Tech wrap: Wikipedia, Google protest anti-piracy bill
The English homepage of Wikipedia went dark and Google’s search page ran the logo “Tell Congress: Please don’t censor the web!” in protest of legislation designed to stop copyright piracy but the free online encyclopedia says “could fatally damage the free and open Internet.” Big tech names including Facebook and Twitter declined to participate in protests of the House of Representatives’ Stop Online Piracy Act and the Senate’s PROTECT Intellectual Property Act, despite their opposition to the legislation, unwilling to sacrifice a day’s worth of revenue and risk the ire of users.
European regulators will decide around the end of March whether to file a formal complaint against Google for misuse of its market position, EU Competition Commissioner Joaquin Almunia told Reuters. Until this point officials had been playing down expectations of an early conclusion to the informal investigation stage, although there still could be a long way to go. Antitrust investigations typically take several years.
EBay’s fourth-quarter profit jumped as the e-commerce company saw solid growth in its online marketplaces and an increase in transactions processed through its PayPal electronic payments business. The operator of the world’s largest online marketplace reported fourth-quarter net income of $2 billion, or $1.51 a share, compared with $559 million, or 42 cents a share, a year earlier. Revenue rose 35 percent to $3.38 billion.
Suspicion is growing that operatives in China, rather than India, were behind the hacking of emails of an official U.S. commission that monitors relations between the United States and China, U.S. officials said. U.S. officials who spoke to Reuters on condition of anonymity said the roundabout way the commission’s emails were obtained strongly suggests the intrusion originated in China, possibly by amateurs, and not from India’s spy service, as previously thought.
Cellphone makers are set to struggle with slow sales growth this year as a weaker global economy discourages consumers from replacing older handsets. Fourth-quarter results are likely to show the slowdown under way. Apple’s long-awaited iPhone 4S and Samsung’s new, broad offering were likely the exceptions in an otherwise lackluster Christmas holiday season. Vendors are expected to report sales of around 142 million smartphones in the October-December quarter, up 42 percent from a year ago, according to a Reuters poll. But analysts said not everyone benefited. “We expect smartphone demand to have remained robust in the fourth quarter, but price erosion is intensifying. Profitability remains the crucial yardstick and it’s likely Apple and Samsung extended their lead,” said CCS Insight analyst Geoff Blaber.
Zynga said it bought four small mobile game companies for an undisclosed sum as the top maker of Facebook games seeks to expand its lineup on smartphones and tablets. The company’s top mobile executive David Ko told Reuters it had acquired German company Gamedoctors in December. Gamedoctors, based in Bielefeld near Hanover, makes the game ZombieSmash. The company also bought Page44 Studios, which is based in San Francisco, in September. That studio created the “World of Goo” game for Apple’s iOS platform. Zynga also acquired HipLogic, another San Francisco-based games company, in August. And Ko also confirmed Zynga purchased New York based Astro Ape Studios in August to develop new titles.
Tech wrap: Zappos hacked
Online shoe retailer Zappos told customers this weekend that it has been the victim of a cyber attack affecting more than 24 million customer accounts in its database. The popular retailer, which is owned by Amazon.com, said customers’ names, email addresses, billing and shipping addresses, phone numbers and the last four digits of credit card numbers and scrambled passwords were stolen. The company, which is well known for its customer service, said due to the high volume of customer calls it is expecting it will temporarily switch off its phones and direct customers to contact via email.
Hackers disrupted online access to the Tel Aviv Stock Exchange, El Al Airlines and three banks in what the government described as a cyber-offensive against Israel. The attacks came just days after an unidentified hacker, proclaiming Palestinian sympathies, posted the details of thousands of Israeli credit card holders and other personal information on the Internet in a mass theft. Israel opened an agency to tackle cyber attacks earlier this month.
A hacker who goes by the name of “Yama Tough” threatened Saturday to release the full source code for Symantec’s flagship Norton Antivirus software on Tuesday. Last week, Yama Tough released fragments of source code from Symantec products along with a cache of emails. The hacker said all the data was taken from Indian government servers.
Use of microblogging in China quadrupled in 2011 compared with the previous year, with nearly half of all Chinese Internet users now taking to the near-instant service to gather news and spread views, a government Internet think tank said. Microblogging, or “Weibo” as it is known in China, allows users to send short messages of 140 characters or less to their followers. The total number of Weibo users rose 296 percent to 249.9 million in 2011, data from the China Internet Network Information Center showed.
The long-term approach of major Japanese investors, combined with an aversion to foreign and hostile takeovers and uncertainty over lawsuits stemming from the $1.7 billion accounting scandal, will likely make any change of ownership at Olympus a gradual process, writes Isabel Reynolds. Olympus is expected to stay listed for the time being and sources with the company’s powerful main bankers, who are also shareholders, say they would be prepared to wait for the firm to recover on its own.
Zappos is giving everyone a lesson on managing a data breach that everyone who may ever have to deal with the problem should look to for guidance. There is a lot to be learned. People understand that such things happen and, unless you’ve been egregiously lax in protecting their account information, will give you the benefit of the doubt. How you respond to the crisis will be what determines whether or not the issue is resolved with minimal damage or it deteriorates into a PR disaster.
As I said, Zappos is giving us a real-time lesson on how to do crisis management properly and we should all be taking notes. For a more detailed analysis: http://blog.unibulmerchantservices.com/z appos-is-giving-us-a-lesson-on-managing- a-data-breach
Tech wrap: Apple reveals child labor at some suppliers
Apple revealed its suppliers in response to harsh criticism that it was turning a blind eye to dismal working conditions at partner factories. Apple’s audit found six active and 13 historical cases of underage labor at some component suppliers. It also found a number of other violations, among them breaches in pay, benefits and environmental practices in plants in China, which figured prominently throughout the 500-page report Apple issued. Other violations found in the audit included dumping wastewater onto a neighboring farm, using machines without safeguards, testing workers for pregnancy and falsifying pay records.
“I would like to totally eliminate every case of underage employment,” Apple CEO Tim Cook told Reuters in an interview. “We have done that in all of our final assembly. As we go deeper into the supply chain, we found that age verification system isn’t sophisticated enough. This is something we feel very strongly about and we want to eliminate totally.”
Enraged Chinese shoppers pelted Apple’s flagship Beijing store with eggs and shoving matches broke out with police when customers were told the store would not begin sales of the iPhone 4S as scheduled. Apple said later after the fracas at its store in Beijing’s trendy Sanlitun district that it would halt all retail sales of the latest iPhone in China for the time being, but said the phones would be available online. Sales at Apple’s other store in Beijing and three in Shanghai went more smoothly, with stocks quickly selling out.
Apple’s next iPad, expected to be released in March, will feature a high-definition screen, run a quad-core chip that allows for faster switching between apps and will work with next-generation LTE wireless networks, Bloomberg reported, citing three people familiar with the product.
Private equity firm TPG Capital is willing to invest about $1 billion in Olympus in a joint deal with Sony or another suitor circling the scandal-hit firm, a person familiar with TPG’s thinking said. So far, TPG has not received any indication from these strategic suitors that they would be willing to work with the private equity firm on a transaction, the source said.
Republican Representative Lamar Smith, the lawmaker behind the Stop Online Piracy Act, vowed to press ahead in the face of fierce criticism from Internet giants such as Google and Facebook. “It is amazing to me that the opponents apparently don’t want to protect American consumers and businesses,” Smith told Reuters in a telephone interview. Smith said Internet counterfeiters cost American consumers, businesses, inventors and workers some $100 billion a year, though critics accuse him of exaggerating. Google executive chairman Eric Schmidt said last month that the bill would “effectively break the Internet” and he compared Smith’s efforts to the same type of censorship that Google has experienced in China.
Telecom operators globally are expected to cut spending on their networks this year, hitting equipment makers that were only just beginning to recover from intense price wars and the last economic downturn. European operators are likely to be more cautious as recession looms and consumers are less willing to splash out on high-end smartphones, while carriers in China and the U.S. slow their frenetic pace of mobile investments. The shift will pressure long-struggling mid-sized gear makers like Alcatel-Lucent and Nokia Siemens Networks, which are more vulnerable than market leader Ericsson or low-cost Chinese player Huawei. Some smaller equipment vendors such as Juniper Networks and Acme Packet have already issued profit warnings, blaming slower spending at big carriers like Verizon and AT&T.
Tech wrap: Groupon goes public, super nova
Shares of daily deals site Groupon rose more than 50 percent in their stock market debut, but at least some of the early trading exuberance may have come from limiting the fraction of the company that was sold. The shares rose as high as $31.14, or 55.7 percent above the IPO price, in early trading on the Nasdaq, at one point pushing the market value of the company up to $19.9 billion. The shares later eased back, closing at $26.11. Despite the early success, there are still lingering questions about Groupon’s business model and about competition from better-funded rivals such as Amazon.com and Google.
Yahoo has signed confidentiality agreements with several parties interested in buying all or part of the company, according to people familiar with the matter. The Internet pioneer said potential buyers had to sign an agreement by Friday to be allowed a close look at Yahoo’s finances. But the Friday deadline could be extended into next week to provide more time for other firms to sign on, the sources said. Some private equity firms have balked at signing Yahoo’s nondisclosure agreement because of restrictions that would prevent them from forming consortiums, sources told Reuters last week.
EU regulators are investigating whether Samsung and Apple may have breached EU antitrust laws with patent infringement claims in their global legal battle over the lucrative smartphone and tablet market. “The (European) Commission has indeed sent requests for information to Apple and Samsung concerning the enforcement of ‘standards-essential’ patents in the mobile telephony sector,” the European Commission said in a statement. Standards-essential patents means they have been incorporated in internationally accepted technology standards, which in the case of Samsung and Apple, means 3G and UMTS technology.
China dismissed a U.S. report on online spying as “irresponsible,” rejecting the charge that China uses cyber espionage to steal lucrative U.S. trade and technology secrets. “Online attacks are notable for spanning national borders and being anonymous. Identifying the attackers without carrying out a comprehensive investigation and making inferences about the attackers is both unprofessional and irresponsible,” Hong told a daily news briefing in answer to a question about the report.
Japan’s Olympus replaced its auditor in 2009 after a disagreement over how to account for several acquisitions, but it decided not to reveal the dispute to investors, an internal document shows. In May 2009, Tsuyoshi Kikukawa, the then president of the camera-maker and medical equipment firm, announced that the contract for its then auditor, KPMG, had ended and that another global accounting firm, Ernst & Young, would take over. Kikukawa made no mention of any row with KPMG, although Japanese disclosure rules require companies to notify investors of “any matters concerning the opinions” of an outgoing auditor.
In a twist, Zynga brings mobile game to Facebook
On Monday, Zynga said it would be bringing its most popular mobile game, “Words with Friends,” to Facebook. The social games maker said the game would be coming soon.
Players on Apple- or Android-powered devices will be able to carry over games from their phones or tablets onto Facebook. Zynga, in an attempt at bathroom humor, said this would allow “a seamless transition from your work computer to the bathroom… don’t lie, you know you do it.”
While it’s no surprise that Zynga would want to tap Facebook to attract more users to “Words with Friends” — a game you have to play with at least one other person — it’s a curious move for a company whose biggest IPO risk is its dependence on Facebook. Future investors are more likely to welcome an announcement in which Zynga distances itself from Facebook, like the recent one about Zynga entering mainland China through its partner Tencent.
The Scrabble-like word game is one of the company’s 12 games available on mobile devices. Zynga counts Lindsay Lohan, Jessica Alba and Reggie Bush as fans of “Words with Friends” but did not reveal any details about how these US Weekly regulars can spell.
A Chinese consumer’s unfortunate encounter with a fake Apple store
On a recent reporting trip to the Chinese city of Kunming to scout out fake Apple stores, I met Wang, a 23-year-old woman who was furious at one particular retailer. As I interviewed her, Wang was nearly in tears as she recounted how she had spent a few months salary at a fake Apple store buying products she now doubts are real.
Wang’s experience is part of a bigger problem foreign brands face in the city, which are racing to reach the millions of potential customers in China’s burgeoning middle class.
On my visit to Kunming, I saw Nike and Adidas stores everywhere and it was hard to determine which stores were legitimate. On one particular road, there are two Nike stores that stood almost directly opposite each other. Both stores, incidentally, displayed the big trademarked “Swoosh.” I doubt that Nike would allow their resellers to be located so closely together for fear of market cannibalization. But, of course, these stories might not have been real Nike resellers.
A little further down on another road, there was a hole-in-the-wall “Walt Disney” store selling generic princess costumes and a “Toni and Guy” salon. That salon, as if trying to convince the passer-by that it was authentic, had the word “England’s” tacked onto the storefront.
Like many second and third-tier cities in China, Kunming has a rapidly growing middle class that is adjusting to rising disposable incomes. This is surely the lure for big foreign brands like Cartier, Zara and H&M, who all have official stores in the downtown area, and for counterfeiters as well.
While major consumer brands like Starbucks, Yum Brands’ KFC and McDonald’s have made second and third-tier cities a priority, many others, like Apple, have not. Which is why the much of the Chinese population is not familiar with the particular subtleties of Apple branding. In the case of the fake Apple store I saw, only experts could tell the difference: the elaborate detail someone went to copy the store layout, design — even the blue staff t-shirts — blew my mind.
In Shanghai or Beijing, these fake Apple stores wouldn’t cut it. Consumers in those cities are far more likely to check prices on the Internet before buying, and are far savvier.
This article reeks of sensationalism and inuendo as opposed to factual reporting. Please move it to the entertainment section where biased, opinionated, gossipy reporting is more acceptable.
Tech wrap: Microsoft’s Office shines, Windows lacks luster
Microsoft reported a greater-than-expected 30 percent increase in fiscal fourth-quarter profit, helped by sales of its Office software, but profit from its core Windows product fell on soft PC sales. Microsoft posted net profit of $5.87 billion, or 69 cents per share, compared with $4.52 billion, or 51 cents per share, in the year-ago quarter. That easily beat Wall Street’s average estimate of 58 cents, according to Thomson Reuters I/B/E/S.
“These are great results given a slower PC environment and it highlights how the company has multiple revenue streams. The $17 billion unearned revenue, which is a forward indicator of business, shows they signed a lot of deals this quarter,” said BGC Financial analyst Colin Gillis.
AT&T posted better-than-expected subscriber growth for the second quarter, pushing its profits and sales past Wall Street estimates despite the loss of exclusive U.S. rights to sell the Apple iPhone.
Nokia’s outlook for its handset business to be profitable in the current quarter brought some relief to its battered share price but analysts doubted it would dispel fears about the future of the onetime cellphone leviathan. Nokia said it sold 16.7 million smartphones in the quarter, falling behind Apple’s 20.3 million iPhones. Its quarterly phone sales volume were down 20 percent from a year ago, missing analysts’ forecasts, at a time when the overall global market grew around 10 percent.
After a brief hiatus and an FBI takedown of several alleged “hacktivists,” two groups that claimed responsibility for a recent wave of cyber vandalism said they are back. A statement was posted online on Thursday jointly by the groups, Anonymous and Lulz Security, after U.S. authorities arrested 16 people earlier this week for several attacks, most prominently Anonymous’ attempt to cripple eBay’s PayPal site after it stopped accepting donations to the WikiLeaks organization.
Groupon’s privacy and data-collection policies came under congressional scrutiny, the latest sign of regulatory pressure on the largest online daily deals company. Representatives Joe Barton and Edward Markey, co-chairmen of the House Bi-Partisan Privacy Caucus, said they sent a letter on Thursday to Groupon CEO Andrew Mason asking about the company’s new privacy and data collection policy. Groupon unveiled new policies earlier this month in an email to its more than 80 million subscribers. The company said it collects subscribers’ contact details and information on their Groupon transactions, financial accounts, location and relationships and shares that data with merchants in some instances.
RIM’s PlayBook received the green light for use in U.S. federal government agencies, the BlackBerry maker said. It is the first tablet computer to receive Federal Information Processing Standard 140-2 certification, RIM said in a statement. FIPS 140-2 is used to judge the security of mobile devices, servers, routers and firewalls, for use by federal agencies such as the FBI. Apple has applied for certification for both the iPhone and the iPad.
Tech wrap: New iPhone seen in time for school
Apple plans to launch a new iPhone with a faster chip for data processing and a more advanced camera in September, Bloomberg said. The new iPhone will include the A5 processor along with an 8-megapixel camera, the report said, quoting two people familiar with the plans. Apple is also testing a new version of the iPad that has a higher resolution screen, the report said, adding a cheaper version of the iPhone aimed at developing countries is also in the works.
A U.S. judge rejected Samsung’s request for a peek at Apple’s unreleased iPhone and iPad, brought in the course of high-stakes patent litigation between the two companies. Apple sued Samsung in April, claiming Samsung’s Galaxy line of smartphones and tablets infringe several patents and trademarks. Samsung counter-sued, asserting its own patents against Apple. In the ruling, the judge said Apple’s legal claims are only based on its products that have already hit the market.
A senior Chinese official said there is no cyber warfare taking place between China and the United States. The two countries might suffer from cyber attacks, but they were in no way directed by either government, Vice Foreign Minister Cui Tiankai said.
Online video site Hulu has been approached by a potential buyer and is weighing whether to sell itself, according to a person familiar with the matter. Hulu is jointly owned by News Corp, Walt Disney, NBC Universal and Providence Equity Partners. The approach presents another decision point for the company, which has shown an unclear strategy and last year spent six months planning an initial public offering before dropping the plan. The acquisition approach has not been made by any of the current equity holders, the person said. The buyer is expected to be either a strategic buyer or private equity.
Shazam, whose technology lets people use their mobile phones to learn the names of catchy songs, raised $32 million in funding to bolster expansion plans and move the company closer to a potential public stock offering.
Digitimes reported that Amazon will launch its own line of tablet computers as soon as August or September, according to Taiwan-based component makers.
Tech wrap: Steve Jobs pitches Apple’s iCloud
Apple CEO Steve Jobs emerged from medical leave to launch an Internet-based service for consumers called the iCloud, which lets users play their music and get access to their data from any Apple device. Jobs walked briskly onstage after James Brown’s “I Got You (I Feel Good)” blasted over the sound system, but shared the spotlight with other Apple execs who showcased Apple’s enhancements to its PC operating system and mobile platform.
Jobs laid out his vision for the iCloud with the elminiation of MobileMe, a subscription-based collection of online services and software. Jobs said the iCloud will allow people to share book purchases, music and data in general, such as calendar items, across different devices, while backing up and updating information regularly.
Among the new features for Apple’s OS X Lion operating software were an improved email infrastructure and multi-touch features. Early impressions by experts watching the presentations were favorable.
For the iPhone and iPad, executives described how the fifth version of the iOS software will feature drop-down notifications for everything from Twitter feeds to Facebook alerts, and new applications such as tabbed surfing for Apple’s Safari Web browser.
Hackers calling themselves Lulz Security said that they had broken into Sony computer systems again, and posted the results on the Internet.
Microsoft is looking to put its popular Kinect motion-sensing device at the heart of its Xbox game console, unveiling plans to allow users to control live television feeds, search YouTube and play action games with voice commands. Microsoft said it will give users access to live television programing through the Xbox in the U.S. sometime next year, following live TV services it already offers in Britain, France and Australia.
Google has become a “political tool” vilifying the Chinese government, an official Beijing newspaper said, warning that Google’s statements about hacking attacks traced to China could hurt its business. By saying that Chinese human rights activists were among the targets of the hacking, Google was “deliberately pandering to negative Western perceptions of China, and strongly hinting that the hacking attacks were the work of the Chinese government,” the People’s Daily overseas edition, a small offshoot of the main domestic paper, said in a front-page commentary.
Tech wrap: Apple’s iCloud on the horizon
Apple will pay between $100 million and $150 million to the four major music labels in order to get its music streaming service iCloud started, according to the New York Post.
Besides increasing the consumer appeal of future Apple gadgets because they’ll need less computer memory, the company’s iCloud service will make it more likely that subscribers will stick with Apple products, Robert Cyran writes. If users store data and programs remotely, devices blend together, Cyran argues.
Together with colleagues and analysts, I’ll be covering Steve Jobs’s keynote speech at Apple’s WWDC live on Monday at 10:00 a.m. PT (1:00 p.m. ET). Chime in at: http://live.reuters.com/Event/Apples_2011_WWDC_Keynote_Speech
The U.S. asked Beijing to investigate Google’s latest allegation of a major hacking attack that the Internet giant says originated in China, the State Department said. State Department spokesman Mark Toner declined to provide details on what was conveyed to the Chinese, or whether the U.S. government believes Beijing may have had a hand in the alleged hacking attack.
China must make mastering cyber-warfare a military priority as the Internet becomes the crucial battleground for opinion and intelligence, two military officers said. The essay by strategists from the People’s Liberation Army’s Academy of Military Sciences did not mention Google’s statement on the hack attacks alleged to have originated in China.
Google acquired PostRank, a service that measures the spread of social networking activities like tweets, diggs and Facebook updates, online. Terms of the deal were not disclosed.
RIM has given up more ground to Apple and Google in the U.S. smartphone market, a report showed. RIM’s shares dropped after a research firm said the company’s slice of the U.S. market for high-end mobile phones narrowed in the three months to April. While Google’s Android platform jumped to a 36.4 percent share and Apple’s iPhone moved up to 26 percent, RIM fell to 25.7 percent from 30.4 percent in the previous quarter, according to the comScore report. The latest figures dropped RIM from second to third place.
2DBOY created World of Goo in 2008, not Page44. Page44 simply helped port the game, but did not create it. http://en.wikipedia.org/wiki/World_of_Go o