Technutt Issue Vol 0611

2

Contents 1 2011 1.1

5 May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

iPhone not tracking users, Apple says (2011-05-01 17:01)

. . . . . . . . . . . . . . . . . . .

6

Ning: A social pioneer changes direction - Fortune Tech (2011-05-01 18:46) . . . . . . . . .

8

Dropbox: The hottest startup you’ve never heard of - Fortune Tech (2011-05-01 18:50) . . .

9

Trouble @Twitter - Fortune Tech (2011-05-01 19:22) . . . . . . . . . . . . . . . . . . . . . .

11

Inside Google’s China misfortune - Fortune Tech (2011-05-01 19:28) . . . . . . . . . . . . .

19

Limelight boosts sales but costs widen loss (2011-05-08 15:12) . . . . . . . . . . . . . . . . .

25

Intel redesigns transistors for faster computers (2011-05-08 15:18) . . . . . . . . . . . . . . .

26

Cyber attack was large-scale, Sony says - Faster Forward - The Washington Post (2011-05-08 15:26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27

Websites offer eyewear deals (2011-05-08 17:01) . . . . . . . . . . . . . . . . . . . . . . . . .

28

Amazon set to expand Phoenix fulfillment center (2011-05-14 11:55) . . . . . . . . . . . . .

29

LinkedIn looking for $32 share in IPO (2011-05-14 12:21) . . . . . . . . . . . . . . . . . . .

30

Facebook-Google rivalry intensifies with PR fiasco (2011-05-14 14:15) . . . . . . . . . . . .

31

New Prius may not arrive for a year (2011-05-14 14:28) . . . . . . . . . . . . . . . . . . . .

33

Websites offer guidance in buying green vehicles (2011-05-15 10:04) . . . . . . . . . . . . . .

34

LinkedIn valued at $9 billion after IPO (2011-05-22 12:24) . . . . . . . . . . . . . . . . . . .

34

Playboy puts all 57 years of its magazines on website (2011-05-22 12:30) . . . . . . . . . . .

36

Smart homes in Phoenix area run by iPads, iPhones (2011-05-22 12:54) . . . . . . . . . . .

38

Bartab smartphone app available at 70 metro Phoenix bars (2011-05-22 13:06) . . . . . . .

41

Online reviews: Which sites can you trust? (2011-05-22 13:23) . . . . . . . . . . . . . . . .

42

21st-century

money

laundering:

Pre-paid

cards

anonymous,

easy

to

transport

(2011-05-28 22:00) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yahoo CEO vows to clean up mess tied to spinoff in China (2011-05-28 23:54)

. . . . . . .

48 48

Banks launch clearXchange transfer system to rival PayPal - May. 25, 2011 (2011-05-29 00:04)

50

Google Wallet app lets you tap to pay with smartphone - USATODAY.com (2011-05-29 20:40)

51 3

4

Google Wallet replaces cash and credit cards for Android users; PayPal sues | syracuse.com (2011-05-29 20:46) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52

Google stole our trade secrets: PayPal (2011-05-29 20:55) . . . . . . . . . . . . . . . . . . .

54

Hackers appear to set sights on bigger targets (2011-05-30 10:20) . . . . . . . . . . . . . . .

55

Tupac’s alive, hackers post on PBS site (2011-05-31 16:17) . . . . . . . . . . . . . . . . . . .

57

5

Chapter 1

2011 1.1

May

iPhone not tracking users, Apple says (2011-05-01 17:01)

6 [1]

NEW YORK - Apple denied that the iPhone has a privacy problem Wednesday - and then promised to fix it. It took the technology giant a week to respond to a brouhaha over how the devices log their owners’ movements.

Privacy concerns erupted last week when security researchers said a file found on PCs linked to iPhones allowed them to create maps of the phones’ movements for up to a year. Combined with similar questions about Google’s Android smartphone software, the news left privacy-conscious smartphone users wondering how much information they were unknowingly giving up.

Apple denied claims that it was keeping tabs on its customers, saying the file records Wi-Fi hot spots and cell towers in the general area of iPhones, not the whereabouts of their users.

The company implied that the privacy concerns raised by that file were partly based on a misunderstanding.

But it also said that a software error was the reason the files are storing up to a year’s worth of information and that it would fix that issue and others in a few weeks. ”Users are confused, partly because creators of this new technology (including Apple) have not provided enough education about these issues to date,” Apple said in its first comprehensive response to the allegations. It had revealed the nature of the location file in a letter to Congress last summer following an earlier round of questions about its location-tracking practices.

The data help the phone figure out its location, Apple said. They allow the phone to listen for signals from hot spots and cell towers, which are much stronger than signals from GPS satellites. Wi-Fi signals don’t reach very far, which means that if a phone picks up a signal it recognizes, it can deduce that it’s close to that hot spot.

Taken together, this means navigation applications can present the phone’s location faster and more accurately than if the phone relied on GPS alone, Apple said.

However, it’s still not clear why the files are so detailed that they allow the reconstruction of the phone’s movements.

In its 10-point question-and-answer statement, Apple didn’t address why the files contain ”timestamps” that link a phone to certain hot spots and cell towers at a certain time. Those timestamps are what allowed the researchers Alasdair Allan and Pete Warden to construct animated maps of a phone’s movements over a year.

Warden said that as far as he could tell, Apple could have used the location data productively without storing timestamps. He said he’s pleased the company is applying software fixes to safeguard the data.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, a Washington-based privacy-rights group, commended the company for quickly making significant changes to the iPhone operating system.

But Larry L. Smith, the president of the Institute for Crisis Management, a public-relations company, said Apple should have responded to concerns last week even if it didn’t have all the answers ready.

Questions such as ”Is Apple tracking my iPhone’s location?” are not entirely unexpected, and Apple should have had some standby statements ready to go, Smith said.

Apple’s reaction is reminiscent of its response last summer, when Consumer Reports and others reported that the iPhone 4 suffered from signal loss when held a certain way.

by Peter Svensson Associated Press Apr. 28, 2011 12:00 AM [2]iPhone not tracking users, Apple says

1. http://iphonedevelopmenttutorial.org/iphonedevelopmenttutorial3.jpg 2.

http:

//www.azcentral.com/arizonarepublic/business/articles/2011/04/28/20110428biz-applie-iPhone-tracking0428.html

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Ning: A social pioneer changes direction - Fortune Tech (2011-05-01 18:46) The online company is saying goodbye to consumers and hello to big (paying) companies.

At a time when the hottest tech giants (Apple [1] ([2]AAPL)) and startups (Zynga) are focused on serving consumers, social-media company Ning is going in the opposite direction: It’s largely abandoning individuals in favor of corporate customers such as publishing houses and nonprofit organizations. Even more surprising: The company is charging money for a service it once gave away free, sort of the tech equivalent of putting the toothpaste back in the tube.

Ning CEO Jason Rosenthal says the strategic change, instituted about nine months ago, is paying off. Last summer the Palo Alto-based company had just 17,000 paying customers. Today, more than 100,000 customers (from Martha Stewart Living Omnimedia ([3]MSO) to rock band Linkin Park) pay anywhere from $3 to $50 per month to use Ning’s software, which lets them launch and run their own mini-Facebooks. Revenue is up 400 % year over year, and Ning expects to be in the black for the first time in the first quarter of next year.

Ning had managed to attract some corporate customers in the past. But the company, which launched in 2004, was known mainly for its consumer product, which enabled virtually any group – a Little League team or a knitting club – to start its own social network. Ning offered a bare-bones version of its service at no charge and sold ads across its customers’ networks. But the ad-based business model didn’t work for Ning, and [4]the company switched gears. Founding [5]CEO Gina Bianchini stepped down in March of last year; when Rosenthal took over, he soon phased out its so-called freemium service.

About 80 % of sites using Ning for free opted to shut down their social networks rather than pay a monthly fee as low as $3. But Ning says the new business model has helped it attract and better serve more lucrative customers. Since last summer the company has accommodated its growing user base of brands and organizations with a series of new features like integration with Facebook Connect, site analytics tools, and a mobile application builder.

Because Ning’s new customer base has deeper pockets, it is highly coveted. It turns out there are more than 125 competing vendors that sell software like Ning’s – and they’ve all discovered that while consumer services get the buzz, corporate customers pay the bills. ”Community-platform software is a commodity,” says Jeremiah Owyang, an industry analyst with research firm Altimeter Group.

Still, Ning’s management (which includes founder and chairman [6]Marc Andreessen) is convinced that it made the right decision in ditching its old model. ”The company was suffering from the fact that it had a split focus,” says Andreessen. Translation: Selling to consumers may be hot, but profits are even hotter.

by Michal Lev-Ram Fortune April 22, 2011 [7]Ning: A social pioneer changes direction - Fortune Tech 8

1. http://fortunebrainstormtech.files.wordpress.com/2011/04/ning_changes_focus.jpg 2. http://money.cnn.com/quote/quote.html?symb=AAPL 3. http://money.cnn.com/quote/quote.html?symb=MSO 4. http://money.cnn.com/video/fortune/2010/09/24/f_ctd_ning_ceo_profitable.fortune 5. http://postcards.blogs.fortune.cnn.com/2010/03/15/gina-bianchinis-surprise-exit-from-ning/ 6. http://money.cnn.com/galleries/2010/fortune/1010/gallery.40_under_40.fortune/index.html 7. http://tech.fortune.cnn.com/2011/04/22/ning-a-social-pioneer-changes-direction/

Dropbox: The hottest startup you’ve never heard of - Fortune Tech (2011-05-01 18:50) A company that wants to bring online storage and sharing to the masses? Hardly original, but with numbers like these, Dropbox may do just that.

The startup on every venture and angel investor’s lips these days [1] isn’t a social media company or a site hawking coupons. No, the tech world is currently enamored with Dropbox, a four-year-old company that aims to bring cloud computing – that catchall phrase corporations use to describe services delivered via the Internet – to consumers and businesses.

MIT graduate Drew Houston co-founded the startup in 2007, when he got tired of keeping track of his USB thumb drive. Without a quick and easy replacement, he did what any entrepreneur would do: created one himself.

[2]Dropbox lets users store digital files – photos, personal documents, music – in an electronic locker that the owner can access or share on nearly any Net-connected device. Its strength lies in its simplicity. Download the utility, create an account, and you’re ready to go. Users put all their electronic files in a virtual folder – the one that lives in the cloud – where they can interact with the files via the Dropbox app or website as if they were in any regular computer folder, view photos in Gallery format, and share them with non-users. ”They’ve said, ’Look, rather than try to do every folder on your machine, do it with one folder, and do a killer job at it,” says Forrester analyst Frank Gillett. ”That extreme focus has produced the ’Wow’ factor to really impress people.”

9

SalesForce.com ([3]CRM) [4]CEO Marc Benioff, who knows Houston and says he follows the company, agrees. ”I can take a file, access it anywhere, and it just works,” he says.

Which is why, despite scant marketing and loads of competition, the service has earned millions of devoted customers who use it for tasks like co-writing books or even coordinating multiple self-steering farm tractors.

One of them is Dave Goldberg, CEO of the online questionnaire company Survey Monkey and a friend of Houston’s. Last year, Houston shared photos of a dinner they had together via Dropbox, and Goldberg got hooked. Survey Monkey relies on Dropbox for file sharing, and Goldberg more recently converted his family to the service. ”It’s not a new concept, but sometimes you have the right team in the right place at the right time with the right product, and it just clicks,” he says. ”I kind of think that’s what Dropbox is and has done. Lots of people have done social networking before Facebook, but making it easy, fast, clean and simple, and then iterating based on what consumers want is also important.”

Silicon Valley insiders attribute Dropbox’s success mostly to word of mouth and an attractive referral program. The service uses a ”freemium” model where the first two gigabytes of storage is free (more capacity costs up to $20 a month), but for every friend who signs up for a free or paid account, both the referral and the referrer get an additional 250 MB. Dropbox also earned some choice product placement: It’s a featured app in the Apple App Store.

Dropbox has also accepted surprisingly little venture funding. It received seed money from Paul Graham’s Y Combinator four years ago and snagged about $7 million from Sequoia Capital, Accel Partners, and others – a pittance compared with the nearly [5] $1 billion raised by Groupon earlier this year. Meanwhile, investors like angel Ron Conway, who says he sees roughly 70 % of all startup deals in the Valley, are dying to get in on a piece of the company.

What gives? Thanks to a lean operation with some 45 employees, Dropbox reportedly experiences well over 10 times year-over-year growth and positive cash flow. Sources say its revenue met internal 2011 sales projections in 2010, and Benioff predicts sales could hit $100 million this year. (The company declined to comment.) Others, like tech entrepreneur Praveen Yajman, another friend and former coworker of Houston’s, indicate the company may already be worth between $1 billion and $2 billion, making it ripe for acquisition and a healthy exit for investors, or setting it up to be a major independent player in the consumer cloud race. Good signs to be sure, and yet, the company doesn’t appear to be taking itself too seriously. Case in point: Dropbox’s jobs page has a random cartoon AK-47-wielding T-Rex riding a great white shark.

Obviously such shop talk, particularly about a company’s valuation, can sometimes be more art than science. And there’s little to stop Google ([6]GOOG), which offers online storage through Gmail, and Amazon ([7]AMZN), with its own Amazon Web Services, from making a greater push into Dropbox’s territory. But all signs point to the fact that the company has enough general support and escape velocity to become one of the few real winners in the cloud once the dust settles, which cartoon dinosaur or not, is some serious business.

by JP Mangalindan Fortune March 16, 2011 [8]Dropbox: The hottest startup you’ve never heard of - Fortune Tech

1. http://fortunebrainstormtech.files.wordpress.com/2011/03/dropbox_illo.jpg 2. http://www.dropbox.com/ 3. http://money.cnn.com/quote/quote.html?symb=CRM 4. http://tech.fortune.cnn.com/2011/02/25/salesforce-wins-bet-on-the-cloud-doubles-down-on-social/ 5. http://finance.fortune.cnn.com/2011/01/10/groupon-raises-like-a-billion-dollars/ 6. http://money.cnn.com/quote/quote.html?symb=GOOG

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7. http://money.cnn.com/quote/quote.html?symb=AMZN 8. http://tech.fortune.cnn.com/2011/03/16/cloud-computing-for-the-rest-of-us/

Trouble @Twitter - Fortune Tech (2011-05-01 19:22)

FORTUNE – In March, shortly after Jack Dorsey went back to work for Twitter, the company he co-founded four years ago, he did a Q &A session with an entrepreneurship[1]

class at Columbia Business School. As students tapped away on their laptops (were they sending tweets?), Dorsey, 34, answered questions about his commitment to his new gig as Twitter’s product chief. Dorsey, after all, is also CEO of Square, a hot payments business, and he returns to Twitter after a rocky run as its CEO – the board demoted him in 2008. (Cofounder Evan Williams took over and held the job for almost two years; then operating chief Dick Costolo assumed the top job.) ”Seems like a revolving door,” mused the interviewer.

Dorsey laughed lightly and replied, ”You know, we’re just individuals. We’re just humans running these companies.” And he compared managing a startup to, of all things, supervising a theater company.

There’s no shortage of drama at Twitter these days: Besides the CEO shuffles, there are secret board meetings, executive power struggles, a plethora of coaches and consultants, and disgruntled founders. (Like Williams. The day after Dorsey announced his return to the company – via tweet, naturally – Williams quit his day-to-day duties at the company, although he remains a board member and Twitter’s largest shareholder, with an estimated 30 % to 35 % stake.) These theatrics, which go well beyond the usual angst at a new venture, have contributed to a growing perception that innovation has stalled and management is in turmoil at one of Silicon Valley’s most promising startups, which some 20 million active users rely on each month for updates on everything from subway delays to election results – and which a growing number of companies, big and small, seek to use to market themselves and track customers. [2] 11

One of Twitter’s earliest and most avid users, Ashton Kutcher (@aplusk), confers with company co-founder Dorsey.

Just two years ago Twitter was the hottest thing on the web. But in the past year U.S. traffic at Twitter.com, the site users visit to read and broadcast 140-character messages, has leveled off. Nearly half the people who have Twitter accounts are no longer active on the network, according to an ExactTarget report from January 2011. It has been months – an eternity in Silicon Valley – since the company rolled out a new product that excited consumers. Facebook’s Mark Zuckerberg used to watch developments at Twitter obsessively; now he pays much less attention to the rival service. Meanwhile companies are hungry to advertise, but Twitter hasn’t been able to provide marketers with enough opportunities. Last year the company pulled in a mere $45 million in ad revenue, according to research firm eMarketer. Facebook brought in $1.86 billion.

Twitter doesn’t lack talented engineers, potential paying customers, or loyal users – and it certainly has plenty of money in the bank: It has raised more than $360 million from such heavyweights as Jeff Bezos and Kleiner Perkins. The problem is a board and top executive team that don’t always appear to have control of its wide-ranging cast of characters, including founders who have attained near-celebrity status (another co-founder, Biz Stone, is a regular on NPR, and earlier this year Dorsey was profiled in Vanity Fair), headstrong and divisive managers, and investors used to getting their way. For some time Twitter’s runaway growth – in the first half of 2009, Twitter added more users more quickly than almost any web service in history – masked its execution problems. But now, with growth of traffic to its site slowing and its rivals beefing up (new social-media darling Groupon has raised more than $1 billion, and Facebook has been on a hiring spree), Twitter needs to get its act together or risk losing buzz, potential ad revenue, and its bright future too.

To be fair, Twitter’s founders didn’t set out to build the next Facebook: Consumers turned it into a social phenomenon and kept signing on to see what it was about. Dorsey, Stone, and Williams started the service as an experimental side project; it was never designed to accommodate the 200 million plus registered accounts worldwide it now hosts. Twitter crashed so frequently in its early days that its ”fail whale” logo that signaled the service was down became a cultural icon emblazoned on ironic hipster T-shirts.

Twitter executives say they spent much of 2010 investing in infrastructure to make the service more reliable. They also have taken steps to address management shortcomings. Twitter has worked with famed startup coach Bill Campbell, an Apple board member and former Intuit ([3]INTU) CEO. Costolo, Twitter’s current CEO, spent his first six weeks on the job creating and refining the company’s first mission statement ”Instantly connect people everywhere to what’s most meaningful to them” and reminding Twitter employees how valued they are. And the company tells Fortune that in coming months Twitter will roll out new features and ad products, including a set of services aimed at helping small businesses market themselves on Twitter. Says Costolo: ”We’ve only achieved 1 % of what Twitter can be.”

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[4] Yet even as management tackles its executive and product problems, a major challenge looms: Twitter needs to figure out what it wants to be when it grows up. It’s one of the reasons Dorsey is back at Twitter, but coming up with Twitter’s raison d’être is a tall order for a visionary who has another big job. Twitter CEO Costolo insists that the company isn’t a ”social network.” But what is it? A media company? A communications tool? Or even something more? Twitter executives need to answer those questions, and fast. ”Twitter could be 10 or even 100 times bigger. I’m hopeful for that,” says Reid Hoffman, co-founder of LinkedIn and a partner at Greylock Partners. (Hoffman doesn’t own a direct stake in Twitter, but he reached out to Fortune to offer his comments when he learned a story was in the works.) ”But it’s not a given. It’s never a given.”

Twitter’s rocky road to social-media stardom Twitter hates being lumped in with Facebook as a social network, but comparing the two companies helps illustrate why Twitter finds itself stuck in neutral. Not long after founding Facebook in his Harvard dorm room, CEO Mark Zuckerberg stopped talking about the company as a social site and started telling people he was building a digital phone book for the new millennium, and he never wavered from that grandiose vision. He brought in seasoned executives to manage the company early on, and although he still dabbles in writing code, he spends his time refining the product and strategy. He’s been criticized for being ruthless, ambitious, and single-minded in his quest to build Facebook – a common knock on the few founders who stay atop their companies. (Exhibit A: Bill Gates.)

The Twitter trio took a quirkier, more meandering path to social-media stardom. In 2006, Evan Williams was striking out with Odeo, the startup he’d founded to help people discover and create podcasts. Apple’s ([5]AAPL) iTunes had rendered his idea irrelevant. Trouble was, he still had venture capital funding.

Williams encouraged employees to experiment with new ideas, hoping something might stick. Jack Dorsey, a young engineer with a deep understanding of the tech behind taxi-dispatch services, suggested a service called Twttr (the vowels came later) that would let people answer the question ”What are you doing?” by text message. The idea resonated, and so, with help from Biz Stone, Odeo’s creative director, Dorsey built a prototype in two weeks. When the company was incorporated a year later, Dorsey, the brains behind the product, became CEO, and Stone was chief creative officer. Williams, who grabbed the title of Twitter chairman, didn’t join Twitter full-time until the spring of 2008.

[6]Meet the players at Twitter 13

Unsure of what they’d created, the founders basically turned Twitter over to its users – initially a bunch of techie early adopters – and watched what they did with it. The result was a bit of anarchy: The crowd developed an unintuitive language all its own (the hashtags and retweets and other abbreviations all came from users); an ecosystem of independent ”dashboard” companies such as TweetDeck and HootSuite emerged to help consumers manage their Twittering – a development that would prove to be a mixed blessing for

Twitter (more on that in a moment). [7] Evan Williams appeared on the Oprah show in 2009 and was at her side when she used Twitter for the first time.

Despite the funky jargon, consumers hopped on in droves (Oprah joined!), and Twitter’s servers and software couldn’t keep up with demand. By the end of 2008 the board decided that Dorsey, a taciturn engineer with no previous management experience, was no longer the right CEO. Williams, who succeeded him, has been accused of pushing Dorsey out, but in an exclusive interview for this story, he put the responsibility for making that decision on the broader board: ”We thought about recruiting somebody from the outside,” he says, ”but the company at that stage was so fragile that bringing in someone from outside was risky. So the VCs asked me if I would do it.”

By that time, communication among the Twitter founders, especially Dorsey and Williams, had started to fray. According to Greg Kidd, an early investor, Dorsey today is circumspect but firm on the subject of his relationship with Williams. ”The most he’s ever said about Ev is, ’We don’t talk.’”

The Evan Williams years When he took over as CEO in 2008, Williams faced huge challenges. The company had just 20 employees, almost entirely engineers, and during the first six months of his tenure, Twitter jumped from 5 million registered accounts to 71.3 million. The service was becoming more than just a venue for idle chatter, a fact driven home when, in 2009, the government put in a call to Williams to ask him to delay maintenance on the service so that Iranian voters could protest the election.

Williams, a reserved Nebraskan, recognized his strengths and weaknesses. That year he toldFortune, ”Focus was always a big problem for me. I think about my last company, and in the last year before I shut it down I started 32 projects, one of which I completed.” Nevertheless, Williams did manage to finish a number of projects at Twitter: He migrated Twitter to a new data center and revamped its technology; moved headquarters as the company grew, landing in offices in downtown San Francisco; made six small acquisitions; and hired another 280 employees, including most of the current management team. [8] 14

Twitter’s board of directors, March 2009. From Left to Right: Peter Fenton, Fred Wilson, Evan Williams, Bijan Sabat, Ted Wang, Jack Dorsey, Biz Stone In the fall of 2009 he brought on Dick Costolo, who had sold Feedburner to Google ([9]GOOG), as the company’s chief operating officer. A friend to Williams, Costolo had already been advising the company on an informal basis and was an angel investor in Twitter. Having dabbled in improvisational theater early in his adulthood, Costolo inspires confidence with his refined public speaking ability, quick wit, and fast decision-making skills. Costolo’s mandate was to figure out a way Twitter could make money and help Williams grow the company. Half a year after he arrived, he got up before a New York City audience to announce Twitter’s killer ad product, Promoted Tweets (basically, ad-supported tweets), and implied that more tools for marketers were on the way.

Meanwhile Twitter turned to startup whisperer Bill Campbell and others to help Williams and Costolo strengthen management (For more on Campbell, see [10]”The Secret Coach.”). Campbell is the guy who helped Eric Schmidt take on the role of CEO and worked closely with the Google founders; he is referred to with deference in the Valley as ”the coach.” The results were mixed: Campbell attended board meetings, met with executives to offer advice, and was often seen around the office on Monday afternoons. He took an especially active role in trying to help the company’s vice president of product, Jason Goldman, forge a working relationship with newly recruited engineering vice president Mike Abbott. Both credit him with helping them work together. But many sources say the relationship never got sorted out. In December, Goldman left abruptly and was replaced on the board. Campbell, who declined to comment, spends less time at Twitter now, sources close to the company say.

By October 2010, Williams had run out of steam. There are different accounts of why he left Twitter.

Williams says he demoted himself, naming his friend Costolo to replace him. Multiple sources close to the board say its members asked him to step aside, but no board member will confirm that. Whatever the reason, Williams left in December for vacation, extended it to January, then through March. On March 29, the day after Dorsey returned as product chief, Williams announced he wouldn’t return to the company in a management role.

How big is it really? And is it a moneymaker?

15

Much like learning to surf or ride a bike, you have to develop a feel for using Twitter. Many users never do, signing up to try it and then giving up. But for those who commit, it’s addictive, entertaining, and cool. It’s emerging as a real-time news reader, offering users a sampling of what’s going on in the world. Dip into your Twitter stream for two minutes, and you may discover that four New York Times journalists were kidnapped in Libya and your train line is experiencing delays. But to the uninitiated, the service is a bit of a mystery.

Just how popular is Twitter? Tracking its growth is complicated in part because many people tweet via dashboards such as TweetDeck (making it hard for Twitter to aggregate the mass viewership that many advertisers covet). The company says it has more than 200 million registered accounts (Facebook has 600 million subscribers), but users are allowed multiple accounts. The company also trumpets that the service had 155 million tweets daily by the end of the first quarter, a jump of 41 % over the prior quarter, but many tweets – news headlines, for example – are often churned out by computers, not humans visiting Twitter.com.

One key measurement of Twitter’s popularity, Twitter.com’s traffic, indicates a disturbing trend: ComScore shows that growth of U.S. visitors to the site has leveled off more than a year after its massive spike upward in 2009. (Twitter disputes this, pointing to Quantcast data that show a 50 % increase in worldwide traffic in the past five months.)

[11] Indeed, Twitter continues to enjoy accelerating growth overseas, and data that Twitter provides from Google Analytics show that international traffic to the site jumped 83 % in the past year. But slowing growth in the U.S. market is an important indicator of the company’s health – the U.S. is the biggest ad market and vital to Twitter’s moneymaking plans. It also is worth noting that the 20-month plateau has come so early in the company’s trajectory; it is one thing for a company with dominant market share to peak. Twitter was a niche when its domestic traffic started to flatten.

To be sure, garnering new users and boosting traffic to Twitter’s website are only one piece of the moneymaking equation. Many believe that Twitter’s search results, which increasingly show up on other sites, are its real jewels. For anyone striving to see events as they unfold, there are few better places to turn. And thanks to two critical search deals signed in 2009, those results frequently turn up tweets in Google and Microsoft’s ([12]MSFT) Bing searches. Type ”Obama budget” into Google, and on the first page of results, alongside links to traditional news outlets and the federal government website [13]Whitehouse.gov, you may see a link to a Politico blog that someone you follow has tweeted. This is one area in which the service has the upper hand over Facebook. Facebook communications are private unless a user chooses to make them public; all tweets are public, which gives marketers a potentially richer pool of content for targeted ads.

Right now, however, advertisers have limited options on Twitter. There are ad-sponsored tweets that appear at the top of search results – on Twitter.com or some Twitter services – and relate to the nature of the inquiry. Search for ”Jet Blue” on Twitter, for example, and your first result is a promoted tweet posted by @DeltaVacations. Then there are promoted accounts, basically paid ads that sit in the right-hand corner of Twitter.com. Promoted Trends, the most expensive option of the bunch, can appear just once in a day and occur when a company pays to place its topic ( #ChipotleGold) among the most organically popular topics 16

(Rihanna and Britney). Verizon Wireless ([14]VZ) ran six Promoted Trends for an NCAA March Madness campaign, paying $120,000 a day for the global ads.

[15] But Twitter executives aren’t always on the same page when it comes to moneymaking endeavors – perhaps because the company lacks a coherent philosophy about what it wants to deliver to customers in the first place. At the beginning of March, the company released an updated Twitter iPhone application with a new feature called a Quick Bar. This bar ran across the top of a Twitter stream and broadcast trending topics.

It included the things people were actually tweeting about most, but also the occasional promoted trend, for which companies paid $120,000. A small group of vocal tech pundits cried foul, with one dubbing it the ”Dickbar,” after Costolo. The company immediately modified the product. ”They roll things out in an almost sheepish way,” says eMarketer analyst Paul Verna. ”When it doesn’t work out, they say it was a test.

It’s like a batter getting up to the plate and bunting all the time.”

Can they get their act together?

Three days after Dorsey’s March 28 return to daily duty at Twitter, the company killed the Dickbar. Dorsey came back to Twitter after the company had tried and failed to lure two senior product managers from Google. In both cases the company was fairly close to closing the deal when Google made counteroffers, showering them with restricted stock grants that are reported to be worth more than $50 million in each case. (Clearly, product people are in high demand in Silicon Valley.) And so product development will fall to Dorsey and new hire Satya Patel, who earlier spent four years working on AdSense at Google – but Patel also plans to keep board seats on the startups he advises. Dorsey, too, will continue to run Square, which is currently in high-growth mode. On the day the announcement was made, Dorsey, who declined requests to be interviewed for this article, tweeted, ”Today I’m thrilled to get back to work at @Twitter leading product as Executive Chairman. And yes: leading @Square forevermore as CEO.” Though Dorsey, through a spokesman, denies saying it, three people close to Square say Dorsey told them that he views his involvement with Twitter as short term.

Costolo doesn’t think this part-time arrangement is problematic. He’s hopeful Dorsey will draw on his design background to inspire Twitter’s ranks and shape the evolution of the product. (Dorsey’s Square has won plaudits for its elegant design.) ”I asked Jack to come back in this role to be the conceptual authority on the products at Twitter and to work with the design and user-support team to allow us to bring clarity to the process of how we develop at Twitter,” he said.

Since Twitter was invented, Internet behemoths have been clamoring to buy it in the belief that it is the 17

one social service with the potential to compete with Facebook. Last fall Microsoft, Google, and Facebook itself all considered buying the company. Microsoft never made an offer, according to sources, but Facebook is believed to have offered $2 billion for Twitter, and Google, by far the most serious, offered as much as $10 billion. Many question why Twitter didn’t sell itself. Microsoft once offered to pay $44.6 billion for Yahoo ([16]YHOO), after all. Today Yahoo is valued at half that.

Twitter’s board members are a high-powered crew. Besides William, Dorsey, and Costolo, the board includes venture capitalists Peter Fenton, Fred Wilson, and Bijan Sabet, former Netscape CFO Peter Currie, former Doubleclick CEO David Rosenblatt, and Flipboard founder Mike McCue. These alpha males disagree about a lot of things, according to many sources, but they all agreed not to sell Twitter. Indeed, in a hotly contested financing round, the company raised another $200 million led by Kleiner Perkins at a $3.7 billion valuation.

When the company accepted the financing, management and the existing board felt that Kleiner partner John Doerr did not belong on the board. He is a board member at Google, which is a potential acquirer of Twitter, and a source of future employees. Instead, Twitter and Kleiner Perkins decided they’d choose two mutually agreed-upon representatives to join Twitter’s board.

That’s why it was odd that when the January board meeting rolled around, Doerr showed up. No one will say whether he was invited – and no one there told him to go home. Instead, the board called a private executive session after the official board meeting to hash out the more sensitive business. Asked about this directly, Costolo said he would not discuss it, and Doerr didn’t return requests for an interview.

Board member Peter Fenton, a partner at Benchmark Capital, acknowledges that the making of Twitter hasn’t been pretty. ”The act of getting from there to here was violent,” he says. ”We’ve had a revolving door of senior leaders who leave.” But he says he’s pleased with the current crew. ”The attribute I’ve now been able to see is that the team is building the respect and affection that is required to get to the next level.”

It’s almost quaint to hear one of Silicon Valley’s most sophisticated investors speak of ”respect”and ”affection.”

When tech investors and entrepreneurs talk about expanding their companies, they tend to focus on new products or untapped markets. On the other hand, if Dorsey is right and managing a startup is indeed like managing a theatrical company, it probably is a good idea to give the performers and stagehands a little love. That way maybe they can #gettheiracttogether.

[EMBED] by Jessi Hempel Fortune April 14, 2011 [17]Trouble @Twitter - Fortune Tech

1. http://fortunebrainstormtech.files.wordpress.com/2011/04/twitter_rocket.jpg 2. http://fortunebrainstormtech.files.wordpress.com/2011/04/jack_dorsey_ashton_kutcher.jpg 3. http://money.cnn.com/quote/quote.html?symb=INTU 4. http://fortunebrainstormtech.files.wordpress.com/2011/04/twitter_numbers1.jpg 5. http://money.cnn.com/quote/quote.html?symb=AAPL 6. http://money.cnn.com/galleries/2011/technology/1104/gallery.twitter_players.fortune 7. http://fortunebrainstormtech.files.wordpress.com/2011/04/evan_williams_oprah_winfrey.jpg 8. http://fortunebrainstormtech.files.wordpress.com/2011/04/2009_twitter_board_final.jpg 9. http://money.cnn.com/quote/quote.html?symb=goog 10. http://money.cnn.com/2008/07/21/technology/reingold_coach.fortune/index.htm 11. http://fortunebrainstormtech.files.wordpress.com/2011/04/twitter_numbers3_new.jpg 12. http://money.cnn.com/quote/quote.html?symb=MSFT 13. http://whitehouse.gov/ 14. http://money.cnn.com/quote/quote.html?symb=vz 15. http://fortunebrainstormtech.files.wordpress.com/2011/04/twitter_numbers2.jpg 16. http://money.cnn.com/quote/quote.html?symb=yhoo 17. http://tech.fortune.cnn.com/2011/04/14/troubletwitter/

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Inside Google’s China misfortune - Fortune Tech (2011-05-01 19:28) The problems that Google faced while establishing its foothold in China would shake the very foundations of the company and its ”Don’t be evil” operating ethos. A look at Google’s past five years in China – and where it went wrong along the way.

By Steven Levy, guest contributor

[1] Viewing the July 22, 2009, solar eclipse with Google goggles FORTUNE – Plans for Google.cn were well under way by May 7, 2005, when an unexpected e-mail arrived in the in-box of Eric Schmidt. It was from a computer scientist and executive at Microsoft named Kai-Fu Lee. ”I have heard that Google is starting an effort in China,” he wrote. ”I thought I’d let you know that if Google has great ambitions for China, I would be interested in having a discussion with you.” Kai-Fu Lee was a celebrated computer scientist – he’d worked for Apple previously – who had become a phenomenon in China. Lee, who had grown up in Taiwan and gotten his Ph.D. at Carnegie Mellon, was the embodiment of the ”sea turtle” – an Asian-born engineer whose success in America was a prelude to a homecoming that allowed him to contribute to China’s drive to the pinnacle of the world economy. Lee was perhaps the most famous of all sea turtles. Hundreds of thousands of people went to his website and wrote to him for advice, as if he were a combination of Warren Buffett, Bill Gates, and Abigail Van Buren. Google immediately recognized how Kai-Fu Lee could accelerate its plans to make a mark in China. ”I all but insist that we pull out all the stops and pursue him like wolves,” senior vice president Jonathan Rosenberg wrote to his fellow executives. So Lee flew to meet with Google founders Sergey Brin and Larry Page in Mountain View, Calif., on May 27, 2005. The session was a lovefest. Lee was startled when Sergey, who had arrived by skateboard, asked him, ”Do you mind if I stretch?” and then did body motions on the floor while asking questions. As they left, Lee overheard one say to the other, ”People like Kai-Fu don’t grow on trees.” When Lee returned to Seattle, he was greeted by a huge box of Google swag, including a basketball, a chair, and a coin-operated gumball machine with a Google logo.

Lee resigned from Microsoft ([2]MSFT) on July 18 and officially accepted Google’s ([3]GOOG) offer the next day. It was worth over $13 million, including a $2.5 million signing bonus. On his Chinese-language website, Lee said that Google had given him a ”shock” by its fresh approach to technology and postulated that in China, his new employer’s youth, freedom, transparency, and honesty would produce a miracle. ”I have the right to make my choice,” he wrote. ”I choose Google. I choose China.” Microsoft rushed to the courthouse and charged Lee with violating a noncompete agreement that was part of his employment contract. But on Sept.

19

13, Judge Steven Gonzalez ruled that while Lee was prohibited from sharing proprietary information with or helping Google in competitive areas such as search and speech technologies, he could participate in planning and recruiting for Google’s effort in China. Ultimately, the two companies would settle, and the restrictions

on Lee’s activities would be lifted in 2006. [4] Eric Schmidt and Kai-Fu Lee unveiling Google’s Chinese name in April 2006.

Google.cn went live on Jan. 27, 2006. A few months later Google China moved into its new offices. It occupied several floors of a gleaming building that appeared as if it were made out of giant white Lego blocks and glass. It was one of several similar structures in the Tsinghua Science Park in the Hardan District of north Beijing, China’s Silicon Valley. Occupying several floors of the high-rise, Google’s headquarters was outfitted with the usual frills: physio balls, foosball tables, a fully equipped gym, a massage room, and (in a nod to local recreational activities) a karaoke room, and a Dance Dance Revolution videogame, as well as a huge cafeteria with free meals. Finding applicants wasn’t a challenge. As soon as the news broke that Lee would be heading Google China, résumés began arriving by the hundreds. Lee went on a recruiting trip that had aspects of a rock-and-roll tour, with students actually bootlegging counterfeit tickets. Google’s head of engineering, Alan Eustace, accompanied Lee on one trip and couldn’t get over how people mobbed him. It was like some weird Asian form of Beatlemania. ”He’d give a talk at a university, and it would be like a basketball game – 2,000 people in the audience,” he says. ”He would be surrounded by literally hundreds of students. People would get close to him, just to touch him.”

Signs of a distressed relationship almost from the start Google had hoped that its decision to create a search engine in the .cn domain – one that followed government rules of censorship – would lead to a level playing field. But even as Google rolled out its .cn web address, there were indications that its compromise would not satisfy the Chinese government. Unexplained outages still occurred. (Meanwhile, Google’s competitor Baidu seemed to hum along unscathed.) And not long after Google got its operating license, in December 2005, the Chinese declared that the license was no longer valid, charging that it wasn’t clear whether Google’s activities made it an Internet service or a news portal.

(Foreigners could not operate the latter.) Google then began a year-and-a-half-long negotiation to restore the license.

Google finally got its license in June 2007. The dispute had been resolved in secret. And to a large degree the level of service stabilized. Another boost that year was that Google was granted a valuable concession: simply typing ”g.cn” would take Chinese users to the Google.cn site. But by then many Chinese had written off Google as an unwelcome outsider with less reliable service. [5] 20

The interior of Google’s Shanghai office.

Because Google had a firm policy against storing personal data inside China – to avoid the problems of having the government demand that Google turn over the data – it did not offer a number of its key services for local Chinese users. No Gmail. No Blogger. No Picasa. Other services had to be drastically altered.

YouTube was blocked entirely.

As Chinese employees came onboard, it took a while for some of them to adjust to the Google style. For instance, many were uncomfortable with Google’s worldwide policy that employees initiate and pursue independent projects during 20 % of their work time. Engineers had to be told by a visiting Mountain View executive that they did not need permission to do a 20 % project. Yet the No. 1 concern of Google’s engineers was their access, or lack of it, to Google’s production code. Google was a collaborative company that wanted its engineers around the world to innovate on its existing products and create exciting new ones. It empowered them to do so by giving them access to its production code base. Without such access, engineers were limited in what they could do.

But unlike Google’s employees in other locations, the China workers did not have such access. The restrictions limited what the engineers could do – and sent a message that they were second-class employees. ”At one time I had the feeling that if we didn’t give them access, there would be a riot,” says Google China manager Ben Luk. Suspicion lingered that the engineering executives behind the policy – some of whom had deep concerns about the company’s China policy – had intentionally engineered rigid restrictions as a form of corporate civil disobedience against their employer’s cooperation with censors.

Government relations fiascos

Google’s success in China depended in part on having a government relations point person who could navigate the tricky shoals of preserving Google’s values without offending Chinese officials. Google’s first GR head was a former vice president of Sina, who was experienced in the ways of Chinese bureaucracies. But perhaps because she did not speak English, she failed to appreciate issues from the Google perspective. She complained to at least one colleague that Google wasn’t flexible enough with the government and did not work hard 21

enough to please it. [6] Kai-Fu Lee, a celebrated Chinese computer scientist who left Microsoft to launch Google in China – which soon ran afoul of the authorities Her tenure came to an end when Google discovered that she had taken it upon herself to give iPods to Chinese officials. She had charged them to Google, and another executive had approved the charge. In Chinese business culture such gifts are routine, but the act unambiguously violated Google policy, not least because it was an explicit violation of the U.S. Foreign Corrupt Practices Act. Google fired both her and the executive who had approved the expense. When she was called to Kai-Fu Lee’s office for dismissal, she was dumbfounded. In Mountain View, this breach was another sign of how difficult the China situation was.

Eustace, the Mountain View executive overseeing China, later recalled the incident as ”the worst moment in our company” and blamed himself for not making sure that Google’s representative to the Chinese government knew how dimly the company would view such an act.

After the employee’s departure, Google chose a three-person government relations team, all female, led by Julie Zhu, an energetic woman in her thirties. She was hired straight from a government ministry, instead of the commercial sector with its backscratching culture. Zhu was better able to communicate with Mountain View. But she had her hands full fending off Chinese government directives. A demand would come from a government ministry to take down 10 items; Google would typically take down seven and hope that the compromise resolved the matter. Sometimes after a few days or weeks Google would quietly restore links it had censored. Every five months Google’s policy-review committee in China would meet to make sure it was filtering the minimum it could possibly get away with. It was, as Google China engineering director Jun Liu put it, ”trench warfare,” but he believed that Google’s continuing problems were proof that it was indeed moving the democracy needle in China.

For all the progress, some Google executives were beginning to think that its great China compromise wasn’t working. A turning point came in 2008, the year China hosted the Olympics. In the run-up to its turn in the international spotlight, China apparently decided to increase its restrictions. It demanded that in addition to censoring the .cn results, Google purge objectionable links from the Chinese-language version of Google.com.

That, of course, was unacceptable to Google – it would mean that it was acting as an agent of repression for Chinese-speaking people all over the world, including in the U.S. Other search engines, including Microsoft’s, agreed to such demands. But Google stalled, hoping that after the Olympics the Chinese would back off.

They did not. The demands for censorship became broader and more frequent.

The last straw 22

In June a new problem arose involving Google Suggest, a search feature that instantly offered fully developed search queries when users typed just a few characters or words into the search box. This innovation, ultimately offered globally, was developed first in China after Google’s search team realized that, because of difficulty in typing, Chinese users generally entered shorter queries into the search box. But Chinese officials discovered that in an alarming (to them) number of instances, the suggestions offered by Google were related to sexual matters. They informed Google of their unhappiness by summoning Kai-Fu Lee and other Google China executives to a local hotel, where representatives of three ministries were waiting with a laptop and a projector. Once everyone was seated, the show began. The Chinese went to Google.cn and typed in a vulgar term for breasts. Google Suggest offered links that displayed raw nudity, and more. The official typed in the word meaning ”son,” and one of the Google Suggest terms was ”love affair between son and mother.” The links to this term yielded explicit pornography. The woman serving tea in the conference room almost fainted at the spectacle. The Google people tried to explain that apparently someone had spammed keywords to artificially boost the popularity of sex sites in Google Suggest. The officials were not impressed. ”You’ve been warned twice before, and this is the third time. So we’re going to punish you.” By that time Lee had already decided to leave Google.

Just before Christmas 2009, Google’s information security manager Heather Adkins learned that she would fall short on her annual ”don’t get hacked” internal goal. Google’s monitoring system had detected a break-in of Google’s computer system, and some of the company’s most precious intellectual property had been stolen.

The hack was geographically tied to China – and both the sophistication of the attack and the nature of its targets pointed to the government itself as an instigator of or a party to the attack. ”The more we learned as we looked into it, the more we realized this wasn’t just a classic hack, but folks

who were after[7] something. This was hacking with a purpose,” says chief legal officer David Drummond. As Google’s security specialists kept looking, they found even more horrendous consequences. The hackers had dug into the Gmail accounts of Chinese dissidents and human rights activists. All their contacts, their plans, their most private information had fallen into the hands of intruders. It was hard to imagine that the Chinese government was not poring over them.

Within days Google set up the most elaborate war room in its history, as an entire Google facility was filled with a mix of security engineers working on the forensics of the incursions and policy lawyers trying to figure out what to do next. Meanwhile Google’s executives began a series of meetings to determine the next step.

The question they discussed was the same one that had been argued five years earlier: What’s the right 23

thing to do in China? Google had originally hoped that the Chinese would appreciate its compromise and tacitly tolerate Google’s quiet pressure to relax the filtering. Instead it was the opposite. And now Google was under attack.

Brin took the incident personally. Insiders observed he was much less perturbed by the theft of Google’s intellectual property than the fact that his company had unwittingly been a tool used to identify and silence critics of a repressive government. Brin wanted the incident to be the catalyst to the action that he and others had been urging since 2008: Google should stop censoring. He was passionate in his insistence. He had support from some executives who had soured on China over the past 10 months – but not all. Notably, Schmidt was not convinced. But Brin was adamant: Google was under attack by the forces of evil, and if his fellow executives did not see things his way, they were supporting evil. (I’d heard from a knowledgeable but not firsthand source that Brin threatened to quit if Google did not change its policy. Brin, through a spokesperson, didn’t recall saying that, and said that the company was so much in his blood and DNA, it was unlikely that he expressed that intention. He did acknowledge that during the many hours of debate, he presented his case with utmost passion.)

Cut ties and the aftermath Brin’s point of view eventually prevailed. On Jan. 10, 2010, Google’s top executives reached a decision. Page had joined Brin in deciding to end Google’s experiment in censorship; the outvoted Schmidt accepted the decision. (Observers would later say that the setback had long-lasting implications for Schmidt’s relationship with the founders, but from the very start of his time at Google, Schmidt had understood that his word on crucial company matters was not final.) In any case, the company decided it would no longer carry out censorship for the Chinese government.

The news spread through Mountain View like an earthquake. Meetings all over the campus came to a dead stop as people looked at their laptops and read how Google was no longer doing the dirty work of the Chinese dictatorship. ”I think a whole generation of Googlers will remember exactly where they were when that blog item appeared,” says one product manager, Rick Klau. [8]

Google fans created a makeshift shrine in front of its China headquarters in March 2010, lighting candles, leaving flowers and cards, and writing messages of appreciation around the Google logo.

For Google’s employees in China, the day was also unforgettable. Not one of them had been alerted ahead of time. Drummond posted his announcement at 6 a.m. Beijing time, and many of the Googlers in Beijing and Shanghai first heard about it when frantic colleagues awakened them. Employees filed into the office in a state of shock. That afternoon Google told all employees to leave and gave them tickets to see Avatar.

The next day everyone gathered in the café for a teleconference with Brin and other executives, who tried to explain Google’s actions. It was a tough sell. Julie Zhu, Google’s new government relations person, delivered 24

an emotional objection to her employers, overseas generals who seemed to have abandoned the soldiers in the theater of war. You should not have given up, she argued. You should have kept fighting.

Kai-Fu Lee now says that if you look at China’s behavior over a long horizon – 20 or 30 years – it’s clear that the trend is toward more openness. The incidents that led to Google’s retreat were ”a perturbation” in this movement, mainly because Chinese leaders had reached their limits. ”The next generation will come up in less than two years,” he says. ”They’re younger, more progressive, many American-trained, and many have worked in businesses and run banks – they’re going to be more open.”

by Steven Levy Wired April 15, 2011 [9]Inside Google’s China misfortune - Fortune Tech

1. http://fortunebrainstormtech.files.wordpress.com/2011/04/google_glasses.jpg 2. http://money.cnn.com/quote/quote.html?symb=MSFT 3. http://money.cnn.com/quote/quote.html?symb=goog 4. http://fortunebrainstormtech.files.wordpress.com/2011/04/x_schmidt_lee.jpg 5. http://fortunebrainstormtech.files.wordpress.com/2011/04/x_google_china_office.jpg 6. http://fortunebrainstormtech.files.wordpress.com/2011/04/kai-fu_lee.jpg 7. http://fortunebrainstormtech.files.wordpress.com/2011/04/in_the_plex_cover.jpg 8. http://fortunebrainstormtech.files.wordpress.com/2011/04/x_google_memorial.jpg 9. http://tech.fortune.cnn.com/2011/04/15/googles-ordeal-in-china/

Limelight boosts sales but costs widen loss (2011-05-08 15:12) Despite higher sales, online content deliverer Limelight Networks Inc. widened its loss during the first quarter after incurring higher costs and operating expenses.

The Tempe-based company on Thursday said it lost $9.8 million, or 9 cents per share, during the quarter than ended March 31. That compares with $5.8 million loss, or 7 cents per share, during the same quarter of 2010.

Reported revenue during the quarter was $49.8 million, an increase of 38 percent compared with revenue of $36 million during the same quarter last year.

Limelight provides services that accelerate the delivery of videos, music, software updates and other content via the Internet, The company said it is positioned to take advantage of three trends; the shift of video and the accompanying advertising dollars online; the growth of mobile internet and tablet computing; and the migration of software application and IT services to the cloud.

Cloud-based services comprised 33 percent of the company’s revenue during the quarter. ”We are pleased with how this strategic positioning, our global scale and our investments in cloud-based services are leading to healthy growth,” said Jeff Lunsford, chairman and CEO, in a statement.

The company announced its earnings before the market closed Thursday. Shares were up nearly 2 percent to $6.38 when trading ended. But in after-hours trading, the stock increased nearly 6 percent to $6.76 per share.

On Tuesday Limelight announced it acquired Web content manager Clickability for $10 million in cash and stock. San Francisco-based Clickability is a provider of Web content-management tools. It was founded in 1999 to help marketers and online publishers create, manage and publish content globally. It tracks visitor experiences and implements branding and social-media campaigns on sites.

Limelight expects Clickability to contribute approximately $4.5 million to $5 million of revenue in the second half of 2011.

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Limelight ended the first quarter with $135 million in cash and short-term marketable securities. The company anticipates second quarter revenue to be in the range of $51.8 million to $53.2 million, higher than analyst estimates of $51.2 million.

by John Yantis The Arizona Republic May. 6, 2011 09:34 AM [1]Limelight boosts sales but costs widen loss

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http://www.azcentral.com/business/articles/2011/05/06/20110506limelight-boosts-sales-costs-widen-loss.

html?utm_medium=twitter&utm_source=twitterfeed

Intel redesigns transistors for faster computers (2011-05-08 15:18)

Associated Press SAN FRANCISCO - Intel Corp. said Wednesday that it has redesigned the electronic switches on its chips so that computers can keep getting cheaper and more powerful.

The switches, known as transistors, have typically been flat. By adding a third dimension - ”fins” that jut up from the base - Intel will be able to make the transistors and chips smaller. Think of how skyscrapers address the need for more office space when land is scarce.

The company said the new structure will let chips run on less power. That gives Intel its best shot yet at cracking the growing markets for chips used in smartphones and tablet computers. Intel has been weak there because its current chips use too much power.

Chips with the 3-D transistors will be in full production this year and appear in computers in 2012.

Intel has been talking about 3-D, or ”tri-gate,” transistors for nearly a decade, and other companies are experimenting with similar technology. The announcement is noteworthy because Intel has figured out how to manufacture the transistors cheaply in mass quantities.

Transistors are at the center of the digital universe. They’re the workhorses of modern electronics, tiny on/off switches that regulate electric current. They’re to computers what synapses are to the human nervous system.

Transistors operate in the shadows, but they’re integral to daily life. And they need to shrink, so that computers can get smaller and smarter.

A chip can have a billion transistors, all laid out side by side in a single layer, as if they were the streets of a city. Chips have no ”depth” - until now. On Intel’s chips, the fins will jut up from that streetscape, sort of like bridges or overpasses.

However, Intel’s advance doesn’t mean it can add a whole second layer of transistors to the chip, or start stacking layers into a cube. That remains a distant but hotly pursued goal of the industry, as cubic chips 26

could be much faster that flat ones while consuming less power.

The demand is there for smartphones that deliver the Internet in our pockets, supercomputers that beat human champions at ”Jeopardy!,” and other feats of computer wizardry that would have been impossible in the 1970s. Processors then could only hold several thousand transistors. Today they hold billions.

The latest change isn’t something that consumers will be able to see because it happens at a microscopic level. But analysts call it one of the most significant shifts in silicon transistor design since the integrated circuit was invented more than half a century ago. ”When I looked at it, I did a big, Wow.’ What we’ve seen for decades now have been evolutionary changes to the technology. This is definitely a revolutionary change,” said Dan Hutcheson, a longtime semiconductor industry watcher and CEO of VLSI Research Inc., who was briefed ahead of time on Intel’s announcement.

For consumers, the fact that Intel’s transistors will have a third dimension means that they can expect a continuation of Moore’s Law. The famous axiom, pronounced in 1965 by Intel co-founder Gordon Moore, has guided the computer industry’s efforts and given us decade after decade of cheaper and more powerful computers.

The core of Moore’s prediction is that computer performance will double every two years as the number of transistors on the chips roughly doubles as well. The progress has been threatened as transistors have been shrunken down to absurd proportions, and engineers have confronted physical limitations on how much smaller they can go. Controlling power leakage is a central concern.

For Intel, which is based in Santa Clara, California, the change is a reminder of its leadership in advanced semiconductor technology and its incentive to keep Moore’s Law alive.

Previous major changes have focused on new materials that can be used for transistors, not entire redesigns of the transistors themselves. ”People have been trying to avoid changing the structure,” Hutcheson said.

Other semiconductor companies argue that there’s still life to be squeezed from the current design of transistors. Hutcheson agrees, but said Intel’s approach should allow it to advance at least a generation ahead of its rivals, which include IBM Corp. and Advanced Micro Devices Inc. The reduced power consumption addresses a key need for Intel.

The performance expectations and power requirements for PCs are much higher than they are for phones and tablet computers, so Intel’s dominance in PC chips doesn’t necessarily lead to success in mobile devices.

Even Intel’s Atom-based chips, which are designed for mobile devices, have been criticized as too power hungry.

The new technology will be used for Intel’s PC chips and its Atom line.

Technological leadership alone won’t guarantee success, however, as Intel has learned in repeated attempts at cracking the mobile market.

Other chip makers such as Qualcomm Inc. and Texas Instruments Inc. have entrenched partnerships with cellphone makers, and there is suspicion about the performance of Intel’s chips in mobile devices. ”When it comes to the mobile market, they have their work cut out for them,” Hutcheson said of Intel. But ”this gives you the transistors to build the next great system.”

by Jordan Robertson Associated Press May. 4, 2011 11:57 AM [1]Intel redesigns transistors for faster computers 1. http://www.azcentral.com/business/articles/2011/05/04/20110504intel-faster-computers.html

Cyber attack was large-scale, Sony says - Faster Forward - The Washington Post (2011-05-08 15:26)

In a letter to a House panel looking into data breaches on Wednesday, Sony said that it is the victim of a large, sophisticated cyber attack.

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Sony executive Kazuo Hirai said the company believes it has identified the cause of the first attack, though not who is behind it. He said the firm found evidence that Anonymous, the loosely organized hacker group that has targeted the company in the past, is responsible for the attacks. The group has publicly denied involvement.

Hirai said in the letter responding to inquiries from a House Commerce subcommittee that intruders had planted a file on Sony s hacked servers named Anonymous with the words We Are Legion, a reference to the group s motto.

Whether those who participated in the denial of service attacks were conspirators of whether they were simply duped into providing cover for a very clever thief, we may never know, Hirai wrote.

Sony declined an invitation to attend the hearing.

On April 26, Sony announced that hackers had broken into its PlayStation and Qriocity networks April 17-19 and may have released the personal and billing information of up to 77 million people.

On Monday, Sony reported a second security breach by hackers, who may have stolen personal information of about 24.6 million users on its Sony Online Entertainment site. The company has shut down the Web site.

At the Wednesday hearing, subcommittee members had harsh words for Sony. Rep. Mary Bono Mack (R-Calif.), the subcommittee chair, said that Sony should have informed its consumers of the first security breach earlier and that its efforts were half-hearted, half-baked. She was particularly critical of Sony s decision to first notify customers of the attack via its company blog,leaving it up to customers to search for information on the breach. Hirai wrote that the company waited a week to notify customers because it took that long to get complete information on the attack.

In the letter, the company restated that it has had no confirmed reports of credit card fraud related to the breach. And the letter detailed the Welcome Back program Sony is launching to make amends with customers.

Sony will provide all PlayStation Network users with complimentary identity theft protection, 30 days of its PlayStation Plus premium service and 30 days of free service for Music Unlimited subscribers. The company is also giving PlayStation Plus and Music Unlimited subscribers one free day for each day the service is down.

It s offering a similar deal to Sony Online Entertainment customers. The letter did not provide new information on the attack announced on Monday.

By Hayley Tsukayama Washington Post May 4, 2011 [1]Cyber attack was large-scale, Sony says - Faster Forward - The Washington Post

1. http://www.washingtonpost.com/blogs/faster-forward/post/cyber-attack-was-large-scale-sony-says/2011/05/04/ AF78yDpF_blog.html

Websites offer eyewear deals (2011-05-08 17:01) NEW YORK - Want to spend less - maybe a lot less - for good-quality prescription eyewear? A growing number of websites cater to people willing to make this most individual of purchases online.

New websites like Warby Parker (warbyparker.com) and the upcoming eyefly.com from clothing-andaccessories seller bluefly.com - as well as more established players like framesdirect.com and 39dollar glasses.com - are defying conventional wisdom that consumers want to touch before they buy certain products.

Starting with technology that determines the shape of your face from a digital photo, the sites say they offer the same service and personal attention as a brick-and-mortar shop, but with better selections of frames and at lower overall prices.

So far, less than 3 percent of the estimated $25 billion Americans spend annually on eyewear, including 28

contact lenses and non-prescription sunglasses, goes to online purchases, according to the Vision Council, a trade group representing manufacturers and suppliers.

Warby Parker, which has sold more than 50,000 pairs of glasses since its February 2010 launch, says its $95 prescription glasses are comparable to eyewear that would sell for $500 at a high-end boutique. The difference is that Warby Parker’s frames don’t carry designer names, which cuts the number of middlemen between manufacturers and consumers, co-founder Neil Blumenthal said.

Buying prescription eyewear online also can let you check out hundreds of different frames - by manipulating the photo you upload - and it can mean spending a lot less time on the process.

But there are plenty of pitfalls, including errors when customers type in the prescriptions themselves.

Here are some things to keep in mind as you navigate: - Selection: Framesdirect.com, which bills itself as the largest full-service online eyewear company, offers more than 100,000 frames, including some from top designers, and it sells contact lenses. Also offering a generous selection is 39dollarglasses.com. Both sites offer so much that shopping can be overwhelming.

Warby Parker cuts the clutter and produces a complete pair of glasses for $95, but its selection may be too small: about 35 styles, all in acetate and most fairly chunky.

- Price: If you need a strong correction or like extra-thin or tinted lenses, fees for those extras can add up.

High-index lenses can add $30, for instance, and a strong correction another $30, though vendors can charge differently for add-ons.

Be sure to examine each company’s shipping fees, too.

And remember that any fine-tuning or tightening you need after you’ve worn your glasses a while will have to be done in person, and your local optician may charge for those services if he or she didn’t sell you your glasses.

- Return policies: As an example, bestbuyeyeglasses.com doesn’t allow full returns or exchanges but will give you 50 percent off new lenses if you exchange a pair of glasses within 30 days of purchase. Warby Parker, on the other hand, promises to refund your full payment within 30 days.

by Anne D’Innocenzio Associated Press May. 8, 2011 12:00 AM [1]Websites offer eyewear deals

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Amazon set to expand Phoenix fulfillment center (2011-05-14 11:55)

Amazon.com Inc. plans to add 400,000 square feet to its fulfillment center at 6835 W. Buckeye Road in Phoenix in a move that will create hundreds of new jobs and expand the online retailer’s footprint in Arizona to more than 3 million square feet.

Construction is expected to begin this month and be completed in September, in time for the company’s Christmas rush.

Once complete, the facility will cover 1 million square feet, making it one of the larger Amazon fulfillment 29

centers in North America.

Amazon now operates three fulfillment centers in the Phoenix area where products are stored and eventually pulled, packaged and shipped to online buyers.

The company is currently seeking candidates for full-time management jobs at its Phoenix and Goodyear facilities that include operations, human resources and technical support.

Amazon, which says it has ”hundreds” of full-time employees in Arizona, brings on thousands of temporary workers for the holiday rush. Last year, the company added as many as 5,000 temporary workers to fill the flood of online orders that come in from October to January.

The Phoenix-area fulfillment centers stock everything from kayaks to capers, and more products are added constantly.

The 600,000-square-foot Buckeye Road facility that has been targeted for expansion opened in 2007. It was followed in 2008 by an 800,000-square-foot facility at 16920 W. Commerce Drive in Goodyear.

Amazon’s largest Valley operation, a 1.2 million-square-foot fulfillment center at 4750 W. Mohave St. in Phoenix, was completed last year. ”Over the past four years, we’ve invested tens of millions of dollars and created hundreds of jobs at our three Phoenix facilities,” Dave Clark, vice president of Amazon’s North America operations, said in a statement emailed to The Arizona Republic. ”We look forward to increasing our presence in Arizona with this expansion project, bringing additional dollars and jobs to the state.”

Arizona’s reluctance to press Amazon to collect sales tax from its Arizona buyers is seen as one of the reasons for the company’s continued expansion in the state. ”We are committed to growth in Arizona because Governor Brewer and other state officials have demonstrated their commitment to Amazon jobs and investment,” Paul Misener, Amazon’s vice president of global public policy, said in a prepared statement.

The company has recently nixed plans to build or expand fulfillment centers in states such as Texas and South Carolina, where it is being pressured to collect and remit sales taxes on purchases made by local residents.

As Amazon continues to add new products such as clothing and groceries, it has been investing heavily in expanding its network of fulfillment centers to store the goods and facilitate their speedy delivery.

Delivery charges and time are seen as a major impediment to online commerce, and Amazon has been diligently working to cut down both.

Many products now ship for free, and in areas such as metro Phoenix with a fulfillment center nearby, they generally arrive in one to two days.

Chief Financial Officer Thomas Szkutak said on the company’s earnings conference call in April that the company could build as many as nine facilities this year after opening 13 fulfillment centers in 2010.

He called investments necessary to keep up with the company’s growth a ”high-quality problem.”

The company also recently announced plans to build fulfillment centers in Washington and Indiana.

by Max Jarman The Arizona Republic May. 9, 2011 12:00 AM [1]Amazon set to expand Phoenix fulfillment center

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LinkedIn looking for $32 share in IPO (2011-05-14 12:21)

NEW YORK - Professional networking website LinkedIn Corp. hopes to sell its stock for $32 to $35 per 30

share in an upcoming initial public offering. Its IPO may encourage other growing Internet services to make their stock market debuts during the next year.

The price target, set in a filing Monday with the Securities and Exchange Commission, signals that LinkedIn is nearly ready to complete its IPO. The shares are expected to be sold May 18, according to IPO analyst Scott Sweet. The stock would then begin trading under the ticker symbol of ”LNKD” on the New York Stock Exchange.

The company’s debut could offer a preview of investor demand for other popular online services that connect people with common interests. Although they haven’t set timetables, Facebook, Twitter, the online deals site Groupon and the game maker Zynga are among the other social-networking services expected to go public.

With more than 500 million users, Facebook is considered to the hottest commodity of them all. The 7-yearold company’s market value has been pegged at $50 billion, based on a private investment in January.

The company said the offering could raise up to $274 million, including the cash that would to go existing shareholders who are selling part of their stakes in the IPO. Based on the IPO’s price targets, LinkedIn would have a market value of $3 billion to $3.3 billion.

Former PayPal executive Reid Hoffman founded LinkedIn eight years ago. Now a venture capitalist, Hoffman remains LinkedIn’s chairman and largest shareholder with a projected post-IPO stake worth $600 million to $665 million.

LinkedIn’s stock offering is expected to attract a lot of attention because it revolves around a well-known Internet brand with more than 100 million registered members.

Most of LinkedIn’s revenue comes from fees it charges for recruiters and businesses that want expanded access to LinkedIn’s website to help fill job openings. The company also sells online ads.

Last year, LinkedIn had net income of $3.4 million on revenue of $243 million. Its revenue totaled $94 million during the first three months of this year, more than doubling from the same period last year.

LinkedIn will offer 4.8 million shares. The company’s current stockholders, including Hoffman, Bain Capital, Goldman Sachs and publishing company McGraw-Hill, will sell 3 million shares.

The company, which is based in Mountain View, Calif., said there will be 94.5 million common shares outstanding after the IPO. After paying investment banking fees and other expenses, LinkedIn estimated it will collect nearly $147 million from the IPO at the mid-range target price of $33.50. LinkedIn plans to use the money for operations and possibly to buy other companies.

Morgan Stanley, BofA Merrill Lynch and J.P. Morgan are managing the offering.

by TALI ARBEL AP Business Writer May. 9, 2011 12:51 PM [1]LinkedIn looking for $32 share in IPO

1. http://www.azcentral.com/business/articles/2011/05/09/20110509linkedin-ipo-share.html

Facebook-Google rivalry intensifies with PR fiasco (2011-05-14 14:15) NEW YORK - The intense rivalry between Facebook and Google just got juicier.

In a twist seemingly out of a Hollywood thriller, Facebook hired a prominent public relations firm to try to plant stories harshly criticizing Google’s privacy practices in leading news outlets. The efforts backfired when the firm approached a blogger who not only declined the assignment, but also went public with the offer. ”If you are out there planting negative stories, you are feeding the conflict,” said Larry L. Smith, president of the Institute for Crisis Management, a public relations company. ”When they get in a shoving match, whoever is perceived by the public to be the bully loses in the public eye.”

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Rather than getting news outlets to circulate stories about privacy problems facing Google, Facebook found itself having to answer questions about why it wanted to maintain secrecy.

Facebook said it never authorized or intended to run any smear campaign against Google. Rather, the company said it hired Burson-Marsteller to prompt investigations into how a new Google service called Social Circle collects and uses data about people. In a statement, Facebook said it should have made it clear that it was behind the efforts.

Burson-Marsteller said Facebook had requested that its identity remain secret ”on the grounds that it was merely asking to bring publicly available information to light.” The firm said that violated its own policies, ”and the assignment on those terms should have been declined.”

Not that it was.

Facebook’s efforts to stay anonymous - something that violates the terms of service for users of its site began to unravel when Burson-Marsteller contacted blogger Christopher Soghoian, an Indiana University graduate student well known in online privacy and security circles.

The firm’s John Mercurio asked Soghoian if he wanted to write an item for ”a top-tier media outlet” blasting Google for what Mercurio calls a ”sweeping violation of user privacy.” Soghoian asked for the identity of the firm’s client, but Mercurio wouldn’t reveal it. Soghoian then posted the email exchange online.

Burson-Marsteller, meanwhile, also pitched USA Today. Instead of running with the planted story, USA Today published an article on the ”PR firm’s attack of Gmail privacy.”

It took Newsweek tech editor Dan Lyons to figure out that Burson-Marsteller’s mystery client was not Apple or Microsoft, as some murmurs went, but Facebook. ”The mess, seemingly worthy of a Nixon re-election campaign, is embarrassing for Facebook, which has struggled at times to brand itself as trustworthy. But even more so for Burson-Marsteller, a huge PR firm that has represented lots of blue-chip corporate clients in its 58-year history,” Lyons wrote in the Daily Beast, a website owned by the same company as Newsweek.

And so, people got a rare glimpse inside Facebook’s thorny relationship with Google in a story that seems more befitting to behind-the-scenes Washington politics or rival pizza joints than the sparring between two seemingly friendly tech giants.

It was also a good lesson on privacy in an age in which few things stay out of the public eye. ”Odds are that if you are writing about something controversial, or doing something controversial, someone is going to leak it,” said Smith, the crisis-management expert.

by Barbara Ortutay Associated Press May. 12, 2011 05:03 PM [1]Facebook-Google rivalry intensifies with PR fiasco

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New Prius may not arrive for a year (2011-05-14 14:28)

TOKYO - Some buyers will have to wait until April for deliveries of the latest Toyota Prius because of shortages of a new battery that’s adding to production delays created by the March earthquake and tsunami in Japan.

The launch Friday of the more spacious ”Prius a,” or ”Prius alpha,” a revamp of Toyota’s popular gasolineelectric hybrid, had been set for last month. But the March 11 magnitude-9.0 earthquake in northeastern Japan destroyed key parts suppliers and forced a delay.

The parts shortage has disrupted production at Toyota’s Japanese plants and the automaker has said production won’t be completely back to pre-disaster levels until late this year. The battery shortage was an issue even before the earthquake.

The new Prius model, which looks like a station wagon or a tiny minivan, comes in two versions - one seating five people, set to go on sale in North America later this year as the ”Prius V,” and one with three rows seating seven people, being offered in Europe mid-2012 called ”Prius +.”

The one with three rows of seats, which starts at 3 million yen ( $37,000) in Japan, is equipped with a new kind of battery called lithium-ion.

The one seating five people, which starts at 2.35 million yen ( $29,000), and earlier Prius models have nickelmetal hydride batteries. The lithium-ion battery takes up less space, allowing for more cabin room.

Toyota executive Satoru Mouri said only 1,000 of the Prius with the lithium-ion batteries could be produced a month. Toyota is planning to produce 2,000 of the other model a month, and is trying to increase production, he said.

Toyota is aiming to sell 2,000 of the new Prius a month in North America and another 2,000 a month in Europe.

In Japan, Toyota has received 25,000 orders for the new Prius models - 18,000 for the model with nickel-metal hydride batteries, and 7,000 for the one with lithium-ion batteries.

Buyers have had long waits for previous Prius models. But the wait this time for some could be especially long, lasting until April next year, according to Toyota.

by Yuri Kageyama Associated Press May. 13, 2011 05:03 PM [1]New Prius may not arrive for a year

1. http://www.azcentral.com/business/articles/2011/05/13/20110513new-prius-may-not-arrive-year.html

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Websites offer guidance in buying green vehicles (2011-05-15 10:04) [1] The timing couldn’t be better. Just as gas prices at the pump climb rapidly, automakers finally have a wide range of new fuel-efficient, alternative-fuel and hybrid cars and trucks to offer.

If you’re in the market, these sites have valuable information: - American Council for an Energy-Efficient Economy: Provides green-car ratings, shopping guide and driving tips. [2]www.green ercars.org.

- Drive Green: Covers the steps of buying a green car, including budget, size and features.

[3]www.drivegreen.com/Auto Buyer Guide drive green guide for car buyers McClatchy-Tribune News Service May. 15, 2011 12:00 AM [4]Websites offer guidance in buying green vehicles

1. http://www.hybridcars.com/electric-car 2. http://www.blogger.com/www.green%20ercars.org 3. http://www.blogger.com/www.drivegreen.com/Auto_Buyer_Guide_%20drive%20_green_%20guide_for_car_buyers 4.

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LinkedIn valued at $9 billion after IPO (2011-05-22 12:24)

SAN FRANCISCO - There was an unmistakable echo of the dot-com boom Thursday on Wall Street.

LinkedIn, a trailblazer in the online networking craze, went public with a roaring stock offering. Within minutes, shares were trading at twice the value set by the company.

Buyers crowded the floor of the New York Stock Exchange, and financial-news networks flashed LinkedIn’s stock price urgently all day. By the closing bell, the company had a market value of $9 billion, the highest for any Internet company since Google had its initial public offering seven years ago. Millionaires and even one billionaire were made, at least on paper.

The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares. All this for a company that skeptics say amounts to an online Rolodex, a place on the Internet for professionals to post resumes and connect with one another and potential employers.

It was enough to remind some people on Wall Street of the heady late 1990s and the debuts of companies 34

like Netscape Communications - and, more infamously - long-forgotten names like Pets.com and Webvan.

Investors wondered whether LinkedIn will be a precursor to another financial frenzy in Silicon Valley. ”I definitely think this will be a catalyst,” said longtime technology investor and analyst Michael Moe, CEO of Global Silicon Valley Asset Management. ”Investors who like growth stocks have been stuck in a desert for a long time, and now it’s like they have found this great pitcher of water.”

At $9 billion, LinkedIn already is worth 18 times its projected revenue this year. Major Internet companies, including Google, trade at an average of about five times projected revenue, according to an analysis by Capital IQ. Using another measure, price-to-earnings ratio, which compares a company’s market value with its profit, LinkedIn finished the day at a staggering 554. By comparison, the average P/E ratio of technology companies in the Standard & Poor’s 500 index like Google and Apple is 15.

Two-thirds of LinkedIn’s revenue comes from the fees it charges to help companies find and hire workers.

Francis Gaskins, president of IPOdesktop.com, said that makes the company more like Monster, an employment firm that depends a lot on the health of the job market. ”Can we stop asking if we are in a bubble now?” venture capitalist Mitchell Kertzman said after LinkedIn stock was trading above $100. ”We are clearly in a valuation bubble.”

If the stock market is thirsty for more businesses that connect people on the Internet, there’s a backlog of privately held companies that might satisfy it.

The short list includes Twitter, the 140-characters-or-fewer messaging service; Zynga, which makes online games like FarmVille; Groupon, the coupon site; and Facebook, the social network with more than 500 million users.

None of those companies has revealed specific plans for going public. Facebook has at least dangled the possibility of filing for an IPO before May. A private investment led by Goldman Sachs Group Inc. valued Facebook at $50 billion in January.

The 109 percent first-day gain for LinkedIn, based in Mountain View, Calif., nearly mirrored Netscape’s first day when it went public on Aug. 9, 1995. Netscape rose that day from $28 to a close of $58.25, or 108 percent.

Netscape co-founder Marc Andreessen’s venture-capital firm, Andreessen Horowitz, has invested in Twitter, Groupon, Zynga and Facebook.

As an individual, Andreessen was an early investor in LinkedIn and is among the more than 102 million people who have posted their resumes and profiles on its website.

LinkedIn has steadily grown since it started in 2003 and it’s adding about a million accounts a week.

In a key distinction from the dot-com days, it also makes money - $3.4 million last year on revenue of $243 million. Its revenue more than doubled during the first three months of this year, putting it on pace to bring in about $500 million in 2011 from advertising and fees.

Kertzman, managing director of Hummer Winblad Venture Partners, was CEO of Liberate Technologies, a maker of software for TV set-top boxes, during the height of the dot-com boom. In 2000, its market value soared to $12 billion. ”I knew something was wrong because I knew we weren’t worth that much and it scared the hell out of me,” Kertzman said.

Aaron Levie, CEO of an Internet storage service called Box.net, sees things differently. Levie, who is 26 and was in high school during the dot-com boom, thinks it’s a good sign that LinkedIn, Facebook and other companies are taking their time to build companies that make money before going public. ”You can tell this is a very different period than the late ’90s,” Levie said. ”Silicon Valley is definitely back, and much healthier.”

LinkedIn’s CEO, Jeff Weiner, said he won’t dwell on high expectations. ”It’s exciting, but it’s a point in time,” Weiner said a few hours after he rang the opening bell at the stock exchange, where LinkedIn’s shares traded under the symbol LNKD. ”One day’s trading is not going to be too meaningful, and the same holds true for the next few days and the next few months. I know it sounds a 35

little like a cliche, but we are in this for the long haul.”

Many of LinkedIn’s employees are now millionaires, at least on paper. The richest is co-founder and executive chairman Reid Hoffman. Already considered one of the smartest and best-connected people in Silicon Valley, Hoffman joined the ranks of the world’s billionaires Thursday. Hoffman, 43, owns a 20 percent stake in LinkedIn, good for about $1.8 billion.

by Michael Liedtke Associated Press May. 20, 2011 12:00 AM [1]LinkedIn valued at $9 billion after IPO

1. http://www.azcentral.com/arizonarepublic/business/articles/2011/05/20/20110520biz-linkedin0520.html

Playboy puts all 57 years of its magazines on website (2011-05-22 12:30)

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[2] CHICAGO - Good news for those who thought their copies of Playboy were gone forever when their moms found them and threw them away.

Playboy launched a Web-based subscription service Thursday called i.Playboy.com that allows viewers to see every single page of every single magazine - from the first issue nearly 60 years ago that featured Marilyn Monroe to the ones hitting the newsstands today. ”They no longer have to store 57 years - 682 issues - of Playboy under their mattress,” said Jimmy Jellinek, the magazine’s chief content officer.

Chicago-based Playboy has seen its circulation plummet from 3.15 million in 2006 to 1.5 million today and has been trying all sorts of gimmicks to attract readers in recent years. One issue, for example, included a set of 3-D glasses to better see a centerfold shot in 3-D; another turned over the cover to cartoon character Marge Simpson.

But if those moves were widely viewed as efforts to attract a younger audience, this one is also aimed at Baby Boomers and even their parents, who might recall pictorials of long-gone movie stars, interviews with the likes of John Lennon and the Rev. Martin Luther King Jr. and the time Jimmy Carter famously revealed the lust in his heart.

And, for those who have claimed they bought the magazine just for the articles, the online service also offers a way to look at the works of such writers as John Updike, Jack Kerouac, Kurt Vonnegut, Hunter Thompson and Norman Mailer just by typing in their names.

Jellinek is optimistic people will pony up the $8 per month or $60 per year for a service that’s ”meant to appeal to that sense of collective nostalgia and affinity.”

He calls the website ”the world’s sexiest time machine” and ”an anthology of cool” for a magazine he refers 37

to as ”the Mount Rushmore of literary greatness.”

But one industry analyst makes Playboy sound more like a tired, dusty half-empty amusement park. ”The problem with Playboy is it not only lost its powerful interviews, but it lost its lead,” said Samir Husni, director of the Magazine Innovation Center at the University of Mississippi School of Journalism. ”This is no longer the ’50s and ’60s, when people talked about the interviews. And who cannot see the girl next door naked in this day and age?”

Husni doubts the service will do much for the company at all. ”The questions are: Do I need it? Do I want it? Is it relevant to me?’ ” Husni said. ”The answer is: No, no and no.’ ” Husni also said it is likely that those who do subscribe will drop the service once they see whatever issues they were curious about.

Jellinek concedes the whole thing is something of an experiment aimed at a niche audience, but he also insists the service has value because it offers a unique window into the past. ”We’re not trying to achieve mass scale here and move the needle for the company in a great way,” he said.

by Don Babwin Associated Press May. 20, 2011 12:00 AM [3]Playboy puts all 57 years of its magazines on website

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Smart homes in Phoenix area run by iPads, iPhones (2011-05-22 12:54)

[1] David Wallace/The Arizona Republic Home builder Rod Cullum demonstrates setting an alarm with an iPad at the front door of the luxury new home development The Village at Paradise Reserve in Paradise Valley.

Instead, you may fire up an app on your smartphone, log in, press a button and hear the front door click open.

Homebuilder Rod Cullum is almost there. With his new luxury homes, the Village at Paradise Reserve in Paradise Valley, buyers still get a key to their front door, but they also get an iPad in their welcome basket.

[2]How the iPad controls new luxury homes Using that Apple iPad or an iPhone, homeowners can perform functions from viewing their security cameras to closing their window shades and turning on (or off) every light in the house. They can also let a visitor through the main gate or check to see whether a garage door was left open. ”You can be anywhere in the world and control your house from that iPad,” Cullum said, adding that he 38

chose an Apple-based Savant home-automation system. ”I could be in my place in Utah and see if someone is swimming in my (Phoenix) pool. I could be in London . . . .”

Cullum, whose Paradise Reserve homes start at about $1.5 million, isn’t the only homebuilder embracing smart-home features. Even homes starting at prices under $200,000 are starting to offer Web-based automated perks.

At Meritage Green homes throughout the Valley, homebuyers can use a smartphone application to adjust their thermostat and can see their energy production, usage and hot-water temperature through an app tied to their Echo solar systems.

And at Shea Homes’ Trilogy at Vistancia in Peoria and Encanterra Country Club in Queen Creek, new homebuyers can unlock at least one door remotely, turn on a light and adjust their thermostat using a Schlage Link smartphone app.

Hal Looney, president of Shea Homes active-lifestyle communities in Arizona, recently demonstrated how a homeowner, while at work or away, can let someone in their home with a touch of the smartphone screen.

People with second homes or vacation homes especially appreciate such automated features, Looney said.

Although new homebuilders look at home automation as a good value-added perk, homeowners don’t have to buy new construction to get some of these features.

In the age of smartphone and computer-tablet applications, automated systems are getting increasingly affordable.

On the lower-tech end of the spectrum, homeowners can buy for less than $50 light switches with motion sensors that turn on automatically when someone enters a room and shut off when the room is empty. Faucets that turn on and off just by lightly touching the spout or handles are now sold at home-improvement stores.

Homeowners can buy automated irrigation systems that monitor local weather-service information and adjust irrigation levels to prevent overwatering. Several area homebuilders, including Shea Homes, include the automated WeatherTRAK irrigation systems to save water in communities.

And through a local home-automation specialist or Smarthome.com, homeowners can buy systems that help them control lighting, appliances and anything that can talk to a Web-enabled system through their smartphone.

The ability to control the main functions of a home from one Web-enabled device can make running a household a little easier. Think the Jetsons or Bill Gates’ smart mansion, said to be nicknamed Xanadu 2.0. No home-automation system can cook dinner - yet, but it can turn on the spa on your way home from work and have your favorite song playing as you walk through the door. ”One of the things I think automation adds is just peace of mind,” said Cullum, who has offered automated features in his custom homes for years. He likes the simplicity of the Apple-based Savant system, which was installed by Cyber Sound in Scottsdale. ”You don’t have to keep track of so many things.”

Adds Cullum: ”They haven’t figured out how to make it to do laundry yet. That would be James Bond cool.”

Home automation Want an automated home? Home-automation gadgets and systems linked to smartphone and computertablet applications are getting increasingly affordable. Here’s a sampling of automated home features.

- Light up a room. Occupancy sensor switches, $20 to $40 at home-improvement stores, automatically turn on the light when someone walks into a room and turn it off when the room is empty. An energy-saving move, many homebuilders now install occupancy sensor switches in walk-in closets and bathrooms where people often forget to turn off lights.

- Unlock a door. Schlage Link is a system that lets homeowners control Schlage door locks, Trane thermostats, Schlage security cameras and plug-in lights or appliances via its smartphone application. Some local Lennar and Shea Homes houses include the Schlage Link system for new homebuyers. A Schlage wireless-keypad deadbolt starter kit, which lets homeowners unlock a door remotely, costs $299.99 plus an $8.99 monthly fee. A Trane thermostat, security cameras and plug-ins that allow lights and appliances to be controlled remotely can be added for an additional fee. For details, visit link.schlage.com.

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- Adjust a thermostat. Locally, homebuilders Meritage, Cullum Homes, Trend Homes and Joseph Carl use the Echo solar system by EchoFirst. The system produces both energy and hot water and is tied to a smartphone application that lets homeowners adjust their thermostat and see how much energy they’re producing and using in real time. For details, visit echofirst.com.

- Stop overwatering. Several local homebuilders, including Shea Homes, include the WeatherTRAK automated irrigation system as a standard feature in some communities. It uses local weather information to adjust amount of water needed to maintain one’s landscaping. For details, visit hydropoint.com.

- Turn on a faucet hands-free. Shea Homes homebuyers can order an optional hands-free Delta kitchen faucet that turns on and off by lightly touching the handles or spout - even with an elbow. Homeowners can buy a Delta Pilar Touch pull-down faucet in stainless steel at Lowe’s stores or at lowes.com for $312.79.

- Manage lights and appliances. Smarthome.com, which specializes in home-automation gadgets and systems, sells a whole-house Insteon control kit. It controls lighting and appliances via an iPhone (not included) for $1,101.45. For details, visit smarthome.com.

- Control a household. The Savant Automation, Control and Entertainment System, sold locally by Cyber Sound in Scottsdale, ties together a home’s whole-house music system; intercom and video; security; lighting control; heating and cooling systems; security cameras; pool and spa controls; garage door and gate control to an iPhone, iPad or iPod control panel. The system lets a homeowner control all these functions remotely.

Jon Summer, president of Cyber Sound, said installing the system starts at about $15,000 but can cost $100,000 or more, depending on the size of one’s home. For details, visit cybersound.tv.

by Kara G. Morrison The Arizona Republic May. 19, 2011 01:26 PM [3]Smart homes in Phoenix area run by iPads, iPhones

1. http://i.azcentral.com/i/sized/7/A/4/e298/j350/PHP4DD5804A7E4A7.jpg 2. http://www.azcentral.com/photo/Style/FoodHome/18967 3.

http://www.azcentral.com/style/hfe/decor/articles/2011/05/19/

20110519smart-homes-phoenix-area-run-by-ipads-iphones.html

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Bartab smartphone app available at 70 metro Phoenix bars (2011-05-22 13:06)

Bartab, a smartphone application new to the Valley, is allowing users to buy drinks for their friends - even if they’re not in the same bar.

Partiers at a Scottsdale club can order a cold beer for friends at a bar in Glendale, or even Manhattan.

It’s all possible through a smartphone app developed in San Francisco called Bartab, now in use at more than 70 Valley bars.

The app allows users to buy vouchers for specific drinks and then redeem them at selected bars. ”I noticed how people could send fake drinks to their friends on Facebook, and thought, let’s make this real,” creator Steve Johnson said.

Users download the free app and connect to it via Facebook. Once they’ve chosen a participating bar in one of 15 U.S. cities, the app shows what drink deals are available, typically $1 for a beer, a shot or a well drink.

Then the user selects recipients and pays through a secure transaction system.

At the bar, users show the bartender the voucher on their phones and pay an additional $1 to receive the drink.

For users such as Dennis Moran, 38, of Scottsdale, the app is a great way to save money. He has used it at the Lodge, Upper Deck Sports Grill, Chop and Wok and Loco Patron, all in Scottsdale. ”It’s very convenient and makes going out affordable and simple,” Moran said. ”I saw that the Chop and Wok was on the list, and hadn’t been there in 20 years, so I thought I would try it out since I live nearby.

I’ve been there a few times now, and have been checking out other new places, too.”

For bars, the app provides unique marketing. They get customers in the door, and when the drink is redeemed, a notification is posted on Facebook, visible to the customer’s friends.

Athena Pauly, general manager for the Canyon in Scottsdale, formerly Fox Sports Grill, said for two months Bartab has been creating a buzz at her restaurant, bringing in about five app users a night. ”Social marketing is so crazy right now, so I decided to give the app a test run,” Pauly said. ”It showed up on Facebook that I bought a friend a drink, and a few of my friends were jealous. It’s quickly caught on. ”And since we changed the name and concept of our restaurant, this is a good tool to utilize so we can spread the word.”

David Wachs, founder of Chicago-based mobile marketing company Cellit, said the app is a smart idea, but it begs some questions.

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”It leverages social networking and this whole viral aspect,” Wachs said. ”The bar has brought the person in once, and you get that Groupon effect. But what do you do now? How do you communicate to the user after they leave the bar? And how do you get them back?”

Wachs says many coupon programs get customers in once for their cheap drink, but the customers don’t linger, or return, and the bar ends up losing money.

But Pauly said the app is paying off so far. ”We offer drinks like domestic beer and well drinks, something we won’t lose on, and it brings people in the door,” Pauly said. ”Usually people stay here for some appetizers and additional drinks.”

Another issue is fraud, but Johnson said his program is low risk.

Bartenders are supposed to ask customers to hit the ”I got my drink” button after being served, so they can’t use it again.

Users only need to be 17 years old to download the app, making them able to purchase vouchers and send drinks. But it’s up to the bar to check IDs. Users are asked to confirm that they are over 17 when downloading the app, but there’s little oversight.

The Bartab application is available in iPhone App Store and Android Market, and more information about the app can be found at [1]bartab.webtab.com.

by Kellie Hwang The Arizona Republic May. 19, 2011 12:13 PM [2]Bartab smartphone app available at 70 metro Phoenix bars

1. http://bartab.webtab.com/ 2.

http://www.azcentral.com/thingstodo/bars/articles/2011/05/17/

20110517bartab-smartphone-app-available-bars-phoenix.html

Online reviews: Which sites can you trust? (2011-05-22 13:23) Everybody has an opinion about food, travel and the products they use. Online, there are plenty of places to express them.

Anyone with a smartphone, iPad or computer can write and post commentary on dozens of websites that accept unsolicited reviews of restaurants, travel, consumer products, home-repair services and many other buying categories.

Once reserved for stuffy, often anonymous critics at newspapers and magazines, such social commentary has become the avocation of millions of people. Their opinions have reshaped how businesses respond to customers, recast their marketing strategies and rewired how those looking for information find it before they buy.

For many businesses, such public scrutiny can be jarring at first. Some go on the defensive. But savvy operators use criticism as important customer feedback and an opportunity to improve.

For new businesses, reviewers add to the tension of a make-or-break situation. A positive write-up can bring new customers; a negative one can keep them away.

As the commentary culture has grown, all the opinions have influenced sales and spun off further business opportunities. They help online retailers such as Amazon.com and Overstock.com sell products to consumers, sight unseen. They also are the main attraction of review sites such as Citysearch, Yelp and TripAdvisor, which rate businesses according to the reviews and also sell them advertising and other business services.

All the openness, and all the dollars at stake, carry the potential for abuse.

Many review sites sell advertising and sponsorships to businesses that are reviewed on their sites, creating the possibility of unfair play.

Review site Yelp continues to be dogged by complaints from business owners and executives who believe they are being ”blackmailed” into buying advertising.

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And when anyone can post a comment, it’s possible to stack the deck with positive or negative reviews by authors with ulterior motives.

To prevent people from gaming the system, the websites employ sophisticated filters and computer programs to weed out bogus commentaries.

Influencing buyers Anything with an address is fair game for so-called ”Yelpers,” who review everything from restaurants to chiropractic clinics on the burgeoning online site Yelp .com.

Hotels, restaurants and tourist attractions are the target of reviews submitted to TripAdvisor, which is owned by travel-booking-site Expedia.

Angie’s List focuses on services providers, from doctors and dentists to roofers and house cleaners.

Other review sites include Zagat, Urban Spoon, Citysearch, Restaurant DB among countless others. Travelbooking sites, including Priceline and Yahoo Travel, also encourage travelers to post reviews.

Retailers’ market research shows that Internet shoppers increasingly rely on online reviews to make decisions and that those who browse a site’s top-rated products list were significantly more likely to make a purchase than those who didn’t. The review-readers also typically spent more per order.

Russell Dicker, director of community for Amazon.com, said that user-generated product reviews are a critical aspect of online retailers’ operations. ”They make the system work,” he said.

Product reviews helped Amazon sell more than $34 billion worth of goods via the Internet in 2010. Dicker said reviews ease online shoppers’ anxiety about buying products sight unseen and also help drive traffic to Amazon’s Web site. When people search for a product online, they often start by reading reviews which provide links to sellers.

Millions of voices For review sites, the reviews are the main draw.

Anything with an address is fair game for so-called ”Yelpers,” who critique everything from restaurants to chiropractic clinics on Yelp.com.

Hotels, restaurants and tourist attractions are the target of reviews submitted to TripAdvisor, which is owned by travel-booking-site Expedia. The estimated 45 million hotel and restaurant reviews posted on TripAdvisor draw 40 million visitors a month to its website. That traffic enabled the company to generate $480 million last year in advertising and booking revenue.

Angie’s List focuses on services providers, from doctors and dentists to roofers and house cleaners.

Other review sites include Zagat, Urban Spoon, Citysearch, Restaurant DB among countless others. Travel booking sites, including Priceline and Yahoo Travel, also encourage travelers to post reviews.

Yelp’s 17 million posted localized reviews of restaurants, retail stores and other businesses attracted 50 million visitors to its site last month, up from 46 million the month before.

Yelp is privately held and doesn’t release financials, but analysts at Up Next Research estimate the company took in $57 million in 2010 and is on target to pass $100 million by 2012.

Because of the growing importance of reviews, companies such as Amazon, Yelp and others go to great lengths to cultivate and nurture their colonies of reviewers.

Contributors can range from one-time authors eager to share a good or bad consumer experience to serial commentators such as Pennsylvania resident Harriett Klausner, who, at last count, has written 24,514 book and product reviews for Amazon.com.

While the companies typically don’t pay for reviews, top contributors at Amazon can be inducted into its exclusive Vine program and receive products from manufactures for their use and review. While Harriet Klausner is Amazon’s most prolific reviewer, A. Chandler is Amazon’s top critic, based on the 27,127 out of 27,816 readers that found her 467 reviews useful.

At Yelp, which opened a 200-plus-employee regional sales office in Scottsdale last year, so-called ”elite” reviewers are regularly feted at social events hosted by the company. Yelp reviewers are nominated, sometimes by themselves, to become ”elites” and are evaluated based on the quantity and quality of their reviews.

Readers on most sites can rate the quality and usefulness of the critiques.

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”The reviewers are constantly being reviewed themselves,” said Gabi Messinger, director of marketing for Yelp’s southwest regional office in Scottsdale.

Every day, Yelp picks a top review in each of the numerous markets it covers to be prominently featured on its site.

Sarah Grimwood has written 245 reviews of Phoenix-area restaurants and businesses since becoming a ”Yelper” in 2007. Besides creating a platform for her comments, Grimwood has found Yelp an important social network and a source of many friendships. ”I didn’t know anybody when I moved here and met most of my friends through Yelp,” she said at a recent function for ”elite” Yelp reviewers at Luci’s Healthy Marketplace in central Phoenix.

Andrea Karetsky, whose Yelp mantra is ”party like a rock star,” has written 143 reviews and also spends a lot of time socializing with fellow ”Yelpers.”

Kurdy Sin of Glendale is attracted to the writing process and constantly strives to improve his commentary. ”I love to write reviews,” he said.

Sin has created 115 reviews and hopes to have one selected as the top review of the day in the Phoenix market.

Army of reviewers When everybody has an opinion, every business has to be on alert.

On opening night for Sam Fox’s latest restaurant, the Arrogant Butcher, there were practically as many critics as customers at the downtown Phoenix restaurant. ”They were out in force with their cellphones and iPads, taking pictures of the food and making notes,” Fox said.

His company, Scottsdale-based Fox Restaurant Concepts, operates 30 restaurants that are constantly being reviewed on Yelp and other sites.

There are 91 reviews of the Arrogant Butcher already posted on Yelp and 276 criticisms of Fox’s more established True Food Kitchen.

Fox takes his reviews in stride. ”We don’t live and die by reviews,” Fox said, offering that some can be off-base. ”If we get a bad review of a restaurant that is packed every night with satisfied customers, we take it with a grain of salt.”

But he acknowledges the company can’t ignore the commentary. ”If it’s a valid complaint, we look at it as an opportunity to improve,” he said.

With more people relying on reviews to make decisions about where they spend their money, they can make or break a new business. And for entrepreneurs unaccustomed to public criticism, a bad review can be a jarring experience.

Erik Angermeier, owner of Slippery Pig Bike Shop in central Phoenix, said he was shocked when a Yelper complained about the dirty couch and being offered used parts for less money. ”Most people are happy to have the option of getting parts for less money,” he said.

Then, he said, he got a call from a salesperson at Yelp offering to ”improve the company’s online reputation” for $300 per month. ”I took it as if they were offering to take down the negative review,” he said.

He turned them down and now wonders if the spate of negative reviews of his business is a result of his refusal to advertise.

Business of opinions How opinions pop up on sites, and how the purchase of advertising can alter that, remains a big focus for the businesses being rated.

The sites insist that buying an ad or extra services has no bearing on the nature of the reviews they publish.

But when a site is selling services to businesses of which it also is publishing reviews, there is at least the potential for abuse.

Basic hotel, restaurant and business listings on TripAdvisor and Yelp are free - but can be enhanced for a fee.

Businesses that advertise on Yelp pop at the top of searches, ahead of competitors with better ratings.

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Those businesses don’t have to worry about their listing being cluttered with Google ads from competing establishments.

On TripAdvisor, an extra fee nets a video and a link that, for example, allows customers to book directly with a hotel instead of through a booking site such as Expedia. And companies such as Expedia, which owns TripAdvisor, can pay to be listed as the top default booking site.

Restaurant-review site Zagat .com gets around the potential appearance of impropriety by charging consumers to access the site and not accepting advertising from restaurants.

Angie’s List requires reviewers to identify themselves and take an oath of honesty. Only businesses with high consumer marks are allowed to advertise.

At other sites, you have to take executives at their word that there ”it doesn’t happen.”

Adam Medros, vice president of product at TripAdvisor, said that a business owner generally would not be happy with a bad review.

But he added, ”There is no correlation between buying an ad and the reviews that appear on our site.”

He said the company encourages advertisers to publish a response to a negative review and to respond to legitimate criticism.

Yelp controversies Yelp continues to be the subject of reports from small-business owners who contend that Yelp salespeople offer to hide negative reviews in exchange for advertising, a practice the company denies.

Yelp spokeswoman Stephanie Ichinose acknowledged that sales people may refer to a business’ reviews when making a sales call but never would offer to quash negative comments in exchange for advertising. ”Some businesses may leap to that conclusion, but that’s not the case,” she said.

Last year, two law firms filed a class-action lawsuit against Yelp on behalf of a Long Beach, Calif., veterinary hospital that drew that conclusion.

The suit, which accused Yelp of ”implied extortion,” was dismissed by a U.S. District Court judge in April, who noted that the claims could not be backed up.

Owners of the veterinary hospital alleged that negative reviews reappeared when the business refused to buy advertising and that Yelp salespeople said they could control which reviews appeared on the site.

Yelp denied the allegations and said the business owners misunderstood how the site works.

Still, Yelp made changes. It took steps to enhance the integrity of its site by allowing access to reviews that had been flagged by its filters and quashed and also did away with the practice of allowing advertisers to feature a favorite review.

Yelp employs a complex system of algorithms and teams of investigators that weed out and remove from the site reviews that contain inaccuracies or authored by friends of the business, disgruntled employees or competitors attempting to manipulate the process. ”People can look at the reviews that get taken down and see there is no pattern of manipulation,” Ichinose said.

Gaming the system Because anyone can post a review, it’s possible to take advantage of the system. Business owners could solicit friends to write positive reviews - or write them themselves. On the other hand, competitors or disgruntled employees could type in negative ones. Most reviews sites employ elaborate filters and algorithms to weed out potential bogus commentary.

Many of the complaints from businesses about Yelp have to do with positive reviews being taken down from the site while negative ones are allowed to remain. ”Nobody complains when a negative review gets taken down,” Ichinose said, adding that some of those positive critiques may have been written by friends of the business owner. ”It’s important to have controls in place so the site can remain trustworthy,” she said.

At most businesses, other reviewers and readers also can flag reviews that seem suspect.

At Zagat.com and other sites, flagged commentaries are turned over to a team for analysis and possible suppression. ”We’re always on the lookout for people trying to game the system,” said Tiffany Herklots, a spokeswoman 45

for the restaurant rating site.

Ichinose acknowledged that legitimate reviews could be caught by Yelp’s filters and suppressed, but that the company continued to fine-tune and improve its monitoring systems. ”When we started in 2005, it was mainly looking at a review and asking ourselves, ’Does this seem legitimate?’ ” Ichinose said of the review-filtration process. ”Now it’s gotten very complex and a lot more accurate.”

TripAdvisor also employs computer programs and algorithms to weed out bogus reviews. On its site, hotels and restaurants suspected of trying to game the system are identified by a red badge. ”The red badge tells users that this hotel tried to manipulate the system,” said TripAdvisors’ Medros. ”It’s a huge deterrent and can cost a hotel a lot of business.”

Medros suggested that instead of complaining about reviews and trying to beat the system, hotels, restaurants and other businesses should put effort into improving their products and responding to and addressing customer complaints. ”Travel is a variable experience and not every day will be good,” he said. ”Most consumers realize that and look at the body of reviews and not a single out the negative ones.”

A lot of negative reviews, of course, could indicate a problem, he said. ”It is critical, then, that the owner responds,” Medros said.

MORE ON THIS TOPIC Some popular review sites TripAdvisor Focus: Hotels, restaurants, attractions.

Website: tripadvisor.com Website visits per month: 50 million.

Yelp Focus: Restaurants, retail stores, businesses.

Website: [1]yelp.com Website visits per month: 50 million.

Citysearch Focus: Hotels, restaurants, retail shops, nightlife.

Website: [2]citysearch.com Website visits per month: 15 million.

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Angie’s List Focus: Household, personal and medical services.

Website:[3] angieslist.com Website visits per month: 1.5 million.

Zagat Focus: Restaurants.

Website: [4]zagat.com Website visits per month: 300,000.

by Max Jarman The Arizona Republic May. 22, 2011 12:00 AM [5]Online reviews: Which sites can you trust?

1. http://yelp.com/ 2. http://citysearch.com/ 3. http://angieslist.com/ 4. http://zagat.com/ 5. http://www.azcentral.com/arizonarepublic/business/articles/2011/05/22/20110522online-review-web-sites.html

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21st-century money laundering:

Pre-paid cards anonymous,

easy to transport

(2011-05-28 22:00)

BOGOTA, Colombia - Forget bulk cash. It’s not the most convenient cross-border conveyance for a 21stcentury money launderer.

A safer and increasingly attractive alternative for today’s criminal is electronic cash loaded on stored-value or prepaid cards. Getting them doesn’t require a bank account, and many types can be used anonymously.

U.S. crime fighters consider the cards a burgeoning threat that regulators haven’t adequately addressed.

In the past year, said John Tobon, a senior U.S. Immigration and Customs Enforcement agent, the cards have become the preferred means of paying couriers who transport illicit drugs across the U.S. No one knows how big a role the cards play in moving more than $20 billion in drug earnings that U.S. authorities estimate crosses from the U.S. to Mexico annually. While anyone crossing that border with $10,000 or more in cash must declare it, prepaid cards are legally exempt. ”These prepaid cards are offering them (criminals) a great alternative to sneak into our financial system,” Tobon said.

It was bank and wire-transfer records that enabled law enforcement to identify the 9/11 hijackers and their overseas cells. ”Had the 9/11 terrorists used prepaid (stored-value) cards to cover their expenses, none of these financial footprints would have been available,” a U.S. Treasury Department report observed.

The cards are barely distinguishable from credit or debit cards and the most versatile let users reload them remotely without having to reveal their identity. Some cards can process tens of thousands of dollars a month. ”I’m not so sure we have a sophisticated understanding of how to deal with this,” said Richard Stana, who oversaw a report on prepaid access for the General Accounting Office, the U.S. Congress’ research arm.

Prepaid cards also are changing the way law-abiding citizens, businesses and governments handle money.

Walmart uses them to distribute payrolls, U.S. government agencies to deliver benefits and migrant workers to send money home.

In the U.S. alone, an estimated $107 billion moved on branded prepaid cards last year, according to Aite Group, a financial-research firm. Globally, the Boston Consulting Group forecasts, transactions with reloadable prepaid cards will reach $840 billion a year by 2017.

An October report by the 34-nation Financial Action Task Force cites just a half dozen laundering cases involving prepaid cards in their short history - each involving from $200,000 to $5 million and most in the U.S. The Treasury wants businesses selling cards that can be used internationally to keep customer identity records and report suspicious transactions. That would affect more than 43,000 U.S. sellers. The prepaid-card industry objects, saying that would hike administrative expenses, with the costs passed on to consumers.

by Frank Bajak Associated Press May. 24, 2011 12:00 AM [1]21st-century money laundering: Pre-paid cards anonymous, easy to transport

1.

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//www.azcentral.com/arizonarepublic/business/articles/2011/05/23/20110523biz-plasticmoneylaundering0524.html

Yahoo CEO vows to clean up mess tied to spinoff in China (2011-05-28 23:54) SAN FRANCISCO - Yahoo Inc. CEO Carol Bartz found herself in a familiar position Wednesday: assuring stock-market analysts that she will clean up a mess damaging the long-slumping Internet company’s market value.

The latest challenge to confront Bartz in her nearly 2 1/2-year tenure emerged two weeks ago. That’s when 48

Yahoo jarred investors by informing them of an abrupt change affecting the value of its 43 percent stake in Alibaba Group, one of the leaders in China’s rapidly growing Internet market.

Alibaba had spun off a potential jewel, its online-payment service Alipay, into a separate company controlled by its CEO, Jack Ma, without giving Yahoo anything in return.

Yahoo’s stock price has plunged by 13 percent since the May 10 revelation, leaving Bartz little choice but to place the issue at the top of the agenda for a meeting that Yahoo had scheduled to provide an update on its turnaround strategy. The Associated Press monitored the San Jose meeting through a webcast because Yahoo wouldn’t allow reporters to attend.

Although she provided few specifics, Bartz spent most of the first hour trying to reassure analysts that Yahoo will be ”appropriately compensated” for the loss of Alipay from its investment portfolio.

Bartz made her points flanked by Yahoo’s chief financial officer, Tim Morse, and company co-founder Jerry Yang, who also is a member of Alibaba’s board of directors. Both men flew to Asia last week to discuss the Alipay matter with Alibaba’s major shareholders, who include Ma and Japan’s Softbank Corp. Bartz said all the key shareholders have committed themselves to negotiating a fair payment for the Alipay spinoff and preserving the value of another Alibaba asset, online auction site Taobao. ”This is a very complex situation,” Bartz said. ”We have approached this thoughtfully and methodically. We think this is the right path to protect shareholder interests.”

Bartz wouldn’t predict when the Alipay issue would be resolved.

Yang, who spent 19 months as Yahoo’s CEO before being replaced by Bartz in January 2009, said the Alipay spinoff was necessary to ensure that Chinese regulators licensed the service. The licensing wouldn’t have been possible if Alipay wasn’t wholly owned by Chinese citizens, Yang said.

Yahoo said Alibaba notified it about the change in Alipay’s ownership on March 31. None of the executives explained why Yahoo waited nearly six weeks to disclose it. ”We believe our disclosure was timely and appropriate,” Bartz said.

by Michael Liedtke Associated Press - May. 26, 2011 12:00 AM [1]Yahoo CEO vows to clean up mess tied to spinoff in China

1. http://www.azcentral.com/arizonarepublic/business/articles/2011/05/26/20110526biz-yahoo0526.html

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Banks launch clearXchange transfer system to rival PayPal - May.

25, 2011

(2011-05-29 00:04)

NEW YORK (CNNMoney) – You will soon be able to pay your friend back for dinner or give your kid $100 by simply logging in to your bank account and entering their name and phone number. No cash, check, PayPal or silly app required.

Bank of America ([1]BAC, [2]Fortune 500), JPMorgan Chase ([3]JPM,[4]Fortune 500) and Wells Fargo ([5]WFC, [6]Fortune 500) announced Wednesday that they will launch a system, called clearXchange, allowing customers to transfer money electronically through their existing accounts.

The new cash transfer system is a direct attempt to rival PayPal, owned by online auctioneer eBay ([7]EBAY, [8]Fortune 500) and currently the dominant player in the person-to-person payment space. This kind of streamlined venture is rare among banks, who are constantly battling each other for customers. ”We call this a model of ’coopetition,’ where we’re actually cooperating with our competitors,” said John Feldman, general manager of clearXchange and a former employee of Bank of America.

[9]11 new tools for your money As more customers shift away from traditional check and cash payments, having an online transfer system will be crucial to keeping customers loyal, Feldman said.

Whereas PayPal and other systems require you to create an account separate from your bank account to transfer money, this new service will let customers simply log in to their existing bank account and enter the recipient’s name and e-mail address or phone number.

The person they’re paying will then instantaneously receive an alert that money is being sent their way. ”We are the air traffic controllers, taking the messages from the separate banks and transferring them to consumers,” said Feldman.

For now, the person on the receiving end must belong to one of the three member banks, but they anticipate that other large financial institutions will soon join the venture, and that it will one day be possible to transfer money to anyone.

ClearXchange will charge each financial institution to use the service; each bank can then decide whether its customers need to pay a fee for using it. Currently, customers aren’t charged.

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Bank of America and Wells Fargo are testing the new service for customers in Arizona, and Chase will join the tests soon. Soon after completing the pilot in Arizona, the banks will expand the testing to a second region.

[10]Your bank is profiling you!

In about a year, the banks expect to be ready to roll out the service nationally.

ClearXchange says its system will be more convenient and secure, since it doesn’t require consumers to provide checking account details like routing numbers. It will also allow customers to see just how much money they have in their account before they transfer money to someone else.

While PayPal is an obvious rival, the banks said traditional checks and cash are its biggest competitors. ”People are used to doing it the old-fashioned way, with writing checks or paying cash,” said Mike Kennedy, head of payments strategy at Wells Fargo. ”But there’s a large and growing market for online person-toperson payments, and we think clearXchange is the best thing in the market for it.”

by Aaron Smith and Blake Ellis CNNMoney May 25, 2011 [11]Banks launch clearXchange transfer system to rival PayPal - May. 25, 2011

1. http://money.cnn.com/quote/quote.html?symb=BAC&source=story_quote_link 2. http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2580.html?source=story_f500_link 3. http://money.cnn.com/quote/quote.html?symb=JPM&source=story_quote_link 4. http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2608.html?source=story_f500_link 5. http://money.cnn.com/quote/quote.html?symb=WFC&source=story_quote_link 6. http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2578.html?source=story_f500_link 7. http://money.cnn.com/quote/quote.html?symb=EBAY&source=story_quote_link 8. http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/11070.html?source=story_f500_link 9. http://money.cnn.com/galleries/2011/technology/1105/gallery.Finovate_money_tools/index.html?iid=EL 10. http://money.cnn.com/galleries/2011/pf/1105/gallery.bank_profiling/index.html?iid=EL 11. http://money.cnn.com/2011/05/25/news/companies/banks_paypal_clearxchange/index.htm

Google Wallet app lets you tap to pay with smartphone - USATODAY.com (2011-05-29 20:40)

NEW YORK Ready to pay for everything via your smartphone? Google is the latest tech company banking on it. On Thursday the search giant launched Google Wallet, a mobile app to pay for goods via your smartphone. Google also announced Google Offers, for mobile discounts you can redeem by tapping your phone at participating merchants, or by showing the bar code as you check out.

Google is partnering with Citi, MasterCard, First Data and Sprint and merchants including Subway, Macy’s, Walgreens and American Eagle Outfitters. Google says it is building an open solution to other financial companies and retailers. ”Your phone will be your wallet just tap, pay and save,” says Stephanie Tilenius, vice president of commerce at Google. Adds Osama Bedier, vice president of payments at Google, ”This is just the beginning.” Consumers will be able to store credit cards, loyalty cards, gift cards and mobile offers on their phones.

Google isn’t the only one at it, of course. The Google announcement follows word that Square, a company headed by Twitter co-founder Jack Dorsey, will also pursue mobile contact-less payments. Visa has invested in the start-up. Financial-software publisher Intuit is also going after mobile payments.

For mobile payments to take off, consumer behavior will have to change. But Google points out that while 51

a decade ago 70 % of consumers were reluctant to pay for stuff online, today 70 % access their credit card information over the Internet. Beth McCormick of American Eagle says, ”For our customers, smartphones are a way of life. This is the next frontier of how customers are going to shop.”

At the start, a Google Wallet will give access to a Citi MasterCard. But it will also include a prepaid Google card that can be funded by any of your credit cards. Google also says it is adding multiple layers of security. ”It was a fundamental consideration from Day 1,” Bedier says.

Citi’s Paul Galant, CEO of Global Enterprise Payments, says this is of ”strategic importance” to Citi in its vision to become ”the world’s digital bank.”

Google will begin initial field testing of Google Wallet in New York and San Francisco this summer. To start, Google Wallet will be compatible with Nexus S 4G, available on Sprint. The Wallet app will connect only to MasterCard PayPass terminals at first, of which there are more than 135,000 in stores and restaurants.

by Edward C. Baig USA Today May 26, 2011 [1]Google Wallet app lets you tap to pay with smartphone - USATODAY.com

1. http://www.usatoday.com/tech/news/2011-05-26-google-payments_n.htm

Google Wallet replaces cash and credit cards for Android users; PayPal sues | syracuse.com (2011-05-29 20:46)

AP Photo/Mary AltafferGoogle Vice President of Payments (and former PayPal executive) Osama Bedier demonstrates how Google Wallet will work during a news conference, Thursday, May 26, 2011, in New York. Google wants the smartphone to be the wallet of the future, a container for digital credit cards, coupons, receipts and loyalty cards that can be ”tapped” to terminals in stores.

Goodbye, cash. Goodbye, credit cards. Hello, Google Wallet.

Google launched its new mobile payment service, called [1]Google Wallet, in New York on Thursday. Demonstrating on an Android smartphone, users can tap credit card icons on their phone and hover it in front of an 52

NFC (near-field communication) device in stores and restaurants. Basically, instead of swiping a credit card, they could just wave their phones at check-out and the amounts would be deducted from their accounts.

Google announced San Francisco and New York would be the first cities to test their product, working in cooperation with MasterCard and Citibank. Consumers across the country will get to try it out as early as this summer.

According to the [2]Associated Press, Google plans to make money by selling coupons and advertising that go along with the service. The company predicts it’ll be the strongest form of advertising yet, appearing at the exact moment when shoppers are about to make purchases and might be swayed by discounts and competitor prices.

[3]Mashable reports that iPhone and Windows Phone 7 devices are not yet compatible with Google Wallet, but they do plan to ”work with all platforms especially if they build NFC into their hardware.” However, the company couldn’t provide any details or numbers, but did name retailers who have signed up, including Macy’s, American Eagle and Subway.

Shortly after Google announced its new service, PayPal filed a lawsuit against the search engine giant, including two former PayPal executives who are now in charge of mobile payments at Google. The 28-page complaint alleges ”misappropriation of trade secrets” and ”breach of fiduciary duty.”

[4]TechCrunch reports Google was in negotiations for two years to have the eBay-owned payment company manage the new mobile service, but instead hired PayPal’s Osama Bedier – the same executive negotiating with Google. The lawsuit claims Bedier may have used knowledge of PayPal’s own plans to launch mobile payments independently for Google’s gain. Bedier had been with PayPal for nine years.

Meanwhile, Visa is working on its own pay-by-phone system with several large banks, including Bank of America and Wells Fargo. [5]CNBC reports Visa’s own virtual wallet will be commercially available later this year.

What do you think of Google Wallet? Could you see yourself replacing credit cards with smartphone payments?

[EMBED] by Geoff Herbert Syracruse.com May 27, 2011 [6]Google Wallet replaces cash and credit cards for Android users; PayPal sues | syracuse.com

1. http://www.google.com/wallet/ 2.

http://www.syracuse.com/newsflash/index.ssf/story/google-unveils-smartphone-pay-service-paypal-sues/

32fe63c19d5a41bf9b2f880c6a13edf1 3. http://mashable.com/2011/05/26/google-mobile-payment-system-liveblog/ 4. http://techcrunch.com/2011/05/26/paypal-lawsuit-google/ 5. http://www.cnbc.com/id/43183004 6. http://www.syracuse.com/news/index.ssf/2011/05/google_wallet_replaces_cash_an.html

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Google stole our trade secrets: PayPal (2011-05-29 20:55)

Google last week unveiled a service to let consumers pay merchants and download coupons with a tap of their mobile phones. Photo: Bloomberg Google’s ambitious plan to supplant credit cards with smartphones has thrust the internet search leader into a legal tussle with online payment pioneer PayPal, which contends Google stole its ideas by hiring away two key executives.

PayPal painted a picture of betrayal and corporate espionage in a lawsuit filed late last week in a California state court, just hours after the [1]unveiling of the ”Google Wallet” payment service in New York.

The 28-page complaint alleges the service evolved from research that eBay’s PayPal had been working on for the past decade.

PayPal fingers two central culprits in the intellectual heist one of its former executives, Osama Bedier, and former eBay executive Stephanie Tilenius.

In its response, Google contends it merely identified talented candidates to run its mobile payments service and then made them offers that proved too tempting to refuse. ”Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, a principle recognised by both California law and public policy,” Google spokesman Aaron Zamost said. ”We respect trade secrets, and will defend ourselves against these claims.”

The civil complaint alleges Google spent more than two years discussing a partnership that would have relied on PayPal to process payments for an application market set up for Google’s mobile phone software, Android.

Google cut off the Android talks earlier this year after it had poached enough PayPal employees to set up its own mobile payments service, according to the suit. The suit doesn’t directly connect the application markets system with the technology behind Google Wallet.

Google recruited Bedier, a PayPal executive for nine years, while the two companies were in talks about their alliance. After initially waffling, Bedier left PayPal to become Google’s vice president of payments four months ago.

Before leaving, Bedier transferred some of PayPal’s secrets to his computer and also uploaded other sensitive information to an internet storage locker called DropBox, the suit alleged. Bedier also began lobbying for Google to hire other PayPal employees working on mobile payments before he took the new job, the suit said.

Google wanted to hire Bedier so badly that Eric Schmidt, then Google’s CEO, and company co-founder Larry Page got involved in the recruitment last fall, according to the suit. Page replaced Schmidt as Google’s CEO last month.

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Tilenius, now Google’s vice president of commerce, began the wooing of Bedier with a Facebook message on July 15, 2010. As part of an agreement when she left eBay in October 2009, Tilenius had agreed not to recruit eBay employees until March of this year, the suit said.

Google, Tilenius and Bedier are all named as defendants in the suit filed in Santa Clara County. It seeks to a court order protecting PayPal’s trade secrets, punitive damages and royalties from any revenue generated

by Google Wallet.

It’s not unusual for a company to go to court when a rival hires away a key executive. Google also was sued six years ago when it hired a top Microsoft executive to oversee its China operations. Before the case was settled, both companies filed documents that revealed colourful details about their rivalry.

Google, which is based in Mountain View, California, also was among six Silicon Valley employers who got into trouble with the US Justice Department for agreeing not recruit each other’s top engineers and other workers with specialised skills. The companies settled the allegations last fall by agreeing not to enter into ”no-solicitation” agreements for five years. Neither eBay nor PayPal were among the employers involved in that settlement. by smh.com.au May 30, 2011 [2]Google stole our trade secrets: PayPal

1. http://www.smh.com.au/digital-life/mobiles/googles-mobile-assault-on-your-wallet-20110527-1f735.html 2. http://www.smh.com.au/technology/technology-news/google-stole-our-trade-secrets-paypal-20110530-1fbea.html

Hackers appear to set sights on bigger targets (2011-05-30 10:20) NEW YORK - This cyberattack didn’t go after people playing war games on their PlayStations. It targeted a company that helps the U.S. military do the real thing.

Lockheed Martin said it was the recent target of a ”significant and tenacious” hack, although the defense contractor and the Department of Homeland Security insist the attack was thwarted before any critical data was stolen.

The effort highlighted the fact that some hackers, including many working for foreign governments, set their sights on information far more devastating than credit-card numbers.

Information-security experts said a rash of cyberattacks this year - including a massive security breach at Sony Corp. last month that affected millions of PlayStation users - has emboldened hackers and made them more willing to pursue sensitive information. ”2011 has really lit up the boards in terms of data breaches,” said Josh Shaul, chief technology officer at Application Security, a New York-based company that is one of the largest database-security-software makers. ”The list of targets just grows and grows.”

Lockheed Martin Corp. said in a statement Saturday that it detected the May 21 attack ”almost immediately” and took countermeasures. ”Our systems remain secure; no customer, program or employee personal data has been compromised,” the Bethesda, Md.-based company said. Neither Lockheed Martin nor federal agencies would reveal specifics of the attack or its origins. Company spokeswoman Jennifer Whitlow declined to comment further on the case Sunday.

This isn’t the first time Lockheed Martin has been targeted. Nearly four years ago, officials revealed that hackers had breached Lockheed’s Joint Strike Fighter program.

Officials said no classified information about the military program was compromised, but heightened protections were added.

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Analysts said the latest attack would likely spur rival defense contractors like Northrop Grumman Corp., Raytheon Co., General Dynamics Corp. and Boeing Co. to take additional steps to safeguard their systems. ”I guarantee you every major defense contractor is on double alert this weekend, watching what’s going on and making sure they’re not the next to fall victim,” Shaul said.

Boeing declined to comment on the company’s network security measures. Northrop Grumman spokesman Randy Belote said in an e-mailed statement, ”We do not comment on whether or not Northrop Grumman is or has been a target for cyber intrusions,” adding that the company ”continuously monitors and proactively strengthens the security of our networks.”

Over the past several years, the U.S. government has become more aggressive in its efforts to tackle cybercrime, developing strategies to beef up government computer systems, expand cooperation with other countries and improve coordination with the private sector.

President Barack Obama declared cybersecurity a top priority shortly after taking office in 2009, setting off several government-wide reviews to develop strategies to better secure government, business and public online activity.

The Pentagon last May set up a new Cyber Command, based alongside the National Security Agency at Fort Meade, Md., in recognition of the expanding threat against the Defense Department and the need to better coordinate the nation’s offensive and defensive cyber operations.

The Department of Homeland Security is also slowly employing an automated system - known as Einstein 2 and Einstein 3 - to protect government agencies’ computer systems.

Still, the attacks have continued. William J. Lynn III, the deputy Defense secretary, said in January that more than 100 foreign intelligence agencies have tried to breach U.S. defense computer networks, largely to steal military plans and weapons-systems designs.

China is often pointed to as a source of cyberattacks because a large amount of malware, or malicious software, originates from there. The government denies it is involved but experts say the high skill level of some attacks suggests the Chinese military, a leader in cyberwarfare research, or other agencies might be stealing technology and trade secrets to help state companies.

Meanwhile, attacks against corporations have been growing this year. In March, RSA, the security division of data storage company EMC, acknowledged that its computer network was hacked.

The implications are serious because RSA’s technology underpins the security of some of the world’s most closely guarded data.

RSA makes small security devices that supply constantly changing numbers that are used as secondary passwords for accessing corporate networks and e-mail.

by Chip Cutter and Lolita C. Baldor Associated Press May. 30, 2011 12:00 AM [1]Hackers appear to set sights on bigger targets

1. http://www.azcentral.com/arizonarepublic/news/articles/2011/05/30/20110530Cyber0530.html

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Tupac’s alive, hackers post on PBS site (2011-05-31 16:17)

A hacker group displeased about a recent PBS documentary on WikiLeaks attacked the broadcaster’s website Sunday night, posting hundreds of stolen passwords as well as fake news stories.

Among the phony news items placed on PBS.org was a story about deceased rappers Tupac Shakur and Biggie Smalls being alive and well in New Zealand. The attacks continued through Monday afternoon as the network struggled to regain control of its site.

PBS said Monday that it was working to close the remaining security holes. A spokesperson said the compromised passwords were from its internal communications sites and that no personal information about the site’s readers had been taken.

A group calling itself LulzSec - a combination of ”security” and the Internet argot for laughs had at another’s expense - claimed responsibility in an online message. ”Greetings, Internets. We just finished watching WikiSecrets and were less than impressed,” the attackers wrote. ”We decided to sail our Lulz Boat over to the PBS servers for further ... perusing.”

First aired May 24, the one-hour ”Frontline” documentary focused on Bradley Manning, a former low-level U.S. Army intelligence analyst who has been charged with unlawfully transmitting tens of thousands of diplomatic cables to WikiLeaks.

The group and its founder, Julian Assange, publicly criticized the documentary even before it aired, saying ”the program is hostile and misrepresents WikiLeaks’ views” and that it tries to ”build an espionage case” against Assange and Manning.

WikiLeaks advocates leaking sensitive information as a means of exposing secretive government and corporate processes. But the group has come under fire by the Justice Department, which announced last year that it was conducting a criminal investigation into whether WikiLeaks violated laws about the disclosure of confidential national security information.

Manning is being held in solitary confinement. According to his attorney, he is denied sheets, forbidden to exercise in his cell and not allowed to sleep between 5 a.m. and 8 p.m.

The show presents a friend of Manning calling him ”very depressed.”

The PBS attackers posted a prominent message on the site that read, ”Free Bradley Manning!”

by David Sarno Los Angeles Times May. 31, 2011 12:00 AM [1]Tupac’s alive, hackers post on PBS site

1. http://www.azcentral.com/arizonarepublic/news/articles/2011/05/31/20110531pbs-hacking0531.html

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BlogBook v0.4, EX 2Îľ & GNU/Linux. http://www.blogbooker.com LAT

Edited: June 12, 2011