Google Chrome Gets Extensions, APIs
Information Week

With support for user-installed extensions, Google Chrome presents stronger competition to the more established Web browsers.

Only days after Mozilla introduced Firefox 3.6, Google has rolled out a new stable release of Google Chrome for Windows.

Google maintains three separate tracks for its Chrome Web browser: developer, beta, and stable.

The updated stable release bring support for Chrome Extensions, a feature that users of Chrome's developer

and beta releases have had since late last year. Extensibility has been one of the major factors in the success of Firefox.

And as with Firefox, some of the most popular extensions for Chrome block ads.

"Google Chrome extensions use the same multiprocess technology that makes the browser fast and more secure, so that extensions won't crash or slow down your browser," said Google product manager Ian Fette in a blog post.

Google has enabled extensions in the Google Chrome for Linux beta and it plans to do the same shortly for Chrome on the Mac.

The updated version of Chrome for Windows also adds support for several new HTML and JavaScript APIs. These include the Web SQL Database API, which allows local storage of structured data; the local storage portion of the Web Storage API, a simpler local storage mechanism; WebSockets, a way to send data back and forth over a persistent communication channel; and a Windows-only notification API, for passing non-disruptive updates to a panel in the user's status-bar area.

In a separate blog post, Fette also said that Google is working to implement a service called Application Cache, which allows the serving of HTML and JavaScript that references Web SQL data. Its engineers are also working on the SessionStorage part of the Web Storage API.

While Firefox use continues to grow, Google's ongoing efforts to polish Chrome appear to be prompting some Firefox fans to reconsider their browser choice. A thread on Reddit about Chrome use suggests that Google's focus on browser basics like speed, stability, and security resonates with users.

Running Mozilla's Dromaeo JavaScript test on Windows XP, Chrome 4.0.302.3 beat Firefox 3.6 in three out of four of the speed trials, with a final score of 139.19 to 83.90.

At the end of this year, Google plans to release Chrome OS, an operating system based on its Web browser and taking full advantage of the preeminence of Google SEO.

Google Social Search Obtains Beta Status

Information Week

Google on Wednesday moved its Social Search experiment from Google Labs to beta status, meaning that it's now a mainstream search option for anyone who believes that the fetishes and fascinations of friends will make Google search results more relevant.

The beta label will remain for a while, the company said, because there's still work to do. The re-branded Social Search will be available in English, though perhaps not immediately everywhere -- Google said it could take a few days to roll out.

Google introduced Social Search last October after several years of dipping its toes in the social waters through various forms of search personalization.

Its public commitment to Social Search occurred at the Web 2.0 Summit in San Francisco, an event at which Facebook COO Sheryl Sandberg declared, "There is a very fundamental shift going on from the information Web to the social Web."

Social Search on Google requires a Google Account and a Google Profile. Users who fill out their Profiles with contact information or add links in their Profiles to other social Internet services, such as Blogger, Twitter, and the like, have the option of seeing what their online associates have posted when it relates to a given search.

Google has extended Social Search to include Google Images, a move that simplifies finding photos shared by friends through services like Flickr and Picasa Web Albums.

The company has added two new Social Search links, labeled "My social circle" and "My social content," that make it easier to see how one's friends fit into Social Search and to see how one's own public pages may appear to friends using Google SEO.

Evidently oblivious to the lack of privacy implied by Social Search, Google on Thursday said it was celebrating Data Privacy Day by publishing the privacy principles under which it has been operating.

Nebraska Man to Plead Guilty in Scientology Site Hack 
USA Today

Federal prosecutors in California say a Nebraska man will plead guilty to participating in a cyber attack on Church of Scientology websites in January 2008.

Thom Mrozek, a spokesman for the U.S. attorney's office in Los Angeles, says Brian Thomas Mettenbrink agreed to plead guilty Monday to the misdemeanor charge of unauthorized access of a protected computer. He faces a year in federal prison.

Court records say Mettenbrink attacked Scientology websites as part of Anonymous, an underground group that protests the Church of Scientology, accusing it of Internet censorship.

Prosecutors say hackers conducted a "denial of service" attack, in which computers flood a target website with malicious Internet traffic, making it unavailable to legitimate users.

Prosecutors say Mettenbrink, of Grand Island, Nebraska, is expected to enter his plea next week in Los Angeles, where the Church of Scientology is based.

Yahoo's 4Q Progress Brightens 2010 Outlook

AP

After a painful descent, things may finally be looking up for long-suffering Yahoo Inc.

Coming off its best quarterly performance since hiring Carol Bartz as its chief executive a year ago, Yahoo promised late Tuesday to deliver even more meaningful progress this year.

For starters, the Internet company expects its revenue for the three months ending in March to rise 3 percent to $1.63 billion. Modest as that sounds, it's a breakthrough for Yahoo after five consecutive quarters of declining revenue while Google Inc. vacuumed up even more Internet advertising.

Even if the company hits management's target, Yahoo's first-quarter revenue will still be nearly $200 million below where it stood two years ago.

Bartz has been vowing since her arrival to engineer a turnaround that eluded her two predecessors, but her efforts through most of 2009 were hampered by the worst U.S. recession since World War II.

Yahoo's fourth-quarter results released Tuesday provided the latest evidence the Internet ad market is regaining its legs as the economy stabilizes. Google, the Internet's dominant advertising vehicle, closed out 2009 with its most robust growth of the year.

"Things seem to be returning to a more normal state in the online advertising business," Bartz told analysts in a Tuesday conference call.

Yahoo earned $153 million, or 11 cents per share, during the final three months of 2009, rebounding from a loss of $303 million, or 22 cents per share, in the prior year.

If not for charges for internal reshuffling and a proposed search partnership with Microsoft Corp., Yahoo said it would have made 15 cents per share in the quarter. That topped the average estimate of 11 cents per share among analysts surveyed by Thomson Reuters.

Yahoo shares climbed 60 cents, or 3.8 percent, in Tuesday's extended trading. Before the results came out, the stock finished the regular session at $15.99, up 13 cents.

Revenue slipped 4 percent to $1.73 billion. In contrast, Google's fourth-quarter revenue surged 17 percent. Yahoo still did better than the first nine months of 2009, when the company's revenue dropped 12 percent.

In a sign of Yahoo's growing confidence, the company added 700 workers to its payroll in the fourth quarter to end December with 13,900 employees. That's still down from Yahoo's recent peak employment of 15,200 workers in September 2008.

Yahoo also intends to buy other companies this year, Bartz said, setting her sights mostly on small deals that improve the company's technology and bring in more compelling content to its Web site.

"We are done looking inward," Bartz told analysts. "We are looking outward at the incredible opportunities ahead."

For all of 2009, Yahoo earned $598 million, or 42 cents per share, on revenue of $6.46 billion. That compared with income of $419 million, or 29 cents per share, on revenue of $7.21 billion in 2008.

Even before the recession's onset in December 2007, Yahoo SEO was on the ropes, as Google widened its lead in the Internet's lucrative search market and online hangouts such as Facebook emerged as new hot spots for socializing and advertising.

Bartz has been trying to spur more advertising by re-establishing Yahoo as the center of people's online lives. The makeover has included a redesigned front page that makes it easier to connect to Facebook and other Web sites. The front page sold all its available advertising in the fourth quarter, Bartz said.

Yahoo was especially pleased with renewed spending on its bread-and-butter - the online billboards known as display advertising. Sales in that category were flat from the same time last year, but climbed 26 percent from the third quarter. That was Yahoo's largest sequential gain in display advertising in three years.

Social Media Security Flaws Haunting The Internet
Scandals, Probes, Hacks
Social Sites Creating Huge Headaches Worldwide
Canada Privacy Office Launches New Facebook Probe
AP

Canada's privacy commissioner is once again probing Facebook over the online social network's privacy policies.

The Privacy Commissioner of Canada said Wednesday it is investigating a complaint from a Facebook user over changes the company introduced in December.

The announcement came just five months after Facebook agreed to give users more control over the information they share with outside applications such as games and quizzes in response to concerns raised by Canadian privacy officials.

The latest complaints stem from changes Facebook made to give users more granular controls over what information is shared with others, while pushing users to be more open.

The complaint alleges that Facebook's new, "default" settings made more information exposed than the user had previously intended. Facebook insists those settings were merely recommendations.

Elizabeth Denham, the assistant privacy commissioner, said some Facebook users have been disappointed at changes that were supposed to improve protection of their personal information.

Facebook, which is based in Palo Alto, Calif., said it has not seen the complaint but it is confident that its process last month was "consistent with user expectations, and within the law."

In the U.S., the Electronic Privacy Information Center and nine other organizations have also filed a complaint with the Federal Trade Commission over last month's changes.

Google Co-Founders To Sell Off Combined 5.5Billion in Stock

AP

Google Inc. co-founders Larry Page and Sergey Brin are relinquishing some of their control over the Internet search leader with the sale of 10 million shares worth $5.5 billion at current prices.

Under a plan disclosed Friday, the longtime business partners will each sell 5 million Google shares during a five-year period that will commence with the first trade.

The sales will occur periodically to lessen the chances of hurting Google's stock price.

Page and Brin, both 36, will remain Google's most influential shareholders, although they will be losing some of their clout.

The two iconoclasts own a special class of Google stock that gives them combined voting power of about 59 percent - enough to override the wishes of all other shareholders if they wanted. The duo secured this veto power to ensure Google remained true to their values, which are summed up in the company motto, "Don't Be Evil."

After the sales, the founders' holdings will be whittled to a combined 47.7 million shares with 48 percent voting power.

Falling below the 50 percent threshold might not matter because they run Google as a ruling triumvirate with the company's chief executive, Eric Schmidt, whose shares hold 10 percent voting power.

Although the trio acknowledge occasional disagreements, they insist they always work things out amicably. What's more, Schmidt, Page and Brin have agreed to remain at Google at least through 2024.

Executives and founders of companies commonly enter into predetermined stock trading plans to raise cash and diversify their investments.

Page and Brin each currently have about $16 billion of their fortunes tied up in Google stock. By their own choice, their annual salary at Google is just $1.

"They are both as committed as ever to Google and are integrally involved in our day-to-day management and product strategy," Google spokeswoman Jane Penner said. "The majority of their net worth remains with Google."

This marks the second time Page and Brin have sold big chunks of stock since Google went public in August 2004.

Three months after the company's initial public offering, Page and Brin filed an 18-month plan that divested 7.2 million shares apiece.

Back then, Google shares were trading around $169.40. The stock is worth three times as much now, closing at $550.01 Friday after falling $32.97, or 5.7 percent.

Google Fueds with China Over Gmail Hack
China denies involvement in Google hackings
AP

BEIJING (AP) - China sharply rebuked the United States on Monday, denying involvement in any Internet attacks and defending its online restrictions as lawful after Washington urged Beijing to investigate an attack against Google.

The search engine giant announced on Jan. 12 that it would pull out of China unless the government relaxes its rules on censorship. The ultimatum came after Google said e-mail accounts of human rights activists critical of China had been hacked.

Since then, U.S. Secretary of State Hillary Rodham Clinton has criticized the censorship of cyberspace, drawing a strong counterattack from Beijing. The Foreign Ministry on Friday said her remarks damaged bilateral relations, while a Chinese state newspaper said Washington was imposing "information imperialism" on China.

On Monday, the Ministry of Industry and Information Technology went on the offensive again, saying the country's anti-hacking policy is transparent and consistent.

"Any accusation that the Chinese government participated in cyberattacks, either in an explicit or indirect way, is groundless and aims to discredit China," an unidentified ministry spokesman said, according to a transcript of an interview with the official Xinhua News Agency posted on the ministry's Web site.

The increasingly heated environment is likely to pose challenges to negotiating an arrangement that would suit both Google's and China's interests.

The company says it remains optimistic it can persuade China's ruling party to loosen restrictions on free expression on the Internet, so it can keep doing business in the country. However, China's government has given little indication it's willing to budge.

"Increasingly, the line emerging from the Chinese government is harder and less open to compromise," said Russell Leigh Moses, an analyst of Chinese politics based in Beijing. "Hillary Clinton's speech was seen by many officials here as the United States' laying down a marker and put matters in a more confrontational mode."

The Communist Party's official People's Daily newspaper also accused the U.S. government of strictly controlling the Internet at home on Monday while urging other countries to build an "Internet freedom utopia."

"In reality, this 'Internet freedom' that it is marketing everywhere is nothing but a diplomatic strategy, and only an illusion of freedom," the paper said.

Xinhua also cited the State Council, China's Cabinet, as criticizing what it called interference in the country's domestic affairs.

Internet control is considered a critical matter of state security in China. Beijing promotes Internet use for commerce, but heavily censors content it deems pornographic, anti-social or politically subversive and blocks many foreign news and social media sites, including Twitter and Facebook, and the popular video-sharing site YouTube.

Google said it had uncovered a computer attack that tried to plunder its software coding and the Gmail accounts of human rights activists protesting Chinese policies. The company traced the attacks on its computers to hackers in China, but hasn't directly tied them to the Chinese government or its agents.

A Chinese Internet security official questioned the allegation, saying Google had not reported its complaints to China's National Computer Network Emergency Response Technical Team.

"We have been hoping that Google will contact us so that we could have details on this issue and provide them help if necessary," Zhou Yonglin, the team's deputy chief of operations, said in an interview with Xinhua posted on the team's Web site.

Zhou said the team logged attacks on 262,000 Chinese computers last year by hackers implanting malicious software such as Trojans, which can allow outside access to the target's computer. More than 16 percent of the attacks came from computers located in the U.S., he said.

Berlusconi Moves to Impose Internet Regulations

AP

Silvio Berlusconi is moving to extend his grip on Italy's media to the freewheeling Internet world of Google and YouTube.

Going beyond other European countries, the premier's government has drafted a decree that would mandate the vetting of videos for pornographic or violent content uploaded by users onto such sites as YouTube, owned by Google, and the France-based Dailymotion, as well as blogs and online newsmedia.

Google, press freedom watchdogs and telecom providers are among those pressing for changes in the draft to prevent the fast-track legislation from taking effect as early as Feb. 4. They say the decree would erode freedom of expression and mandate the technically burdensome - maybe even impossible - task of monitoring what individuals put on the Internet.

Reporters Without Borders Media says the measures could force Web sites to obtain licenses to operate in Italy.

The 34-page decree mandates vetting of any content harmful to minors, specifically pornography or excessive violence, and would require telecoms providers to shut down any Internet site not in compliance, or face fines ranging from euro150 to euro150,000 ($210 to $210,960).

The draft says it would be handled by "an authority," without elaborating, raising questions about among media freedom advocates about how it could be implemented.

Reporters Without Borders said in a statement this week that the draft proposal as written "pose yet another threat to freedom of expression in Italy."

The draft was written in mid-December, just around the same time the media empire founded by Berlusconi announced it was seeking at least euro500 million (US$779 million) in damages against YouTube and Google for allegedly misusing video it produced. The move is in response to a 2007 European Union directive to set up media rules, but only Italy has taken the directive to mean putting Internet companies in the hotseat.

The decree also inherently challenges the YouTube business model, shared by other hosting platforms, of allowing users to upload video without being controlled - the principle at the center of the Milan trial of four Google executives charged with defamation and violating privacy for allowing a video to be posted online showing an autistic youth being abused. Google says it removed the video as quickly as it could. A verdict is expected in the coming weeks, with the executives facing possible jail sentences.

The decree could also provide a tool to swiftly deal with hate groups, like those praising Berlusconi's attacker that mushroomed on Facebook after Berlusconi was struck by a man wielding a statue of Milan's cathedral.

Carlo Carnevale Maffe, an Internet economist at Milan's Bocconi University, argues that Internet must be regulated like other economic platforms or big companies will retain a monopolistic grip and keep getting bigger and more powerful.

"I cannot consider YouTube as a benefactor of mankind. I must consider YouTube as a company," Maffe said. "Google and the Internet live without regulation worldwide. This is impossible and we need to clear what are the limits of this new platform. We need to upgrade the legal platform to make sure the Internet is not blocked from innovation, but to give fair competition to the Internet."

Google's concern is that the decree takes aim at user-generated content, which drives YouTube seo,  that is by its nature not managed in the same way as TV network content is. That was not the intention, Google argues, of the EU directive that Italy has taken to include Internet controls.

"If I am the BBC and I am using the web to broadcast my IPTV (Internet protocol TV), I am in the scope of the directive. If I am a user posting on YouTube a video of my son's birthday, I am not under the scope of the directive," Marco Pancini, European senior policy counsel of Google Italia, said in an interview Friday before testifying on the decree before an Italian parliamentary committee.

Pancini was quoted earlier this week as telling Italian media that it would "destroy the Internet," but he said Friday that after meeting with drafters this week that he was convinced they were open to amending the decree.

Pancini was testifying along with the Italian associations for Internet and telecommunication providers as well as the national press and music federations. Pancini said he expected parliament to return the draft with changes next week, delaying implementation.

China Slams U.S. Criticism of Internet Controls
Fallout over Gmail hack continues

AP

A Chinese flag flutters near the Google logo on top of Google's China headquarters in Beijing, China, Friday, Jan. 22, 2010. U.S. Secretary of State Hillary Rodham Clinton on Thursday urged China to investigate cyber intrusions that led search angle Google to threaten to pull out of that country, and challenged Beijing to openly publish its findings.

Beijing issued a stinging response Friday to Hillary Rodham Clinton's criticism that it is jamming the free flow of words and ideas on the Internet, accusing the United States of damaging relations between the two countries by imposing its "information imperialism" on China.

Foreign Ministry spokesman Ma Zhaoxu defended China's policies regarding the Web, saying the nation's Internet regulations were in line with Chinese law and did not hamper the cyber activities of the world's largest online population. His remarks follow those made by the U.S. secretary of state, who in a speech Thursday criticized countries engaging in cyberspace censorship, and urged China to investigate computer attacks against Google.

"Regarding comments that contradict facts and harm China-U.S. relations, we are firmly opposed," Ma said in a statement posted Friday on the ministry's Web site. "We urge the U.S. side to respect facts and stop using the so-called freedom of the Internet to make unjustified accusations against China."

In her speech in Washington, Clinton cited China as among a number of countries where there has been "a spike in threats to the free flow of information" over the past year. She also named Tunisia, Uzbekistan, Egypt, Iran, Saudi Arabia and Vietnam.

A state-run newspaper labeled the appeal from Washington as "information imperialism," and Ma insisted that China had "the most active development of the Internet" of any country.

Washington, meanwhile, carried its message on Internet freedom directly to Chinese bloggers. The U.S. Embassy in Beijing and consulates in Shanghai and Guangzhou hosted Internet-streamed discussions with members of the blogging community on Friday afternoon - the latest example of Washington's outreach to Chinese bloggers as a way of spreading its message.

The bloggers met with U.S. diplomats from the political, economic and public affairs sections, who held discussions and answered questions about Clinton's speech. The meetings were similar to a session organized during Obama's visit to China in November.

Zhou Shuguang, who blogs under the name "Zuola," attended the session in Guangzhou and said Clinton's speech resonated deeply with Chinese bloggers frustrated by the content controls.

"We welcome the U.S. bringing this topic to the table for discussion in a diplomatic way," Zhou said.

Internet control is considered a critical matter of state security in China, and Beijing is not expected to offer any concessions. Beijing promotes Internet use for commerce, but heavily censors content it deems pornographic, anti-social or politically subversive and blocks many foreign news and social media sites, including Twitter and Facebook and the popular video site YouTube.

Underscoring such sensitivities, Chinese media published only scant reports on Clinton's speech and Web sites carrying the Foreign Ministry response had disabled their comments pages.

"For many senior leaders in the party, they're going to see this as just a further example of Western misunderstanding of China, Western domination of the agenda, and they're going to be more encouraged to push or defend China's own press policies," said David Bandurski, a Chinese media scholar at the University of Hong Kong.

Bandurski said that could give added impetus to multibillion-dollar plans to raise Chinese state media's overseas profile. China has been setting up new bureaus for state newspapers and funding the official Xinhua News Agency's move into television while establishing new foreign language channels for broadcaster China Central Television.

Phil Deans, a China expert at Temple University's Japan campus in Tokyo, said Beijing will likely view Clinton's comments as further confirmation that the current administration is no more amenable to its world view than the preceding one.

"After a year of sort of getting to know you and seeing how things are, the two sides realize they have a very, very different view of how the world does work and how the world should work," Deans said.

Clinton's speech came on the heels of a Jan. 12 threat from Google to pull out of China unless the government relented on censorship. The ultimatum came after Google said it had uncovered a computer attack that tried to plunder its software coding and the e-mail accounts of human rights activists protesting Chinese policies.

Eric Schmidt, Google's chief executive, said Thursday that the company hoped to find a way to maintain a presence in China but intended to stop censoring search results within "a reasonably short time."

Responses to the Google issue have ranged widely among Chinese Internet users, with some placing flowers at its Beijing headquarters and others penning screeds bidding good riddance.

U.S. State Department officials have said they intend to lodge a formal complaint with Chinese officials soon over the Google matter. Clinton not only urged China to investigate the cyber intrusions but openly publish its findings.

Clinton's speech was also denounced by an official newspaper Friday as part of a U.S. campaign to impose its values and denigrate other cultures while exploiting their societies' vulnerabilities.

"China's real stake in the 'free flow of information' is evident in its refusal to be victimized by information imperialism," said the English-language Global Times newspaper.

Apple May Give Bing Top iPhone Billing

Business Week

Amid an accelerating rivalry with Google, Apple is discussing ways to make Bing the default search engine on the iPhone

In 2003, when Apple said its iTunes music software would work on PCs using the Windows software of its age-old rival, Microsoft, Apple made up posters that read "Hell Froze Over." Hell may be getting frosty again.

Apple (AAPL) is in talks with Microsoft (MSFT) to replace Google (GOOG) as the default search engine on its iPhone, according to two people familiar with the matter. The talks have been under way for weeks, say the people, who asked not to be named because the details have not been made public.

The discussions reflect the accelerating rivalry between Apple and Google, now the main provider of Web search on the iPhone. While the two companies have worked as partners in the past and Google Chief Executive Eric Schmidt had a seat on Apple's board, Apple and Google have more recently begun competing in several markets, including mobile phones. Google sells a smartphone, the Nexus One, that competes directly with the iPhone and it has spearheaded development of a wireless handset operating system that rivals the iPhone OS.

"Apple and Google know the other is their primary enemy," says one of the people, who's familiar with Apple's thinking. "Microsoft is now a pawn in that battle." Apple is also working on ways to manage ad placement on its mobile devices, a move that would encroach on Google's ad-serving business, the person says.

The discussions could still unravel and may not be concluded quickly. Microsoft spokesman Frank Shaw and Apple spokeswoman Katie Cotton declined to comment on potential involvement of Bing seo.

Default Reaps Financial Benefits

A deal between Apple and Microsoft may mean iPhone owners would automatically get Microsoft's Bing as the main search engine, possibly requiring users to actively change phone settings if they want to search via Google. Google is now the default search engine on the iPhone. To search via Bing, a user needs to download a Bing application or go through the browser to call up www.bing.com. Microsoft may also be lobbying to make Bing an alternative on Apple's Safari browser for Mac users. Currently, Mac users can choose either Google or Yahoo search through the Safari browser.

Being the default search engine on the iPhone carries financial benefits for Google, which collects revenue from ads placed alongside its search results and shares a portion of that with Apple. Most mobile advertising now is viewed on Apple's iPhone and iPod touch, according to mobile advertising company AdMob. To clinch the deal, Microsoft may be willing to share a higher portion of its revenue or pay a larger flat annual fee than Google seo does. Neither Apple nor Google discloses the financial terms of their search partnership.

Clinching the coveted default spot on the iPhone would also help Bing gain market share in the quickly growing area of mobile search. Of people who use mobile search, 86% used Google in November, according to the Nielsen Co. Only 11% used Bing.

Google Rivalry Unfolds

Apple and Microsoft are rivals, too, though cooperation between them is not unprecedented. Microsoft builds Mac versions of its Office suite of business programs, such as Word. When Apple co-founder Steve Jobs returned to the company in 1997, one of his first acts was to settle intellectual-property infringement claims in exchange for $150 million in much-needed cash and a promise from Microsoft that it would continue developing upgrades of Office for the Mac. Back then, Apple was in dire financial straits and desperate for friends. Now it's in a position of strength. "If you have to do a deal with the devil, you might as well deal with the devil that needs you most," says Forrester Research (FORR) analyst James McQuivey.

Apple initially agreed with little hesitation to use Google as the default search engine in the iPhone before it was launched in 2007, according to two people familiar with the negotiations. Besides using the search bar, the companies worked together to create special versions of Google Maps and the YouTube video player tailored to run faster on the device. At the time, Apple had little hesitation because Google's popular software could help drive the popularity of the iPhone—and because Google wasn't seen as a potential rival.

That began changing more than a year ago as the two companies encroached further on each other's turf. Apple has refused to approve two Google applications for distribution in its App Store—including one called Latitude that uses GPS data and other types of information to show users which friends are nearby.

Even if it's consummated, an Apple-Bing deal may prove short-lived. The person familiar with Apple's thinking says Apple has a "skunk works" looking at a search offering of its own, and believes that "if Apple does do a search deal with Microsoft, it's about buying itself time." Given the importance of organic search marketing and its tie to mobile advertising—and the iPhone maker's desire to slow Google—"Apple isn't going to outsource the future."

Google Scraps China Cell Phone Launch Amid Dispute

AP

Google on Tuesday postponed the launch of its mobile phone in China, adding to the potential commercial fallout of its dispute with Beijing over Internet censorship and e-mail hacking.

One person briefed on Google's decision said it was linked to the company's threat that it will shut its Chinese-based search engine if restrictions aren't eased.

The company concluded it would "not be a good experience" for consumers to receive a phone right now with its applications, said the person, who spoke on condition of anonymity due to the sensitivity of the issue.

Marsha Wang, a spokeswoman for Google Inc., however, only said the planned Wednesday ceremony with local carrier China Unicom Ltd. was postponed. She declined to give a reason or say when the launch might be rescheduled.

China has the world's most-populous mobile phone market, with more than 700 million accounts and increasingly prosperous customers who readily pay for the latest technology and services.

Beijing referred to Google by name Tuesday for the first time since its Jan. 12 announcement that it would no longer censor search results in China and might shut down Google.cn. The government said the search giant must obey China's laws and traditions, suggesting it was giving no ground in talks with the company.

"Foreign enterprises in China need to adhere to China's laws and regulations, respect the interests of the general public and cultural traditions and shoulder corresponding responsibilities. Google is no exception," said Foreign Ministry spokesman Ma Zhaoxu at a regular news briefing.

Beijing promotes Internet use for business and education but blocks access to material deemed subversive or pornographic, including Web sites abroad run by dissidents and human rights groups.

Free speech groups and the White House lauded Google's stance but there was no indication other companies might follow its lead and challenge government controls.

A Google pullout would be awkward for China. Chinese and foreign businesses rely on its e-mail, maps and other services based abroad. That could lead to disruptions if authorities try to retaliate by blocking access to Google's U.S. site.

Google declined to comment on a report by the Chinese business magazine Caixin that the company has told manufacturers Motorola and Samsung to remove its logo, search engine and maps from phones being produced for the China Unicom venture.

Phone calls to Unicom's press office in Beijing were not answered. A Unicom spokeswoman in Hong Kong, Sophia Tso, said she had no information. Spokespeople for Motorola Ltd. and Samsung Electronics Co. did not immediately respond to requests for comment.

Google said last week that an attack in December from China targeted the Mountain View, California-based company's infrastructure and at least 20 other major companies from the Internet, financial services, technology, media and chemical industries.

The Foreign Correspondents' Club of China sent an e-mail Monday to its members warning that reporters in at least two news bureaus in Beijing had said their Gmail accounts had been broken into, with their e-mails surreptitiously forwarded to unfamiliar accounts. One of the accounts belonged to an Associated Press journalist.

Ma, the foreign ministry spokesman, said China strictly prohibits computer hacking in any form.

The chief executive of China's e-commerce giant Alibaba Group, which operates the China arm of Google rival Yahoo Inc., said Tuesday at a conference in Taiwan that foreign companies such as Google should not pull out of China.

"It is easy to give up, but one must hang on," said Jack Ma. "China will set the rule of (the) game in the 21st century, and businesses must not go to the mainland for the profit motives only but rather to take part in setting the rules."

Yahoo turned over its China operations to Alibaba several years ago after failing to gain market share against Chinese competitors. Yahoo now owns 39 percent of Alibaba.

China also has the world's most-populous Internet market, with more than 384 million people online, bigger than the entire U.S. population.

Google.cn, set up in 2005, trails local rival Baidu Inc., with a 35 percent market share to Baidu's 60 percent.

Google Tried to Enlist Companies as Allies After Cyber Attack‏

Bloomberg

Google Inc. approached other companies to seek their help drawing attention to a cyber attack from China last month and was frustrated by their reluctance to come forward, according to a person familiar with the matter.

Google announced this week that it was one of at least 20 companies targeted in a “highly sophisticated” computer attack and wanted others to talk about the incident, the person said. The companies refused, and Google made the announcement by itself, the person said.

Since then, three other companies, Adobe Systems Inc., Juniper Networks Inc. and Rackspace Hosting Inc., have said they were targeted by cyber attacks. The reluctance of companies to join Google in its initial announcement illustrates the pressure on them to protect their business in China, the world’s third- largest economy, said Barry James, who helps manage $2 billion at James Investment Research in Xenia, Ohio.

“Companies are not going to be cutting off their nose to spite their face,” James said. “It’s an underlying problem that exists in terms of dealing with a country where they don’t necessarily follow all the same rules that we do. More experienced firms have a better grip on how to navigate that.”

In disclosing the attacks, Google said it plans to stop censoring Web-search results in China, a move that may lead to the closing of its Chinese site and offices in the country. Mountain View, California-based Google said the attacks were directed at e-mail accounts of human-rights activists.

Jill Hazelbaker, a spokeswoman for Google, declined to comment on how the company handled the matter.

China Revenue

Google probably can afford to leave China, said Marshall Meyer, a professor of management at the University of Pennsylvania’s Wharton School.

“If they were making a lot of money, I don’t think they’d do this,” said Meyer, who teaches an MBA course on how companies operate in China. “You have to cultivate good relationships with the government -- no way around it.”

Less than 2 percent of Google’s $21.8 billion in revenue came from China last year, according to Jefferies & Co. By comparison, China accounted for 13 percent of Intel Corp.’s sales in 2008, the last time the company disclosed results from the country. Cisco Systems Inc. made 11 percent of its revenue from the Asia Pacific region, excluding Japan, in the most recent quarter.

Google rose $1.87 to $591.72 at 9:32 a.m. New York time on the Nasdaq Stock Market. The stock has almost doubled in the past year.

‘All About Profit’

Dan Slane, chairman of the U.S.-China Economic and Security Review Commission, a federal agency, said he was surprised more companies aren’t standing up with Google.

“It’s all about profit, and I understand where the silence is coming from, but they are missing the long-term picture,” Slane said in an interview. Chinese leaders’ “end game is to extract as much technology out of American companies as they can, transfer that to their own companies and, when they feel those companies have reached a level of technical maturity, show the American companies the door.”

Google co-founder Sergey Brin pushed the company’s executives to take a stand against the attacks and end its censorship of Web-search results in China, according to another person familiar with the matter. As part of the discussion, Google executives analyzed the financial effect of the company leaving China, the person said.

Yahoo! Inc., the second most used U.S. search engine, was also among the companies targeted by the attack in China, a person familiar with the matter said this week. Yahoo, which said it “stands aligned” with Google in condemning Chinese cyber attacks on users, said that it doesn’t generally disclose attacks on its computer systems.

Microsoft’s Stance

Technology companies such as Microsoft Corp. and Intel have spent years building businesses in China, the world’s largest Internet and mobile-phone market.

Microsoft Chief Executive Officer Steve Ballmer said yesterday in an interview with Bloomberg Television that his company intends to stay in China and wants to be “part of the solution” in the country.

Intel, the world’s biggest chipmaker, said there is no change in its view of the Chinese market and it hadn’t seen evidence of a “broad-based attack” on its systems.

“We have nothing to say concerning other companies’ views” of the Chinese market, said Chuck Mulloy, a spokesman for the Santa Clara, California-based company.

Cisco, the world’s largest maker of networking equipment, said it’s closely following discussions of censorship in China.

“As Cisco is not a service or content provider and doesn’t participate in the censorship of information by any government, we cannot comment regarding the specifics of any of our industry peers,” the San Jose, California-based company said in a statement.

Foreign Reporter's G-mail Hacked in China

AP

BEIJING (AP) - International journalists in China said Monday that their Google e-mail accounts have been hacked in attacks similar to the ones against human rights activists that the search giant cited as a reason for considering pulling out of the country.

In announcing a possible exit from China last week, Google did not specify how the accounts with its Gmail e-mail service were hacked into or by whom. Information since then has trickled out.

The Foreign Correspondents' Club of China sent an e-mail Monday to its members warning that reporters in at least two news bureaus in Beijing said their Gmail accounts had been broken into, with their e-mails surreptitiously forwarded to unfamiliar accounts.

Although the warning did not name the organizations, one of the accounts belonged to an Associated Press journalist.

John Daniszewski, senior managing editor for international news at the news cooperative in New York, deplored the breach and said the AP will be investigating to determine if any vital information was compromised.

The foreign correspondents' club asked its members to be vigilant in protecting their e-mail accounts and computers from attack.

"We remind all members that journalists in China have been particular targets of hacker attacks in the last two years," the club's message read. "Please be very careful what you click on, and run virus checks regularly."

Google's announcement Tuesday that it might quit the huge Chinese market shocked the international business community and cheered many free-speech advocates. Google said a sophisticated attack in December from China targeted the Mountain View, California-based company's infrastructure and at least 20 other major companies from the Internet, financial services, technology, media and chemical industries.

Google said only two e-mail accounts were infiltrated in the attacks, with basic information such as subject lines and the dates that the individual accounts were created accessed. In its investigation, Google said it found that dozens of accounts of human rights advocates in China, the U.S. and Europe were routinely accessed by third parties, not due to a security breach at Google, but through viruses and spy software secretly placed on the users' computers.

The tactics used against the journalists are similar to those described by one human rights activist. After Google's announcement, Beijing law professor and human-rights lawyer Teng Biao wrote on his blog that someone broke into his Gmail account and forwarded e-mails to another account. The attack made use of a service that Gmail and other Web-based e-mail services offer, allowing users to set e-mail addresses to which their mail can be forwarded automatically.

Another activist said she was notified by David Drummond, Google's top lawyer, on Jan. 7 about an intrusion into her account. Tenzin Seldon, a Tibetan rights activist and sophomore at Stanford University, said she allowed her laptop to be inspected by Google's security experts, who found no viruses on the machine.

China-based international correspondents have seen their e-mail accounts hit by periodic waves of cyberattacks and snooping from undetermined sources over the past two years. The AP, Agence France-Presse, Dow Jones, Reuters and other news organizations were targeted in September in an attack in which viruses were implanted in ordinary looking e-mails.

The e-mails, which appeared to be from an editor of an English-language paper in Singapore, bore an attachment that once opened would install malware - malicious software - on computers, said a report late last year by computer security experts McAfee Inc.

Baidu Anticipates Life After Google

Washington Post

BEIJING -- In 2000, a 31-year-old software engineer named Li Yanhong, a.k.a. Robin Li, left his job in Silicon Valley and returned home to China to start an Internet search engine. He raised $26.2 million in venture capital, including a modest investment by Google.

Ten years later, Li's company, Baidu, has become the dominant search engine in China, a goliath with 7,000 employees and a market value of $16.2 billion on the Nasdaq Stock Market. Google, which sold its stake in 2006 when it launched its own Chinese site, has lagged far behind, capturing less than half of the market share Baidu has here.

In a country obsessed with economic advancement, Li, a graduate of Beijing University and SUNY at Buffalo, has attained what Chinese newspapers have called pop-star status, with fans thronging Baidu conferences. And to many here, his company's success has become a point of national pride, even though its initial investors were virtually all American.

Now investors are betting that Baidu will reap the benefits if Google ends up exiting China over its dispute with the government about alleged cyberattacks on Google e-mail and source code. Since Tuesday, when Google announced that it would stop censoring its search engine even if that meant losing its Chinese business license, Baidu's stock on the Nasdaq has surged 21 percent to a new high, adding $2.8 billion to the company's market value in just three days.

Although investors are happy, China watchers are worried about the political consequences of Chinese Internet users depending too heavily on Baidu for news and information.

The company has been accused of altering search results for advertisers, by either deleting content or pushing firms' sites higher up on the search result lists in return for payments. The charge has prompted the company to launch an overhaul of its listings.

Moreover, as a Chinese company, Baidu has little choice but to comply with government demands for censorship. An industry source familiar with the firm said officials from the Ministry of Industries and Information Technology are stationed at its offices.

The company does not pretend to have a mission, as Google does: "Don't be evil."

"Baidu does face the same censorship issues, but without the corporate culture that resents censorship," said Jeremy Goldkorn, founder of a blog called Danwei.org and an online media expert in Beijing.

In an item he posted last week on his blog, Baidu's chief product designer, Sun Yunfeng, said that in China, "every enterprise or every individual must dance with shackles."

"This is the reality," Sun wrote. "Do as much as you can is the real attitude to have as a business or a person." The posting was later taken down from his blog, but reprinted on other sites.

"Whether it's Baidu or Chinese versions of YouTube or Sina or Sohu, Chinese Internet sites are getting daily directives from the government telling them what kinds of content they cannot allow on their site and what they need to delete," said Rebecca MacKinnon, an Open Society fellow and co-founder of GlobalVoicesOnline.org, a network of bloggers and online activists.

MacKinnon said she has compared search results on Google's China search engine and Baidu over the past four years and that "consistently, Baidu has censored politically sensitive search results much more thoroughly than Google.cn." She added, "There are a number of very sensitive terms that get no results from Baidu. On google.cn, you get sanitized results but at least you get results."

Meeting Chinese needs

Baidu owes much of its success to the vision and drive of its founder. Li, who declined to be interviewed for this article, tailored Baidu to what he believed were the needs and tastes of the Chinese. He made the search engine box longer and wider for Chinese characters. He introduced a feature that people with interests in, say, basketball could use to find other people with similar interests and exchange views.

More important, Baidu also linked to sites where people could download free music MP3s, largely pirated. That accounted for much of Baidu's traffic in its early years and about 20 percent of it as late as 2005, according to an industry source familiar with the company. Today, Baidu has captured two-thirds of the Chinese market.

Although the company said it couldn't possibly monitor the multitude of sites run by third parties, critics say it turned a blind eye to the legal issues. The People's High Court of Beijing has twice ruled in Baidu's favor in copyright infringement suits brought by record companies. Today, music downloads account for well under 10 percent of Baidu's traffic, the industry source said.

More recently, Baidu has introduced a Wiki-style service called "Baidu Zhidao" or Baidu Knows, where people can plug in questions and get replies. It has also courted beginners on the Web, a large category given that the number of Chinese Internet users -- 338 million at last count in the middle of last year -- is growing about 30 to 40 percent a year.

Success despite setbacks

In a business dominated by U.S. giants such as Google, Yahoo and Microsoft, Baidu has played to national pride. The name Baidu (by-DOO) means "100 degrees" but was inspired by a Song Dynasty love poem in which it means 100 times. A man is searching for his true love during the traditional Lantern Day Festival. "A hundred times I search for her in the crowd and turn around just to discover she is there where the lantern lights are dim," the man writes.

The firm has "managed to convince a lot of people that, as a Chinese company, they have a grip on the subtleties of the Chinese language," said Kaiser Kuo, an Internet consultant and musician. In one ad, Baidu featured a bumbling, inarticulate foreigner in Chinese garb meeting a clever Chinese character who talks circles around the befuddled foreigner.

Baidu has its critics. Many of them think that the company's ardor for money prompted it to accept payments in return for deleting negative reports. When the Sanlu Group was found to have sold dairy products containing kidney-damaging melamine, critics alleged that Baidu had agreed to filter out relevant pages from its search results, citing a document purporting to describe an agreement between Sanlu and Baidu. Baidu denied the accusations, but the incident damaged the company's reputation and for a time drove traffic to other sites, according to one competitor.

There have been other controversies as well. In November 2008, China Central Television said Baidu's paid search service, which let Web sites pay to be listed higher among search results, highlighted links to unlicensed companies that offered medical products or services. CCTV said the sites sold treatments -- many of them fake, useless or unlicensed -- for cancer, sexually transmitted diseases and other ailments. CCTV also said that consumers were more likely to purchase such products because it wasn't clear that the product placement had been purchased.

Despite such setbacks, Baidu continues to make gains. It earned $72.2 million in the third quarter last year. Big advertisers include Nike, Intel and other Fortune 500 companies.

It's a reminder that Baidu's mission isn't political or philanthropic: It's a business.

"For ordinary people, the critical information is not keyhole reports of Zhongnanhai," said Baidu's chief product designer Sun, in his blog post last week, referring to the compound where China's top leaders live, "but the most routine information in economy, culture and technology fields."

As with the rest of his posting, this observation was also deleted from his blog, but it was reprinted elsewhere.

German Government Warns Against MS Explorer Use

AP

BERLIN (AP) - Microsoft Corp. on Saturday rejected a German government warning against using Internet Explorer until a patch can be developed to fix a security flaw, saying the problem is not a threat to general users.

The Federal Office for Information Security, or BSI, told Germans to avoid use of all versions of Explorer after the security hole led to hacks against Google and others.

Microsoft confirmed the weakness earlier this week after Google announced that hackers in China had pried into e-mail accounts of human rights activists. The company said, however, that the hole could be closed by setting the browser's Internet security zone to "high."

But the BSI insisted that such measures were not sufficient.

"Using Internet Explorer in 'secure mode,' as well as turning off Active Scripting makes attacks more difficult, but can not fully prevent them," BSI said in a statement released Friday.

Thomas Baumgaertner, a Microsoft spokesman in Germany, said the company was aware of the warning, but did not agree with it, pointing out that the attacks on Google were by highly motivated people with a very specific agenda.

"These were not attacks against general users or consumers," Baumgaertner said. "There is no threat to the general user, consequently we do not support this warning.

Why Google Is Quitting China

Forbes 

It's not censorship. The search giant just couldn't compete with Baidu.

It's easy to give up if you've already lost the battle. And Google is doing just that in China. Eric Schmidt's move to quit offering a censored Google.cn search engine to the Chinese market has been read by idealists as the right thing to do. But it is first a business decision.

Even though Google's ( GOOG - news - people ) market share climbed from 15% in mid-2006 to 31% today, the company had hoped for a bigger share by now. Kai-Fu Lee, Google China's former president, told me in 2006 that Google not only wanted to have a competitive product to Baidu's, the local search leader, but a superior product. This didn't happen: Baidu has only increased its market share, going from 47% in mid-2006 to 64% today. That's a big lead.

Baidu, started by China-born entrepreneur Robin Li in late 1999 just as Larry Page and Sergey Brin were cranking up Google in Silicon Valley, understands the local Chinese market better than Google's Mountain View team.

Google fumbled with an initially inferior Chinese search engine launched in 2000, while Baidu grabbed the lead in China--and kept it--with several innovative search features customized for local tastes. Baidu introduced community-oriented services that appealed to Chinese Internet users, including bulletin boards where leads on information could be exchanged--a service that Google China's former president Kai-Fu Lee dismissed as having nothing to do with search. Baidu also offered instant messaging, a hit with China's Netizens.

Plus, Baidu was first to the market with mobile search and information offered up in multimedia, including video clips. Baidu also set up a national network of advertising resellers in 200 Chinese cities to educate businesses about the power of online advertising--a step that Google did not take.

Baidu's search feature for music also proved highly popular. Google, realizing the potentially illegal nature of the free music downloads, opted to provide links to music stores instead. Baidu later began collaborating with music labels on authorized downloads.

One other key factor put Baidu in the lead: Its search technology was considered superior to Google seo in the Mandarin language. Scrambling to catch up, in 2005 Google hired the experienced Lee as its president from Microsoft  ( MSFT -  news  -  people ). Then in 2006 Google launched its first Chinese-language search engine run from China, Google.cn. With Lee at the helm, Google recruited dozens of top engineers and linguists to its Beijing headquarters to perfect search results on Google.cn. Working at the towering headquarters of Google China at Zhongguancun Software Park in northeastern Beijing, some 100 engineers wrote codes to deal with inputting Pinyin or Roman letters to signify Mandarin sounds and such intricate tasks as delineating words in Chinese characteristics that don't clearly define white spaces.

The efforts paid off with speedier and more precise search results as well as more reliable service. But no matter the global brand name, the maximized effort and the financial resources, Google's Chinese search engine couldn't trump Baidu.

Perhaps Google should have turned over its business to local rival Baidu and let Baidu run with it. There is a precedent. Back in 2005 Jerry Yang turned over the management reins for Yahoo! ( YHOO - news - people) in China to Jack Ma, the charismatic leader of China's e-commerce powerhouse Alibaba. Yang knew that Ma, thinking local, acting local, would have a better shot at getting the right formula for China.

Granted this is still a work in progress as Yahoo! refines its features for the Chinese market. But as Zeng Ming, former president of Yahoo! China, told me, "The net is about culture. You can't have expats running it."

Indeed, why give up now--unless you realize there's no way you're ever going to win the race. After all, Page and Brin had already crossed the line back in 2006 by agreeing to have their new Google.cn, run from China, subject to censorship. They didn't have much choice. All companies doing business in China follow the same Chinese government rules. Yes, Baidu's search results are also censored.

It wasn't all that long ago--2004--that it looked like Google might use Baidu as its entry route. Google invested $5 million in Baidu for a 2.6% stake but shifted strategy in mid-2006 by selling those shares for more than $60 million and rolling out Google.cn the same year. In hindsight, and given its bumpy history in China and this latest jockeying with the Chinese government, maybe Google should have pursued the go-with-Baidu strategy.

If Google exits the $300 million Chinese search market now, it's giving Baidu runway to be a monopoly. And if that happens, Baidu has a shot at becoming the world's dominant search company (it's already entered Japan) by sheer arithmetic alone.

By serving China's nearly 300 million Internet users and 670 million mobile phone users--both the world's largest markets--Baidu may someday be bigger than Google globally, something Robin Li once told me he has no doubts will happen.

Rebecca A. Fannin is an internationally recognized author and journalist who has been writing about entrepreneurship and innovation for nearly 20 years. Her book, Silicon Dragon, was published by McGraw-Hill in 2008 and translated into several languages. During the height of the dot-com boom from 1999-2001, she was international news editor at Red Herring, later joining the Asian Venture Capital Journal as international editor and writing for several leading business publications, including Inc., The Deal, Worth, CEO and Fast Company. She also authored "A New Dawn" for KPMG in 2009. Fannin has lectured at several universities in Asia and the U.S., and has made numerous public speaking appearances worldwide.

Yahoo, AP Near Deal On Content Use

The Wall Street Journal

Taking a step toward mapping the future of online news, the Associated Press and Yahoo Inc. are closing in on a deal that would impose tighter restrictions and potentially a higher price tag on AP stories distributed on Yahoo's news site, people familiar with the matter said.

The deal, expected to be reached in the next few weeks, could begin to resolve an increasingly urgent issue in the media industry: how news organizations deal with the major Internet portals, which some publishers say unfairly profit from their work and cost them tens of millions of dollars in revenue.

An AP spokesman declined to comment on the negotiations. Yahoo also declined to comment, beyond saying, "The AP is one of Yahoo's most important content partners. Yahoo values our long-standing relationship with AP and expects it will continue for years to come."

The AP has been haggling with Google Inc., Microsoft Corp. and Yahoo over new terms that would govern the portals' distribution of AP news articles, and the pressure on all parties is mounting as deadlines approach. Google, whose contract with the AP will expire around the end of January, recently stopped hosting new AP stories on Google News in an apparent effort to clear its news site of all hosted AP content by month's end in case a deal isn't reached.

Google said that its agreement with the AP "permits us to host its content on Google properties" but that it isn't adding new AP content "at the moment."

The AP, which has about 1,500 U.S. newspapers as members, has unique organizing powers in a fragmented industry. It is leading the effort to control how and where its members' material appears on the Internet, both on the portals' own news sites and in search results that send readers to AP articles on its members' Web sites. The not-for-profit news cooperative is currently testing a system to tag and track its articles and, eventually, its members' articles to assure compliance with terms-of-use agreements.

The AP has said its objective is to correct previous agreements, which gave Internet portals like Yahoo access to a broad swatch of its online articles in a single, relatively inexpensive package. Those deals helped make AP material ubiquitous, but executives say they also diluted the value of the AP's news offerings by not limiting availability or distinguishing articles that were unique.

AP's negotiations with Yahoo have included the possibility of licensing the news cooperative's material in tiers, separating breaking news from more exclusive material, for instance, according to the people who are familiar with the matter.

The efforts come as publishers grapple with how to collect fees when their content is distributed online now that their key source of revenue, advertising, has eroded and many of their readers get their news from the Web via Yahoo SEO.

News Corp., which owns The Wall Street Journal, has been a particularly vocal critic of Google and other sites that publish excerpts of its stories. The New York-based company has held discussions with Microsoft Corp. about a plan to remove the publisher's newspaper content from Google's search engine while continuing to feature it on Microsoft's online properties, according to people familiar with the matter.

Depending on what Yahoo signs up for, a new fee structure could mean a bigger total price tag for the Internet giant, the people familiar with the matter said. The AP has also asked Yahoo to comply with stricter terms of use in the proposed two-year deal. And it hopes to keep open the option of distributing other valuable content to other news outlets, the people said.

A new AP tracking system has also figured in the negotiations with Yahoo, Google and Microsoft, whose search engines drive as much as 50% of the traffic to the largest newspaper sites.

AP executives have said the system would not only police independent sites that republish articles without authorization or payment, but also bring in more money from content distributed through the search engines. The system, which was announced last summer, is still in beta mode, the AP said.

Google has long held that it is a friend to publishers and that they are free to make their material inaccessible to Google SEO users. It has also worked with some publishers to develop products designed in part to boost traffic to their Web sites.

Some Internet portals could be reluctant to sign on to a system that gives publishers extensive information and control over content. They might also decide that for all its news-gathering clout, the AP is not so indispensable that portals need to agree to more restrictions to carry its material. "All news does not emerge from the AP's forehead," said Danny Sullivan, who is the editor of SearchEngineLand.com, which tracks search engines.

But newspaper publishers hope that won't be the case. In leading the way in these negotiations, the AP "could provide an opportunity for other newspapers and newspaper companies to ride that coattail and cut a similar deal with the aggregators," said Jim Moroney, publisher of the Dallas Morning News.

Google Tells China It Will End SERP Censorship

Guardian UK

Decision from world's leading search engine comes amid a clampdown on the internet in China over the last year

Google, the world's leading search engine, has thrown down the gauntlet to China by saying it is no longer willing to censor search results on its Chinese service.

The internet giant said the decision followed a cyber attack it believes was aimed at gathering information on Chinese human rights activists.

The move follows a clampdown on the internet in China over the last year, which has seen sites and social networking services hosted overseas blocked – including Twitter, Facebook and YouTube – and the closure of many sites at home. Chinese authorities ­criticised Google for supplying "vulgar" content in results.

Google acknowledged that the decision "may well mean" the closure of Google.cn and its offices in China.

That is an understatement, given that it had to agree to censor sensitive material – such as details of human rights groups and references to the pro-democracy protests in Tiananmen Square in 1989 – to launch Google.cn.

Google was in contact with the US state department before its announcement. Spokesman PJ Crowley said: "Every nation has an obligation, regardless of the origin of malicious cyber activities, to keep its part of the network secure.

"That includes China. Every nation should criminalise malicious activities on computer networks."

In a post on the official Google Blog, the company outlined a "highly sophisticated and targeted" attack in December which it believes affected at least 20 other firms: "These attacks and the surveillance they have uncovered, combined with the attempts over the past year to further limit free speech on the web, have led us to conclude that we should review the feasibility of our business operations in China.

"We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all."

Hillary Clinton stepped into the debate, urging Beijing to respond to Google's announcement.

The US secretary of state said in a statement: "We have been briefed by Google on these allegations, which raise very serious concerns and questions. We look to the Chinese government for an explanation."

She added: "The ability to operate with confidence in cyberspace is critical in a modern society and economy."

Human Rights Watch praised the decision and urged other firms to follow suit in challenging censorship. "A transnational attack on privacy is chilling, and Google's response sets a great example," said Arvind Ganesan, director of the group's corporations and human rights programme.

Google said the cyber attack originated from China and that its intellectual property was stolen, but that evidence suggested a primary goal was accessing the Gmail accounts of Chinese human rights activists.

Two accounts were accessed but Google believed only account information and subject lines were obtained. It is notifying the other targeted companies and working with US authorities.

Its investigation had shown that, separately, the accounts of dozens of US-, China- and Europe-based Gmail users who are advocates of human rights in China appeared to have been routinely accessed by third parties.

The company added that it was sharing the information not just because of the security and human rights implications "but because this information goes to the heart of a much bigger global debate about freedom of speech".

Acknowledging the potential consequences, it stressed: "This move was driven by our executives in the United States, without the knowledge or involvement of our employees in China."

The message, headlined "A New Approach to China" and signed by David Drummond, senior vice-president of corporate development and chief legal officer, said the company launched Google.cn in 2006 in the belief that the benefits of increased access to information for people in China "outweighed our discomfort in agreeing to censor some results".

At the time Google promised to monitor conditions in China and reconsider its approach if necessary.

But Evgeny Morozov, an expert on the political effects of the internet and a Yahoo fellow at Georgetown University, questioned why Google had made the decision after four years.

"They knew pretty well what they were getting into. Now it seems they are playing the innocence card ... It's like they thought they were dealing with the government of Switzerland and suddenly realised it was China," he said.

Morozov said it was hard to see the logical connection between the security of human rights activists and Google's self-censorship, particularly given that the firm had chosen not to comment on whom it believed responsible for the hacking. It had become easier for "pretty much anyone" to launch cyber attacks in the last few years, he added.

He added that it could have been damaging for Google if news of the breach had emerged later and it appeared the company had done nothing.

Google has only a third of the search-engine market in China, which is dominated by the Chinese giant Baidu. Although its revenues have continued to rise, many analysts believed it was finding business hard going. In June Google suffered intensive disruption to search functions and Gmail for over an hour, after authorities told it to scale back search functions.

China has the world's largest internet population.

Rebecca MacKinnon, an assistant professor at the University of Hong Kong's Journalism and Media Studies Centre, said her research showed Google had censored less than Baidu. Google's decision "certainly sets an example in terms of a company trying to do what's best for the user and not just whatever increases the profit margins", she added.

Nart Villeneuve, research fellow at the University of Toronto's Citizen Lab – which examines the exercise of political power in cyberspace – said the decision to give such a full account of the attacks and link it to human rights issues was unprecedented.

Google's decision to launch the censored service was highly controversial at the time. It was attacked by campaigners and accused of "sickening collaboration" in a Congressional hearing.

The Chinese Foreign Ministry referred the Guardian to the Ministry of Industry and Information Technology. But an employee at MIIT said it was not responsible for handling the query, because it dealt with only the technical side of internet issues. He added that many other departments dealt with other aspects of internet management, but added that he did not know who the Guardian should contact in this instance.

China Writers Say Google Ready To Settle Book Row

AP

Google Library Project Approaches Launch
Google Apologizes to Chinese Writers

Google Inc. wants to apologize for its poor communication with Chinese authors about scanning their books into its online library and is ready to work out a settlement to allay copyright concerns, a writer's group said Sunday.

The U.S. search giant has been working the past five years on an ambitious plan to scan all the world's books into a digital library accessible to anyone with an Internet connection. Google says the project is an invaluable chance for books to get more exposure, but many authors and publishers argue it is a copyright violation.

The Chinese Writers' Association said it received a letter from Google acknowledging its efforts had upset Chinese authors.

"Following discussions and communications in recent months, we do believe that our communication with Chinese writers has not been good enough," Google said in the scanned letter posted on the association's Web site.

"Google is ready to apologize to Chinese writers about this," said the letter, which bore the signature of Erik Hartmann, Asia-Pacific head of Google Books.

Google confirmed Sunday that the letter was authentic. In a statement, the company said its Google Books project is "fully compliant" with U.S. and Chinese law.

Last month, a Chinese court heard Chinese author Mian Mian's lawsuit against Google for scanning her work into its library. A Beijing judge told the two sides to hold talks on a settlement and report back, according to the writer's lawyer.

The search giant's statement comes after a recent call by the government-affiliated China Written Works Copyright Society to negotiate compensation for Chinese authors.

Google plans to work out a settlement proposal with Chinese writers by March and reach a formal agreement by June, the scanned letter said. It said it would take the "unprecedented move" of making a complete list of Chinese books it has scanned, in response to a request from the writers' group.

Google has scanned more than 10 million books worldwide since 2004, including 2 million with the consent of about 30,000 publishers. Another 2 million books in Google's library no longer are in copyright. Google has been only showing snippets from the remaining books while it tries to iron out copyright disputes.

"In China like everywhere else, if a book is in copyright we don't show more than a few snippets of text without the explicit permission of the rightsholder," Google said in an e-mailed statement. "In addition, we have a long-standing policy of honoring authors' wishes, and authors or publishers who wish to exclude their book may do so at any time."

Google Searches The Wires For AP Solution

NY Post

Google is doing an end run around the Associated Press.

The search giant has stopped hosting stories and other material from the AP on its news site, and instead is linking to other media Web sites that carry the same AP articles.

The change comes as Google and the wire service attempt to hammer out a new licensing deal before their current agreement expires at the end of the month.

Neither side has been willing to discuss the details they're debating, but it seems likely that the AP is asking for better financial terms and more restrictions on how its content is used by Google.

"We have a licensing agreement with the Associated Press that permits us to host its content on Google properties such as Google News," Google said in a statement, which didn't explain the change. "Some of that content is still available today. At the moment we're not adding new hosted content from the AP."

A spokesman didn't return a call requesting further comment.

The AP declined to comment.

Google struck deals with the AP and other news outlet in the past few years to resolve disputes over whether Google had infringed on their copyrights by putting headlines and story snippets on its news site.

The agreement with the AP allowed Google to reproduce some AP stories on its sites, including Google News, rather than sending readers elsewhere.

Google insisted at the time that it wasn't paying to index AP stories or link to them, saying that practice fell under the "fair use" doctrine. The search company said the licensing deal covered new and more extensive uses of AP content.

The AP, however, isn't satisfied and has expressed concerns about its content being a source of revenue for Google and other sites that can sell search terms or ads on the pages.

In the past year, Tom Curley, AP's president and chief executive, has indicated that it will take a harder line with sites that reproduce parts of articles without a licensing agreement.