"[Microsoft] has always succeeded in having large volumes of relatively low-cost items and that's a message we need to play out very strongly over the next few months," Robert Youngjohns, who heads up Microsoft's sales and marketing in North America, tells the P-I's Joseph Tarticoff. "It's really twisting the value proposition around so it goes around what the customer is really worried about, which is, 'How do I make my budget this month?'"

The stock prices for the big-box discounters - Wal-Mart, BJ's Wholesale Club, and PriceSmart -- have gained 6% between Nov. 20, 2007, and Nov. 19 of this year, while that of department stores, including Kohl's, JC Penney, and Saks Fifth Avenue, fell 60%.

If you are a male past the age of puberty who reads magazines like Conde Nast Portfolio, you're probably aware that the Fontainebleau Hotel in Miami Beach has undergone a massive renovation. Or at least that the word Fontainebleau and a woman wearing a very revealing thong and no top have been seen together in advertising on heavier-than-usual stock doing little more than purring that "the epicenter for style, fame and glamour" has re-opened. (The model is also the face -- and body -- of the Web site.) The hotel, designed by the architect who made Miami …

After months of teaser ads, Verizon Wireless is releasing the touch-screen BlackBerry Storm today. A new TV ad claims that typing on the Storm is more accurate than typing on other touch-screen phones: "Lookie here! It's typing Reno, Nevada, not Rhino Frittata or Emo Piñata," says a voiceover. Verizon is heavily subsidizing the device, which costs $199 after a $50 mail-in rebate with a two-year contract, Sara Silver reports. A massive ad campaign started in September with mailers to customers that read: "The Storm Is Coming." In October, the company began running TV teasers featuring a Storm user …

American Airlines CFO Tom Horton says that U.S. restrictions that cap foreign voting investment in U.S. carriers to 25% eventually must fall, and he foresees "a world when there will be a handful of global companies that can take customers and cargo anywhere they need to go." American is currently seeking immunity from antitrust rules to form a venture with British Airways and Spain's Iberia, Justin Baer reports. Delta already enjoys immunity though its partnership with Air-France-KLM. And Continental recently agreed to join an alliance anchored by United and Lufthansa. Horton was unsure if changes to foreign ownership …

Record-setting Olympic champion Michael Phelps has signed an exclusive fast-food contract with Subway -- a surprising development, Emily Bryson York reports, because the swimmer openly campaigned for a relationship with McDonald's during the Summer Olympics in Beijing. He will represent the brand "across all marketing channels" in a campaign touting the chain's variety of offerings. "We knew Michael Phelps was a big fan of our sandwiches and we wanted to build on that with him to illustrate that Subway is a brand that can play a role in helping everyone -- from elite athletes to weekend joggers -- perform …