decline

Trading revenue from securitized products at the 10 biggest global investment banks dropped to roughly $10 billion last year from about $17.5 billion in 2010, according to data from consultant Coalition Ltd.

The three JPMorgan executives left amid involuntary reductions in the past four weeks in the bank’s securitized- products division, which trades and sells mortgage bonds, derivatives and other asset-backed securities, according to two of the people with knowledge of the matter. Jennifer Zuccarelli, a JPMorgan spokeswoman, said she couldn’t comment on the departures, as did Gonzalez and Angelica. Contact information for Kim couldn’t immediately be located.

The bank also dismissed about 5 percent of its equities traders and salesmen yesterday and cut about 100 employees in its treasury and securities services unit in January, according to three people with knowledge of those moves. Andy Taylor, the bank’s head of commercial mortgage bond trading, was shifted to run the loan-trading book. Justin Perras, a company spokesman, confirmed Taylor’s move.

Bank of America eliminated at least half a dozen mortgage traders and salesmen this week. That included John McNiff, a managing director who served as co-head of commercial mortgage securities trading, said people with knowledge of the moves.

Jackier, Eck

Managing directors Seth Jackier in mortgage sales and John Eck in asset-backed trading also opted to leave Bank of America, said the people. Michael Case, a director in commercial mortgage security banking, and salesmen John Livingstone and Michael L. Miller also departed, one of the people said.

Some Bank of America employees volunteered to resign in exchange for a so-called garden leave, a period of 90 days in which they receive full salary and benefits while staying at home, and severance packages including stock, the people said.

“This isn’t necessarily bad news” for people who are weighing moves to other firms, said Jeanne Branthover, managing director at Boyden Global Executive Search Ltd. in New York. “Areas like this that didn’t come back as expected are the ones that companies are now evaluating.”

European Crisis

Banks pulled back from making new loans to package into bonds last year as Europe’s debt crisis roiled credit markets and sent relative yields soaring. Credit Suisse Group AG is shutting its unit responsible for making loans, while the retreat has left other firms short on mortgages to pool for sale.

Bank of America is also cutting outside the U.S., dismissing almost a dozen workers at its Canadian capital- markets business as part of a global staff reduction, one person said. The move leaves the bank with almost 500 people at offices in Toronto, Montreal, Vancouver and Calgary, the person said.

Wall Street firms are firing staff and reducing pay as revenue wanes from trading and underwriting. More cuts are coming at Bank of America as part of Chief Executive Officer Brian T. Moynihan’s efficiency plan, which may target as much as $8 billion in total annual savings. Moynihan, 52, already announced as many as 30,000 job cuts in retail banking and technology.

Bank of America lost market share last year to rivals including New York-based Morgan Stanley (MS) in the trading of equities, bonds, currencies and commodities, Matthew O’Connor, an analyst at Deutsche Bank AG, said in a Jan. 19 research note.

To contact the reporters on this story: Hugh Son in New York at hson1@bloomberg.net; Dawn Kopecki in New York at dkopecki@bloomberg.net.

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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Kraft’s Name Change to Mondelez Leaves Experts Guessing

By David Welch - Mar 22, 2012 3:19 AM GMT+0700

Is it pronounced mon-dah-lay? Mon- dah-lezz? Oh, it’s mohn-dah-LEEZ.

That, according to corporate naming expert Nina Beckhardt, is the first problem with Mondelez, the name Kraft Foods Inc. (KFT) plans to give its global snacks business after spinning off its U.S. grocery unit this year.

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Photographer: Brent Murray

The second problem: What does it mean? The name is a combination of the word “monde,” derived from the Latin for “world,” and “delez,” an expression for delicious. The name might suit a company commanding $32 billion in revenue from Beijing to Berlin if the connection was apparent. It’s not, Beckhardt said.

“The public gets sick of compressed words if they aren’t intuitive,” said Beckhardt, founder and president of The Naming Group, a New York-based firm that has named shoes for Puma SE (PUM) and high-end stereos for Sony Corp. (6758) “When the pronunciation isn’t accessible, it looks bad. It’s not intuitive.”

Mondelez isn’t the first corporate name to generate confusion. When Andersen Consulting switched to Accenture in 2001, pundits wondered why they would leave behind such name recognition. The move paid off later when Arthur Andersen accounting -- once under the same corporate umbrella as the consulting firm -- became embroiled in the Enron Corp. (ENRNQ) accounting scandal.

Philip Morris changed its name to Altria Group Inc. (MO), claiming that the Latin word “altus,” suggested high performance. The name also disassociated the company from the baggage of tobacco litigation and health concerns.

Corporate Versus Brand

Corporate name changes tend to have less of an impact, either good or bad, than brand name changes, Beckhardt said. That could be good news for Northfield, Illinois-based Kraft, which plans to use Mondelez strictly on the back of packages of such snack foods as Oreo cookies and Newtons snacks. After the split, the snacks business will market those brands directly to consumers and Mondelez will remain in the background.

Establishing the corporate name will take time, said Sharon Shedroff, founder of San Diego consulting firm Strategic Vision Inc. The Mondelez name may be understood in European countries where Latin-based languages are spoken. People speaking other languages will have a tougher time figuring it out.

“Until the brand is established, it will be difficult for people to give it meaning in the U.S. and probably in Asia,” Shedroff said in a phone interview. “Brands under it, like Oreo, could lend credibility to Mondelez.”

Kraft Groceries

Kraft’s grocery business will retain the Kraft name as it continues selling cheese and other items that have borne founder J.L. Kraft’s moniker since he started as a wholesaler in 1903.

Nissan Motor Co. (7201)’s decision to put its corporate name on Datsun cars sold in the U.S. in 1981 was a disaster, said Jim Hall, principal of 2953 Analytics in Birmingham, Michigan.

Americans liked the Datsun 510 sedan and 240Z sports car, and Datsun was the second-best selling Japanese brand in the U.S. behind Toyota Motor Corp. (7203) at the time. The change to Nissan caused confusion, Hall said. Today, Nissan trails Toyota and Honda Motor Co. (7267)

Kraft asked employees to suggest names, and more than 1,000 participated, submitting more than 1,700 potential names, the company said. The inspiration for Mondelez came from two employees, one in Europe and another in North America.

Kraft realizes that the pronunciation of Mondelez isn’t easily picked up by everyone, said Michael Mitchell, a company spokesman. People will figure it out before too long, he said.

“It will take a while to get used to,” Mitchell said in a phone interview. “People will learn how to pronounce it, and it will be good.”

To contact the reporter on this story: David Welch in Detroit at dwelch12@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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Madonna Vows to Oppose Gay Law in Putin’s Hometown

By Anastasia Ustinova - Mar 22, 2012 4:22 AM GMT+0700

Madonna’s first tour in Russia drew the ire of orthodox Christian activists. Now she vows to defy a new law against promoting homosexuality when she performs in President-elect Vladimir Putin’s hometown in August.

“I will come to St. Petersburg to speak up for the gay community and to give strength and inspiration to anyone who is or feels oppressed,” the pop star said by e-mail late yesterday. “I’m a freedom fighter.”

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Madonna performs during the Bridgestone Super Bowl XLVI Halftime Show at Lucas Oil Stadium on Feb. 5, 2012 in Indianapolis, Indiana. Photographer: Christopher Polk/Getty Images

The law, signed on March 7 by St. Petersburg Governor Georgy Poltavchenko, a Putin ally and former KGB officer, bans lesbian, gay, bisexual and transgendered “propaganda” that could give minors “the false perception that traditional and nontraditional relationships are socially equal.”

Homosexuality was outlawed in the Soviet era and wasn’t decriminalized in Russia until 1993. Seventy-six of the 193 members of the United Nations deem homosexuality illegal, according to Human Rights Watch. At least five countries, including Iran, impose the death penalty for consensual same-sex relations, the New York-based advocacy group says.

Madonna, ranked the 8th highest-earning celebrity in Forbes magazine’s 2010 list with estimated earnings of $58 million, plans to return to Russia for the third time with a concert in Moscow on Aug. 7, followed two days later by St. Petersburg. Tickets for both performances range from 1,500 rubles ($51) to 50,000 rubles apiece, according to PMI Corp. and Euro Entertainment, the organizers of the events.

‘Ridiculous Atrocity’

“I don’t run away from adversity,” Madonna, who has used her fame to support gay rights, said in the e-mail. “I will speak during my show about this ridiculous atrocity.”

Madonna’s first show in Russia six years ago was marred by protests of Russian Orthodox activists who objected to her performance of the song “Live to Tell,” which she sang while wearing a crown of thorns and dangling from a cross.

During the singer’s second visit in 2009 on the Sticky and Sweet tour, a Communist group urged her to sing a revolutionary anthem like the Marseillaise as she performed near the Winter Palace in St. Petersburg, which was stormed by the Bolsheviks in 1917. The palace now houses the Hermitage Museum.

The American pop star’s financial interests in Russia extend beyond show business. She opened a Hard Candy upscale fitness center in Moscow last year, a 35,000 square-foot (3,250 square-meter) facility less than 650 yards (600 meters) from the Kremlin. This was the second Madonna-themed gym in the world, after Mexico City. She plans to open a third in St. Petersburg, Europe’s fourth-largest city.

‘Lots of Criticism’

The Russian Orthodox Church, the dominant religious body in a country of 143 million people, considers homosexuality a sin. About 69 percent of Russians identify themselves as Orthodox, according to a poll last August by the Moscow-based Levada Center.

“There’s lots of criticism from the media community about this law, but somehow most of the media forget about this crucial word -- minors,” said Vladimir Vigilyansky, a spokesman for the Moscow Patriarchy, by phone. “It’s about propaganda among minors, not about banning homosexuality itself.”

Russia, which is preparing to host the Winter Olympics in 2014 and the soccer World Cup in 2018, was chastised for the legislation by Canada, which issued a warning to its citizens who plan to travel to St. Petersburg to avoid “displaying affection in public, as homosexuals can be targets of violence.”

The former imperial capital, founded by Peter the Great in 1703, is the country’s top tourist destination and a host city for the World Cup. About 2.3 million foreigners visited the city in 2010, the last year for which government data is available.

To contact the reporter on this story: Anastasia Ustinova in в Чикаго at austinova@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net



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