BRIEFCASE.

Byline: -- Staff and Wire Services

MySpace to offer music downloads

MySpace.com will soon enable members of the popular online social networking hub to sell downloads of their original music directly through MySpace Web pages, company executives said Friday.

The initiative, which is still in a test phase, has the potential to turn millions of computer users, many of them independent or aspiring artists already using the site to build a fan following, into online music retailers.

Los Angeles-based MySpace was expected to formally announce the venture and its partnership with San Francisco-based Snocap Inc., which developed the technology, on Tuesday.

Chris DeWolfe, MySpace's chief executive, said Friday the online music venture is a logical progression for the Internet portal, given changing trends in the music industry that have made it more affordable for bands to make quality recordings and make them available online.

Union members in L.A. increase

WESTWOOD -- Union membership rates slowly declined across the country over the past decade, but membership held steady in California and even increased slightly in Los Angeles, according to a UCLA study released Friday.

``In the context of a national labor movement that is struggling, Los Angeles is a beacon of hope,'' said Ruth Milkman, UCLA sociology professor and lead author of the study titled ``Union Membership in 2005: Data on Los Angeles, California and the United States.''

``This is one of the few regions of the country where unions are doing well,'' Milkman said.

According to the study, national unionization rates dropped from 14.5 percent in 1996 to 12.5 percent in 2005. In California, however, the rate remained virtually unchanged -- dipping from 16.9 percent in 1996 to 16.5 percent in 2005. Los Angeles saw a slight increase in the unionization rate, rising from 15.4 percent in 1996 to 15.5 percent in 2005.

The study also found that women, immigrants and young people were more likely to be unionized in Los Angeles and in California than in the United States as a whole.

``A century ago, L.A. was famous for its anti-unionism,'' Milkman said. ``But today it's just the opposite. Those who boasted that Los Angeles was `the citadel of the open shop' in the early 20th century must be turning over in their graves.''

Sacramento had California's highest unionization rate in 2005, at 20.6 percent. San Francisco placed second at 16.6 percent, and Los Angeles placed third.

Gateway rejects bid for retail end

IRVINE -- Gateway Inc., the third-largest personal-computer company in the United States, said Friday that it rejected an unsolicited $450 million bid for its retail business from eMachines Inc. founder Lap Shun Hui.

Gateway said the Aug. 23 offer for the retail operations is not in the best interest of its shareholders.

``Gateway's board of directors and management team remain committed to taking the appropriate steps to enhance shareholder value,'' the company said in a brief statement. A Gateway spokesman, David Hallisey, declined to elaborate on the decision.

Analysts said Gateway's rejection was no surprise.

Economy hurts San Jose ranking

SAN FRANCISCO -- Silicon Valley ranks last in an annual ranking of 12 U.S. technology hubs because of the region's notoriously high housing costs, traffic congestion, unemployment rate and other quality-of-life problems.

According to a survey by the Silicon Valley Leadership Group, the nation's top-ranked tech hub is North Carolina's Raleigh-Durham area, which enjoys relatively affordable housing and a thriving job market. The region also wins points for local kids' performance on eighth-grade math tests, as well as comparatively low sales taxes and affordable utility bills.

The No. 2 city is Seattle, home to thousands of well-paid technology professionals who work at Microsoft Corp., in suburban Redmond, Wash.

No. 3 was the greater Denver area, which despite a growing number of traffic jams and soaring housing prices is also home to many startups in the emerging alternative-energy niche.

San Jose-based SVLG ranked its home region last for the second straight year -- a dubious distinction considering that last year's list didn't include expensive cities such as New York or those with struggling urban cores such as Philadelphia and Chicago, all of which finished higher than Silicon Valley this year.

Manufacturing grows but slows

WASHINGTON -- The nation's manufacturing sector expanded in August at a slower clip than in July amid rising commodity prices, a trade group said Friday.

The Institute for Supply Management, based in Tempe, Ariz., said its manufacturing index registered 54.5 in August, just below the 54.7 July reading. Analysts expected the index to be flat.

A reading of 50 or more indicates expansion, while below 50 shows contraction. The August figure represented the 39th consecutive month of growth.