History > 2012 > USA > Internet (I)

Rutgers Webcam-Spying Defendant

Is Sentenced to 30-Day Jail Term

May 21, 2012
The New York Times
By KATE ZERNIKE

NEW BRUNSWICK, N.J. — A judge here sentenced Dharun Ravi to 30 days in jail on Monday for using a webcam to spy on his roommate having sex with a man, a punishment that angered prosecutors and did little to quiet the debate over using laws against hate crimes to fight antigay bias.

His roommate, Tyler Clementi, killed himself in September 2010, two days after discovering that Mr. Ravi had spied on him in their room at Rutgers University, galvanizing national concern about suicide among gay teenagers.

Mr. Ravi had faced up to 10 years in prison after a jury convicted him of all 15 counts against him, which included bias intimidation, invasion of privacy and tampering with a witness and evidence.

Prosecutors vowed to appeal, and the sentence surprised even many who had called for leniency, as it came after an extended scolding by Judge Glenn Berman in Superior Court in Middlesex County.

“I heard this jury say guilty 288 times — 24 questions, 12 jurors, that’s the multiplication,” the judge told Mr. Ravi, recalling the questionnaire jurors filled out in arriving at the verdict. “And I haven’t heard you apologize once.”

“I do not believe he hated Tyler Clementi,” the judge told a courtroom packed on one side with supporters of Mr. Ravi and on the other with those of the Clementi family. “I do believe he acted out of colossal insensitivity.”

Prosecutors and Mr. Clementi’s family, who had addressed reporters with relief bordering on buoyancy following the verdict two months ago, canceled a news conference planned for after the sentencing. Mr. Ravi’s family collapsed into an embrace with his lawyers. Just moments earlier, his mother, Sabitha Ravi, had sobbed while imploring the judge to spare her son prison time.

“The media misconstrued the facts to the public and misconceptions were formed,” she said, telling how she watched helplessly as her son sank into despair after he was charged and dropped out of Rutgers, barely eating or leaving the house. “All I could do was hug him and cry.”

At her tears, Mr. Ravi himself broke down crying, the first time since the beginning of the trial that he had publicly shown more than a glimpse of emotion.

Mr. Ravi, 20, was not charged with causing Mr. Clementi’s death, but the suicide hung heavily over the trial, and over the sentencing on Monday. Mr. Clementi’s mother, father and brother spoke before the judge delivered his decision, breaking down occasionally as they recalled his accomplishment and his promise, and the pain of losing him and of reliving the agony of his final days as they endured three weeks of courtroom testimony.

“I cannot imagine the level of rejection, isolation and disdain he must have felt from his peers,” Tyler’s brother James Clementi said. “Dharun never bothered to care about the harm he was doing to my brother’s heart and mind. My family has never heard an apology, an acknowledgment of any wrongdoing.”

His mother, Jane Clementi, also criticized students who knew about the spying from Mr. Ravi’s Twitter feeds. “How could they all go along with such meanness?” she said. “Why didn’t any one of them speak up and try to stop it?”

Judge Berman said he wanted to impose a sentence that was “constructive” and would provide a measure of closure — “though I don’t know how the Clementis will ever get closure,” he said. He said he imposed the jail time for witness and evidence tampering and for lying to the police. But for the bias intimidation convictions, he gave Mr. Ravi three years’ probation.

The judge did not explicitly say why he deviated so far from the maximum sentence. But he said he believed the State Legislature had intended prison time to be attached to crimes of violence, and there had been none.

Mr. Ravi’s lead lawyer, Steven Altman, had earlier read from a presentencing memo by a corrections officer who had interviewed Mr. Ravi and recommended against incarceration.

Mr. Ravi, who came to this country from India as a child, remains a felon and could face deportation. But the judge said he would recommend against that.

Gillian M. Christensen, a spokeswoman for Immigration and Customs Enforcement, said the agency was “in the process of reviewing documents relating to the conviction and sentencing” of Mr. Ravi, but would not comment further.

Some immigration lawyers pointed on Monday to a clause declaring that a legal resident, or green card holder, like Mr. Ravi can be deported if convicted of two or more crimes involving “moral turpitude,” as long as neither crime arose out of a single scheme.

Thomas E. Moseley, an immigration lawyer based in Newark, said that if the immigration authorities “wanted to be really aggressive,” they might argue that the tampering crime was separate from the bias crime.

Judge Berman also sentenced Mr. Ravi to 300 hours of community service, counseling about cyberbullying and what he called “alternate lifestyles,” and approximately $11,000 in fees. Most of the money is to be used to help victims of bias crimes.

Mr. Clementi, an 18-year-old who had recently come out to his parents, and Mr. Ravi were three weeks into their freshman year at Rutgers when Mr. Clementi asked if he could have the room for the evening so he could be alone with a man, whom he had met on a Web site for gay men.

In court, prosecutors presented a long trail of electronic evidence to show how Mr. Ravi had set up a webcam to spy on the men, then gone into a friend’s room and watched. He caught only a glimpse of Mr. Clementi and his visitor in an embrace, then sent out Twitter messages announcing that he had seen his roommate “making out with a dude.” He set up the camera again two days later and urged others to watch. But by then, Mr. Clementi had seen the Twitter posts and turned off the webcam.

Mr. Clementi, an accomplished violinist from Ridgewood, N.J., checked Mr. Ravi’s Twitter feed 38 times and filed a request for a room change — and then jumped to his death from the George Washington Bridge. In court on Monday, his mother said she feared Mr. Ravi’s Twitter posts were the last thing her son saw before he jumped.

Many gay rights advocates had hailed the jury’s verdict as a bold strike against bias, a message that bullying of gay men and lesbians should not be dismissed as a mere prank.

But other prominent gay commentators argued that while what Mr. Ravi did was repugnant, it was not the kind of sustained or aggressive behavior that constitutes bullying.

The sentence similarly divided them.

Steven Goldstein, the chairman of Garden State Equality, a New Jersey gay rights group that pushed for the state to pass its strict antibullying statutes after Mr. Clementi’s death, said the sentence was lighter than what many shoplifters received.

“We have opposed throwing the book at Dharun Ravi,” Mr. Goldstein said in a statement. “But we have similarly rejected the other extreme, that Ravi should have gotten no jail time at all, and today’s sentencing is closer to that extreme than the other.”

William Dobbs, who had attended rallies supporting Mr. Ravi, said the judge was reflecting the discomfort many gay rights campaigners expressed at the use of hate crimes to prosecute Mr. Ravi.

“The judge had to control a backlash to an out-of-control prosecution,” he said. “The number of charges, the severity and the potential penalties, even the amount of resources devoted to this trial, was out of all proportion to the incident.”

Bruce J. Kaplan, the Middlesex County prosecutor, issued a statement after the sentencing, saying that while his office had not requested the maximum prison term, “it was expected that his conviction on multiple offenses of invading the privacy of two victims on two separate occasions, four counts of bias intimidation against Tyler Clementi, and the cover-up of those crimes would warrant more than a 30-day jail term.”

Still, even some jurors continued to struggle over the appropriate sentence. One, Susan Matiejunas, said she had watched the proceedings on television all morning and was surprised.

“Thirty days is a slap on the wrist,” she said. “Six months to a year would have been more suitable, since we convicted him on so many counts.”

Ms. Matiejunas telephoned later to say she had reconsidered.

“The kid has spent two years in purgatory just waiting for all of this to end,” she said. “I think probably 30 days really is quite enough on top of all that.”

Nate Schweber contributed reporting from New Brunswick, and Hannah Miet and Kirk Semple from New York.

    Rutgers Webcam-Spying Defendant Is Sentenced to 30-Day Jail Term, NYT, 21.5.2012,
    http://www.nytimes.com/2012/05/22/nyregion/rutgers-spying-defendant-sentenced-to-30-days-in-jail.html

From a Facebook Founder

Comes a Way to Streamline Work Flow

May 20, 2012
The New York Times
By QUENTIN HARDY

SAN FRANCISCO — Facebook’s success has spawned a multimillion-dollar boom in social networking. There are networks for photo-sharers, for children and for workers inside companies. Yammer and Jive, for instance, promise to energize employees and increase their productivity by enabling fast information sharing.

Dustin Moskovitz thinks this is a bad idea that won’t fly. “The first time I looked at Yammer, I thought I was on Facebook,” he said. “Work is not a social network, with serendipitous communications and photo collections. Work is about managing tasks, and responding to things quickly.”

Mr. Moskovitz does know a little bit about running the operations of a fast-growing company. He helped found Facebook along with Mark Zuckerberg, Eduardo Saverin and Chris Hughes while at Harvard in 2004. His job was to make sure the computers straining to run Facebook’s expanding network never went down.

After leaving Facebook in 2008 with enough equity to make him one of the world’s youngest billionaires, Mr. Moskovitz, now 27, works on his own version of company management software for the networked age. He calls it Asana.

Asana is task-based software, a shared to-do list for the company. Work is assigned and completed by a potentially unending set of teams created on the fly. Asana is a Sanskrit word meaning “easeful posture.” Yoga practitioners think of it in terms of complex poses done effortlessly. “You should read a lot into the name,” Mr. Moskovitz said.

Tasks can be named and assigned across the company, then shut down or subdivided as the work progresses. People can rank, or have others rank, which of their jobs need attention soonest. If a company wants, anyone can look in on anyone else’s work, offering help and criticism. “We think of e-mail, in-person meetings, and whiteboards as our competition,” said Justin Rosenstein, Mr. Moskovitz’s co-founder at Asana.

Like Mr. Moskovitz, Mr. Rosenstein came from Facebook, though he stopped first at Google where he built an early system for engineers to organize their work. At Facebook, he helped invent the “like” button and ran Facebook’s Pages project, which is a way for brands and celebrities to build networks. He was frustrated, he said, building “an enormously ambitious project, and losing a lot of time around coordination.”

Mr. Moskovitz, who was used to working one on one, was by then managing 200 engineers. His solution was something called “Tasks,” which is similar to what became Asana, but it was mainly for engineers. Eventually the two men decided that helping whole companies get things done might be something important that they were good at doing, and they left Facebook to start Asana.

Mr. Moskovitz is uncomfortable with his outsize wealth. It remains a complex legacy of the Facebook years, he says. What he finds far more interesting to talk about is the ambition derived from having built something so big. “You learn what an enterprise is capable of. Everything else measures against that,” he said. “One of the purposes of life, and selfishly what makes people happy, is building things that are impactful.”

Mr. Moskovitz left Facebook on good terms. He socializes with Mr. Zuckerberg, who still gives Mr. Moskovitz credit for building much of Facebook.

Asana was released and tested on only a few companies in February 2011, then more broadly last November, with several thousand users. The company has not revealed the size of its user base, but said it had been growing rapidly.

Asana will compete with corporate networking products from fellow start-ups like Jive Software and Yammer, as well as the offerings from big companies, like Chatter, which is owned by Salesforce.com, and Socialcast, owned by VMWare. These corporate social networks are now used by millions of employees.

The privately held Asana has a small fraction of that. Early adopters of Asana include Foursquare, a location-based social network, and The Sacramento Bee, where it is used in the online news department. “Having all the jobs you have to do in one place definitely speeds up the amount we work, though,” said Sean McMahon, director of digital media at The Bee. He still likes to oversee his employees, though he can do it with a lighter hand than in the past.

Managers will probably have to learn new tasks when they use corporate social software. “Businesses are in the midst of a retooling because of cloud computing, social media, mobility and lots of data,” said Tony Zingale, chief executive of Jive Software, the largest of the corporate social networks. “Groups are starting to make decisions, and information to them has to be filtered and personalized.”

Mr. Rosenstein, Asana’s co-founder, says people will have to learn to work independently. “Each company will have to develop its own conventions,” he said. “I spend a lot of time developing people, setting a vision, and explaining why we do what we do.” For the faint of heart, Asana does offer tools for centralized management.

For the bold, there are outcomes like Asana itself, where everyone can name and assign tasks to anyone else, or kick them back to the originator if they do not like what they were assigned.

Both Mr. Moskovitz and Mr. Rothstein say their job titles simply are “Asana,” as are the titles for their 22 colleagues. Pay, however, still varies widely, depending on qualifications and how early someone joined the company. Mr. Moskovitz pays himself $33,280 a year, which his lawyers have advised him is legally less risky for the company than a salary of $1 a year.

The title sharing is a pragmatic attempt at company building. “It wasn’t uncommon for people to call themselves Googlers or Facebookers, so we just took it further,” Mr. Moskovitz said. “We brought in people who could all be managers elsewhere. If one person was named the manager, the rest would leave.”

For a company full of young, successful people that is run by a billionaire, Asana is a remarkably hard-working and down-to-earth place — all the way down. It is on the ground floor of a building that looks out on a parking lot of the Society for the Prevention of Cruelty to Animals.

Instead of the fancy pool tables found in Google or the open bars and expensive murals at Facebook, on the floor is a single game of the 1960s hit Twister — a social game, and one particularly suited to a young and flexible work force.

    From a Facebook Founder Comes a Way to Streamline Work Flow, NYT, 20.5.2012,
    http://www.nytimes.com/2012/05/21/technology/from-a-facebook-founder-a-social-network-for-the-office.html

Facebook Gold Rush: Fanfare vs. Realities

May 19, 2012
The New York Times
By GRETCHEN MORGENSON

IT’S an old line on Wall Street: If you can get your hands on a hot new stock, you probably don’t want it.

This bit of Street wisdom came to mind last week, as Facebook went public amid so much fanfare.

The stock eked out a 23-cent gain on its Day 1, to $38.23. This suggests that many professional money managers viewed all the hype as just that. Whatever the long-term prospects of this company — an issue over which reasonable people reasonably disagree — the idea that small-time investors might get rich fast struck the pros as absurd.

It is true that initial public offerings have increasingly become a game for early investors and their Wall Street enablers. Since the 1980s, average first-day gains on new stock issues have risen steadily. According to one 2006 study, the average first-day return on I.P.O.’s in the 1980s was 7 percent. By the mid-1990s, it was 15 percent. In the 1999-2000 dot-com boom, it was 65 percent.

We all know how that last one turned out.

It’s no coincidence that as those averages were rising, individual investors were becoming more enamored with the stock market. The great democratization of the equity market, which began in the 1980s, lured small investors into the game.

A lot of these people got burned. Academics at the Warrington College of Business Administration at the University of Florida recently compiled a list of about 250 companies that doubled — at least — in price on their first trading day. Many quickly fell back to earth.

Going back to 1975, the list provides some of the greatest hits in I.P.O. land. The top 10 first-day gainers all went public in the Internet boom. They included VA Linux, which rose almost 700 percent, to a market capitalization of more than $1 billion, and The Globe.com, which produced a gain of 606 percent on its first day as a public company. Foundry Networks and WebMethods soared more than 500 percent.

Some of the companies on the list have disappeared or have been acquired. Others are still around, to lesser and greater degrees. TheGlobe.com trades at less than a penny a share. VA Linux is now called Geeknet and, as of Friday, had a market value of $94 million.

Why did Facebook get a relatively slow start out of the trading gate? One possibility is that the investment bankers who priced the stock considered the history of private trading in the shares before the offering. Facebook was unusual in this way, Laszlo Birinyi of Birinyi Associates pointed out last week.

“There was trading before the I.P.O., so many investors have some feel, some idea of pricing,” he noted. Most offerings are priced based upon what the company and its bankers guess the stock will fetch.

Indications are that Facebook was bought primarily by individual investors, not institutions. Indeed, institutions that had invested early were big sellers in the I.P.O. To many market veterans, this showed that the smart money was getting out while the getting was good.

With investors still believing the advice of Peter Lynch, the former Fidelity fund manager who told individuals to buy stocks of companies they knew as consumers, it is easy to see why Facebook’s offering resonated with the public. But now comes the hard part: operating as a company that returns its investors’ favors with actual earnings.

    Facebook Gold Rush: Fanfare vs. Realities, NYT, 19.5.2012,
    http://www.nytimes.com/2012/05/20/business/in-facebook-stock-rush-fanfare-vs-realities.html

Facebook’s Prospects May Rest on Trove of Data

May 14, 2012
The New York Times
By SOMINI SENGUPTA

SAN FRANCISCO — Mark Zuckerberg, Facebook’s chief, has managed to amass more information about more people than anyone else in history.

Now what?

As Facebook turns to Wall Street in the biggest public offering ever by an Internet company, it faces a new, unenviable test: how to keep growing and enriching its hungry new shareholders.

The answer lies in what Facebook will be able to do — and how quickly — with its crown jewel: its status as an online directory for a good chunk of the human race, with the names, photos, tastes and desires of nearly a billion people.

Facebook’s shares are expected to begin trading as early as this week. Already, lots of investors are scrambling to buy those shares, with giddy hopes that it will become a big moneymaker like Google. Because of that high demand, Facebook is expected to increase its offering price from its initial range, giving the company a valuation possibly as high as $104 billion.

In the eight years since it sprang out of a Harvard dorm room, Facebook has signed up users at breakneck speed, kept them glued to the site for longer stretches of time and turned a profit by using their personal information to customize the ads they see.

Whether it can spin that data into enough gold to justify a valuation of as much as $104 billion remains unclear.

“We know Facebook has an awful lot of data, but what they have not worked out yet is the most effective means of using that data for advertising,” said Catherine Tucker, a professor of marketing at the Sloan School of Management at the Massachusetts Institute of Technology. “They are going to have to experiment a lot more.”

Analysts, investors and company executives can rattle off any number of challenges facing the company. As it works to better match ads to people, it has to avoid violating its users’ perceived sense of privacy or inviting regulatory scrutiny. It needs to find other ways to generate revenue, like allowing people to buy more goods and services with Facebook Credits, a kind of virtual currency. Most urgently it has to make money on mobile devices, the window to Facebook for more and more people.

All the while, its ability to innovate with new features and approaches — to “break things,” in the words of Mr. Zuckerberg — may be markedly constrained once it has investors to answer to.

“They are going to have to think about whether they can continue with the motto ‘Done is better than perfect,’ ” said Susan Etlinger, an industry analyst at the Altimeter Group. “When you’re operating as a public company, life is very different. We haven’t seen that play out yet. It’s going to take a few quarters to figure out what a public Facebook is going to look like.”

Skeptics point out that the company’s revenue growth showed signs of slowing in the first quarter of 2012. And a Bloomberg survey of 1,253 investors, analysts and traders found that a substantial majority were dubious about the eye-popping valuation Facebook was seeking. “It’s a risky asset. No doubt about that,” said Brian Wieser, of Pivotal Research Group. “Google was less risky.” No matter. Mr. Wieser says he thinks that Facebook is worth $83 billion and that its revenue will grow by at least 30 percent for the next five years.

The comparisons to Google are inevitable. When that company went public in 2004, there were so many doubters that the company lowered its offering price to $85 a share. It closed at just over $100 on the first day of trading, and now sells for more than $600. Facebook is farther along than Google was in terms of revenue, having brought in nearly $4 billion last year, or $5.11 a user, compared with Google’s $2 billion in 2003.

One Facebook investor, who spoke on the condition of anonymity because of market regulations as the offering draws near, noted that when Google went public it already had a clear business strategy. By contrast, he described Facebook this way: “They have built an incredibly valuable asset — as opposed to a business they have executed well.”

The most pressing issue for Facebook executives may be the mobile challenge. Already, over half of Facebook’s 901 million users access the site through mobile devices. In regulatory filings, the company says mobile use is growing fastest in some of Facebook’s largest markets, including the United States, India and Brazil. Facebook goes on to acknowledge that it makes little to no money on mobile and that “our ability to do so successfully is unproven.”

There is not much space on mobile screens to show advertisements. And Google and Apple, two of Facebook’s biggest rivals, control the basic software on most smartphones, which could make it harder for the company to make inroads there. Facebook’s response to this challenge so far has been to aggressively acquire companies focused on mobile, including Instagram, for which it paid $1 billion in April. But it warned in a revision to its offering documents last week that the mobile shift meant it was adding users faster than it was increasing the number of ads it displayed.

What Facebook already has — more than any other digital company — is a spectacularly rich vault of information about its users, who cannot seem to stay away from the site. Americans, on average, now spend 20 percent of their online time on Facebook alone, thanks to the ever-growing menu of activities the company has introduced, from playing games to sampling music to posting pictures of baby showers and drunken escapades. Some 300 million photos are uploaded to the site daily.

How Facebook exploits its users’ information — and how those users react — is the next reckoning. David Eastman, worldwide digital director for the advertising agency JWT, said Facebook would need to give marketers more data about what kinds of users click on what kinds of advertising, and about their travels on the Internet before and after they click on an ad. Most brands want to have a presence on Facebook, he said, but they do not quite understand who sees their pitches and whether they lead to greater sales.

“They need to make the data work more,” Mr. Eastman said. “They need to provide deeper data. Right now the value of Facebook advertising is largely unknown.”

While the bulk of Facebook’s revenue comes from North America, it is banking on international growth. The company has expanded its global footprint so rapidly that four out of five Facebook users are now outside the United States. It is the dominant social network in large emerging markets like Brazil and India, though it shows no signs of penetrating China — where it would face not only government censorship but stiff competition from homegrown social networks.

Mr. Zuckerberg, who has studied Mandarin, signaled his ambitions to crack the vast Chinese market as far back as 2010. He suggested that Facebook would first try to advance deeper into markets like Russia and Japan before it took on a country as “complex” as China.

With international growth comes international regulatory headaches. Facebook already faces audits in Europe on whether the company is living up to promises made to consumers about how it uses their data — and now, a stringent new data protection law. In India, it has been sued for spreading offensive content. And in the United States, it faces privacy audits by the Federal Trade Commission for the next 20 years. In its offering documents, Facebook repeatedly warns of legislative and regulatory scrutiny over user privacy, “which may adversely affect our reputation and brand.”

Maintaining brand loyalty is excruciatingly difficult in the Internet business. Across Silicon Valley, investors are plotting the next big thing in social networks. Already, the clock may be ticking for Facebook.

“There is no consumer-facing Internet brand or site that ever keeps consumers’ attention for more than 10 years,” said Tim Chang, a managing director at Mayfield Fund. “It is not hard to imagine that in 10 years, people are going to be off of Facebook even.”

Mr. Zuckerberg has an answer to that. In the video for investors released this month, Mr. Zuckerberg hinted at the ambitions he had for the company. Facebook, in his vision, will hook itself into the rest of the Web, making itself indispensable. Already Facebook serves as a de facto Internet passport, allowing users to log in with their Facebook identities and explore millions of other Web sites and applications.

“I think that we’re going to reach this point where almost every app that you use is going to be integrated with Facebook in some way,” Mr. Zuckerberg says in the video. “We make decisions at Facebook not optimizing for what is going to happen in the next year, but what’s going to set us up for this world where every product experience you have is social, and that’s all powered by Facebook.”

    Facebook’s Prospects May Rest on Trove of Data, NYT, 14.5.2012,
    http://www.nytimes.com/2012/05/15/technology/facebook-needs-to-turn-data-trove-into-investor-gold.html

Data Harvesting at Google Not a Rogue Act, Report Finds

April 28, 2012
The New York Times
By DAVID STREITFELD

SAN FRANCISCO — Google’s harvesting of e-mails, passwords and other sensitive personal information from unsuspecting households in the United States and around the world was neither a mistake nor the work of a rogue engineer, as the company long maintained, but a program that supervisors knew about, according to new details from the full text of a regulatory report.

The report, prepared by the Federal Communications Commission after a 17-month investigation of Google’s Street View project, was released, heavily redacted, two weeks ago. Although it found that Google had not violated any laws, the agency said Google had obstructed the inquiry and fined the company $25,000.

On Saturday, Google released a version of the report with only employees’ names redacted.

The full version draws a portrait of a company where an engineer can easily embark on a project to gather personal e-mails and Web searches of potentially hundreds of millions of people as part of his or her unscheduled work time, and where privacy concerns are shrugged off.

The so-called payload data was secretly collected between 2007 and 2010 as part of Street View, a project to photograph streetscapes over much of the civilized world. When the program was being designed, the report says, it included the following “to do” item: “Discuss privacy considerations with Product Counsel.”

“That never occurred,” the report says.

Google says the data collection was legal. But when regulators asked to see what had been collected, Google refused, the report says, saying it might break privacy and wiretapping laws if it shared the material.

A Google spokeswoman said Saturday that the company had much stricter privacy controls than it used to, in part because of the Street View controversy. She expressed the hope that with the release of the full report, “we can now put this matter behind us.”

Ever since information about the secret data collection first began to emerge two years ago, Google has portrayed it as the mistakes of an unauthorized engineer operating on his own and stressed that the data was never used in any Google product.

The report, quoting the engineer’s original proposal, gives a somewhat different impression. The data, the engineer wrote, would “be analyzed offline for use in other initiatives.” Google says this was never done.

The report, which was first published in its unredacted form by The Los Angeles Times, also states that the engineer, who began the project as part of his “20 percent” time that Google gives employees to do work on their own initiative, “specifically told two engineers working on the project, including a senior manager, about collecting payload data.”

As early as 2007, the report says, Street View engineers had “wide access” to the plan to collect payload data. Five engineers tested the Street View code, a sixth reviewed it line by line, and a seventh also worked on it, the report says.

Privacy advocates said the full report put Google in a bad light.

“Google’s rogue engineer scenario collapses in light of the fact that others were aware of the project and did not object,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “This is what happens in the absence of enforcement and the absence of regulation.”

The Street View program used special cars outfitted with cameras. Google first said it was just photographing streets and did not disclose that it was collecting Internet communications called payload data, transmitted over Wi-Fi networks, until May 2010, when it was confronted by German regulators.

Eventually, it was forced to reveal that the information it had collected could include the full text of e-mails, sites visited and other data.

Even if a user was not working on a computer at the moment the Street View car slowly passed, if the device was on and the network was unencrypted, all sorts of information about what the user had been doing could be scooped up, data experts say.

“So how did this happen? Quite simply, it was a mistake,” a Google executive wrote on a company blog in 2010. “The project leaders did not want, and had no intention of using, payload data.”

But according to the report, the engineer suggested in his proposal that it was entirely intentional: “We are logging user traffic along with sufficient data to precisely triangulate their position at a given time, along with information about what they were doing.”

Attending to paperwork did not seem to be a high priority, however. Managers of the Street View project told F.C.C. investigators that they never read the engineer’s proposal, called a design document. A senior manager of Street View said he “preapproved” the document before it was written.

More than a dozen countries began investigations of Street View in 2010. In the United States, the Justice Department, the Federal Trade Commission, state attorneys general and the F.C.C. looked into the matter.

The engineer at the center of the project cited the Fifth Amendment protection against self-incrimination. Because F.C.C. investigators could not interview him, they said there were still unresolved questions about the case.

    Data Harvesting at Google Not a Rogue Act, Report Finds, NYT, 28.4.2012,
    http://www.nytimes.com/2012/04/29/technology/google-engineer-told-others-of-data-collection-fcc-report-reveals.html

Following the Breadcrumbs on the Data-Sharing Trail

April 28, 2012
The New York Times
By NATASHA SINGER

WOULD you like to donate to the Obama campaign? Sign up for a college course? Or maybe subscribe to Architectural Digest?

If you have ever felt inundated by such solicitations, by e-mail or by snail mail, you may have wondered what you did to deserve it.

I did.

I wondered how all those campaigns, companies and institutions got my number. And how much money data brokers behind the scenes might make by flipping my name and address.

Turns out there’s no easy way for consumers in the United States to track the data dealers who profile our spending, Web browsing and social media habits, the better to sell us stuff. Although the Federal Trade Commission issued a consumer privacy report last month urging companies that collect and share customer information to give people more notification and control over the proliferation of their personal details, the recommendations don’t have the force of binding regulations.

So, without a right to compel vendors to show me where my data goes, I decided to do some profiling of my own.

I subscribed to a half-dozen print magazines last year, signing up for each with a different typo in my name or variation in my address. Then I collected the direct mail that resulted, tracking the solicitations back to the publishers who had shared my erroneous contact information.

Admittedly, it was unscientific. But I figured this little off-line experiment might provide insight into an even more opaque world — online behavioral targeting — where ad networks deliver tailored marketing pitches to people based on their location, search queries, online purchases and the like.

Here are the results:

Natawsha, the name under which I had subscribed to Wired and The New Yorker, got hit up for a donation to Literacy Partners, a tutoring company in Manhattan, and received a bulletin from the New-York Historical Society.

Nafasha, who signed up for Fast Company, received solicitations from Forbes. The mangled address I had submitted to Foreign Policy received a cascade of mail from, among others, the World Monuments Fund, Barron’s and the Kiplinger Letter. And a subscription to The New York Review of Books led to solicitations from the Central Park Conservancy, the New York Public Library and The New York Times — and, on behalf of President Obama’s 2012 campaign, an appeal from Michelle Obama.

“It is revenue-producing for a publisher to collect subscribers’ information and sell it,” said Paul Stephens, the director of policy and advocacy at the Privacy Rights Clearinghouse, a consumer group in San Diego. “It’s just information that is very valuable to advertisers who want to target individuals based on their interests.”

INDEED, the Direct Marketing Association, a trade group, has estimated that spending on direct marketing in the United States reached $163 billion in 2011.

Still, a report earlier this year from the White House, laying out a privacy bill of rights for consumers, implicates the decades-old practice of list-sharing, among others. The report says consumers have a right to expect that companies will collect, use and share information in ways consistent with the context in which people provided it.

In other words, if you subscribe to a magazine, you might reasonably expect to receive offers from magazines owned by the same publishing house, said Nancy J. King, a privacy law expert who is an associate professor at Oregon State University’s College of Business.

“But you probably would not have expected a magazine to share your information with a political campaign” that has inferred your political preferences from your choice of periodicals, Professor King said.

Of course, publishers are hardly the only businesses sharing and selling consumer information. In the United States, with the exception of specific sectors like credit and health care, companies are free to use their customers’ data as they deem appropriate. That means every time a person buys a car or a house, takes a trip or stays in a hotel, signs up for a catalog or shops online or in a mall, his or her name might end up on a list shared with other marketers. That can happen directly, or through middlemen known as list brokers and data brokers.

The ultimate purpose of all this sharing and profiling is to personalize marketing, using analytics to predict the offers most likely to interest consumers based on their past behavior, says Linda A. Woolley, the executive vice president of Washington operations at the Direct Marketing Association.

“Sometimes the analytics are right; sometimes they are wrong,” Ms. Woolley said. “The industry exists to try to perfect those guesses.”

For those who’d rather not receive such offers, she said, the trade group offers a dedicated Web site, dmachoice.org, where people can opt out of getting all kinds of direct mail or specific categories of it, like credit card offers.

But Christopher Olsen, the assistant director of privacy and identity protection in the Federal Trade Commission’s bureau of consumer protection, said companies ought to notify their customers if they plan to share information about them with third parties — rather than simply permitting people to opt out after the fact. Indeed, the agency’s recent report calls on industry to be more transparent with consumers.

“If your name is flying around the ether because you have subscribed to a magazine,” Mr. Olsen said, “you ought to understand who has got that information and whether you have a choice about its onward distribution.”

ALTHOUGH all of the magazines contacted for this article said their subscribers could opt out, some publishers took a more active approach than others to notifying readers of their practices.

Natalie Raabe, a spokeswoman for The Atlantic, for example, said the magazine occasionally allows companies it has screened to contact subscribers about products or services that may be of interest. But the magazine does not share subscriber addresses directly with these companies, she said; it uses a third party to administer the process.

A spokeswoman for Condé Nast, publisher of The New Yorker, said it adhered to industry best practices and offered subscribers multiple ways to opt out.

Diane R. Seltzer, list manager at The New York Review of Books, vets all proposals from companies that want to market to subscribers to ensure the offers are appropriate. Those making the cut are charged a rental fee of $105 per 1,000 names for one-time use, she said. The publication runs an ad in every issue, she added, notifying subscribers of this practice and explaining how to opt out.

“We are very proactive in trying to keep subscribers happy,” she said.

In light of the new federal privacy reports, however, at least one publisher said it might halt, or at least further limit, the selling of its subscriber list.

“I think media companies are going to have to tackle this issue,” said David Rothkopf, the new chief executive of Foreign Policy. Two months into the job, he said, he had hired a new circulation director and intended to review his magazines’ list-sharing policy: “I think there are people out there who don’t want to be part of some giant circulating mailing list.”

    Following the Breadcrumbs on the Data-Sharing Trail, NYT, 28.4.2012,
    http://www.nytimes.com/2012/04/29/business/on-the-data-sharing-trail-try-following-the-breadcrumbs.html

Facebook Offers More Disclosure to Users

April 12, 2012
The New York Times
By KEVIN J. O’BRIEN

Facebook, seeking to address concerns about the personal information it collects on its users, said Thursday that it would provide any user with more about the data it tracks and stores.

In a posting on its privacy blog, Facebook said the expanded archive feature would be introduced gradually to its 845 million monthly active users. It goes beyond the first archive made available in 2010, which has been criticized as incomplete by privacy advocates and regulators in Europe.

The archive Facebook published two years ago gave users a copy of their photos, posts, messages, list of friends and chat conversations. The new version, Facebook said, includes previous user names, friend requests and the Internet protocol addresses of the computers that users have logged in from. More categories of information will be made available in the future, Facebook said.

Online social networks offer free services to users and make money primarily through advertising, which can often be directed more effectively using the information the network has collected on them.

Facebook, which is preparing for an initial public stock offering, most likely in May, has been trying to accommodate government officials in Europe, where privacy laws are more stringent than in the United States.

Facebook’s data collection practices have tested the boundaries of Europe’s privacy laws. The social networking site, based in Menlo Park, Calif., is Europe’s leading online network, according to comScore, a research firm in Reston, Va.

In December, the Irish Data Protection Commission reached an agreement with Facebook, which runs its international businesses from offices in Dublin, to provide more information to its users and amend its data protection practices. “We took up their recommendation to make more data available to Facebook users through this expanded functionality,” the company said in a statement.

Facebook agreed to make those changes by July. In Europe, 40,000 Facebook users have already requested a full copy of the data that the site has compiled on each of them, straining the company’s ability to respond. Under European privacy law, the company must comply with the requests within 40 days.

Max Schrems, the German law student who filed the complaint leading to the agreement with the Irish authorities, criticized Facebook’s latest offer as insufficient.

“We welcome that Facebook users are now getting more access to their data, but Facebook is still not in line with the European Data Protection Law,” said Mr. Schrems, a student at the University of Vienna. “With the changes, Facebook will only offer access to 39 data categories, while it is holding at least 84 such data categories about every user.”

In 2011, Mr. Schrems requested his own data from Facebook and received files with information in 57 categories. The disclosure, Mr. Schrems said, showed that Facebook was keeping information he had previously deleted from the Web site, and was also storing information on his whereabouts, gleaned from his computer’s I.P. address.

Facebook’s data collection practices are being scrutinized in Brussels as European Union policy makers deliberate on changes to the European Data Protection Directive, which was last revised in 1995. The commissioner responsible for the update, Viviane Reding, has cited Facebook’s data collection practices in pushing for a requirement that online businesses delete all information held on individuals at the user’s request.

Ulrich Börger, a privacy lawyer with Latham & Watkins in Hamburg, said he thought it was unlikely that the European Union would enact laws that would significantly restrict the use of customized advertising, which is at the core of the business model for Web sites like Facebook. It is more likely, Mr. Börger said, that lawmakers would require Facebook and other networking sites to revise their consent policies to make them more easy to understand. But it was unlikely that Facebook would be legally prevented from using information from individuals who sign up for the service.

“I don’t see any fundamental change,” Mr. Börger said. “It comes back to the question of consent. They cannot go so far as to prohibit things that people are willing to consent to. That would violate an individual’s freedom to receive services they want to receive.”

    Facebook Offers More Disclosure to Users, 12.4.2012,
    http://www.nytimes.com/2012/04/13/technology/facebook-offers-more-disclosure-to-users.html

A Billion-Dollar Turning Point for Mobile Apps

April 10, 2012
The New York Times
By JENNA WORTHAM

The path for Internet start-ups used to be quite clear: establish a presence on the Web first, then come up with a version of your service for mobile devices.

Now, at a time when the mobile start-up Instagram can command $1 billion in a sale to Facebook, some start-ups are asking: Who needs the Web?

Smartphones are everywhere now, allowing apps like Foursquare and Path to be self-contained social worlds, existing almost entirely on mobile devices. It is a major change from just a few years ago, underscoring how the momentum in the tech world is shifting to mobile from computers.

In that context, the Instagram deal looks like something of a turning point, as even the Web giant Facebook tries to get a better grasp on a market that requires a rethinking of old rules.

“For decades, the center of computing has been the desktop, and software was modeled after the experience of using a typewriter,” said Georg Petschnigg, a former Microsoft employee who is one of the creators of Paper, a new sketchbook app for the iPad. “But technology is now more intimate and pervasive than that. We have it with us all the time, and we have to reimagine innovative new interfaces and experiences around that.”

Venture capitalists are eager to get in on the mobile trend. According to the research firm CB Insights, mobile apps and companies attracted 10 percent of the total investment dollars from American venture capital firms in last year’s fourth quarter, and 12 percent of deals were mobile-related, up from 7 or 8 percent in previous quarters.

Ben Lerer, manager of the venture capital firm Lerer Ventures, said he preferred to back companies that were building services for mobile first and the Web second, because “businesses that are thinking that way are planning for the future.”

Mr. Lerer was one of the early investors in OMGPop, a New York company that was close to shutting down until it had an overnight hit in Draw Something, a twist on Pictionary for the iPhone. Last month, OMGPop was snapped up for $200 million by the game company Zynga, which has been trying to reduce its dependence on Facebook-based games like FarmVille.

Another hit game, Angry Birds from the Finnish company Rovio, started out on the iPhone before migrating to computers and video game consoles — an unusual trajectory in the game world.

Cellphones are also prompting a shift in how people want to share things online, creating a market for apps that make instant sharing easy, said S. Shyam Sundar, a director of the Media Effects Research Lab at Pennsylvania State University.

In other words, many people want to post a photograph of themselves right from a sun-drenched beach in Bali, rather than waiting until they are back home to upload all 50 pictures onto Facebook.

“People are living in the moment and they want to share in the moment,” Professor Sundar said. “Mobile gives you that immediacy and convenience.”

Instagram, a social network focusing on just that kind of instant photo sharing, does have a Web site — but it is essentially there just to encourage people to download the company’s apps. It is one of several social networks that have established themselves entirely on mobile. Another is Foursquare, which lets users share their location with a select few friends and has attracted nearly 15 million members.

“Mobile-first is the direction that many social networks are headed,” said Holger Luedorf, the company’s head of business development. If done right, he said, such services start to feel “baked into” the phone itself.

Dave Morin, who was at Facebook early on and left to create Path, a social network for mobile phones, said he realized that the world was headed for a mobile-centric future in 2009, when the influential analyst Mary Meeker published a report saying that more people would soon connect to the Internet on mobile devices than on personal computers.

Path does not release user numbers, but its app appears to have traction, particularly among people who have become disenchanted with Facebook. “Because you take your smartphone with you everywhere, you can quickly and easily take a photo or video, map your location or jot down a note or a thought,” Mr. Morin said.

Companies that start with a Web site then try to shrink it into an app face a tough challenge. Screen space on mobile devices is at a premium. And to avoid turning off users, designers and developers have to cut back on clutter and streamline their services, avoiding slow load times and stuttering interruptions.

Start-ups that put their resources into mobile from the beginning can skip some of the hassles. “You’re freed from worrying about so many of the things that you have to think about when it comes to Web development,” said Oliver Cameron, one of the founders of Everyme, an app introduced Tuesday that analyzes a user’s contacts and generates miniature social networks around people it thinks belong together.

Then there is the relative ease in finding an audience. Web sites and software packages have trouble standing out in the crowd. But apps have a simple distribution mechanism in app stores, which can immediately bring an app to a customer’s attention. “In February we had close to 900,000 downloads,” said Andreas Schobel, chief executive of Catch, a start-up in San Francisco that makes a note-taking app. “How would we do that on the Web?”

Mobile apps tailored to work for specific devices like the iPhone also run faster than Web sites, Mr. Schobel noted. “When you’re on the phone you need the experience to be instantaneous,” he said. “You just can’t do that yet on the Web.”

Brian X. Chen contributed reporting.

    A Billion-Dollar Turning Point for Mobile Apps, NYT, 10.4.2012,
    http://www.nytimes.com/2012/04/11/technology/instagram-deal-is-billion-dollar-move-toward-cellphone-from-pc.html

Warned of an Attack on the Internet, and Getting Ready

March 30, 2012
The New York Times
By SOMINI SENGUPTA

SAN FRANCISCO — On a quiet Sunday in mid-February, something curious attracted the attention of the behind-the-scenes engineers who scour the Internet for signs of trouble. There, among the ubiquitous boasts posted by the hacking collective Anonymous, was a call to attack some of the network’s most crucial parts.

The message called it Operation Global Blackout, and rallied Anonymous supporters worldwide to attack the Domain Name System, which converts human-friendly domain names like google.com into numeric addresses that are more useful for computers.

It declared when the attack would be carried out: March 31. And it detailed exactly how: by bombarding the Domain Name System with junk traffic in an effort to overwhelm it altogether.

There was no way to know for sure whether this was a pre-April Fool’s Day hoax or a credible threat. After all, this was Anonymous, a decentralized movement with no leaders and no coherent ideology, but a track record of considerable damage. The call to arms would have to be treated as one would treat a bomb threat called in to a high school football game. The engineers would have to prepare.

Those preparations turned into a fast-track, multimillion-dollar global effort to beef up the Domain Name System. They offer a glimpse into the largely unknown forces that keep the Internet running in the face of unpredictable, potentially devastating threats.

Among those leading the effort was Bill Woodcock, whose nonprofit based in San Francisco, Packet Clearing House, defends vital pieces of Internet infrastructure. By his calculation, the Anonymous threat was as good a reason as any to accelerate what might have been done anyway over the next several months: fortify the network, chiefly by expanding the capacity of the root servers that are its main pillar.

“Whether or not Anonymous carries out this particular attack, there are larger attacks that do happen,” Mr. Woodcock said. “A forewarning of this attack allowed everyone to act proactively for a change. We can get out in front of the bigger attacks.”

In an attack, the hackers would in effect point virtual cannons at the name servers and blast them with data in what is called a distributed denial of service attack, or DDoS. The only effective way to mitigate such an attack is to expand capacity — so much so that the system can absorb the extra traffic thrown at it, while still accommodating the normal load.

“DDoS is very much a numbers game,” Mr. Woodcock said. “If the target has more than the sum of the attackers’ capability and normal day-to-day traffic, then it is fine.”

In the last few weeks, in a campaign financed mostly by companies that maintain Internet infrastructure, several huge 40-gigabit routers and hundreds of servers have been shipped across the world and hooked into the network, giving the Domain Name System additional computing power. It was part of what is often called an arms race between attackers and defenders on the Internet.

On Saturday, if an attack takes place, it is likely to be imperceptible, at least initially, to the bulk of the world’s Internet users, though service could slow down in places that have narrow bandwidth to begin with — much of sub-Saharan Africa, for instance. In the improbable event of a huge attack that goes unabated for several days, the ability to connect to Web sites could be impaired.

But if the defenses are effective, the result will be something akin to what happened with the Y2K bug: advance warning, plenty of preparation and then barely a blip on the Internet.

Still, it will be anything but a normal Saturday for the people who run the Domain Name System. They plan to be glued to their monitors, looking out for signs of unusual network traffic, communicating with one other through encrypted, digitally signed e-mails or through a private telephone hot line maintained just for this purpose.

“For us, it’s not going to be another day at the office,” said Paul Vixie, whose nonprofit Internet Systems Consortium in Redwood City, Calif., runs a root server known as the F-root. “We are going to be on alert.”

There are 13 root servers worldwide, run by government institutions, universities and private companies. The operators of several of them declined to talk about the threat, including VeriSign, which runs two root servers. Some insisted that they routinely expand capacity to guard against attacks that come from different quarters all the time.

Mr. Vixie, for his part, warned against what he called “panic engineering” in the face of any particular threat. “We are using the threatened attack,” he said, “to go kick the tires on everything, make sure there’s no loose dangly parts.”

Part of the challenge here is the mercurial and leaderless nature of the Anonymous movement. Just after one so-called Anonymous member called for the attack to protest, among other things, “our irresponsible leaders and the beloved bankers who are starving the world for their own selfish needs out of sheer sadistic fun,” another unnamed member of the movement pushed back. “I don’t think this is a good idea,” this person wrote on an Anonymous-affiliated site. “The collateral damage is not worth it.”

A pragmatist wondered how participants would know when to end the attack, if indeed the Domain Name System was overwhelmed. Another suggested that they attack only “the 10 most used sites.” Yet another reckoned that root servers would be so heavily protected that an Anonymous attack could only disrupt them for “a few minutes.”

Since late February, there has been little to no chatter about Operation Global Blackout on Twitter, which Anonymous often uses to spread the word about its campaigns.

Even so, computer security professionals point out, anyone can act in the name of Anonymous, and Anonymous has certainly swung its wrecking ball around in the last few years: its denial of service attacks have impaired private sites like that of PayPal, and some of its offshoots have penetrated the e-mail communications of global law enforcement agencies.

Dan Kaminsky, a security researcher who pointed out the inherent vulnerabilities of the Domain Name System several years ago, put the probability of an effective attack this way: as unlikely as a shark descending from the sky, jaws open.

Nevertheless, on the Internet, no warning should go unheeded, he said: “It is belt-and-suspenders stuff: Is everything where it should be? You have to be ready for disaster.”

    Warned of an Attack on the Internet, and Getting Ready, NYT, 30.3.2012,
    http://www.nytimes.com/2012/03/31/technology/with-advance-warning-bracing-for-attack-on-internet-by-anonymous.html

A Surge in Learning the Language of the Internet

March 27, 2012
The New York Times
By JENNA WORTHAM

Parlez-vous Python? What about Rails or JavaScript? Foreign languages tend to wax and wane in popularity, but the language du jour is computer code.

The market for night classes and online instruction in programming and Web construction, as well as for iPhone apps that teach, is booming. Those jumping on board say they are preparing for a future in which the Internet is the foundation for entertainment, education and nearly everything else. Knowing how the digital pieces fit together, they say, will be crucial to ensuring that they are not left in the dark ages.

Some in this crowd foster secret hopes of becoming the next Mark Zuckerberg. But most have no plans to quit their day jobs — it is just that those jobs now require being able to customize a blog’s design or care for and feed an online database.

“Inasmuch as you need to know how to read English, you need to have some understanding of the code that builds the Web,” said Sarah Henry, 39, an investment manager who lives in Wayne, Pa. “It is fundamental to the way the world is organized and the way people think about things these days.” Ms. Henry took several classes, including some in HTML, the basic language of the Web, and WordPress, a blogging service, through Girl Develop It, an organization based in New York that she had heard about online that offers lessons aimed at women in a number of cities. She paid around $200 and saw it as an investment in her future.

“I’m not going to sit here and say that I can crank out a site today, but I can look at basic code and understand it,” Ms. Henry said. “I understand how these languages function within the Internet.” Some see money to be made in the programming trend.

After two free computer science classes offered online by Stanford attracted more than 100,000 students, one of the instructors started a company called Udacity to offer similar free lessons. Treehouse, a site that promises to teach Web design, picked up financing from Reid Hoffman, the founder of LinkedIn, and other notable early investors.

General Assembly, which offers workroom space for entrepreneurs in New York, is adding seven classrooms to try to keep up with demand for programming classes, on top of the two classrooms and two seminar rooms it had already. The company recently raised money from the personal investment fund of the Amazon founder Jeff Bezos and DST Global, which backed Facebook.

The sites and services catering to the learn-to-program market number in the dozens and have names like Code Racer, Women Who Code, Rails for Zombies and CoderDojo. But at the center of the recent frenzy in this field is Codecademy, a start-up based in New York that walks site visitors through interactive lessons in various computing and Web languages, like JavaScript, and shows them how to write simple commands.

Since the service was introduced last summer, more than a million people have signed up, and it has raised nearly $3 million in venture financing.

Codecademy got a big break in January when Michael R. Bloomberg, the mayor of New York, made a public New Year’s resolution to use the site to learn how to code. The site is free. Its creators hope to make money in part by connecting newly hatched programmers with recruiters and start-ups.

“People have a genuine desire to understand the world we now live in,” said Zach Sims, one of the founders of Codecademy. “They don’t just want to use the Web; they want to understand how it works.”

The blooming interest in programming is part of a national trend of more people moving toward technical fields. According to the Computing Research Association, the number of students who enrolled in computer science degree programs rose 10 percent in 2010, the latest year for which figures are available.

Peter Harsha, director of government affairs at the association, said the figure had been steadily climbing for the last three years, after a six-year decline in the aftermath of the dot-com bust. Mr. Harsha said that interest in computer science was cyclical but that the current excitement seemed to be more than a blip and was not limited to people who wanted to be engineers.

“To be successful in the modern world, regardless of your occupation, requires a fluency in computers,” he said. “It is more than knowing how to use Word or Excel but how to use a computer to solve problems.”

That is what pushed Rebecca Goldman, 26, a librarian at La Salle University in Philadelphia, to sign up for some courses. She said she had found herself needing basic Web development skills so she could build and maintain a Web site for the special collections department she oversees.

“All librarians now rely on software to do our jobs, whether or not we are programmers,” Ms. Goldman said. “Most libraries don’t have an I.T. staff to set up a server and build you a Web site, so if you want that stuff done, you have to do it yourself.”

The challenge for Codecademy and others catering to the hunger for technical knowledge is making sure people actually learn something, rather than dabble in a few basic lessons or walk away in frustration.

“We know that we’re not going to turn the 99 percent of people interested in learning to code into the 1 percent who are really good at it,” said Mr. Sims of Codecademy. “There’s a big difference between being code-literate and being a good programmer.”

Some who have set their sights on learning to program have found it to be a steep climb. Andrew Hyde, 27, who lives in Boulder, Colo., has worked at start-ups and is now writing a travel book. He said he leaped at the chance to take free coding classes online.

“If you’re working around start-ups and watching programmers work, you’re always a little bit jealous of their abilities,” he said. But despite his enthusiasm, he struggled to translate the simple commands he picked up through Codecademy into real-world development. “It feels like we’re going to be taught how to write the great American novel, but we’re starting out by learning what a noun is,” he said.

Mr. Sims said he was aware of such criticisms and that the company was working to improve the utility of its lessons.

Seasoned programmers say learning how to adjust the layout of a Web page is one thing, but picking up the skills required to develop a sophisticated online service or mobile application is an entirely different challenge. That is the kind of technical education that cannot be acquired by casual use for a few hours at night and on the weekends, they say.

“I don’t think most people learn anything valuable,” said Julie Meloni, who lives in Charlottesville, Va., and has written guides to programming. At best, she said, people will learn “how to parrot back lines of code,” when they really need “knowledge in context to be able to implement commands.”

Even so, Ms. Meloni, who has been teaching in the field for over a decade, said she found the groundswell of interest in programming, long considered too specialized and uncool, to be an encouraging sign.

“I’m thrilled that people are willing to learn code,” she said. “There is value here. This is just the first step.”

This article has been revised to reflect the following correction:

Correction: March 27, 2012

An online summary for this article misspelled the name of the company started by Zach Sims and Ryan Bubinski. It is Codecademy, not Codeacademy. An earlier version also misstated the employer of Rebecca Goldman as Drexel University.

    A Surge in Learning the Language of the Internet, NYT, 27.3.2012,
    http://www.nytimes.com/2012/03/28/technology/for-an-edge-on-the-internet-computer-code-gains-a-following.html

With Video,

Obama Looks to Expand Campaign’s Reach

Through Social Media

March 14, 2012
The New York Times
By JEREMY W. PETERS

When presidential candidates have a message they want voters to hear far and wide, they have typically turned to that old campaign standby: the television ad.

But as President Obama and his advisers prepare to begin their general election push, they are turning first not to a 30-second commercial but a 17-minute online documentary that they hope will be shared and spread online through social networks and e-mail.

When the Tom Hanks-narrated, Hollywood-style documentary, called “The Road We’ve Traveled,” is set to go online Thursday night, it will appear on a new YouTube platform that enables the Obama campaign to turn the passive experience of watching a video into an organizing and fund-raising tool. The technology will allow viewers to post campaign content to their Facebook pages, volunteer and donate all without having to leave Mr. Obama’s dedicated YouTube page.

Eventually campaign strategists hope to use the new software to focus on people in highly specific ways. For example, if someone watches a video about a certain geographic location, like Florida, a list of that person’s Facebook friends in Florida would appear alongside the video with a message from the campaign that suggests recommending the video to them.

The Obama campaign’s efforts underscore the importance that political campaigns now attach to Web video and the role the medium will probably play in the coming election. Once best known in politics as the venue for viral parodies and hastily produced response efforts, online video is vital in the way campaigns communicate with and persuade voters.

“The importance of video is so new for campaigns, even relative to ’08,” said Teddy Goff, the Obama campaign’s digital director. “Now it’s in some ways the primary way our digital operation communicates with supporters. And increasingly it will be the primary way we communicate with undecided voters.”

Television is likely to remain the dominant way campaigns reach voters for the foreseeable future. Experts predict that about 10 percent of the campaigns’ advertising budgets this year will be spent on the Web. But online video offers campaigns a way to connect with people they know are engaged and not fast-forwarding through messages on their DVR players or flipping channels during commercials.

And, perhaps more important, it offers them a way to disseminate their messages into online communities where friends and family members share, discuss and debate. Campaigns believe that helps elevate their messages beyond propaganda.

“This year it’s all about getting your message into those trusted networks because everyone is suspicious about politicians,” said Darrell West, of the Center for Technology Innovation at the Brookings Institution. “It’s hard to be persuasive through a direct advertisement. But if you can get people to share videos, it adds a degree of credibility because a friend is endorsing it. People will take it more seriously.”

“The Road We’ve Traveled” was conceived and produced by the campaign to stand out from standard political video fare. For starters, it was directed by Davis Guggenheim, the Oscar-winning director whose film credits include “Waiting for Superman” and “An Inconvenient Truth.” It features interviews with Obama administration officials past and present, including Vice President Joseph R. Biden Jr. and Rahm Emanuel, the former White House chief of staff. Former President Bill Clinton makes an appearance as well, hailing Mr. Obama’s decision to kill Osama bin Laden as one he hoped he would have had the courage to make as president.

The new YouTube platform that the Obama campaign will use to release the documentary gives anyone visiting the president’s YouTube page a number of options to share the content or pledge support, the kind of one-click approach that campaigns now see as an integral part of their digital strategies.

Mitt Romney’s campaign is using similar technology with its Web videos. Visitors can donate, volunteer and share content, all within Mr. Romney’s YouTube page. The campaign has worked to keep its video offerings dynamic, producing roughly two a week over the course of the campaign.

The Obama campaign has taken a similar one-stop-shopping approach to streamline online donations. Borrowing a technique from online merchants like Amazon and Fresh Direct, repeat donors do not need to resubmit their credit card information to make a pledge. The campaign saves it on file, and all the donor has to do is click.

Where online video offers some of the most potential, strategists say, is in modernizing the traditional aspects of campaigning, like get-out-the-vote efforts and responses to attacks from opponents.

“It’s the ability to get your message out quickly that makes all the difference,” said Zac Moffatt, the Romney campaign’s digital director. “And that’s really where I think YouTube has found a niche in politics.”

Some strategists said what has changed in this election is the ability to turn Web video into something people act on. “One of the biggest challenges with YouTube is giving people a clear action to take after viewing,” said Stephen Muller, the Obama campaign’s video director. “The goal is to bring our engagement tools to our supporters.”

    With Video, Obama Looks to Expand Campaign’s Reach Through Social Media, NYT, 14.3.2012,
    http://www.nytimes.com/2012/03/15/us/politics/with-youtube-video-obama-looks-to-expand-social-media-reach.html

Viral Video, Vicious Warlord

March 14, 2012
The New York Times
By NICHOLAS D. KRISTOF

I’d like to thank the makers of the “Kony 2012” video for goading me to write about Joseph Kony. With about 100 million views, it is now one of the most viral videos of all time.

My starting point is a “bravo” for film-makers for galvanizing young Americans to look up from their iPhones and seek to make a difference for villagers in central Africa who continue to be murdered, raped and mutilated by Kony and his Lord’s Resistance Army. Just in the last two months, the Lord’s Resistance Army has mounted 20 raids in Congo alone.

But nobody fights more wickedly than humanitarians, so there have been a series of attacks on the video. Let me try to address some of the criticisms.

Let Africans resolve their own problems. It’s neocolonialist for Americans to think that they can solve Congolese problems, when they can’t even solve their own. This is just one more example of “white man’s burden” imperialism.

When a warlord continues to kill and torture across a swath of Congo and Central African Republic, that’s not a white man’s burden. It’s a human burden.

To me, it feels repugnant to suggest that compassion should stop at a national boundary or color line. A common humanity binds us all, whatever the color of our skin — or passport.

The issue is complicated, in ways that don’t come through in a misleading video. For example, the video doesn’t make clear that Kony is no longer a threat in Uganda.

The video doesn’t contain errors, but it does simplify things greatly to hold attention. Complexity is, er, complicated: It has been a leading excuse for inaction during atrocities — during the Armenian genocide, during the Holocaust, during Rwanda, during the Bosnian slaughter. Each episode truly was complicated, but, in retrospect, we let nuance paralyze us.

It’s true that Kony’s forces are diminished and no longer a danger in Uganda, but he remains a threat in Congo, Central African Republic and South Sudan. Those are tough neighborhoods — I’ve been held at gunpoint in Central African Republic and chased through the Congo jungle by a warlord whose massacres I interrupted — that rarely get attention and are little understood. Yes, the video glosses over details, but it has left the American public more informed. Last year, Rush Limbaugh defended the Lord’s Resistance Army because it sounded godly.

American kids worrying about Kony accomplish nothing. The video promotes feel-good gestures — wear a bracelet! — that enrich a do-nothing aid organization but have no benefit in the jungles of central Africa.

It’s true that indignation among Americans won’t by itself stop Kony. Yet I’ve learned over the years that public attention can create an environment in which solutions are more likely.

Public outrage over Serbian atrocities in the Balkans eventually led the Clinton administration to protect Kosovo and hammer out the Dayton peace accord. The Sudan civil war killed millions over half-a-century on and off, until public outrage — largely among evangelical Christians — led President George W. Bush to push successfully for a peace agreement in 2005.

I asked Anthony Lake, now the executive director of Unicef who was President Clinton’s national security adviser during the 1994 Rwandan genocide, whether a viral video about Rwanda would have made a difference then. “The answer is yes,” he said. He suggested that this kind of public attention would also have helped save more lives in Darfur and in Congo’s warring east.

In 1999, then-Secretary of State Madeleine Albright paid a brief visit to war-ravaged Sierra Leone and was photographed with a 3-year-old girl whose right arm had been chopped off. The photograph, widely circulated, helped galvanize outside powers to crush the militias. Sierra Leone is now at peace, and that girl is studying in the United States.

I asked Albright, who later led a task force on preventing genocide, what she thinks of the Kony video.

“Shining a light makes a lot of difference,” she said, adding that Kony’s prospects are probably less good now than before the video came out.

The bottom line is: A young man devotes nine years of his life to fight murder, rape and mutilation, he produces a video that goes viral and galvanizes mostly young Americans to show concern for needy villagers abroad — and he’s vilified?

I don’t know if this initiative will make a difference. But if I were a Congolese villager, I would welcome these uncertain efforts over the sneering scorn of do-nothing armchair cynics.

    Viral Video, Vicious Warlord, NYT, 14.3.2012,
    http://www.nytimes.com/2012/03/15/opinion/kristof-viral-video-vicious-warlord.html

New Interest in Hacking as Threat to Security

March 13, 2012
The New York Times
By MICHAEL S. SCHMIDT

WASHINGTON — During the five-month period between October and February, there were 86 reported attacks on computer systems in the United States that control critical infrastructure, factories and databases, according to the Department of Homeland Security, compared with 11 over the same period a year ago.

None of the attacks caused significant damage, but they were part of a spike in hacking attacks on networks and computers of all kinds over the same period. The department recorded more than 50,000 incidents since October, about 10,000 more than in the same period a year earlier, with an incident defined as any intrusion or attempted intrusion on a computer network.

The increase has prompted a new interest in cybersecurity on Capitol Hill, where lawmakers are being prodded by the Obama administration to advance legislation that could require new standards at facilities where a breach could cause significant casualties or economic damage.

It is not clear whether the higher numbers were due to increased reporting amid a wave of high-profile hacking, including the arrest last week of several members of the group Anonymous, or an actual increase in attacks.

James A. Lewis, a senior fellow and a specialist in computer security issues at the Center for Strategic and International Studies, a policy group in Washington, said that as hacking awareness had increased, attacks had become more common. He said that the attacks on the nation’s infrastructure were particularly jarring.

“Some of this is heightened awareness because everyone is babbling about it,” he said of the reported rise in computer attacks. “But much of it is because the technology has improved and the hackers have gotten better and people and countries are probing around more like the Russians and Chinese have.”

He added: “We hit rock bottom on this in 2010. Then we hit rock bottom in 2011. And we are still at rock bottom. We were vulnerable before and now we’re just more vulnerable. You can destroy physical infrastructure with a cyberattack just like you could with a bomb.”

The legislation the administration is pressing Congress to pass would give the federal government greater authority to regulate the security used by companies that run the nation’s infrastructure. It would give the Homeland Security Department the authority to enforce minimum standards on companies whose service or product would lead to mass casualties, evacuations or major economic damage if crippled by hackers.

The bill the administration backs is sponsored by Senators Joseph I. Lieberman, independent of Connecticut, and Susan Collins, Republican of Maine. It has bipartisan support, and its prospects appear good. Senator John McCain, Republican of Arizona, is sponsoring a more business-friendly bill that emphasizes the sharing of information and has fewer requirements for companies.

Last week on Capitol Hill, Janet Napolitano, the secretary of Homeland Security; Robert S. Mueller III, the director of the Federal Bureau of Investigation; and Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, made their pitch to roughly four dozen senators about why they should pass the Lieberman-Collins bill.

At a closed-door briefing, the senators were shown how a power company employee could derail the New York City electrical grid by clicking on an e-mail attachment sent by a hacker, and how an attack during a heat wave could have a cascading impact that would lead to deaths and cost the nation billions of dollars.

“I think General Dempsey said it best when he said that prior to 9/11, there were all kinds of information out there that a catastrophic attack was looming,” Ms. Napolitano said in an interview. “The information on a cyberattack is at that same frequency and intensity and is bubbling at the same level, and we should not wait for an attack in order to do something.”

General Dempsey told the senators that he had skipped a meeting of the National Security Council on Iran to attend the briefing because he was so concerned about a cyberattack, according to a person who had been told details of the meeting. A spokesman for General Dempsey said the chairman had “sent his vice chairman to the meeting on Iran so that he could attend the Senate meeting and emphasize his concern about cybersecurity.”

“His point was about his presence at the cyber exercise rather than a value judgment on the ‘threat,’ ” the spokesman, Col. David Lapan, said.

Experts say one of the biggest problems is that no part of the government has complete authority over the issue. The Central Intelligence Agency and the National Security Agency give the government intelligence on potential attacks, and the F.B.I. prosecutes hackers who break the law. The Department of Homeland Security receives reports about security breaches but has no authority to compel business to improve their security.

“Nobody does critical infrastructure of the dot-com space where America now relies on faith healing and snake oil for protection,” Mr. Lewis said. “The administration wants it to be the Department of Homeland Security, but the department needs additional authorities to be effective.”

    New Interest in Hacking as Threat to Security, NYT, 13.3.2012,
    http://www.nytimes.com/2012/03/14/us/new-interest-in-hacking-as-threat-to-us-security.html

Apple Adds Sharper Screen and Speed to New iPad

March 7, 2012
The New York Times
By NICK WINGFIELD

SAN FRANCISCO — Apple updated the iPad on Wednesday with a high-definition screen, a faster wireless connection and several other refinements, all packaged in a device without any major design changes.

As recent history has shown, though, Apple may not need a bold overhaul of the look of its tablet computer to attract waves of new buyers.

The company said the new iPad would go on sale on March 16 at a starting price of $499, unchanged from the last generation of iPads. The product will have a screen that provides a comparable level of clarity to the iPhone’s “retina display,” with higher resolution than conventional high-definition televisions, according to Apple executives.

“That is distinctive and is a kind of leapfrog above existing and announced products,” said A. M. Sacconaghi, an analyst at Sanford C. Bernstein & Company.

And in a sign that Apple intends to more seriously protect its share of the tablet market, which is expected to get more competitive this year, the company said it would continue to sell its second-generation iPad, dropping the price to $399 from $499.

At a company event, Apple also showed a new version of Apple TV, the company’s $99 set-top box for accessing Internet video, which streams movies in the sharpest of the high-definition video formats, called 1080p.

The initial reaction to the tablet computer was mixed, as has frequently been the case of late with Apple’s new iterations. Apple’s stock price was about flat in regular trading, ending up 43 cents higher, at $530.69, a 0.1 percent gain.

The new tablet, called simply the new iPad, with no numbers or letters after the name, is an effort to keep growth chugging along in a two-year-old business that has turned into a major franchise for the company. Apple’s $9.15 billion in iPad sales over the holiday quarter was almost double the amount of revenue Microsoft reported from its Windows software and not far from Google’s total revenue as a company during the same period.

Speaking from the same stage where Steven P. Jobs, the company’s late chief executive, introduced the second-generation iPad almost exactly a year ago, the company’s new chief executive, Timothy D. Cook, said the iPad last quarter outsold the number of personal computers sold by any individual manufacturer.

“In many ways, the iPad is reinventing portable computing and outstripping the wildest predictions,” Mr. Cook said.

The new iPad, the third generation of the device, is nearly indistinguishable from its predecessor, though it is slightly heavier and thicker. The most visible of its changes is the screen, which can display text and images that appear as sharp as they would on a printed page. The company said the screen has more than 3.1 million pixels, or four times more than the current iPad.

It will also operate on the fourth-generation cellphone network technology known as LTE. In the United States, the new iPad will work on AT&T’s and Verizon’s networks to get data.

The iPad will also allow users to dictate e-mail, though Apple did not introduce an iPad version of Siri, a voice-command virtual-assistant feature that proved popular on the iPhone 4S.

Last fall, Apple disappointed some pundits and enthusiasts by making mostly incremental enhancements with the iPhone 4S. That product ended up squashing doubts to become a smash hit, leading to record sales over the holidays. During that time, Apple, based in Cupertino, Calif., solidified its lead as the most valuable company in the world, with a market capitalization of almost a half-trillion dollars, well ahead of its nearest rival, Exxon Mobil.

At times, Apple has wowed people by radically rethinking the design of its products. Several years ago, it overhauled its MacBook Air with a drastically thinner case. It gave the iPhone 4 a novel, hard-edged case that looked very different from the design of early iPhones.

Charles Wolf, an analyst at Needham & Company, said those kinds of radical redesigns did not happen every year, partly because the smaller components and other underlying technologies that made them possible did not change at that pace. Mr. Wolf said he believed that more of Apple’s innovation was happening in software because it was not as encumbered by the development of outside technologies in that area.

“I always look at Apple as a software company,” he said.

The new iPad may show how durable Apple’s hold on the tablet market is. For most of the two years the iPad has been on sale, Apple has faced a phalanx of competitors from Hewlett-Packard, Research in Motion, Samsung and Motorola, yet none has established a firm beachhead in the tablet business. A few of those competitors, like H.P., gave up.

In a recent survey of American consumers with tablets by Forrester Research, 73 percent said they owned an iPad. That is a sharp contrast to the smartphone business, where Apple’s market share has steadily eroded as phones based on Google’s Android operating system have swept the market. Phones with Android software accounted for 51.6 percent of smartphone shipments worldwide in the fourth quarter, compared with 23.4 percent for the iPhone, according to Canalys, a research firm.

Sarah Rotman Epps, an analyst at Forrester, said the iPad had maintained its grip on the market because most consumers bought it through retail stores rather than wireless carriers. “Android smartphones are selling like hot cakes because that’s what the carriers push,” she said. “With tablets, carriers are not the main destination for tablets.”

The new iPad, though, is likely to face more serious challenges to the product’s dominance than in the past. Over the holidays, Amazon is estimated to have sold more than five million of its Kindle Fire, a smaller tablet that has attracted a new group of consumers to the category with a $199 price tag.

Later this year, the first tablet devices to use Windows 8, a new operating system from Microsoft, are expected to hit the market. The software has been redesigned by Microsoft to take advantage of touch-screen devices.

Apple sold 15.4 million iPads over the holiday quarter and has sold 55 million iPads in total since they first went on sale in 2010.

Mr. Cook told the audience Wednesday that Apple had sold 315 million iOS devices through the end of 2011 and that iPads, iPhones and iPods were now responsible for 75 percent of the company’s revenue. The chief criticism that some stalwarts of the PC industry have leveled at the iPad is that the device is not well suited for creating content, even if it is good for consuming it.

Apple, though, sought to undermine that argument with a number of new apps. Those include a new version of its Mac software for editing digital photographs, iPhoto. A new version of Apple’s GarageBand music software lets up to four people play together in a virtual band with iPads that are connected wirelessly.

    Apple Adds Sharper Screen and Speed to New iPad, NYT, 7.3.2012,
    http://www.nytimes.com/2012/03/08/technology/apple-updates-ipad-with-some-refinements.html

As New iPad Debut Nears, Some See Decline of PCs

March 5, 2012
The New York Times
By NICK WINGFIELD

The chief executive of Apple, Timothy D. Cook, has a prediction: the day will come when tablet devices like the Apple iPad outsell traditional personal computers.

His forecast has backing from a growing number of analysts and veteran technology industry executives, who contend that the torrid growth rates of the iPad, combined with tablet competition from the likes of Amazon.com and Microsoft, make a changing of the guard a question of when, not if.

Tablet sales are likely to get another jolt this week when Apple introduces its newest version of the iPad, which is expected to have a higher-resolution screen. With past iterations of the iPad and iPhone, Apple has made an art of refining the devices with better screens, faster processors and speedier network connections, as well as other bells and whistles — steadily broadening their audiences.

An Apple spokeswoman, Trudy Muller, declined to comment on an event the company is holding Wednesday in San Francisco that is expected to feature the new product.

Any surpassing of personal computers by tablets will be a case of the computer industry’s tail wagging the dog. The iPad, which seemed like a nice side business for Apple when it was introduced in 2010, has become a franchise for the company, accounting for $9.15 billion in revenue in the holiday quarter, or about 20 percent of Apple’s total revenue. The roughly 15 million iPads Apple sold in that period was more than twice the number it sold a year earlier.

In the fall, Amazon introduced the iPad’s first credible competitor in the $199 Kindle Fire. Although Amazon does not release sales figures for the device, some analysts estimate it sold about four million in the holiday quarter. Later this year, tablets from a variety of hardware manufacturers based on Windows 8, a new, touch-screen-friendly operating system from Microsoft, could further propel the market.

“Tablets are on fire, there’s no question about that,” said Brad Silverberg, a venture capitalist in Seattle at Ignition Partners and a former Microsoft executive, who hastened to add that he was speaking mainly of the iPad, which dominates current sales.

Tablets are not there yet. In 2011, PCs outsold tablets almost six to one, estimates Canalys, a technology research company. But that is still a significant change from 2010, the iPad’s first year on the market, when PCs outsold tablets 20 to one, according to Canalys. For the last two years, PC sales were flat, while iPad sales were booming. The Kindle Fire and Barnes & Noble’s Nook gave the market an additional lift over the holidays. Apple is banking on the tablet market. Its iPad brought in nearly 40 percent more revenue during the holidays than Apple’s own computer business, the Macintosh, did.

“From the first day it shipped, we thought — not just me, many of us thought at Apple — that the tablet market would become larger than the PC market, and it was just a matter of the time that it took for that to occur,” Mr. Cook of Apple said recently at a Goldman Sachs investor conference.

Gene Munster, an analyst at Piper Jaffray, estimated that Mr. Cook’s prediction would come true in 2017, but others contend tablets will be on top sooner than that.

For example, in a blog post on Friday, Horace Dediu, an analyst with Asymco in Finland, made a detailed argument that tablet sales would pass traditional PC sales in the fall of 2013. His projections rest heavily on an assumption that Apple will face more serious competition in the tablet market from Amazon’s Kindle Fire, Windows 8 and a wave of other devices based on Google’s Android, an operating system that has been mostly successful in the smartphone market.

Tim Bucher, an entrepreneur who has held senior positions at Apple, Microsoft and Dell, said tablet sales would “absolutely” pass those of PCs, a trend he argued would become even more pronounced as a younger, tablet-savvy generation ages.

“I think the older generation does not pick up on the way of interacting with the new devices,” Mr. Bucher said, contrasting older people with the next generation. “I don’t know how many YouTube videos there are out there showing everyone from babies to animals interacting with iPads.”

Where does that change leave the PC, the lowly machine that defined computing for decades?

At a technology conference in 2010, Steven P. Jobs, then Apple’s chief executive, heralded what he called the post-PC era and compared personal computers to the trucks that prevailed in the automobile industry until society began moving away from its agrarian roots. PCs are “still going to be around and have a lot of value,” said Mr. Jobs, who died in October. “But they’re going to be used by one out of X people.”

Even Mr. Cook in his recent speech said he was not predicting the demise of the PC industry, although he did say the iPad was cannibalizing some computer sales, more Windows PCs than the much smaller market for Macs. One category of PCs where that is especially true is netbooks, the inexpensive notebook computers that have had a steep decline in shipments in the last couple of years. “What the iPad is doing is taking growth away from the PC market that would have gone to a secondary or tertiary device,” said Mr. Dediu. “It’s not so much people are going to drop PCs. They’re going to add this additional device.”

Traditional PCs are not standing still. Boxy desktop computers are an ever-diminishing part of the PC business, while Apple’s MacBook Air and a category of Windows laptops with Intel processors called ultrabooks have reinvented traditional clamshell notebooks as superthin devices that turn on instantly like tablets.

Microsoft’s introduction of Windows 8 promises to shake up computer designs further. Microsoft and its hardware partners have shown laptops with keyboards that can be swiveled around or removed altogether, turning them into tablets.

“The tablet and PC markets are all going to blur,” said Tim Coulling, an analyst at Canalys. “We’re going to see a lot of form-factor innovation. We’ll be asking, What is a tablet and what is a traditional PC?”

    As New iPad Debut Nears, Some See Decline of PCs, NYT, 5.3.2012,
    http://www.nytimes.com/2012/03/06/technology/as-new-ipad-debut-nears-some-see-decline-of-pcs.html

Mystery Witness in Rutgers Case Tells of Webcam Unease

March 2, 2012
The New York Times
By KATE ZERNIKE

NEW BRUNSWICK, N.J. — As he and his new boyfriend lay naked on a bed in a nondescript dormitory room at Rutgers University, the man sensed he was being spied on.

“I just happened to glance over,” the man, now a nervous and heavily shielded star witness, told a courtroom here on Friday. “It just caught my eye that there was, you know, a camera lens looking directly at me.”

As he left the room that night, he testified, a group of students were standing nearby, joking and looking at him in a way that unsettled him. When they met again two nights later, he heard students laughing outside.

He wanted to see his new boyfriend again — they had been exchanging e-mails for weeks now, but had had only three dates, and were texting furiously in the hopes of setting up another one. But he was not sure he would return to the dorm.

“I felt a little uneasy about it,” he said.

He never saw his new boyfriend, Tyler Clementi, again. Mr. Clementi, an 18-year-old student at Rutgers, jumped to his death from the George Washington Bridge the next evening, Sept. 22, 2010, after posting a message on Facebook that ended, “sorry.”

It was two weeks later, when prosecutors went to his house, that the man learned that the camera, on Mr. Clementi’s roommate’s computer, had been used to view them as they had sex.

The roommate, Dharun Ravi, is on trial in Superior Court on charges that he set up the camera and encouraged others to watch its images of the men having sex. Prosecutors have charged him with invasion of privacy, bias intimidation and hindering apprehension, after, they say, he tried to cover up his Twitter messages to friends encouraging them to watch. He is not charged in Mr. Clementi’s death.

The man was the most anticipated witness in the trial — the small windowless courtroom in the Middlesex County Courthouse had been packed with spectators and reporters for three days with the promise of his testimony.

He is identified in court documents only as “M.B.,” and before he came in the room the judge warned the journalists assembled that they could not record or photograph the man.

M.B., who appeared to be in his late 20s or early 30s, entered with his shoulders hunched, seeming to twitch as he walked, as if he was on trial rather than a witness. He had close cropped hair and a bit of a 5 o’clock shadow, He wore a blue and white striped shirt, more casual than the well-tailored suits of Mr. Ravi and his friends who have testified. In the courtroom he did not look, as Mr. Ravi’s friends have described him, “scruffy” or “shady.”

He testified that he and Mr. Clementi met in an online chat room for gay men in early August 2010, then exchanged instant messages and text messages for several weeks. Mr. Clementi, an accomplished violinist, told the man he was going to Rutgers early, before the regular start of the fall semester, for a music program. They agreed that it made sense to wait until Mr. Clementi was at Rutgers to meet in person.

“We were just talking, getting to know each other at that time,” he said. “I was comfortable, he was comfortable, until he was coming closer to actually meet in person.”

Their first date was a few weeks later, on Thursday, Sept. 16. They met twice more, on the next Sunday and Tuesday, before Mr. Clementi, who had only recently told his parents he was gay, went to the bridge and committed suicide.

At first the room seemed like a normal dorm room, he testified.

But then, he told a prosecutor, “I had just glanced over my shoulder and I had noticed there was a webcam that was faced toward the direction of the bed, and I just thought it was kind of strange. Just being in a compromising position and seeing a camera lens — I guess it just stuck out to me that if you were sitting at a desk using the computer, that camera wouldn’t be facing that direction, it would be facing the person at the computer.”

The man was the witness whom both the prosecution and the defense had been waiting for. To prosecutors, M.B. is a victim of harassment based on sexual orientation — a proxy of sort for Mr. Clementi.

To the defense, M.B. was evidence that Mr. Ravi was not motivated by bigotry but by suspicion — of an older man who appeared out of place among the college freshmen in the dorm. Mr. Ravi’s lawyers contend that he set up the webcam because he was afraid that the man would steal his valuable computer equipment.

    Mystery Witness in Rutgers Case Tells of Webcam Unease, NYT, 2.3.2012,
    http://www.nytimes.com/2012/03/03/nyregion/in-rutgers-case-mystery-man-testifies-about-noticing-a-webcam.html

NASA Says It Was Hacked 13 Times Last Year

March 2, 2012
The New York Times
By REUTERS

(Reuters) - NASA said hackers broke into its computer systems 13 times last year, stealing employee credentials and gaining access to mission-critical projects in breaches that could compromise U.S. national security.

The National Aeronautics and Space Administration spends only $58 million of its $1.5 billion annual IT budget on cyber security, Paul Martin, the agency's inspector general, told a Congressional panel on NASA security earlier this week.

"Some NASA systems house sensitive information which, if lost or stolen, could result in significant financial loss, adversely affect national security, or significantly impair our nation's competitive technological advantage," Martin said in testimony before the U.S. House Committee on Science, Space and Technology, released on Wednesday. (http://bit.ly/yQFSB8)

He said the agency discovered in November that hackers working through a Chinese-based IP address broke into the network of NASA's Jet Propulsion Laboratory.

He said they gained full system access, which allowed them to modify, copy, or delete sensitive files, create user accounts for mission-critical JPL systems and upload hacking tools to steal user credentials and compromise other NASA systems. They were also able to modify system logs to conceal their actions, he said.

"Our review disclosed that the intruders had compromised the accounts of the most privileged JPL users, giving the intruders access to most of JPL's networks," he said.

In another attack last year, intruders stole credentials for accessing NASA systems from more than 150 employees.

Martin said the agency has moved too slowly to encrypt or scramble the data on its laptop computers to protect information from falling into the wrong hands.

Unencrypted notebook computers that have been lost or stolen include ones containing codes for controlling the International Space Station as well as sensitive data on NASA's Constellation and Orion programs and Social Security numbers, Martin said.

(Reporting By Jim Finkle; editing by Gunna Dickson)

    NASA Says It Was Hacked 13 Times Last Year, NYT, 2.3.2012,
    http://www.nytimes.com/reuters/2012/03/02/technology/02reuters-nasa-cyberattack.html

Andrew Breitbart, Conservative Blogger, Dies at 43

March 1, 2012
The New York Times
By JEREMY W. PETERS

Andrew Breitbart, a conservative blogger and activist who built a national media persona by putting undercover video on the Internet to bring discredit and disgrace to his liberal targets, died on Thursday in Los Angeles. He was 43.

The cause was apparently a heart attack, said his father-in-law, the actor Orson Bean. Someone saw Mr. Breitbart collapse on the sidewalk, Mr. Bean added, and when the paramedics arrived they were unable to revive him. Mr. Bean said he believed Mr. Breitbart had a history of heart problems.

Mr. Breitbart was as polarizing as he was popular. On the political right he was hailed in the same breath with Rush Limbaugh and Matt Drudge as a truth-teller who exposed bias and corruption. On the left, he was derided by many as a provocateur who played fast and loose with the facts to further his agenda.

Among his biggest coups was forcing the resignation of a New York congressman, Anthony D. Weiner. Someone in Mr. Breitbart’s network of tipsters and fans had e-mailed him sexually explicit photos that Mr. Weiner had taken of himself and sent to women online. Mr. Breitbart published some of the photos on his Web site, BigGovernment.com, igniting a firestorm that reached to the highest levels of Congress.

The move displayed two of Mr. Breitbart’s defining features as a media personality: an eagerness to flout authority, and an innate sense for the viral news story. With the Weiner scandal, Mr. Breitbart, already a cult figure, only solidified his status as a force in his own right.

On Thursday, many of the luminaries he looked up to as a young man paid homage to him. Mr. Limbaugh called him “an indefatigable bulldog for the conservative cause.”

Mr. Breitbart was one of the most aggressive — and controversial — users of blogs to disseminate political information and rumors, and his video methods were new in conservative media. What Mr. Limbaugh was to radio and what Mr. Drudge was to the Internet, Mr. Breitbart was to online video and images.

Mr. Breitbart worked with Mr. Drudge early in his career, helping him staff The Drudge Report. But another media star, Arianna Huffington, gave Mr. Breitbart what turned out to be his biggest break. She hired him in 1997 when she was a conservative commentator in need of research help. She gave Mr. Breitbart a title, director of research, and what he described in his book “Righteous Indignation” as a “bizarre and cloistered office” in her Los Angeles home.

It did not take long for Ms. Huffington to see his value as a tireless employee. He struck up a friendship with her and her mother, who came to regard him as almost a son of her own.

“She would say, ‘Andrew, you’ve got to sleep, got to stop,’ ” Ms. Huffington said in an interview on Thursday. “You could sort of see the destructive side of his incredible passion for whatever he believed in at the time. It was all-consuming.”

Mr. Breitbart was instrumental in helping Ms. Huffington create an early Web presence with a site called Arianna Online. After he left her for The Drudge Report, she reached out to him again. He wrote in his book that he got a call one day in 2004. It was Ms. Huffington. “Do you have any ideas for a Web site?” he quoted her as asking. Mr. Breitbart went on to work with Ms. Huffington and her business partners Kenneth Lerer and Jonah Peretti for the next seven months creating the now heavily trafficked news site The Huffington Post.

Andrew James Breitbart was born on Feb. 1, 1969, in Los Angeles, a month before Gerry and Arlene Breitbart adopted him. He grew up in the exclusive Brentwood section of Los Angeles, an experience he called disjointing.

“Even though it was very much a keep-up-with-the-Joneses enclave, my parents seemed oblivious to all that,” he wrote. “When the first sushi restaurant popped up in our neighborhood in the early 1980s, we had meat loaf that night.”

He was a graduate of Tulane University, having majored in American studies.

Though he described his parents as Republican, he said they were not overtly political. “They came from the Silent Generation,” he said.

Silent Mr. Breitbart was not. As a conservative commentator he was a frequent presence on cable television shoutfests. He seemed to thrive on conflict.

In 2009, Mr. Breitbart started the first in a series of “Big” blogs with names like “Big Journalism,” “Big Hollywood” and “Big Government.” The Web sites gave Mr. Breitbart a big online perch of his own from which to unleash his assaults on liberal causes and figures.

One target, in 2009, was the community organizing group Acorn. A young conservative activist named James O’Keefe had come to Mr. Breitbart with undercover video of Acorn workers apparently offering advice on how to evade taxes and conceal child prostitution. In videotaping the encounter, Mr. O’Keefe and a companion had posed as a pimp and a prostitute. Mr. Breitbart eagerly published the tapes, and they went viral. In response, Congress ended grants to Acorn, and federal agencies severed ties with the group.

Mr. Breitbart earned a reputation for being playful but also selective with the facts. In an infamous case in 2010, he helped instigate the firing of an Agriculture Department official, Shirley Sherrod, by publishing a heavily edited video clip of her speaking at an N.A.A.C.P. event. Her comments, as edited, suggested that she had discriminated against a white farmer more than two decades ago.

In the full video, however, she could be heard saying that she had eventually helped the farmer and that she had learned from the experience — that all people must overcome their prejudices. At Mr. Breitbart’s death, she was suing him for defamation.

Many on the left, like the liberal Web site Media Matters, often portrayed Mr. Breitbart as a caricature. Indeed, there was an element of performance art to what Mr. Breitbart did that could make him seem coarse and crude. He was often profane, and it was not uncommon to find him in rumpled shirts and torn jeans.

But in reality he was a more complex figure. He supported gay rights and once served on the board of GOProud, an organization for conservatives dedicated to gay and lesbian causes. His friends described him as a deeply committed father to his four children and a loyal husband to his wife, Susie.

And while he often railed against what he called corrupt mainstream media, he also knew that he needed them to further his own legitimacy. When he released the Weiner photos, he partnered with ABC News because, he said, he knew it would lend an imprimatur of authority.

He is survived by his wife; a daughter, Mia; and three sons, Samson, Charlie and William Buckley.

He was true to his reputation right up until he died. At 11:25 p.m. on Wednesday he sent out a Twitter message to someone who had taken issue with one of his comments. Mr. Breitbart had referred to him using a vulgarity “cause I thought you were being intentionally disingenuous,” he wrote. “If not I apologize.”

Ian Lovett, Brian Stelter and Daniel E. Slotnik contributed reporting.

    Andrew Breitbart, Conservative Blogger, Dies at 43, NYT, 1.3.2012,
    http://www.nytimes.com/2012/03/02/us/andrew-breitbart-conservative-blogger-dies-at-43.html

Revising the Limits for the Unlimited

March 1, 2012
The New York Times
By BRIAN X. CHEN

Sometimes, all-you-can-eat does not mean all you can eat.

Smartphone users who try to get the most out of their devices are learning exactly what that means, even while paying for plans that promise unlimited consumption.

Some of the nation’s largest wireless phone companies are getting around those plans by slowing down a smartphone’s Internet transfer speeds for heavy users. The practice serves as a backdoor limit of data by making some downloads impossible.

The wireless companies say they are trying to find a fair way to manage the swelling demand for mobile data, but consumers are feeling cheated and suspect some carriers are trying to lure them into higher-cost data plans.

“It’s like taking a Ferrari into a dealer, and you get it back, and it only goes 45 miles per hour, and you say, ‘What the heck, dude?’ ” said Matt Spaccarelli, who recently found his phone slowed. “And they say, ‘You’re going 100 miles per hour, and it’s too dangerous for you, but if you pay us more, we’ll let you go fast again.’ ”

AT&T on Thursday clarified the limits of its unlimited data plan. It published a Web page describing what kind of data use might lead to customers’ data connections being slowed — or throttled, as the practice is known.

Previously, AT&T said customers with unlimited data plans who were in the top 5 percent of data users in a given area could be subject to throttling, but it did not give any specific limits. Now the company says that customers with smartphones on unlimited plans for its third-generation network are in the top 5 percent if they download three gigabytes of data in a month.

Three gigabytes are enough to stream more than 1,500 minutes of video or receive 150,000 e-mails, according to AT&T.

AT&T also said customers with newer 4G smartphones who used more than 5 GB of data in a month would be in the top 5 percent of its heaviest data users and would be subject to slower speeds.

Verizon Wireless and T-Mobile said they had not changed their policies in reaction to AT&T’s.

Those three carriers all have some form of a throttling policy, which, they say, helps clear congestion of cellular networks as millions of customers switch from traditional cellphones to data-guzzling smartphones.

But to some customers, AT&T’s throttling seems to be a move to push them to pay more.

Mr. Spaccarelli, 39, a student from Simi Valley, Calif., was streaming an episode of “The Office” to his iPhone late last year when he received a text message from AT&T. “Your data usage is among the top 5 percent of users,” the message said. “Data speeds for the rest of your current bill cycle may be reduced.”

The playback became so slow that the show was unwatchable, Mr. Spaccarelli said, so he shut off the phone and went to bed.

For several days afterward, the data speeds on Mr. Spaccarelli’s iPhone were so slow that checking e-mail, Web browsing and using apps that required an Internet connection were impossible. Unhappy, he sued AT&T in small-claims court in Simi Valley, where he argued that AT&T could not sell him an unlimited data plan while significantly limiting its speeds.

A judge ruled in his favor last Friday, and he won $850. AT&T has said it will appeal the judge’s ruling.

Parul Desai, policy counsel for telecommunications at Consumers Union, an advocacy group, said carriers had not shown evidence for how and when their networks needed to be throttled.

“Is this an issue of where you’re trying to squeeze consumers into limited data plans?” she said. “Are you just trying to move people over to higher-priced plans?”

AT&T, the nation’s No. 2 carrier after Verizon, appears to be getting the most heat. The company disclosed its throttling policy in July, but only recently have some customers begun receiving notices that their connections were being slowed.

AT&T stopped offering unlimited data plans to new subscribers in 2010. But those who already owned a smartphone with an unlimited data plan were allowed to continue.

AT&T’s policy states that customers whose phones are throttled will have reduced speeds until the next billing cycle.

Adam Varsano, 49, who lives in New York, said he was informed his phone was being throttled one day into his new billing cycle.

AT&T’s throttling also kicks in for the heaviest unlimited data users who are in areas with congested cell sites, said Mark Siegel, an AT&T spokesman. But those customers are throttled until the next billing cycle, regardless of the state of the network for the remaining time period.

AT&T is cautious when discussing the topic of throttling. The company declined multiple requests for an interview with an executive, but provided a prepared statement. “AT&T, like other wireless companies, must take steps to manage the exploding demand for mobile data as fairly and as effectively as possible,” the company said.

The company also took the opportunity to push its agenda in Washington. “To meet that demand, we need wireless spectrum, a very scarce resource,” it said. “We have been doing everything we can to get more spectrum through federal government auctions and other means.”

Verizon, which calls its throttling method “network optimization,” said it throttled the top 5 percent of data users on an unlimited data plan only when the network in their area was overloaded.

“Once you are no longer connected to a congested site, your speed will return to normal,” said Brenda Raney, a Verizon spokeswoman. “This could mean a matter of seconds or hours, depending on your location and time of day.”

Sprint Nextel, the nation’s No. 3 carrier, does not throttle its unlimited data customers — a benefit the company is aggressively marketing in its effort to lure customers away from rivals.

Not everybody is convinced that throttling certain customers is the best solution for network traffic. John Aalbers, chief executive of Volubill, a London-based company that advises wireless companies on charging policies, said a problem with data throttling was that it upset customers.

“The connotation is that you’re being punitive and you’re punishing the user when what you really want them to do is have them use more and more of your service,” Mr. Aalbers said.

He said that carriers could create separate types of data plans for customers with specific types of usage patterns.

For instance, carriers could charge people who watch a lot of Netflix videos on their smartphones a little extra — streaming video is one of the most taxing activities on a wireless network.

In exchange the carriers could give those customers priority in gaining access to the higher network speeds so they would get a consistently good connection when watching videos. That way, customers on normal data plans would still be able to enjoy fast Internet speeds, stream the occasional video or play a game and not be throttled either.

David Isenberg, who worked at AT&T Labs Research for 12 years before leaving to start an independent telecom consulting firm, said that carriers could reduce network speeds based on the states of their networks, not specific customer usage.

He said carriers could measure their networks in real time to know when there was congestion and when throttling was necessary. “That would be a slightly less stupid way of managing their capacity,” he said.

While defining unlimited is difficult, AT&T does know how to define one thing clearly.

The company’s terms-of-service agreement, to which every wireless customer must agree to use its products, forbids people from filing class-action lawsuits against it, so disgruntled customers have to fight the carrier one by one. To help them, Mr. Spaccarelli created a Web site, taporc.com, containing the documentation he presented to the judge.

“I don’t want people to think this dude just got lucky,” he said.

    Revising the Limits for the Unlimited, NYT, 1.3.2012,
    http://www.nytimes.com/2012/03/02/technology/some-wireless-carriers-revise-limits-for-the-unlimited.html

For Impatient Web Users,

an Eye Blink Is Just Too Long to Wait

February 29, 2012
The New York Times
By STEVE LOHR

Wait a second.

No, that’s too long.

Remember when you were willing to wait a few seconds for a computer to respond to a click on a Web site or a tap on a keyboard? These days, even 400 milliseconds — literally the blink of an eye — is too long, as Google engineers have discovered. That barely perceptible delay causes people to search less.

“Subconsciously, you don’t like to wait,” said Arvind Jain, a Google engineer who is the company’s resident speed maestro. “Every millisecond matters.”

Google and other tech companies are on a new quest for speed, challenging the likes of Mr. Jain to make fast go faster. The reason is that data-hungry smartphones and tablets are creating frustrating digital traffic jams, as people download maps, video clips of sports highlights, news updates or recommendations for nearby restaurants. The competition to be the quickest is fierce.

People will visit a Web site less often if it is slower than a close competitor by more than 250 milliseconds (a millisecond is a thousandth of a second).

“Two hundred fifty milliseconds, either slower or faster, is close to the magic number now for competitive advantage on the Web,” said Harry Shum, a computer scientist and speed specialist at Microsoft.

The performance of Web sites varies, and so do user expectations. A person will be more patient waiting for a video clip to load than for a search result. And Web sites constantly face trade-offs between visual richness and snappy response times. As entertainment and news sites, like The New York Times Web site, offer more video clips and interactive graphics, that can slow things down.

But speed matters in every context, research shows. Four out of five online users will click away if a video stalls while loading.

On a mobile phone, a Web page takes a leisurely nine seconds to load, according to Google, which tracks a huge range of sites from the homes of large companies to the legions of one-person bloggers. Download times on personal computers average about six seconds worldwide, and about 3.5 seconds on average in the United States. The major search engines, Google and Microsoft’s Bing, are the speed demons of the Web, analysts say, typically delivering results in less than a second.

The hunger for speed on smartphones is a new business opportunity for companies like Akamai Technologies, which specializes in helping Web sites deliver services quicker. Later this month, Akamai plans to introduce mobile accelerator software to help speed up the loading of a Web site or app.

The government too recognizes the importance of speed in mobile computing. In February, Congress opened the door to an increase in network capacity for mobile devices, proposing legislation that permits the auction of public airwaves now used for television broadcasts to wireless Internet suppliers.

Overcoming speed bumps is part of the history of the Internet. In the 1990s, as the World Wide Web became popular, and crowded, it was called the World Wide Wait. Invention and investment answered the call.

Laying a lot of fiber optic cable for high-speed transmission was the first solution. But beyond bandwidth, the Web got faster because of innovations in software algorithms for routing traffic, and in distributing computer servers around the world, nearer to users, as a way to increase speed.

Akamai, which grew out of the Massachusetts Institute of Technology’s Laboratory for Computer Science, built its sizable business doing just that. Most major Web sites use Akamai’s technology today.

The company sees the mobile Internet as the next big challenge. “Users’ expectations are getting shorter and shorter, and the mobile infrastructure is not built for that kind of speed,” said Tom Leighton, co-founder and chief scientist at Akamai, who is also an M.I.T. professor. “And that’s an opportunity for us.”

The need for speed itself seems to be accelerating. In the early 1960s, the two professors at Dartmouth College who invented the BASIC programming language, John Kemeny and Thomas Kurtz, set up a network in which many students could tap into a single, large computer from keyboard terminals.

“We found,” they observed, “that any response time that averages more than 10 seconds destroys the illusion of having one’s own computer.”

In 2009, a study by Forrester Research found that online shoppers expected pages to load in two seconds or fewer — and at three seconds, a large share abandon the site. Only three years earlier a similar Forrester study found the average expectations for page load times were four seconds or fewer.

The two-second rule is still often cited as a standard for Web commerce sites. Yet experts in human-computer interaction say that rule is outdated. “The old two-second guideline has long been surpassed on the racetrack of Web expectations,” said Eric Horvitz, a scientist at Microsoft’s research labs.

Google, which harvests more Internet ad revenue than any other company, stands to benefit more than most if the Internet speeds up. Mr. Jain, who worked at Microsoft and Akamai before joining Google in 2003, is an evangelist for speed both inside and outside the company. He leads a “Make the Web Faster” program, begun in 2009. He also holds senior positions in industry standards groups.

Speed, Mr. Jain said, is a critical element in all of Google’s products. There is even a companywide speed budget; new offerings and product tweaks must not slow down Google services. But there have been lapses.

In 2007, for example, after the company added popular new offerings like Gmail, things slowed down enough that Google’s leaders issued a “Code Yellow” and handed out plastic stopwatches to its engineers to emphasize that speed matters.

Still, not everyone is in line with today’s race to be faster. Mr. Kurtz, the Dartmouth computer scientist who is the co-inventor of BASIC, is now 84, and marvels at how things have changed.

Computers and networks these days, Mr. Kurtz said, “are fast enough for me.”

    For Impatient Web Users, an Eye Blink Is Just Too Long to Wait, NYT, 29.2.2012,
    http://www.nytimes.com/2012/03/01/technology/impatient-web-users-flee-slow-loading-sites.html

Confronting a Law Of Limits

February 24, 2012
The New York Times
By JAMES B. STEWART

These days, it’s hard to find a superlative that adequately describes Apple. But maybe simplest is best: biggest.

Measured by market capitalization, Apple is the world’s biggest public company. This week it solidified its lead over Exxon Mobil, the previous titleholder, as Apple’s shares hit a record high of $526.29, which gave it a market capitalization of just under $500 billion. Apple becomes only the 11th company to reach the top spot since 1926, according Howard Silverblatt, a senior index analyst for Standard & Poor’s.

Apple’s first-quarter earnings of more than $13 billion accounted for more than 6 percent of all earnings for the S.& P. 500, according to Mr. Silverblatt. Sales for the quarter that ended Dec. 31 included an astonishing 37.04 million iPhones and 15.43 million iPads and totaled $46.33 billion, up 73 percent from the year before. Earnings more than doubled. Compare that with this week’s earning from the tech giants Hewlett-Packard (down 44 percent) and Dell (down 18 percent).

Apple shares have surged 68 percent from their low point in June, and it’s not just Apple shareholders who have benefited. Apple is now such a large part of the S.& P. 500 and the Nasdaq 100 indexes that it has buoyed millions of investors who own shares of broad index funds and mutual funds. These investors account for an estimated half of the American population. This week the Nasdaq composite reached its highest level since 2000 and the S.& P. 500 hit levels not seen since before the financial crisis.

Here is the rub: Apple is so big, it’s running up against the law of large numbers.

Also known as the golden theorem, with a proof attributed to the 17th-century Swiss mathematician Jacob Bernoulli, the law states that a variable will revert to a mean over a large sample of results. In the case of the largest companies, it suggests that high earnings growth and a rapid rise in share price will slow as those companies grow ever larger.

If Apple’s share price grew even 20 percent a year for the next decade, which is far below its current blistering pace, its $500 billion market capitalization would be more than $3 trillion by 2022. That is bigger than the 2011 gross domestic product of France or Brazil.

Put another way, to increase its revenue by 20 percent, Apple has to generate additional sales of more than $9 billion in its next fourth quarter. A company with $1 billion in sales has to come up with just another $200 million.

Robert Cihra, an analyst who covers Apple at Evercore Partners, told me this week that the law of large numbers as it applied to Apple had “been a concern for years now.” But, he said, “over the past couple of years, they have actually accelerated revenue growth. I don’t know that can continue indefinitely. If you extrapolate far enough out into the future, to sustain that growth Apple would have to sell an iPhone to every man, woman, child, animal and rock on the planet.”

The law of large numbers may explain why, even at its recent lofty stock price, Apple looks like a bargain by most measures. The ratio of its share price to its earnings, a common measure of a company’s stock value, is less than 11 based on earnings projections for this year. That is well below the market’s average P/E ratio of about 13. Apple shares are even being bought by so-called value investors, who are usually confined to stodgier, low-growth but arguably undervalued companies.

“The valuation on Apple stock right now is unjustifiably low,” Mr. Cihra said. “If it weren’t so big, the P/E multiple would be a lot higher. They almost doubled their earnings in calendar year 2011 and yet the stock is trading currently at a P/E multiple of less than 11. It’s trading way below the market average, even though it’s growing way above the market average. The multiple is being compressed simply because investors are asking how it can get bigger.”

There may be sobering reasons for that. Other companies that have reached the top appear to have been felled by Bernoulli’s law. Cisco Systems held the top position and hit a market capitalization of $557 billion — larger than Apple’s — in March 2000, at the peak of the technology bubble. Its market capitalization today is about $100 billion, and shares are down nearly 80 percent since March 2000. In contrast with Apple, Cisco’s market value and sky-high 120 P/E ratio were inflated by investor euphoria rather than actual results. But other titleholders have met a similarly disappointing fate, although far less drastic.

Exxon Mobil, recently displaced by Apple as the biggest company by market value, took over the top spot in 2006, seven years after the merger of Exxon and Mobil. At the end of that year, its market capitalization was $447 billion. Today it’s $35 billion lower. General Electric held the title for a number of years, most recently in 2005, when its market capitalization was $370 billion. Today, it’s just $205 billion. Microsoft was No. 1 in 2002 with a market capitalization of $276 billion. Today, it’s $262 billion.

Of recent titleholders, the only one that has gained is I.B.M., whose market capitalization of $65 billion ranked first in 1990. Today, it’s $229 billion. Over the intervening 22 years, that is a compound rate of return of 11.2 percent including dividends — impressive but hardly the growth rate Apple shareholders have come to expect. Over the same period, an S.& P. 500 index fund returned 8.7 percent.

Can Apple escape a similar fate?

After never being a dominant force in personal computers, Apple surged to the top of the S.& P. 500 by transforming the cellphone into a multitasking smartphone, arguably the single most important technological advance so far in the 21st century. It rolled over vaunted rivals like Nokia, Motorola and Research in Motion with a combination of brilliant technology, dazzling design and shrewd marketing backed by the singular vision of its late founder, Steve Jobs. “Everyone truly needs it,” Mr. Cihra said of the smartphone. “It’s the most transformative piece of technology in our lifetimes.”

Notwithstanding Apple’s huge size, Wall Street analysts are overwhelmingly positive on the company’s prospects. Of 57 analysts who cover the company, 52 have a strong buy or buy recommendation. Only one recommends selling: Edward Zabitsky, the chief executive and founder of ACI Research in Toronto, who specializes in telecommunications and has been Apple’s reigning Cassandra for years. He’s a favorite target of the Web’s “iPhone death watch,” which features negative (and thus far wrong) projections about Apple.

“In all my years as an analyst, I’ve never gotten the kind of attention I’ve gotten from my Apple call,” Mr. Zabitsky told me this week. “I’ve gotten e-mails from everyone from radiologists to car repair people from all over North America telling me I’m a fool. We’re just a research operation, so we’re not trying to get any business from Apple. If we were, I doubt we’d get any.”

“Apple has created a tremendous ecosystem where there was none,” Mr. Zabitsky acknowledges. But he says he thinks competition will erode Apple’s advantages as computing shifts to the cloud. “The question isn’t whether this will happen, but why and when. The company that understands this best is Microsoft. They’re betting the farm on Web apps. They’ll be competing with Apple on every product. Microsoft is big enough and motivated enough to make this happen.”

But Mr. Zabitsky remains a solitary voice.

“The reason Apple has been able to continue growing at a spectacular rate, even as its revenue base has surpassed $100 billion, is because it targets the world’s biggest markets,” Mr. Cihra said. He rates the stock a buy and projects revenue for calendar year 2012 at $165 billion. “The simple fact is that they still have a small share of huge markets — single-digit shares in both PCs and mobile phones.”

Global mobile phone subscriptions neared six billion in 2011, with Apple’s share of the handset market at 5.6 percent, according to the market intelligence firm IDC. “There’s no mathematical reason Apple can’t keep growing at a premium rate for at least several more years,” Mr. Cihra said. “At the end of the day, there’s no good reason for market cap to be a ceiling.”

Apple fans are eagerly awaiting Apple’s next big thing. A voice-activated television that upends TV the way Apple transformed music and cellphones? Maybe. And Mr. Cihra may well be right that Apple investors have at least several years of breathing room.

But history suggests that excessive enthusiasm can often precede a fall. At Cisco’s peak, every Wall Street analyst covering the company rated it a strong buy or buy. “Cisco continues to execute very well and demonstrates that it is in a class by itself,” Seth Spalding, an analyst at Epoch Partners, wrote, joining a chorus of analysts praising Cisco’s latest earnings — in November 2000.

    Confronting a Law Of Limits, NYT, 24.2.2012,
    http://www.nytimes.com/2012/02/25/business/apple-confronts-the-law-of-large-numbers-common-sense.html

Army Private Faces Arraignment in WikiLeaks Case

February 23, 2012
The New York Times
By THE ASSOCIATED PRESS

FORT MEADE, Md. (AP) — An Army private accused of spilling a mountain of U.S. secrets to WikiLeaks is being asked for the first time to enter a plea to the charges.

The arraignment of Pfc. Bradley Manning begins Thursday afternoon at Fort Meade near Baltimore.

Officials say Manning also will be asked whether he wants to be tried by a judge or a jury.

The 24-year-old native of Crescent, Okla., faces 22 counts, including aiding the enemy. That charge carries a maximum sentence of life in prison.

Manning has been locked up since May 2010. He allegedly gave the anti-secrecy WikiLeaks website more than 700,000 classified documents and video clips while working in Iraq.

Defense lawyers say Manning was a troubled soldier who shouldn't have had access to classified material.

    Army Private Faces Arraignment in WikiLeaks Case, NYT, 23.2.2012,
    http://www.nytimes.com/aponline/2012/02/23/us/AP-US-Manning-WikiLeaks.html

White House,

Consumers in Mind,

Offers Online Privacy Guidelines

February 23, 2012
The New York Times
By EDWARD WYATT

WASHINGTON — The Obama administration on Wednesday outlined a set of online privacy principles that officials said would help consumers control the use of their personal data gleaned from Internet searches.

The framework for a new privacy code moves electronic commerce closer to a one-click, one-touch process by which users can tell Internet companies whether they want their online activity tracked.

Much remains to be done before consumers can click on a button in their Web browser to set their privacy standards. Congress will probably have to write legislation governing the collection and use of personal data, officials said, something that is unlikely to occur this year. And the companies that make browsers — Google, Microsoft, Apple and others — will have to agree to the new standards.

But because those companies also are the largest competitors in the business of providing advertising to Web sites, and are part of a consortium participating in the development of the principles, administration officials said they expected the standards would give consumers privacy while also allowing electronic commerce to grow.

“American consumers can’t wait any longer for clear rules of the road that ensure their personal information is safe online,” President Obama said in a statement released Wednesday. “By following this blueprint, companies, consumer advocates and policy makers can help protect consumers and ensure the Internet remains a platform for innovation and economic growth.”

Even before Congress approves privacy legislation, the Federal Trade Commission will have the ability to enforce compliance with a code of conduct to be developed by the Commerce Department or with advertising industry guidelines that companies would adopt voluntarily, Jon Leibowitz, the chairman of the F.T.C., said during a call with reporters on Wednesday.

Companies responsible for the delivery of nearly 90 percent of online behavioral advertisements — ads that appear on a user’s screen based on browsing and buying habits — have agreed to comply when consumers choose to control online tracking, the consortium said on Wednesday.

But even if a click of a mouse or a touch of a button can thwart Internet tracking devices, there is no guarantee that companies won’t still manage to gather data on Web behavior. Compliance is voluntary on the part of consumers, Internet advertisers and commerce sites.

"The real question is how much influence companies like Google, Microsoft, Yahoo and Facebook will have in their inevitable attempt to water down the rules that are implemented and render them essentially meaningless,” John M. Simpson, privacy project director for Consumer Watchdog, said in response to the administration’s plan. "A concern is that the administration’s privacy effort is being run out of the Commerce Department.”

But Mr. Leibowitz noted that the F.T.C. had already been aggressively penalizing companies that did not adhere to their stated privacy programs. Last year it brought charges against both Google and Facebook.

“If you ask what makes businesses want to do this,” Mr. Leibowitz said, the answer is, “respecting consumer privacy and protecting data online encourages Internet commerce.”

The Digital Advertising Alliance, a group of marketing and advertising trade groups, said it had committed to following the instructions that consumers gave about their privacy choices by using Do Not Track technology already available in most Web browsers.

Stu Ingis, general counsel for the Digital Advertising Alliance, said the group hoped to reach agreement within about nine months with browser companies on standards for the use of a one-click notification of a consumer’s privacy desires.

Hardly a day goes by without some development in the expansion of privacy standards or the punishment of privacy violations. On Wednesday, California’s attorney general, Kamala D. Harris, said the state had reached an agreement with Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion to strengthen privacy protections for smartphone owners who download mobile applications.

The agreement will force software developers to post conspicuous privacy policies detailing what personal information they plan to obtain and how they will use it. It also compels app store providers like Apple and Google to offer ways for users to report apps that do not comply.

The new privacy outline brings together several efforts to develop and enforce privacy standards that have been progressing for the last couple of years on parallel tracks, under the direction of advertisers, Internet commerce sites and software companies.

The next step will be for the Commerce Department to gather Internet companies and consumer advocates to develop enforceable codes of conduct aligned with a “Consumer Privacy Bill of Rights” released as part of the administration’s plan on Wednesday.

The bill of rights sets standards for the use of personal data, including individual control, transparency, security, access, accuracy and accountability.

Tanzina Vega contributed reporting from New York

and Nick Bilton and Nicole Perlroth from San Francisco.

    White House, Consumers in Mind, Offers Online Privacy Guidelines, NYT, 23.2.2012, http://www.nytimes.com/2012/02/23/business/white-house-outlines-online-privacy-guidelines.html

Behind the Google Goggles, Virtual Reality

February 22, 2012
The New York Times
By NICK BILTON

SAN FRANCISCO — It wasn’t so long ago that legions of people began walking the streets, talking to themselves.

On closer inspection, many of them turned out to be wearing tiny earpieces that connected wirelessly to their smartphones.

What’s next? Perhaps throngs of people in thick-framed sunglasses lurching down the streets, cocking and twisting their heads like extras in a zombie movie.

That’s because later this year, Google is expected to start selling eyeglasses that will project information, entertainment and, this being a Google product, advertisements onto the lenses. The glasses are not being designed to be worn constantly — although Google engineers expect some users will wear them a lot — but will be more like smartphones, used when needed, with the lenses serving as a kind of see-through computer monitor.

“It will look very strange to onlookers when people are wearing these glasses,” said William Brinkman, graduate director of the computer science and software engineering department at Miami University in Oxford, Ohio. “You obviously won’t see what they can from the behind the glasses. As a result, you will see bizarre body language as people duck or dodge around virtual things.”

Mr. Brinkman, whose work focuses on augmented reality or the projection of a layer of information over physical objects, said his students had experimented on their own with virtual games and obstacle courses. “It looks really weird to outsiders when you watch people navigate these spaces,” he said.

They have not seen the Google glasses. Few people have, because they are being built in the Google X offices, a secretive laboratory near Google’s main Mountain View, Calif., campus where engineers and scientists are also working on robots and space elevators.

The glasses will use the same Android software that powers Android smartphones and tablets. Like smartphones and tablets, the glasses will be equipped with GPS and motion sensors. They will also contain a camera and audio inputs and outputs.

Several people who have seen the glasses, but who are not allowed to speak publicly about them, said that the location information was a major feature of the glasses. Through the built-in camera on the glasses, Google will be able to stream images to its rack computers and return augmented reality information to the person wearing them. For instance, a person looking at a landmark could see detailed historical information and comments about it left by friends. If facial recognition software becomes accurate enough, the glasses could remind a wearer of when and how he met the vaguely familiar person standing in front of him at a party. They might also be used for virtual reality games that use the real world as the playground.

People flailing their arms in midair as they play those games is a potentially humorous outcome of the virtual reality glasses. In a more serious vein is the almost certain possibility of privacy issues and ubiquitous advertisements. When someone is meeting a person for the first time, for example, Google could hypothetically match the person’s face and tell people how many friends they share in common on social networks.

This month, the Electronic Privacy Information Center, a research and advocacy group for Internet privacy, asked the Federal Trade Commission to suspend the use of facial recognition software until the government could come up with adequate safeguards and privacy standards to protect citizens.

Mr. Brinkman said he was very excited by the possibilities of the glasses, but acknowledged that the augmented reality glasses could pose some ethical issues.

“In addition to privacy, it’s also going to change real-world advertising, where companies can virtually place ads over other people’s ads,” he said. “I’m really interested in seeing how the government can successfully regulate augmented reality in this sense. They are not really going to know what people are seeing behind those glasses.”

    Behind the Google Goggles, Virtual Reality, NYT, 22.2.2012,
    http://www.nytimes.com/2012/02/23/technology/google-glasses-will-be-powered-by-android.html

WikiLeaks, a Postscript

February 19, 2012
The New York Times
By BILL KELLER

THIS is apparently the revenge of Julian Assange: everyone who runs afoul of the rock-star leaker is condemned to spend eternity discussing the cosmic meaning of WikiLeaks. As the editor of The Times during our publication of many articles based on that treasury of military and diplomatic secrets, and as the lucky man the WikiLeaks founder singled out as his Least Favorite Journalist, I have participated in half a dozen panel discussions, and turned down at least that many. I can’t complain about the one in Madrid, where, after holding forth in a packed auditorium, the American, British, German, French and Spanish editors who broke news based on WikiLeaks commemorated the collaboration with an after-hours prowl through the Prado Museum and a 27-course meal cooked by master chef Ferran Adrià. (If Europe is dying, Spain is where I plan to go for the wake.) Unforgettable in a different way was the retrospective in Berkeley, where Assange himself, then as now awaiting an extradition ruling in England, was Skyped in on a giant screen, like the mighty Oz, to pontificate on Western media’s failure to turn the files into a kind of Nuremberg trial of American imperialism. About half the audience seemed on the verge of tossing their underwear at the screen.

Add to that the three or four documentaries on the WikiLeaks adventure, the dozen books — including, weirdly, Assange’s unauthorized autobiography — and a couple speculative Hollywood projects, in which I have a twofold interest. (1. The very slight possibility that I might make some money for my small piece of the story. 2. The exceedingly remote chance that a director will take up my wife’s brilliant idea that Assange be played by Tilda Swinton.)

It’s amazing they keep inviting me to these things, since I’m a bit of a spoilsport. My consistent answer to the ponderous question of how WikiLeaks transformed our world has been: really, not all that much. It was a hell of a story and a wild collaboration, but it did not herald, as the documentarians yearn to believe, some new digital age of transparency. In fact, if there is a larger point, it is quite the contrary.

With the subject showing no signs of going away — one more documentary melodrama of our WikiLeaks adventure will be featured at next month’s South by Southwest festival — I decided to check up on the lingering fallout from what may be the nation’s all-time greatest cascade of blown secrets.

Assange himself, who gave a handful of journalists early access to the pilfered data, has moved from a supporter’s country mansion to much more modest digs while he fights extradition to Sweden on sexual abuse charges. An American grand jury is believed to still be mulling an indictment for his role in the leaks. He compiled many hours of interviews for an autobiography, then backed out of the project, but his publisher — in the proper anarchist spirit of WikiLeaks — published it over his objections. (Evidently not for profit. It is No. 1,288,313 on the Amazon list of best-selling titles.) Assange’s newest project, announced last month, is a television talk show in which he will interview “iconoclasts, visionaries and power insiders.” So says the proud buyer of this series, RT (formerly Russia Today), the Kremlin’s English-language propaganda arm and keeper of the cult of Putin. No, not kidding.

Kremlin TV aside, Assange has declined from global notoriety to B-list celebrity: he lacks enough star power for a hosting gig on “Saturday Night Live,” but he did have a cameo in Sunday’s episode of “The Simpsons.”

Bart: “How ya doin’, Mr. Assange?”

Julian: “That’s my personal information, and you have no right to know about it.”

Bada-bing.

The Army private accused of divulging three-quarters of a million secret documents to WikiLeaks, Bradley Manning — who was at first kept in such inhumane custody that the State Department spokesman quit in protest — is scheduled to be arraigned Thursday on charges that could mean life in prison. You don’t have to excuse his alleged crime to think the original sin in the whole drama is that this tormented soul had access to so many secrets in the first place.

What we cannot know for sure is the fate of the many informants, dissidents, activists and bystanders quoted in the American cables. Assange published source names over the strong objections of the journalists who had access to the data (we expunged the names from our reports) and to the horror of human rights groups and some of his WikiLeaks colleagues. I’ve been told that a few exposed sources fled their countries with American help, a few others were detained by authorities, and none are known to have been killed. But would we even know? When I read stories like the Reuters account last week of the three men beheaded in Yemen for giving information to Americans, I worry anew about the many innocent witnesses named in the WikiLeaks cables.

The publication of so many confidences and indiscretions did not bring U.S. foreign policy to a halt. But it did, at least temporarily, complicate the lives of U.S. diplomats. American officials say that foreign counterparts are sometimes more squeamish about speaking candidly, and that it is harder to recruit and retain informants around the world.

As raw material for journalists, the cache of secrets has had a phenomenal afterlife. It’s been 10 months since The Times, The Guardian, Der Spiegel and the other partners in this project filed their last major extracts from the files. And still, literally every day, stories based on the trove appear somewhere in the world, either because local news organizations are catching up with morsels of scandal that did not attract major newsrooms, or because new events cast the cables in a more interesting light. Notably, State Department dispatches reporting on the dissolute lifestyles of Mideast autocrats provided a little extra kindling for the bonfires of the Arab Spring.

But the idea that this was the opening of a floodgate has proved exactly wrong. In the immediate aftermath of the breach, several news organizations (including this one) considered creating secure online drop-boxes for would-be leakers, imagining that new digital Deep Throats would arise. But it now seems clear that the WikiLeaks breach was one of a kind — and that even lesser leaks are harder than ever to come by.

Steven Aftergood, who monitors secrecy issues for the Federation of American Scientists, said that since WikiLeaks the government has elevated the “insider threat” as a priority, and tightened access to classified material. Nudged by an irate Congress, the intelligence agencies are at work on an electronic auditing program that would make illicit transfer of secrets much more difficult and make tracking the leaker much easier.

“A lot of attention has been focused on WikiLeaks and its colorful proprietors,” Aftergood told me. “But the real action, it turns out, is not at the publisher level; it’s at the source level. And there aren’t a lot of sources as prolific or as reckless as Bradley Manning allegedly was.”

For good reason. The Obama administration has been much more aggressive than its predecessors in pursuing and punishing leakers. The latest case, the arrest last month of John Kiriakou, a former C.I.A. terrorist-hunter accused of telling journalists the names of colleagues who participated in the waterboarding of Qaeda suspects, is symptomatic of the crackdown. It is this administration’s sixth criminal case against an official for confiding to the media, more than all previous presidents combined. The message is chilling for those entrusted with keeping legitimate secrets and for whistleblowers or officials who want the public to understand how our national security is or is not protected.

Here’s the paradox the documentaries have overlooked so far: The most palpable legacy of the WikiLeaks campaign for transparency is that the U.S. government is more secretive than ever.

    WikiLeaks, a Postscript, NYT, 19.2.2012,
    http://www.nytimes.com/2012/02/20/opinion/keller-wikileaks-a-postscript.html

Flaw Found in an Online Encryption Method

February 14, 2012
The New York Times
By JOHN MARKOFF

SAN FRANCISCO — A team of European and American mathematicians and cryptographers have discovered an unexpected weakness in the encryption system widely used worldwide for online shopping, banking, e-mail and other Internet services intended to remain private and secure.

The flaw — which involves a small but measurable number of cases — has to do with the way the system generates random numbers, which are used to make it practically impossible for an attacker to unscramble digital messages. While it can affect the transactions of individual Internet users, there is nothing an individual can do about it. The operators of large Web sites will need to make changes to ensure the security of their systems, the researchers said.

The potential danger of the flaw is that even though the number of users affected by the flaw may be small, confidence in the security of Web transactions is reduced, the authors said.

The system requires that a user first create and publish the product of two large prime numbers, in addition to another number, to generate a public “key.” The original numbers are kept secret. To encrypt a message, a second person employs a formula that contains the public number. In practice, only someone with knowledge of the original prime numbers can decode that message.

For the system to provide security, however, it is essential that the secret prime numbers be generated randomly. The researchers discovered that in a small but significant number of cases, the random number generation system failed to work correctly.

The importance in ensuring that encryption systems do not have undetected flaws cannot be overstated. The modern world’s online commerce system rests entirely on the secrecy afforded by the public key cryptographic infrastructure.

The researchers described their work in a paper that the authors have submitted for publication at a cryptography conference to be held in Santa Barbara, Calif., in August. They made their findings public Tuesday because they believe the issue is of immediate concern to the operators of Web servers that rely on the public key cryptography system.

“This comes as an unwelcome warning that underscores the difficulty of key generation in the real world,” said James P. Hughes, an independent Silicon Valley cryptanalyst who worked with a group of researchers led by Arjen K. Lenstra, a widely respected Dutch mathematician who is a professor at the École Polytechnique Fédérale de Lausanne in Switzerland. “Some people may say that 99.8 percent security is fine,” he added. That still means that approximately as many as two out of every thousand keys would not be secure.

The researchers examined public databases of 7.1 million public keys used to secure e-mail messages, online banking transactions and other secure data exchanges. The researchers employed the Euclidean algorithm, an efficient way to find the greatest common divisor of two integers, to examine those public key numbers. They were able to produce evidence that a small percentage of those numbers were not truly random, making it possible to determine the underlying numbers, or secret keys, used to generate the public key.

They said they “stumbled upon” almost 27,000 different keys that offer no security. “Their secret keys are accessible to anyone who takes the trouble to redo our work,” they wrote.

To prevent this, one of the organizations that had collected the public keys has removed the information from the Internet and taken steps to protect it from theft.

To perform their study, the researchers used several databases of public keys, including one at the Massachusetts Institute of Technology and another created by the Electronic Frontier Foundation, a Internet privacy rights group. The foundation’s database results from a project, known as the SSL Observatory, originally intended to investigate the security of the digital certificates that are used to protect encrypted data transmitted between Internet users and Web sites.

“We were very careful: we did not intercept any traffic, we did not sniff any networks,” Mr. Hughes said. “We went to databases that contained public information and downloaded public keys.”

The researchers said they were not able to determine why the random number generators had produced imperfect results, but they noted that the problem appeared in more than the work of a single software developer.

They also stated that if they had been able to discover the flaw, it was also possible that it had been previously uncovered, perhaps by organizations or individuals with malicious intent: “The lack of sophistication of our methods and findings make it hard for us to believe that what we have presented is new, in particular to agencies and parties that are known for their curiosity in such matters,” they wrote.

While they said that the publication of results that potentially undermine the security of encryption keys was inappropriate unless the parties were notified first, the researchers noted that the way they discovered the flaw made identifying potentially vulnerable parties a challenge.

“The quagmire of vulnerabilities that we waded into makes it infeasible to properly inform everyone involved, though we made a best effort to inform the larger parties and contacted all e-mail addresses recommended or specified in still-valid affected certificates,” they wrote. “The fact that most certificates do not contain adequate contact information limited our options. Our decision to make our findings public, despite our inability to directly notify everyone involved, was a judgment call.”

There have been previous failures of random number generators that have undermined Internet security. For example, in 1995, two researchers at the University of California, Berkeley, discovered a flaw in the way the Netscape browser generated random numbers, making it possible for an eavesdropper to decode encrypted communications. Last year a group of computer hackers revealed that Sony had made a crucial mistake in not using a random number in the algorithm used by the security system of the PlayStation 3, making it possible to discover the secret key intended to protect digital content on the system.

The researchers whimsically titled their paper “Ron Was Wrong, Whit Is Right,” a reference to two pioneers in public key cryptography, Ron Rivest and Whitfield Diffie.

Mr. Diffie was a developer of the first method for two people who had not previously physically met to share a secret message safely. However, what became known as the R.S.A. algorithm, created by and named after three mathematicians, Mr. Rivest, Adi Shamir and Leonard Adleman, ultimately became the dominant standard. (They later helped found the security company RSA.) The so-called Diffie-Hellman method, developed by Mr. Diffie, Martin Hellman and Ralph Merkle, required only a single secret number.

    Flaw Found in an Online Encryption Method, 14.2.2012,
    http://www.nytimes.com/2012/02/15/technology/researchers-find-flaw-in-an-online-encryption-method.html

An ‘Entertainment Device’ Is Expected From Google

February 9, 2012
The New York Times
By DAVID STREITFELD and NICOLE PERLROTH

SAN FRANCISCO — Google is developing a home entertainment device, according to people with knowledge of the company’s plans, in a move that would bring it more broadly into consumer electronics.

The device, which exists as a prototype and will eventually be sold as a branded item to consumers, is the company’s most significant venture into hardware. While the initial purpose of the device will be for streaming music, the eventual use could be much wider.

As the Internet matures, the leading companies are trying to create full-fledged ecosystems to preserve their individual dominance. Amazon, which began as a retailer, now makes reading devices. Apple, which originally produced only hardware, now sells content.

Google still makes the vast majority of its money from Internet search. But as computing detaches from the desktop and laptop, the company cannot afford to be marginalized. The new device is an effort to control the design, production and sale of an entertainment device, just as its competitors have done so successfully.

Larry Page, who last year took the reins of the company he co-founded, has been intent on moving into hardware. The entertainment device has been in the works for more than a year, before Google made a $12.5 billion deal to buy the handset maker Motorola Mobility, the most likely manufacturer of the device. That acquisition is likely to close next week.

Owning Motorola — whose origins lie in a company that made an earlier generation of home entertainment systems before stumbling — will put Google into direct competition with the phone makers that use its Android software as well as Apple and its iPhone.

A Google spokesman declined to comment.

While Google has talked openly about its designs on consumers’ living rooms, news that the device was becoming a reality surfaced last week in an application the search giant filed with the Federal Communications Commission. In the application, Google said it would begin testing a device it labeled simply an “entertainment device.”

The device will have Bluetooth and Wi-Fi and, as Google noted in the application, it will “connect to other home electronics equipment.” The application, which was first reported by the tech Web site GigaOM, said Google would test the device for stability in employees’ homes through the summer.

Analysts are wary of Google’s venture into the notoriously cutthroat hardware field. Apple has loyal, sometimes fanatical followers, and enviably rich profit margins. Amazon is willing to lose money on its devices and make it up on sales of content. Most other hardware makers have a much tougher slog.

But Google is seen as having little choice.

“Google’s future depends on extending its influence beyond the PC screen,” said James McQuivey, a Forrester analyst. “They’ve made tremendous progress in the mobile phone business, but their attempts to do the same thing with the TV and tablet flopped because the hardware manufacturers they relied on were not able to move fast enough.”

But Mr. McQuivey noted that controlling manufacturing meant calling the shots. “It’s quite telling that Amazon introduced its tablet two months ago and is already the second tablet maker in the market,” he said.

Last November, Google introduced its own streaming music service to compete with Apple and Amazon in the wars for digital media. The service lets users access music from various Internet connected devices. By manufacturing its own device, Google can tether those listeners back to its own product.

Google’s larger goal, a person closely tied to the project said, was to connect everything in the home to the Internet, including light bulbs, speakers and TV sets. Google unveiled a “conceptual” version of a multi-purpose device last year at a developer conference.

The perils of not having full control of the design and manufacturing of a device became apparent with Google TV, which was codeveloped in 2010 by Google, Sony, Intel and Logitech. Reviewers hated it and the public scorned it. Guerrino De Luca, chief executive of Logitech has acknowledged publicly that the Google TV was “a mistake of implementation of a gigantic nature.”

Nick Bilton contributed reporting.

    An ‘Entertainment Device’ Is Expected From Google, NYT, 9.2.2012,
    http://www.nytimes.com/2012/02/10/technology/google-at-work-on-an-entertainment-device.html

If Silicon Valley Costs a Lot Now,

Wait Until the Facebook Update

February 8, 2012
The New York Times
By MICHAEL COOPER

PALO ALTO, Calif. — Imagine looking for a house in San Francisco or one of the nicer parts of Silicon Valley, which are already among the most expensive parts of the country. Now imagine having to bid against a legion of newly minted Facebook millionaires.

“I’m kind of worried — a thousand millionaires are going to be buying houses!” Connie Cao said as she and her family toured a home in a good school district here.

Her husband, Jared Oberhaus, was more optimistic. “Maybe sellers are sitting on their houses now, waiting for Facebook, and they’ll all come on the market at the same time,” he said.

It will be some time before the first Facebook shares are sold to the public, and even longer before Facebook’s employees are able to turn their paper wealth into cash and officially take their places as the newest members of the 1 percent. But the mere anticipation of the event may pour a little kerosene onto what is already a fairly hot local real estate market.

When Ken DeLeon, a Silicon Valley real estate agent, recently sold an 8,000-square-foot house to a Facebook employee, he said, the movers showed up at the client’s old 1,000-square-foot home and asked, “Did you win the lottery?”

Silicon Valley has been good to Mr. DeLeon, a former lawyer, who said he sold $275 million worth of homes last year, and who is finishing up a memoir about overcoming illness, injury and loss that he calls “Why Do Bad Things Happen to Sexy People?”

Even after some of the air went out of the housing bubble in the Bay Area in recent years, prices in the most desirable parts of San Francisco and Silicon Valley stayed buoyant enough to remain out of reach for most people. A report on 2011 housing prices by Coldwell Banker, the real estate company, found that 8 of the nation’s 20 most expensive markets were in Silicon Valley or the Bay Area. Mr. DeLeon said Palo Alto, with its limited supply, had remained remarkably strong — and could hit new peaks this year.

In recent weeks, he said, there have been signs that the market has been heating up more: 10 homes in Palo Alto sold for more than their asking prices last month, some by large amounts. Now, with the long-expected Facebook public offering a step closer to reality, Mr. DeLeon said he expected to see several things happen: some sellers may keep their homes off the market until they judge the time is right, some speculators may snap up old houses to tear down and rebuild, and some buyers may feel pressure to make offers before the deluge hits.

A steady stream of would-be buyers walked through the open house Mr. DeLeon held here on Sunday — a 2,325-square-foot home with a small backyard and an asking price of nearly $1.8 million. They checked out the sunken Japanese-style dining room and the heated concrete floors with leaf inlays. Many got lattes from the barista stationed in the backyard.

Mr. DeLeon said he already had plans to market to Facebook employees. One strategy: he intends to buy ads on Facebook. “It’s amazing how you can target them,” he said.

    If Silicon Valley Costs a Lot Now, Wait Until the Facebook Update, NYT, 8.2.2012,
    http://www.nytimes.com/2012/02/09/us/california-housing-market-braces-for-facebook-millionaires.html

The Zuckerberg Tax

February 7, 2012
The New York Times
By DAVID S. MILLER

WHEN Facebook goes public later this year, Mark Zuckerberg plans to exercise stock options worth $5 billion of the $28 billion that his ownership stake will be worth. The $5 billion he will receive upon exercising those options will be treated as salary, and Mr. Zuckerberg will have a tax bill of more than $2 billion, quite possibly making him the largest taxpayer in history. He is expected to sell enough stock to pay his tax.

But how much income tax will Mr. Zuckerberg pay on the rest of his stock that he won’t immediately sell? He need not pay any. Instead, he can simply use his stock as collateral to borrow against his tremendous wealth and avoid all tax. That’s what Lawrence J. Ellison, the chief executive of Oracle, did. He reportedly borrowed more than a billion dollars against his Oracle shares and bought one of the most expensive yachts in the world.

If Mr. Zuckerberg never sells his shares, he can avoid all income tax and then, on his death, pass on his shares to his heirs. When they sell them, they will be taxed only on any appreciation in value since his death.

Consider the case of Steven P. Jobs. After rejoining Apple in 1997, Mr. Jobs never sold a single Apple share for the rest of his life, and therefore never paid a penny of tax on the over $2 billion of Apple stock he held at his death. Now his widow can sell those shares without paying any income tax on the appreciation before his death. She would have to pay taxes only on the increase in value from the time of his death to the time of the sale.

Now compare Mr. Zuckerberg with Lady Gaga. Last year she told Ellen DeGeneres that she had to get “completely wasted” to sign her tax returns because she owed so much. Lady Gaga reportedly earned $90 million in 2010. Because she earns fees and royalties, she’s subject to the highest income-tax rate. So, assuming she’s just as successful this year, she will certainly pay more than $30 million in taxes and probably more than $45 million, which is infinitely more tax than Mr. Zuckerberg will pay on the $23 billion of Facebook stock he now holds.

Why is this?

Our tax system is based on the concept of “realization.” Individuals are not taxed until they actually sell property and realize their gains. But this system makes less sense for the publicly traded stocks of the superwealthy. A drastic change is necessary to fix this fundamental flaw in our tax system and finally require people like Warren E. Buffett, Mr. Ellison and others to pay at least a little income tax on their unsold shares. The fix is called mark-to-market taxation.

For individuals and married couples who earn, say, more than $2.2 million in income, or own $5.7 million or more in publicly traded securities (representing the top 0.1 percent of families), the appreciation in their publicly traded stock and securities would be “marked to market” and taxed annually as if they had sold their positions at year’s end, regardless of whether the securities were actually sold. The tax could be imposed at long-term capital gains rates so tax rates would stay as they were.

We could call this tax the “Zuckerberg tax.” Under it, Mr. Zuckerberg would owe an additional $3.45 billion when Facebook went public (that’s 15 percent of the value of the roughly $23 billion of stock he owns). He could sell some shares to pay the tax (and would be left with over $20 billion of Facebook stock after tax), or borrow to pay the tax.

If his Facebook shares decline in value next year, he’d get a refund.

President Obama has proposed a “Buffett rule” that would require millionaires to pay tax at a 30 percent effective minimum rate. Under the rule, Mr. Buffett’s taxes might have doubled to $12 million in 2010, but this would represent only a trivial amount of additional tax for him. If the Buffett rule applied in 2010, Mr. Buffett’s effective tax rate would be only about 2/100 of 1 percent on the $8 billion in appreciation of his holdings. A Zuckerberg tax would be far better: under it Mr. Buffett would have paid $1.2 billion in tax in 2010.

A mark-to-market system of taxation on the top one-tenth of 1 percent would raise hundreds of billions of dollars of new revenue over the next 10 years. The new revenue could be used to lower payroll taxes, extend the George W. Bush tax cuts, repeal the alternative minimum tax, reduce the budget deficit, prevent military cuts or a combination of all of these.

This tax would not affect the middle class, or even most wealthy Americans. Nor would it affect small-business owners. It would affect only individuals who were undeniably, extraordinarily rich. Only publicly traded stock would be marked to market.

Some would argue that it is inherently unfair to tax “paper gains” before they are realized — Mr. Zuckerberg won’t receive $28 billion in cash; he holds only paper. Moreover, markets are inherently volatile; one year’s paper gains is another’s real losses. However, these arguments are far less credible when paper losses give rise to real tax refunds. Moreover, in a downturn, the mark-to-market tax would act as a fiscal stimulus — the cash refunds would offset a declining stock market.

This proposal follows the Ronald Reagan model by broadening the “base” of tax without increasing rates. In fact, Reagan was responsible for the last major reform of our antiquated realization system when he signed a law requiring taxpayers to pay a tax on interest that accrued on bonds but was not paid.

The most profound effect of a mark-to-market tax would be to level the playing field between wage earners, on one hand, and founders and investors on the other. Superwealthy holders of publicly traded securities could no longer escape tax on their vast wealth.

David S. Miller is a tax lawyer.

    The Zuckerberg Tax, NYT, 7.2.2012,
http://www.nytimes.com/2012/02/08/opinion/the-zuckerberg-tax.html

Steal This Column

February 5, 2012
The New York Times
By BILL KELLER

AMONG the wonders of the Internet, Wikipedia occupies a special place. From its birth 11 years ago it has professed, and has tried reasonably hard to practice, a kind of idealism that stands out in the vaguely, artificially countercultural ambience of Silicon Valley. Google’s informal corporate mantra — “Don’t Be Evil” — has become ever more cringe-making as the company pursues its world conquest. Though Bill Gates has applied his personal wealth to noble causes, nobody thinks of Microsoft as anything but a business. I marvel at Facebook’s Mark Zuckerberg and his acolytes; but I marvel at their imagination and industry, not what the new multibillionaire described last week as their “social mission.” But Wikipedia, while it has grown something of a bureaucratic exoskeleton, remains at heart the most successful example of the public-service spirit of the wide-open Web: nonprofit, communitarian, comparatively transparent, free to use and copy, privacy-minded, neutral and civil.

Like many people, I was an early doubter that a volunteer-sourced encyclopedia could be trusted, but I’m a convert. Although I find errors (a spot check of the entries for myself and my father the other day found minor inaccuracies in both, which I easily corrected), I use it more than any other Web tool except my search engines, and because I value it, I donate to its NPR-style fund-raising campaign.

So as I followed the latest battle in the great sectarian war over the governing of the Internet — the attempt to curtail online piracy — I was startled to see that Wikipedia’s founder and philosopher, Jimmy Wales, who generally stays out of the political limelight, had assumed a higher profile as a combatant for the tech industry. He supplied an aura of credibility to a libertarian alliance that ranged from the money-farming Megatrons of Google to the hacker anarchists of Anonymous.

Et tu, Jimmy?

For those of you who have not followed this subject — or who, like me, regard phrases like “Net neutrality” as Novocain for the brain — the latest skirmish concerns the rampant online theft of songs, films, books and other content. Separate bills advancing in the House and Senate would have given the government new tools to go after digital bootleggers. The central purpose of the legislation — rather lost in the rhetorical cross-fire and press coverage — was to extend the copyright laws that already protect content-creators in the U.S. to offshore havens where the most egregious pirates have set up shop. Like most people who make their living the way I do, I think parasite Web sites should be treated with the same contempt as people who pick pockets or boost cars.

But the legislation in question, drafted by the once-mighty entertainment industries, was vague and ham-handed, a case of overreach by Hollywood’s lobbyists. In the journalistic equivalent of taking a bullet for you, I read all 78 staggeringly dull pages of the House version, called SOPA. Interpreted in the most draconian way, it might have criminalized innocent sites and messed with the secure plumbing of the Internet itself. The partisans of an unfettered Internet saw their moment, and seized it. They unleashed a wave of protest that included much waving of the First Amendment and an attention-grabbing blackout of Wikipedia, the company’s most conspicuous foray into protest politics. The legislation is dead, and proponents of the open Web have shown that they are the new power in Washington.

The question is, how will they use their muscle now? Does this smackdown mean that any attempt to police the Web for thievery is similarly doomed?

Jimmy Wales, when I connected with him in London, was the voice of reason compared with some members of the openness alliance. He disavows the hacker anarchists — whose most recent stunt to protest enforcement of the copyright laws was to sabotage the Justice Department Web site — as “incredibly counterproductive.” He said he believes copyright protection is “unquestionably good” but that enforcement should focus on serious criminal enterprises, not the music fan who burns a copy for a friend or the search engine that merely offers the link to a bad place. (Agreed.) He worries that, under too-sweeping legislation, a site like Wikipedia could be punished because its very informative article about the aptly named site “The Pirate Bay” includes a link to the offending destination. (That kind of prosecutorial overkill seems unlikely, but it would be appalling.)

Wales thinks the current copyright protections — which require publishers, broadcasters and other content-makers to watch out for piracy of their own material and notify Internet hosts to take it down — work fine in the U.S. He grants that enforcement in foreign countries is a problem, but he opposes as burdensome and stifling any effort to make search engines or other intermediaries filter what flows through them.

Wales is not endorsing legislation yet, but he had positive things to say about an alternative bill, one that has won support from some tech companies and Internet freedom groups. The so-called OPEN Act would give new powers to the International Trade Commission to issue temporary restraining orders against sites that specialize in selling bootleg copies of books, movies, TV shows and so on, and to cut off their access to the online payment processors and ad-placing services that fund them.

I read those 44 pages, too, and the best that can be said about the law — drafted by the improbable left-right duo of Senator Ron Wyden, an Oregon Democrat, and Representative Darrell Issa, a California Republican — is that it’s a start. An impartial copyright expert who examined the bill at my request pointed out many loopholes and ambiguities that could make enforcement cumbersome and easily evaded. And personally, I’d go beyond OPEN (and Jimmy Wales) to give the intermediaries — search engines, online sharing services — greater responsibility to police what passes through their sites, rather than obliging the victim to do all the work.

“Google can remove sites from its search results for causing too much spam; why not for piracy?” said Robert Levine, whose 2011 book, “Free Ride,” is a wonderfully clear-eyed account of this colossal struggle over the future of our cultural lives.

But the OPEN Act is at least something to build on, and its sponsors have indicated they are flexible. The music and motion-picture industries should be reaching out to the saner members of the tech industry to collaborate in making it better, instead of demonizing it as if it were written by Blackbeard himself. The online industry is not a monolith. Internet companies that have made fortunes building paid venues — Apple (proprietor of iTunes) and Microsoft (Xbox Live) and Netflix, among others — have been pretty quiet during the angry backlash against copyright laws. They have a financial stake in protecting intellectual property.

“Basically, we need some serious reform,” Wales told me. “Everything should be on the table. But it’s not a war; it’s a giant public policy question.”

Ah, Jimmy, Jimmy, there’s the rub. These days in Washington, everything is a war. This is a complicated subject that has been turned into simplistic sloganeering by rival vested interests dressed up as the saviors of freedom.

When the founders enshrined free speech in the Constitution, they did not mean “free” in the sense of Wikipedia. As Justice Sandra Day O’Connor wrote in an important 1985 Supreme Court decision supporting intellectual property rights: “the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas.”

Content-makers would be crazy to let the Internet be stunted as a force for invention, mobilization and shared wisdom. It’s the sea we all swim in.

At the same time, online companies would be crazy to let piracy kill off the commerce that supplies quality material upon which even free sites like Wikipedia depend.

    Steal This Column, NYT, 5.2.2012,
    http://www.nytimes.com/2012/02/06/opinion/steal-this-column.html

How to Fight The Man

February 2, 2012
The New York Times
By DAVID BROOKS

A few weeks ago, a 22-year-old man named Jefferson Bethke produced a video called “Why I Hate Religion, but Love Jesus.” The video shows Bethke standing in a courtyard rhyming about the purity of the teachings of Jesus and the hypocrisy of the church. Jesus preaches healing, surrender and love, he argues, but religion is rigid, phony and stale. “Jesus came to abolish religion,” Bethke insists. “Religion puts you in bondage, but Jesus sets you free.”

The video went viral. As of Thursday, it had acquired more than 18 million hits on YouTube. It speaks for many young believers who feel close to God but not to the church. It represents the passionate voice of those who think their institutions lack integrity — not just the religious ones, but the political and corporate ones, too.

Right away, many older theologians began critiquing Bethke’s statements. A blogger named Kevin DeYoung pointed out, for example, that it is biblically inaccurate to say that Jesus hated religion. In fact, Jesus preached a religious doctrine, prescribed rituals and worshiped in a temple.

Bethke responded in a way that was humble, earnest and gracious, and that generally spoke well of his character. He also basically folded.

“I wanted to say I really appreciate your article man,” Bethke wrote to DeYoung in an online exchange. “It hit me hard. I’ll even be honest and say I agree 100 percent.”

Bethke watched a panel discussion in which some theologians lamented young people’s disdain of organized religion. “Right when I heard that,” he told The Christian Post, “it just convicted me, and God used it as one of those Spirit moments where it’s just, ‘Man, he’s right.’ I realized a lot of my views and treatments of the church were not Scripture-based; they were very experience based.”

Bethke’s passionate polemic and subsequent retreat are symptomatic of a lot of the protest cries we hear these days. This seems to be a moment when many people — in religion, economics and politics — are disgusted by current institutions, but then they are vague about what sorts of institutions should replace them.

This seems to be a moment of fervent protest movements that are ultimately vague and ineffectual.

We can all theorize why the intense desire for change has so far produced relatively few coherent recipes for change. Maybe people today are simply too deferential. Raised to get college recommendations, maybe they lack the oppositional mentality necessary for revolt. Maybe people are too distracted.

My own theory revolves around a single bad idea. For generations people have been told: Think for yourself; come up with your own independent worldview. Unless your name is Nietzsche, that’s probably a bad idea. Very few people have the genius or time to come up with a comprehensive and rigorous worldview.

If you go out there armed only with your own observations and sentiments, you will surely find yourself on very weak ground. You’ll lack the arguments, convictions and the coherent view of reality that you’ll need when challenged by a self-confident opposition. This is more or less what happened to Jefferson Bethke.

The paradox of reform movements is that, if you want to defy authority, you probably shouldn’t think entirely for yourself. You should attach yourself to a counter-tradition and school of thought that has been developed over the centuries and that seems true.

The old leftists had dialectical materialism and the Marxist view of history. Libertarians have Hayek and von Mises. Various spiritual movements have drawn from Transcendentalism, Stoicism, Gnosticism, Thomism, Augustine, Tolstoy, or the Catholic social teaching that inspired Dorothy Day.

These belief systems helped people envision alternate realities. They helped people explain why the things society values are not the things that should be valued. They gave movements a set of organizing principles. Joining a tradition doesn’t mean suppressing your individuality. Applying an ancient tradition to a new situation is a creative, stimulating and empowering act. Without a tradition, everything is impermanence and flux.

Most professors would like their students to be more rebellious and argumentative. But rebellion without a rigorous alternative vision is just a feeble spasm.

If I could offer advice to a young rebel, it would be to rummage the past for a body of thought that helps you understand and address the shortcomings you see. Give yourself a label. If your college hasn’t provided you with a good knowledge of countercultural viewpoints — ranging from Thoreau to Maritain — then your college has failed you and you should try to remedy that ignorance.

Effective rebellion isn’t just expressing your personal feelings. It means replacing one set of authorities and institutions with a better set of authorities and institutions. Authorities and institutions don’t repress the passions of the heart, the way some young people now suppose. They give them focus and a means to turn passion into change.

    How to Fight The Man, NYT, 2.2.2012,
    http://www.nytimes.com/2012/02/03/opinion/brooks-how-to-fight-the-man.html

Online Ambitions,

and a Dash of Real Estate,

Drive Newspaper Deals

January 29, 2012
The New York Times
By TANZINA VEGA

IF the future of media is digital, who would want to buy a newspaper? Many people, it turns out.

Investors acquired the newspapers in several major American cities in the second half of 2011, including The San Diego Union-Tribune, The Chicago Sun-Times, The Omaha World-Herald, The San Francisco Examiner and the 16 newspapers that made up The New York Times Company’s Regional Media Group.

Seventy-one daily newspapers were sold in the United States last year, for a total “just under $800 million,” said Owen Van Essen, president of Dirks, Van Essen & Murray, a company that specializes in newspaper mergers and acquisitions. Investors included billionaires like Warren E. Buffett and Philip F. Anschutz, a newly created media company called Wrapports, and media investors like Halifax Media Holdings and the Black Press Group.

Answering the question of why is a little more difficult. Advertising revenue and circulation, two industry benchmarks, have come under tremendous pressure in the last few years. According to the Newspaper Association of America, from 2006 through 2010, print advertising revenue declined to $22.8 billion from $46.6 billion for daily and Sunday papers. In the same period, paid circulation figures declined at many newspapers as users migrated to the Web.

The notion of newspaper pages whipping through printing presses, then being bundled with twine and tossed onto street corners might be considered romantic by some while others view it as bad business. But while newspaper companies can be bought on the cheap these days, some investors seem persuaded they can turn a quick profit while others may view owning a paper as a civic duty.

“A lot of these companies are acquiring newspapers and looking for underperforming assets,” said Agata Kaczanowska, a media industry analyst for the research company IbisWorld. “They’ll acquire the local newspapers and they’ll go in and slash operations to where these newspapers are profitable. It’s kind of like flipping houses.”

Ken Doctor, a news industry analyst, highlighted the “historically low prices” for newspaper properties and the potential for the buyers to make a profit. So far, he said, “the way they have maintained profitability is cost-cutting” — staff reductions, outsourcing and consolidating printing operations and call centers.

Alan D. Mutter, a lecturer for the Graduate School of Journalism at the University of California, Berkeley, and a former newspaper editor, pointed to the deal made by the private equity group Platinum Equity, which bought The San Diego Union-Tribune in 2009 for a sum reported to be less than $50 million and resold it for more than $110 million in 2011.

“They’re hoping for the same miracle that occurred with Platinum,” Mr. Mutter said. “That’s what all these guys are trying to get.”

On Platinum’s Web site, the company cites the actions it took to make The Union-Tribune profitable. A video features interviews with Ed Moss, the publisher of The Union-Tribune, and Jeff Light, the editor, highlighting the new production system, a redesign of the paper and upgraded facilities as reasons for the company’s recent success.

“After five consecutive years of double-digit declines, we’ve now stabilized the revenue,” Mr. Moss said in the video, adding that the company was now profitable every month.

Real estate assets may also play a part in decisions to buy, some analysts say. “Newspapers have big buildings,” Mr. Doctor said. “They are usually in a somewhat valuable location.”

Douglas Arthur, a publishing and media analyst at Evercore Partners agreed. “There’s no doubt that people who have looked at these companies, part of their equation is to look at the value of the real estate.”

Mr. Anschutz, owner of the Anschutz Corporation in Denver, bought the Oklahoma Publishing Company in September. The Broadmoor, a luxury hotel in Colorado Springs, Colo., was part of the sale.

In San Diego, the real estate interests of the paper’s new owner have been on prominent display. Douglas W. Manchester, chairman of the Manchester Financial Group and a developer who bought The San Diego Union-Tribune from Platinum Equity, recently wrote a front-page editorial for the paper, which was renamed U-T San Diego, calling for development of downtown waterfront land.

In an interview with Voice of San Diego, a nonprofit news organization, Mr. Manchester made no secret of his desire to redevelop “the prime Mission Valley parcel on which the paper’s headquarters sit.” Mr. Manchester, like many other newspaper buyers, did not return requests for an interview.

Mr. Van Essen, the merger specialist, said that while some buyers weighed things like real estate in their buying decisions, the real value in purchasing a paper was in its content. “You recognize you’re buying more than just the printed product,” Mr. Van Essen said. “You’re buying the entire organization, which is the backbone to be able to produce a digital product.”

Papers have an advantage in the market for local online advertising. Mr. Mutter, the Berkeley lecturer, said, “You have to think of it as an audience gathering, advertising delivery system.” In addition to credibility and visibility in local communities, newspapers offer advertisers “hundreds of millions of marketing impressions a day,” he added.

Online ad revenue in the United States has increased steadily since 1999, according to the Interactive Advertising Bureau, reaching $7.9 billion in the third quarter of 2011, a 22 percent increase from the period a year earlier.

Timothy P. Knight, the former publisher of Newsday and one of the co-founders of Wrapports, which bought The Chicago Sun-Times for $20 million in December, said the company’s goal was to make additional investments in print and digital properties.

“Print will continue to be an extremely important part of the product offering we use in our local communities,” Mr. Knight said. “We think this is a terrific opportunity to invest in using digital technology to deliver content and being able to leverage the trust that local newspapers have.”

Mr. Arthur, of Evercore Partners, said the industry was experiencing “brief surges in optimism” from the initial success of recent digital subscription plans. Among those with such plans are The New York Times, The Financial Times and The Wall Street Journal.

The MediaNews Group, based in Denver, announced in August that it would begin a digital pay model for the online versions of 23 of its newspapers outside of Colorado. Other newspapers have experienced increased payments for mobile and e-reader versions of their print editions.

“There is the beginning of a slow paradigm shift on the Web, where suppliers of content and consumers of content are beginning to realize that they need to pay for content,” Mr. Arthur said. “The free lunch will not go on forever.”

    Online Ambitions, and a Dash of Real Estate, Drive Newspaper Deals, NYT, 29.1.2012,
    http://www.nytimes.com/2012/01/30/business/media/online-ambitions-fuel-newspaper-deals.html

7 Charged as F.B.I. Closes a Top File-Sharing Site

January 20, 2012
The New York Times
By BEN SISARIO

In what authorities have called one of the largest criminal copyright cases ever brought, the Justice Department and the F.B.I. have seized the Web site Megaupload and charged seven people connected with it with running an international enterprise based on Internet piracy.

Megaupload, one of the most popular so-called locker services on the Internet, allowed users to transfer large files like movies and music anonymously. Media companies have long accused it of abetting copyright infringement on a vast scale. In a grand jury indictment, Megaupload is accused of causing $500 million in damages to copyright owners and of making $175 million by selling ads and premium subscriptions.

The arrests were greeted almost immediately with digital Molotov cocktails. The hacker collective that calls itself Anonymous attacked the Web sites of the United States Justice Department and several major entertainment companies and trade groups in retaliation for the seizure of Megaupload.

The case against Megaupload comes at a charged time, a day after broad online protests against a pair of antipiracy bills in Congress: the Stop Online Piracy Act, or SOPA, in the House of Representatives, and the Protect Intellectual Property Act, or PIPA, in the Senate. The bills would give United States authorities expanded powers to crack down on foreign sites suspected of piracy. But technology companies and civil liberties groups say that the powers are too broadly defined and could effectively result in censorship.

Four of the seven people, including the site’s founder, Kim Dotcom (born Kim Schmitz), were arrested Friday in New Zealand; the three others remain at large. Each of the seven people — who the indictment said were members of a criminal group it called Mega Conspiracy — is charged with five counts of copyright infringement and conspiracy. The charges could result in more than 20 years in prison.

As part of the crackdown, about 20 search warrants were executed in the United States and in eight other countries, including New Zealand. About $50 million in assets were also seized, as well as a number of servers and 18 domain names that formed Megaupload’s network of file-sharing sites.

The police arrived at Dotcom Mansion in Auckland on Friday morning in two helicopters. Mr. Dotcom, a 37-year-old with dual Finnish and German citizenship, retreated into a safe room, and the police had to cut their way in. He was eventually arrested with a firearm close by that the police said appeared to be a shortened shotgun.

“It was definitely not as simple as knocking at the front door,” said Grant Wormald, a detective inspector.

The police said they seized 6 million New Zealand dollars, or $4.8 million, in luxury vehicles, including a Rolls-Royce Phantom Drophead Coupe and a pink 1959 Cadillac. They also seized art and electronic equipment and froze 11 million dollars in cash in various accounts.

Mr. Dotcom and three others arrested in New Zealand appeared in court Friday afternoon and were denied bail. Extradition proceedings will continue Monday.

The police said the other three arrested in New Zealand were Finn Batato, 38, a German citizen and resident; Mathias Ortmann, 40, a German citizen who is a resident of Hong Kong; and Bram van der Kolk, 29, a Dutch citizen who is a resident of New Zealand.

The police said they were still searching Dotcom Mansion on Friday evening.

Ira P. Rothken, a lawyer for Megaupload, said by telephone Thursday that “Megaupload believes the government is wrong on the facts, wrong on the law.”

On Wednesday, Google and Wikipedia joined dozens of sites in political protests by blacking out some content and explaining their arguments against the antipiracy laws.

The group Anonymous, which has previously set its sights on PayPal, Sony and major media executives, was more blunt in its response. The group disabled the Justice Department’s site for a time, and it also claimed credit for shutting down sites for the Motion Picture Association of America and the Recording Industry Association of America, two of the most powerful media lobbies in Washington, as well as those of Universal Music Group, the largest music label, and BMI, which represents music publishers.

“Let’s just say, for #SOPA supporters their #SOPAblackout is today,” Anonymous wrote in a Twitter post. In an e-mail, a spokesman for the group said it was responsible for the Web attacks.

The Megaupload case touches on many of the most controversial aspects of the anti-piracy debate. Megaupload and similar sites, like RapidShare and MediaFire, are often promoted as convenient ways to transfer large files legitimately; a recent promotional video had major stars like Will.i.am of the Black Eyed Peas singing Megaupload’s praises. But media companies say the legitimate uses are a veil concealing extensive theft.

Mr. Dotcom has made himself a visible target. He splits his time between Hong Kong and New Zealand and casts himself in flamboyant YouTube videos. His role as one of the most prominent Web locker operators has earned him a half-joking nickname in Hollywood: Dr. Evil.

According to the indictment, he took in $42 million from Megaupload’s operations in 2010.

The indictment against Megaupload, which stems from a federal inquiry that began two years ago, was handed down by a grand jury in Virginia two weeks ago but was not unsealed until Thursday.

It quotes extensively from correspondence among the defendants, who work for Megaupload and its related sites. The correspondence, the indictment says, shows that the operators knew the site contained unauthorized content.

The indictment cites an e-mail from last February, for example, in which three members of the group discussed an article about how to stop the government from seizing domain names.

The Megaupload case is unusual, said Orin S. Kerr, a law professor at George Washington University, in that federal prosecutors obtained the private e-mails of Megaupload’s operators in an effort to show they were operating in bad faith.

“The government hopes to use their private words against them,” Mr. Kerr said. “This should scare the owners and operators of similar sites.”


Nicole Perlroth and Jonathan Hutchison contributed reporting.

    7 Charged as F.B.I. Closes a Top File-Sharing Site, NYT, 20.1.2012,
    http://www.nytimes.com/2012/01/21/technology/megaupload-indictment-internet-piracy.html

Senate Postpones Vote on Internet Piracy Bill

January 20, 2012
The New York Times
By JONATHAN WEISMAN

WASHINGTON — Senator Harry Reid, the majority leader, on Friday called off a scheduled vote on the online antipiracy bill that had rallied the World Wide Web and rocked Capitol Hill, and House leaders took steps to slow legislation as well.

Taking to the medium that helped organize extensive protests against the legislation, Mr. Reid, Democrat of Nevada, announced a delay in the vote via the social media Web site Twitter. But he indicated the issue, which had been scheduled for a vote Tuesday, had not died.

“There’s no reason that legitimate issues raised about Protect I.P. can’t be resolved,” he wrote, referring to the legislation by its shorthand name. “Counterfeiting & piracy cost 1000s of #jobs yearly. Americans rightfully expect to be fairly compensated 4 their work. I’m optimistic that we can reach compromise on Protect I.P. in coming week.”

In the House, Representative Lamar Smith, the Texas Republican who is chairman of the Judiciary Committee, called off plans to formally draft his version of the antipiracy bill next month.

After vowing two days ago to move forward, Mr. Smith said in a statement on Friday: “The committee remains committed to finding a solution to the problem of online piracy that protects American intellectual property and innovation.” But he added, “The House Judiciary Committee will postpone consideration of the legislation until there is wider agreement on a solution.”

The Protect I.P. Act and its counterpart in the House, the Stop Online Piracy Act, had broad bipartisan support when they were drafted by Mr. Smith and Senator Patrick Leahy, Democrat of Vermont and chairman of the Judiciary Committee. The bills were pushed hard by the Hollywood studios, recording industry, book publishing world and United States Chamber of Commerce as antidotes to rampant piracy of American cultural wares by offshore Web sites.

But many Internet companies, including Google, Facebook, Twitter and Reddit, saw the bills as a threat, and said they would stifle creativity on the Internet while forcing search engines and social media to become police officers for the Department of Justice. Other outlets, like Wikipedia, objected to any proposed laws that could crimp the free flow of information on the Internet.

With new-economy aplomb, the Internet giants rallied their troops to rise up against Washington stalwarts like the Motion Picture Association of America and the Recording Industry Association of America. What had started as a nonpartisan issue began turning to Republican advantage, as Republicans led the flight away from the bill.

By Thursday night, senior Republican staff members were bragging that the remaining supporters of the bills were largely Democrats, even though members of both parties had helped draft them.

Mr. Leahy went along with Mr. Reid’s decision to back off, but he made it clear he was doing so reluctantly.

“More time will pass with jobs lost and economies hurt by foreign criminals who are stealing American intellectual property and selling it back to American consumers,” he said in a statement.

“The day will come when the senators who forced this move will look back and realize they made a knee-jerk reaction to a monumental problem,” he added. “Somewhere in China today, in Russia today, and in many other countries that do not respect American intellectual property, criminals who do nothing but peddle in counterfeit products and stolen American content are smugly watching how the United States Senate decided it was not even worth debating how to stop the overseas criminals from draining our economy.”

    Senate Postpones Vote on Internet Piracy Bill, NYT, 20.1.2012,
    http://www.nytimes.com/2012/01/21/technology/senate-postpones-piracy-vote.html

In Fight Over Piracy Bills, New Economy Rises Against Old

January 18, 2012
The New York Times
By JONATHAN WEISMAN

WASHINGTON — When the powerful world of old media mobilized to win passage of an online antipiracy bill, it marshaled the reliable giants of K Street — the United States Chamber of Commerce, the Recording Industry Association of America and, of course, the motion picture lobby, with its new chairman, former Senator Christopher J. Dodd, the Connecticut Democrat and an insider’s insider.

Yet on Wednesday this formidable old guard was forced to make way for the new as Web powerhouses backed by Internet activists rallied opposition to the legislation through Internet blackouts and cascading criticism, sending an unmistakable message to lawmakers grappling with new media issues: Don’t mess with the Internet.

As a result, the legislative battle over two once-obscure bills to combat the piracy of American movies, music, books and writing on the World Wide Web may prove to be a turning point for the way business is done in Washington. It represented a moment when the new economy rose up against the old.

“I think it is an important moment in the Capitol,” said Representative Zoe Lofgren, Democrat of California and an important opponent of the legislation. “Too often, legislation is about competing business interests. This is way beyond that. This is individual citizens rising up.”

It appeared by Wednesday evening that Congress would follow Bank of America, Netflix and Verizon as the latest institution to change course in the face of a netizen revolt.

Legislation that just weeks ago had overwhelming bipartisan support and had provoked little scrutiny generated a grass-roots coalition on the left and the right. Wikipedia made its English-language content unavailable, replaced with a warning: “Right now, the U.S. Congress is considering legislation that could fatally damage the free and open Internet.” Visitors to Reddit found the site offline in protest. Google’s home page was scarred by a black swatch that covered the search engine’s label.

Phone calls and e-mail messages poured in to Congressional offices against the Stop Online Piracy Act in the House and the Protect I.P. Act in the Senate. One by one, prominent backers of the bills dropped off.

First, Senator Marco Rubio of Florida, a rising Republican star, took to Facebook, one of the vehicles for promoting opposition, to renounce a bill he had co-sponsored. Senator John Cornyn of Texas, who leads the G.O.P.’s Senate campaign efforts, used Facebook to urge his colleagues to slow the bill down. Senator Jim DeMint, Republican of South Carolina and a Tea Party favorite, announced his opposition on Twitter, which was already boiling over with anti-#SOPA and #PIPA fever.

Then trickle turned to flood — adding Senators Mark Kirk of Illinois and Roy Blunt of Missouri, and Representatives Lee Terry of Nebraska and Ben Quayle of Arizona. At least 10 senators and nearly twice that many House members announced their opposition.

“Thanks for all the calls, e-mails, and tweets. I will be opposing #SOPA and #PIPA,” Senator Jeff Merkley, Democrat of Oregon, wrote in a Twitter message. Late Wednesday, Senator Charles E. Grassley of Iowa, the senior Republican on the Senate Judiciary Committee, withdrew his support for a bill he helped write.

The existing bill “needs more due diligence, analysis and substantial changes,” he said in a statement.

Few lawmakers even now question the need to combat pirates at Web sites in China, Russia and elsewhere who have offered free American movies, television shows, music and books almost as soon as they are released. Heavyweights like the Walt Disney Company secured the support of senators and representatives before the Web companies were even aware the legislation existed.

“A lot of people are pitching this as Hollywood versus Google. It’s so much more than that,” said Maura Corbett, spokeswoman for NetCoalition, which represents Google, Amazon.com, Yahoo, eBay and other Web companies. “I would love to say we’re so fabulous, we’re just that good, but we’re not. The Internet responded the way only the Internet could.”

For the more traditional media industry, the moment was menacing. Supporters of the legislation accused the Web companies of willfully lying about the legislation’s flaws, stirring fear to protect ill-gotten profits from illegal Web sites.

Mr. Dodd said Internet companies might well change Washington, but not necessarily for the better with their ability to spread their message globally, without regulation or fact-checking.

“It’s a new day,” he added. “Brace yourselves.”

Citing two longtime liberal champions of the First Amendment, Senator Patrick Leahy and Representative John Conyers Jr. of Michigan, Mr. Dodd fumed, “No one can seriously believe Pat Leahy and John Conyers can be backing legislation to block free speech or break the Internet.”

For at least four years, Hollywood studios, recording industry and major publishing houses have pressed Congress to act against offshore Web sites that have been giving away U.S. movies, music and books as fast as the artists can make them. Few lawmakers would deny the threat posed by piracy to industries that have long been powerful symbols of American culture and have become engines of the export economy. The Motion Picture Association of America says its industry brings back more export income than aerospace, automobiles or agriculture, and that piracy costs the country as many as 100,000 jobs.

The House response, SOPA, was drafted by a conservative Republican, Representative Lamar Smith of Texas, with the backing of 30 co-sponsors, from Representative Debbie Wasserman Schultz of Florida, the chairwoman of the Democratic National Committee, to mainline Republican Peter King of New York. The Senate’s version, written by Mr. Leahy, the Vermont Democrat who is chairman of the Senate Judiciary Committee chairman, attracted 40 co-sponsors from across the political spectrum and cleared his committee unanimously.

Then the Web rose up. Activists said the legislation would censor the Web, force search engines to play policemen for a law they hate and cripple innovation in one of the most vibrant sectors of the American economy.

Mr. Smith, the House Republican author, said opposition Web sites were spreading “fear rather than fact.”

“When the opposition is based upon misinformation, I have confidence in the facts and confidence that the facts will ultimately prevail,” Mr. Smith said.

Google, Facebook and Twitter have political muscle of their own, with in-house lobbying shops and trade associations just like traditional media’s. Facebook has hired the former Clinton White House press secretary Joe Lockhart. Google’s Washington operations are headed by Pablo Chavez, a former counsel to Senator John McCain, Republican of Arizona, and a veteran of the Senate Commerce Committee.

And for all the campaign contributions, Washington parties and high-priced lobbyists the old economy could muster, nothing could compare to the tentacles the new economy can reach into Americans’ everyday lives through sites like Wikipedia. Aides to Senator Harry Reid, the majority leader, say he will press forward with a vote Tuesday to open debate on the Protect I.P. bill. Negotiators from both parties are scrambling for new language that could assuage the concerns of the Internet community, but expectations are that the bill will now fail to get the 60 votes to move forward — a significant setback.

“The problem for the content industry is they just don’t know how to mobilize people,” said John P. Feehery, a former House Republican leadership aide who previously worked at the motion picture association. “They have a small group of content makers, a few unions, whereas the Internet world, the social media world especially, can reach people in ways we never dreamed of before.”

    In Fight Over Piracy Bills, New Economy Rises Against Old, NYT, 18.1.2012,
    http://www.nytimes.com/2012/01/19/technology/web-protests-piracy-bill-and-2-key-senators-change-course.html

Online Piracy and Political Overreach

January 18, 2012
The New York Times

For months, it seemed as if Congress would pass an online antipiracy bill, even though its main weapons — cutting off the financing of pirate Web sites and making them harder to find — risk censoring legitimate speech and undermining the security of the Internet. But the unmovable corporations behind those bills have run into an unstoppable force: an outcry by Internet companies led by Google and Wikipedia that culminated in an extraordinary online protest on Wednesday.

Lawmakers have begun peeling away from the bills, notably Senators Marco Rubio, the Florida Republican who cosponsored the Senate version, and John Cornyn, the powerful Texas conservative. They dropped out after Wikipedia’s English language site went dark and Google put a black bar on its homepage on Wednesday.

The Protect I.P. Act would have easily passed the Senate last summer if not for a hold placed by Senator Ron Wyden, a Democrat of Oregon. The Stop Online Piracy Act, introduced in the House in October, has also lost some of its initial backers. And on Saturday, the White House released a statement warning that it would “not support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.”

Though we are encouraged by legislators’ newfound caution about the potential consequences of the bills, Congress must keep working on ways to curtail the growing business of foreign rogue Web sites trafficking in counterfeit goods and stolen intellectual property.

The Internet industry was pitted against some of the best-honed lobbying groups, including Hollywood and the recording studios, the United States Chamber of Commerce and the A.F.L.-C.I.O. The industry has made a good case that some of the definitions of wrongdoing — like “facilitating” intellectual property infringement — were overly broad. They said allowing property rights owners to direct payment companies like Visa and ad networks like Google’s to stop doing business with sites they deemed infringing — with no penalties if they were proved wrong— could stymie legitimate online expression.

They made the case that the proposal to make infringing Web sites “disappear” from the Internet by forbidding search engines from finding them or redirecting their Web addresses to other Internet domains was easy to get around and could potentially undermine efforts to stop hackers from doing exactly the same thing.

The Internet companies now have the responsibility to come up with a workable alternative that gives owners of intellectual property rights better tools to stop piracy by Web sites located in faraway countries. These sites get some 53 billion visits a year, more than Google or Wikipedia. Yet they are outside the grasp of American law.

The focus on cutting the financing of online pirates, which features in the House and Senate bills, is the right way to go. Sponsors of both bills have moved to delete, at least temporarily, provisions to make rogue Web sites disappear. The legislation could be further amended to narrow the definition of criminality and clarify that it is only aimed at foreign sites. And it could tighten guarantees of due process. Private parties must first get a court order to block business with a Web site they deem infringing on their copyrights.

We are happy that the drive to pass antipiracy legislation has slowed enough that Congress might actually consider all its implications carefully. Lawmakers can now act wisely to create tools that can help combat the scourge of online piracy without excessive collateral damage.

    Online Piracy and Political Overreach, NYT, 18.1.2012,
    http://www.nytimes.com/2012/01/19/opinion/online-piracy-and-political-overreach.html

The False Ideals of the Web

January 18, 2012
The New York Times
By JARON LANIER

Berkeley, Calif.

WE who love the Internet love the fact that so many people contribute to it. It’s hard to believe that skeptics once worried about whether anyone would have anything worthwhile to say online.

There is, however, an outdated brand of digital orthodoxy that ought to be retired. In this worldview, the Internet is a never-ending battle of good guys who love freedom against bad guys like old-fashioned Hollywood media moguls. The bad guys want to strengthen copyright law, and make it impossible to post anonymously copied videos and stories.

The proposed Stop Online Piracy Act, or SOPA, which is being considered in the House while the Senate looks at a similar bill, is deemed the worst thing ever. Popular sites like Wikipedia staged a blackout on Wednesday to protest the bills. Google put a black banner over its name. Nothing quite like that has ever happened before. This is extraordinary, because it shows that belief in the priority of fighting SOPA is so absolute as to trump the stated nonpartisan missions of these sites.

The legislation has indeed included draconian remedies in various drafts, so I join my colleagues in criticizing the bills. But our opposition has become so extreme that we are doing more harm than good to our own cause. Those rare tech companies that have come out in support of SOPA are not merely criticized but barred from industry events and subject to boycotts. We, the keepers of the flame of free speech, are banishing people for their speech. The result is a chilling atmosphere, with people afraid to speak their minds.

Our melodrama is driven by a vision of an open Internet that has already been distorted, though not by the old industries that fear piracy.

For instance, until a year ago, I enjoyed a certain kind of user-generated content very much: I participated in forums in which musicians talked about musical instruments.

For years, I was warned that old-fashioned control freaks like media moguls might separate me from my beloved forums. Perhaps a forum would be shut down because it was hosted on some server with pirated content.

While acknowledging that this is a possible scenario, a very different factor — proprietary social networking — is ending my freedom to participate in the forums I used to love, at least on terms I accept. Like many other forms of contact, the musical conversations are moving into private sites, particularly Facebook. To continue to participate, I’d have to accept Facebook’s philosophy, under which it analyzes me, and is searching for new ways to charge third parties for the use of that analysis.

At the moment that wouldn’t bother me much, because I know a lot of people at Facebook and I know they are decent. But I’ve seen what happens to companies over time. Who knows who will be using my data in 20 years?

You might object that it’s all based on individual choice. That argument ignores the consequences of networks, and the way they function. After a certain point choice is reduced.

And it’s not Facebook’s fault! We, the idealists, insisted that information be able to flow freely online, which meant that services relating to information, instead of the information itself, would be the main profit centers. Some businesses do sell content, but that doesn’t address the business side of everyday user-generated content.

The adulation of “free content” inevitably meant that “advertising” would become the biggest business in the open part of the information economy. Furthermore, that system isn’t so welcoming to new competitors. Once networks are established, it is hard to reduce their power. Google’s advertisers, for instance, know what will happen if they move away. The next-highest bidder for each position in Google’s auction-based model for selling ads will inherit that position if the top bidder goes elsewhere. So Google’s advertisers tend to stay put because the consequences of leaving are obvious to them, whereas the opportunities they might gain by leaving are not.

The obvious strategy in the fight for a piece of the advertising pie is to close off substantial parts of the Internet so Google doesn’t see it all anymore. That’s how Facebook hopes to make money, by sealing off a huge amount of user-generated information into a separate, non-Google world. Networks lock in their users, whether it is Facebook’s members or Google’s advertisers.

This belief in “free” information is blocking future potential paths for the Internet. What if ordinary users routinely earned micropayments for their contributions? If all content were valued instead of only mogul content, perhaps an information economy would elevate success for all. But under the current terms of debate that idea can barely be whispered.

To my friends in the “open” Internet movement, I have to ask: what did you think would happen? We in Silicon Valley undermined copyright to make commerce become more about services instead of content — more about our code instead of their files. The inevitable endgame was always that we would lose control of our own personal content, our own files. We haven’t just weakened Hollywood and old-fashioned publishers. We’ve weakened ourselves.

Jaron Lanier is the author of “You Are Not a Gadget: A Manifesto”

and a researcher at Microsoft Research, but these views are his alone.

    The False Ideals of the Web, NYT, 18.1.2012,
    http://www.nytimes.com/2012/01/19/opinion/sopa-boycotts-and-the-false-ideals-of-the-web.html

With Twitter, Blackouts and Demonstrations,

Web Flexes Its Muscle

January 18, 2012
The New York Times
By JENNA WORTHAM

The Web buzzed with protests large and small on Wednesday as the tech industry rallied against Congressional legislation to curb Internet piracy.

Some sites blacked out — among them, the English-language Wikipedia, though it was possible to access the encyclopedia through several clever workarounds — while others, including Google and Craigslist, draped their pages with information about the bills, or restricted access.

Many start-ups quickly cobbled together tech solutions to support their cause. HelloFax, for example, created a tool that let people send their representatives faxes voicing their opinions through the Web.

The effort was an unusual orchestration that began gathering steam online late Tuesday night and escalated early Wednesday morning, eventually whipping the Web into a frenzy.

Google said 4.5 million people signed its online petition to Congress, voicing displeasure at the legislation; Twitter said more than two million posts on the subject flowed through the site by early afternoon, nearly four times as many as usual.

Engine Advocacy, a service that helps people call their local members of Congress, said on Twitter that it was averaging roughly 2,000 calls per second, while Wikimedia Foundation, the nonprofit organization that oversees Wikipedia, said four million people used its blacked-out site to look up contact information for their local representative.

Opponents of the legislation also took their demonstrations into the real world in New York, San Francisco and Seattle, but drew relatively modest numbers of protesters. Still, for a group that tends to be more comfortable showing solidarity from behind the warm glow of a computer screen — by changing a profile picture or reposting a favorite motto — it was a considerable showing.

The New York rally, organized by a tech industry trade group, attracted about a thousand protesters in Midtown Manhattan.. Sebastian Delmont, 38, who works at StreetEasy, a real estate search site, said about half of his co-workers attended the protest. “Our worry is that they are building something like a Great Firewall, like in China and the Middle East,” he said.

In Washington by Wednesday morning, several lawmakers had reconsidered their support of the bills — one in the House, one in the Senate. The legislation is intended to curtail copyright abuses by preventing American search engines and Web sites from directing users to the mostly foreign sites that allow for the distribution of stolen materials like music, movies, television shows, software and other content.

The tech industry has argued that the bills are too broad, threaten free speech, stifle innovation and most likely will not even effectively eliminate piracy.

A freshman senator, Marco Rubio of Florida, a rising Republican star, announced that he would no longer back the Senate bill, the Protect Intellectual Property Act, or PIPA, which he had co-sponsored. Senator John Cornyn, the Texas Republican who heads the campaign operation for his party, urged Congress take more time to study the measure.

“Concerns about unintended damage to the Internet and innovation in the tech sector require a more thoughtful balance, which will take more time,” he posted on his Facebook page at 9 a.m.

Supporters of the bills, like major media and entertainment companies, struggled to get their message out, but found the going rough. “It’s very difficult to counter the misinformation when the disseminators also own the platform," said Cary H. Sherman, chairman and chief executive of the Recording Industry Association of America, a trade group that represents the United States music industry, referring to Google and Facebook.

Mike Nugent, executive director of Creative America, a coalition of major entertainment companies and industry unions, said he was taking the long view on the issue and not focusing on the Internet protests this week. “We’re digging in for a tough fight over the next week and in the longer term,” he said.

On Wednesday, the corporate group began its second nationwide advertising campaign in print, radio and television to push the legislation. A banner ad with the headline “What to Do During an Internet Blackout” appeared on select Web sites and on a Times Square billboard. Suggestions included: “Read a book. Listen to music. Go to a movie. Watch the game. Tune into a show” — all copyrighted content the legislation intends to protect.

The group will also hold town hall meetings and place robo-calls in certain districts to educate constituents on the need for these bills, Mr. Nugent said. “It really comes down to ‘Don’t steal our stuff,’ ” he said.

But the issue is difficult for some in the entertainment industry. Andy Samberg of "Saturday Night Live,” for example, and his colleagues in the video comedy group the Lonely Island, as well as a number of musicians and authors, wrote a letter to Congress saying they had serious concerns about the legislation as written.

“Online piracy is harmful and it needs to be addressed, but not at the expense of censoring creativity, stifling innovation or preventing the creation of new, lawful digital distribution methods,” they said in the letter.

The activity on the Web touched many different kinds of sites. More than 25,000 blogs on the popular platform WordPress chose to go black to support the cause, and 12,500 others added a “Stop Censorship” ribbon to their sites. Fight for the Future, a nonprofit group helping coordinate efforts around the Web, said 50,000 sites had promised their allegiance and pledged participation in the online demonstration.

I Can Has Cheezburger, a hub for humorous pictures of cats, and Etsy, a marketplace for crafts, greeted users with banners of information about the bills. Reddit, a community discussion site; Boing Boing, the culture blog; and the comedy video site My Damn Channel were blacked out.

The mobile restaurant finder UrbanSpoon and some news organizations, including Wired.com, blacked out some content.

Mark Zuckerberg, chief executive of Facebook who had previously remained silent about the bills, weighed in by late Wednesday afternoon. He posted on his own Facebook page, saying: “The world today needs political leaders who are pro-Internet. We have been working with many of these folks for months on better alternatives to these current proposals.”

Within an hour, more than 200,000 Facebook users had clicked the Like button on his post.

Even a few in Congress joined in the online efforts. Representatives Anna G. Eshoo, Democrat of California who represents part of Silicon Valley, and Earl Blumenauer, Democrat of Oregon, blacked out their Congressional sites for the day. And by late Wednesday afternoon, Senator Kirsten Gillibrand, a Democrat in New York who was a co-sponsor of the PIPA bill, posted this message on her Facebook page: “I agree there are real concerns with the current legislation & I’m working to make important changes to the bill. We must work to strike a balance between ending online piracy to protect New York jobs & ensuring Internet freedom so our tech community can continue to flourish.”

In San Francisco, 60 people gathered at the stairs of City Hall to join the protest.

"I don’t go to rallies,” said Anis Salvesen, 34, the marketing manager for Tripping, a travel start-up based in San Francisco. “I’ve been to one other rally in my life. But this legislation is bad, it would directly impact our company." He added, “We’ve made our point. The next move is on them and if they don’t respond, then we will keep at them.”

Brian Chen, Amy Chozick and Jonathan Weisman contributed reporting.

    With Twitter, Blackouts and Demonstrations, Web Flexes Its Muscle, NYT, 18.1.2012,
    http://www.nytimes.com/2012/01/19/technology/protests-of-antipiracy-bills-unite-web.html

Behold the Power of Google

January 18, 2012
2:35 pm
The New York Times
By ANDREW ROSENTHAL
The Loyal Opposition - From the Desk of Andrew Rosenthal

Talk about instant gratification.

Big Internet companies such as Google and Firefox, and the English-language version of Wikipedia, are holding a one-day protest today against anti-piracy bills moving through Congress. Many people (including the members of the Times editorial board) have been fighting these bills for months, without much visible success. But within hours of the black bar appearing on Google’s home page, D.C. reacted.

Marco Rubio of Florida started things off. He announced this morning that he was no longer backing the Protect Intellectual Property Act. This was interesting not just because he’s a right-wing favorite who is talked about as White House material, but because Senator Rubio actually co-sponsored that bill.

Later, Senator John Cornyn of Texas also said he would no longer back the bill and said Congress should slow down on this sweeping legislation. He said on his Facebook page that it was better to get this bill right, rather than “fast and wrong.” That was refreshing because I can’t remember the last time Mr. Cornyn acted sensibly. His voice matters, because he heads the Senate campaign committee, which controls millions of dollars in re-election funds.

Congress should certainly take more time on the Senate bill, and on the House version, the Stop Online Piracy Act, but it shouldn’t abandon the issue entirely.

There’s a lot of hysteria on both sides of this debate. The current legislation does go too far, and could cause real harm to free speech and innovation on the Web. It would give copyright holders too much power, allowing Internet service providers to block sites that seem to enable intellectual property infringement, without legal oversight. But online piracy is a gigantic problem. Millions of people routinely steal other people’s intellectual property every day without a moment’s hesitation.

We’re written about these issues in detail on the editorial page and will have more to say on the subject. With patience and political courage, the two sides could find middle ground. Requiring court orders in lieu of pre-emptive strikes against sites suspected of wrongdoing would go a long way

But the fact is, Google and Wikipedia did everyone a big service, and the swift reaction of lawmakers was gratifying. Now, if Mr. Cornyn and Mr. Rubio would pay as much attention to the Occupy protesters and the pain of the middle class, the country would be even better off.

This blog post has been revised to reflect the following correction:

Correction: January 17, 2012

An earlier version of this post stated that the Protect Intellectual Property Act

is a House bill. It’s actually a Senate bill.

    Behold the Power of Google, NYT, 18.1.2012,
    http://loyalopposition.blogs.nytimes.com/2012/01/18/behold-the-power-of-google/

Young, in Love and Sharing Everything,

Including a Password

January 17, 2012
The New York Times
By MATT RICHTEL

Young couples have long signaled their devotion to each other by various means — the gift of a letterman jacket, or an exchange of class rings or ID bracelets. Best friends share locker combinations.

The digital era has given rise to a more intimate custom. It has become fashionable for young people to express their affection for each other by sharing their passwords to e-mail, Facebook and other accounts. Boyfriends and girlfriends sometimes even create identical passwords, and let each other read their private e-mails and texts.

They say they know such digital entanglements are risky, because a souring relationship can lead to people using online secrets against each other. But that, they say, is part of what makes the symbolism of the shared password so powerful.

“It’s a sign of trust,” Tiffany Carandang, a high school senior in San Francisco, said of the decision she and her boyfriend made several months ago to share passwords for e-mail and Facebook. “I have nothing to hide from him, and he has nothing to hide from me.”

“That is so cute,” said Cherry Ng, 16, listening in to her friend’s comments to a reporter outside school. “They really trust each other.”

We do, said Ms. Carandang, 17. “I know he’d never do anything to hurt my reputation,” she added.

It doesn’t always end so well, of course. Changing a password is simple, but students, counselors and parents say that damage is often done before a password is changed, or that the sharing of online lives can be the reason a relationship falters.

The stories of fallout include a spurned boyfriend in junior high who tries to humiliate his ex-girlfriend by spreading her e-mail secrets; tensions between significant others over scouring each other’s private messages for clues of disloyalty or infidelity; or grabbing a cellphone from a former best friend, unlocking it with a password and sending threatening texts to someone else.

Rosalind Wiseman, who studies how teenagers use technology and is author of “Queen Bees and Wannabes,” a book for parents about helping girls survive adolescence, said the sharing of passwords, and the pressure to do so, was somewhat similar to sex.

Sharing passwords, she noted, feels forbidden because it is generally discouraged by adults and involves vulnerability. And there is pressure in many teenage relationships to share passwords, just as there is to have sex.

“The response is the same: if we’re in a relationship, you have to give me anything,” Ms. Wiseman said.

In a 2011 telephone survey, the Pew Internet and American Life Project found that 30 percent of teenagers who were regularly online had shared a password with a friend, boyfriend or girlfriend. The survey, of 770 teenagers aged 12 to 17, found that girls were almost twice as likely as boys to share. And in more than two dozen interviews, parents, students and counselors said that the practice had become widespread.

In a recent column on the tech-news Web site Gizmodo, Sam Biddle called password sharing a linchpin of intimacy in the 21st century, and offered advice to couples and friends on how to avoid missteps.

“I’ve known plenty of couples who have shared passwords, and not a single one has not regretted it,” said Mr. Biddle in an interview, adding that the practice includes the unspoken notion of mutually assured destruction if somebody misbehaves. “It’s the kind of symbolism that always goes awry.”

Students say there are reasons, beyond a show of trust, to swap online keys. For instance, several college students said they regularly shared Facebook passwords — not to snoop on or monitor each other, but to force themselves to study for finals. A student would give her password to a friend to change it — and not disclose the new password — thereby temporarily locking out the Facebook account holder and taking away a big distraction to studying.

Alexandra Radford, 20, a junior at San Francisco State University, said she had done this for friends several times during exams. One friend wanted to know the new password before finals ended, but Ms. Radford held firm.

“Once finals were over, I gave it to her,” she said. “She was, like, ‘Oh, my gosh, thank you.’ She knew I was good about not giving her the password back.”

But Ms. Radford is more sheepish about the passwords she shared a few years ago in high school with her boyfriend. They even changed their passwords to reflect their relationship. Hers: ILoveKevin. His: ILoveAly.

“We did it so I could check his messages because I didn’t trust him, which is not healthy,” she conceded.

Counselors typically advise against the practice, and parents often preach the wisdom of password privacy. Winifred Lender, a child psychologist in Santa Barbara, had her three sons sign “digital contracts” that outline terms for how much media they will consume, how they will behave online and that they will not share passwords. Still, Ms. Lender said, her 14-year-old was recently asked by a friend for his password.

“He said: ‘You give me yours and I’ll give you mine.’ ”

Her son was taken aback but then relied on a tried-and-true excuse for saying no. “He blamed it on his parents,” Ms. Lender said of her son. “He said, ‘If I give you my password, my mom will have a cow.’ ”

Emily Cole, 16, a high school junior in Glastonbury, Conn., felt the sting of password betrayal in seventh grade, when she gave her e-mail password to her first boyfriend.

Then she started to develop feelings for another student, she said, and sent an e-mail to her. Her boyfriend read the e-mail and started spreading it around the school, calling Ms. Cole a “pervert.”

Ms. Cole said it was deeply hurtful. And yet, despite what happened, she said she would not have reservations about sharing her password with her new boyfriend.

“I know this sounds kind of weird, but we have a different relationship,” she said. “We’re not in seventh grade. I trust him in a different way, I suppose.”

Ms. Cole’s mother, Patti, 48, a child psychologist, said she believed her daughter would be more judicious now about sharing a password. But, more broadly, she thinks young people are sometimes drawn to such behavior as they might be toward sex, in part because parents and others warn them against doing so.

“What worries me is we haven’t done a very good job at stopping kids from having sex,” she said. “So I’m not real confident about how much we can change this behavior.”

    Young, in Love and Sharing Everything, Including a Password, NYT, 17.1.2012,
    http://www.nytimes.com/2012/01/18/us/teenagers-sharing-passwords-as-show-of-affection.html

Protest on Web Uses Shutdown to Take On Two Piracy Bills

January 17, 2012
The New York Times
By JENNA WORTHAM

With a Web-wide protest on Wednesday that includes a 24-hour shutdown of the English-language Wikipedia, the legislative battle over two Internet piracy bills has reached an extraordinary moment — a political coming of age for a relatively young and disorganized industry that has largely steered clear of lobbying and other political games in Washington.

The bills, the Stop Online Piracy Act in the House and the Protect IP Act in the Senate, are backed by major media companies and are mostly intended to curtail the illegal downloading and streaming of TV shows and movies online. But the tech industry fears that, among other things, they will give media companies too much power to shut down sites that they say are abusing copyrights.

The legislation has jolted technology leaders, venture capitalists and entrepreneurs, who are not accustomed to having their free-wheeling online world come under attack.

One response is Wednesday’s protest, which directs anyone visiting Google and many other Web sites to pages detailing the tech industry’s opposition to the bills. Wikipedia, run by a nonprofit organization, is going further than most sites by actually taking material offline — no doubt causing panic among countless students who have a paper due.

It said the move was meant to spark greater public opposition to the bills, which could restrict its freedom to publish.

“For the first time, it’s very clear that legislation could have a direct impact on the industry’s ability to do business,” said Jessica Lawrence, the managing director of New York Tech Meetup, a trade organization with 20,000 members that has organized a protest rally in Manhattan on Wednesday. “This has been a wake-up call.”

Tim Wu, a professor at Columbia Law School, said that the technology industry, which has birthed large businesses like Google, Facebook and eBay, is much more powerful than it used to be.

“This is the first real test of the political strength of the Web, and regardless of how things go, they are no longer a pushover,” said Professor Wu, who is the author of “The Master Switch: The Rise and Fall of Information Empires.” He added, “The Web taking a stand against one of the most powerful lobbyers and seeming to get somewhere is definitely a first.”

Under the proposed legislation, if a copyright holder like Warner Brothers discovers that a foreign site is focused on offering illegal copies of songs or movies, it could seek a court order that would require search engines like Google to remove links to the site and require advertising companies to cut off payments to it.

Internet companies fear that because the definitions of terms like “search engine” are so broad in the legislation, Web sites big and small could be responsible for monitoring all material on their pages for potential violations — an expensive and complex challenge.

They say they support current law, which requires Web sites with copyright-infringing content to take it down if copyright holders ask them to, leaving the rest of the site intact. Google, which owns YouTube and other sites, received five million requests to remove content or links last year, and it says it acts in less than six hours if it determines that the request is legitimate.

The major players supporting the legislation, including the United States Chamber of Commerce and the Motion Picture Association of America, say those measures are not enough to protect intellectual property. They emphasize that their primary targets are foreign Web sites that sell counterfeit goods and let people stream and download music and video at no charge — sites that are now largely out of reach of United States law enforcement. And they are fighting against what they characterize as gimmicks and distortions by Internet companies opposed to the bills.

With talk of censorship and loss of Internet freedom, “the current debate has nothing to do with the substance of the bills,” David Hirschmann, who leads the Chamber of Commerce’s initiative on intellectual property, said in an interview. “We will certainly use every tool in our toolbox to make sure members of Congress know what’s in these bills.”

With financial resources that few other groups can match, the chamber is one of Washington’s most powerful lobbying forces and has shown the ability to alter Congressional debate on its own.

Senator Patrick J. Leahy, Democrat of Vermont and author the Protect IP Act, accused opponents Tuesday of trying to “stoke fear” through tactics like the Wikipedia blackout. “Protecting foreign criminals from liability rather than protecting American copyright holders and intellectual property developers is irresponsible, will cost American jobs, and is just wrong,” he said in a statement.

Opponents of the legislation have clearly seized the momentum in the debate. Their protests have gained traction in that key provisions were stripped out of one bill and the Obama administration has raised concerns. Legislators have already agreed to delay or drop one ire-inducing component of the bills, Domain Name System blocking, which would prevent access to sites that were found to have illegal content.

A total of 115 companies and organizations have lobbyists working on the antipiracy bills, spending millions of dollars to sway the outcome, according to federal disclosure records. They include corporate and technology giants on both sides of the legislation, with entertainment groups like News Corporation and the Recording Industry Association of America backing it and Internet firms like Google and Facebook raising concerns about it.

The largest advocates for the bills disagree with the tech industry’s main rallying cry, which is the notion that they will hurt the average Internet user or interfere with their online activities.

“The bill will not harm Wikipedia, domestic blogs or social network sites,” said Representative Lamar Smith, Republican of Texas and a primary sponsor of the House bill.

Most people in the tech world agree that the problem of piracy needs to be addressed. But they say their main concern is that the tech industry had little influence on the language of the legislation, which is still in flux and so broadly worded that it is not entirely clear how Internet businesses will be affected. Big Internet companies say the bills could prevent entire Web sites from appearing in search results — even if the sites operate legally and most content creators want their videos or music to appear there.

“It shouldn’t apply to U.S. Web sites, but any company with a server overseas or a domain name overseas could be at risk,” said Andrew McLaughlin, vice president at Tumblr, a popular blogging service.

Mr. McLaughlin said the fear is that on large and diverse Web communities like Tumblr, any user who uploads an unauthorized clip from a movie or an unreleased track from an album is putting the whole company in the line of fire.

In November, Tumblr rigged a tool that “censored” the page its users see when they log into the site, explained the legislation and routed them to contact information for their representatives in Congress. The stunt resulted in 80,000 calls to legislators in a three-day period. Mr. McLaughlin said the company was planning a similar approach for Wednesday.

Some who oppose the bill, including the Electronic Frontier Foundation, an online rights group, see a bright spot in a potential compromise called the OPEN Act, which would provide for the International Trade Commission to judge cases of copyright or trademark infringement. If the commission found that a foreign site was largely devoted to piracy, it could compel payment processors and online advertising companies to stop doing business with it.

Silicon Valley has championed companies that provide alternatives to piracy, like Spotify and Netflix. And the industry says that the problem could be solved by letting it do what it does best — innovating.

“It’s something that could be solved using technology through collaboration with these start-ups,” said Ms. Lawrence of New York Tech Meetup.

Reporting was contributed by Eric Lichtblau, Edward Wyatt and Claire Cain Miller.

    Protest on Web Uses Shutdown to Take On Two Piracy Bills, NYT, 17.1.2012,
    http://www.nytimes.com/2012/01/18/technology/web-wide-protest-over-two-antipiracy-bills.html

Web Gang Operating in the Open

January 16, 2012
The New York Times
By RIVA RICHMOND

Five men believed to be responsible for spreading a notorious computer worm on Facebook and other social networks — and pocketing several million dollars from online schemes — are hiding in plain sight in St. Petersburg, Russia, according to investigators at Facebook and several independent computer security researchers.

The men live comfortable lives in St. Petersburg — and have frolicked on luxury vacations in places like Monte Carlo, Bali and, earlier this month, Turkey, according to photographs posted on social network sites — even though their identities have been known for years to Facebook, computer security investigators and law enforcement officials.

One member of the group, which is popularly known as the Koobface gang, has regularly broadcast the coordinates of its offices by checking in on Foursquare, a location-based social network, and posting the news to Twitter. Photographs on Foursquare also show other suspected members of the group working on Macs in a loftlike room that looks like offices used by tech start-ups in cities around the world.

Beginning in July 2008, the Koobface gang aimed at Web users with invitations to watch a funny or sexy video. Those curious enough to click the link got a message to update their computer’s Flash software, which begins the download of the Koobface malware. Victims’ computers are drafted into a “botnet,” or network of infected PCs, and are sent official-looking advertisements of fake antivirus software and their Web searches are also hijacked and the clicks delivered to unscrupulous marketers. The group made money from people who bought the bogus software and from unsuspecting advertisers.

The security software firm Kaspersky Labs has estimated the network includes 400,000 to 800,000 PCs worldwide at its height in 2010. Victims are often unaware their machines have been compromised.

The Koobface gang’s freedom underscores how hard it is to apprehend international computer criminals, even when identities are known. These groups tend to operate in countries where they can work unmolested by the local authorities, and where cooperation with United States and European law enforcement agencies is poor. Meanwhile, Western law enforcement is awash in computer crime and lacks the resources and skilled manpower to tackle it effectively, especially when evidence putting individuals’ fingers on keyboards must be collected abroad.

On Tuesday, Facebook plans to announce that it will begin sharing information about the group and how to fight them with security researchers and other Internet companies. It believes public namings can make it harder for such groups to operate and send a message to the criminal underground.

None of the men have been charged with a crime and no law enforcement agencies have confirmed they are under investigation.

The group investigators have identified has adopted the tongue-in-cheek name, Ali Baba & 4: Anton Korotchenko, who uses the online nickname “KrotReal”; Stanislav Avdeyko, known as “leDed”; Svyatoslav E. Polichuck, who goes by “PsViat” and “PsycoMan”; Roman P. Koturbach, who uses the online moniker “PoMuc”; and Alexander Koltysehv, or “Floppy.” )

Efforts to contact members of the group for comment have been unsuccessful.

Weeks after early versions of the Koobface worm began appearing on Facebook, investigators inside the company were able to trace the attacks to those responsible. “We’ve had a picture of one of the guys in a scuba mask on our wall since 2008,” said Ryan McGeehan, manager of investigations and incident response at Facebook.

Since then, Facebook and several independent security researchers have provided law enforcement agencies, including the Federal Bureau of Investigation, with information and evidence. Most notably, Jan Droemer, a 32-year-old independent researcher in Germany, has provided important information and leads, including a password-free view inside Koobface’s command-and-control system, known as the “Mothership.” Mr. Droemer spent nights and weekends for four months in late 2009 and early 2010 unmasking the gang members using only information available publicly on the Internet.

The F.B.I. declined to comment.

That computer crime pays is fueling a boom that is leaving few Internet users and businesses unscathed. The toll on consumers alone is estimated at $114 billion annually worldwide, according to a September 2011 study by the security software maker Symantec.

Russia, in particular, has a reputation as a hacker haven, although it has pursued several prominent cases against spammers recently. The Soviet education system’s emphasis on math and science combined with post-Communist economic collapse and weak private industry meant there were many highly trained engineers, but few legitimate outlets for their skills, said Vsevolod Gunitskiy, an assistant professor at the University of Toronto.

“Russia is sort of a perfect storm for cybercrime,” he said. The proliferation of organized crime and official corruption created “this very strong legacy of contempt for the laws and general culture of criminality.”

The Russian Embassy in Washington said it does not have any information regarding this group and that American law enforcement officials had never contacted the embassy on this issue.

The men investigators believe are behind Koobface look a lot like ordinary software enthusiasts, albeit with more tattoos and an outlaw persona. Mr. Avdeyko, who is two decades older than the other men and has been tied to an infamous spyware program dating to 2003 called CoolWebSearch, appears to hold a leadership role.

He and at least two of the other men have worked in the world of online pornography, said Mr. Droemer. Mr. Korotchenko and several of the other men apparently tried to run a legitimate mobile software and services business, colorfully named MobSoft Ltd. They did not reply to e-mails requesting interviews.

Mr. Droemer said the gang’s success was more attributable to workaday persistence and willingness to adapt than technical sophistication. They could have spread Koobface to many more PCs, he said. “They could have done a lot more technical things to make it more perfect, more marvelous. But there was just no need to do it. They were just investing as much to get the revenue they wanted to get.”

The group cleverly harnessed the infrastructures of powerful online services — from Facebook and Twitter to Google’s search engine and Blogger — to do the heavy lifting, and may have run its enterprise with just a few computers.

Koobface will probably earn its place in history for pioneering and leading the criminal exploitation of social networks, rather than the size of its profits. Data found in the botnet’s command-and-control system suggests the group has earned at least $2 million a year for the 3 1/2 years of its existence, although the actual total is very likely higher, Mr. Droemer said.

Experts say the gang could have further enriched itself through identity fraud, since it has had access to millions of PCs and social-network profiles, but that there is no evidence it has done so.

Indeed, in a 2009 Christmas e-card to security researchers left inside victim computers, the gang vowed it would never steal credit card or banking information. It called viruses “something awful.” Its tactics have been less ruthless than those of many other hacker groups, experts said. For instance, it has never deployed malicious programs that install automatically, and rather has required its victims to make several unwise clicks.

While the Koobface gang operates freely, Facebook has focused on building elaborate defenses against the worm, which relentlessly struck the site again and again until disappearing in March. The gang abandoned the site after Facebook mounted a major counteroffensive, which included an effort to dismantle the command-and-control system of the botnet and a simultaneous push to scrub its network of the worm and clean up infections in users’ PCs.

“We fired all the different guns at the same time,” said Joe Sullivan, chief security officer at Facebook. “If we could literally shut down the command-and-control, all the infections, and just make them have to start over from scratch in all contexts, we figured they might decide to move on.” He hoped they would conclude Facebook was unprofitable, he said.

But Facebook’s effort and two earlier takedown efforts by security researchers — including one by the Bulgarian researcher Dancho Danchev, who revealed the name of one Koobface member on his blog last week — have failed put an end to Koobface, and smaller sites continue to suffer.

“People who engage in this type of stuff need to know that their name and real identity are going to come out eventually and they’re going to get arrested and they’re going to be targeted,” Mr. Sullivan said. “People are fighting back.”

    Web Gang Operating in the Open, NYT, 16.1.2012,
    http://www.nytimes.com/2012/01/17/technology/
    koobface-gang-that-used-facebook-to-spread-worm-operates-in-the-open.html

Internet Access Is Not a Human Right

January 4, 2012
The New York Times
By VINTON G. CERF

Reston, Va.

FROM the streets of Tunis to Tahrir Square and beyond, protests around the world last year were built on the Internet and the many devices that interact with it. Though the demonstrations thrived because thousands of people turned out to participate, they could never have happened as they did without the ability that the Internet offers to communicate, organize and publicize everywhere, instantaneously.

It is no surprise, then, that the protests have raised questions about whether Internet access is or should be a civil or human right. The issue is particularly acute in countries whose governments clamped down on Internet access in an attempt to quell the protesters. In June, citing the uprisings in the Middle East and North Africa, a report by the United Nations’ special rapporteur went so far as to declare that the Internet had “become an indispensable tool for realizing a range of human rights.” Over the past few years, courts and parliaments in countries like France and Estonia have pronounced Internet access a human right.

But that argument, however well meaning, misses a larger point: technology is an enabler of rights, not a right itself. There is a high bar for something to be considered a human right. Loosely put, it must be among the things we as humans need in order to lead healthy, meaningful lives, like freedom from torture or freedom of conscience. It is a mistake to place any particular technology in this exalted category, since over time we will end up valuing the wrong things. For example, at one time if you didn’t have a horse it was hard to make a living. But the important right in that case was the right to make a living, not the right to a horse. Today, if I were granted a right to have a horse, I’m not sure where I would put it.

The best way to characterize human rights is to identify the outcomes that we are trying to ensure. These include critical freedoms like freedom of speech and freedom of access to information — and those are not necessarily bound to any particular technology at any particular time. Indeed, even the United Nations report, which was widely hailed as declaring Internet access a human right, acknowledged that the Internet was valuable as a means to an end, not as an end in itself.

What about the claim that Internet access is or should be a civil right? The same reasoning above can be applied here — Internet access is always just a tool for obtaining something else more important — though the argument that it is a civil right is, I concede, a stronger one than that it is a human right. Civil rights, after all, are different from human rights because they are conferred upon us by law, not intrinsic to us as human beings.

While the United States has never decreed that everyone has a “right” to a telephone, we have come close to this with the notion of “universal service” — the idea that telephone service (and electricity, and now broadband Internet) must be available even in the most remote regions of the country. When we accept this idea, we are edging into the idea of Internet access as a civil right, because ensuring access is a policy made by the government.

Yet all these philosophical arguments overlook a more fundamental issue: the responsibility of technology creators themselves to support human and civil rights. The Internet has introduced an enormously accessible and egalitarian platform for creating, sharing and obtaining information on a global scale. As a result, we have new ways to allow people to exercise their human and civil rights.

In this context, engineers have not only a tremendous obligation to empower users, but also an obligation to ensure the safety of users online. That means, for example, protecting users from specific harms like viruses and worms that silently invade their computers. Technologists should work toward this end.

It is engineers — and our professional associations and standards-setting bodies like the Institute of Electrical and Electronics Engineers — that create and maintain these new capabilities. As we seek to advance the state of the art in technology and its use in society, we must be conscious of our civil responsibilities in addition to our engineering expertise.

Improving the Internet is just one means, albeit an important one, by which to improve the human condition. It must be done with an appreciation for the civil and human rights that deserve protection — without pretending that access itself is such a right.

 

Vinton G. Cerf, a fellow at the Institute of Electrical and Electronics Engineers,

is a vice president and chief Internet evangelist for Google.

    Internet Access Is Not a Human Right, NYT, 4.1.2012,
http://www.nytimes.com/2012/01/05/opinion/internet-access-is-not-a-human-right.html

PayPal Executive Named Chief of Yahoo

January 4, 2012
The New York Times
By STEVE LOHR

Yahoo, the struggling consumer media company, announced on Wednesday that its new chief executive would be Scott Thompson, the president of PayPal, the online payment service.

Mr. Thompson, analysts say, has a background mainly as a technologist instead of being an expert in digital media or corporate turnarounds. While PayPal, a division of eBay, is a consumer service, analysts said that is very different from a media company.

But in a conference call on Wednesday morning, Roy J. Bostock, the chairman of Yahoo’s board, said that at PayPal Mr. Thompson had proved he could take a company with solid assets and build the business. That is the central challenge at Yahoo, Mr. Bostock said, noting that the company has a wealth of strong media and advertising assets, and an online audience of more than 700 million visitors a month.

The problem, he said, was that Yahoo had been floundering — “treading water,” as he put it. “You can call it a turnaround, if you want to,” Mr. Bostock said.

Under Mr. Thompson, PayPal expanded its number of users to more than 104 million, from 50 million, and increased its revenue to more than $4 billion, from $1.8 billion. “That, to me, is a track record of building,” Mr. Bostock said.

Mr. Thompson said it was too soon to discuss any strategic shifts he might make. But he said Yahoo has to innovate and improve its offering for both consumers and advertisers. “That balancing is what we need at Yahoo,” Mr. Thompson said. “That is how big businesses with network effects are built on the Internet.”

The chief executive job at Yahoo, Mr. Thompson said, represents a daunting challenge, but also a major opportunity. “The core business assets are stronger than people believe at this point,” he said.

Mr. Thompson replaces Carol Bartz, who was dismissed in September. The company has been run by Tim Morse since Ms. Bartz left. He will now return to his former post as chief financial officer.

Yahoo shares were down 2.1 percent in early trading Wednesday.

    PayPal Executive Named Chief of Yahoo, NYT, 4.1.2012,
    http://www.nytimes.com/2012/01/05/technology/paypal-executive-named-ceo-of-yahoo.html

Google Bases a Campaign on Emotions, Not Terms

January 1, 2012
By CLAIRE CAIN MILLER

Google, one of the biggest advertising companies in the world, has finally embraced advertising for itself.

The search giant made its first push into advertising with a Super Bowl ad in 2010 about a young couple falling in love. But through last year it began a more focused national television campaign, as well as taking on other efforts, like hosting Google-themed conferences in an effort to represent its online brand in the offline world.

“This past year has really been a remarkable transformation for Google,” said Peter Daboll, chief executive of Ace Metrix, a firm that evaluates TV and video ads.

Though Google is a household name, it needs to tell its story now for a few reasons. It needs new businesses like the Chrome browser and the Google Plus social network to succeed if it is going to find sources of revenue beyond search ads.

The ads are also part of Google’s mission, led by Larry Page, its co-founder and chief executive, to pare down its product offering and make Google products more attractive, intuitive and integrated with one another.

Lorraine Twohill, Google’s vice president for global marketing, would not disclose how much the company had increased its advertising spending, but said there had been a shift in strategy.

“As we got bigger, we had more competition, more products, more messages to consumers, so we needed to do a bit more to communicate what these products are and how you can use them,” she said.

Also as Google comes under attack from antitrust regulators, it can’t hurt to tell heartwarming stories about Google to wide audiences.

“If we don’t make you cry, we fail,” Ms. Twohill said. “It’s about emotion, which is bizarre for a tech company.”

Some viewers may be hard-pressed to keep their eyes dry after watching “Dear Sophie,” Google’s ad for Chrome in which a father sends multimedia messages to his baby daughter, or to hold back a smile watching grandmothers and children dancing to Lady Gaga.

But that is not to say that Google, where data is religion, does not back up sentimental branding efforts with cold, hard data.

Before showing the Super Bowl ad, Google tested a dozen versions on YouTube and chose to broadcast the one that received the most views.

And Google events, which also fall under the marketing division, require immense spreadsheets, like one to choose a location for Google Zeitgeist, its annual conference for wooing its biggest advertisers. The spreadsheet charted 140 hotels from Manhattan to Phoenix, with color-coded tabs and columns for ballroom size, room rates and the number of layovers to fly there.

The winner was Paradise Valley, Ariz., where Google’s event planner, Lorin Pollack, brought the company headquarters’ preschool motif to the desert.

“Google’s an online brand,” Ms. Pollack said. “You can’t experience the brand except for typing keys. It’s a huge responsibility to actually bring that brand to life outside of the computer.”

The lanterns lining the steps at the nighttime parties were Google colors — red, yellow, blue and green — and oversized stuffed ottomans mimicked the office’s beanbags, where engineers sit with laptops perched on their knees. Attendees could climb on the giant tricycle that Google Street View engineers ride to take photos or design their own Android robot T-shirts. A vending machine dispensed primary-colored juggling balls, bought by swiping Android cellphones.

Even the tablecloths had to evoke Google, which meant no billowy linen, Ms. Pollack said.

“Google is a very clean, simple brand,” she said. “Linen gets sloppy. It gets dirty; it’s hard to sit under. I take a lot of inspiration from our home page. It’s just simple.”

Like Google’s events, its TV ads are light on details about products’ features. Instead, they are meant to evoke curiosity and emotion, Ms. Twohill said.

The first ads for Chrome, aimed at frequent Web users, were online and discussed the browser’s speed and security. But when it came time to take Chrome mainstream, she said, Google turned to television to reach those “who don’t get out of bed in the morning and think, ‘I’ll get a new browser today.’ ”

Google broke the recent trend of 15-second television ads to tell stories in a minute or two.

An ad for Google Plus shows the arc of a couple’s courtship without spoken words. The man places the woman in a social circle titled “love of my life,” but he starts out in her circle called “creepers.” Over time, though, he graduates to “book club,” “ski house” and eventually “keepers.”

Another, which was broadcast just before Christmas, shows the Muppets in a Google Plus Hangout video chat singing along to Queen and David Bowie. A newspaper ad for Google Plus featured the Dalai Lama joining Desmond Tutu by Hangout after he was denied a visa to visit South Africa.

Google is also advertising its search engine, even though, with two-thirds market share in the United States, it is hardly an unknown brand to anyone.

“I still think it’s important to remind people why Google matters, how it’s had an impact on people’s lives, what life was like before this,” Ms. Twohill said. An added incentive is that Google’s main rival, Microsoft’s Bing, also has a new ad campaign.

One search ad shows a surfer finding the perfect wave, a teenager becoming the youngest person to discover a supernova and a man installing solar panels.

“We’re all searching for a different thing, even if we’re all trying to get to the same endpoint,” a voice says.

Google’s strategy has connected with viewers, Mr. Daboll said, because they would rather view a story than have products pushed at them. Google ads took five of the top 10 spots on Ace Metrix’s list of the most effective TV ads for Web sites last year.

“Google has been so dominant in its usefulness,” he said. “Now they want to make you feel something about search, as opposed to just relying on it as a useful tool.”

Google Bases a Campaign on Emotions, Not Terms, NYT, 1.1.2012,
    http://www.nytimes.com/2012/01/02/technology/google-hones-its-advertising-message-playing-to-emotions.html