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Where theTechWorld Is Headed
SMALL BUSINESS
MONDAY, NOVEMBER 3, 2014 ~ VOL. CCLXIV NO. 106
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Business & Finance
I
nvestigators said an improper co-pilot command
preceded the in-flight
breakup of Virgin Galactic’s
experimental spacecraft. A1
n The U.S. may call Hank
Greenberg to testify in his lawsuit against the government
over the AIG bailout. C1
n Google’s Android system
ran 84% of the smartphones
shipped last quarter, down a
bit from the second period. B6
n The FCC is drafting rules
to protect 911 services and
maintain competition amid
phone-network overhauls. B6
n “Nightcrawler” and “Ouija”
tied for first place at the
weekend movie box office. B5
i
i
World-Wide
n Republicans hold a slim lead
on the question of which party
likely voters want to control
Congress, a poll on the eve of
elections found. A1, A4, A6
n Afghanistan’s president
has embraced tight cooperation with coalition and Afghan troops, the coalition’s
commander said. A11
n A suicide bombing near
Pakistan’s border crossing
with India killed at least 50. A
faction of the Pakistani Taliban claimed responsibility. A11
n Israel closed its border
crossing into Gaza following a
rocket attack. Prime Minister
Netanyahu urged calm amid
unrest in Jerusalem. A16
n Residents of east Ukraine
voted in an election that Kiev,
the U.S., the EU and others
have condemned as illegal. A9
n Soldiers in Burkina Faso
drove away protesters as opposition emerged to the military
regime that seized power. A16
n Nearly 75% of voters polled
back quarantines of healthcare workers who treat Ebola
patients in West Africa. A8
n Researchers are studying
a rare genetic disease in an
effort to understand Ebola. A8
n A top Hong Kong official
rejected proposals by protesters for a referendum to resolve
the political standoff. A16
n A Bangladeshi Islamist was
convicted of war crimes in the
1971 independence war and
sentenced to death. A16
Exxon, Shell, Chevron Pare Back as Rising Production Costs Squeeze Earnings
As crude prices tumble, big oil
companies are confronting what
once would have been heresy:
They need to shrink.
Even before U.S. oil prices began their summer drop toward
$80 a barrel, the three biggest
Western oil companies had lower
profit margins than a decade ago,
when they sold oil and gas for
half the price, according to a
Wall Street Journal analysis.
Despite collectively earning
$18.9 billion in the third quarter,
the three companies—Exxon Mo-
Media............................... B5
Moving the Market C2
Opinion.................. A13-15
Sports.............................. B8
U.S. News................. A2-8
Weather Watch........ B7
World News.... A9-11,16
>
s Copyright 2014 Dow Jones & Company.
All Rights Reserved
By Daniel Gilbert
in Houston and
Justin Scheck in London
bil Corp., Royal Dutch Shell PLC
and Chevron Corp.—are now
shelving expansion plans and
shedding operations with particularly tight profit margins.
The reason for the shift lies in
the rising cost of extracting oil
and gas. Exxon, Chevron, Shell,
as well as BP PLC, each make less
money tapping fuels than they
did 10 years ago. Combined, the
four companies averaged a 26%
profit margin on their oil and gas
sales in the past 12 months, compared with 35% a decade ago, according to the analysis.
Shell last week reported that
its oil-and-gas production was
lower than it was a decade ago
and warned it is likely to keep
falling for the next two years.
Exxon’s output sank to a fiveyear low after the company disposed of less-profitable barrels in
the Middle East. U.S.-based Chev-
BURDEN OF PROOF
Convert Tests Boundaries
Of German Terror Law
BY ANTON TROIANOVSKI
in Germany and the West.
Mr. Lau, who has delivered serGathering Strength
WUPPERTAL, Germany—Funmons to hundreds of listeners at
Germany reports growing
damentalist Islamic preacher
town squares across Germany, denumbers of Salafis, followers of a
Sven Lau claims he has a simple
nies
the allegation. Despite wirestrict interpretation of Islam who
test to separate undercover oftaps and searches of his home and
sometimes have ties to terrorism.
ficers from passersby. He gives
computers by authorities, he re6,000 followers
them the finger. If they don’t remains free. He denied any ties to
spond, he said, “they’re intelliterrorism or the extremist group
gence agents.”
Islamic State—“I’m not pro-IS,” he
4,000
German authorities have
said—and described his past trips
spent at least eight years monito Syria as humanitarian work.
toring Mr. Lau, a 34-year-old exThe standoff between Mr. Lau
2,000
firefighter from a Catholic family
and German security agents ilwho now practices a strict form
lustrates the difficulty of drawof Islam known as Salafism.
ing a clear line between opinion
0
Officials say Mr. Lau is one of
and sedition at a time when Eu2011
’12
’13
’14
the most prominent Islamic
ropean authorities face growing
Source: Federal Office for the Protection of
the Constitution
preachers in Germany, with a
numbers of disaffected Muslims,
The Wall Street Journal
charismatic message that lures
some of them taking on radical
young Germans into radical Musviews. Security officials say they
lim circles. The head of Germonitor a wide range of Islamist
many’s domestic intelligence agency called Mr. Lau proselytizing but only a small minority pass the
one of the country’s “best-known propagandists.” threshold for prosecution on charges of supporting
Authorities allege Mr. Lau inspired some of his fol- terrorism.
lowers to join Islamic militants in Syria and Iraq,
German authorities, who say they still watch Mr.
Please turn to page A12
and fear they will eventually spawn terror attacks
YEN 112.34
PollGives
GOPEdge
On Eve
Of Vote
ron, for which production has
been flat for the past year, is delaying major investments because of cost concerns.
BP has pared back the most
sharply, selling $40 billion in assets since 2010, largely to pay for
legal and cleanup costs stemming
from the Deepwater Horizon oil
spill in the Gulf of Mexico that
year.
To be sure, the companies, at
Please turn to page A8
 Heard: Saudi Arabia’s strategy... C6
Republicans hold a narrow edge
on the question of which party
likely voters want to control Congress, a new Wall Street Journal/
NBC News poll finds, signaling that
the GOP heads into Tuesday’s balloting with a breeze, but not a
strong wind, at its back.
The survey found plentiful evidence that Election Day will draw
an electorate that thinks the nation is on the wrong track and dislikes the direction in which President Barack Obama has led the
country. With eight or more Senate races considered close, even a
slight advantage for Republicans
could produce enough victories to
give the party the six seats it
needs to gain control of the chamber.
The final Journal/NBC News
survey before Tuesday’s balloting
found that 46% of likely voters favor a Congress led by Republicans,
while 45% prefer Democratic control.
The GOP claimed a similar, onepercentage-point lead among likely
voters in the 10 states where Senate races are most competitive and
where the balance of power in the
chamber will be decided.
Those results suggest a narrower advantage for Republicans
than in the latest midterm election, in 2010, when the GOP entered Election Day with a six-percentage-point advantage among
likely voters. The GOP that year
swept to a majority in the House,
with a gain of 63 seats, and won
six Senate spots.
Bill McInturff, the Republican
Please turn to page A4
 Colorado as test case................ A4
 Gubernatorial races tight......... A6
 Early votes spur early boasts... A6
Virgin Crash Sets Back
Space-Tourism Race
BY ANDY PASZTOR
MOJAVE, Calif.—An improper
co-pilot command preceded Friday’s in-flight breakup of Virgin
Galactic LLC’s rocket, according
to investigators, when movable
tail surfaces deployed prematurely.
Two seconds after the surfaces moved—with SpaceShip
Two traveling faster than the
speed of sound—“we saw disintegration” of the 60-foot-long
experimental craft, according to
Christopher Hart, acting chairman of the National Transporta-
tion Safety Board.
The co-pilot died in the accident, and the other pilot was severely injured.
The sequence of events released by the NTSB indicates
that the rocket ship separated
normally from its carrier and the
propulsion system worked normally until the tail surfaces,
called feathers, deployed.
The disaster, coupled with the
explosion earlier last week of an
unmanned Orbital Sciences Corp.
cargo rocket destined for the international space station, has set
Please turn to page A8
Oh Say, Can You See This? In Spain, Flap Unfurls Over Flags
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i
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Secessionists Raise Tiny Banners to Protest Law; Cat vs. Mouse
BY MATT MOFFETT
n Islamist militants in the
Philippines killed six soldiers
guarding a road project. A16
CONTENTS
Abreast of the Market C1
Corporate News B2,3,6
Global Finance............ C3
Heard on the Street C6
Law Journal................ B4
Markets Dashboard C4
Big Oil Feels Need to Shrink
GALLIFA, Spain—The Spanish
flag affixed to the town-hall facade of this Catalan hamlet isn’t
something you’d expect to see on
a public building. It is so small it
looks like it ought to be attached
to a toothpick protruding from a
plate of flan.
A Catalan separatist politician
hung the paper-back-sized banner as a way of complying with
the letter of a national law requiring towns to fly the Spanish
flag, while at the same time
thumbing his nose at authorities
in Madrid.
Composite
i
THEY’RE OFF: Runners cross the Verrazano-Narrows Bridge early in the race Sunday. Mary Keitany and Wilson Kipsang of Kenya won their events.
“They asked
standard-sized.
for a flag,” said
Not only has Galpro-indepenlifa refused to
dence
leader
strike the mini
Jordi
Fornas.
banner, it has also
“Well, there it is. I
raised a massive
hope
they’re
starred flag rephappy.”
resenting the CatNow, Gallifa is
alan
indepenat the center of a
dence movement.
political row out
As separatist
of all proportion
passions surge in
Agramunt’s Catalan
to the size of eiSpain, a peculiar
independence banner
ther its flag or its
cat - a n d - m o u s e
population of 200.
game involving
Spain’s central government is su- flags is playing out in scores of
ing to have the flag replaced town halls in Catalonia and
Please turn to page A12
with a standard that is, well,
Meatier bottom lines. That ’s Ryder.
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P2JW307000-6-A00100-10EFFB7178F
n The worst rail delays in over
a decade are impeding Midwest
crop shipments and boosting
corn and soybean prices. C1
Lucas Jackson/Reuters
n Publicis is in talks to buy
Sapient as the French ad giant
seeks to transform itself into
a digital-technology firm. B1
n Diageo and Jose Cuervo are
nearing a deal to swap the
U.K. firm’s Bushmills whiskey
label for a tequila brand. B3
EURO $1.2523
BY PATRICK O’CONNOR
n Municipal bonds have
posted their longest string of
monthly gains in over two decades, outpacing blue-chip
stocks and corporate debt. C1
n Stocks are entering what
normally is their strongest
period, but some investors
worry about the potential impact of global tensions. C1
n The U.S. has blocked China’s
efforts to use a summit to
start talks on a free-trade
zone spanning the Pacific. A10
HHHH $2.00
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Kenyans Sweep Top Spots in a Blustery New York City Marathon
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