Google’s 4Q earnings rise despite Motorola woes

SAN FRANCISCO (AP) — Google eked out slightly higher earnings in the fourth quarter, despite a financial drag caused by the Internet search leader’s expansion into device manufacturing and a decline in digital ad prices as more people gaze into the smaller screens of smartphones.

The results announced Tuesday pleased investors, helping to lift Google’s stock by 5 percent in extended trading.

More advertising poured into Google during the holiday shopping season, fueling a moneymaking machine that has steadily churned out higher profits since the company went public in 2004. Google’s fourth-quarter ad revenue totaled $ 12.1 billion, a 19 percent increase from the previous year.

Some of that money, though, has been shifting away from personal computers as advertisers try to connect with an expanding audience that relies on smartphones and tablet computers to reach Google’s search engine, email and other online services. By some estimates, about one-fourth of the clicks on Google’s search ads are now coming from mobile devices.

So far, advertisers have been unwilling to pay as much money to market their wares on mobile devices, largely because the smaller screens leave less room for commercial links and other marketing messages. The trend is one of the reasons that the average price for the ads that Google shows next to its search results has fallen from the previous year in five consecutive quarters, including the final three months of last year.

In a positive sign, though, Google’s average ad prices in the most recent quarter dropped by just 6 percent from the same period in 2011. That’s the smallest decline during the pricing downturn, raising hopes that Google may be starting to solve the pricing problems posed by the growing usage of mobile devices.

In a conference call Tuesday, Google CEO Larry Page predicted ad prices will gradually rise as the devices become even more sophisticated to unleash new ways to reach potential customers at the times they are most likely to buy something.

“In today’s multi-screen world, the opportunities are endless,” Page said.

Google earned nearly $ 2.9 billion, or $ 8.62 per share, during the fourth quarter. That compared to net income of $ 2.7 billion, or $ 8.22 per share, at the same time last year.

If not for the costs of employee stock compensation and certain other accounting items, Google said it would have earned $ 10.65 per share. On that basis, Google exceeded the average earnings estimate of $ 10.54 among analysts surveyed by FactSet.

It proved to be a difficult quarter to decipher because of an accounting quirk and the additions of new business lines that muddied the comparisons with the previous year.

For instance, Google Inc. didn’t own Motorola Mobility in 2011, having completed its $ 12.4 billion acquisition of the troubled handset maker eight months ago. What’s more, the Google is bringing in more revenue from tablet computers, which it began selling under the Nexus brand during the final half of last year.

Things were further complicated by Google’s recent agreement to sell a part of the Motorola Mobility division that makes cable TV boxes. That division is now accounted for as a discontinued operation whose revenue wasn’t booked in the latest quarter, even though it will remain a part of Google until the $ 2.35 billion sale is completed later this year.

Under that equation, revenue surged 36 percent from the previous year to $ 14.4 billion.

After subtracting advertising expenses, Google’s revenue totaled $ 11.3 billion. That figure was well below the average analyst estimate of $ 12.1 billion, according to FactSet.

But many of the analyst forecasts included revenue from Motorola Mobility’s set-top division, which Google excluded from its breakdown. Had the set-top division been included in Google’s accounting, the company’s net revenue would have matched analyst estimates.

The performance boosted Google’s stock by $ 35.33 to $ 738.20 in Tuesday’s extended trading.

Google would be doing even better if not for problems at Motorola Mobility, a cellphone pioneer that has been struggling since Apple revolutionized the industry with the release of the iPhone in 2007.

Motorola Mobility suffered an operating loss of $ 353 million on revenue of $ 1.5 billion in the fourth quarter

Google has been able to offset the slump in its search advertising prices by selling more video advertising on its YouTube subsidiary and other more graphical forms of marketing. The number of clicks on Google ads has still been rising, too. That’s important because the company typically gets paid by the click. In the fourth quarter, Google’s total ad clicks rose 24 percent from the previous year.

To gain a foothold in the mobile market, Google bakes its services into its Android software, an operating system that it gives away to makers of smartphones and tablets.

Android is now powers more than 500 million mobile devices worldwide, giving it a wide lead over Apple’s software for iPhones and iPads. Through September, Apple had shipped about 370 million iPhones and iPads. Apple Inc., which has morphed from a Google ally to bigger rival in the past five years, is scheduled to release its fourth-quarter results after the stock market closes Wednesday.

Google, which is based in Mountain View, Calif., didn’t update how many more Android devices were activated in the fourth quarter..

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Josh Duhamel named host of Kids' Choice Awards

NEW YORK (AP) — There's plenty of green slime in Josh Duhamel's future.

The star of "Transformers: Dark of the Moon" on Wednesday was named host of Nickelodeon's 26th Annual Kids' Choice Awards, which will be broadcast from the Galen Center in Los Angeles on March 23.

Duhamel, who starred on the NBC drama "Las Vegas," has already been inducted into Nickelodeon's Arm Fart Hall of Fame and showered in green goo.

The Kids' Choice Awards honor kids' favorites in film, music, sports and television by tallying the votes of kids online and via mobile devices. During the show, green slime is routinely dumped on celebrities and winners receive trophies shaped like blimps.

Last year's awards, hosted by Will Smith, attracted 6.2 million viewers.

___

Online: http://www.nick.com

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The New Old Age Blog: Study Links Cognitive Deficits, Hearing Loss

There’s another reason to be concerned about hearing loss — one of the most common health conditions in older adults and one of the most widely undertreated. A new study by researchers at Johns Hopkins Medicine suggests that elderly people with compromised hearing are at risk of developing cognitive deficits — problems with memory and thinking — sooner than those whose hearing is intact.

The study in JAMA Internal Medicine was led by Dr. Frank Lin, a hearing specialist and epidemiologist who over the past several years has documented the extent of hearing problems in older people and their association with falls and the onset of dementia.

The physician’s work is bringing fresh, and some would say much-needed, attention to the link between hearing difficulties and seniors’ health.

In his new report, Dr. Lin looked at 1,984 older adults who participated over many years in the Health ABC Study, a long-term study of older adults conducted in Pittsburgh and Memphis. Participants’ mean age was 77; none had evidence of cognitive impairment when the period covered by this research began. In 2001 and 2002, they received hearing tests and cognitive tests; cognitive tests alone were repeated three, five and six years later.

The tests included the Modified Mini-Mental State exam, which is administered through an interview and yields an overall picture of cognitive status, and the Digit Symbol Substitution Test, a paper-only exercise that asks people to match symbols and numbers, which can reveal deficits in someone’s working memory and executive functioning.

Dr. Lin found that annual rates of cognitive decline were 41 percent greater in older adults with hearing problems than in those without, based on results from the Modified Mini-Mental State Exam. A five-point decline on that test is considered a “clinically significant” indicator of a change in cognition.

Using this information, Dr. Lin found that elderly people with hearing problems experienced a five-point decline on the exam in 7.7 years, compared with 10.9 years for those with normal hearing.

Results from the Digit Symbol Substitution Test showed the same downward trend, though not quite as steep: older people with hearing loss recorded a yearly rate of cognitive decline 32 percent greater on it than those with intact hearing. In both cases, the results showed an association only, with no proof of causality.

Still, given the fact that nearly two-thirds of adults age 70 and older have hearing problems, it is an important finding.

For caregivers and older adults, the bottom line is “pay attention to hearing loss,” said Kathleen Pichora-Fuller, a professor of psychology at the University of Toronto who was not involved in the study.

Most people seek medical attention for hearing difficulties 10 to 20 years after they first notice a problem, she said, because “there’s a stigma about hearing loss and people really don’t want to wear a hearing aid.” That means years of struggling with the consequences of impairment, without interventions that can make a difference.

One consequence that may help explain Dr. Lin’s findings is social isolation. When people have a hard time distinguishing what someone is saying to them, as is common in older age, they often stop accepting invitations to dinners or parties, attending concerts or classes, or going to family events. Over time, this social withdrawal can become a self-fulfilling prophecy, leading to the loss of meaningful relationships and activities that keep older people feeling engaged with others.

A substantial body of research by cognitive scientists has established that seniors’ cognitive health depends on exercising both body and brain and remaining socially engaged, and “now we have this intersection of hearing research and cognitive research lining up and showing us that hearing health is part of cognitive health,” said Dr. Pichora-Fuller, who originally trained as an audiologist.

Family physicians and internists, too, often dismiss older patients’ complaints about hearing, and should pay close attention to Dr. Lin’s research, she said.

“I hope this study will be a wake-up call to clinicians that auditory tests need to be part of the battery of tests they employ to look at an older person’s health,” agreed Patricia Tun, an adjunct associate professor of psychology at Brandeis University.

Although the tests are effective and cause no known harm, a panel of experts recently failed to recommend them for older adults because of a lack of supporting evidence, as I wrote last August.

Another potential explanation for Dr. Lin’s new finding lies in a concept known as “cognitive load” that Dr. Tun has explored through her research. Basically, this assumes that “we only have a certain amount of cognitive resources, and if we spend a lot of those resources of processing sensory input coming in — in this case, sound — it’s going to be processed more slowly and understand and remembered less well,” she explained.

In other words, when your brain has to work hard to hear and identify meaningful speech from a jumble of sounds, “you’ll have less mental energy for higher cognitive processing,” Dr. Tun said.

Even seniors who hear sounds relatively well often report that words sound garbled or mumbled, she noted, indicating a deterioration in hearing mechanisms that process complex speech.

Also, as yet unidentified biological or neurological pathways may affect both speech and cognition. Or hearing loss may exacerbate frailty and other medical conditions that older people oftentimes have in ways that are as yet poorly understood, Dr. Lin’s paper notes.

A limitation to his study is its reliance, in part, on the Modified Mini-Mental State exam, which asks older adults to respond to questions posed by an interviewer, according to Barbara Weinstein, a professor and head of the audiology program at CUNY’s Graduate Center.

Her research has shown that hearing-compromised seniors may not understand questions and answer incorrectly, confounding results. Another limitation arises from the failure to test participants’ hearing over time, as happened with cognitive tests, making associations more difficult to tease out.

Dr. Lin hopes to address this through another research project that would follow older adults over time and test whether interventions such as hearing aides help prevent the onset or slow the progression of cognitive decline. In the meantime, older people and caregivers should arrange for hearing tests if they have concerns, and consider getting a hearing aid if problems are confirmed.

Getting sound to the brain is the “first and most important step” in preventing sensory deprivation that can contribute to cognitive dysfunction, said Kelly Tremblay, a professor of speech and hearing science at the University of Washington.

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DealBook: Microsoft May Back Dell Buyout

The effort to take Dell private has gained a prominent, if unusual, backer: Microsoft.

The software giant is in talks to help finance a takeover bid for Dell that would exceed $20 billion, a person briefed on the matter said on Tuesday. Microsoft is expected to contribute up to several billion dollars.

An investment by Microsoft — if it comes to pass — could be enough to push a leveraged buyout of the struggling computer maker over the goal line. Silver Lake, the private equity firm spearheading the takeover talks, has been seeking a deep-pocketed investor to join the effort. And Microsoft, which has not yet made a commitment, has more than $66 billion in cash on hand.

Microsoft and Silver Lake, a prominent investor in technology companies, are no strangers. The private equity firm was part of a consortium that sold Skype, the online video-chatting pioneer, to Microsoft for $8.5 billion nearly two years ago. And the two companies had discussed teaming up to make an investment in Yahoo in late 2011, before Yahoo decided against selling a minority stake in itself.

A vibrant Dell is an important part of Microsoft’s plans to make Windows more relevant for the tablet era, when more and more devices come with touch screens. Dell has been one of the most visible supporters of Windows 8 in its products.

That has been crucial at a time when Microsoft’s relationships with many PC makers have grown strained because of the company’s move into making computer hardware with its Surface family of tablets.

Frank Shaw, a spokesman for Microsoft, declined to comment.

If completed, a buyout of Dell would be the largest leveraged buyout since the financial crisis, reaching levels unseen since the takeovers of Hilton Hotels and the Texas energy giant TXU. Such a deal is taking advantage of Dell’s still-low stock price and the abundance of investors willing to buy up the debt issued as part of a transaction to take the company private. And Silver Lake has been working with Dell’s founder, Michael S. Dell, who is expected to contribute his nearly 16 percent stake in the company to a takeover bid.

Yet while many aspects of the potential deal have fallen into place, including a potential price of up to around $14 a share, talks between Dell and its potential buyers may still fall apart.

Shares of Dell closed up 2.2 percent on Tuesday, at $13.12. They began rising after CNBC reported Microsoft’s potential involvement in a leveraged buyout. Microsoft shares slipped 0.4 percent, to $27.15.

Microsoft’s lending a hand to Dell could make sense at a time when the PC industry is facing some of the biggest challenges in its history. Dell is one of Microsoft’s most significant, longest-lasting partners in the PC business and among the most committed to creating machines that run Windows, the operating system that is the foundation of much of Microsoft’s profits.

But PC sales were in a slump for most of last year, as consumers diverted their spending to other types of devices like tablets and smartphones. Dell, the third-biggest maker of PCs in the world, recorded a 21 percent decline in shipments of PCs during the fourth quarter of last year from the same period in 2011, according to IDC.

In a joint interview in November, Mr. Dell and Steven A. Ballmer, Microsoft’s chief executive, exchanged friendly banter, as one would expect of two men who have been in business together for decades.

Mr. Dell said Mr. Ballmer had gone out of his way to reassure him that Microsoft’s Surface computers would not hurt Dell sales.

“We’ve never sold all the PCs in the world,” said Mr. Dell, sitting in a New York hotel room brimming with new Windows 8 computers made by his company. “As I’ve understood Steve’s plans here, if Surface helps Windows 8 succeed, that’s going to be good for Windows, good for Dell and good for our customers. We’re just fine with all that.”

Microsoft has been willing to open its purse strings in the past to help close partners. Last April, Microsoft committed to invest more than $600 million in Barnes & Noble’s electronic books subsidiary, in a deal that ensures a source of electronic books for Windows devices. Microsoft also agreed in 2011 to provide the Finnish cellphone maker Nokia billions of dollars’ worth of various forms of support, including marketing and research and development assistance, in exchange for Nokia’s adopting Microsoft’s Windows Phone operating system.

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Russians Leaving Syria Cross Into Lebanon

MASNAA, Lebanon (AP) —

Four buses carrying Russian citizens escaping the Syrian civil war have crossed into Lebanon.

A Russian embassy official traveling with the group on Tuesday says about 80 people, mostly women and children, are on the buses.

Several men also have been seen in the first group of Russian citizens being evacuated from Syria.

Russia sent two planes to Beirut that will take the group home later.

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Cycling-No sympathy for Armstrong on social media

LONDON, Jan 21 (Reuters) – Lance Armstrong’s televised doping confession has done nothing to restore his shattered reputation, a study of responses posted to the Twitter social media site showed.

“What was particularly noticeable in our analysis of the Armstrong revelation was the sheer lack of sympathy out there,” said Charlie Dundas of sports market research company Repucom.

“The tone of the discussion around the Oprah Winfrey interview highlighted the level of disappointment and anger that exists. It’s clear the public are far from ready to forgive Lance Armstrong,” he added.

In the interview, Armstrong admitted to using performance-enhancing drugs on his way to his seven Tour de France titles. The Texan also said he hoped a lifetime ban would one day be lifted to allow him to compete in events like marathons.

The Armstrong interview generated 1.9 million Twitter posts between Jan. 14-20, Repucom said. America accounted for more than a quarter of these, with Australia the second most active nation on the site. (Writing by Keith Weir, editing by Mark Meadows)

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Michelle Obama wears Wu to the balls again

WASHINGTON (AP) — Michelle Obama made it a fashion tradition Monday night, wearing a custom-made Jason Wu gown to the inauguration balls. The ruby-colored dress was a follow-up to the white gown Wu made for her four years ago when she was new to Washington, the pomp and circumstance, and the fashion press.

She now emerged in velvet and chiffon as a bona fide trendsetter.

"I can't believe it. It's crazy," said Wu, reached at his Manhattan studio. "To have done it once was already the experience of my life. To have a second time is tremendous."

President Barack Obama also struck a similar style chord to his first-term inaugural balls: He wore a white tie with his tuxedo.

The red halter dress was the only one Wu, who went from fashion insider to household name on this night in 2009, submitted for Mrs. Obama's consideration. He collaborated with jeweler Kimberly McDonald on the jeweled neckline. "For this occasion, it had to be real diamonds," Wu said.

He said he felt the dress showed how he has grown up as a designer — and how Mrs. Obama's style has evolved to be even more confident.

The first family headed out to inaugural festivities earlier on Monday with Mrs. Obama leading a very coordinated fashion parade in a navy-silk, checkered-patterned coat and dress by Thom Browne that were inspired by a menswear necktie.

The outfit was specifically designed for Mrs. Obama, but Browne said he wasn't 100 percent sure she was going to wear it until she came out with it on at Inauguration. "I am proud and humbled," he said.

The rest of Mrs. Obama's Inauguration Day outfit included a belt from J. Crew, necklace by Cathy Waterman and a cardigan by Reed Krakoff, whose ensemble she also wore to yesterday's intimate, indoor swearing-in ceremony.

Obama wore a blue tie with his white shirt, dark suit and overcoat. Malia Obama had on a plum-colored J. Crew coat with the hemline of an electric-blue dress peeking out and a burgundy-colored scarf, and her younger sister Sasha had on a Kate Spade coat and dress in a similar purple shade.

"It is an honor that Sasha Obama chose to wear Kate Spade New York," said the company's creative director, Deborah Lloyd, in an email to the Associated Press. "She epitomizes the youthful optimism and colorful spirit of the brand. We are so proud to have been a part of this historic moment."

Jenna Lyons, creative director of J. Crew, said it was "a huge point of pride for all of us" to be a part of the day — as the brand was back in 2009 when the girls wore outfits by CrewCuts, its children's label.

"It's amazing to see the evolution of the family. I love the way Michelle looks. She looks beautiful in something so clean and tailored. It's such an elegant choice," Lyons said, "and they all look so sophisticated! You can see how the girls have grown up in the four years, and they're still so alive and vibrant, but more sophisticated."

The vice president's wife, Jill Biden, wore a gray coat and dress by American designer Lela Rose.

Mrs. Obama has worn Browne's designs for other occasions, including a gray dress with black lace overlay to one of the presidential debates last fall, and she honored him last summer at the Smithsonian's Cooper-Hewitt National Design Awards for his contribution to fashion.

Browne made his name in modern — very modern — menswear, but he launched womenswear in 2011. He was in Paris on Monday, just finishing previews for his next menswear collection. The idea to use the tie fabric came to him because he was indeed designing these men's clothes at the same time, he explained.

"I wanted 'tailored' for her. For me, she stands for strength and confidence, and that's what I wanted to design for her," he said.

Simon Collins, dean of the school of fashion at Parsons The New School for Design in New York, said the Obamas dressed in their typical fashion: one that shows pride in their appearance.

"They are a stylish couple and their children look fabulous. Too many people get dressed in the dark," he said. "They show it's good to dress up, take pride in how you look. ... It's a wonderful example for America and the rest of the world."

He also noted that the Obamas seem to understand that the fashion industry is a driving force in the U.S. economy and that its lobby is a powerful one. They don't treat fashion frivolously, he observed.

The first lady "is so supportive of so many American designers," Browne noted.

But Collins said he was a bit surprised the public doesn't pay much attention to the president's wardrobe. He joked that Obama should perhaps try one of Browne's signature shrunken suits — the ones that show a man's ankles.

At the end of the Inaugural festivities, Mrs. Obama's outfit and accompanying accessories will go to the National Archives.

___

Samantha Critchell tweets fashion at (at)AP_Fashion, and can be reached on Twitter at (at)Sam_Critchell.

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The New Old Age Blog: The Brutal Truth of 'Amour'

It has been a few days since I left the movie theater in a bit of a daze, and I’m still thinking about “Amour.”

So much of this already much-honored film rings utterly true: the way a long-married Parisian couple’s daily routines, their elegant life of books and music and art, can be upended in a moment. The tender care that Georges (Jean-Louis Trintignant) provides for Anne (Emmanuelle Riva) as multiple strokes claim her body and her mind, and the inexorable way that care wears them both down. Their withdrawal into a proud dyad that seeks and accepts little help from outsiders, even family. “We’ve always coped, your mother and I,” Georges tells their daughter.

The writer and director Michael Haneke’s previous movies, which I haven’t seen, tend to be described as shocking, violent, even punitive. “Amour,” which Times critic Manohla Dargis called a masterpiece, includes one brief spasm of violence, but the movie remains restrained, not graphic. It’s brutal only because life, and death, can be brutal.

Is popular culture paying more attention to aging and caregiving? In the last couple of years, I have written about these subjects surfacing in a YouTube series (“Ruth & Erica”), in movies like “The Iron Lady,” in novels like Walter Mosley’s “The Last Days of Ptolemy Grey.”

A couple of weeks back, watching a play called “The Other Place,” starring the remarkable Laurie Metcalfe, I suddenly realized that the dynamic physician and businesswoman onstage had some sort of early-onset dementia. Dementia seems a particularly popular subject, in fact. Intrinsically dramatic, it suffuses the Mosley novel and Alice LaPlante’s “Turn of Mind,” and some of my favorite movies about aging, “Away From Her,” “Iris” and “The Savages.”

“Kings Point,” Sari Gilman’s compelling documentary about a retirement community in Florida where nobody seemed to expect to grow old, just won an Oscar nomination for best short-subject documentary and will be shown on HBO in March. And “Amour,” which won the Palme d’Or at Cannes, is up for five Academy Awards, including best picture, best director and a best actress nomination for the 85-year-old Ms. Riva. (Academy voters: Just give it to her.)

A number of these artists, Mr. Haneke included, have spoken about their own experiences with aged relatives. Perhaps, as the population ages and more people confront the consequences, the stories our culture tells itself have evolved to include more old people, more caregivers. Or maybe I just want that to be true.

“Do not go see this,” my movie-going buddy had been warned, probably because her mother has dementia and friends who had seen the film wanted to spare her. I know some people found “Amour” too slow-paced or claustrophobic — like many elderly couples’ lives, it basically takes place in four rooms — or too grim. (If you’ve seen it, tell us what you thought.)

If you’re a full-time caregiver or you’re coping with a relative with dementia, perhaps you would prefer to spend your 2 hours 7 minutes of precious time off watching something funny. Escapism has its virtues.

But I found “Amour” unflinching and provocative and beautiful.

Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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DealBook: China’s Focus on Aerospace Raises Security Questions

TIANJIN, China — When Airbus executives arrived here seven years ago scouting for a location to assemble passenger jets, the broad, flat expanse next to Tianjin Binhai International Airport was a grassy field.

Now, Airbus, the European aerospace giant, has 20 large buildings and is churning out four A320 jetliners a month for mostly Chinese state-controlled carriers. The company also has two new neighbors — a sprawling rocket factory and a helicopter manufacturing complex — both producing for the Chinese military.

The rapid expansion of civilian and military aerospace manufacturing in Tianjin reflects China’s broader ambitions.

As Beijing’s leaders try to find new ways to invest $3 trillion of foreign reserves, the country has been aggressively expanding in industries with strong economic potential. The Chinese government and state-owned companies have already made a major push into financial services and natural resources, acquiring stakes in Morgan Stanley and Blackstone and buying oil and gas fields around the world.

Aerospace represents the latest frontier for China, which is eyeing parts manufacturers, materials producers, leasing businesses, cargo airlines and airport operators. The country now rivals the United States as a market for civilian airliners, which China hopes to start supplying from domestic production. And the new leadership named at the Party Congress in November has publicly emphasized long-range missiles and other aerospace programs in its push for military modernization.

If Boeing’s difficulties with its recently grounded aircraft, the Dreamliner, weigh on the industry, it could create opportunity. Chinese companies, which have plenty of capital, have been welcomed by some American companies as a way to create jobs. Wall Street has been eager, too, at a time when other merger activity has been weak.

Washington is trying to figure out what to do about China’s deal-making broadly. “Many of these transactions raise important security issues for our country,” said Michael R. Wessel, a member of the U.S.-China Economic and Security Review Commission, which was created by Congress to monitor the bilateral relationship. “China’s interest in promoting these investments isn’t necessarily consistent with our own interests, and it’s appropriate to thoroughly examine the transactions.”

In aerospace, the Chinese deal-makers have deep ties to the military, raising additional issues for American regulators. The main contractor for the country’s air force, the state-owned China Aviation Industry Corporation, known as Avic, has set up a private equity fund to purchase companies with so-called dual-use technology that has civilian and military applications, with the goal of investing as much as $3 billion. In 2010, Avic acquired the overseas licensing rights for small aircraft made by Epic Aircraft of Bend, Ore., using lightweight yet strong carbon-fiber composites — the same material used for high-performance fighter jets.

Provincial and local government agencies in Shaanxi Province, a hub of Chinese military aircraft testing and production, have set up another fund of similar size for acquisitions. Last month, a consortium of Chinese investors, including the Shaanxi fund, struck a $4.23 billion deal with the American International Group to buy 80 percent of the International Lease Finance Corporation, which owns the world’s second-largest passenger jet fleet.

“There has always been an obvious cross-fertilization of ideas, expertise and money between the civilian and military,” said Martin Craigs, a longtime aerospace executive in Asia who is now the chairman of the Aerospace Forum Asia, a nonprofit group in Hong Kong. He added that Chinese companies had been actively hiring senior American and European aerospace engineers, so national security concerns could be quelled some by hiring the right people.

The push into aerospace coincides with growing worries in the West and across Asia about China’s increasingly assertive territorial claims, including the dispatch of Chinese warships to waters long patrolled by Japan, the Philippines and Vietnam.

Coincidentally, hours after the A.I.G. deal was announced, two Chinese navy destroyers and two frigates showed up in disputed waters patrolled by Japan. China and Japan have stepped up public criticisms of each other since. And the Obama administration has begun a strategic “pivot,” shifting military forces from the Mideast back to the western Pacific, a move that Chinese officials have criticized as an attempt to contain their country.

Such confrontations in the region are drawing attention to China’s deal-making ambitions.

In October, a $1.79 billion bid by a business linked to Beijing’s municipal government to acquire the corporate jet and propeller plane operations of bankrupt Hawker Beechcraft in Wichita, Kan., fell apart over national security concerns in Washington. Executives found it hard to disentangle the civilian operations from the company’s military contracting business.

But many aerospace experts predict that Chinese investors and companies will find ways to appease American regulators. “There will be concerns undoubtedly and generally quite valid, but the commercial imperatives are such that people will find a way around them,” said Peter Harbison, the chairman of CAPA-Center for Aviation, a global aerospace consulting firm.

The sale of A.I.G.’s leasing business is expected to face scrutiny by the Committee on Foreign Investment in the United States, the government panel that reviews the national security implications of deals involving foreign buyers.

The group’s customers include many of the largest carriers in the United States, and the federal government has long counted on being able to use civilian passenger jets to transport troops overseas during a national emergency. When Saddam Hussein sent the Iraqi army into Kuwait in 1990, the Defense Department relied on the emergency mobilization of civilian jetliners to ferry 60 percent of the soldiers sent to and from the Mideast during the first Persian Gulf war and a quarter of the cargo, according to a RAND study.

Henri Courpron, the chief executive of A.I.G.’s International Lease Finance Corporation, said that he did not believe the United States should be concerned that the acquisition would prevent civilian aircraft from being available in a future crisis. Only 8 percent of the company’s aircraft are currently leased to American air carriers, and most of these are narrow-body aircraft that lack the range to ferry troops across oceans.

“It’s really a nonissue — we have 900-plus aircraft in our fleet, and there are only 11 wide bodies” currently being leased to American carriers, he said in a telephone interview. He added that the carriers have control over the aircraft during the leases. Executives from the consortium buying the stake in the leasing company declined repeated requests for interviews.

Chinese suitors in the aerospace industry understand the concerns. In part, they watched the experience in the natural resources industry. The China National Offshore Oil Corporation failed in its 2005 bid to acquire Unocal after intense political opposition. After that, Chinese energy giants have been more cautious, pursuing minority stakes in the United States and limiting their outright acquisitions.

Chinese companies are taking a similar tack in aerospace, pursuing joint ventures and technical cooperation agreements alongside acquisitions. For example, Avic is working with General Electric and other American aerospace companies on the production of a civilian jetliner, the C919. Beijing envisions the narrow-body C919 as the next step toward building a domestic aerospace business that can compete with Boeing and Airbus.

Western companies and their advisers say that they are acutely aware that technology transfers could help China strengthen its military and develop more competitive civil airplanes, and are taking precautions to protect trade secrets and national security. “You transfer the part that is most easily reverse engineered, or easily dissected,” said a lawyer with detailed knowledge of these transactions.

But many in the aerospace sector are more skeptical that the West can avoid losing control of technology. “The mentality is, they’re going to find a way to get there anyway, and we may as well get there with them,” Mr. Harbison of the CAPA-Center for Aviation said.

Airbus executives say that they are being prudent. They add that there are few trade secrets about the A320 manufactured here, an aircraft that was designed in 1986. “The A320 is well known all over the world,” said Jean-Luc Charles, the general manager of Airbus’s operations here.

A tour of the main assembly area, a hangar with gray steel walls and large red cranes overhead, suggests that it may be possible to protect the technology. The seats are installed here and the aircraft painted, but the factory is largely assembling planes from kits imported from Europe. Entire fuselages, with green protective coatings, are brought by ship from Hamburg, Germany. Even the stepladders and freight elevators give weight limits in German, and the tool boxes are labeled in English, not Chinese.

Mr. Charles said that 95 percent of the parts are still imported, and that it would take many years for that amount to shrink. “One by one, we start to give them the parts,” he said. “But each subassembly is a complex project — it takes five years.”

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India Ink: Arguments in Delhi Gang Rape Trial Begin Thursday

NEW DELHI— The five men accused of raping and murdering a 23-year-old physiotherapist in a case that has transfixed India appeared before the trial judge Monday for a brief and largely procedural hearing.

Additional Sessions Judge Yogesh Khanna scheduled the next hearing for noon on Thursday, when defense attorneys and prosecutors are expected to begin arguments over precisely which criminal charges the accused will face at trial.

Nearly a dozen reporters were present in the courtroom, the first hearing before Judge Khanna in the fast-track court specifically set up for this trial. But Judge Khanna ordered the reporters to leave the courtroom before the proceeding took place under a renewed order that will make the trial closed to anyone not directly connected to the trial, including reporters.

The reporters filed out of the courtroom in an orderly fashion, in contrast to the chaos that surrounded earlier proceedings, when reporters found out belatedly that the charges were being read in another room and then banged on the door of a magistrate’s court, demanding to be let in.

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