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Netflix and Hulu first stabs at original scripted programming

2012-02-12T08:00:00.000-08:00

In this image released by Netflix, Steven Van Zandt is shown in a scene from "Lillyhammer. Both Netflix and Hulu are debuting their first stabs at original scripted programming. Netflix has released all eight episodes of "Lilyhammer" a fish-out-of-water drama with Steve Van Zandt, and on Tuesday, Hulu will premiere "Battleground," an "Office"-style political faux-documentary. (AP Photo/Netflix)

Within just over a week, Netflix and Hulu are both debuting their first stabs at original scripted programming.

The shows amount to a milestone in Internet television, an early sign of the leveling between broadcasting and streaming. Programming options between TV and the Web are increasingly separated by little more than the "video source" button on your remote.
But the most salient thing about the new offerings from Netflix and Hulu are just how "TV" they are.

Earlier this week, Netflix released all eight episodes of "Lilyhammer," a fish-out-of-water drama starring Steve Van Zandt ("The Sopranos") as a New York mobster relocated to Norway. On Tuesday, Hulu will premiere "Battleground," a faux-documentary sitcom about the young operatives of a middling political campaign in Wisconsin.

Each has a broadcast pedigree. "Lilyhammer" was produced for the Norwegian Broadcasting Corporation (a lesser known NBC) and began airing there in January. As a script, "Battleground" was initially purchased by Fox (whose corporate parent, News Corp., is a co-owner of Hulu, along with Walt Disney Co. and NBCUniversal).

That both "Battleground" and "Lilyhammer" look and feel so much like broadcast shows is a signal of their high-quality (though "Lilyhammer" is notably better made) and their lack of innovation. These are ultimately just a couple of new shows among hundreds, only ones consumable through a new distribution method.

The 50-minute-long "Lilyhammer," for which Van Sandt is also a producer and writer, is the more intriguing of the two. It often feels almost like a parody of a "Sopranos" spinoff: If we're going to have Silvio in Scandinavia, then how about Paulie Walnuts in Walla Walla? Or Uncle Junior in Jakarta?

When "Frankie the Fixer" (Van Zandt) gives up a rival to the FBI, he opts for witness protection in Lillehammer, Norway. Remoteness is part of the attraction, as is its wintery allure: "Did you see the Olympics of `94?" he asks. "It was beautiful."

In Norway, Frankie _ now renamed Giovanni Hendriksen _ cuts an amusing figure in parkas and sweaters. He easily grasps the language from audio tapes (Frankie speaks in English but most other character speak Norwegian, which is subtitled) and finds it quite easy to set up shop.

Giovanni quickly gathers a girlfriend (Marian Saastad Ottesen), a nightclub and a few minions. The jokes mainly revolve around either Giovanni being out-of-place (a Mafioso on skis!) or the locals' reaction to his crudeness.

One gets the sense that "Lilyhammer" would be funnier to Norwegians. Mostly, Giovanni is portrayed kindly, a straight-talking dose of manly aggression who runs roughshod over softer, peaceful Norwegian folk. It's entertaining enough, but about as subtle as "Sopranos on Ice!"

"Battleground," judging by its first two episodes, is a light, watered-down knockoff of "The Office," moved a little further west and focusing on a slightly younger demographic. Its 13 episodes will debut every Tuesday.

It stars Jay Hayden as Chris "Tak" Davis, campaign manager to Deirdre Samuels (Meighan Gerachis), who's running for a Wisconsin Senate seat. The show, about 22 minutes long, uses the "Office" format of interstitial interviews with the twist that they take place after the election _ and thus carry foreshadowing of trouble to come.

The timing of "Battleground" might seem good considering the current Republican presidential primaries, but any actual politics are left out. There's nothing that might offend either side of the political spectrum here, and also little to inspire either Democrats or Republicans.

Instead, "Battleground" _ whose producers include Marc Webb, the director of "(500) Days of Summer," as well as an "Office" episode _ is a typical workplace comedy, only with the backdrop of campaign posters and buttons. No one over 25-years-old much matters _ it's the "zany" young staff and volunteers who get all the screen time.

It comes off something like a student fantasy of playful politics. Hayden expends more energy trying to look suave and knowing than funny.

For Hulu and Netflix, the shows don't need to be masterpieces, just conversation-starters _ drops of newness to freshen up their extensive libraries and garner media coverage in articles like this one. Neither "Lilyhammer" nor "Battleground" is good enough to send anyone rushing to sign up for a subscription. (Netflix's streaming service is $7.99 a month, as is Hulu Plus.)

But in the gathering convergence of TV and Internet viewing, these shows represent an early salvo.

Netflix's most anticipated shows _ a David Fincher-produced adaptation of the British series "House of Cards" and new episodes of the cult comedy "Arrested Development" _ are due later this year and in 2013. Hulu has plans for more original programming, including a documentary series from Richard Linklater ("Dazed and Confused").

Google Inc.'s YouTube is in the midst of rolling out more than 100 niche-oriented "channels" on its video platform. Yahoo will later this year release a sci-fi, animated series produced by Tom Hanks.

And for the first time ever, even the Super Bowl was streamed online. More than 2.1 million viewers watched the game on eitherNBCSports.com or NFL.com.

"Lilyhammer" and "Battleground" are, surely enough, just a beginning.

Blackberry maker RIM Replaces CEOs

2012-01-23T06:06:00.000-08:00

Research In Motion Ltd. (RIM) shook up its top management, replacing co-Chief Executive Officers Jim Balsillie and Mike Lazaridis, who guided the BlackBerry maker for two decades and struggled to compete against Apple Inc. (AAPL)

Thorsten Heins, a chief operating officer who joined RIM four years ago from Siemens AG, will replace the pair in the CEO post effective immediately, RIM said in a statement. Director Barbara Stymiest will take over as chairman, as the two also cede their co-chairmen positions. Lazaridis, who founded RIM in 1984, will become vice chairman; Balsillie will remain a board member without any operational role.

The shakeup comes after Balsillie and Lazaridis showed little sign of being able to stop Apple and Google Inc. (GOOG)’s gains as the Silicon Valley companies remade the mobile-computing market with devices such as the iPhone and iPad. Waterloo, Ontario-based RIM’s stock tumbled 75 percent last year as sales slumped, and the two men, both 50, drew investor criticism for releasing products without the features necessary to compete.

“Heins is a product execution guy, he’s not a visionary,” said Ehud Gelblum, a New York-based analyst at Morgan Stanley. “Heins has to give people a reason why they need a BlackBerry. It’s going to be very difficult for him.”

Plunging Sales

RIM, once the most valuable company in Canada, fell 3.2 percent to $17 at the close in New York Jan. 20, giving it a market capitalization of $8.9 billion. In German composite trading today, the stock climbed 4.2 percent to the equivalent of $17.90 as of 12:52 p.m. in Frankfurt.

RIM has lost 88 percent since its peak in 2008, when soaring BlackBerry sales pushed its market value to more than $80 billion. Last quarter, sales fell about 6 percent to $5.17 billion.

Lazaridis, Balsillie and Stymiest all said the decision to step down was the men’s own and not a response to outside pressure. The shift is a result of the company’s evolution and the introduction of new technologies that will give RIM more competitive products, Lazaridis said.

“This marks the beginning of a new era for RIM,” he said in an interview. “It was a bit of bumpy ride. We’ve done it as best we could. Thorsten is the ideal choice. He has the right skills at the right time.”

RIM’s share of the global smartphone market sank to 11 percent in the third quarter from 15 percent a year earlier, according to research firm Gartner Inc., stung by customer defections to the iPhone, and handsets that use Google Inc.’s Android software, including Samsung Electronics Co.’s Galaxy.

‘Leaderless Company’

The company faced a Jan. 31 deadline to report the findings of a review of its management structure. RIM agreed to the review to fend off an effort to overhaul management by investor Northwest & Ethical Investments LP, which had proposed the company split the chairman and CEO roles.

“RIM had its era, but now it seems very hard to gain back market share in the smartphone market even if the top managers are changed,” said Mitsushige Akino, who oversees about $600 million in Tokyo at Ichiyoshi Investment Management Co. “The iPhone and Android are well established in the market.”

Still, other investors led by Jaguar Financial Corp. (JFC) kept pushing for leadership changes and called for RIM to divide into separate companies, seek a merger or sell itself. Investors owning 8 percent of RIM supported the effort, Jaguar has said.

Takeover Approaches

RIM is hurt by “management dominance and a lack of board oversight, which leads to a leaderless company,” Jaguar CEO Vic Alboini said in October. “The timing is very ripe now for a new CEO to step in.”

Speculation that the drop in RIM’s value will lead to takeover approaches drove the company’s stock to one-day gains of at least 5 percent more than 10 times since the beginning of August. RIM didn’t put itself up for sale or consider a sale, according to a person familiar with the matter, who couldn’t comment for attribution because the information isn’t public. Tenille Kennedy, a spokeswoman for RIM, said the company’s policy is not to comment on rumors or speculation.

RIM’s market-share slump in the past two years was driven by the U.S., where consumers were quick to adopt Apple and Android devices. RIM, which dominated the U.S. smartphone market before Apple and Google entered it, had its share of sales drop to 16.6 percent in the three months ending in November, according to ComScore Inc. Google’s Android boosted its share to 46.9 percent and Apple increased to 28.7 percent.

‘Secular Loser’

The BlackBerry, which gained popularity among bankers, lawyers, executives and politicians for its reliability, has also began losing its hold of the corporate market as more companies allow workers to use iPhones and Android handsets.

The BlackBerry is “a secular loser to Apple and Android devices,” Ittai Kidron, an analyst at Oppenheimer & Co. in New York, told investors in a note last month. There are few signs RIM can recover as “execution issues remain a drag,” he said.

As the U.S. market evolved, RIM decided to place more emphasis on growing international sales, Balsillie said in an interview. While sales in Asia and Latin America rose, they weren’t enough to offset the slump in North America, resulting in RIM’s first revenue drop years in nine years in September.

“The biggest dilemma was the U.S. market went down the path of mobile high-end computing on a 4G platform, and our products were suited for a global marketplace,” Balsillie said. “The greatest dilemma was resources and capacities, where do you put them. We couldn’t do both.”

Former Siemens Manager

“They’re going to have to run fast,” Rene Schuster, CEO of Telefonica SA’s German unit, said in an interview in Munich. “They have a good brand. The question is: are they now able to bring new innovation to the market so that when a consumer looks at the choice they’re going to pick RIM? It’s going to be a challenge for them.”

With Heins, 54, RIM is banking on an executive who has remained largely in Balsillie’s and Lazaridis’s shadow. In July, he was named to the enlarged position of chief operating officer for product and sales, overseeing engineering, hardware and software.

In an interview, Heins cited RIM’s 75 million subscribers, “strong balance sheet” and negligible debt as advantages. He said the company’s focus on its own software will yield results in the long term. About 18 months ago, the company considered and decided against adopting another operating system, he said.

“Jim and Mike’s strategy of not sacrificing long-term value for short-term gain is the right one,” said Heins, who worked at Siemens for more than 20 years before joining RIM. “I share that value.”

Product Delays

RIM’s strategy of relying on its own software mimics that of Apple. Other handset makers, such as Samsung, HTC Corp. and Motorola Mobility Holdings Inc. (MMI), have boosted sales by using the Android software Google gives away for free.

Last year’s promotion of Heins, a German national originally from Munich, was part of a plan to accelerate product development. Still, the company’s missteps since have included delays with a new operating system the company is betting on to challenge Apple and Google. In December, RIM said the first BlackBerrys based on the new system, called BB10, won’t be available until the latter part of this year.

The company also suffered a nine-month delay in getting e- mail onto the PlayBook tablet. The technical difficulties and marketing missteps have left PlayBook shipments at a little more than 1 percent of those for Apple’s market-leading iPad.

Tablets Fight

Heins’s challenge isn’t just fighting Apple and the Android-camp led by Google, which dominate the smartphone and tablet markets. He will also need to fend off competition from Microsoft Corp. (MSFT), which is working with carriers such as AT&T Inc. and device manufacturers including Nokia Oyj (NOK1V) to gain ground in the smartphone market.

RIM’s PlayBook meanwhile is now just one of dozens of tablets seeking to gain share from Apple’s iPad. Amazon.com Inc. (AMZN)’s newest such device hit store shelves on Nov. 14 and quickly surpassed more-established tablets from Samsung Electronics Co. and Barnes & Noble Inc.

Lazaridis founded RIM when he was a senior at the University of Waterloo in Canada. The company began working on wireless products three years later, developing a pager that evolved into what is known as the BlackBerry. Balsillie, a 1989 graduate of Harvard Business School, joined RIM in 1992.

‘Here to Fight’

In addition to his vice-chairman role, Lazaridis will run the board’s innovation committee. He said he will work closely with Heins and provide strategic counsel.

Lazaridis also said he plans to boost his RIM stake by $50 million. Balsillie said he will remain a significant shareholder. They each own about 5 percent of the company now.

Stymiest, a former Royal Bank of Canada executive, became a RIM director in 2007. She previously was a partner at Ernst & Young LLP and chief financial officer of BMO Nesbitt Burns Inc. RIM will also name Fairfax Financial Holdings Inc. CEO Prem Watsa a director, bringing the number of board members to 11.

As part of the overhaul, Heins said he will also seek a new marketing chief for the company. Balsillie had taken over the those duties after RIM’s first marketing chief, Keith Pardy, left in March, less than two years after joining the company.

“We are in a competitive world, but we believe in our own strength,” Heins said. “I’m here to fight.”

Steve Wozniak talks about Android advantages over iPhone

2012-01-17T05:50:00.000-08:00

Apple co-founder Steve Wozniak says he wishes his iPhone did all that his Android does.

Apple co-founder Steve Wozniak may have waited in line for the release of new iPhones, but he says there are ways Android has leapt ahead of iPhone.

In an interview with Dan Lyons for the Daily Beast comparing iPhones with Android phones, the Woz laments the limitations of Apple's smartphone.

"My primary phone is the iPhone," the Woz said. "I love the beauty of it. But I wish it did all the things my Android does, I really do."

However, don't get the idea that Woz is getting ready to dump the iPhone. He said his main beef is with Siri, which he said no longer works as well as he would like.

"I used to ask Siri, 'What are the five biggest lakes in California?' and it would come back with the answer," he said. "Now it just misses. It gives me real estate listings. I used to ask, 'What are the prime numbers greater than 87?' and it would answer. Now instead of getting prime numbers, I get listings for prime rib, or prime real estate."

He also said he prefers the GPS navigation on Android phones and he also takes issue with the battery life on the iPhone ("it just started running through the battery so fast").

Despite those gripes, Woz says he still recommends the iPhone, especially for people who might be intimidated by Android's complexity.

"The people I recommend the iPhone 4S for are the ones who are already in the Mac world, because it's so compatible, and people who are just scared of computers altogether and don't want to use them. The iPhone is the least frightening thing. For that kind of person who is scared of complexity, well, here's a phone that is simple to use and does what you need it to do," he said.

Ultrabooks will be taking aim at Apple

2012-01-09T06:08:00.000-08:00

Ultrabooks will try to catch up with Apple, and catch the eyes of buyers, at the International Consumer Electronics Show, which starts Tuesday in Las Vegas. Photo: Julie Jacobson / AP

One theme clearly will dominate this year's International Consumer Electronics Show: catching up with Apple.

Mind you, no companies are putting it that way in their announcements for this week's Las Vegas gadget fest, but the subtext fairly rings out.

The big news, as any tech blog or analyst will tell you, will be the bevy of manufacturers unveiling so-called "ultrabooks." What's an ultrabook? An Intel-based PC that strives to match the MacBook Air's weight, thinness and power.

Apple, incidentally, released its first Air in January 2008 and achieved the breakthrough design everyone's now mimicking - with solid state flash storage and improved battery life - in October 2010.

So, put another way, the big news is that PC makers have caught up to Apple, 15 months late - assuming, of course, the devices are any good.

"The bottom line is, Apple is not at CES, yet they cast a very long shadow," said Tim Bajarin, president of consulting firm Creative Strategies.

Depending on whom you ask, companies will unveil anywhere from 30 to 70 ultrabooks. That seems eerily reminiscent of last year's event, when companies showcased dozens of slates in a rush to replicate the success of Apple's iPad.

Nevertheless, we'll see plenty more this week. And the Apple envy won't stop there.

Microsoft is expected to drop a few more hints about Windows 8, its forthcoming operating system optimized for tablets and offering multitouch technology. It'll work sort of like, well, Apple's iOS, which - not to belabor the point - appeared on the iPad in January 2010.

Many companies will also roll out new smart phones in their quest to chip away at the dominance of Apple's iPhone. So far reality hasn't come close to the hype.

Reports are we'll see some new AT&T smart phones running on its LTE network - offering so-called fourth generation speeds - an LG phone powered by Intel's new mobile chipset, Medfield, and plenty of new devices running on the latest version of Android, Ice Cream Sandwich.

Even the various ultra-high resolution and 3-D TVs on display this year will have to compete with Apple in consumers minds, despite that Apple hasn't introduced a TV. Just the rumblings it will roll out some category game-changer this year or next is likely to hold off many consumers from upgrading the biggest screen in their home.

So does all the CES news still matter, even if the products are behind or inferior to their Apple counterparts? Of course it does. Bringing more options to the market at competitive costs - many will be cheaper than the Apple versions - is always good for consumers.

This year's CES is on track to be the second biggest ever in terms of physical size, with more than 1.8 million square feet of exhibit space booked as of press time, according to the Consumer Electronics Association, which owns and organizes the event. That's up about 9 percent from last year's show.

The popular iLounge, featuring Apple accessories, has swelled from 4,000 square feet when it launched two years ago to 88,000 square feet this year. Apple itself, by the way, hasn't exhibited at the CES since 1994.

Google May Have Violated Its Own Paid Link Policy

2012-01-03T05:49:00.000-08:00

Google appears to have paid bloggers to write about Chrome in a way that violates its own paid link policy, according to Search Engine Land. If Google applied a similar penalty to those it’s doled out to past violators, the Chrome download page would be removed from its search engine results for between a month and a year. Don’t bet on that happening, though. The campaign is another example of how Google’s diverse business can lead it to trip over itself.

The crux of the issue is that Google or its advertising firm Unruly has sponsored bloggers to discuss its browser and include a “Chrome for small businesses” promo video, as first spotted by SEO Book. Some of these posts purport to be reviews of Chrome and how it aids merchants. In reality, they provide no details on Chrome features or how the browser can actually benefit small businesses. This classifies them as garbage posts — the kind Google demoted in its Panda algorithm update. SEL’s Danny Sullivan does a deep dive into several of the sponsored blog posts if you want examples.

So You Got a Kindle Fire? Try Our First-Timer Guide

2011-12-26T09:45:00.000-08:00

If you’ve recently purchased or been gifted a Kindle Fire, congratulations!

Now it’s time to begin taking advantage of your device, courtesy of our handy little guide below.

1. Set Up & Sync

After you’ve charged your Kindle Fire and connected it to your Amazon account (under Settings), you’ll want to sync the device with your existing media libraries and services.

Email: The Kindle Fire doesn’t come with a default email client; therefore, accessing your email through your browser is your best bet. If you’d rather use an app, download an email client for the Kindle Fire through the Appstore (from the top navigation, select Apps, then Store). If you have Yahoo Mail, download the dedicatedYahoo Mail client (free). If you’re using another email provider, we recommend Enhanced Email (works with a range of providers, $9.99), and/or Exchange by Touchdown (free, works with one Exchange server account at a time).

Calendar: Next, you’ll want to make your calendar(s) accessible on your Kindle Fire at all times. The best solution for that is a $5.99 app called CalenGoo, which syncs beautifully with Google Calendar.

Books: If you’ve already been downloading and reading Kindle books on another device, you can import your library by pulling up the Archives in your pre-loaded Kindle app. If you’re a first-time Kindle reader, you can shop for books by selecting the Store button. Make sure to check out the section for free books, most of them classics.

Music & Documents: To get your music on your Kindle Fire, upload your music library to Amazon Cloud Drive, which lets you store up to 5GB (about 1,000 songs) for free, to access on any Android device using theAmazon MP3 app. You can also store photos and documents on the cloud drive for access on your Kindle Fire.

Other: You can also download apps to access your content from Netflix, Hulu Plus, Feedly (a visual RSS reader that can be synced across the desktop and other mobile devices), Read It Later (a tool that lets you bookmark articles on the web for later reading on your smartphone or Kindle Fire) and Evernote.

2. Download & Pin Your Favorite Apps

There are hundreds of great games, magazines, utility tools and other apps to download in addition to the cross-platform apps we recommended above. Make sure you read the reviews before downloading any app, particularly with magazines, as not all of them have been formatted for the Kindle Fire’s smaller screen. Among our favorites:

Games: Angry Birds (free), Cut the Rope ($0.99), Words With Friends (free), Sudoku Deluxe (free), Solitaire(free), Hangman (free) and Monopoly ($4.99).

News: Pulse (comes pre-loaded), News360 and the Wall Street Journal.

Magazines: Wired, The New Yorker, Sports Illustrated.

Entertainment: Netflix, Hulu Plus, Pandora, TuneIn Radio.

Other: SeekDroid ($2.99, lets you locate and remotely wipe your device in the event of theft), Adobe Readerand imo instant messenger (free, works with Skype, Facebook Chat, Google Talk, MSN, ICQ, AIM, Yahoo, Jabber and MySpace Chat) are among our must-haves.

Pin the apps you plan to use most on the bottom carousel by selecting and holding their icons on the main screen.

3. Sign Up for Amazon Prime

If you’ve never taken advantage of a free, 30-day trial of Amazon Prime, now’s the time. Amazon Prime gets you free, two-day shipping on all Amazon.com orders, plus access to Amazon’s library of hundreds of streaming films and TV shows on your Kindle Fire, laptop and HDTV. You’re also allowed to borrow one book from the Kindle Library Lending each month. After your free trial, an Amazon Prime subscription costs $79 per year.

4. Accessorize

Now that your Kindle Fire is all set up, you might want to outfit it with a few accessories, including a wall charger ($24.99) and headphones, neither of which comes with the Kindle Fire. U.S. owners might also want to look into purchasing a two-year warranty with accident protection for $44.99.

You can also find dozens of cases for your Kindle Fire on Amazon, Etsy and elsewhere. We’ve included a selection below.

If you have any additional apps, accessories or advice for first-time Kindle Fire owners, please share it with us in the comments section below.

The Hope for the Future of Firefox

2011-12-22T05:55:00.000-08:00

The clock is ticking. Google has extended its revenue agreement with Mozilla for another three years. Last year, 98 percent of Mozilla’s funds were from Google, and without it, development of Firefox would be severely hampered.

With Firefox market share falling, will businesses find it relevant three years from now? And what if Google doesn’t extend the agreement at that point, and the money runs out?

The Challenges

Firefox faces many challenges, some self-imposed, but the largest of which are based on its being in an extremely competitive browser market. Here are the top three.

1. Power Users

Power users initially loved Firefox due to its extended features and customizability. Recently, Google’s Chrome browser has provided the same, and went further with better security and speed, causing many power users to switch over.

2. Deep Pockets

Mozilla is a nonprofit organization, and Firefox is an open-source project. Though neither of its top two competitors, Google's Chrome or Microsoft’s Internet Explorer, are direct money generators, both companies depend on browsers as a window to their online products. For Google, ads on Web pages generate most of its money, so it wants to get as many ad-filled Web pages in front of users as possible.

3. Mobile Market

Though 93 percent of Web browsing is done through desktops and laptops, mobile browsing has nearly doubled in the last year to reach almost 8 percent. This is likely to grow exponentially in the next year, as tablets and e-readers hit the mainstream, and nearly every new mobile phone will have a Web browser. Apple and Google own the default browsers on the popular mobile devices, giving them a huge advantage.

An Opportunity

Desktops aren’t dead yet, but eventually you can expect mobile usage to surpass desktop usage, perhaps within those three years for which Mozilla has secured Google's funding. As users and businesses embrace new phones and tablets, they’ll be learning how best to browse the Web with them, and how to seamlessly share the browsing experience among their desktops and mobile devices. This is where Firefox could make could make a difference.

Despite controlling Chrome and Android’s default browser, Google has done little to make switching between the two easy, besides introducing bookmark syncing in the Android Ice Cream Sandwich update. Even though Apple gave the Safari name to both its mobile and desktop browsers, it also hasn’t paid attention to moving between them.

Mozilla already has a mobile version of Firefox that uses Firefox Sync to sync browsing history, open tabs, bookmarks, and saved passwords. If it were to release an iOS version as well--as mobile browser Dolphin did--it would have a presence on the top smartphones and tablets. It would also have to make deals with mobile device vendors to have Firefox preinstalled.

Finally, Mozilla needs to find that “killer app” type of feature or functionality, possibly with help from its open-source community, that will allow it to stand out from the competition. The combination of these would make Firefox much more useful and visible.

Google has its thumb on Firefox, but is enabling it to live a bit longer. If Firefox is to remain competitive several years from now, it has to make a difference, as it did in its early days. Finding a killer feature and working not only across the major operating systems, but between desktops and mobile devices as well, could be Firefox’s saving grace. Will Mozilla make it happen?

Stolen Credit Cards Go for $3.50 at Online Bazaar

2011-12-20T06:17:00.000-08:00

In mid-September, a European hacker nicknamed Poxxie broke into the computer network of a U.S. company and, he said, grabbed 1,400 credit-card numbers, the account holders’ names and addresses, and the security code that comes with each card.

With little trouble, he sold the numbers for $3.50 each on his own seller’s site, called CVV2s.in, to underworld buyers who have come to trust the quality of his goods, he said.

“The main thing in any business is honesty,” Poxxie said, without any trace of irony.

The Traverse City, Michigan-based Ponemon Institute, which researches data security, estimates that thieves annually steal 8.4 million credit-card numbers in the U.S. alone. How do cyberbandits, who have turned hacking into a volume business, unload all those numbers. A lot like Amazon.com, it turns out.

Customers on CVV2s can search for card numbers by bank, card type, credit limit and zip code, loading them into a virtual shopping basket as they go. The site offers the ability to search by bank identification number. That means customers can choose cards by institutions known to have weak security, Poxxie said. CVV2s even has an automated feature that lets clients validate the numbers in real time, to make sure the bank hasn’t canceled the card.

Sites like Poxxie’s make up the cyberunderworld’s version of a pirate’s cove, offering their online booty at cut-rate prices. Hundreds of millions of dollars in stolen data are bought and sold in underground’s chat rooms and forums every year, a fencing operation that becomes more robust annually, according to RSA, the security division of EMC Corp. CrackHackForum.com, one of the sites, even mimics EBay Inc., rating buyers and sellers with starred reviews.

$114 Billion a Year

Symantec Corp., the cybersecurity firm, estimates that cyberthieves steal data worth $114 billion a year. By comparison, the Federal Bureau of Investigation said the take from all bank robberies in the U.S. in 2010 was just $43 million. The global market in cocaine is an estimated $85 billion, according to the United Nations.

“The problem is getting worse faster than we’re getting better,” said Tony Sager, chief operating officer of the Information Assurance Directorate at the National Security Agency, which includes some of the U.S. government’s best cyberexperts. “We’re not keeping pace.”

To look inside the cyberbazaar, to find details on prices and goods for sale, Bloomberg News gathered information through publicly available websites and in restricted forums, aided in this search by cybersecurity experts. Some of the information was provided through online interviews with participants, who protected their real identities as they discussed details on their lives and criminal operations.

How to Verify

The cyberunderground thrives because of anonymity: Hackers can devise any persona to conduct business and use a variety of technical tricks to hide their tracks. Their stories were verified to the extent possible by security experts who have watched the careers and methods of specific hackers for years.

As recently as 2008, the fight between those who protect computer networks and those who attack them was about evenly matched. That’s no longer the case, according to the cybercops. The defenders are losing the battle because of a combination of their opponents’ technical achievements and rapid advances in a global supply chain of theft.

In 2009, Symantec cataloged 2.8 million new viruses infecting computers. A year later, that number had jumped to 286 million. One reason for the hundredfold growth is that sophisticated viruses now change their digital signatures as they infect new machines. Because anti-virus software uses a catalog of known signatures to stop infections, the dominant cybersecurity technology in many cases is useless as a result.

Cheap Malware

Some of the market’s most advanced malware -- stealth software that steals data or lets hackers take remote command of a computer -- can be bought for a few thousand dollars. Sophisticated spam operations implant the malware in computers for pennies per victim.

Black-market vendors test malware against the latest anti- virus programs; provide hosting for command-and-control servers in countries that can’t be touched by U.S. law enforcement; or start a directed denial-of-service attack on a commercial or other website priced by the number of hours the site is down.

One enterprise, advertised recently on the Israeli forum SecondZion, has created a language-aid call center for hackers who need to pose as U.S. bank customers or communicate with a German-speaking money mule, as currency transporters are called. The hackers provide a script; operators do the rest. “Good afternoon, ladies and gentleman crooks,” the site says, noting that its translators are “all operators with extensive experience.” Two users followed up with comments praising the service as excellent.

Illicit Chat Rooms

Distribution of goods and services is organized through thousands of illicit chat rooms and invitation-only forums. Some are publicly accessible: Any beginner looking to learn the basics of a so-called SQL injection hack -- a basic attack on the security of a website -- can join a forum like OpenSC and ask for tips. Others are private and access is strictly protected.

The most serious criminals congregate on forums such as Maza. Membership to the forum is granted only by a vote of all of its senior members and only after an eight-day waiting period, according to researchers who have tried to infiltrate it. Most deals done on the forum are large, so members use an escrow system. Cash or goods are held either by a trusted senior hacker or one who has retired from the business. In a criminal world in which conspirators almost never meet and trust is in short supply, the escrow system has evolved as a way for elite hackers to do big business.

‘Five Figures’

“Most of the transactions of in those forums will be in the five figures,” said a security investigator who has infiltrated several such forums. “The escrow system is the only way to make those transactions viable.”

Public hacker sites, including CrackHackForum and HackForums, usually have rules against selling stolen data. Enforcement of sales postings is often weak and varies widely.

Poxxie’s site, which is well known to security experts, was run until recently from a server in India, where U.S. law enforcement carries little weight with local authorities when it comes to computer crime. The site was recently moved or shut down, a common security practice among hackers.

Poxxie has been in business long enough to see the price for a stolen credit card plummet because of over-supply and more sophisticated safety precautions by banks. Why charge $3.50 for a stolen card number with the purchasing power to buy a car? The card could be canceled at any time after purchase, he said, and there are inherent risks in using it.

Crime Wave

“In this whole carding scene, nothing is guaranteed,” Poxxie said via ICQ, the online messaging network that is a common platform for doing business in the cyberunderground.

Poxxie’s business is a boutique firm in an industrial-scale crime wave. Although the targets of cybercrime are still concentrated in the U.S. and Europe, the perpetrators are global. Some are independent operators who make a few thousand dollars a month, often supplementing their income with a day job. Others are members of large criminal organizations.

Hex Nightmare falls somewhere in between. When you conduct business with the 20-something cyberthief, the first -- and only -- thing you see is an avatar on ICQ: an anime version of a girl in hip huggers and a tank top. A person who has tracked her over several years said Hex Nightmare has managed to gain an impressive pedigree in the cyberunderground, learning quickly and moving in some of the most trusted circles of top cyberthieves.

Take-Home Pay

Her take-home from cybertheft, which concentrates mostly on stealing credit-card numbers and online banking credentials, compares with the pay of some lower-level corporate executives, she said via ICQ -- keeping her true identity secret. “I can possibly make an extra $8k a month on top of my regular income,” she said.

To the young hacker, cybertheft is like a second job, one she juggles, she said, with going out to clubs on weekend nights and waitressing during the week. Her legitimate job is also a way to launder illicit income, she said. Hex Nightmare said she didn’t want the debt of a university education and instead spent two years on the forums learning her trade. The hacker faces none of violence associated with other organized crime and otherwise leads a relatively normal life.

“They have no idea what I do,” she said of friends and acquaintances. The details of the cyberthief’s personal life -- including her real gender and age -- couldn’t be verified but her business model and activities were corroborated by a security professional and fit the profile typical of young hackers, according to Eric Strom, an FBI special agent who heads an elite cyber team based in Pittsburgh.

Like Universities

“These are marketplaces, but they are also like universities,” Strom said. “You have newbies on there, you have seasoned guys. It’s a meeting place, it’s a social networking place, everything wrapped into one.”

Working out of an office in a tech hub along the Monongahela River, Strom wears short-sleeves and loose pants, the uniform of a man who fights crime at a computer keyboard. His unit has a storied place in that world. It was behind DarkMarket, an elite English-language hackers forum that turned out to be an FBI sting when 56 of its members were arrested in 2008.

Before turning to the cyber world, Strom spent most of his FBI career fighting the Mafia. It’s was good training, he said.

Like the Mob

“The stance we take is looking at it through the lens of organized crime,” he said. It took the better part of the 1980s and early 1990s for federal authorities to understand and begin to dismantle the U.S. mafia: develop investigative capacity, penetrate complex enterprises, pass new laws. It will take time with global cybercrime as well, Strom said.

“We’re trying to keep pace with how the crime is evolving,” he said.

Facing sophisticated cartels, the FBI and European law enforcement officials have created new cybersquads and launched major investigations. In October 2010, the FBI began one of its most ambitious cybercrime operations. Code-named Trident Breach, authorities broke up an international crime ring responsible for stealing $70 million from online bank accounts of small businesses and local government throughout the U.S. and Europe. There were arrests in four countries, including 39 in the U.S.

Frustrations

That success was accompanied by frustrations faced daily by investigators: There is almost no chance the world’s top cybercriminals -- residing in safe-haven countries like Belarus, Romania, and Ukraine -- will ever be brought to justice. Most of the individuals detained last year were international students who, acting as so-called mules, withdrew money from the hackers’ U.S. bank accounts and forwarded it home. Five people who were described as kingpins were detained for questioning in Ukraine. All five were eventually set free without seeing the inside of a courtroom, the FBI said in September.

“Cybergangs, mainly in Eastern Europe and the former Soviet Union, are making money that rivals some drug cartels,” said Richard Clarke, former special adviser on cybersecurity to U.S. President George W. Bush, at an October conference on network security. “There is frankly nothing the FBI and Secret Service can do about it.”

In April, the Department of Justice dismantled one of the largest known criminal botnets, a network of infected computers programmed to send data automatically from their hard drives to a server controlled by hackers. The department declared the break-up of Coreflood, as the botnet was known, a major victory.

The Russians

It said almost nothing about the criminals who ran it. Researchers at Dell SecureWorks, the Atlanta-based security firm that aided the investigation, said the kingpins behind Coreflood are three Russians last known to be living comfortably in Rostov, a mid-size city on the Don River.

“Our relationship with the Russians is always a work in progress,” Strom said.

No one personifies Russia’s place at the top of the cyber underworld more than Gribo-demon, a Russian programmer, around 30 years old, U.S. investigators estimate. He is one of the few cybercriminals who is the focus of a his own FBI special operation. Gribo-demon is the author of SpyEye, a sophisticated malware package first released in late 2009 and upgraded several times since then.

Once downloaded on a machine, the malware can be used by hackers to take remote command of key functions. Using SpyEye, a cyberthief can hijack an online banking session in real time, transfer funds to accounts they or their mules control, and adjust the balance displayed so nothing seems amiss.

Seems Legit

The transaction looks legitimate because, in computer terms, it is. All the bank can tell is that it was made from their customer’s computer, using their correct password. A basic version of SpyEye costs around $2,000, according to the hacker sites.

“SpyEye provides military-grade intrusion capabilities for the price of a TV,” said Gunter Ollmann, vice president of research at Damballa Inc., the Atlanta-based security firm that tracks major cyberthreats.

Gribo-demon’s real innovation stems from what he didn’t do: keep SpyEye to himself. Hackers used to write their own code. Good tools were trade secrets. Gribo-demon instead licenses SpyEye, mimicking Microsoft and Oracle, a business model that arguably opened cybercrime to the masses.

The model was pioneered by a competitor and fellow Russian who created popular malware called ZeuS, according to security experts. ZeuS first appeared in 2008. Both programmers provided clients with customer service, offering an array of enticing modules to add functionality for an additional price.

Beta Testing

The ZeuS author, known as Slavik, even Beta-tested new versions with elite users, according to Don Jackson, a SecureWorks researcher. Slavik disappeared in late 2010, but not before he handed the ZeuS source-code to Gribo, who incorporated some of its features into his own product, Jackson said.

Security experts say it’s hard to overestimate impact of Slavik’s and Gribo-demon’s handiwork. In September, the Tokyo- based cybersecurity firm Trend Micro publicized a dossier on a 20-something Russian cyberthief who goes by the name Soldier, tracing his activities in the underground forums over several months. Using SpyEye, soldier stole $3.2 million from U.S. customers of three banks in just six months -- about $17,000 a day -- Trend Micro said.

Going Price

The hacker used bank-account information scraped from more than 25,000 victims’ computers, in some cases renting other cyberthieves’ networks of infected computers. He created counterfeit checks with banking data and mailed them to money mules throughout the United States. They cashed them, then forwarded the funds untraceably to Russia. He even used stolen credit card numbers vacuumed from the victims’ hard drives to buy pre-paid postal-service labels for the packages.

“From start to finish, this guy leveraged every bit of data,” said Alex Cox, an investigator for Netwitness, a cybersecurity division of EMC Corp., which has also been tracking Soldier’s activities.

The most remarkable thing about the theft -- and this is, to experts in the field, the most worrisome development of the past few months -- was that Soldier didn’t need any special expertise with computers. All he needed was a shopping list.

“He’s not a lone hacker,” said Trend Micro’s David Perry. “He didn’t write any code.”

Shopping List

Strom said the FBI is also tracking Soldier and is confident they’ll get him. “These guys are very sophisticated, but often times they slip up,” Strom said.

Strom and other investigators have one significant advantage: the hackers have a habit of turning their skills on one another. The FBI’s DarkMarket sting started with a hacker war between a hacker, calling himself Iceman, who ran CardersMarket, and JiLsi, the DarkMarket administrator, whose real name was Renukanth Subramaniam, the FBI said.

“We took advantage of that animosity,” Strom said, eventually persuading JiLsi to turn over the site to the FBI and giving the bureau control over all communications involving DarkMarket’s 2,500 members. As a result, Subramaniam was sentenced to more than four years in prison in the U.K.

Maza, the elite Russian forum, was recently hacked and its database dumped online. It presented a priceless opportunity for law enforcement. The forum’s database held membership lists, e- mail addresses, IP addresses, and passwords -- the kind of information the world’s top cyber thieves try very hard to keep secret. The main suspect in the Maza attack is the administrator of a rival site, Hex Nightmare said.

Learned a Lot

“We learned a lot of lessons with DarkMarket, and we’ve passed that experience on not only to other offices within the FBI but to our counterparts overseas,” Strom said. “We’re definitely taking the fight back to them.”

Hex Nightmare agrees the FBI may eventually make more progress. When Slavik, the author of the ZeuS malware, disappeared in 2010, he was at the height of his fame. Theories about his disappearance abound on the underground: Slavik was killed; he now works as a cyberspy for the Russian government. Hex Nightmare has her own: “I think Slavik thought it was a good time to get out.”

Google Donating $11.5M to Fight Modern Slavery

2011-12-15T05:50:00.000-08:00

Tech giant Google announced Wednesday it is donating $11.5 million to several coalitions fighting to end the modern-day slavery of some 27 million people around the world.

In what is believed to be the largest-ever corporate grant devoted to the advocacy, intervention and rescue of people being held, forced to work or provide sex against their will, Google said it chose organizations with proven records in combating slavery.

"Many people are surprised to learn there are more people trapped in slavery today than any time in history," said Jacquelline Fuller, director of charitable giving and advocacy for Google. "The good news is that there are solutions."

The Washington-based International Justice Mission, a human rights organization that works globally to rescue victims of slavery and sexual exploitation, was chosen by Google to lead the efforts.

It will partner with Polaris Project and Slavery Footprint and a handful of smaller organizations for the multi-year effort to rescue the enslaved, push for better infrastructure and resources for anti-slavery enforcement agencies overseas, as well as raise awareness here in the United States and help countries draft anti-slavery legislation.

"Each year we focus some of our annual giving on meeting direct human need," Fuller said. "Google chose to spotlight the issue of slavery this year because there is nothing more fundamental than freedom."

Gary A. Haugen, president of the International Justice Mission, said the coalition would focus on three initiatives: A $3.5 million intervention project to fight forced labor in India; a $4.5 million advocacy campaign in India to educate and protect the vulnerable; and a $1.8 million plan to mobilize Americans on behalf of the millions currently at risk of slavery or waiting for rescue around the world.

The remaining $1.7 million will go to several smaller organizations working to combat slavery.

"It's hard for most Americans to believe that slavery and human trafficking are still massive problems in our world," said Haugen. "Google's support now makes it possible for IJM to join forces with two other leading organizations so we can bring to bear our unique strengths in a united front."

Those leading the U.S. efforts will meet in Washington on Wednesday to kick off the joint initiative. The project will focus on improved legislation to protect vulnerable children and adults in the United States, as well as a push for more accountability and transparency in the U.S. supply chain by retailers and manufacturers to make sure their products are "slave-free."

The trafficking of women for the sex trade is common in big American cities. Some illegal immigrants find themselves forced to work in sweatshops, in private homes as domestic servants or on farms without pay under the threat of deportation.

The new effort will launch new initiatives that ordinary Americans can take to help abolish modern-day slavery, such as understanding how their own clothing or smartphones might contain fabrics or components manufactured by forced labor.

"Whether it's by calling the national human trafficking hotline, sending a letter to their senator, or using online advocacy tools, millions of Americans will be able to use their voices to ensure that ending this problem becomes a top priority," said Bradley Myles, executive director of Polaris Project.

Facebook users can report suicidal behavior

2011-12-13T20:19:00.001-08:00

Facebook has a new service that will enable users of the social network to report friends who have expressed suicidal thoughts and make sure they get an offer of help from the National Suicide Prevention Lifeline.

Friends will be able to report suicidal behavior by clicking a report option next to any content on the site and choosing suicidal content under the harmful behavior option, Facebook spokesman Frederic Wolens told Reuters.

Facebook will then send the suicidal person an email that will encourage them to call the National Suicide Prevention Lifeline (phone number included). The email will also include a link that will enable those who would prefer not to talk on the phone to begin a confidential online chat session with a crisis worker.

Facebook and Lifeline have been working together since 2006 to provide help to at-risk users of the social networking site, but this is the first time Facebook is making online chat sessions available to its users as an option for suicide prevention.

"Although the Lifeline on average handles 70,000 calls per month, we have heard from our Facebook fans and others that there are many people in crisis who don't feel comfortable picking up the phone," John Draper, Lifeline's project director, said in a statement. "This new service provides a way for them to get the help they need in the way they want it."

Lifeline said they will make sure that crisis center workers will be available 24 hours a day seven days a week to respond to Facebook users who prefer to use a chat session.

Surgeon General Regina M. Benjamin commended Facebook and Lifeline for addressing suicide — which she described as one of America's most tragic public health programs. In a statement she said that nearly 100 Americans die by suicide every day.

"We have effective treatments to help suicidal individuals regain hope and a desire to live and we know how powerful personal connections and support can be," she said. "Therefore we as a nation must do everything we can to reach out and provide them with the help and hope needed to survive and return to productive lives with their family, friends and communities."

Amazon.com executive dies in plane crash

2011-12-05T06:06:00.000-08:00

An executive with Amazon.com died Sunday in a small-plane crash on the shore of Lake Huron.

Tom Phillips, 52, of Kirkland, was a general manager with Amazon Web Services, the Seattle Times reports. He was flying to a home he owned on Mackinac Island when the crash occurred.

Phillips was on the board of several area organizations, including Sacred Heart School in Clyde Hill.

"Tom's a family man, puts his family first, and he's very involved and committed to our community here at our school and at our parish, and he's one of the first people, if anything ever is needed they call Tom,” said friend Julie Prince.

Search and rescue controllers at Coast Guard Sector Sault Ste. Marie, Mich., were contacted by a Michigan State Police 911 dispatcher at 10:07 p.m. Saturday, after the dispatcher was called by a concerned family member reporting Phillips and 29-year-old Joe Pann overdue, the Coast Guard said.
The men had departed St. Ignace en route to Mackinaw Island in a Piper Saratoga and were expected to arrive at about 8 p.m. The flight is only about 4.5 miles and should have taken only about six minutes.

Shortly before noon Sunday, a Coast Guard aircrew involved in the search effort received a signal from a 121.5 MHz emergency locator transmitter. When they investigated the transmitted signal, they found the plane wreckage about 100 yards from the shore and about three miles north of St. Ignace, Mich.

Federal Aviation Administration records show the plane was owned by the charter company Great Lakes Air Inc.

Federal investigators are expected to arrive Monday.

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Amazon, B&N Tablets Taking a Bite Out of Apple

2011-11-29T06:06:00.000-08:00

Amazon said Monday that it has sold "millions" of Kindle Fire tablets while Barnes & Noble also appears to be having early success with its new device, the Nook Tablet, according to a Wall Street Journal roundup of analyst commentary.

The newspaper cited several industry researchers as saying that Apple, which has dominated the tablet category with its iPad for several years, may finally be facing some real competition as the holiday buying season kicks into gear.

Amazon didn't release specific sales figures for the Kindle Fire, which was released on Nov. 15. But the online retail giant did say that the 7-inch, $199 Android tablet "has been its best-selling item for eight weeks," factoring in an extended pre-order period, and that it had sold "more than four times" as many Kindle devices this Black Friday as it had the previous year, according to the Journal.

Forrester Research estimated that Amazon could sell five million Kindle Fires by the end of January. That's not nearly as impressive as the 13.5 million iPads that Piper Jaffray analysts believe Apple will sell in the fourth quarter, but if Amazon does approach the Forrester projection, it would almost certainly be the second-biggest tablet maker in the world.

And the Kindle Fire's success would certainly offer encouragement to others in a category where the competition has been beaten down by the iPad's dominance for some time. The likes of Hewlett-Packard, Motorola, and Research in Motion have all made high-profile attempts to compete with Apple in the tablet arena over the past year—all have failed, often spectacularly.

But would-be competitors will have to move quickly in 2012 to take advantage of what looks to be a much more wide-open tablet market than it has been in 2011. In addition to Apple and Amazon, Barnes & Noble "also appears to be generating customer interest" in its $249 Nook Tablet, according to Forrester.

"With Amazon and Barnes & Noble, you have brands that can be competitive" with Apple, Forrester analyst Sarah Rotman Epps told the Journal.

PCMag columnist and Creative Strategies analyst Tim Bajarin added that the Kindle Fire and Nook Tablet are the first Android- based tablets that have online content and apps that are comparable to Apple's for the iPad. "[T]here's no confusion" for users of the Amazon and Barnes & Noble tablets, he said, a welcome difference from other devices running Google's mobile operating system which tend to be less simple and user-friendly.

What Microsoft, Oracle, IBM, And SAP Don't Tell Customers

2011-11-19T10:48:00.000-08:00

The four big software vendors -- Microsoft, Oracle, IBM, and SAP -- have hidden motives that customers need to understand, otherwise they might be pushed into buying products and services that don't fit their needs.
That's the takeaway from a recent Gartner talk in Australia, reported by IT News.
At a symposium this week, Gartner analyst Dennis Gaughan explained what the four big vendors are really trying to do, based on Gartner's experience with its clients.

Microsoft mainly wants to protect Windows and Office. Microsoft is a platform company, and its main goal is to protect its highly lucrative Windows and Office monopolies, while establishing other platforms that will be hard for customers to break away from later. New functionality is "drip fed" to users of those core platforms, but new products exist to protect the core. He advised extreme caution before moving to Office 365, and said not to slip into an "all-Microsoft" mentality.

Oracle products don't really work well together. Oracle's sales force is extremely aggressive about pushing a suite of products, but has much fewer integration points than SAP. In fact, integration is usually left entirely up to the customer. Oracle is also very reluctant to talk about product roadmaps for fear that future products will cannibalize existing ones. The company makes more than 90% of its profits through maintenance fees, and will do whatever it takes to keep those fees flowing in. Gaughan also expressed some surprise that so many customers keep working with Oracle despite reporting that Oracle is "the most difficult vendor to deal with."

IBM wants to take over your IT strategy. IBM bills itself as a thought leader, but its real business is selling consulting services. To thrive, IBM account managers try to take control of a company's IT strategy so they can keep pushing new products. Gaughan recommends taking a collaborative or partner approach.

SAP confuses customers with pricing. A lot of SAP customers ask Gartner for help figuring out SAP's pricing and licensing, as SAP has unusual terms for billing data going into and out of systems. Gaughan also said that a big technology transition that was driving SAP revenue for the last few years -- moving existing customers from the old R/3 system to the newer Business Suite -- is almost done, which means SAP will have to be more aggressive with maintenance fees. He recommended locking in maintenance prices now.

Overall, Gaughan said that most of the innovation being done in these companies is in their research arms. Their real goal is protecting the status quo for as long as possible.

Facebook comments on Porn and Violence Spam attacks

2011-11-16T08:48:00.000-08:00

This week it would appear that Facebook was the victim of a rather unsettling security breach where loads of violent and/or pornographic images were strewn across users feeds, these attacks commented on late in the dar on Tuesday by the company. Facebook has sent out a statement which points to a browser vulnerability as the culprit and note that they’re currently investigating to find out who is responsible for the whole situation. Unsavory images, video, and links have flooded in on your average everyday friend’s streams and in most cases, they’ve got no idea.

Currently Facebook is shutting down handfuls of malicious Pages and accounts that appear to have been taking part in the attack. In general it appears that Facebook users were in one way or another tricked into pasting and executing a Javascript code which then took their Facebook accounts for quite a ride down sharing lane. Of course users affected have only to change their password, run a virus scan on their computer if they believe it’s that kind of bug, and check through their Facebook apps to find any they might not have added themselves (or were unaware that they added, in this case). Have a peek at Facebook’s statement on the matter here:

“Protecting the people who use Facebook from spam and malicious content is a top priority for us, and we are always working to improve our systems to isolate and remove material that violates our terms. Recently, we experienced a coordinated spam attack that exploited a browser vulnerability. Our efforts have drastically limited the damage caused by this attack, and we are now in the process of investigating to identify those responsible.
During this spam attack users were tricked into pasting and executing malicious javascript in their browser URL bar causing them to unknowingly share this offensive content. Our engineers have been working diligently on this self-XSS vulnerability in the browser. We’ve built enforcement mechanisms to quickly shut down the malicious Pages and accounts that attempt to exploit it. We have also been putting those affected through educational checkpoints so they know how to protect themselves. We’ve put in place backend measures to reduce the rate of these attacks and will continue to iterate on our defenses to find new ways to protect people.” – Facebook

If you feel as though you’ve been affected by the attack in question or have witnessed some nasty images / video / links in your news feed, report it to Facebook immediately and be sure to take another peek at your security settings to make sure you’ve got nothing unwanted sitting around, specifically in your apps.

Facebook fails to stop bots accessing personal information: B.C. study

2011-11-07T17:21:00.000-08:00

This file photo shows a view of the Facebook homepage.

Photograph by: Nicholas Kamm, AFP/Getty Images

VANCOUVER — A study by researchers at the University of British Columbia found that Facebook’s security system failed to stop a large-scale infiltration in which computer-generated fake Facebook profiles collected personal information about thousands of Facebook users.

In a paper to be presented at next month’s Annual Computer Security Applications Conference in Orlando, Florida, the researchers said they collected 250 gigabytes of information from Facebook users by using socialbots — fake Facebook profiles created and controlled by computer code.

The fake Facebookers, who were set up with names, photos and computer-generated status updates, sent friend requests to about 5,000 random Facebook users. When people accepted those friend requests, the socialbots followed up by putting out friend requests to friends of the initial group.

As a result, it took only eight weeks for researchers to acquire 250 gigabytes of personal information from Facebook users.

“This data include email addresses, phone numbers, and other profile information, all of which have monetary value,” the researchers — Yazan Boshmaf, Ildar Muslukhov, Konstantin Beznosov and Matei Ripeanu — wrote in their paper, The Socialbot Network: When Bots Socialize for Fame and Money.

The data breaches weren’t limited to the infiltrated accounts but spread to other connected accounts.

“Unfortunately, this also includes the private data of users who have not been infiltrated, but are connected to infiltrated users,” the study said.

The researchers found that even operating the socialbot network (SbN) at a conservative pace, each socialbot could collect on average 175 new chunks of publicly inaccessible data per day.

The study suggests the ease with which the fictitious Facebook users could join the network and expand their sphere of influence means online social networks are vulnerable not only to data theft but to misinformation campaigns.

The UBC study suggests that many Facebook users will friend total strangers.
“Most OSN users are not careful enough when accepting connection requests sent by strangers, especially when they have mutual connections,” the researchers said. “This behaviour can be exploited to achieve a large-scale infiltration with a success rate of up to 80 per cent.”

Socialbots can command a high price tag. The researchers, who had 102 socialbots and one bot master in their Facebook infiltration, said socialbots command as much as $29 each on the Internet black market.

Researchers found that the Facebook Immune System (FIS), a security system that is supposed to safeguard the network against spam and cyberattacks, was ineffective in thwarting the large-scale infiltration.

Contacted for comment on the findings of the UBC study, Facebook replied in an email that it uses a combination of three systems to combat such attacks.

“We are constantly updating these systems to improve their effectiveness and address new kinds of attacks. We use credible research as part of that process,” Facebook said in its email. “We have serious concerns about the methodology of the research by the University of British Columbia and we will be putting these concerns to them.”

The researchers said they got the approval of UBC’s behavioural research ethics board. The data they collected was encrypted and anonymized and deleted after they completed their data analysis.

Report by:
© The Vancouver Sun

Googles patent attorney on legal reforms, Microsoft and more

2011-11-06T07:38:00.000-08:00

Google stands at the center of the escalating mobile patent wars, as the developer of the Android operating system that triggered scores of lawsuits and countersuits.

Depending on whom you ask, the company is either the high-minded adult in the debate du jour over intellectual property — or a blatant patent thief.

In an interview in this morning’s Chronicle, Google’s patent counsel Tim Porter argues the system itself is broken.

For too long, the patent office granted protection to broad, vague or unoriginal ideas masquerading as inventions. That inevitably led to the legal dramas now unfolding, he said.

His Q&A continues below:

Q: Microsoft’s patent attorney Horacio Gutiérrez argued that licensing and cross-licensing deals are the natural and healthy solution to this wave of patent disputes. What do you think is the healthy solution?

A: I would hope that companies working out solutions between themselves is the result. The problem is if those deals are based on the threats of excluding products from countries or excessive damages, based on vague or overbroad patents. That leads to skewed settlements and skewed licensing agreements.

At the end of the day, my hope is people can reach sensible agreements and everyone can move forward and make great products.

Q: Microsoft now has at least 10 agreements in place with Android manufacturers. Does that effectively mean Android is no longer a free platform and, for that matter, that Microsoft is making more money off licensing the platform than Google is?

A: We don’t know what the terms of those agreements are. Unless you do, it’s hard to speculate on what that means.

Q: You mentioned the 2007 Supreme Court decision a few times. Do you think patent vetting became more rigorous after that?

A: I think they’re making an effort. There’s reason to be concerned though. They’re also facing pressure to issue patents more quickly and to streamline review procedures.

There are obviously competing pressures there. So I think it’s too early to tell.

Q: What did you make of the America Invents Act, the recently passed reform of the nation’s patent laws?

A: I would characterize that as being maybe a good first step. There are a lot of improvements in the new law, the problem is it doesn’t go far enough. It doesn’t address the standards for patenting, it doesn’t address vagueness and over broadness. And it doesn’t address excessive damages.

It’s good to give the patent office more money to conduct more detailed examinations of patents, and I think there are things in the law that make it easier for the patent office to review patents that have been granted. But the bottom line is there is still a lot of work to be done and that’s frustrating after a process that lasted five or six years.

Google Moves Reader to Plus, Despite Complaints

2011-11-01T06:09:00.000-07:00

With its upgrade of Google Reader on Monday, Google has shut down the native social content-sharing features of the popular RSS feed manager and shifted the functionality in modified form to Google+.

Google Reader users who want to continue sharing RSS feed content with others thus need to set up a membership in Google+, the company's new social networking site.

If they have been sharing on Reader using a pseudonym, they'll now have to switch to using their real name, which is required for a Google+ account. Google has said that it will allow pseudonyms on Google+ at some point, but hasn't said when nor how.

Reader becomes the latest Google application whose functionality has been changed -- either mandatorily or optionally -- by Google+, which the company is in the process of integrating with many other Google sites and applications.

For example, users of the Picasa photo service can continue using a pseudonym as long as they don't set up a Google+ account. If they do, they have to integrate it with their Picasa account, and replace their Picasa Web name with their Google+ identity.

Google is also giving Blogger publishers the option of replacing their Blogger user profile with their Google+ profile, but doing so, again, requires that publishers identify on Blogger using their Google+ real name.

Google's decision to shut down Reader's content-sharing features, announced last week, has led some users to complain in discussion forums and blog posts, and even set up a petition.

In addition to objecting to the requirement to give up pseudonyms -- especially in Iran -- in order to continue sharing, users also have complained about the loss of a dedicated place for RSS feed sharing.

In their view, it will be less convenient and less useful to have Reader content sharing reflected within Google+, along with a wide variety of other non-Reader content.

Sharing Reader content will now be based on Google's +1 button, which is tightly integrated with Google+, and on Google+ Circles, the feature that lets users organize their Google+ contacts into different groups, like family, co-workers and any other category they define.

In addition to the Google+ integration, the upgraded Reader includes a user interface redesign that is meant to be cleaner and simpler.

It's not clear whether users will be able to carry over to Google+ the social connections they have established using Reader's now retired "friending," "following" and "shared link" features, or whether they'll have to recreate them manually.

Google is making it possible for users who decide to stop using Reader to export their account data.

"We hope you'll like the new Reader -- and Google+ -- as much as we do, but we understand that some of you may not. Retiring Reader's sharing features wasn't a decision that we made lightly, but in the end, it helps us focus on fewer areas, and build an even better experience across all of Google," wrote Alan Green, a software engineer, in Monday's announcement.

People who haven't used the Reader social sharing features will feel no effect from the Google+ integration.

Samsung Overtakes Apple in Smartphone Sales

2011-10-28T06:16:00.000-07:00

Samsung Electronics Co. overtook Apple Inc. (AAPL) in the last quarter to become the world’s largest smartphone vendor amid a widening technology and legal battle between the two companies.

Samsung shipped 27.8 million smartphones in the last quarter, taking 23.8 percent of the market, Milton Keynes, U.K.- based Strategy Analytics said in an e-mailed statement today. Apple’s 17.1 million shipments, comprising 14.6 percent of the market, pushed the Cupertino, California-based company to second place. Nokia Oyj (NOK1V) maintained its third position, it said.

Apple, which released its iPhone 4S this month, held the top spot for only one quarter after dislodging Espoo, Finland- based Nokia earlier this year. Samsung, based in Suwon, South Korea, has turned to Google Inc. (GOOG)’s Android software to boost sales of its Galaxy smartphones and tablet computers.

“Samsung has come out with products that appeal to all the different form factors and specifications out there,” said T.Z. Wong, a Beijing-based analyst at researcher IDC. “That is a strategy they have executed very well.”

Natalie Kerris, a spokeswoman for Apple, wasn’t immediately available for comment after normal business hours. Nam Ki Yung, a Seoul-based spokesman for Samsung, declined to comment on the research company’s estimate.

Smartphone Sales
“Samsung’s rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution,” Strategy Analytics wrote. “Samsung has demonstrated that it is possible, at least in the short term, to differentiate and grow by using the Android ecosystem.”

The global smartphone market climbed 44 percent from a year earlier to 117 million units, Strategy Analytics said. Nokia dropped to 14.4 percent from 32.7 percent a year earlier.

In the wider mobile-phone market that includes lower-cost devices, Nokia maintained its top spot even after losing 5 percentage points of share, the researcher said in a separate statement. Its 27.3 percent kept it ahead of Samsung’s 22.6 percent, with LG Electronics Inc. (066570) third.

Chinese phone maker ZTE Corp.’s cheaper handsets helped it take 4.7 percent and overtake Apple for fourth place. Global market shipments climbed 14 percent to 390 million units, according to the researcher.

Samsung, also the world’s largest manufacturer of televisions, today reported record revenue from its phone division that helped mask a slump in earnings from computer- memory chips and panels.

Legal Battles
Samsung rose 2.3 percent to 945,000 won at the close of trading in Seoul today. The shares have declined 0.4 percent this year, compared with a 25 percent jump for Apple.

Apple and Samsung have accused each other of infringing patents for technology used in handsets and tablets, with court cases still pending in Milan and Sydney. Legal battles between the two companies intensified after Apple claimed in an April lawsuit in the U.S. that Samsung’s Galaxy devices “slavishly” copied the iPhone and the iPad.

Apple’s profit last quarter missed analysts’ estimates for the first time in at least six years after customers delayed handset purchases in anticipation of its new phone. Sales of the new model, iPhone 4S, surpassed 4 million in the first weekend of sales that began Oct. 14, topping Apple’s previous sales record for its handsets.

Samsung and Nokia also released new handsets this month as consumers increasingly use mobile phones to surf the Internet, play videos and access social-networking sites.

Samsung and Google pit the talk-to-type technology of Android Ice Cream Sandwich against Apple’s Siri voice-command digital assistant. Nokia, which has a partnership with Microsoft Corp. (MSFT), this week unveiled its Windows-based handset called Lumia 800.

Developers expect much from Android 4 upgrade today

2011-10-18T06:24:00.000-07:00

Fragmentation and bugs beset the popular mobile platform, and the 'Ice Cream Sandwich' update details remain a mystery

Google's Android 4.0 "Ice Cream Sandwich" mobile OS release, which is expected to debut this evening, has developers hoping for resolution of longstanding platform fragmentation problems and critical bug fixes.

Android application developers now deal with multiple versions of the operating system, geared for either phones or tablets but not both. They also have had to cope with customized interfaces, making it tough to build applications to run across the variety of Android units on the market. "I'm anticipating [the operating system upgrade] hotly," said Brian Hardy, a software engineer and instructor at mobile software developer Big Nerd Ranch. "It's always nice to see what's new, but it will be refreshing to be able to develop on one platform at some point in the future."
Currently, developers can use the Android 2.x platform for smartphones and 3.x platform for tablets. Google has released a compatibility library for sharing some functionality between 3.x and 2.x systems, but does not solve all problems, Hardy said. As an example, he cited that the action bar functionality is not available in the library.

Another developer chimed in that unification would bring Google in line with competitor Apple. "It's exactly what Apple did when they came out with the iPad," said Nick Farina, CTO at developer Meridian. "Google is doing the same, which I think is good." As a result, Android tablets and phones will share the same UI, simplifying development, he said.

Fragmentation has even affected Android's WebKit browser engine, said Mike Burns, a developer at Thoughtbot. "This is part of the fragmentation problem. They fix bugs in one version and introduce bugs in another version," he noted.

Android 4's arrival is anticipated as part of a Samsung Galaxy Nexus smartphone debut in Hong Kong scheduled for this evening in U.S. time zones. Google has emphasized the unity the operating system upgrade is supposed to bring to the fragmented Android landscape. "Our goal with Ice Cream Sandwich is to deliver one operating system that works everywhere, regardless of device. Ice Cream Sandwich will bring everything you love about [the Honeycomb release of Android] on your tablet to your phone, including the holographic user interface, more multitasking, the new launcher, and richer widgets," wrote Hugo Barra, Google's product management director for Android, in a May blog post.

But Ice Cream Sandwich will not solve all problems with the platform, said David Cao, organizer of the Silicon Valley Android Developer Group and vice president of mobile at BeyondSoft. He is not a developer himself, but said Android still has problems in which Google controls the release of code and some device vendors get the code before others, he said. "Android is somewhat open, but it's not completely open."

Fragmentation is not the only issue hurting developers. "I look forward to the bug fixes more than anything else," said Thoughtbot's Burns. Android has had issues with bugs in widgets and HTTP as well, not just in WebKit, said Burns. The widget issues are the most prevalent, he said -- in particular, issues with rotating the device and screen pages. Screen fragments, such as the tab bar, do not get updated when pages are swiped left to right, he said. "I'm hoping that they've gone through and fixed all these kinds of situations."

Burns also wants to see improvements in caching data from the Web. "It's all manual. I have to maintain my own cache, and every application has to do this. So if [Google] could give us something, that would be great," he said.

Meridian's Farina cited issues with software-based graphics rendering related to pre-Android 3.0 releases. He said, "The way that graphics are drawn to the screen is using a software technology that basically as old as Windows 3.1."
Big Nerd Ranch's Hardy adds that he anticipates some new APIs but that Google has said little about Ice Cream Sandwich, making it hard to know what to truly expect. Google has not yet released a software development kit for Ice Cream Sandwich, so even when Android 4.0 is released, it will be some time before developers can write one Android 4.0 application that runs on multiple systems, he said. Plus, cellular carriers and device makers have to update the operating systems on their devices.

Ice Cream Sandwich Joins Android Pals on Google Campus

2011-10-16T07:51:00.000-07:00

Google may have postponed the debut of Ice Cream Sandwich, the next version of its Android mobile operating system optimized for smartphones, in deference to the passing of Apple's Steve Jobs. But as the I, Programmer blog discovered this weekend, it looks like somebody forgot to tell the delivery guys not to drop off the latest Android-themed statuary at the search giant's Mountain View, Calif. campus.

Check out the video below of Googlers installing the Ice Cream Sandwich statue in an area outside of Google's Building 44 that is rapidly turning into a kind of Candyland. Ice Cream Sandwich last week joined such Android-version commemorating statues as a ginormous doughnut (Android 1.6 Donut), a giant éclair (Android 2.0 Éclair), and a big old cup of frozen yogurt (Android 2.2 Froyo).

Interestingly, the Ice Cream Sandwich statue is the only version statue in the shape of the Android icon itself, although the iconic green robot does have its own statue in the garden as well.

Google and Samsung had been expected to unveil Ice Cream Sandwich on Samsung Nexus Prime smartphone at the Samsung Mobile Unpacked event during CTIA in San Diego last week. But that Oct. 11 event was cancelled, according to Google, because "we believe this is not the right time to announce a new product as the world expresses tribute to Steve Jobs's passing."

It has been reported that the operating system, which may be dubbed Android 4.0, though that is not entirely clear, will make its debut at an Oct. 27 event in London. Samsung however, has called those rumors "not true whatsoever."

Google previewed Ice Cream Sandwich at the Google I/O conference in May to the delight of Android developers. Earlier this month, Google chairman Eric Schmidt let it slip at Salesforce.com's Dreamforce conference that Android 4.0, the next major overhaul to Google's mobile OS, will be released in "October or November."

Google CEO Larry Page also made it clear that Ice Cream Sandwich is on its way soon during the company's third-quarter earnings call with analysts last week.

Apple in talks to add streaming Hollywood movies to iCloud

2011-10-13T20:03:00.000-07:00

Apple is said to be involved in negotiations with Hollywood movie studios in an effort to give customers the ability to stream movies they own to devices like an iPhone, iPad or Apple TV.

Citing people familiar with the matter, The Wall Street Journal reported on Thursday that Apple wants to give its customers the ability to stream movies they have purchased through iTunes without the need to manually transfer the files. The talks come as Apple has launched its iCloud product, and movie studios have rolled out their own cloud-based movie streaming service, dubbed UltraViolet.

UltraViolet movies can be streamed to an iPhone or iPad using the Flixster application available on the iOS App Store, however an UltraViolet account does not include any movies that may have been purchased through iTunes. The new UltraViolet format lets people stream a film they have purchased on DVD or Blu-ray, and is seen as a way to help boost slumping sales of movies.

Rumors that Apple wants to give users the ability to stream and re-download movies they have purchased are not new. Apple has already secured deals for iTunes customers, allowing them to re-download songs and TV shows they own, but Hollywood movies cannot be re-downloaded.

Previous reports have claimed that the so-called "HBO window" has been a sticking point in negotiations. The window is a deal in which three of the top six film studios have distribution deals with premium network HBO, and under the terms of that deal, outlets must halt sales or distribution of a film when it premieres on HBO.

As recently as August, Apple was still said to be pursuing a cloud-based streaming and re-downloading service, though such a deal with Hollywood studios was said to not be imminent.

The studios' UltraViolet service launched this week, giving customers access to "digital lockers" that let customers stream or download a digital copy of physical purchases on a wide variety of devices. The service requires customers to create an account that serves as a hub for all of their purchased media, and passcodes that ship with physical discs allow users to access those movies online from remote servers.

All of the major movie studios except for Walt Disney Co. are backing UltraViolet, while it is planning its own proprietary service called KeyChest. Neither Disney nor Apple were part of the consortium that formed UltraViolet.

Chrome browser heading to Android devices

2011-10-03T17:06:00.000-07:00

A mobile version of Chrome, Google’s popular and super-fast desktop browser, may be getting ready to launch on Android phones soon, according to a post on the Chromium Code site.

Chrome for Android is most definitely in the pipeline and looks set to bring much of the main features of the desktop browser; we’re hoping for the speed dial/smart home screen and tabbed browsing, which you can currently get with Opera Mobile and Dolphin Browser HD, but can’t get on the stock Android browser.

Hopefully this would also allow for easier bookmark syncing, along with easy link sharing between the desktop and phone browser. We'd be surprised if there wasn't some kind of Google+/Google Account tie-in with all of this as well. Most of all though, we’re hoping for a superfast browser that comes installed on every Android phone.

Chrome for Android looks to be ready soon; perhaps the wrapping will be taken off duringSamsung’s ‘Google Episode’ event at San Diego next Tuesday, where Ice Cream Sandwich and theGoogle Nexus Prime are also thought to publicly debut. We'll know for sure a week tomorrow.

Google+ Will Be the Next Big Thing for Your Business

2011-09-22T06:06:00.000-07:00

Why the BUZZ about Google+? The last thing entrepreneurs need is another social network to join, right? Weren't you just getting the hang of Twitter? Didn't you just start putting that Facebook business page together? So why is Brogan back here telling you to get into Google+, and pronto?

I've never made a prediction like this before. I'm not exactly Mr. Bleeding Edge. But what I've seen so far is that the new social network from Google has a lot of advantages that are worth thinking about, and entrepreneurial types should take a look-see.

The Next Big Thing
Google+ is a social networking platform, but you can look at it a lot of different ways. You can say it's like Facebook, only cleaner. It's like Twitter, only more engaging. It has the potential to be a great collaboration and communication platform (you can isolate who sees information by sharing it with specific Circles, or groupings of people). In its earliest weeks of existence, it already was sending more traffic to my website than any other social networking platform.
Share your thoughtsAlso, realize that Google+ is indexed by the biggest search engine in the world, also known as Google. Other search engines like it, too. And it has a lot of integration points, such as Google Places (which shows you location information), and an incredible potential for integrating even more of Google's services over time.

How It Will Help Your Business
Social networks are built to try and emulate real-world connectivity and information-sharing. On one hand, they're like a more interesting telephone. On the other hand, they're built to augment (not replace) cocktail parties, chamber of commerce meetings and other places where people get to know each other (or at least used to). Google+ does this surprisingly well, for a few reasons.

Google+ lets you share photos, videos, links and location data with everyone, or with your select Circles. Thus, when you find the good stuff that applies to your real estate friends, if you've grouped them into a Circle, you can send that information only to them. Other times, you can share with the general public to try and grow your audience.

What Makes It Different
First (and important) Facebook is not indexed by Google for search results, meaning that everything you do inside there stays inside there. Second, Facebook and LinkedIn both are set up for more of an "exclusive" model, which means that you have to know someone to know something. That's why you see companies pushing so hard for "likes," and why you see people spam the LinkedIn Groups.
Google+ is slowly rolling out their "for business" parts of the platform, but on the day I wrote this, I can tell you that even being on their system as an individual representing a company is a big opportunity. The traffic to ChrisBrogan.com has received a huge boost since linking the occasional post from Google+.

Get In Early
Simply put, it's important to take action on Google+ right now. I saw the benefits of this when I joined Twitter in October 2006. If you get in, get familiar, start growing connections and learn how to curate and share, you'll be ahead of the game. It's not usually my thing to make predictions, but I'm sticking with this one. See you on Google+.

NetFlix: Tipping Point or Overreaction?

2011-09-18T19:40:00.000-07:00

NetFlix experienced another 8.3% decline Friday (September 16, $155.19) on further investor discontent on lower subscription guidance. The bears in the stock claim that NetFlix has hit a tipping point where lower subscriber adds reduce ability to pay for content and less content begets greater churn; the (few) bulls in the stock cite the correction has gone too far. NetFlix stock has declined 36% over the past month and 48% from its high in July. Given the recent steep decline in the stock price against a backdrop of a profitable business model by the market leader, there is at least the opportunity for short term appreciation as well as longer term investment. Consider the following:

The drop in the number of DVD subscribers had to be expected by investors. The trend toward streaming is not new. NetFlix has been citing an increase trend toward greater streaming for several quarters. Moreover, the new market entrants are largely based on streaming (not physical DVDs) due to the attractiveness of the business model. The only difference is that NetFlix split its business into two revenue models, so the trends have been highlighted. And, recall, streaming is more profitable.

Investors are worried NetFlix will lose content war, but it is not a foregone conclusion. Today, it is expected that NetFlix will lose the Starz content in February, and many bears are concerned that competitors will pick up the content and put NetFlix at a disadvantage. However, whatever competitor picks up the content will have to pay for the content. Today, NetFlix has the largest subscriber base over which to amortize content costs, so the content costs would pose a bigger burden on its competitors. While having the greatest amount of content will attract subscribers, attractiveness will depend on the cost of that content to the subscribers. NetFlix operates with the model of a cable company, bundling content costs in a subscription format. NetFlix also does so at a cheaper price than other competitive subscription models and at a price of only a couple rentals from pay-as-you go models.

Companies are competing to sign content deals, and content-providers are cautious given the history in the music industry. Today, the streaming market is still nascent as no one provider has a full plate of content. WalMart’s Vudu focuses on HD movies, Hulu Plus focuses on television episodes, Amazon has a smaller library, and Apple’s iTunes has edge with Apple loyalists. And, there is some competition from physical DVD rental providers such as Blockbuster and RedBox. All continue to try to amass content at a reasonable pricing structure and the race is still on. To date, NetFlix still has the largest movie library overall although the size of the streaming-only content is not broken out.

Investors are concerned by NetFlix pricing, but it is attractive versus competition. The knock on NetFlix pricing is because it is more expensive today to rent DVDs and stream than it was with NetFlix in July. But compared to competition, NetFlix still offers convenience and competitive pricing. Perhaps subscribers had a good deal previously, and perhaps investors have a better business model now. Again, NetFlix streaming model is the most attractive subscription on the market, and the pay-as-you-go rentals can surpass the monthly fee after two rentals. Add in NetFlix near ubiquity on devices, cheerful customer service, and strong customer satisfaction and the model has not yet been unseated.

The large stock price reaction to the potential impact on EPS was overdone.The reduction in subscriber forecast was small, with less than 1% drop in streaming customers and 5% in DVD customers. Overall, the reduction was 1M subscribers from the previous forecast, and a 1.3M drop, if conservatively assumed all to be paid subscribers. On a very crude measurement, NetFlix has earned $0.16 EPS per year per 1M subscribers in FY10. NetFlix is on a FY11 run rate to earn about $0.20 EPS per year per 1M subscribers. This potential $0.20 loss in EPS assuming all those lost were paid represents 3% of next year’s earnings forecast, and cost the company $54/share, or 26% of the stock price. That would imply that those were very important subscribers or a foreshadowing of a deterioration in a business model that has not yet been proven. There is not a clear better mousetrap today nor is there evidence that the business model is broken.

The stock has gapped down 26% over two days. NetFlix continues to have 61% of the market share, is just entering international markets, and has a profitable business model. Unless the company reports significant drop in subscribers or a competitor comes up with a more attractive and sustainable business model, investors could expect for NetFlix to return to its pre-announcement price of $209. If the model stays on track, and NetFlix continues to expand streaming in the US, expand into international markets and grow its content, a strong Q3 earnings report next month could propel the stock price beyond that.

AT&T 4G LTE network (aka, real 4G) launches 9/18

2011-09-16T08:34:00.000-07:00

AT&T's rollout of its new high-speed mobile data network will officially begin on Sunday.

Currently, AT&T's high-speed network uses technology that allowed it to be quickly implemented across the country but only offered incremental upgrades over this 3G speeds.

Many criticized the company for even using the term "4G" because they felt it devalued the much more robust and faster solutions offered by carriers like Sprint and Verizon.

AT&T heard this criticism lound and clear and has been working to launch an LTE network. LTE is the 4G standard currently in use byVerizon and widely considered to be the superior format of the competing 4G offerings.

On September 18, AT&T will flip the LTE switch in Atlanta, Chicago, Dallas, Houston, and San Antonio. Other major markets will get the upgraded service in the coming months.

AT&T originally said it would be able to launch its LTE network in mid-2011, and while it was a little bit off that target, in the world of mobile infrastructure changes, that's pretty good.

Of course, AT&T still has many obstacles to overcome. Verizon's LTE network has been up and running for nearly a year and encompasses a large swath of the country. In addition, AT&T continues to rank at the bottom of the charts when it comes to both customer service and the mobile service itself.

Nevertheless, it's keeping busy as it continues to score sweetheart, exclusive-provider deals with devices like the Kindle and Sony's Playstation Vita.

AT&T Countersues DOJ To Defend T-Mobile Deal

2011-09-11T08:24:00.000-07:00

AT&T is countering the U.S. government's attempt to block its $39 billion acquisition of T-Mobile by depicting the deal as a way to provide consumers with better cell phone service at lower prices.

The argument, submitted in a Friday court filing, is AT&T Inc.'s first legal response to a lawsuit that the Department of Justice filed last week in an effort to ensure T-Mobile remains independent. AT&T's 25-page document echoed the company's previous contention that buying rival T-Mobile will enable it to expand its mobile communications network so there are fewer dropped connections in a world where constant online access is becoming the norm.

The Justice Department believes there wouldn't be enough competition if AT&T devours T-Mobile, creating a void that would increase prices and reduce the incentive to develop new technology.

AT&T's lawyers contend that the Justice Department's analysis reflects a misunderstanding of the market. They say T-Mobile, the fourth largest cell phone carrier with 33.6 million customers, isn't a significant competitive threat to AT&T, the No. 2 carrier with nearly 100 million customers. T-Mobile has been losing market share in recent years, a trend that AT&T argues will discourage its German parent, Deutsche Telekom, from investing to improve its own wireless network.

In contrast, AT&T says it spent more than $30 billion in network upgrades from 2008 through 2010, yet still can't keep up with customers' growing demand to transfer data over phones and other wireless devices, according to the court documents. But if it can snap up T-Mobile, AT&T believes the added capacity will put it in a better position to deliver better services. AT&T already has pledged to invest at least $8 billion and transfer 5,000 jobs currently in overseas call centers back to the U.S. if the T-Mobile purchase goes through.

The court filing also seeks to counter the Justice Department's theory that the U.S. cell phone market would be dominated by just three carriers – AT&T, Verizon Wireless and Sprint Nextel Corp, if T-Mobile disappears from the market. AT&T's filing cites "innovative upstarts" MetroPCS and Leap/Cricket and regional carriers such as US Cellular and Cellular South as viable alternatives for most consumers.

"The (Justice) Department does not and cannot explain how, in the face of all these aggressive rivals, the combined AT&T/T-Mobile will have any ability or incentive to restrict output, raise prices, or slow innovation," the AT&T's lawyers wrote.

It's unusual for the Justice Department to challenge a proposed acquisition in court. Most companies back out of deals to avoid tangling with the government. But AT&T has a huge incentive to fight: It will have to pay a $3 billion termination fee if its agreement with T-Mobile unravels.

AT&T, which is based in Dallas, is seeking a quick resolution to the case.

The first hearing in the case is set for Sept. 21 in Washington before U.S. District Court Judge Ellen Huvelle.

Google buys Zagat, targets Groupon, Facebook

2011-09-10T08:07:00.000-07:00

By beefing up its local deals offerings, Google could transform the whole market, analyst says

With Zagat's restaurant reviewing operation now in its arsenal, Google is in a position to radically change the daily deals market.

That could spell big trouble for Groupon, which made its name in the localized deals business, and Facebook, which has started investing in this area.

"Zagat will play a prominent role in Google's overall plans for becoming a player in travel, entertainment and particularly deals," said Dan Olds, an analyst at The Gabriel Consulting Group.

"Groupon and others have paved the way with their deals offerings. I would expect to see Google expand the Zagat model to many more businesses, and also become much more active in the Web deals space," Olds said.

Google announced Thursday that it had bought world-reknowned restaurant ratings publisher Zagat for an undisclosed sum.

Google expects the move to expand its online maps and local business listings to include restaurant reviews and recommendations.

"Zagat will be a cornerstone of our local offering," said Marissa Mayer, Google's vice president of local, maps and location services, in a blog post.

Rob Enderle, an analyst at the Enderle Group, noted that Zagat's initial value to Google will probably lie with helping Google Maps users pick out places to stay or eat. "It will also allow them to target high-scoring products for deals and the scores will help validate the value of the deal," he added.

IDC analyst Hadley Reynolds added that Zagat's treasure trove of restaurant information could benefit Google by increasing searches for local restaurants.

He suggested that Google could also add in-depth YouTube video reviews to search results.

"At the end of the day, the target for Google is local advertising, and this deal is well-focused there, and not just in the U.S.," said Reynolds. "Zagat will work particularly well for mobile searches, another primary Google target, where a much higher percentage of searches is local, and restaurants are a natural local search query."

Just this spring Facebook launched Deals on Facebook, a service focusing on helping users find discounts on local activities like concerts or hot air balloon rides.

Google has been increasingly turning attention to the local daily deals business.

Early last month it wrapped up an agreement to buy The Dealmap in an effort to further extend its local deals business. And last April, Google unveiled a beta test of Google Offers, a service designed to go head on against with Groupon.

"For Zagat, the acquisition represents 'game on' rather than 'game over,' as it was about to become the Encyclopedia Britannica of the review business," said Reynolds. "Now they have a second chance to reinvent the service for the online world, assuming Google can harness the management acumen not to kill the value of the brand - something that has been a challenge for them in the past."

Amazon and California in Deal on Tax

2011-09-09T06:06:00.000-07:00

The pitched battle between Amazon.com and the state of California over taxes is threatening to turn into a draw.

Lobbyists and lawmakers worked on Thursday to prepare new legislation that would give the retailer a one-year reprieve from collecting sales tax in the state. If Amazon cannot get a change in federal tax policy by next June, it will start collecting the tax in September 2012.

Amazon has been resisting a measure passed by legislators at the beginning of the summer mandating that e-commerce companies with subsidiaries in the state collect the taxes. It has spent more than $5 million to gather 500,000 signatures to put the issue on the ballot next June.

Democratic legislators tried this week to come up with a two-thirds vote in the state Senate that would have blocked the ballot measure. They failed. That left them, and Gov. Jerry Brown, with few options except to hope that voters would agree to pay more for online goods.

Why Amazon would agree to surrender even a portion of its fiercely defended competitive advantage is a little mysterious. Some observers speculated that the company was merely buying time and would move its subsidiaries out of California, letting it once again sell in the state without charging the tax.

The retailer, which is getting the most criticism in its history over the tax issue, declined to comment. It has repeatedly said it wants one federal law rather than individual tax provisions in every state.

Amazon was supposed to start collecting the tax under a California law that took effect July 1 but chose to fight instead. If the provisional deal can be completed by the end of the legislative session on Friday, the referendum will be dropped.

The official language of the deal, which was struck late Wednesday, has not been worked out, and participants cautioned that it all could still fall apart. Legislators do not return until January.

“We’re waiting to see the exact words, but we’re hopeful,” said Bill Dombrowski, head of the California Retailers Association. The group was the driving force behind the July law, which was supposed to raise a badly needed $200 million in the current fiscal year.

What Does Google+ Mean For Small Businesses?

2011-09-05T07:27:00.000-07:00

With the recent launch of Google+, there has been considerable focus paid to debating the merits of Google+ vs. Facebook. However, beyond direct comparison of apples and oranges, there’s a bigger story at play here for Google+.

Since its start in 1998, Google has been building and amassing an entire universe of web tools. From email and calendars to Google Docs, advertising, payment processing, site analytics, mobile, and third party apps for everything in between, the ‘Google Universe’ now offers a complete hub for its users.

The missing piece in this Google Universe has always been social…until now. Google+ has the capacity to bring all these tools together with people at the center of their new social hub.

What does Google+ mean for the small businesses?

Google Apps Marketplace and Google’s Chrome Web Store are extensive marketplaces for web applications that host everything from accounting to project management applications, CRM to full blow ERP applications. Google+ Circles provides the social glue for co-workers who are using Google’s business apps.

Google+ has the potential to become the feed or conversation manager for all the apps that are managing activity inside of a business. It offers an expansive, easy to manage to unite all business communications within a Google+’s feed.

Small businesses are migrating, over 3 million so far away from expensive on premise software solutions to Google Apps for their IT infrastructure in the cloud. This presents Google+ with a unique advantage to penetrate the small business market.

Single platform or best-of-breed?

Another key question for users is whether the benefit of having a series of best-of-breed tools presents a clear enough advantage over a single source for all business interactions. With best-of-breed, users get top-notch functionality and feature sets, however, they’re left with a fragmented experience.

Purchasing managers, IT, and end users are left juggling a patchwork of vendors and individual tools that don’t always play well together. Microsoft for IT, Oracle for the backend infrastructure, Facebook for marketing and social, LinkedIn for work connections, PayPal for payments… integrations across all these tools can be complex and expensive.

When we look back over the history of computing, we see a recurring trend where users migrate from individual tools to a unified platform. It’s a similar pattern with every computing platform since the mainframe.

Traditionally, whenever a new computing platform emerges, a large number of software vendors flood the market and are purchased by business departments or individuals at a high unit cost. Then over time, a unified application emerges on the scene, setting off a wave of conversions away from point pieces to the single solution.

This same pattern is set to repeat with Google, particularly in the small business segment. It’s no secret that small businesses have already been looking to replace desktop software and move toward a web-only environment. Online tools offer an ease of use, accessibility, and low cost that typical enterprise software just can’t match. And even web-based apps can be cumbersome if users are required to jump back and forth between apps and vendors to access point solutions for each bit of functionality.

With the addition of Google+, small businesses now have a complete hub in Google that extends far beyond document sharing. Google offers a viable web-based alternative for all that’s needed to keep the wheels turning day in and day out. In short, it’s becoming possible to run an entire business based on the Google ecosystem alone.

For the small business, we know that simplicity is best. With Google, capital spending goes way down as users can access these tools on the web, and largely for free. Even more importantly, life is much easier for the small business as the full suite of tools is in one place, and integrated right out of the box.

Unlike Facebook, Google+ is less about a place to hang out and connect with friends. Rather, it’s a way to tie all the pieces of the Google Universe together and give easy access to the full suite of Google tools through a single toolbar. History shows that the benefit of an integrated system will draw small businesses away from point, best-of-breed solutions.

HTC responds to allegations that its phones are spying on users

2011-09-03T07:55:00.000-07:00

HTC on Friday responded to user allegations that at least two of its smartphones, the HTC Sensation and the HTC EVO 3D, spy on users. BGR reported on Thursday that a new Android software update issued to these two handsets included tweaks that cause the OS to log users’ behavior. As discovered by InfectedROM forum member TrevE, Carrier IQ and four other processes in Android 2.3.4 purportedly gather usage stats and transmit them in the background. HTC has confirmed to BGR that these functions are all tied to an opt-in service however, and the Taiwan-based firm says it is not spying on anyone. Read on for more.

HTC confirmed to BGR that all of the data collected by the devices in question is encrypted, and any identifying data is stripped prior to transmission. Moreover, the vendor insists that the data collected by the processes in question is only sent to HTC if the user has previously opted in to an error reporting feature. “HTC, like most manufacturers, has an opt-in error reporting function built in to our devices,” an HTC spokesperson said in a statement delivered to BGR via email. “If your phone experiences an error, you have the option of ‘Telling HTC’ so we can make improvements to our phones. Details about this are in our privacy policy on each device and in order for data to be collected, you have to opt-in. If you do opt-in, we protect your privacy by de-identifying and encrypting the data.”

The statement goes on to reassure users that any data that might be transmitted with regard to the processes discovered on InfectedROM is tied to opt-in functions. The company also notes that none of the data is used to spy on users, but rather to investigate crashes and other unexpected errors. “HTC is committed to protecting your privacy and that means a commitment to clear opt-in/opt-out as the standard for collecting any information we need to serve you better,” HTC said in its statement.

AT&T Justice Department Battle: Wireless Carrier Gears Up For Rare Antitrust Fight

2011-09-01T08:45:00.000-07:00

The Justice Department's rejection of AT&T's proposed purchase of T-Mobile USA will test new federal guidelines on challenging mergers and the companies' resolve in forming the nation's largest wireless carrier.

A courtroom battle is likely and could wring out information that the companies would prefer to keep private. Still, AT&T Inc. has a big incentive to fight: If the deal is called off, the company has to pay a $3 billion breakup fee and surrender some of its unused spectrum for wireless communications.

AT&T is promising to fight the Justice Department's decision. The department filed a lawsuit Wednesday to block the $39 billion deal, saying it would reduce competition and lead to price increases for customers.

If AT&T follows through on that, it could produce the biggest antitrust showdown since business software maker Oracle Corp. squared off with the federal government seven years ago. That dispute, triggered by the government's decision to block Oracle's proposed purchase of rival PeopleSoft Inc., exposed several well-kept corporate secrets and required Oracle CEO Larry Ellison to testify before a packed courtroom.

In the end, Oracle pulled off something few companies have done in the past 30 years: It persuaded a federal judge that the Justice Department didn't have grounds to block its PeopleSoft deal. Oracle closed its $11.1 billion takeover four months after getting the favorable court ruling.

Usually, not even the most powerful companies bother to fight government regulators in an antitrust dispute. Google Inc., for example, backed off in 2008 when the Justice Department threatened to sue to block a proposed Internet search partnership with Yahoo Inc. Microsoft Corp., the world's largest software maker, pulled out of a deal to buy Intuit Corp. in 1995 after the Justice Department objected.

The Justice Department filed 138 antitrust cases in federal courts from 1999 to 2008 and lost just four of them, according to the latest breakdown from the agency.

One reason that the Justice Department has such a good track record is because it rarely challenges a deal unless it's very confident it can win, said Joseph Bauer, a University of Notre Dame law professor and antitrust expert.

Knowing AT&T would probably go to court, the Justice Department may have wanted to signal that it intends to get tougher on corporate marriages between rivals in markets with few other competitors.

A union between AT&T and T-Mobile USA would leave Verizon and Sprint as the only other major cellphone carriers in the U.S. T-Mobile, a subsidiary of German telecom company Deutsche Telekom AG, is currently the No. 4 wireless carrier, while AT&T is second. Combined, AT&T would be the largest.

In a sign of its confidence, the Justice Department decided to strike down the deal even though it could have taken about three more months to study the pros and cons. The timing stunned AT&T, which said it didn't get any advance warning.

"It was an aggressive and impressive move by the DOJ to take the battle right at AT&T," said Daniel Wall, a San Francisco attorney who represented Oracle in its 2004 fight to win the right to buy PeopleSoft. "It sent a statement that the DOJ intends to fight this one all the way to the finish line."

Wall said AT&T may have a tougher time proving its case than Oracle did against the Justice Department. In the PeopleSoft deal, Wall said, antitrust enforcers seemed to be manipulating the definition of the business software market. "This time, it looks to me that they have a pretty solid market definition," Wall said. "They don't appear to be playing games."

University of Iowa law professor Herbert Hovenkamp said the Justice Department is being guided by a set of new guidelines, issued late last year, which make it clearer when mergers should be challenged on antitrust grounds.

"I don't think they are overreaching here," Hovenkamp said. "If there is a broader message here, it's that the government intends to enforce these new guidelines."

Besides being forced to divulge potentially damaging information, AT&T will face other risks if it doesn't settle with the Justice Department. Going to trial will take months, or even years, leaving the company in a legal limbo that could depress its stock price and cause customers and key employees to defect.

There's another risk to going to trial: as they try to prove their case, antitrust lawyers sometimes obtain confidential e-mails that contain embarrassing snippets and present other evidence that can make companies look bad.

Those are some of the reasons why AT&T mayl try to reach some kind of settlement with the government.

If AT&T persists, antitrust experts said that it's better off going up against the Justice Department than the Federal Trade Commission, which also handles antitrust reviews. That's mainly because lawsuits with the Justice Department are contested in federal courts. By contrast, the threshold for the FTC to block deals is generally lower, and the ensuing legal skirmishes occur in administrative law proceedings that drag on longer.

"The merging parties usually have a better shot when they are going up against the DOJ than the FTC," said D. Daniel Sokol, a University of Florida professor specializing in antitrust law.

Facebook pays $40,000 to bug spotters

2011-08-30T21:31:00.000-07:00

Facebook wants you to try to hack into its site -- and if you succeed, it will pay you for the details.

Facebook said this week that that it has paid out more than $40,000 under its new "bug bounty" security initiative. Launched three weeks ago, Facebook's program invites security researchers -- both the professional kind and hacker hobbyists -- to send it the details of any Facebook vulnerabilities that they uncover. If the report checks out, Facebook will pay a finder's fee of at least $500.

It's willing to go higher for extra-impressive bug spotting.

"We've already paid a $5,000 bounty for one really good report," Facebook Chief Security Officer Joe Sullivan wrote in a blog post. "One person has already received more than $7,000 for six different issues flagged."

Although the social networking has its own security team, Facebook launched its bug bounty program to tap into the collective wisdom of the site's 750 million users.

"We hire the best and brightest, and have implemented numerous protocols," Sullivan wrote. "We realize, though, that there are many talented and well-intentioned security experts around the world who don't work for Facebook."

Researchers from more than 16 countries have successfully submitted bounty bugs, Facebook said. Its public "thank you" list names dozens of contributors.

Facebook also took pains to assure bug-hunters that it won't take any legal action against those who submit bugs, even if they were uncovered through less-than-legal routes into Facebook's systems.

That's often how hackers find vulnerabilities, but even those without any ill intent -- so-called "white-hat hackers" -- can land in hot water with companies if they tell them about their intrusion.

"We worked with several third-party groups to ensure that the language in our policy protects researchers and makes clear our intent to work with, not punish, those who report information," Sullivan wrote.

The Electronic Frontier Foundation, an advocacy group that often weighs in on Internet-related legal issues, is a fan of that approach.

"We hope to see others follow Facebook's lead and go even further," the EFF wrote last year about Facebook's security policy. "The more transparent companies are about their approaches to vulnerability disclosure -- and the more they encourage users to come forward -- the more often they will learn about problems that need to be fixed."

Google, Yahoo Bidding on Hulu This Week

2011-08-24T06:09:00.000-07:00

We first reported on Google making a Hulu bid back in July, and speculated on those possibilities as far back as June. While the exact details of Google’s bid haven’t been released, the Wall Street Journal has indicated that Google is officially part of the bidding war that will close this week. Final bids are due in by Wednesday.

At that time we’ll see how the landscape will change. Potential bidders include Google, Yahoo, Amazon, and DirectTV, and other companies – including Microsoft and Apple – have been pegged as potential silent bidders. Should a search engine or display ad group take Hulu, it may change the landscape dramatically.

Yahoo is seen as the most likely candidate; they started the bidding when they went to Hulu (currently owned by Comcast, NewsCorp, and Disney) and made an unsolicited bid. Since that time, Hulu has opened the floor to any potential buyers. It’s expected that the bids will range from $500 million to $2 billion (U.S.), depending on what licensing deals come alongside the website purchase.

For Google, the licensing is the biggest selling point; it would allow them to push YouTube further along and would give them an additional video-based revenue source to boot. Yahoo, however, focuses on entertainment and TV news and would thus be an intuitive buyer. As a top display ad company, Yahoo also has a lot to gain from the additional high-visibility web space. For anyone advertising on YouTube or Hulu, or through Yahoo, this is a deal to pay attention to.

US senator sees regs on online taxes years off

2011-08-18T06:01:00.000-07:00

Republican U.S. Sen. Bob Corker said Tuesday that it could be three or four years before Congress passes national guidelines on tax collections by online retailers like Amazon.com Inc.

Corker told reporters after a speech to the Smith County Chamber of Commerce that he understands the complaints of local retailers.

"The brick and mortar stores have turned out to be places where people look at the product and try it on and see if it works for them," he said. "And then they go to the Internet and actually buy the product without sales taxes.

"Obviously that's unfair."

Questions about online sales taxes have come into focus in Tennessee after the state last year struck a deal with Amazon to waive the requirement for the online retailer to collect the taxes on distribution centers being built in the state.

Amazon has said it expects to create 1,200 full-time jobs in Bradley and Hamilton counties, and the company has since announced it will build another facility in Lebanon.

A University of Tennessee study has estimated that the state will lose a total of $411 million in sales taxes from online sales in the current budget year.

Amazon lobbyist have said they are willing to collect the taxes once national standards are established, but threatened to abandon projects in Tennessee and elsewhere if states unilaterally required them to collect the tax.

Gov. Bill Haslam has said he wants to take a lead crafting a national standard, and has expressed optimism about such an arrangement coming into force soon. But Corker said he had not yet spoken with his fellow Republican about those aims.

"He has not mentioned that he may be taking the leadership, but we both have had a lot going on," Corker said.

The senator and governor were scheduled to dine together later Tuesday, and Corker said he "wouldn't be surprised" if the matter came up.
Haslam's office didn't immediately return messages seeking comment.

Microsoft Tweaks Bing Product Search

2011-08-16T06:11:00.000-07:00

Microsoft has made changes to Bing's Shopping search engine designed to accelerate and simplify the product-finding process.

Bing Shopping's filter options to narrow results according to criteria like product category, brand and style, which previously were only displayed on the results page, will now also appear on the fly in a drop-down list below the search box as people type in queries.

Microsoft expects that these changes will help shoppers refine their searches more quickly, even before they execute the query and are taken to the results page, the company said on Monday.

In addition, Bing now features a new filter option that lets users call up only products whose prices have been cut, as well as another filter option that displays products only from a specific store.

Microsoft also expanded the scope of Bing Shopping's lists, which users can create and share with their contacts on Facebook. Previously, Bing users could only create a single Shopping list, but now they can create multiple lists. Also, Bing users can now share a Shopping list with a subset of their contacts, whereas before they had to share the list with all their friends.

Microsoft rolled out the ability for users to link Bing Shopping with their Facebook accounts in April.

Microsoft has been trying for years to level the search playing field through heavy investment in Bing and via high-profile partnerships, like its search deal with Yahoo and custom integration with Facebook, but Google remains dominant in search advertising and usage.

In the U.S. in July, Google grabbed a 65.1 percent share of search queries, followed in a very distant second place by Yahoo with 16.1 percent and by Bing in third place with 14.4 percent, according to comScore.

Hackers protest BART decision to block cellphones

2011-08-15T05:38:00.000-07:00

Threat realized: Internet activist group Anonymous planted its logo on myBART.org and released users’ personal information on a website. (AP Photo/myBART.org)Making good Sunday on its promise to attack BART’s website in a “censorship” protest, the shadowy Internet activist group Anonymous defaced the transit agency’s myBART site with its logo and released personal information — including passwords — of at least 2,400 of the site’s users.
By Sunday evening, BART had disabled the site. Agency spokesman Jim Allison confirmed it was taken down, but could not say when it would return.

“We’ll bring it back only when we’re confident everyone’s information is secure,” he said.

Anonymous said Saturday it would shut down BART’s website at noon Sunday in one of several actions planned against the transit agency in response to BART’s brief shutdown of underground cellphone service last week.

A protest of recent fatal shootings by BART police had been planned for Thursday, but failed to materialize when BART officials — hoping to prevent protesters from communicating about police locations — shut down cellphone service in stations for about three hours. That action has been criticized by politicians and free-speech advocates.

Shortly after noon Sunday, the Anonymous logo appeared on the website myBART.org, with a link to the group’s Twitter feed. On a separate website, the group posted what it said was the site’s “Info User Database,” which included names, addresses, phone numbers, email accounts and account passwords.

“I think it’s an invasion of my privacy,” said William Hulsebos of San Francisco, whose name and password appeared on the list. “That’s really sad; I’m actually glad you called. I have that password on a couple of things, and I guess we’ll have to start changing the password around.”

MyBART, which has 55,000 users, informs members of activities throughout the Bay Area that they can attend via BART. The main website, bart.gov, was unharmed as of press time Sunday.

The website that published users’ names said the hacking was done because “BART doesn’t give a s--- about it’s customers and riders and to show that the people will not allow you to kill us and censor us. This is but the one of many actions to come. We apologize to any citizen that has his information published, but you should go to BART and ask them why your information wasn’t secure with them.”

Twitter users responded to the news by the hundreds, some supporting the action and others expressing reservations. One commenter wrote that though he had previously supported Anonymous, the release of personal information was “ridiculous.”

“It doesn’t matter that BART didn’t secure their info,” wrote Crappy Tires. “You released the info at the end of the day. That hurts private citizens.”

Allison said his agency hopes to notify people whose information was compromised. He noted that the hacked website infrastructure is separate from the computer network used for BART service operations, and no one’s financial information is stored on myBART.

Allison said BART is working with the FBI and U.S. Homeland Security Department in connection with the hacking.

Anonymous has called for a peaceful protest of BART “censorship” and police at 5 p.m. today at the Civic Center station.

Allison promised an increased presence by BART police, but would not say whether another shutdown of cellphone service is planned.

“I’m not ruling it out,” Allison said. “We’re going to do whatever it takes to try to maintain a safe environment for passengers in the paid area.”

Anonymous is a loosely affiliated international collective of hackers who typically get involved in computer-related issues, including support for WikiLeaks.

Anonymous leaves its mark around the Net

January 2008:

War on Church of Scientology begins with hackers flooding the religious group’s servers with fake data requests after the church tried to censor Internet postings of famous member Tom Cruise.

March 2008:

Hackers infiltrate the Epilepsy Foundation’s website to trigger seizures in users who are photo- and pattern-sensitive; it’s the first time the hackers inflict physical harm.

April 2009:

Time magazine’s online poll of the Top 100 most influential people is rigged; “Moot,” aka Christopher Poole, who runs website 4chan, receives 16 million votes.

July 2010:

The Oregon Tea Party is attacked for using the slogan, “We are Anonymous. We are Legion. We do not forgive. We do not forget. Expect us” on its Facebook page, which received an onslaught of images and flames from the hackers; within hours, the Oregon group apologized and removed its Facebook profile.

August:

Anonymous threatens to take down social networking giant Facebook in November.

Aug. 14:

Anonymous takes over myBART.org and releases information on about 2,000 users.

Even Google hates its own 'names' policy

2011-08-13T07:01:00.000-07:00

The Google+ real names policy is so bad, Google can't even describe it honestly. Fortunately, the solution is easy and obvious.

Google's only big blunder in the creation of its otherwise excellent Google+ social network has been a flawed policy on what users are allowed to call themselves. Everybody hates the policy. Even Google hates it.

A lot of thought went into Google+. But the names policy? Not so much.

Here's my interpretation of Google's real names policy:

We require you to use your real name on the service. If we catch you using a fake name, we will give you four days to change it to your real name. If you don't change it, we won't let you use Google+. The main reasons for our policy are that we don't want anonymous trolls, spammers and haters wrecking the service, and also because real names make Google+ a better platform for commerce.

This is my own statement of Google's policy. Google people have never honestly articulated this policy. Instead, Google always couches its policies in euphemisms and misdirection. Their actual policy is so unpalatable that they can't even say it out loud.

Here's Google's disingenuous statement about its real names policy (according to Google+ product manager Saurabh Sharma in a video posted this week):

Google has "asked that those signing up for the service use the name they commonly go by in the real world." The reason? Google wants to "make connecting with people on the web more like connecting with people in the real world."

I respect what Google is trying to do with its real names policy -- at least I have no interest in Google+ descending into some kind of unholy mix between 4chan, YouTube and Chatroulette, where conversations are dominated by hate speech-spewing cowards hiding behind anonymity. And I understand that Google isn't a nonprofit organization -- they want to monetize. That's fair.

But Google's statement is disingenuous on three counts:

1. They're not "asking." It's a requirement. They don't want to say "requiring" because the truth sounds too harsh.

To ask is to imply that you'll respect the person's decision. "Asking" is not what Google is doing. They are "Requiring."

Google should be honest and say: "We are requiring that those signing up for the service use the name they commonly go by in the real world."

2. The stated reason for the policy is not the real reason. "More like connecting with people in the real world?" Why? Google's official policy page says it's "so that the people you want to connect with can find you."

But that's not the reason. In fact, that doesn't even make sense. Where in the real world does using my real name let people find me? The phone book? Do they still make phone books? I don't get it.

It's disingenuous of Google to not admit that real names also make Google+ a better environment for civil discussion and a better platform for commerce.

The phony "real world" argument could be used as the reason for everything and anything. "Oh, we're plastering advertising on every conceivable bit of G+ real estate, because we wanted to make Google+ more like the real world."

"We're going to force you to listen to random telephone conversations of people using Google Voice because we wanted to make Google+ more like the real world."

"We're working to make diseases transmissible over Google+ because we wanted to make Google+ more like the real world."

Enough with this ridiculous "real world" misdirection. The policy exists to make Google+ a better and more lucrative social platform, not to make it more like the real world.

3. The stated reason for the policy is not true. Using "real names" does not make Google+ like the "real world."

As I drive and walk around in the real world, people can see me but they don't know my name. More than 99% of the other people I encounter in the real world will never know who I am.

If someone asks me my name, I can say anything I want. Nobody requires me to use my "real name." I'm not even legally required to provide my name to the police in the real world.

Google's names policy requires members to positively identify themselves to everyone they encounter, making available all online activity available to 100% of the people they converse with (with a simple Google search).

If I know your name, I can find out everything you've posted on message boards, your address and phone number, whether or not you own your home, what your political affiliations are.

There's only one place in the real world where such absolute identification is required: prison. Every prisoner has a prisoner ID number displayed on his or her uniform and mug shot.

I suspect that Google is often blinded by its presumption that humans are just consumers. If a person is nothing more than a biological machine that buys things, then Google's description of its policy makes sense. When you buy something, you hand over a credit card, and now that store knows exactly who you are (unless you pay cash).

But if you participate in a political protest, go to a nightclub, attend an AA meeting, go to a party, or generally live your life, there is no absolute, irrevocable, searchable, permanent trail of exactly what you ever did or said available to everyone who sees or hears you.

The online world is not and cannot be anything at all like the real world. This point was made with stark clarity by The Atlantic's Alexis Madrigal.

Why Google's policy is incompatible with Google+

Google's policy can't work. For example, what about any person with a personal brand that happens to be a pseudonym?

Under Google's policy, Dr. Phil, Lady Gaga, Snoop Dogg and Ralph Lauren would be forced to use Google+ as Phillip McGraw, Stefani Germanotta, Calvin Broadus and Ralph Lifshitz.

Or is the plan to allow the rich and famous to use pseudonyms but not battered women, persecuted minorities, political dissidents and others using fake names out of self defense?

The best thing about Google+ is that user behavior is governed not by draconian rules imposed by the company, but by subtle and gentle incentives that are user controlled. For example, you don't have a maximum character count for updates of 140 (Twitter) or 420 (Facebook). You can post a novel if you want to, but you can also expect to be uncircled. Behavior is governed by the voluntary choices of users, not edicts handed down by software developers.

Nearly all favorable comparisons between Google+ and Facebook have something to do with Google's empowerment of users to make their own choices.

That's why Google's real names policy is incompatible with the rest of Google+. It's far too Zuckerbergian to co-exist with Google's other user policies.

There's also a strategic incompatibility. If Google's plan is to offer some exclusive little private club in one corner of the Internet a mere alternative to Facebook, then the real names policy is no big deal.

But if Google's strategy is to be a universal social layer for the Internet, then the names policy is fatally flawed. You can't expect to exclude everyone who wants or needs a pseudonym and expect to be the world's social platform.

The solution is easy and obvious

The solution to the real names problem couldn't be easier or more obvious. Go ahead and require a real name. But simply make the user name field like other fields in the profile -- let users hide it, as long as they've put something in the "Nickname" field.

The combination of a hidden real name and an exposed nickname lets Google have it both ways: Users can use pseudonyms, but Google itself can know who the person is (for consistency across Google accounts, and also for commerce).

Google could even add two more controls that would make the change more consistent with Google's objectives. First, allow people to hide their real name only if their account is associated with a cell phone number. (Google already allows Gmail addresses and Google accounts to be associated with phones for identification.) This would prevent people from signing up for one account after another, then abusing Google+ policies under serial pseudonyms.

Second, come up with some subtle signal -- an icon, for example -- that tells everyone that a pseudonym is a pseudonym.

Just about everyone hates Google's real names policy. And the policy itself is so objectionable that Google executives are apparently too ashamed or embarrassed to honestly and plainly express the policy.

Come on, Google: Come up with a real names policy that doesn't require phony justifications.

Apple vs. Exxon: The Battle For America's Most Valuable Company

2011-08-12T06:47:00.000-07:00

As Apple overtook Exxon Mobil this week as the most valuable company in the U.S., tech analysts were crowing about the striking turnaround of a company that was thought to be on its last legs in the late-1990s.

"It's one of the great growth stories that I've ever seen," veteran Apple analyst Charlie Wolf of Needham Securities told HuffPost. "It's gone from an $8 billion company in the early part of the past decade to where it is now a hundred billion in terms of revenue. Apple has shown enormous profitability and is posting astonishing growth numbers."

For outsiders, the race between the underdog tech company and the old-school oil giant represented the ultimate 21st century battle. With Apple beating out Exxon in terms of market value -- for now -- it seemed to point to an American economy where innovation and new technology could one day win out over fossil fuels.

But the contest between the two companies might have more to do with market forces than the fundamentals of either of the two companies.

"The big picture story is that the oil and tech sectors are susceptible in different ways to economic trends that are going around the world," said Kenneth Green, a resident scholar at the American Enterprise Institute.

David Kreutzer, a research fellow at the Heritage Foundation, said Exxon's recent dip was mostly caused by broader market expectations.

"Exxon's prices fluctuate with oil prices," Kreutzer said. And "oil prices go up and down with expectations of economic growth."

"Apple has outgrown the PC market for 21 straight quarters," Wolf said, That's the halo effect of the iPhone, the iPod, the iPad, which are picking up converts all over the place. Especially in the Far East." But Wolf lauded Apple for its ability to develop revolutionary products such as the iMac, iPhone, iPod and iPad.

But for all of Apple's innovation, Exxon, which has been the Fortune 500's most profitable company every year in the last half-decade, is unlikely to lose its place at the top of the market any time soon, according to Daniel J. Weiss, a senior fellow at the Center for American Progress. "Exxon is going to continue to be a mega force in the world energy markets," he said.

As fossil fuels become more limited in supply, energy companies, including Exxon, are using methods such as ultra-deep water drilling and sub-salt drilling to find new reserves, according toFrank A. Verrastro, the director of the energy and national security program at the Center for Strategic and International Studies.

"You've also started to see a movement in shale gas," he said. "A lot of these oil companies have seen the writing on the wall that the world is changing, so they need to adjust their strategy."

Despite the pressures of climate change, the global economy's dependence on oil isn't likely to wane anytime soon, Green said.

"There is the inescapable reality that even if we didn’t use oil for energy, it is the basis for our entire chemistry," said Green. "From fertilizer to the materials used to make, well, everything, our chemistry is petrochemistry. There is nothing on the horizon that is going to displace that. There's no magic gizmo that does that for you -- and there's no evidence that there's anything around the corner that will."

But in the end -- however lopsided the comparison -- enthusiasm for Apple's rise could not be dampened. "What is Exxon?" said Wolf. "It's really tied to the price of oil -- it's such an old-line company, it's not tied to innovation. And it will continue to grow with oil prices."

Google Probe: FTC looks into Android too

2011-08-11T06:01:00.000-07:00

In addition to probing Google's strategies for building its search business, federal antitrust regulators are also looking into whether Google is barring smartphone makers that load the company's Android mobile operating system on their devices from using competitors' services, according to The Wall Street Journal.

The Journal, citing "people familiar with the probe," reported today that lawyers from the Federal Trade Commission are asking whether the Web giant is preventing device makers that use Android from also featuring services from Google competitors. It's unclear from the Journal report if that relates to other mobile operating systems, such as Windows Phone, or other mobile applications, such as mapping services. But a number of handset makers that use Android, such as HTC, also sell devices that run Windows Phone software.

It's been six weeks since the FTC served Google with civil subpoenas. At the time, Google Fellow Amit Singhal wrote in a blog post that the agency has "begun a review of our business," but added that it was "unclear exactly what the FTC's concerns are." The presumption has been that trustbusters would focus on Google's market power in search advertising as well as Web search, businesses that it dominates in the United States.

The Journal noted that the FTC is also looking into whether "Google grants preferential placement on its website to its own products." That's an allegation that's surfaced over the years from rivals, who claim that Google's search results favor the company's services. And the Journal reported that regulators are also "looking into allegations that Google unfairly takes information collected by rivals, such as reviews of local businesses, to use on its own specialized site and then demotes the rivals' services in its search results."
Google has denied breaking antitrust laws or engaging in unfair business practices. A Google spokeswoman declined to comment specifically about the investigation, telling CNET, "We understand that with success comes scrutiny. We're happy to answer any questions they have about our business."

Google and Oracle Still Battling Over Android E-mail

2011-08-09T05:54:00.000-07:00

Google and Oracle continue to tussle over a potentially damaging e-mail in the ongoing lawsuit over alleged Java patent violations in the Android mobile OS.

"What we've actually been asked to do by [Google co-founders Larry Page and Sergey Brin] is to investigate what technical alternatives exist to Java for Android and Chrome," Google engineer Tim Lindholm wrote in the August 2010 e-mail to Android chief Andy Rubin. "We've been over a bunch of these, and think they all suck. We conclude that we need to negotiate a license for Java under the terms we need."

Google had tried to get the e-mail redacted on grounds it was subject to attorney-client privilege and that Oracle had revealed it in violation of a protective order, but Judge William Alsup disagreed, and ruled that it should remain public.

"In an extraordinary act of defiance" of Alsup, Google has since failed to reproduce 12 documents related to the e-mail, Oracle said in a letter jointly filed with Oracle Saturday in U.S. District Court for the Northern District of California.

In the letter, Google and Oracle laid out their respective positions on the e-mail. Ten of the documents are drafts of the "inculpatory," or incriminating e-mail, and two are copies of the version sent, Oracle said.

Google only claimed the e-mail was privileged after Alsup suggested it would prove troublesome to its defense at trial, Oracle added.

"Nothing in the Lindholm document indicates any legal advice or attorney work product. Instead, it reflects a sophisticated and experienced engineer's blunt and candid assessment that Google had no good alternatives to Java, and that Google needed a license from Oracle for its use of Java," Oracle said.

But Google tells a different story in the joint letter filed Saturday.

The various drafts of Lindholm's e-mail were generated by an autosave function while he was "drafting a clearly privileged e-mail to Google in-house counsel Ben Lee," Google said. "The only reason those drafts don't list Lee as a recipient is because filling in the list of recipients (the "To" line) was the last thing Mr. Lindholm did."

"Imagine that you are writing a letter to your lawyer and to others who have been tasked by lawyers with investigating facts relating to an anticipated lawsuit," Google added. "Eager to set down your thoughts, you draft the substance of the email first, leaving the 'To' line empty. When you are satisfied with the draft, you loop back to the 'To' field and begin to fill in the names. You add the lawyer's name last."

"Unsurprisingly, those snapshots--all taken in rapid succession within a few seconds or minutes of each other--show that no one was listed in the 'To' field, because you filled that in last," Google said. "Only the final version--the one you actually send--shows all recipients, including the lawyer, and bears a privilege warning."

Oracle is "using autosaves of a clearly privileged document to create a false impression that these are different documents and that none of them was, or was meant to be, communicated to a lawyer," Google said.

Moreover, the e-mail offers no proof that Google willfully infringed on the Java patents, according to Google. Rather, it "concerns an investigation made in anticipation of Oracle's lawsuit, shortly after Google learned of the patents that Oracle is asserting."

Google is asking Alsup for a chance to prove that all versions of the e-mail are privileged, by showing him "what the autosaves are and how they came into being" and the final version of the e-mail for a basis of comparison.

Lindholm would also submit a declaration explaining that he "prepared the email at the behest of and in coordination with Google's lawyers, and that the email constituted a privileged communication to them in anticipation of this lawsuit," Google said.

If Alsup's track record in the case is any guide, he may rule on Google's request quickly.

Oracle sued Google in August 2010, alleging that Android violated a number of patents held by Oracle on the Java programming language, which it acquired through the purchase of Sun Microsystems. Google has denied any wrongdoing.

A trial has been scheduled for Oct. 31, but Alsup has indicated he'd like the companies to settle the matter before then.

Android Versus iOS States Mapped For The US

2011-08-06T18:45:00.000-07:00

Android continues to dominate the mobile landscape with a 40% share of US mobile subscribers, according to the latest ComScore report. However, wouldn’t it be interesting to see how it maps out across the US? Well, mobile ad network Jumptap has done just that. The company issued a report today along with a map showing which platforms are most popular by state.

The report found that the majority of states that over-indexed for Android subscribers were in the South and Southwest regions, including California, Texas, and Florida. States that over-indexed for iOS subscribers are generally in the Midwest and New England areas with the exception being Louisiana.

However, there were also states that turned up neutral, which all seem to sit in the lower half of the country interspersed between Android-dominant states. And surprisingly, there’s still plenty of demand for BlackBerries up north in states such as Oregon, the Dakotas, and New York.

AT&T to Curb Wireless Browsing Speed for Heaviest Data Users

2011-08-03T06:18:00.000-07:00

AT&T Inc. (T), the largest U.S. phone company, will curb browsing speeds for its heaviest users on unlimited wireless data plans to cope with surging data traffic.

Starting Oct. 1, customers on an unlimited plan whose monthly use puts them into the top 5 percent of data consumption may experience reduced speeds until the end of that billing cycle, the Dallas-based company said today on its website. Normal browsing speeds will return once the customer begins a new cycle, AT&T said.

“This change will never impact the vast majority of our customers and is designed to create a better experience for all,” the company said. Heavy users who don’t want their speeds curbed can switch to a so-called tiered plan and pay more, AT&T said.

AT&T and other carriers are battling congestion on their networks as sales of smartphones surge and more people use them to download video and browse the Web. The company said the move to curb unlimited data plan users is designed to target those customers who typically use 12 times more data than the average smartphone customer.

“Even as we pursue this additional measure, it will not solve our spectrum shortage and network capacity issues,” AT&T said. The carrier said its planned takeover of T-Mobile USA Inc., which has yet to be approved by regulators, will address capacity problems.

AT&T spokesman Brad Burns declined to comment beyond the statement.

AT&T was unchanged at $29.26 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped less than 1 percent this year.

How Yahoo Got To A Billion Clicks

2011-08-01T06:02:00.000-07:00

A sophisticated personalization algorithm--combined with ever-savvier editors--has helped boost the Today box on Yahoo's home page to the tune of a 270% increase in clicks since 2009. Here’s what they're doing right.

If you’ve flitted across the Yahoo home page recently, you know how addictive its Today module can be. That’s the little box at the top of the page (as in the image above) containing four news stories—including at least one you usually can’t help but click on.

According to Yahoo, that’s entirely intentional—and the result of a lot of hard work spent trying to figure out how to serve up news that you, yes you, will find irresistible.

The company started work on a powerful personalization algorithm four years ago. Now it’s paying dividends. The system generates 45,000 totally unique versions of the Today module every five minutes. (All five screenshots in this post were taken within minutes of each other, using different Yahoo accounts.)

And in the two years since the algorithm went live, Yahoo says clicks on the stories in the Today box among U.S. users have increased 270%. This year, the module is averaging a whopping 1 billion clicks per month in the U.S.

Yahoo is now in the process of rolling out the algorithm—nicknamed CORE (for Content Optimization and Relevance Engine)—to its other media properties. It hopes CORE's results will entice visitors to gobble up ever-more content in the Yahoo ecosystem, and in the process, turn it into the “premier media company” that its executives like to claim that it already is.

They might be on to something. The Yahoo home page is the most visited of any page in the U.S. containing programmed content. Every day, 35 million unique visitors give it a look-see, and 110 million stop by every month. The increase in number of clicks in the Today box between this year and last—167 million—is the equivalent of adding an entire LATimes.com to Yahoo’s content ecosystem.

So how does the personalization strategy work? Yahoo gave Fast Company a peek behind the curtain, and it turns out that the secret sauce is only partially due to the work the algorithm does on its own. The other impact it's having is on Yahoo's Front Page editors, who are getting savvier about what will appeal to readers, in large part due to the insights they're gaining from the algorithm.

Here’s how it works.

The algorithm

CORE’s job is to figure out which stories are going to play well with which specific audiences. Yahoo generates a profile for each user based on information they've entered about themselves, like gender and age (if they're a registerd Yahoo user), the places they've visited when they've come to Yahoo in the past, and the stories they've already seen during that particular visit. Based on that information, it's up to CORE to figure out which of the 50-100 “packages” the editors have going at any one time will be most interesting to that particular visitor.

(The term “package” refers to those combinations of photos, headlines, text, and links that get dropped into the Today box. In the image at left, for example, the story about Speaker Boehner along with the three little links to the "Senate Dems", "Treasury", and "Debt fear" stories constitute a “package”.)

To test the packages, CORE grabs a portion of Yahoo visitors as they arrive on the site and uses them as a guinea pigs, tossing some of the new packages at them and seeing what attracts their interest. (Who gets lumped into that bucket is determined by a virtual "flip of the coin," so that the pool is not always populated by the same people.)

CORE then uses the results of those tests to rank every package according to how well it will do each visitor, based on their particular targeting attributes. So, for example, it might decide to serve up a particular package to women in the 35-44 age range in Peoria, for example, but not to men in that same age range in Peoria, or women in the 21-24 age range in Seattle.

“What we’re doing here is matchmaking,” Raghu Ramakrishnan, chief scientist for search and cloud platforms, tells Fast Company. “We know something about the user, about their context, and about the pool of articles we have. At the end of the day, it’s a matchmaking task.”

But the algorithm doesn’t work in a vacuum. It is also helping the editors who run the Front Page become smarter about how to put the packages together in the first place.

The editors

CORE can’t go hunting independently through the thousands of stories among Yahoo partners' content, or the stories generated in-house, to find the pieces that might most interest Yahoo visitors. It totally relies on the Front Page editors to tell it what to look at, and that’s where some of the art comes in.

The Front Page team is staffed by a group of online journalists, including its chief, Liz Lufkin, a former deputy managing editor at both the San Francisco Chronicle and USA Today. Lufkin tells Fast Company that the insights the team is gaining from CORE are adding nuance to their traditional understandings about what various audiences might be interested in.

Some of the findings buck conventional wisdom. CORE has shown the team that boomers don’t just care about health and retirement; they also like music. Teens will click on parenting stories, as well as science and weather. And men actually are sometimes interested in fashion (which Lufkin chalks up, at least in part, to their trying to make sense of what their wives and daughters are wearing).

And while the average woman might not spend a lot of time following the ins and outs of football or baseball, some sports stories do capture their attention. The day that Fast Company visited the Front Page team, CORE predicted that a story about Derek Boogaard, the hockey player who died unexpectedly this spring, would do well with women—and indeed, according to the dashboard that Front Page editors monitor continuously, it did, perhaps because of the tragic nature of his death.

CORE is also helping Yahoo’s editors get a jump on upcoming stories. Months before the wedding of Prince William and Kate Middleton, the Front Page team noticed a rising interest in the bride's sister, Pippa. So while it took the rest of the media a few days after the event to catch up to the frenzy surrounding the maid of honor (and her headline-grabbing bum), Yahoo’s editors were ready from the beginning.

“When the Royal Wedding happened—and [Pippa’s] dress [hit]—we knew it was going to be big,” Lufkin says. “All weekend long we went Pippa-crazy. The data let us know to be on the lookout for that.”

But it’s not all fluff. The algorithm is also turbo-charging the team’s ability to tackle hard news. When Congresswoman Gabrielle Giffords was shot in January, for example, the editors tested a variety of angles to determine which one would grab the most interest. The winner, according to CORE? A story about the aide who tried to save her. It might not be what the New York Times would lead with, but it was the story that resonated most with the millions of people who landed on the Yahoo homepage that day.

"Our readers have a much wider range of interest than we've traditionally given them credit for," Lufkins says. "If we can present them content that is compelling, there’s a really big opportunity" to grab their interest.

Having the editors at the wheel also means they can override the algorithm when important news is at stake. On the day Fast Company visited, President Obama was slated to give an important speech that evening on the draw down of troops in Afghanistan.

The algorithm predicted that the story on the speech would do miserably with Yahoo visitors. And indeed, according to the dashboard, it wasn’t getting many takers. But the editors still flipped the override switch, ruling that the story would be shown to all visitors to the home page at least once, irrespective of what the algorithm said. It was, and Yahoo willingly took the hit on clicks. Some stories, the editors say, everyone simply needs to see.

But, still, they monitored the story’s performance for any insights about what was resonating. “We want to learn how to do it better the next time,” Lufkin says, “not to sensationalize it, but to make it more relevant.”

As CORE moves out to other parts of the Yahoo network—like Yahoo News, where it’s headed next—the company hopes to reap a similar performance boost as it’s seen with the Today module.

Meanwhile, the company’s scientists are working on making the algorithm even smarter, determining what you’ll like not just based on simple variables, like your age and gender, but based on specific things you’ve expressed an interest in before, like “golf” or “Warren Buffet.”

Still, the human touch will always be part of the equation.

“From the beginning, we made the decision that we weren’t going to make everything entirely algorithmic,” Ramakrishnan says. “We need to leverage the editors and let them [use] the data we have to make smarter decisions in real time.”