Apple's share price suffers as AT&T drops iPhone bomb

AT&T's declaration that only 146,000 Apple iPhones registered on its network in the first two days it was on the market has led to widespread shock at what is now being seen as the device's failure and a down period for Apple shares, sliding 7.5 per cent over a few days last week, a fall of some $10bn in total market capitalisation.

This is one time no one can forgive Apple. In the past it has executed launches so well that it has become metronomic and surprise-free. It might be that this was a result of the problems that people had once they had bought their devices, getting home and finding that it was almost impossible to sign up with AT&T over a clogged network, but it might also be because many of the early devices were bought by people from outside the US, who are fine with paying AT&T for service, but are just going to go home to Europe or Asia Pacific, ignore the loss of voice use, and just use the iPhone as a music and internet gadget. We certainly know some of those, but are there 100,000 of them?

Because that's about the number that everyone agrees Apple missed its numbers by and some analysts had pegged it as high as 400,000 or 500,000, getting carried away on the iPhone euphoria that has been hyped to hell.

An entire month's sign ups, or better still a quarter, will be more indicative, and as word gets out of what it is like to own such a device there may be a snowball effect. We've spoken to people who have one, and they agree that it's even better in real life.

Even so, as many as 25 per cent of the buyers were from people that were previously on other US networks, so even at what is being seen as a low level, this will be taking customers away from AT&T's rivals, and scaling up from just two days of sales it is still likely that Apple will make its first year sales targets.

http://www.theregister.co.uk/2007/07/31/iphone_launch_fiasco/

Microsoft Works to become a free, ad-funded product

Microsoft Works 9.0 — which will be the new product’s name, if Microsoft opts to stick with its current nomenclature — might also debut at some point as Microsoft-hosted low-end productivity service, as many have been speculating. A hosted version of Works would give Microsoft a head-to-head competitor with Google Docs & Spreadsheets and other consumer- and small-business focused services, analysts have said.

For the time being, however, the new version of Works will be ad-funded, according to Satya Nadella, the newly minted Corporate Vice President of Microsoft’s Search & Advertising Platform Group. Nadella told me during an interview on July 27 that Microsoft recently released the new ad-funded version of Microsoft Works.

If Works 9.0 is out, I haven’t found it yet — other than a couple download links on torrents and other sharing sites. Anyone else seen it?

(I’ve asked Microsoft for more information on the new ad-funded Works suite. No word back yet. Update: Even though Microsoft’s own vice president discussed the product, no one will talk. The official comment, via a Microsoft spokeswoman: “We’re always looking at innovative ways to provide the best productivity tools to our customers, but have nothing to announce at this time.”)

Nadella added that Works will be just “the first of the ad-funded software we are going to do.” When I asked for other examples of products might decide to make free and ad-funded, he mentioned Office Accounting Express — a product which is currently available as both a free download and as a component of certain Office Live paid subscriptions. He also said software downloads/shareware was another category ripe with products that could be free and ad-funded.

http://blogs.zdnet.com/microsoft/?p=604

California e-voting machines have more holes than Swiss cheese

Hackers hired to evaluate the security of e-voting machines used in California found serious flaws that could allow for vote tampering in all three systems studied.

The defects included the ability to overwrite firmware, install malicious applications, forge voter cards and gain access to the inside of voting machines by unfastening screws that were supposed to be inaccessible. The defects were found in machines provided by Sequoia Voting Systems, Hart Intercivic and Diebold Elections Systems.

The team was unable to test equipment sold by Election Systems & Software because the vendor dragged its feet in cooperating with the review, which is authorized under California law.

The e-voting machine assessment was part of a "top-to-bottom" review that Secretary of State Debra Bowen undertook earlier this year into all ballot machines used in the state, whether or not they are computerized. Several "red teams" were given access to the source code and user manuals of e-voting machines and directed to hack them if possible.

"The red teams demonstrated that the security mechanisms provided for all systems analyzed were inadequate to ensure accuracy and integrity of the election results and of the systems that provide those results," wrote Matt Bishop, the study's principal investigator and a professor at the University of California at Davis.

He said the teams probably could have uncovered additional vulnerabilities had they not encountered significant delays in obtaining information and tools from the three vendors involved. Many documents didn't arrive until July 13, just seven days before the five-week study was concluded. Other software was never delivered at all.

"Despite these problems, the red team testing was successful, in that it provided results that are reproducible and speak to the vulnerability of all three systems tested," Bishop wrote.

Among the findings of the study:

* Testers were able to overwrite firmware in the Sequoia's Edge/Insight/400-C, in the GEMS system sold by Diebold and in Hart's System 6.2.1.

* They were also able to bypass physical locks in Sequoia's Edge system by unfastening screws.

* Testers were able to penetrate Diebold's GEMS server system by exploiting Windows as it was delivered and installed by the vendor. That allowed them to make security changes, including the installation of a wireless device, that were never recorded by audit logs.

* Testers found an undisclosed account in the Hart software that an attacker could exploit to gain unauthorized access to the election management database.

All three companies challenged the review, arguing that the laboratory environment under which it was conducted was unrealistic. Natch…..

http://www.theregister.com/2007/07/30/evoting_machine_review/

Will Google Rule The Airwaves?

Greed is good. Well isn't it?

As if it didn't already control enough, now Google wants to control the air. Or, the Washington Post reports, at least it wants a shot at controlling part of the $15 billion worth of public airwaves that Federal Communications Commission will be setting the auction rules for tomorrow.

The fate of the airwaves, which are being abandoned by television broadcasters moving to digital programming and are ideal for carrying wireless signals, will have a profound effect on the future of the cellphone industry. The auction is scheduled for next January.

Currently, major U.S. wireless carriers like AT&T and Verizon Wireless dictate which Web sites, search engines and music-download services their customers have access to on their cellphones.

But Google has offered to spend $4.6 billion for airwaves it would use to build "a new, open network it says will loosen the grip telecom operators have on how costumers use their cellphones," the Post reports.

But for the plan to work, the FCC rules must work in its favor, so Google is taking its first serious plunge into lobbying, opening a temporary 12-person office on Pennsylvaia Avenue. So far, it seems to be working.

"Its goal of creating an open-access network, first thought as a long-shot proposal, has gained substantial political traction among FCC commissioners and Democratic lawmakers, who see the auction as an opportunity to create a new competitor in the wireless industry," the Post reports.

You've got to ask, though. How long can a company with a dozen lobbyists working to bend federal law in its favor continue proclaiming its mantra is "Don't Be Evil"?

http://www.cbsnews.com/stories/2007/07/30/the_skinny/main3109992.shtml

Microsoft’s Gates to Jump Ship

Microsoft is beset with competition from all sides, unlike any it has seen in decades, and Bill Gates, who co-founded the company 32 years ago, still intends to step away next year as planned.

But so far, Mr. Gates, Microsoft’s 51-year-old chairman, shows no sign of fading away.

One year into a planned two-year transition, there are few visible cues that Mr. Gates is ready to leave the world’s technology stage to devote his energies principally to the $33 billion foundation he established seven years ago with his wife.

Indeed at the company’s annual financial meeting last week Mr. Gates spoke first, outlining a decade-long agenda, not a mere 12-month outlook.

He described a world in which the widespread availability of broadband networks would reshape computing, giving rise to what he said would be “natural user interfaces” like pen, voice and touch, replacing many functions of keyboards and mice.

Mr. Gates has stayed deeply engaged in the company’s technology strategy. He still frequently participates in high-level strategy planning sessions with Microsoft’s closest partners, like Intel, according to executives who have attended the meetings.

During a wide-ranging interview last week exploring his diminished role at Microsoft, the company’s challenge and its competitors, Mr. Gates insisted that he really has begun stepping back.

“I am in a lucky situation of having way more things that seem interesting to do and very exciting and important, and working with smart people, and highly impactful, way more than a 24-hour day will fit,” Mr. Gates said. To be sure, there is widespread skepticism in the industry about the possibility of Mr. Gates genuinely disengaging. Microsoft’s dominance is being challenged as never before by Google in particular, and Wall Street refuses to believe the company will regain its edge. The company’s stock has largely remained flat since the end of the dot-com era.

http://www.nytimes.com/2007/07/30/technology/30gates.html?ei=5088&en=
d1f829ab11495691&ex=1343448000&adxnnl=1&partner=rssnyt&emc
=rss&pagewanted=all&adxnnlx=1185810660-+VS4n//nu/kRWZyYih5gVA

Woz backs internet video start-up

With his mind not his money

Apple guru Steve Wozniak and Red McCombs, a co-founder of advertising behemoth Clear Channel, are backing an internet start-up which uses compression to improve online videos.

Currently being used to run a site for flogging secondhand cars, they believe the high quality videos can be used in various ecommerce sites. Hotswap allows you to search by car type, make, or mileage. The sellers provide the video tour of the car, which is then uploaded to the website. Hosting the video and selling the car is a free service.

Woz is an adviser to company and will "give them ideas that come into my mind", according to Reuters.

The site, founded by Luke Thomas and Ryan Waliany, also claims it is "a user generated and aggregated wisdom community".

The 20-year-old company founders were previously, and presumably briefly, students at Berkeley.

The videos are played back using Adobe's Flash.

http://www.theregister.co.uk/2007/07/30/woz_backs_video_start/

Vulture Microsoft applies to give itself cancer

Adds tumor.com to web site

Microsoft realizes it has a schizophrenic relationship with open source software but can't seem to find any meds capable of correcting the situation.

During a speech today at OSCON, Microsoft's open source chief Bill Hilf revealed that Microsoft will submit its Shared Source License to the Open Source Initiative (OSI) for approval. Microsoft's decision to make peace with the OSI – the self-proclaimed protector of open source software – ends a rather combative, multi-year debate between the parties.

Along with the licensing shift, Microsoft has launched a new Microsoft.com/opensource web site where you can find about the software maker's work with the enemy.

We must warn you not to be confused by the "shared source" language Microsoft is using. The company introduced the Shared Source program as a way of showing customers and governments its code under tight restrictions. Microsoft will not be submitting the actual Shared Source license to the OSI, according to OSI president Michael Tiemann, who we interviewed here.

Rather, Microsoft is expected to submit two other licenses described as a permissive license and a community license. One is very BSD like and should go right through the OSI, Tiemann said, possibly by September.

"The second one will take some scrutiny with us looking at it from US and EU laws perspective," Tiemann said.

Microsoft, however, has decided to put its OSI push under the shared source banner much in the same way the OSI calls the GPL an open source license in a fashion that angers the Free Software Foundation.

Microsoft has described the Linux operating system as a cancer, generally slaughtered free software in the press and most recently threatened that it might, kinda, sort of think about suing companies over their use of open source software. At the same time, Microsoft has signed partnership agreements with the likes of Novell, SugarCRM and XenSource and fostered open source software work via its labs and developer sites.

"We have been schizophrenic at times," Hilf said. "One side of the company says this and another one says that. So people ask if we're all on the same page. We are."

Umm, well maybe….

http://www.theregister.co.uk/2007/07/26/microsoft_osi_opensource/

Just how serious was the iPhone hack?

The iPhone and Apple Inc.'s desktop computers may be vulnerable to hackers due to a flaw in their Web browser, according to a security firm that said it found a way to hack into the iPhone.

Baltimore-based Independent Security Evaluators said yesterday employees took control of iPhones through a Wi-Fi link, or by tricking users into going to a website.

Principal security analyst Charles Miller said the security weakness allows someone to take control of Apple's Safari Web browser and see other applications on the device at the same time, which could also make users of Macintosh desktop computers vulnerable to attacks.

The security consultants said they were able to take control of an iPhone and make calls or send text messages, as well as access emails, voice-mail, address books and call and Web-browsing history. Miller said Apple has been given a possible security patch.

http://www.thestar.com/Business/article/239470

EU files anti-trust charges against Intel

Six-year probe bares litigation

After years of investigation, the European Commission has issued formal charges against Intel today, for alleged anti-competitive business practices against rival AMD.

"I can confirm the statement of objections has been sent," EC spokesman Ton Van Lierop told Reuters.

The EU has been sniffing around Intel's business practices in Europe for six years, but the investigation got a second wind in 2005 when AMD formally accused its arch-rival of using illegal tactics to dominate the PC and server markets. AMD has also launched formal complaints against Intel in the US, Japan, and Germany — although no decisions have been reached in any of the areas.

Intel would not comment on the Commission's charges, but it's likely the company will have a statement prepared when the the official EU statement is filed tomorrow morning. The company has previously denied the charges.

In 2005, EC officials raided Intel premises as a part of their investigation.

"We have not been informed by the EC of the issuance of a statement of objections concerning Intel," AMD said in a statement. "On the basis of an initial press report, we await the EC's public description of its apparent decision to charge Intel with illegal monopoly practices that harm consumers, as well as Intel's response."

http://www.theregister.co.uk/2007/07/26/eu_files_antitrust_charges_against_intel/

Targets Eye a Blu Christmas

Retailer to stock only Blu-ray players this holiday.

In an announcement made by Sony today, it was stated that the major retail outlet, Target, would continue to exclusively stock Blu-ray players throughout the holiday season as well as increase their stock of Blu-ray discs. The shift will be most obviously underscored this October when the retailer will heavily promote and offer holiday sales toward Sony's next-gen BDP-S300 Blu-ray player.

This makes for the second company in just under two months to have announced an exclusive relationship with Blu-ray, as Blockbuster recently announced plans to stock only Blu-ray discs in their store nationwide.

The win for Blu-ray occurs directly on the heels of Microsoft's recent drop in price for its HD DVD player from $199 to $179. Target, however - despite today's announcement - will continue to stock the Xbox 360 add-on throughout the holiday.

Stay tuned sportsfans for more information on exactly how (or if) these announcements will affect the ongoing format war.

http://dvd.ign.com/articles/808/808548p1.html

Just in from our What Have They Been Smoking Dept.:US Senators call for universal Internet filtering

US senators today made a bipartisan call for the universal implementation of filtering and monitoring technologies on the Internet in order to protect children at the end of a Senate hearing for which civil liberties groups were not invited.

Commerce Committee Chairman Daniel K. Inouye (D-Hawaii) and Senate Commerce, Science, and Transportation Committee Vice Chairman Ted Stevens (R-Alaska) both argued that Internet was a dangerous place where parents alone will not be able to protect their children.

“While filtering and monitoring technologies help parents to screen out offensive content and to monitor their child’s online activities, the use of these technologies is far from universal and may not be fool-proof in keeping kids away from adult material," Sen. Inouye said. “In that context, we must evaluate our current efforts to combat child pornography and consider what further measures may be needed to stop the spread of such illegal material over high-speed broadband connections."

"Given the increasingly important role of the Internet in education and commerce, it differs from other media like TV and cable because parents cannot prevent their children from using the Internet altogether," Sen. Stevens said. "The headlines continue to tell us of children who are victimized online. While the issues are difficult, I believe Congress has an important role to play to ensure that the protections available in other parts of our society find their way to the Internet."

The measures they are calling for include directing the Federal Communications Commission to identify industry practices "that can limit the transmission of child pornography" and requiring the Federal Trade Commission to form a working group to identify blocking and filtering technologies in use and "identify, what, if anything could be done to improve the process and better enable parents to proactively protect their children online."

"[T]he most important finding of the committee is that developing in children and youth an ethic of responsible choice and skills for appropriate behavior is foundational for all efforts to protect them—with respect to inappropriate sexually explicit material on the Internet as well as many other dangers on the Internet and in the physical world," the Thornburgh Committee concluded.

http://pressesc.com/news/78225072007/us-senators-call-universal-internet-filtering

Apple falls as iPhone figures fail to live up to hype

Our day isn’t complete unless we run down The Jerkoff

Apple confirmed investors’ worst fears last night when the group admitted that its landmark iPhone had fallen well short of initial sales forecasts. although the company made partial amends by reporting a 73 per cent jump in third-quarter profits.

The Macintosh and iPod music device maker reported net income of $818 million (£398 million) for the period as strong computer sales pushed group revenues up by 24 per cent to $5.14 billion.

But Apple also reported that it had sold just 270,000 iPhones and product accessories, such as headphones and carrying cases, in its first two days on sale, which were the last two days of its third quarter.

The initial iPhone sales were well below the 500,000 to 700,000 range that some analysts had forecast, while Apple’s decision to lump the device’s sales in with its accessories appeared to be an attempt to mask an even bigger shortfall in demand.

iPhone’s poor initial sales figures confirmed fears raised by AT&T, the device’s exclusive carrier, on Tuesday that initial demand had not met expectations. AT&T said it had only activated 146,000 iPhones its first day and a half on sale, sending Apple’s shares down by 6 per cent that day.

Investors had hoped that AT&T’s figures did not tell the whole story since they related to the number of phones activated rather than the number sold.

But yesterday’s disclosure, made after the New York Stock Exchange had closed, confirmed that investor fears had not been misplaced.

The shares fell by 84 cents to $136.42 last night, in after-hours trading following the announcement.

___________________________________________________________________

Someone from the peanut gallery responds......

"You might instead ask when was the last occasion that 270,000 mobile phones at any price were sold in 30 hours? Hard isn't it? Apple isn't responsible for speculation on numbers it is the media. Apple has a history of being conservative on forecasts of revenue and new products - something to bear in mind. But they have offered the forecast that they will have sold 1 million iPhones by September 30th. How many mobile phone models at any price have sold a million in 3 months and 30 hours?"

Tony Crooks, Eastbourne, East Sussex

http://business.timesonline.co.uk/tol/business/industry
_sectors/technology/article2142297.ece

Judge Unimpressed by ConnectU's Case Against Facebook

Dorm room chit chat does not a legal contract make.

The judge's message Wednesday to ConnectU over its intellectual property lawsuit against fellow social-networking site Facebook was clear: show us the evidence.

ConnectU, which accuses Facebook of stealing its ideas, has been in legal pursuit of its rival, Facebook founder and CEO Mark Zuckerberg, and early employees Eduardo Saverin, Dustin Moskovitz, Andrew McCollum and Christopher Hughes for nearly three years, and there still isn't an end in sight.

Massachusetts Federal Judge Douglas P. Woodlock repeatedly stressed that there was simply not enough evidence to back up allegations that Zuckerberg, who had performed programming work for ConnectU while it was in development, had pilfered the start-up's business model and code. Facebook now boasts more than 30 million members worldwide, while ConnectU stands at well under 100,000.

"Claims must have a factual basis." --Judge Douglas P. Woodlock

Woodlock asked ConnectU's counsel, led by John F. Hornick of the Washington, D.C.-based firm Finnegan, Henderson, Farabow, Garrett & Dunner, to revise its court complaint before the case could go forward. "Claims must have a factual basis," the judge said. The allegations, which ranged from breach of confidence to fraud to misappropriation of trade secrets, comprised a "most evanescent of explanations," Woodlock said. He gave ConnectU's founders--Divya Narendra and twin brothers Cameron and Tyler Winklevoss--until August 8 to provide a revised complaint. He also gave Facebook two weeks after that date to respond.

Consequently, anyone who was hoping for a definitive answer from Wednesday's dismissal hearing for the ongoing legal tussle was likely left disappointed, as the case will probably not see much further development until the fall.

Woodlock also indicated that even the strongest of ConnectU's claims, the count of copyright infringement, is still on a shaky foundation. The reason, he said, is that the majority of the allegations date back to the days before either Facebook or ConnectU was a formal corporation, when all the founders of both companies were students at Harvard.

"It's gossamer thin on the question of contract," Woodlock said. Indeed, no formal deals were signed between Zuckerberg and the ConnectU founders, and the "paper trail" is limited to e-mails and telephone voice-mail messages that Woodlock recommended the plaintiffs spell out more effectively in their revised complaint.

http://www.nytimes.com/cnet/CNET_2100-1030_3-6198891.html?
_r=1&ref=technology&oref=slogin

Swedish Woman Gets Superfast Internet

She’s 75 years old and she’s the networking guru’s Mom. Geez, the lengths some people will go to for a little PR…..

She is a latecomer to the information superhighway, but 75-year-old Sigbritt Lothberg is now cruising the Internet with a dizzying speed. Lothberg's 40 gigabits-per-second fiber-optic connection in Karlstad is believed to be the fastest residential uplink in the world, Karlstad city officials said.

In less than 2 seconds, Lothberg can download a full-length movie on her home computer -- many thousand times faster than most residential connections, said Hafsteinn Jonsson, head of the Karlstad city network unit.

Jonsson and Lothberg's son, Peter, worked together to install the connection.

The speed is reached using a new modulation technique that allows the sending of data between two routers placed up to 1,240 miles apart, without any transponders in between, Jonsson said.

'We wanted to show that that there are no limitations to Internet speed,'' he said.

Peter Lothberg, who is a networking expert, said he wanted to demonstrate the new technology while providing a computer link for his mother.

''She's a brand-new Internet user,'' Lothberg said by phone from California, where he lives. ''She didn't even have a computer before.''

His mother isn't exactly making the most of her high-speed connection. She only uses it to read Web-based newspapers.

http://www.nytimes.com/aponline/technology/AP-Sweden-
High-Speed-Internet.html?em&ex=1185595200&en=6298746ab6642580&ei=5087%0A

WSJ: Hide the Button:Steve Jobs Has His Finger on It

Apple CEO Never Liked The Doodads, Not Even on His Shirts or Underneath Them. In fact, he's had his nipples surgically removed!

According to the Wall St. Journal, the iPhone is Jobs's attempt to crack a juicy new market for Apple Inc. But it's also part of a decades-long campaign by Jobs against a much broader target: buttons.

The new Apple cellphone famously does without the keypads that adorn its rivals. Instead, it offers a touch-sensing screen for making phone calls and tapping out emails. The resulting look is one of the sparest ever for Apple, a company known for minimalist gadgets. While many technology companies load their products up with buttons, Jobs treats them as blemishes that add complexity to electronics products and hinder their clean aesthetics.

Buttons have long been a hot-button issue for Apple's CEO. Bruce Tognazzini, a former user-interface expert at Apple who joined the company in 1978, says Jobs was adamant that the keyboard for the original Macintosh not include "up," "down," "right" and "left" keys that allow users to move the cursor around their computer screens, giving it a sleeker appearance than other personal computers have. Jobs's reasoning, says Mr. Tognazzini: Omitting the cursor keys would force independent software developers to create programs that used the Mac's mouse -- a novel technology at the time.

"He wanted the thing to look nonintimidating," Mr. Tognazzini says.

Mr. Tognazzini says the strategy worked, but he adds that many users still craved cursor keys and other buttons missing from the original Mac. Just days after Jobs resigned from Apple in 1985, Mr. Tognazzini proposed a new keyboard that ended up nearly doubling the key count of the original Mac keyboard, earning it the code-name USS Enterprise for its girth. Customers snapped it up when it went on sale in 1987.

Go ahead paste this link onto your browser and enjoy the rest of this Wall Street Journal article. You Apple fans and Jobs-lovers don’t wanna miss this….

http://online.wsj.com/article/SB118532502435077009.html?mod=hps_us_pageone

China Smashes Major Piracy Op

Chinese police, Microsoft and the U.S. FBI helped bust a major Chinese piracy ring

A multi-year investigation by Chinese police investigators and the U.S. Federal Bureau of Investigation led to the dismantling of a piracy ring responsible for pirating and distributing up to $2 billion of software. The two-year investigation led to the demise of two criminal organizations - located in Shanghai and Shenzhen - and included up to 25 arrests according to officials from both nations. Police found pirated software valued at $500 million after conducting the raid in Shenzhen.

Using information provided by the FBI Los Angeles bureau and Microsoft, the China Public Security Bureau (PSB) was finally able to target sources responsible for pirating large amounts of software from companies such as Microsoft and Symantec.

During the investigation, authorities were able to track more than 50,000 copies of software which was considered "sophisticated-quality." As many as 290,000 counterfeit software CDs were also confiscated during the raids in Shanghai and Shenzhen.

"This case represents a milestone in the fight against software piracy - governments, law enforcement agencies and private companies working together with customers and software resellers to break up a massive international counterfeiting ring," said Brad Smith, Microsoft general counsel and senior vice president. "This case should serve as a wake-up call to counterfeiters," he added.

The FBI reported that it believes the majority of the software (70 percent) was distributed to users in the United States, while the remaining pirated goods went to countries like Canada, the U.K., Australia and Japan.

The China PSB continues to be engaged in a long but tiresome battle against piracy, as China remains the leading source of pirated goods in the world. The Business Software Alliance reported that 82 percent of software used in China is likely pirated.

http://www.dailytech.com/China+Breaks+up+Major+Piracy+Operation/article8165.htm

Did Facebook founder steal the idea?

Mark Zuckerberg is being sued by the creators of a rival networking site that claims he stole their idea and code

Mark Zuckerberg, the 23-year-old founder of Facebook, will today be accused of stealing the idea for his enormously popular social networking site from a rival website. Mr Zuckerberg is being for sued for stealing the source code – and design – of Facebook from ConnectU.com, a similar, university-based social network which he worked for briefly as a programmer four years ago.

At a district court in Boston, Massachusetts, ConnectU's founders, who were in the same year at Harvard as Mr Zuckerberg, will demand that Facebook be shut down and that control of the site – and its profits – be handed over to them.

Cameron and Tyler Winklevoss, and their business partner Divya Narendra claim that Mr Zuckerberg stole not only "the basic idea" of Facebook from ConnectU, but also its specific code which, they say, was "proprietary and confidential."

Their action alleges copyright infringement, misappropriation of trade secrets, and breach of contract. The case comes at an inopportune time for Facebook, which last year reportedly turned down an offer as high as $1 billion from Yahoo! and is widely considered to be on the verge of listing on the stock market.

Accusations that the claimants are being opportunistic appear, however, to be misplaced. The lawsuit was first brought in August 2004, when Facebook had only 200,000 registered users, and it is only because of procedural delays that it has not been heard until now.

According to an article in the Stanford Daily three years ago, Mr Zuckerberg began working with the team from ConnectU.com in November 2003, doing coding, attending meetings and sending e-mails. He then left the site, which at the time was called Harvard Connection, to develop his own ideas, and three months later launched Facebook, which the plaintiffs claim took away a valuable business opportunity.

Mr Zuckerberg has admitted that he did six hours of coding for ConnectU on a voluntary basis, but said that he thought the site was a "personals page" and not a social networking site.

Mr Winklevoss disagreed, telling the paper: "It was clear to him what we wanted. He stalled us for months while he worked on his own idea, which he launched in February as an original idea."

http://technology.timesonline.co.uk/tol/news/tech_and_web/the_web/article2125952.ece

When 'God Machines' go back to their maker

All that glitters doesn't stay sold

Comment The genius of Apple's strategy for its iPhone is to make a defensive move look like an offensive one.

It's a prudent safety measure - like adding a safety bolt to the back door. Only, thanks to an American press corps that longs for escapism, it looks like a Blitzkreig.

Imagine if Apple hadn't created this newest addition to its iPod family. Financial analysts would be beating the company up, just as they have for the past couple of years, for failing to meet the challenge of music on mobile phones. Only louder.

Most mobiles have the potential to play music adequately these days - and some, particularly Sony Ericsson's handsets, do it very well. Analysts have been warning Apple for years that the iPod risked going the way of the starting handle after the invention of automatic ignition.

Instead, Apple has the handset manufacturers running around like headless chickens - and the network operators nervous. As a happy consequence, Apple itself has had free publicity worth millions for what is really a premium, high-margin addition to its iPod product line (iSuppli pegs the iPhone margin at over 50 per cent, which suggests Apple netted $350m of revenue in a weekend's business. Ker-ching!).

That shows the power of marketing - when you have a press pack only too willing to be manipulated. This is no accident, for the hype is central to Apple's tactics - much as it was when it launched the iTunes Music Store in 2003.

The idea is to create the illusion of unquenchable demand, so Apple can drive better deals with its suppliers (in the case of the iTunes store, the record labels) or network partner (in the case of the iPhone, the carriers).

In each case, Apple casts the spell that this is a partnership the supplier, or partner, can't possibly live without. In fact, as the record labels have discovered, and the network partners will soon find out, these are deals they very much can live without. All that glitters doesn't stay sold

The name "God Machine" gives you an idea of the scale of how much is missing from some people's lives - a yawning void they want to be filled by a piece of consumer electronics. But now that these machines are beginning to shuffle back to their maker (returning the product within 14 days of purchase may cost you $111.87- but saves you over $2,000 in operator fees) - it's time to ask some serious questions.

iPhone is perhaps not the emphatic "must have" gadget Apple's cheerleaders in the US press may have wished for. The amazing multi-touch interface dazzles, in the way that a bright shiny object might dazzle a child. But as our own Cade Metz pointed out, it actually makes some tasks more tedious. Over at PalmInfocenter, Tim Carroll compares the steps against a Treo, here, before advising Apple to "employ a tap counter".

In truth, the only four killer applications for the mobile phone are (in order); voice, voice, voice, and SMS. And if you make any of these more difficult for people to use than they should be, the manufacturer should have a very good Plan B. And here, Apple runs into the same wall as Nokia, and every other phone manufacturer.

http://www.theregister.co.uk/2007/07/19/god_machine_meets_maker/

Last but not least: Miss America calls for mandatory internet safety classes

Tells Congress she looked at dirty photos

The current Miss America has asked Congress to take further steps in protecting children from internet predators.

Lauren Nelson, who received her country's highest honor for looking classy in a swimsuit, told the Senate Commerce Committee that internet safety classes should be mandatory for school children.

"We don't allow our children to ride their bikes without first teaching them about proper safety, and we shouldn't let them use the computer and access the internet without taking the same precautions," Nelson said.

Since winning the Miss America beauty pageant, Nelson, age 20, has used the platform to discourage those wishing to objectify youngsters in a sexual fashion. She told Congress the subject personally touched her life seven years ago when somebody sent her dirty pictures over the internet.

When she was 13 years old, she and a friend were approached by a stranger on an internet chat room. The mystery chatter somehow compelled Nelson — who would go on to get a master's degree in musical theater — to divulge her name, age, gender and home address, as well as that of her friend's.

A few days later, the stranger sent her dirty photos.

"We were shocked and disgusted. We then told our parents, who immediately addressed this incident and reported it to the proper authorities, and luckily we were able to avoid a potentially dangerous situation. Not all children are as lucky as my friends and I were."

After winning the prestigious pageant crown, Nelson joined a sting operation conducted by America's Most Wanted. She posed as a 14-year-old girl inside internet chat rooms and waited to be propositioned. Nelson managed to lure eleven alleged would-be pedophiles to show up in person. They were all arrested.

Nelson told congress that new classes need to be established to teach the dos and don'ts of social networking sites and chat rooms. She also said children need to take additional lessons on how to be "responsible cyber citizens" - and not cyber-bullies.

No word yet on whether parents can simply teach their kids some common safety sense without the United States Congress getting involved. More as this develops.

http://www.theregister.co.uk/2007/07/24/miss_america_fights_internet_predators/

Jesus Phone needs an exorcist

Demonic possession for the Apple iPhone?

Security researchers have discovered a security flaw in Apple's iPhone that could allow miscreants to wreak havoc on users of the highly-revered device, which has been dubbed the Jesus Phone by its more blindly faithful users.

A proof-of-concept website that exploits the vulnerability secretly siphons SMS text messages, contact information, call history and voice mail. And one of the researchers who wrote it says it would be trivial to effect other misdeeds, including turning the iPhone into a bugging device by surreptitiously switching on the audio recorder and uploading audio files. Stealing a user's passwords, email messages and browsing history is also possible.

The exploit works silently and only requires that an iPhone user visit a maliciously-crafted website. It took less than three days for the team to discover the vulnerability and less than two weeks to devise the exploit. In all, about 215 person hours were devoted to the project.

What's more, "there are serious problems with the design and implementation of security on the iPhone," according to an executive summary prepared by researchers, who work for a firm called Independent Security Evaluators. Most notably, they say, the iPhone gives full administrative privileges to each process running on the device, a decision considered unorthodox among many in the security industry.

"The mail application really doesn't have any reason to read the text messages and the text messages (reader) really doesn't have any reason to read the mail," Charlie Miller, principle security analyst for Independent Security Evaluators, told The Reg. "Security 101 is you limit the amount of information available to the least amount necessary. That's not happening here."

Among other design problems, the iPhone fails to randomize addresses and and non-executable heaps, commonly used techniques designed to thwart security exploits.

Researchers notified Apple of the vulnerability early last week and the company is investigating the claim, according to Independent Security Evaluators. Miller plans to provide additional details about the vulnerability next week at the Black Hat Security Conference in Las Vegas.

Apple representatives didn't respond to a request for comment.

The disclosure by Independent Security Evaluators comes amid a steady stream of big and small hacks designed to unlock latent features in the iPhone and demonstrate that the much-vaunted device is, after all, a mere mortal in the world of electronics.

http://www.theregister.co.uk/2007/07/24/iphone_security_vulnerability/

AT&T Earnings Up, but iPhone Sales? Feh!

AT&T, the largest telephone company, reported first-quarter earnings today that solidly beat Wall Street’s forecasts as wireless subscribers continued to devour data services like text messaging and Internet access.

But investors and analysts were clearly disappointed that AT&T had not signed up more iPhone customers as subscribers at the end of the quarter, sending down shares of both Apple and AT&T in early trading.

AT&T said it signed up 146,000 iPhone customers, well below analyst estimates, which ran as high as 500,000 units. Shares of Apple were down as much as 5 percent in early trading and more than 3 percent in mid-afternoon, trading around $139. AT&T’s shares were up about half a percent in mid-afternoon, at slightly above $40.

AT&T has an exclusive deal with Apple to provide wireless service for the iPhone, the combination digital music player, cellular phone and Internet device. The phone went on sale on June 29, two days before the quarter ended, amid fanfare surpassed only by the release of the final “Harry Potter” book last week.

The number could also reflect the difficulty many iPhone customers reported experiencing when they tried to activate their phones during the first few days, analysts said.

Richard G. Lindner, AT&T’s chief financial officer, described demand for the iPhone as “strong,” and said that iPhone subscribers tend to buy more expensive rate plans than other wireless customers.

Eugene Munster, an Apple analyst with Piper Jaffray, said iPhone sales were largely in line with analysts’ earliest targets, but as public excitement grew so did investor expectations. “Our belief all along has been that there is a surge of demand coming for the iPhone, but it is hard to predict when that surge will hit,” he said.

Mr. Munster compared the iPhone launch to that of the iPod, which was viewed a huge disappointment at the end of its first quarter on the market. Apple sold 4.6 million units during the last quarter of 2004, while Wall Street had expected 8 million. Mr. Munster said the iPhone would probably show a similar gradual ramp up, surging in 2009. A bright spot in the iPhone numbers during the quarter was that roughly 40 percent of the iPhone subscribers were new AT&T customers.

Revenue from data services, which include text messaging, e-mail and Internet access on smartphones, increased nearly 67 percent to $1.7 billion year over year, while a 13 percent rise in overall wireless revenue largely met expectations. Mr. Lindner said that only 60 percent of AT&T’s wireless customers today use data services, providing AT&T with a huge growth opportunity. Wireless growth continued, with service revenue up nearly 15 percent year over year, while wireless subscribers rose by 1.5 million to 63.7 million. AT&T’s churn rate, which refers to the number of subscription cancellations, declined slightly during the quarter.

AT&T said its profit rose to $2.9 billion, or 47 cents a share, from $1.81 billion, or 46 cents a share in the quarter last year. The prior-year results came prior to the acquisition of BellSouth.

http://www.nytimes.com/2007/07/24/technology/24cnd-phone.html?ref=technology

IPhone Flaw Lets Hackers Rule

A team of computer security consultants say they have found a flaw in Apple’s wildly popular iPhone that allows them to take control of the device.

The researchers, working for Independent Security Evaluators, a company that tests its clients’ computer security by hacking it, said that they could take control of iPhones through a WiFi connection or by tricking users into going to a Web site that contains malicious code. The hack, the first reported, allowed them to tap the wealth of personal information the phones contain.

Although Apple built considerable security measures into its device, said Charles A. Miller, the principal security analyst for the firm, “Once you did manage to find a hole, you were in complete control.” The firm, based in Baltimore, alerted Apple about the vulnerability this week and recommended a software patch that could solve the problem.

A spokeswoman for Apple, Lynn Fox, said, “Apple takes security very seriously and has a great track record of addressing potential vulnerabilities before they can affect users.”

“We’re looking into the report submitted by I.S.E. and always welcome feedback on how to improve our security,” she said.

There is no evidence that this flaw had been exploited or that users had been affected.

Dr. Miller, a former employee of the National Security Agency who has a doctorate in computer science, demonstrated the hack to a reporter by using his iPhone’s Web browser to visit a Web site of his own design.

Once he was there, the site injected a bit of code into the iPhone that then took over the phone. The phone promptly followed instructions to transmit a set of files to the attacking computer that included recent text messages — including one that had been sent to the reporter’s cellphone moments before — as well as telephone contacts and e-mail addresses.

“We can get any file we want,” he said. Potentially, he added, the attack could be used to program the phone to make calls, running up large bills or even turning it into a portable bugging device.

http://www.nytimes.com/2007/07/23/technology/23iphone.html?_r=1&ref=business&oref=slogin

Microsoft vs Apple

Aren’t we in the Post-PC age already?

The fact is that when you compare Microsoft and Apple, you’re not comparing like with like.

Being a company fortunate enough to have a popular product implies a level of responsibility to past, present and future customers. The more popular the product, the greater the responsibility. Microsoft has a responsibility to over 90% of home desktop users and even more than that in business markets. Apple doesn’t. Apple can afford to push boundaries which may or may not pay off for them because, quite frankly, who cares? If they get it wrong, who’s it really going to affect? They have that luxury and more power to them. They’re doing a good job and I hope they keep it up.

In comparison, Microsoft’s decisions have implications on a global scale and its innovations have to be in accordance with that reality.

That’s not to say that Microsoft innovation is crippled by compromise, lethargy or inertia, but rather that it innovates in areas where it really, really matters, rather than what’s simply going to be a popular money-spinner.

Yes, they throw money into plenty of other areas too - Zune, Xbox/Xbox360, gaming, hardware. Some of it’s good and some not so good, but just because you might think that Microsoft doesn’t do as good a job at search engines as Google, develop better MP3 players than Apple or gaming consoles than Sony, why should Microsoft keep out of those markets altogether? And why is it indicative of their imminent decline?

That’s a type of brand-loyal elitist blinkered arrogance which seems to be increasingly accepted but is actually quite nauseating.

When you watch Steve Jobs and Bill Gates speaking together, you’re not looking at men whose respective companies are slugging it out in the same weight division. If Jobs says that “…the era of the PC is largely over”, whose interests do you think he’s serving by making that statement? Yours? The IT industry’s? Don’t be naïve.

We're in the post-PC era? Not a chance.

http://apcmag.com/6624/end_of_the_pc_era_dont_make_me_laugh

When 'God Machines' go back to their maker

A case of sour grapes or truth-telling? You be the judge.....

The name "God Machine" gives you an idea of the scale of how much is missing from some people's lives - a yawning void they want to be filled by a piece of consumer electronics. But now that these machines are beginning to shuffle back to their maker (returning the product within 14 days of purchase may cost you $111.87- but saves you over $2,000 in operator fees) - it's time to ask some serious questions.

iPhone is perhaps not the emphatic "must have" gadget Apple's cheerleaders in the US press may have wished for.

The amazing multi-touch interface dazzles, in the way that a bright shiny object might dazzle a child. But as our own Cade Metz pointed out, it actually makes some tasks more tedious.

Over at PalmInfocenter, Tim Carroll compares the steps against a Treo, here, before advising Apple to "employ a tap counter".

In truth, the only four killer applications for the mobile phone are (in order); voice, voice, voice, and SMS. And if you make any of these more difficult for people to use than they should be, the manufacturer should have a very good Plan B. And here, Apple runs into the same wall as Nokia, and every other phone manufacture

The iPhone may yet, as I hoped back in January, give the established manufacturers a long overdue reality check. Both Nokia and Sony Ericsson have made their smartphones overly crufty and complicated as the years go by - while Windows Mobile remains a collection of cracks that defies any plaster. Reg readers long for simplicity.

The iPhone, however, doesn't look like the future of phones. If Apple permits it, the iPhone should make great inroads into the "second phone" market occupied by Windows Mobile and RIM's Blackberry today. But the tablet market is pretty small at the end of the day. And there really isn't much Apple, or anyone else, can do about mobile data services vs real life. Perhaps no one ever will.

Less than a month after the launch we can look back to the hyperbolic ventilations of Apple's Poodle Press - the Pogues, Levys and Mossbergs - and ask ourselves, "what on earth were they thinking??"

http://www.theregister.com/2007/07/19/god_machine_meets_maker/

Microsoft grows despite Vista

Wow not now

Not that you'd know it from Microsoft's results, or projected revenue, but the giant launched a brand-spanking new version of Windows this year.

Not only did Windows Vista - billed by Microsoft as its biggest operating system for 10 years - fail to distinguish Microsoft's latest fiscal year from previous, non-Windows-Vista years, but Microsoft also missed its own expectations by several million dollars.

The coming fiscal year looks little better.

Microsoft told Wall St it's reconciled to the fact the seven-year-old Windows XP will occupy more of the client revenue mix than Microsoft would have preferred, while revenue for the full year will grow less than the year just closed.

With the "wow" clearly failing to materialize in fiscal 2007, Microsoft was left to pronounce itself "broadly happy" - not blown away - with Windows Vista sales.

The sounds of chickens gently roosting could be heard on Thursday's call with Wall St analysts, coming - as the results did - after OEMs and component manufacturers have adjusted their own expectations having experienced lower-than-expected results as sales failed to live up to Microsoft's hype.

Microsoft reported revenue growth of 15.6 per cent to $51.1bn for the year to June 30, with growth of 12 per cent in net income to $14bn, and earnings per diluted share of $1.42 up - from $1.20. Annual growth is broadly in line with the non Windows Vista world of between eight and 14 per cent for the previous three years. Chief financial officer Chris Liddell said Windows Vista revenue recognition came in $20m to $30m lower than expected.

The outlook for fiscal 2008 is not especially promising for Windows Vista either, as Microsoft made it clear consumers - not businesses - will drive client license growth. Microsoft expects revenue growth of between $56.8m and $57.8m, an increase on the last year's figures of between 11 and 13 per cent, a broad spectrum with a bottom end coming in significantly beneath the last year's figure.

http://www.theregister.com/2007/07/20/microsoft_quarter_vista/

Champion at Checkers That Cannot Lose (to Carbon-Based Life Forms, That Is)

Checkers is so over.

A computer program named Chinook vanquished its human competitors at tournaments more than a decade ago. But now, in an article published Thursday on the Web site of the journal Science, the scientists at the University of Alberta who developed the program report that they have rigorously proved that Chinook, in a slightly improved version, cannot ever lose. Any opponent, human or computer, no matter how skilled, can at best achieve a draw.

In essence, that reduces checkers to the level of tic-tac-toe, for which the ideal game-playing strategy has been codified into an immutable strategy. But checkers — or draughts, as it is known in Britain — is the most complex game that has been solved to date, with some 500 billion billion possible board positions, compared with the 765 possibilities in tic-tac-toe.

Even with the advances in computers over the past two decades, it is still impossible, in practical terms, to compute moves for all 500 billion billion board positions. So, the researchers took the usual starting position and looked only at the positions that occurred during play.

“It’s a computational proof,” said Jonathan Schaeffer, a professor of computer science at the University of Alberta who led the effort. “It’s certainly not a formal mathematical proof.” That means it is impossible for anyone to check every calculation the computer has performed.

Because of the vast calculations, the researchers had to keep painstaking track of the data. Miscopying a single bit — a glitch that did occur every few months — could render their result incorrect if not caught and corrected. When an error was caught, calculations had to be restarted from that point. A checkers hobbyist has independently verified major components of the proof with another computer program.

Dr. Schaeffer began his quest in 1989, aiming to write software that could compete with top checkers players in the world. In April, 18 years later, he and his colleagues finished their computations.

“From my point of view, thank God it’s over,” Dr. Schaeffer said.

For an exercise in futility, anyone can play a game against the perfect Chinook at http://www.cs.ualberta.ca/~chinook/play/. (It is limited to 24 games at a time.)

The earlier incarnation of Chinook, relying on artificial intelligence techniques and the combined computing power of many computers, placed second in the 1990 United States championship behind Marion Tinsley, the world champion, who had won every tournament he had played in since 1950.

That achievement should have earned Chinook the right to challenge Dr. Tinsley, a professor of mathematics at Florida A&M University, for the world championship, but the American Checkers Federation and the English Draughts Association refused to sanction a match. After much wrangling in the checkers world, Dr. Tinsley and Chinook battled for the man-versus-machine checkers title in 1992.

Dr. Tinsley won, 4 to 2 with 33 draws. Chinook’s two wins were only the sixth and seventh losses for Dr. Tinsley since 1950. In a rematch two years later, Dr. Tinsley withdrew after six draws, citing health reasons. Cancer was diagnosed, and Dr. Tinsley died seven months later.

Chinook easily triumphed over other human challengers, but the unfinished match against Dr. Tinsley left lingering doubt whether Chinook could claim to be the best of all time.

The new research proves that Chinook is invincible in traditional checkers. In most tournament play, however, a match now starts with three moves chosen at random. In solving the traditional game, the researchers have also solved 21 of the 156 three-move openings, leaving some hope for humans.

http://www.nytimes.com/2007/07/20/science/20checkers.html?
r=1&ref=technology&oref=slogin

This Just In: New Zealand offers a degree in prostitution

Funding for tertiary courses in prostitution could be considered under changes aimed at boosting quality and relevance in the sector, New Zealand education officials say.
But MPs on parliament's education and science select committee were told today that although courses in the world's oldest profession might be considered if providers put them forward, they would still have to meet tight criteria to get funding.

The questions on prostitution, posed by New Zealand First MP Brian Donnelly, surfaced as MPs were quizzing Tertiary Education Commission officials on changes to how tertiary education was funded.

Under the changes, from next year, institutions will be bulk funded on the basis of agreed three-year plans rather than on the number of students enrolled in specific approved courses.

Tertiary Education Minister Michael Cullen has said the changes are aimed at increasing the "quality and relevance" of courses.

However, they have raised questions regarding the TEC's actual control over individual courses.

National Party education spokeswoman Katherine Rich said she was concerned by the TEC's apparent "agnostic" attitude towards the content of courses under the new system.

She questioned whether it might lead to a continuing proliferation of courses such as twilight golf seen under the old system. TEC chief executive Janice Shiner said under the new system a request to provide prostitution courses would be assessed against the same criteria as any other course.

http://www.theage.com.au/news/world/now-for-a-degree-in-prostitution
/2007/07/18/1184559843317.html

IPhone Shortages? Come Back Tomorrow

Is Apple managing an iPhone shortage by throttling back on shipments? Would Jerkoff Jobs try and pull something like that? Maybe so. Blackfriars has created a Google Maps mashup that shows iPhone availability at various Apple stores around the U.S., drawing data that Apple provides on its website. Stores that have iPhones in stock show up as green pins, stores with no iPhones have red pins. According to Business 2.0, supplies ran out at 22 stores on Tuesday afternoon, but were back in stock on Wednesday morning.

While this isn't exactly news -- Apple's online store has been saying for several weeks that new shipments of iPhones arrive at their stores every day, and that many stores sell out on a daily basis -- it does suggest an interesting wrinkle to Apple's distribution strategy for the much-worshipped consumer device.

In the old days, Apple would release a popular product and rapidly sell out. Frustrated customers would wait for months while the company got its supply chain in gear. Now, instead of selling out its entire stock of iPhones in a few days, it looks like Apple has carefully rationed the devices. Instead of one big sell-through, the company has orchestrated a bunch of small, distributed sellouts. You may not be able to get the iPhone this afternoon, but if you come back to the same store tomorrow morning, you may be in luck.

It's a much smarter distribution strategy than the old way, as it keeps iPhones in the pipeline, minimizes customer complaints and prevents bad press from cropping up.

http://blog.wired.com/gadgets/2007/07/iphone-shortage.html

VoIP goes Hollywood (Dream on, schmucks!))

What do Ashton Kutcher and voice over IP technology have in common?

Glad you asked. Kutcher, best known for his role on That '70s Show and MTV's reality show Punk'd, is "creative director" for a Silicon Valley start-up called Ooma, which has developed a device that will allow users to make free VoIP calls to any phone in the U.S.

The company, which has $27 million in funding, officially announced itself Thursday.

Unlike Vonage, which requires users pay a monthly flat rate for domestic calling, or Skype, which charges users a low cost fee to make or accept calls from regular phones, Ooma charges a one-time fee of $399 for the Ooma device. After that, all domestic local and long distance calling is free.

Exactly what Kutcher knows about Internet telephony or the communications market in general, is a mystery. But apparently, the actor/husband of Demi Moore helped design the company's logo and the viral marketing campaign called "White Rabbit," which the company will launch this fall. As part of the campaign, Ooma will give away roughly 2,000 Ooma boxes to participants, who will then be able to invite three friends to also get a free Ooma box in exchange for deploying the box and trying the service.

The viral campaign is designed to create buzz for the product, but it's also necessary in order to ensure the service actually works. Ooma relies on a peer-to-peer network, much like the PC-to-PC calling service available through Skype. And it needs to seed the market with devices.

Through this model calls are connected directly to customers rather than through a central server owned and operated by a service provider. Ooma uses this peer-to-peer network to avoid paying phone companies for terminating calls when Ooma users make long distance calls to non-Ooma users. So if I'm an Ooma user in New York City, and I call my dad in Delaware, who is not an Ooma user, the Ooma network will find an Ooma user in my dad's local calling area and mooch off that stranger's local phone line to complete the phone call between my dad and me.

Andrew Frame, CEO of the company, claims that with strategically placed Ooma devices, the company can cover 95 percent of the population. (Of course, this also requires that most Ooma users also keep their regular phone lines so that calls can connect to the public switched telephone network.) And for regions where there is no Ooma box, Frame said the company will eat the cost of interconnecting to the local telephone network.

I have to admit I'm skeptical that Ooma will actually get enough people to buy one of these devices, which looks like an answering machine. The $399 price tag is not trivial, especially when you consider that Ooma may not be around very long. Several other pure play VoIP providers are struggling to stay afloat. Earlier this week, SunRocket closed its doors, leaving some 200,000 subscribers in the lurch. And Vonage, saddled with a huge headache of a lawsuit from Verizon, is also bleeding subscribers.

The service also has a few catches. For one, International calling is not free. Frame said the rates will be similar to other VoIP services like Skype or Vonage. What's more, the Ooma box provides one jack per phone. If users want to hook up additional phones, they'll have to buy a separate adapter called a Scout for each phone at a cost of $39 a pop.

And the final catch is that, like many other VoIP offerings, Ooma doesn't fully comply with enhanced 911, which means if you want the fire department or ambulance driver to actually find your house when you call 911 then you'd better keep your $20 a month regular phone line.

http://crave.cnet.com/8301-1_105-9746917-1.html

The return of the ransom-ware Trojan

Malware with menaces

Virus writers are revisiting the tactic of holding data on compromised machines to ransom with a new strain of so-called "ransom-ware" Trojan.

Gpcode-AI encrypts data on compromised machines before demanding money from users to decrypt it. The malware also include backdoor key-logging features designed to pinch confidential bank account and credit card details from compromised PCs.

"This Trojan belongs to the Synowal family, traditionally used to steal passwords and banking details. This variant, however, not only does that, but blackmails users by encrypting their data so that they cannot access it," explained Luis Corrons, Technical Director of PandaLabs.

Blackmail

When Gpcode-AI installs on the system, it encrypts every single document on the hard disk and creates a file called "read_me.txt" with the kidnapper’s demands (obfuscated copy below). Prospective marks are asked to fork out $300 for a tool to decrypt the files.

Hello, your files are encrypted with RSA-4096 algorithm (http://en.wikipedia.org/wiki/RSA).

You will need at least few years to decrypt these files without our software. All your private information for last 3 months were collected and sent to us.

To decrypt your files you need to buy our software. The price is $300.

To buy our software please contact us at: xxxxxxx@xxxxx.com and provide us your personal code -xxxxxxxxx. After successful purchase we will send your decrypting tool, and your private information will be deleted from our system.

If you will not contact us until 07/15/2007 your private information will be shared and you will lost all your data.

Glamorous team

The demands falsely claim that payment needs to be made by a set deadline or else data will be unrecoverable. In reality the malware lacks any routine to delete encrypted data and the tactic is a simple ruse designed to speed up payment from victims.

The malware uses a complex encryption algorithm to encrypt user files and archives, making it impossible for victims to open files. But the Trojan uses a modified version of RC4 - and not RSA-4096 as mentioned in the text - to scramble data, according to an analysis by anti-virus experts at Kaspersky Labs. The claim that private user files might be sent to a malicious user is also false.

Victims of the malware are strongly urged not to pay money to the creators of the malware since this will only encourage further crime. Anti-virus vendors are working on technologies to both block the malware and restore scrambled data.

Holding data to ransom using viruses to encrypt data is not a new tactic. Previous virus strains, such as the PGPCoder family, used the same tactic. Ransom-A threatened to delete a file every 30 minutes unless prospective marks paid out the relatively modest sum of $10.99. Another type of malware, Arhiveus-A, attempted to coax users into purchasing pills from an online drug story rather than asking for money directly.

http://www.theregister.co.uk/2007/07/19/ransomware_trojan/

Dell Continues to Nosedive

The latest in the PC sales horse race as called by the analysts at Gartner. (IDC saw the same race and reported it essentially the same way.)

Dell worldwide market share in the second quarter is down to 15 percent from 17.8 percent a year earlier. Shipments are down 5.5 percent.

So far, the new jockey, founder Michael Dell, hasn’t made a difference. As has happened for the past two years, the slide is likely to be reflected in weaker financial results, which Dell is expected to report Aug. 30.

The winner was Hewlett-Packard with 18.2 percent share, up from 14.9 percent. Shipments were up 36.6 percent, more, on a percentage basis, than any one else except Acer, which was up 54.2 percent. Acer’s market share was 7.2 percent, up from 5.2 percent a year ago.

In the United States, Dell remains the No. 1 PC vendor, but not by much. It was Dell vs. H.P., 29.9 percent to 25.1 percent. A year ago, the gap was 14.6 percentage points.

The stand-out again was Acer, which more than doubled its market share to 5.6 percent. Indeed, it jumped Toshiba to become the No. 4 PC vendor in the United States after Gateway. (Yeah, it’s still around and still slipping, but not quite as badly as it had been.) Toshiba, though, grew strongly to finish just behind Acer at 5.5 percent market share as shipments grew 54 percent, according to Gartner’s analysis.

IDC teases out the results for Apple, which it puts in fourth place in a dead heat with Gateway with 5.6 percent market share. Apple’s shipments grew 26.2 percent year over year.

The market grew 11.7 worldwide and 5.9 percent in the United States, Gartner said.

http://bits.blogs.nytimes.com/2007/07/18/dell-continues-to-sink/#more-247

Microsoft Windows patent will spy for advertisers

The computer is impersonal again

If you thought adverts on the web have become more offensive and more intrusive than ever before, then it might be time to find alternatives to using software from Microsoft.

Microsoft has filed a patent that threatens to breathe life into Bill Gates' and Ray Ozzie's Frankenstein-like Windows Live "vision", unveiled in November 2005, for putting annoying, in-your-face internet adverts inside your most important Windows applications.

The giant has claimed what it calls an "advertising framework" that would suck "context data" from your PC so advertisers can display ads on the client, and to split revenue with the advertiser and the owner of the application supplying the data.

According to the patent, any application such as - oh, say - a word processor or email client - may "serve as both a source of context data and as a display client." Microsoft's advertising framework would also stipulate "acceptable" advertising - so no porn popping up in your Dynamics CRM or ads for SAP - "restrictions on use of alternate display clients" (so no money for you, Linux), and "specifying supporting media" - forget Real Player and QuickTime, the future is Silverlight.

The patent, filed with the US patent and trademark office, would allow for more targeted, relevant and context-sensitive ads, according to Microsoft.

"Targeted advertisements is highly valued by advertisers because it allows placement of advertisements that are theoretically of greater interest to a particular audience member than blanket advertising," Microsoft's filing said.

Aside from the usual competitive concerns of the dominant supplier of PC operating systems further integrating its applications, this time with the internet to dive online ad revenue, Microsoft's patent is packed with the usual thorny knot of security and privacy concerns. These include spying on, storing and streaming data from personal files stored on a PC plus information on the users' computing activity to advertisers, plus the potential for hackers to attack machines by cracking both the data store and data stream.

Microsoft's envisions a "context manager" that would gather data from "various data sources" with a "profile manager" and "profile database" storing data "over a period of time" for use in "refining context data for advertisement selection."

An "advertising manager" may control the relationship with suppliers and the interface, meaning a "word processor may display a banner ad along the top of a window... while a graphical ad may be displayed in a frame associated with the application. A digital editor for photos or movies may support video-based advertisements."

The advertising manger would also "log ad placement results and may even take steps to verify ad consumption" for enforcement of contractual relationships, of course.

Sun Microsystem’s former chief executive Scott McNealy once lectured us long and hard on losing our online privacy to the internet. Looks like you can kiss farewell to the anonymity of using a PC, too.

http://www.theregister.com/2007/07/18/microsoft_advertising_pc_patent/

Yang: No more denial at Yahoo

Jerry Yang struck a humble tone Tuesday in his first report to investors as Yahoo's new CEO, turning a routine earnings call into an unusual corporate confession.

"I'm very well aware of the challenges we face," Yang said, as Yahoo's financial performance disappointed investors for the sixth quarter in a row. "There's a significant gap between where Yahoo is and where it needs to be."

Yahoo's profit for the quarter ended June 30 was $161 million, or 11 cents per share, 2 percent less than it was a year ago. Revenue was $1.70 billion, up only 7 percent, despite the rapid expansion of online advertising.

Yahoo also said performance for the rest of the year would be poorer than previously expected, prompting some investors to immediately begin selling the stock. Yahoo closed Tuesday at $27.53, up 3 three percent on hopes that its woes were behind it. The stock promptly fell more than 4 percent as soon as the quarterly report was released after trading closed.

Since early 2006, the value of Yahoo's stock has plummeted more than 35 percent. Yang replaced Terry Semel as chief executive last month.

During the call, Yahoo President Susan Decker introduced a laundry list of mistakes by saying: "Let's begin with the areas where I think we could have done a better job." Decker went on to acknowledge everything from failures to make timely investments in Yahoo's technology platform to a reluctance to make tough personnel

The candor was in marked contrast to traditional earnings calls, where executives strive to make their companies look as good as possible. Afterward, some analysts joked that Yahoo had entered a 12-step program.

http://www.siliconvalley.com/ci_6401762?nclick_check=1

LOTS OF 'GREED' BEHIND THE IPHONE

Maybe greed is good, as Gordon Gekko said in "Wall Street," but no one likes to be called "greedy."

So foreheads flexed last Thursday in Sun Valley, Idaho, when Sony honcho Sir Howard Stringer used that word to describe Apple chairman Steve Jobs. Stringer was part of a panel at the Allen & Co. media mogul powwow with Barry Diller (IAC), Jeff Bezos (Amazon) and Sergey Brin (Google), discussing how technology has changed the way people get their entertainment and news.

According to one audience member, Stringer said it's funny that Jobs accuses record companies of greed because they want to get paid for music downloads. Stringer said Jobs, who just launched the iPhone, is the "greedy" one because he wants a world where only he makes money.

http://www.nypost.com/seven/07182007/gossip/pagesix/lots_of_greed_behind_the_iphone_pagesix_.htm

Google targets small business

Just in case you've been hiding under a rock, Google has launched a search engine service for small businesses that costs as little as $100 (£49) a year to run.

Google Custom Search Business is aimed at the millions of businesses that have a web presence but offer users no way of searching their website.

Dave Girouard, VP and general manager, Google Enterprise, said: "While many of these businesses invest in search advertising and search engine optimization to help customers find their business, customers are left on their own to navigate content once they land on a site.

"We are reducing the hurdles of cost, complexity and time so that small businesses can help customers find what they need."

Businesses can sign up for the new service online, and "in less than 10 minutes" customers and visitors are able to search their site using Google's search technology, for more relevant results.

The basic service, which looks set to rival Microsoft's enterprise business, searches up to 5,000 web pages and costs $100 a year, while for $500 (£245) a year, Google will search up to 50,000 web pages.

The service builds on Google Custom Search Engine, a free advert-supported service which was introduced in October last year, by adding business integration features, enabling sites to turn off adverts and offering a more customised feel, as well as email and phone support.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/17/bcngoog117.xml

U.S. Tech Employment Hits Its Highest Point In Seven Years

Wanna tell your boss to take this job and shove it? Go right ahead.

The 2% unemployment rate matches other professional categories and is a big improvement from 5% in 2004.

The unemployment rate for IT occupations fell to 2%, and total IT employment has reached nearly 3.6 million, better than it has been the past seven years, according to the most recent household employment survey by the Bureau of Labor Statistics.

The results paint a much better picture for the health of the IT profession than during the recession of 2003 and 2004, when the IT unemployment rate hit 5.3%. But a shift in the type of work U.S. tech workers do also is continuing. The biggest job gains the past year come for software engineers, IT managers, and network systems analysts. Programmers and support specialists continue to lose jobs.

Total IT employment of 3.58 million and the size of the available IT workforce -- 3.65 million working or unemployed -- are at their highest levels since the BLS started using these eight computer-related job categories in 2000. At 2%, the tech unemployment rate matches that of the larger management and professional class measured by BLS. Employers added about 93,000 computer-related jobs from a year ago.

The figures are based on an InformationWeek analysis averaging quarterly BLS household surveys for the past 12 months, as of June.

Programmers remain the third largest IT job category, employing more than a half million people and providing 15% of computer-related jobs. Programmer employment is down 26% from 2001, and 3% from a year ago. Support specialist jobs slipped 4%, and make up 9% of the tech workforce.

IT management jobs continue to grow, providing 12% (423,000) of computer-related jobs. Manager jobs are up more than 50% since 2001 and 22% since 2004, as more IT pros take a bigger role leading projects, managing systems, and coordinating outsourcers and others vendors.

Twenty-five percent of tech pros are employed as software engineers, and 21% as computer scientists and system analysts. Engineer jobs grew 3%, computer scientist and analyst jobs dipped 1%.

http://www.informationweek.com/news/showArticle.jhtml?articleID=201002045

Oklahoma woman takes sue happy RIAA to the bank

$68,685.23 to cover three year case

In what appears to be the first known case of its kind, the RIAA has been ordered to pay a defendant nearly $70,000 in attorney fees and costs after unsuccessfully suing for copyright infringement.

According to court documents, the Recording Industry Association of America first contacted Oklahoma resident Deborah Foster by phone in 2004. An RIAA settlement representative accused her of downloading copyrighted material off the file-sharing program, Kazaa, using the screen name "fllygirl11," and demanded a payment of $5,000. Foster refused, claiming she did not download any songs from the internet. The settlement representative responded by offering to go down as far as $3,750, but Foster again refused to pay.

In response, the RIAA filed suit against Deborah Foster in November 2004. Her adult daughter Amanda was added to the complaint in July 2005 when it was indicated that she had access to the internet account. Because Amanda failed to defend herself against the complaint, the RIAA won the case against her by default.

The ruling against Deborah was then amended to allege she "contributorily and/or vicariously" infringed on copyrighted recordings.

The RIAA continued its lawsuit against Deborah Foster, claiming she was liable as the owner of the internet account responsible for the copyright infringement. Foster refused to settle with the RIAA outside of court, and as the case dragged on, her litigation investment became considerable.

On July 13, 2006 the Oklahoma court ordered the RIAA's claims against Foster be dismissed with prejudice and ruled she was eligible to be awarded attorneys fees. The court was skeptical that "an internet-illiterate parent, who does not know Kazaa from a kazoo" could be liable for copyright infringement committed by someone else using her internet account.

Foster first requested $105,680.75 in attorney fees, but the RIAA objected to this, claiming the figure was unreasonable and that she was not entitled to fees for work that could have been avoided "had she assisted the RIAA or acceded to settlement." The court eventually whittled the award down to $68,685.23 in a 14-page document which itemized her expenses.

A RIAA representative would not talk to us about the case, and said she did not know if it was the first time attorneys' fees were rewarded to a defendant in similar RIAA copyright lawsuits

http://www.theregister.com/2007/07/17/riaa_pays_legal_fees/