MediaFile

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.

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.

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.

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.

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.

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.

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.

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.

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.

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