Yahoo Search For New CEO Nears Close

As posted by: Wall Street Journal

Yahoo Inc. is in the final stretch of its search for a chief executive officer, and a decision could come as soon as next week, said people close to the Internet company.

Among candidates still under consideration is Carol Bartz, the former chief executive officer of Autodesk Inc., a publicly traded company that builds design software used in engineering also offering Autodesk Training. She's "on the list," said a person familiar with the matter, adding that she has impressed the Yahoo directors she has met so far.

A Yahoo spokesman declined to comment. An Autodesk spokeswoman said Ms. Bartz was traveling Thursday and couldn't be reached for comment. Her candidacy was first reported by the Web site AllThingsD.com, which is owned by Dow Jones & Co., publisher of The Wall Street Journal.

Whether Ms. Bartz is a backup candidate or a front-runner remains unclear. People familiar with the matter said the board is leaning toward an external pick at this phase, as it winds down a search it formally announced on Nov. 17. Former Vodafone Group PLC Chief Executive Arun Sarin, whom the Yahoo board had been seriously considering, has withdrawn his name, according to people familiar with the matter. Mr. Sarin didn't return requests for comment.

The board has yet to make an offer and is unlikely to before next week, said people close to the company. At the latest, Yahoo is hoping to announce a new leader before it reports fourth-quarter earnings at the end of the month, they said. Once Yahoo board members agree on a candidate, the company also will have to negotiate an employment agreement. That sometimes takes a few weeks.

Choosing Ms. Bartz, 60 years old, would indicate that Yahoo is looking for a steady hand who has run a public company over someone with Internet and online advertising experience. If the board heads in that direction, the company could also seek to hire another senior executive with more extensive consumer product experience, which analysts and investors argue Yahoo needs to better compete with Google Inc. and other rivals.

Ms. Bartz still serves as executive chairman of Autodesk, of San Rafael, Calif., which she ran as chief executive from 1992 to 2006. Autodesk is around half the size of Yahoo, with approximately 7,000 employees world-wide. In its fiscal year ended January 31, 2008, Autodesk reported $2.2 billion in revenue. Yahoo's revenue in its fiscal year ending December 2007 was $6.97 billion.

Ms. Bartz was also an executive at Sun Microsystems Inc. and she sits on the board of Cisco Systems Inc., with Yahoo's Chief Executive and co-founder Jerry Yang. She is also a member of the Intel Corp. board with Yahoo President Susan Decker.

Microsoft Wins Key Search Deals

As posted by: Wall Street Journal

LAS VEGAS -- Microsoft Corp., facing a bleak economy and rivals that have outflanked it in the consumer market, announced a milestone for the next version of Windows and a raft of deals designed to boost its online-search business.

The company showed a preliminary version of Windows 7, the next major edition of its flagship operating system, available for consumers to test on their personal computers starting Friday. Microsoft also announced a five-year deal with Verizon Wireless to make its Internet-search service broadly available on the wireless carrier's mobile phones and a similar agreement with Dell Inc. covering that hardware maker's PCs. The Microsoft agreements displace an existing search deal that rival Google Inc. had with Dell and another that Google was previously negotiating with Verizon.

The plans were unveiled Wednesday evening at the Consumer Electronics Show here by Microsoft Chief Executive Steve Ballmer, in his first stint delivering a keynote speech at the annual trade show. For years, Microsoft chairman and co-founder Bill Gates had kicked off the event and anchored Microsoft's presence there, but Mr. Gates last year stepped away from day-to-day involvement at the Redmond, Wash., company to focus on philanthropy.

Microsoft CEO Steve Ballmer delivers keynote address Wednesday at the Consumer Electronics Show in Las Vegas.

Mr. Ballmer took the stage for Microsoft at a time when much of the technology industry is on edge about the impact that the weakening world economy will have on demand for their products. The consumer initiatives Microsoft has unveiled at the show have at times tilted toward gee-whiz technologies like wristwatches that receive weather updates, but didn't end up selling well.

Microsoft lavished the most attention on Windows 7, the successor to Windows Vista, which received poor reviews when it came out two years ago.

During that same time, Apple Inc. has made small gains in the consumer market with its Macintosh computers, even though Microsoft still retains an overwhelming advantage. Windows 7 has new features designed to make it work more easily with devices like digital cameras and home networks.

Microsoft is placing a heavy emphasis on its speed, promising it will run well on everything from high-performance PCs to Netbooks, inexpensive laptops that have become a hit in the down economy.

At CES, Microsoft announced that developers who participate in Microsoft's technical programs could download the "beta" or test version of Windows 7 starting Wednesday night. The company will open that invitation to the wider public Friday, though it plans to limit the number of downloads to about three million.

Microsoft released an earlier test version of Windows 7 in October, though the version it is now offering includes all the final features expected in the software. Microsoft has said previously that it plans to ship the final version of Windows 7 by January 2010. Microsoft's distribution deals with Verizon and Dell could provide a lift for its search business, which has lagged far behind Google in share of queries by Internet users.

The agreement with Verizon, starting in the first half of this year, will make Microsoft's search engine easily accessible from nearly all of the handsets from the carrier, a joint venture of Verizon Communications Inc. and Vodafone Group PLC.

Time Warner Takes $25 Billion Hit

Aol On Deathbed

Responding to past problems and the future perils of the economic downturn, Time Warner Inc. attempted to clear its slate by writing down $25 billion of assets to account for the tumbling value of its cable, publishing and AOL businesses.

The move, coming as the advertising outlook sours, could signal more write-downs for media and cable companies. After a rash of acquisitions at peak prices, companies in those industries are having to scale back accounting values in the now-sullen climate. The media industry also faces secular declines in areas such as newspapers, broadcast television and radio, which are being ravaged by ad declines.

Time Warner CEO Jeff Bewkes has signaled a shift to focus more on the TV and movie businesses.

Coupled with weaker-than-expected advertising revenue,Time Warner's fourth-quarter write-down is expected to swing the company to an annual loss for 2008 -- its first in six years.

Time Warner Cable Inc., whose shares have fallen 50% in the past couple of years, represented the bulk of the non-cash write-down, at nearly $15 billion. The news also highlights the lingering effects of Time Warner's disastrous 2001 merger with AOL and a gloomy outlook for the magazine-publishing business.

Time Warner has made a slew of acquisitions since the company's last major write-down in 2002 for the value of AOL and its cable systems. Time Warner Cable spent about $9 billion of cash and 16% of its equity acquiring assets from rival Adelphia in 2005. AOL also has been on a buying spree in its bid to revamp itself as an ad-based company. Investors chided AOL last year for the steep $850 million price tag of its Bebo acquisition.

Cable-TV company Comcast Corp. similarly plans to write down its stake in wireless broadband company Clearwire Corp., whose shares have fallen about 60% in the past 12 months, said people familiar with the situation. Last October, CBS Corp. recorded a $14.1 billion charge, largely for the shrinking value of its local television and radio stations. "We believe that similar announcements from other media companies could be forthcoming," said UBS analyst Michael Morris.

Time Warner's write-down says a lot about the challenges that face Chief Executive Jeff Bewkes. Mr. Bewkes has signaled a shift to focus more on the TV and movie businesses and less on non-content assets such as Time Warner Cable, which he expects to spin off by the end of the current quarter.

But he still needs to find long-term solutions for AOL and publishing. Time Warner CFO John Martin, speaking at an investor conference, said the company is still interested in finding AOL a partner, after on-off talks with potential candidates, but noted the current climate "is not conducive to" quick action.

Time Warner rang more alarm bells about the advertising climate, saying "the economic environment has proved somewhat more challenging" than previously expected, particularly at its AOL and publishing units. The company scaled back its operating projection for 2008, saying it now expects adjusted operating income before depreciation and amortization to be $13 billion, up 1%, a drop from its previous forecast of a 5% increase.

Time Warner shares were down 6.3% at $10.29 in 4 p.m. composite trading on the New York Stock Exchange, while Time Warner Cable stock was down 4.8% at $21.56.

In addition to the write-down, Time Warner will record charges of as much as $380 million in the fourth quarter, including as much as $60 million from the restructuring of a lease for floors in its Time & Life Building in Manhattan held by Lehman Brothers Holdings Inc.; a $40 million increase in its credit-loss reserves for bankruptcy filings by retail customers; and $280 million for a court judgment against its Turner Broadcasting System Inc.

Time Warner still expects cash flows for 2008 to total $5.5 billion, matching its outlook provided in November, because of strong performances from its film division and its cable-television networks.

Time Warner was expected to come under pressure to write down assets as it carried over $42.5 billion in goodwill on the books for 2008. Mr. Martin said he expects no "adverse impacts" from the write-down, noting there are no debt covenants or tax implications that will lead to more financial pain.

The Time Warner Cable write-down reflects the decline in the market value of the company, a drop in the value of its franchise rights and lowered expectations for cash flow amid increased competition and higher borrowing costs. Time Warner Cable said it also plans to take a charge of about $350 million related to its investment in Clearwire.

Time Warner is to report fourth-quarter earnings Feb. 4.

Microsoft Targets Adobe in Web-Design Software

As posted by: Wall Street Journal

Adobe Systems Inc. is facing increasing pressure from Microsoft Corp., which is using its deep pockets to challenge Adobe's dominance of Web design software.

Adobe's Flash software, which adds video and animation to Web sites, is at the heart of many popular Internet destinations. Retailers, media outlets and entertainment sites rely on Flash to make their sites interactive and to serve up advertisements.

But Microsoft has recently launched a new version of its competing Silverlight technology and has been aggressively courting the operators of popular Web sites and advertising agencies that are Adobe's core customers.

Netflix Inc. recently said it would use Silverlight to stream movies over the Internet. When CBS Corp.'s college sports group decided to build its Web site using Silverlight earlier this year, Microsoft chipped in free development and support that "reduced our costs tremendously," said Tom Buffolano, the CBS business unit's former chief. A CBS spokesman declined to comment.

Winning the war with Microsoft "is clearly the most important priority," said Adobe Chief Executive Shantanu Narayen.

The economic downturn is adding to Adobe's challenges. The company Tuesday said its net income rose 11% for the quarter ended Nov. 28, but revenue growth stalled. Sales were $915.3 million, little changed from a year ago and below Adobe's original targets. Adobe is forecasting revenue for the current quarter will decline about 5% to 10%. Earlier this month, Adobe said it would cut 600 jobs, or 8% of its work force.

Microsoft sees opportunity in the economic pressures on Adobe. "I'm sure that we will gain ground technologically," said Bob Muglia, senior vice president of the Microsoft unit responsible for Silverlight.

Adobe's Flash player is installed on about 98% of Internet-connected PCs, and Silverlight is only installed on about 25%, according to Adobe and Microsoft. Adobe executives said this gives the smaller company about a two-year head start. But Microsoft is "willing to invest" in order to win certain "trophy sites," said Mr. Muglia.

Earlier this year, for instance, General Electric Co.'s NBC Universal chose Silverlight over Flash to deliver video from Beijing Olympics over the Web. Microsoft was an official sponsor of the Democratic National Convention, which streamed video using Silverlight.

Spokeswomen from Microsoft and Adobe declined to comment on the terms of these deals, as did representatives from the Web sites.

"There's no doubt that Adobe is ahead of Microsoft in terms of features," said Al Hilwa, an analyst at research company IDC. "But winners aren't always picked on merit. Companies strike deals, woo customers, and try to build an ecosystem. Microsoft is very good at that."

Adobe isn't without wins: In November, MLB.com LLC, the Web site for Major League Baseball, switched to Flash from Silverlight for online video of games.

Last year, Web design firm Cynergy Systems Inc. began using Microsoft tools for the first time to build Internet sites. While Cynergy still uses Adobe technology for 80% of the sites it builds, it uses Silverlight for the other 20% and that work is growing more quickly, said Dave Wolf, Cynergy's vice president of sales and marketing.

While millions of software programmers use Microsoft's tools, the company has little traction among Web designers. Adobe said it is counting in part on loyalty from graphic designers to hold Microsoft at bay.

"It's difficult to find designers who know Silverlight," said Scott Stanfield, chief executive of Vertigo Software Inc., which specializes in building sites with Silverlight. "I can't imagine a more hostile community [to Microsoft] than designers," he said, noting his firm's designers still use software from Adobe to sketch plans for sites before building them with Silverlight.

Adobe is also wooing computer programmers, the majority of whom use Microsoft's tools. Navtrak Inc. built the fleet-management software it sells to trucking companies using Adobe's technology after sending some of its programmers to an Adobe-sponsored training session last year, said Todd Hodges, a Navtrak product manager.

In May, Adobe launched the Open Screen Project, a group of 19 companies -- including Nokia Corp., Qualcomm Inc., and Verizon Communications Inc.'s wireless unit -- to attract developers. The project promises developers that they can build software once -- using Adobe's technology -- and have it run on PCs, mobile phones and televisions.

Microsoft issuing emergency fix for browser flaw


REDMOND, Wash. — Microsoft is taking the unusual step of issuing an emergency fix for a security hole in its Internet Explorer software that has exposed millions of users to having their computers taken over by hackers.

The "zero-day" vulnerability, which came to light last week, allows criminals to take over victims' machines simply by steering them to infected Web sites; users don't have to download anything for their computers to get infected, which makes the flaw in Internet Explorer's programming code so dangerous. Internet Explorer is the world's most widely used Web browser.

Microsoft said it plans to ship a security update, rated "critical," for the browser on Wednesday. People with the Windows Update feature activated on their computers will get the patch automatically.

Thousands of Web sites already have been compromised by criminals looking to exploit the flaw. The bad guys have loaded malicious code onto those sites that automatically infect visitors' machines if they're using Internet Explorer and haven't employed a complicated series of workarounds that Microsoft has suggested.

Microsoft said it has seen attacks targeting the flaw only in Internet Explorer 7, the most widely used version, but has cautioned that all other current editions of the browser are vulnerable.

Microsoft rarely issues security fixes for its software outside of its regular monthly updates. The company last did it in October, and a

Here is the full story from Microsoft.

Microsoft has completed the investigation into a public report of this vulnerability. We have issued MS08-078 to address this issue. For more information about this issue, including download links for an available security update, please review MS08-078. The vulnerability addressed is the Pointer Reference Memory Corruption Vulnerability - CVE-2008-4844.

Resources:
You can provide feedback by completing the form by visiting Microsoft Help and Support: Contact Us.

Customers in the United States and Canada can receive technical support from Microsoft Product Support Services. For more information about available support options, see Microsoft Help and Support.

International customers can receive support from their local Microsoft subsidiaries. For more information about how to contact Microsoft for international support issues, visit International Support.

Microsoft TechNet Security provides additional information about security in Microsoft products.

Disclaimer:
The information provided in this advisory is provided "as is" without warranty of any kind. Microsoft disclaims all warranties, either express or implied, including the warranties of merchantability and fitness for a particular purpose. In no event shall Microsoft Corporation or its suppliers be liable for any damages whatsoever including direct, indirect, incidental, consequential, loss of business profits or special damages, even if Microsoft Corporation or its suppliers have been advised of the possibility of such damages. Some states do not allow the exclusion or limitation of liability for consequential or incidental damages so the foregoing limitation may not apply.

Revisions:
December 10, 2008: Advisory published

December 11, 2008: Revised to include Microsoft Internet Explorer 5.01 Service Pack 4, Internet Explorer 6 Service Pack 1, Internet Explorer 6, and Windows Internet Explorer 8 Beta 2 as potentially vulnerable software. Also added more workarounds.

December 12, 2008: Revised to correct operating systems that support Windows Internet Explorer 8 Beta 2. Also added more workarounds and a reference to Microsoft Security Advisory (954462).

December 13, 2008: Revised to add the workaround, Disable XML Island functionality. Also, in a FAQ entry, clarified the list of recommended workarounds and added the blog post URL for recommended workarounds.

December 15, 2008: Updated the workarounds, DisableXMLIsland functionality and Disable Row Position functionality of OLEDB32.dll.

December 17, 2008: Advisory updated to reflect publication of security bulletin.

Seimens to Pay Huge Fine in Bribery Inquiry

As posted by: Wall Street Journal

FRANKFURT -- German engineering company Siemens AG and U.S. authorities are expected to settle a longstanding bribes-for-business investigation Monday with a record $800 million fine -- almost 20 times higher than the largest previous penalty under the U.S. Foreign Corrupt Practices Act.

Documents filed with a U.S. court Friday by the U.S. Justice Department and the Securities and Exchange Commission allege corruption reaching the top echelons of Siemens management. The conglomerate allegedly spent more than $1 billion bribing government officials around the globe -- including former Argentine President Carlos Menem -- to win infrastructure contracts in recent years.

A Siemens building in Munich

The detailed claims of wrongdoing could trigger more fines and arrests in other parts of the world for Munich-based Siemens, people familiar with the matter said. Siemens, which makes everything from wind turbines to high-speed trains, is being investigated for corruption in at least 10 other countries. German authorities could announce a separate fine of several hundred million dollars as early as Monday in a parallel probe, said people familiar with the matter.

At the same time, the U.S. court documents state that Siemens, Europe's largest engineering company by revenue, took aggressive steps to ferret out corruption after the bribery scandal erupted in late 2006. The recent steps, which the Justice Department described as "extraordinary" in a court filing, factored into the Justice Department's decision to not press for a fine as high as $2.7 billion, according to the Justice Department's sentencing memorandum.

U.S. authorities have used a carrot-and-stick approach by rewarding remedial action as they ramp up prosecutions under FCPA, enacted in 1977 to clamp down on overseas bribery. The proposed settlement nonetheless dwarfs the largest previous FCPA fine of $44 million, levied last year against a subsidiary of Houston-based oil-services company Baker Hughes Inc. for $4 million in alleged bribes paid to government officials in Kazakhstan.

Under the accord between Siemens and the Justice Department and SEC, the company will admit inadequate internal controls and doctoring its books. But it won't formally plead guilty to bribery charges. That will allow it to keep bidding for public-sector infrastructure projects in the U.S., according to people familiar with the matter.

A Siemens spokesman confirmed the company is close to a settlement with U.S. authorities.

The federal U.S. District Court for the District of Columbia is scheduled to rule on the plea bargain at a Monday hearing. If the court approves the settlement, Siemens would pay a criminal fine of $450 million to the Justice Department and $350 million in civil damages to the SEC. The company also would have a U.S.-approved external compliance monitor for as many as four years.

The SEC claims Siemens made at least 4,283 bribe payments totaling $1.4 billion alone between March 2001 and September 2007. Misconduct was "systematic" and involved "employees at all levels of the company, including former senior management," the SEC said in a court filing.

The filing details alleged bribes to government officials in 10 countries, including payments to supply transit systems in Venezuela; medical equipment in China, Vietnam and Russia; power equipment in Iraq and Israel; refineries in Mexico; and telecommunications equipment in Nigeria and Bangladesh.

It accuses Siemens of paying more than $40 million in bribes to senior government officials in Argentina between 1998 and 2004 to try to secure a contract to make national identification cards. Illicit payments included "at least $2.6 million" in 1998 and 1999 to Mr. Menem, who was Argentina's president at the time, and two other senior government officials, according to the SEC filing. Mr. Menem has in the past denied illegal payments from Siemens.

U.S. prosecutors claim Siemens employed several methods to conceal bribes, including sham consulting contracts. The Justice Department also claims that Siemens used "removable Post-It notes" with affixed signatures to obscure audit trails and "cash desks" where employees could fill "empty suitcases" with as much as €1 million ($1.3 million) to pay bribes.

The SEC filing alleges that Siemens's management board ignored and suppressed frequent "red flags." It accuses the company's former chief financial officer, Heinz-Joachim Neubürger, of taking insufficient action in 2003 after auditors flagged suspicious payments in Nigeria and of misleading the company's nonexecutive supervisory board on other compliance matters.

Mr. Neubürger left Siemens in 2006 and has denied any wrongdoing. He and at least two other former management-board members remain criminal suspects in a continuing bribes-for-business probe by German prosecutors, according to people familiar with the matter. Prosecutors are working through a list of about 300 suspects and more indictments are expected after German courts recently handed out suspended prison terms to three former managers.

Siemens paid a €201 million fine to German authorities last year and didn't contest the charges after a court ruled the company had paid €12 million in bribes to government officials in Nigeria, Russia and Libya to win telecom-equipment contracts. A follow-up settlement with German authorities, expected to be announced in the coming days, involves alleged bribes at other business units.

U.S. prosecutors will argue for some leniency at Monday's court hearing in Washington. They will highlight how Siemens has replaced all but one management-board member and hired hundreds of compliance officers after a dawn raid by German police in November 2006.

The Justice Department said Siemens also took "aggressive steps" to preserve evidence after the raid and has shared more than 100,000 pages of documents with U.S. authorities. "The reorganization and remediation efforts have been extraordinary," the Justice Department added in a court filing.

Amid the scandal, Siemens has paid more than €850 million to external consultants since late 2006 -- including more than €200 million to the U.S. law firm Debevoise & Plimpton LLP, which investigated corruption allegations and regularly reported its findings to the Justice Department and SEC.

The German company also said earlier this year it would launch civil proceedings that seek financial damages from 11 former management-board members for failed oversight earlier this decade. The targeted individuals under investigation for negligence and failed oversight include former chief executives Heinrich von Pierer and Klaus Kleinfeld, both of whom have denied any wrongdoing.

Innocents Die in the Drug War

Of all the casualties claimed by the U.S. "war on drugs" in Latin America, perhaps none so fully captures its senselessness and injustice as the 2001 CIA-directed killing of Christian missionary Veronica Bowers and her daughter Charity in Peru.

No one is suggesting that the CIA intentionally killed Mrs. Bowers and her baby. It was an accident. But according to Rep. Pete Hoekstra (R., Mich.), it was an accident waiting to happen because of the way in which the CIA operated the drug interdiction plan in Peru known as the Airbridge Denial Program. Mr. Hoekstra says the goods to prove his charge are in a classified report from the CIA Inspector General that he received in October.

Under the program, initiated by President Clinton, the CIA was charged with identifying small civilian aircraft suspected of carrying cocaine over Peru on a path to Colombia, and directing the Peruvian military to force them down.

Mary Anastasia O'Grady talks to Kelsey Hubbard about the collateral damage caused by the CIA's fight against drug trafficking.

Strict procedures were put in place to minimize the risks to innocents. But after viewing the IG report, Mr. Hoekstra -- the ranking member of the House Intelligence Committee -- says that it is clear that those procedures had gone out the window long before the April 20, 2001 tragedy.

On that day the Bowers family was flying in a single-engine plane over the Amazon toward their home in Iquitos. Mrs. Bowers was holding the infant on her lap when a bullet fired by the Peruvian Air Force, under direction of the CIA, hit the aircraft, traveled through her back and into Charity's skull. The plane crash-landed on the Amazon River. Mr. Bowers, his young son and the pilot survived. Neither the plane nor its passengers were found to be involved in any way in the drug business and initial reports said that the mistaken attack was a tragic one-time error.

Get the latest information in Spanish from The Wall Street Journal's Americas page.

The IG report looked at the Airbridge Denial Program from its inception in 1995 until its termination in 2001 and took seven years to complete. In statements to the press last month Mr. Hoekstra said it demonstrates every one of the 15 "shootdowns" that the CIA participated in over the life of the program had "violations of required procedures." He also said that the report "found that CIA officers knew of and condoned the violations, fostering an environment of negligence and disregard for the procedures."

Equally troubling, the congressman says, is the IG finding that after the tragedy there was an attempt to cover up what had been going on in Peru. He has also said that the IG report finds that there were "unauthorized modifications" made to "the presidentially mandated intercept procedures by people who had no authority to do so" and that "there was effectively no legal oversight of the program." He further charges that "there is evidence that CIA officials made false or misleading statements to Congress," and that "the CIA denied Congress, the NSC [National Security Council] and the Department of Justice access to key findings of internal reviews that established and documented the sustained and significant violations of the required procedures."

"It was a rogue operation," he told me by telephone on Tuesday. "They knew they weren't following the rules, and they never did anything about it. They were callous about it." When I asked him to explain further, he said: "My take on this is that they became obsessed with the mission."

The CIA says that director Michael Hayden has "recognized the seriousness of [the report's] findings" and "is absolutely committed to a process looking at systemic issues and accountability that is as thorough and fair as possible." The office of House Intelligence Committee Chairman Silvestre Reyes (D., Texas) won't comment on the report. But Mr. Hoekstra is calling for more of it to be declassified and for the Justice Department to review "whether further criminal investigation is warranted."

Yet to honor the memory of Mrs. Bowers and her daughter and spare innocent lives in the future, a broader discussion in Congress about U.S. drug policy in the region is needed.

Consider the fact that Mr. Clinton's justification for the Airbridge Denial Program was that drug trafficking was a threat to Peruvian national security. Of course it was: Prohibition naturally produces powerful criminal networks that undermine the rule of law. But as a 2001 Senate Intelligence Committee report found, the drug runners learned to avoid detection by altering their routes via Brazil. It also found that while Peru's coca business shrank, Colombia's took off.

Since then, U.S. interdiction has put the pressure on Colombia and the problem is now resurging in Peru. The latest reports are that Mexican cartels are teaming up with remnants of the Shining Path terror network to rebuild the business, proving once again the futility of the supply-side attack as a way of minimizing drug use in the U.S.

Does it matter if Google's search results are fixed?

The fools, usually, are us.

We, the people, switch off our critical faculties and happily barter our trust for the joy of convenience.

So will we ever make the effort to even raise an eyebrow when we read "Google this week admitted that its staff pick and choose what appears in its search results"?

These words, from The Register's Andrew Orlovski, ought surely to give one or two people pause for a small grunt of concern.

As Orlovski points out, Google News expressly declares that the "selection and placement of stories on this page were determined automatically by a computer program." Except that, it appears, maybe they weren't.

He quotes Michael Arrington of TechCrunch, who suggested that Google will "make obvious changes - An example is if "thousands of people" were to knock a search result off a search page, they'd be likely to make a change..."

"Now what, you may be thinking, is an 'obvious change'?" writes Orlovski. "Is it one that is frivolous? (Thereby introducing a Google Frivolitimeter? [Beta]). Or is it one that goes against the grain of the consensus? If so, then who decides what the consensus must be?"

Notice the considerable idealism in Google's DNA.

Orlovski concludes by questioning Google's "unique democracy" in the way search results are presented. He cites Google's current explanation of Page Rank:

"PageRank also considers the importance of each page that casts a vote, as votes from some pages are considered to have greater value, thus giving the linked page greater value. We have always taken a pragmatic approach to help improve search quality and create useful products, and our technology uses the collective intelligence of the Web to determine a page's importance."

The important words here, surely, aren't "value" or "useful" or "collective" or "intelligence." They are "pragmatic" and "approach."

Many who reside in Inner Accolyteville cling fondly to the belief that the Web, with Google as its artificial heart, symbolizes a new democracy, a new honesty, a new pulsating, life-affirming form of justice.

But Google's is surely a "pragmatic approach." It's an advertising agency. It makes its money out of advertising. Mundane classified advertising at that. There is nothing idealistic about it.

Indeed, the idealism of Web 2.0 as a whole is, these days, rushing down the Turbulent River to be replaced by an endearing rush toward pragmatic approaches.

Google wants its search results to become more pragmatic, not for any political, social or even intellectual reason. The company simply thinks it's better for business. Advertising business.

Most of us won't notice or care and will continue to depend on Google because it's so dominant, so fast, so very much our rolling dictionary of the world.

This leave Google to approach its business in as pragmatic a way as it chooses. It will makes changes, and we will continue to believe in them.

The folks at Google are no fools. As for us, well, the slapping of our foreheads always comes a little too late.

Yahoo brings its Glue to the U.S.

Yahoo rolled out a U.S. beta version of its Glue Pages, giving a visual boost to users' search results, according to a posting on its Yahoo blog site.

The beta is designed to allow users to enter a search and have not only text links appear on the site, but also related pictures, videos and blogs.

The company is taking a page from its Yahoo India Glue Pages site, which it unveiled in May.

With this effort, Yahoo is seeking to put related content all on one page, while its competitor Google currently offers up text links, with additional links to related photos, videos, blogs, books and news.

Microsoft's Live Search takes a similar approach to Google's.

Yahoo offers severance with a soft landing

A pink slip for corporate America's newly laid off typically means a severance package and a "see ya."

But when Yahoo issued its layoff notices to 10 percent of its workforce on Wednesday, it came with a twist, according to several sources.

Yahoo's 1,520 pink-slipped employees will remain on the payroll through February 13, retaining the ability to continue vesting any options that may come available through that separation date. Vacation accrual, however, will not apply, noted one source.

By the same token, those laid off employees will be "on call" to answer any questions that those who will be taking up the slack may have, to a certain extent anyway.

For those folks who have not landed a job by February 13--which in this recessionary climate may be many--nor bad-mouthed the company, will be entitled to an additional lump sum payment of two, three, or even four more months of severance, sources say.

And on top of that, an additional one month of severance will be awarded for every five years of service at Yahoo, sources note.

Banks drop, tech firms rise in privacy trust rankings

When it comes to protecting consumer privacy, Americans in general trust financial institutions less than they did a year ago and tech firms more, according to a new survey that lists American Express as No. 1 for the third year in a row.

Auction site eBay rose from eighth place to No. 2, IBM remained in third, Amazon rose from fifth to fourth and HP jumped from 16th place to 6th. Apple (No. 8), Yahoo (No. 14) and Microsoft rose and Facebook broke into the top 20 for the first time. However, Google fell from 10th place. (The survey doesn't provide any specific rankings below the top 20 so it is unclear where Microsoft and Google rank now, however they are in the top 50, according to Larry Ponemon, chairman of the Ponemon Institute, which conducted the survey.)

Meanwhile, Charles Schwab, Countrywide, and Bank of America fell out of the top 20.

"It's a matter of perception versus reality. There should be a correlation," Ponemon said in an interview. Asked if perception and reality are indeed correlated in the survey results, he responded, "I hope so."

Regarding American Express topping the list, Ponemon said, "People believe that because of AmEx's customer service orientation that they're going to be good at protecting their privacy."

Meanwhile, IBM is "viewed as one of these old-line IT companies, as dependable," he said.

Respondents also said they are worried about identity theft and losing control of their personal data. Sixty-two percent of the respondents said they believe that identity theft most affects their perceptions about a company's privacy, while 53 percent said data breach notification did. Only 45 percent said they feel they have control over their personal information, while 73 percent said the protection of their privacy is important or very important.

For the survey, 6,486 U.S. adults were asked which companies they thought were most trustworthy and which did the best job safeguarding personal information. The survey has been conducted since 2004 on behalf of consumer privacy watchdog Truste.

Start-up OpenX touts burgeoning ad traffic

It may be that the technology and advertising industries are curtailing spending in the current painful economic environment, but one start-up, OpenX, is happy to report progress in establishing its new business.

OpenX sells support and consulting services around an open-source software package geared toward publishers that need to serve ads on their online properties. The Pasadena, Calif.-based company also has been expanding online, first by hosting the software on its own site, free to lower-traffic customers, and second through a pilot test of a marketplace that lets advertisers buy ads across a larger group of publishers.

Among the milestones the company is announcing Monday: The OpenX software, installed by customers or hosted by OpenX, currently delivers 300 billion ads per month. About 2,500 customers are using the hosted version now, with a growth rate that sees customers double each week.

"This is some pretty phenomenal growth," crowed Chief Executive Tim Cadogan, a former Yahoo search and advertising executive.

Next comes the more difficult process of converting the free products and services into revenue-generating operations. The vast majority of the ads served by the installed software were from freely downloaded versions, and few of those using the hosted service are premium customers.

But Cadogan said the company has just launched the support products and online services, and that revenue generation is a priority. "We are all over the revenue side and pushing that really hard. I expect more news on that in the next one to three months," he said.

More than 10,000 customers installed version 2.6 of the OpenX software since its July release. The company plans to release 2.7 into beta testing soon, a version that will add a plug-in system that will enable customers to customize the software with specific modules for tasks such as specific targeting, video ads, or mobile ads, Cadogan said.

Holiday ornaments decorate Google search results


While some are decorating Christmas trees, Google has ornamented its search results with holiday-theme graphics.

Google spruced up a search for "Christmas tree" with a column of holly leaves to separate the search results on the left with the search ads on the right. A search for "Christmas" gets candy canes, and Santa gets the holly treatment.

Christmas might be the largest-scale trigger for the seasonal economic frenzy, but other holidays get fancy dividers, too, including candles for Kwanzaa, and dreidels and menorahs for Hanukkah.

And, in what's probably inappropriate to call an Easter egg, Google also added a Festivus pole for fans of the TV show Seinfeld.

It's not the first time Google has noted occasions by changing the advertising divider. On Gay Pride Day in 2008, the company added a rainbow divider.

Google slips from list of top companies on privacy

Google has stepped off the top 20 list of the most trusted U.S. companies for privacy, according to a report in theSan Francisco Chronicle on Monday.

The Internet search giant was ranked No. 10 last year, but slipped off into the ether this year as the 6,500 people surveyed by the Ponemon Institute may have associated Google with "big company syndrome," the Chronicle story reported. TRUSTe co-sponsored the survey.

The report, citing the Ponemon Institute, said:

"Google (and Microsoft) suffer from big company syndrome," Dr. Larry Ponemon said. "People figure that if you're big and collecting data, there must be an issue."