Microsoft Doing Better Than Expected

Story first appeared in The Washington Post.

Microsoft produced a surprisingly strong quarter to start the year, pleasing investors looking forward to even bigger things from the software maker’s much-anticipated overhaul of Windows operating system next fall.

The performance announced Thursday defied the conventional thinking that Microsoft would have trouble selling more Windows licenses as more people snapped up tablet computers, such as Apple Inc.’s trendsetting iPad, while other prospective personal computer buyers delayed making their purchases until the next version of Microsoft’s operating system hits the market.

That didn’t turn out to be the case during the three months ending in March as revenue at Microsoft’s Windows division edged up by 4 percent from last year to $4.6 billion. Microsoft attributed the gain to an uptick in businesses who bought licenses for Windows 7. It marked only the second time in the past six quarters that Microsoft has registered a year-over-year gain in the Windows division.

High hopes are riding on the revamped system, Windows 8, because Microsoft designed it to run on devices that can be controlled by touch, as well as keyboards and computer mice. That means Windows 8 can serve a dual purpose: it could help spur the development of sleeker PCs that spur more sales and also give Microsoft a chance to grab a piece of the rapidly growing tablet computer market.

Although Microsoft hasn’t announced a target date yet, most analysts believe Windows 8 will go on sale in September or October.

Microsoft Corp. earned $5.1 billion, or 60 cents per share, during the period marking first three months of the year — the Redmond, Wash company’s fiscal third quarter. That was a 2 percent decline from net income of $5.2 billion, or 61 cents per share, a year ago.

Last year’s results were boosted by a tax benefit of $461 million, or 5 cents per share.

Revenue rose 6 percent from last year to $17.4 billion

Analysts had anticipated earnings of 58 cents per share on revenue of $17.2 billion, according to a FactSet survey.

Microsoft’s shares gained 87 cents, or nearly 3 percent, to $31.88 in Thursday’s extended trading.

While the Windows division held up better than expected, one of Microsoft’s recent strongholds weakened. The deterioration occurred in the entertainment division as Microsoft’s shipments of its Xbox 360 video game console plunged by nearly 50 percent to 1.4 million units. The sagging demand occurred as more people are playing games on phones and tablet computers. Revenue in the entertainment division declined 16 percent from last year to $1.6 billion.

Microsoft’s long-suffering online division, which has struggled for years to compete against Internet search leader Google Inc., managed to narrow its losses in the latest quarter. The division, which includes its Bing search engine, posted an operating loss of $479 million compared to a loss of $776 million at the same time last year. Microsoft’s online revenue totaled $707 million, a 6 percent increase. By comparison, Google’s revenue during the same period surged by 24 percent.


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Google Wants to Simplify Things

Story first appeared on Marketwatch.

We’ve all heard this nonsense before from multi-billion dollar companies. They are suddenly going to act like start-ups.

Why do companies do this? Why would they want to act like a start-up? Is it romantic? Sentimental? It is downright foolish.

What company wants to act like a start-up unless they are a start-up?

So how would Google actually go about acting like a start up.? First, make a lot of dumb decisions and work 16 hours a day trying to correct them. That would be one way.

Here’s another: Google needs to also close all the free restaurants they have on campus. Close them. Start-ups don’t have that sort of free food. Maybe some bananas and juices. Employees can bring their own food and store it in a cheap refrigerator. Now you are talking start up.

Note to Larry: Get rid of the jets you guys now own. What start-up in history has a jet fleet? To act like a start-up you are going to have to dump the jets.

Let’s face it. This whole act like a start-up business is insincere rubbish. You cannot act like a start up any way because you are a mature company.

When some chief executive says that he wants his company to act like a start-up, what he is really saying is that he thinks that his employees are lazy and they should work more hours. That’s probably the only part of the start-up ethos he is interested in, or he’d sell the jets and close food services. If you think a division is not pulling its weight, say so. Find the managers and fire them, or at the very least, lecture them.

There is not one person I have seen go to work for Google who has not put on a lot of pounds from all the free food.

And insofar as free food is concerned, we're not talking about a few snack rooms or a normal cafeteria where you’d pay some modest fee for a salad and sandwich. We're talking about multiple massive food courts producing some of the finest corporate food one has ever seen — all you can eat every day, for free.

And there are weird amenities. For example all the syrups in all the soda pop stations — brand names — have been specially formulated for Google so there is no high-fructose corn syrup in any of the sodas.

These are food palaces serving every sort of cuisine. All that is missing are carafes of Bordeaux wine served by slave girls.

So let’s get this act like a start-up idea off the table and do what needs to be done at Google. What needs to be done is for the company to get people enthused about the outstanding ancillary products. And by this, we do not mean the Google+ Facebook competitor.

We're referring to its navigation system, for starters. The Google turn-by-turn navigation system combined with its street-level photos has no peer. If this was sold as a stand-alone product to compete with Tom-Tom, Garmin and Magellan it would probably ruin those companies overnight.

Why someone doesn’t take this software and put it on a 7-inch tablet? It should be sold as a navigation system, because Google is promoting it poorly.

And the thing can navigate a walking tour, a bicycle route and easily re-adjust for detours. If you want to take a scenic route, the device is not constantly telling you to take a U-turn. It assumes you, the driver, know what you are doing. Drive five miles off course? No problem.

Google has a lot of initiatives that would be great little stand-alone operations. If Larry Page wants to think start-up, then perhaps he should spin some of these operations off and into their own facilities. Then these divisions would be acting like real start-ups.

But then again, there goes the free food.


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Google Concerned About The Freedom of the Web

Story first appeared in The Huffington Post.

The principles of openness and universal access that underpinned the Internet's creation are facing their greatest-ever threat, the co-founder of Google said in an interview published by Britain's Guardian newspaper on Monday.

He said that the threat to freedom of the Internet came from a combination of factors, including increasing efforts by governments to control access and communication by their citizens.

Attempts by the entertainment industry to crack down on piracy, and the rise of "restrictive" walled gardens such as Facebook and Apple, which tightly control what software can be released on their platforms, were also leading to greater restrictions on the Internet.

There are very powerful forces that have lined up against the open Internet on all sides and around the world.

He said he was concerned by efforts of countries such as China, Saudi Arabia and Iran to censor and restrict use of the Internet.

The rise of Facebook and Apple, which have their own proprietary platforms and control access to their users, risked stifling innovation and balkanising the web. However, the freedom and importance of organic Google SEO still reigns supreme for both the business and the individual.


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Apple Releases Update for Flashback Virus

Story first appeared in The Huffington Post

Apple has followed through with its promise to develop software that will detect and remove the malicious Mac Flashback trojan, which infected more than 600,000 Mac laptops worldwide.

On April 12, the company released yet another Java update that removes the most common variants of the Flashback malware. While the update is meant only for OS X Lion and Mac OS X v10.6, Apple suggested previously that users with Macs running Mac OS X v10.5 or earlier disable Java in order to better protect their devices from the Flashback trojan.

When the company on April 10 announced it would be developing a malware removal tool, Apple also mentioned it is currently working with Internet service providers (ISPs) across the world to shut down the network of computer servers presumably hosted by the malware authors and currently supporting the Flashback trojan.

This is Apple's third software update to Java in nine days; however, this latest update release is the first one actually designed to detect and remove the Flashback trojan from Mac laptop devices, as well as patch up the Java vulnerabilities of which the trojan took advantage.

According to PCMag, another function of the update is to disable the Java plugin on all Web browsers (not just Safari) and turn off applet execution by default. In addition, Apple explained in its support document for the Java update, "Users may re-enable automatic execution of Java applets using the Java Preferences application. If the Java web plug-in detects that no applets have been run for an extended period of time it will again disable Java applets."

The Flashback trojan has been around in various forms since last September, but it wasn't until recently that it seemed to become a huge problem, prompting Java developer Oracle to release a security update back in February.

While Apple has been criticized for its slow response to the Flashback trojan, at least it seems its Java security updates have been working.

On April 12, ZDNet reported the results of a study conducted by security software developer Symantec, which found that the number of infected Macs has dropped to around 270,000 from more than 600,000 just last week.

Then again, it's just as likely the drop in infected devices is due to increasing awareness of the Flashback trojan's existence and to the release of tools to fight the malware by such Internet security companies as F-Secure, Symantec and Dr. Web, the firm that first discovered just how widely the trojan had spread back on April 4.


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Boeing Hires Hackers to Secure the Fort

Story first appeared in the Los Angeles Times.

Most weekdays a pair of college buddies ride their bikes to a computer center and try to hack into computer security systems belonging to Boeing Co. Rather than having them arrested, Boeing is paying them to do it — a situation that the car-loving, video-gaming friends have pronounced "awesome."

For two years, the young engineers have worked side by side in a secluded unit where they design and thoroughly test ironclad security systems for the largest aerospace company in the world. Boeing's systems need to be capable of staving off hackers and keeping safe some of the nation's most prized intellectual property.

Like many of their colleagues in surrounding cubicles, the friends spend much of their days devising, revising and analyzing complicated security programs that they then use their well-honed skills to attempt to crack.

The pair from Cal Poly Pomona were hired after they aced a cyber-security competition held by Boeing in which the aerospace giant urged students to consider careers in cyber security and, of course, scouted for fresh talent.

As computer threats become more coordinated and complex, Boeing and other defense contractors are bolstering their cyber-security staffs. Increasingly they are turning to unlikely characters, students who had distinguished themselves more on simulated cyber battlefields than in classrooms. As long as there are computers, there will be somebody trying to attack them.

The damage from hackers to consumers is well known, but the potential for corporate sabotage is far greater, and the need for cyber sleuths like those at Boeing is huge and growing.

Corporate computers serve thousands of employees engaging in different tasks and require layer upon layer of sophisticated security protection.

Those workers need access to the Internet. Although that access enables employees to get the information they need to do their jobs, it also opens a door for hackers to sneak through.

It's not just monolithic corporations at risk. Even small businesses are liable for lost or stolen data. Visa recently stated that 95% of credit card thefts originate at small businesses. Such liability has driven demand for cyber-security expertise.

A generation ago, the brightest engineers in the aerospace industry were typically recruited from Ivy League universities and other prestigious institutions. Now defense contractors are broadening the hiring pool as they hunt for savvy young computer whizzes at local colleges.

Raytheon Co.'s president of intelligence information systems businesses said last year at a conference that her company's most impressive cyber-security hires have come from outside of traditional recruiting outlets.

One recruit was a man who didn't have a college education and didn't graduate from high school. He had a GED and worked at a pharmaceutical plant stuffing pills into bottles.

At night, he participated in online hacker competitions and outperformed others. That person would have not gotten through the normal Raytheon recruiting process.


The Boeing cyber unit is a 3,000-square-foot room with cream-colored walls and floor-to-ceiling windows on a far wall that lets the afternoon sun stream in on row after row of slate-gray cubicles. The work space is a mini-fort of sorts, with 6-foot walls on four sides and small video cameras mounted near the entrance that enable team members to see who is coming their way. It resembles the chaos of a college dorm room. Inside, a tangle of computer wires lies on the floor and papers are strewn about on desks, along with a half-eaten burrito or two.

The techs there enjoy a world full of colorful terms to describe lurking computer threats.

They try to stop "Trojan horses," which enable a hacker to gain access to computers when people click on dangerous links.

They try to squash "worms" that replicate, spread and corrupt computer files.

And they fight "logic bombs" that hide in computers and delete files at a specific time.

Cyber-security professionals have identified tens of thousands of threats aimed at Microsoft Windows programs over the years. If Windows vulnerabilities are found on Boeing's security system, the hackers are responsible for fixing it.


With cyber security risks, if one employee makes a mistake — forgetting to download a security update or clicking a suspicious link — hackers may get all the access they need to cause trouble.

For example, an employee may receive an email with an attachment that appears to be an Excel spreadsheet but in reality is malicious software. Once opened, the file can embed a virus that will record and send back key strokes or other data, such as credit card numbers.

Boeing's cyber-security workers need to know how to counter that attack so even if the virus is launched it will not infect the system. They determine whether the newest, most harmful viruses — which when activated may damage or delete files, cause erratic system behavior, display messages or even erase data — would work on the system.

Boeing's cyber-security team can spend weeks prodding the system on a platform they designed called "cyber range in a box" that simulates the Internet without actually going live on it. They comb through the security system, seeing whether there are new ways to inject harmful code that would change the database content or dump information like credit card numbers or passwords to a hacker.

In this controlled environment, the team can apply what they learn in real-world situations.

Once they find security lapses within the systems, they plug them.


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Facebook Buys Instagram

Story first appeared in The Detroit Free Press.

Facebook, the biggest social-networking service, is buying the Instagram mobile photo-sharing application for about $1 billion in cash and stock, using its biggest acquisition yet to attract users of mobile devices.

Instagram, owned by San Francisco-based Burbn, was valued at $500 million after raising about $60 million last week from investors including Sequoia Capital, said people with knowledge of the funding who asked not to be identified because the matter is private. The transaction is expected to close this quarter, Menlo Park, Calif.-based Facebook said Monday.

Instagram, the most popular free photo-sharing application on Apple's App Store, boasts more than 30 million users. Owning it may help Facebook in its effort to attract handset users and advertisers who target them.

In order to monetize mobile, Facebook needs a lot more mobile participation.  What they bought with Instagram was a photo app with high brand recognition and an enormous audience.

The deal marks the first time Facebook has acquired a product and company with so many users, Facebook CEO wrote on his profile page. The company also announced the transaction on its website.

Facebook, which intends to raise $5 billion in the biggest initial public offering of an Internet company, says it plans to let Instagram remain independent.  By remaining independent, Instagram will be allowed to keep and build on their strengths and features rather than integrating everything into Facebook.


Instagram was introduced in October 2010. Building on its popularity among iPhone users, last week the company added an application for Google's Android operating system.

Instagram received seed funding of about $500,000 from two major donors in 2010. It raised a $7-million round in 2011, when it had 1.75 million users, from Benchmark Capital and a group of angel investors including Twitter and Quora executives.

The startup closed its most recent financing just days before Facebook's purchase was announced, the people with knowledge of the matter said.

The purchase extends the role of Apple's App Store as a platform for building companies, said an analyst at Yankee Group. It may also be the largest purchase price for an app built for the App Store.

Marketers including Nike, Tiffany and Burberry have begun using Instagram to promote products using photos. Gap's Banana Republic unit held a contest on the site asking users to submit pictures of their New Year's Eve outfits for a chance to win a trip to New York City.

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Clean Up Your Mac and Protect From Viruses

Story first appeared in The Washington Post.

For years, Mac users have been able to believe that they are safer than the average computer user and turned their noses up at antivirus software. But as Apple’s market share has grown, so has the threat to Mac users’ security.

Last week, a Russian-based security company called Dr. Web reported that up to 600,000 Macs appeared to be part of a growing botnet, mostly in the United States and in Canada. Security researchers are referring to the virus as Flashback.

A senior security researcher at ZScaler, said that while he can’t confirm Dr. Web’s numbers, the conditions sound right for a malware problem of that scale. The virus should be a wake-up call to those who still think that their Mac is invulnerable to attacks like this, he said.  Macs are not impenetrable to threats-those threats do exist.

Macs were particularly affected in this attack because of a vulnerability in the Apple version of Java — the company stopped using Oracle’s releases of Java a couple of years ago, and supports its own versions. Yet while Oracle had patched the problem with Java that caused this problem months ago, Apple had yet to address the problem until April 3, when it issued a patch for the vulnerability. It then released a second patch on April 5.

Several experts have said that this appears to be one of the largest-ever attacks on Macs.

To improve Mac security in the future, it is recommended that users keep updated versions of Java as they come and automate their computers to check for security updates regularly.

He also recommended that users who have yet to do so bite the bullet and install some kind of antivirus software on their Mac, which should also clean up any machine that’s been infected. If you want to check if you’ve been infected without downloading anti-virus software, the security firm F-Secure has instructions for a good, if technical, way to do so.

There are, of course, also some practices that users can use to minimize the likelihood of infection. For one, don’t click on links in e-mails that you’re not absolutely sure have come from someone you trust. The same goes for opening attachments. If a URL looks suspect, don’t click on it no matter how “hilarious” a video is said to be. Don’t believe promises from ads that sound too good to be true and don’t agree to download any software that you didn’t specifically set out to find.

Finally, any time you’re putting personal, particularly financial, information into a form online, make sure that you see an “https” at the start of the Web address. If you don’t see it, there’s a chance you’ve been redirected to a fake site, particularly if the signal that you’re on a secure server has been there before. Try typing in the address of the Web site you want again — don’t hit refresh — or try an alternate method of getting what you want done.

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Best Buy CEO Suddenly Resigns

Story first appeared on Yahoo News.

The Best Buy Co Chief Executive suddenly resigned from the company during an investigation into allegations of personal misconduct, the electronics retailer said on Tuesday.

The surprise departure comes as Best Buy, the world's largest electronics retailer, has struggled because consumers are purchasing more electronics online and can easily compare competitors' prices on their mobile devices while looking at a product in a Best Buy store.
Certain issues were brought to the board's attention regarding his personal conduct, unrelated to the company's operations or financial controls, and an audit committee investigation was initiated. Prior to the completion of the investigation, he chose to resign.


Best Buy said that a board member, would serve as interim CEO and that a search for a new CEO was under way.
The timing of his departure came as a surprise to Wall Street. Only two weeks ago, he presided over the company's announcement of a plan to close 50 of its 1,100 large stores and cut 400 jobs.

But critics have complained that under his tenure, which lasted less than three years, Best Buy became a showroom for Amazon.com and other online retailers, with consumers going to Best Buy stores to check out electronics like high-definition televisions, then buying them elsewhere for less.

The company, a bellwether for the consumer electronics industry, reported declines in same-store sales in six of the last seven quarters, including during the 2010 holiday season when it bet on technology like 3D television that was not embraced by consumers.
Despite offering bigger discounts and free shipping in the 2011 holiday season, Best Buy suffered a 2.4 percent drop in same-store sales in the quarter ended March 3, including a 2.2 percent decline at U.S. stores open at least 14 months.

The company was looking internally and externally for a permanent CEO and that the interim CEO would also be considered for that post.
The interim CEO has been a Best Buy director since April 2008. He formerly served as executive vice president and chief financial officer of UnitedHealth Group. At one point, he was considered a potential successor to UnitedHealth's CEO but left the U.S. health insurer to lead a private equity fund.

Best Buy's stock rose as much as 4.8 percent to $23.74 after the news that the CEO would be replaced, but the shares ended down 6 percent at $21.32.

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