The Royal Dutch/Shell Group downgraded the size of its proven oil and gas reserves for the fourth time this year as the oil giant continued to stumble over a scandal that shocked the markets and forced the resignation of three top executives. The company, which in January reduced its confirmed oil and gas holdings by 20 percent, or 3.9 billion barrels, said that it was downgrading another 103 million barrels from "proven" to less certain categories. Shell blamed the reduction on accounting changes involving "royalties paid in cash in Canada." Combined with two other announcements since January, it brings the total of downgraded reserves to 4.47 billion barrels, the company said.

Internet Ad Revenue Rises

Internet advertising revenue reached a record $2.3 billion in the first quarter, the latest sign that the industry is poised to surpass its bubble-era peak. The growth is notable because fourth-quarter ad revenue typically gets a bump from holiday advertising. Ads on search sites have driven the industry's recovery, with all other formats declining 7 percent in 2003 from the previous year. These simple text ads, which appear next to relevant Web searches and cost advertisers only when people click on them, have soared in popularity because they are easy to set up and effective at finding potential customers, advertisers say.

MORE NEWS

Interest rates on federally backed loans for college students and their parents are expected to fall to a record low for the 2004-2005 academic year, lending institutions said. The rate on the federal Stafford loan for students should fall to 2.77 percent in the next academic year from 2.82 percent in the current year, while the rate on the federal PLUS loan that parents take out should drop to 4.17 percent from the current 4.22 percent.

The recording industry sued 493 more people it said were illegally sharing music across the Internet, raising to nearly 3,000 the number of people who have been hit by such suits nationwide. The Recording Industry Association of America, the trade group for the largest labels, said none of the lawsuits targeted Internet users at colleges or universities.

Eugene McQuade, president of Bank of America, the second-biggest U.S. bank, will resign by the end of June. McQuade, 55, was president and chief operating officer of FleetBoston Financial before it was bought by Bank of America in April.

Southwest Airlines raised ticket prices $1 or $2 each way on about 90 percent of its routes and cited higher fuel prices as one of the reasons. Jet-fuel spot prices have risen 47 percent in the past year.

Omnicare, the nation's largest provider of pharmacy services to nursing homes, made an unsolicited offer to buy NeighborCare for $1.33 billion in cash. The $30-a-share bid is 70 percent higher than NeighborCare's closing price Friday.

Boeing Capital, the aerospace giant's financing arm, agreed to sell its commercial finance portfolio to General Electric subsidiary GE Commercial Finance for about $2 billion in cash. Boeing said the portfolio of loans and leases had been successful, but the company had signaled its intention earlier this year to pull out of non-aerospace markets.

Continental Airlines again rescinded a fare hike, after trying more than a dozen times to boost overall fares. Earlier this month, the Houston carrier cited higher fuel costs as it raised fares worldwide by $10 or $20 one-way, depending on the length of the flights.

Mark H. Swartz, Tyco International's former chief financial officer, has declined to testify in the trial of Mark A. Belnick, the company's top lawyer, so Belnick's attorneys want to enter Swartz's testimony from the trial of Swartz and Tyco chief executive L. Dennis Kozlowski, which was declared a mistrial.

T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.05 percent from 1.04 percent the previous week. Rates on six-month bills rose to 1.375 percent from 1.335 percent. The actual return to investors is 1.066 percent for three-month bills, with a $10,000 bill selling for $9,973.50, and 1.404 percent for a six-month bill selling for $9,930.10. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, was 1.83 percent, unchanged from the previous week.

Spiegel agreed to sell its 99-year-old flagship catalogue business to an affiliate of private equity firm Pangea Holdings for $53.4 million. The retailer has been marketing its three divisions to raise money for creditors owed roughly $1.5 billion since it filed for bankruptcy in March 2003. Spiegel said it is talking with prospective purchasers for its Eddie Bauer clothing chain, the largest of its units. Pangea got approval last week to buy Spiegel's Newport News women's apparel division for $28.6 million.

Virgin Group is planning an initial public offering of its mobile telephone division for up to $2.3 billion. The IPO comes after T-Mobile International, Deutsche Telekom's wireless unit, agreed to transfer its 50 percent interest in Virgin Mobile to Virgin Group. T-Mobile will be entitled to some proceeds from a Virgin Mobile IPO, the companies have said.

Cisco Systems unveiled a long-awaited router for directing traffic at the heart of the Internet, aiming to recapture its share of the high-end "core" routing market. One refrigerator-sized Carrier Router System-1 can transfer the equivalent of the entire U.S. Library of Congress in 4.6 seconds.

PalmOne won a lawsuit filed by Xerox over handwriting recognition technology after a judge said Xerox's patent was invalid. The ruling by U.S. District Judge Michael A. Telesca in Rochester, N.Y., will lead to the dismissal of Xerox's seven-year-old suit against PalmOne and its former parent, 3Com.

The Supreme Court agreed to hear arguments this fall on whether the government can require cattle producers to pay for research into cattle diseases and for advertising of beef products. For nearly 20 years beef producers have had to pay fees that are used to promote the industry, but lower courts have ruled that the programs violate the First Amendment guarantee of free speech. The government says the program is needed to reassure the public about nutrition and food safety.

Lehman Brothers Holdings named Joseph Gregory, 52, its co-chief operating officer and a veteran of its hallmark fixed-income businesses, as president, a post that was vacant for eight years. The other co-chief operating officer, Bradley H. Jack, 45, was named to the office of the chairman, with responsibility for investment banking relationships.

Lucent Technologies said it will buy Telica, a privately held Internet phone service provider based in Marlboro, Mass., for about $295 million in stock and options. The acquisition is expected to strengthen New Jersey-based Lucent's Accelerate portfolio, which helps service providers deliver voice, data and multimedia services, such as streaming video, to subscribers over wireless and wire-line networks.

INTERNATIONAL

Silvio Berlusconi, the prime minister of Italy, criticized European monetary authorities for maintaining a strong euro against the dollar, saying their policy was "inconceivable and inconsiderate." Speaking at a political rally in Milan, Berlusconi said, "By keeping euro yields at levels twice as high as the dollar's, European goods' prices have soared 25 percent higher than dollar-denominated prices." The euro rose more than 20 percent against the dollar last year.

LOCAL BUSINESS

Radio One agreed to acquire KRTS-FM in Houston for about $72.5 million in cash. The deal is expected to close in the third quarter. Radio One expects to change the classical music station's call letters and format. The acquisition increases to three the number of radio stations the Lanham-based company owns and operates in the Houston market.

W.R. Grace, which sought bankruptcy protection because of asbestos injury lawsuits, told a federal bankruptcy judge that it would file its plan to leave Chapter 11 within 120 days. David Bernick, the Columbia-based chemical and building materials manufacturer's lawyer, said that asbestos personal injury claimants are the only stakeholders delaying resolution of plan negotiations. Asbestos was widely used for insulation and fireproofing until the 1970s and has been linked to respiratory ailments and a rare and particularly lethal form of cancer.

Circuit City Stores, based in Richmond, is testing a new business that takes items on consignment from consumers and sells them on eBay. The first Trading Circuit location opened over a week ago in Atlanta. The shops, adjacent to Circuit City stores, will accept just about anything that can be sold on the Internet auction site -- not just consumer electronics. Trading Circuit will take items that consumers want to sell on e-Bay and handle the entire transaction. The company will take a 35 percent cut from the first $500 of an item's selling price and 25 percent from the rest. Consumers also must pay the eBay posting fee and a payment-service fee.

EARNINGS

Medtronic said its fiscal fourth-quarter earnings rose nearly 17 percent, to $568.9 million, on sales of $2.7 billion. For fiscal 2004, Medtronic earned $1.96 billion on sales of $9 billion, compared with $1.6 billion on sales of $7.7 billion a year earlier.

Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.

Campbell Soup said it earned $142 million in its fiscal third quarter, up 10 percent from a year earlier, as favorable currency exchange rates offset increased promotional spending and lower volume. Sales in the quarter, ended May 2, rose 4.2 percent, to $1.67 billion. U.S. ready-to-serve soup sales for the quarter fell 13 percent, and condensed soup sales for the quarter declined 6 percent.