Story originally appeared on the New York Times.
MOUNTAIN VIEW, CALIF. — When Isabelle Olsson, the lead industrial designer for Google Glass, arrived at Diane von Furstenberg’s New York studio to fit models for the new device, she wasn’t concerned about how the models would look strutting along the runway wearing tiny screens and computers on their faces.
Instead, she was nervous about color.
The current palette for the frames of Glass, the Internet-connected eyewear, is limited: cotton (white), tangerine (orange), sky (blue) and two shades of gray. Although wearing a pop of turquoise or coral on your face might fly in Silicon Valley, Ms. Olsson worried they would clash on the runway.
But when she entered the studio days before Fashion Week last fall, she saw coral crepe tunics and flowing turquoise pants. The styles, which Ms. von Furstenberg described as “rebel princess,” just happened to be the same palette as Glass, despite being conceived long before the designer discovered the gadget.
A week later, one model matched a tangerine Glass to the orange architectural squiggle on a jumpsuit, and another paired a sky Glass to a turquoise slouchy tank and bag. When Ms. von Furstenberg took her call at the end, she wore tangerine. On her arm was Sergey Brin, Google’s co-founder, in sky.
“I love color, so I knew it was important, but not the extent to which it is about the emotional connection,” said Ms. Olsson, who trained in Sweden and whose job interview at Google, in which she did not know the secret project she would be working on, included questions like, “Do you like yellow?”
Ms. Olsson, 30, is one of a group of women charged by the company with turning Glass into the next It accessory. If high fashion and high tech are worlds apart, the women of Google Glass are like explorers, trying to connect the two.
They are also pushing another boundary, as senior women in tech, where men still outnumber women three to one. The disparity is even more extreme among engineers. Yet at Glass, women are leading hardware and business efforts for one of Google’s biggest-ever product gambles.
Along with Ms. Olsson, the team includes Jean Wang, 33, a hardware engineer in charge of Glass features like optics and acoustics, and Kelly Liang, 39, the director of business development, who oversees partnerships with app developers and others.
In an interview over a luau-style lunch at the company headquarters here, the three said they do not give much thought to their status as women in tech.
Ms. Liang came from investment banking, where she said she became comfortable being the only person not in cuff links. Ms. Wang said that when she pursued her doctorate in electrical engineering, there were five men for every woman in her courses.
“I’ve been inert to seeing myself as a woman versus a man,” she said. “I see my colleagues as my colleagues, regardless of gender.”
“That being said,” she added, “I think there’s a lot more to do to encourage women in the technical space.”
The three said they are conscious of bringing a woman’s perspective, as it were, to their work on Glass, whether it’s trying it on people with long hair and feminine facial structure or thinking about the apps women would like to see (thus the partnership Ms. Liang struck with Elle for an app that delivers street-style photos and fashion news).
There are the young women who tell Ms. Olsson after they see her speak about Glass that they want to become industrial designers or mechanical engineers, too, and the women with disposable income who ask where they can buy the product, which Google has said would be available more broadly to consumers next year (the cost has not yet been announced, though early testers paid $1,500).“Most of the people who stop me on the street are women,” Ms. Olsson said. “Women have a different reaction than when they see some dude wearing it. It makes a difference seeing it on me.”
That is one of the reasons that — when a Tumblr blog titled White Men Wearing Google Glass (including one in the shower) — made the rounds on the Internet, the women of Google Glass collectively cringed.
“It frustrates me because it’s not representative,” Ms. Olsson said.
Still, the blog highlighted not just technology’s gender problem, but also Google Glass’s style problem. While flaunting the newest gadget may be the epitome of style for people in the tech industry, something that could be so radically paradigm-changing is a harder sell for a set more accustomed to the double G’s of Gucci.
“We absolutely have to consider style and fashion, because once you put something on your body, it becomes part of your expression of who you are,” said Jennifer Darmour of Artefact, a technology design firm. “For the broader mainstream, I think Google Glass is devoid of style.”
Still, the fashion world is intrigued by something that is both a new potential shopping pathway and an accessory in its own right.
Ms. von Furstenberg said she decided to include Glass in her show after running into Mr. Brin, a friend, in Sun Valley, Idaho. He was “wearing these odd glasses,” she said, and when she tried them on, “I was floored.”
Accessories, Ms. von Furstenberg said, “tell someone that extra bit about you, and I think to wear Glass is to show that you are engaged, you are current, you are open to new things.”
Vogue has dedicated 12 pages in its September issue to a futuristic spread featuring models wearing Glass, sleek hair and minimalist designs, like an oversize amethyst Stella McCartney coat, in a rusted steel house in Texas resembling an alien spaceship.
“For me, the trend of the season was color and the attitude was the future,” said Tonne Goodman, Vogue’s fashion director, who oversaw the feature. She said Glass lent “a fantastic dimension to it.”
And Miu Miu’s new Rasoir sunglasses bear a resemblance to Glass, with their frame across the top of the eyes that cuts away below. A spokeswoman declined to comment on whether Miuccia Prada was inspired by Glass, but the sunglasses have sold out twice in the Bay Area.
As wearable technology moves beyond research labs, other tech and fashion companies are also experimenting with how to turn devices into accessories.
Apple hired Paul Deneve, the former chief executive of the Yves Saint Laurent Group, to work on “special projects,” widely believed to be wearable computing like a smart watch. The designer Rebecca Minkoff made a hot pink studded clutch that opens to reveal Bluetooth-connected speakers. A new clutch called Everpurse wirelessly charges smartphones tucked inside.
Ms. Liang acknowledged that Glass does not yet suit everyone, but said the fashion industry’s embrace of it has made a difference.
“All of a sudden it wasn’t just an electronics device,” she said of Ms. von Furstenberg’s show. “It was a fundamental shift in the way consumers and partners looked at Glass, as a fashion accessory that could be beautiful.”
She hinted that more styles and apps are coming that would make Glass attractive to a wider audience, like frames in different styles and ones that could clip onto prescription lenses. Ms. Olsson recently revealed a prototype with a hipster tortoise frame.
The new devices are a far cry from the original prototypes created by the Glass engineers. They took a cellphone’s motherboard, a battery and a Pico projector and taped it all to a pair of white plastic frames printed with a 3-D printer.
Then they had to make it look good, but still function.
“Usually you get design briefs, and they’re documents and requirements and schedules,” Ms. Olsson said. “But this brief was short and sweet: it was ‘comfortable and beautiful.’ Which was terrifying.”
One of the biggest problems was that device components are made for rectangular boxes — computers and phones — and not for wearable gadgets.
Ms. Olsson and Ms. Wang kept pushing the engineers to shrink things. One day they took the camera, shaved off a few centimeters and reattached it, finding it still worked.
Ms. Liang and Ms. Olsson traveled to Asia for inspiration, like a teacup with glaze around the edge that led to a black border on Glass.
“I die for Japanese design and architecture,” Ms. Olsson said. “Sometimes when we’re struggling with something, I say, ‘Make it more Japanese’ — clean and considered and balanced but still bold and edgy.”
That also describes how she incorporates Glass into her look. She favors tangerine (“I’m very pale so I don’t mind a pop of color”) to go with her red hair, minidresses, slouchy Givenchy bag and signature robin’s egg blue fingernails.
Ms. Wang wears charcoal (“It works well with different clothing”), and Ms. Liang, who says Glass is most useful while driving her children in her minivan, likes cotton.
It matches the mother-of-pearl Rolex her husband gave her for an anniversary: a watch she wears only for sentimental reasons now, she said, because Glass, seen out of the corner of her eye, is already telling her the time.
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Wednesday, August 28, 2013
Microsoft says CEO Ballmer to retire in 12 months
Story originally appeared on the Detroit News.
New York — Microsoft CEO Steve Ballmer, who took over the helm of the world’s largest software company from founder Bill Gates, will retire within the next 12 months.
Microsoft Corp. did not name a successor. The company said it is forming a search committee, which will include Gates, and Ballmer will stay on until a replacement is found.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a statement released by the Redmond, Wash., company.
After the news broke, Microsoft’s stock shot up as much as 9 percent shortly after the markets opened. The shares came within two dollars of their 52-week high.
Microsoft has struggled in the Ballmer era. When he took the helm in January 2000, Microsoft’s market value stood at more than $601 billion. Today, the company is worth less than half that amount, at nearly $270 billion.
The CEO’s announcement comes less than two months after the company unveiled a sweeping reorganization of its business in an attempt to reignite competition with faster-moving rivals such as Apple and Google.
Among Ballmer’s biggest mistakes, detractors say, were his initial dismissals of emerging threats from Google and Apple. He consistently pooh-poohed Google as a one-trick company during its early years and in 2007 declared: “No chance that the iPhone is going to get any significant market share.”
Google quickly made important inroads in Internet video, online maps, email and mobile computing and contributed to the damage that the iPhone and iPad have done to Microsoft and its partners in the PC market.
Microsoft, along with other companies that thrived in the era of personal computers, is scrambling to transform its business as people increasingly come to rely on smartphones and tablets.
Although it derives some three-quarters of its revenue from sales of software and services to businesses large and small, Microsoft has failed to capture the imagination of consumers who have become more enamored with mobile gadgets than PCs. Response to the newest version of its flagship Windows operating system, Windows 8, has been lukewarm.
In his statement, Ballmer noted that the company is moving in a new direction and needs a CEO that will be there for the longer term.
Microsoft, he added, “has all its best days ahead.”
Ballmer, 57, met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University. He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that IBM would release in 1981.
Ballmer, a zealous executive prone to arm-waving and hollering, did the job so well that he would become Gates’ sounding board and succeed him as CEO in 2000. He has worked at Microsoft for 33 years, matching the tenure of Gates, who left the company in 2008.
“It’s a tad surprising, but every other business head has been rotated out,” said BGC Financial analyst Colin Gillis. “They swapped out all their segment heads over the past few years. The only one they haven’t changed is the CEO.”
Ballmer, a Detroit native, returned to his home state in June to open Microsoft’s first-ever full-service Michigan store inside Troy’s Somerset Collection. Ballmer helped set a party-like atmosphere at the grand opening, and at one point picked a child out of the crowd and gave him a ticket for a new Xbox One.
Though investors cheered the news on Friday, Gillis cautioned that it could be a “tough 12 months” for the company.
The obvious successor — former Windows head Steven Sinofsky — got booted by Ballmer, he said.
Sinofsky left the company shortly after the launch of Windows 8 last year.
Veteran executive Julie Larson-Green, the head of Microsoft’s devices and studios engineering group, has been floated as a potential successor. She was promoted to her most recent position in July, after being tapped in November to lead all Windows software and hardware engineering.
Although the company said Friday that it will consider both internal and external candidates, some analysts are betting that the company’s next leader will come from outside.
Walter Pritchard, an analyst with Citi Investment Research, said Microsoft’s expected focus on external candidates will make it tough to predict who will become the next CEO and what direction they will take it in. He added that the search will likely take a significant amount of time, potentially the entire 12 months Ballmer has said he will stay.
When Ballmer joined Microsoft in 1980, it was populated with geeky programmers, led by Gates and the other founder, Paul Allen. Ballmer had already held a product management job at Procter & Gamble and was attending Stanford University’s graduate school of business when Gates convinced him to move to the Seattle area to whip Microsoft into shape.
Ballmer dropped out of Stanford, but only after Gates agreed to give him an 8.75 percent stake in a then-tiny startup that still hadn’t even incorporated as a company. It turned out to be one of the world’s greatest business partnerships. By late 2012, Ballmer had accumulated an estimated fortune of nearly $16 billion from his initial Microsoft stake and additional stock options he later received.
He also was instrumental in growing Microsoft from a company that had fewer than 40 employees and $12 million in annual revenue when he came aboard. In 2012, Microsoft had 94,000 employees and $74 billion in annual revenue.
When he took to the stage to extol Microsoft, Ballmer often acted more like a crazed cheerleader than the chief executive of an influential company. In one presentation that eventually became a viral sensation on the Internet, Ballmer bounded across the stage, jumping up and down while yelping and imploring the audience to stand up, before breathlessly proclaiming, “I LOVE THIS COMPANY!”
But Microsoft enjoyed its greatest success with Gates at the helm and Ballmer as his sidekick.
Gates turned over the reins to Ballmer in January 2000 in a surprise move, because Ballmer had been considered more of a numbers and sales specialist, not a technology specialist.
The CEO change came just a few weeks after Microsoft’s stock hit a record high of nearly $60, on a split-adjusted basis. While Ballmer was CEO, Microsoft’s stock performed poorly, slashing billions from the company’s market value.
Part of the downfall stemmed from the bursting of a technology bubble that helped inflate Microsoft’s stock just before Ballmer took over.
But Microsoft also has fallen out of favor because many investors had concluded Microsoft was interested in protecting its Windows franchise than coming up with new ideas and products to enter promising new markets on the Web and mobile devices. It didn’t help that Ballmer seemed to initially underestimate the threats posed by a resurgent Apple Inc. and Internet search leader Google Inc.
By the time Ballmer took Google more seriously and began pouring money into trying to build a better Internet search engine, Microsoft already was hopelessly behind. The company’s online division lost billions of dollars without putting a serious dent into Google’s dominance of the field.
Google’s rise riled the quick-tempered Ballmer, especially when key Microsoft engineers began defecting to the then-smaller company. After one Microsoft employee met with Ballmer in November 2004 to tell him he was leaving to join Google, Ballmer threw a chair across his office, according to a sworn declaration filed in a lawsuit. Ballmer then launched into an obscenity-laced tirade In which vowed to “kill” Google.
By 2012, the iPhone was generating more revenue than Microsoft was as an entire company and giving people less reason to replace their PCs. Again, Ballmer had to scramble in an attempt to adapt and ordered a dramatic makeover of Windows so it could run on mobile devices, as well. The new system, Windows 8, borrowed many of its ideas from the software that ran the iPhone, just as Microsoft had copied some of the concepts for its early versions of Windows from Apple’s Macintosh.
The iPhone’s immense popularity helped Apple overtake Microsoft as the world’s most valuable company while Ballmer was CEO.
In midday trading, Microsoft shares rose $1.88, or 6 percent, to $34.27. Over the past 52 weeks, the company’s shares have traded between $26.26 and $36.43.
New York — Microsoft CEO Steve Ballmer, who took over the helm of the world’s largest software company from founder Bill Gates, will retire within the next 12 months.
Microsoft Corp. did not name a successor. The company said it is forming a search committee, which will include Gates, and Ballmer will stay on until a replacement is found.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a statement released by the Redmond, Wash., company.
After the news broke, Microsoft’s stock shot up as much as 9 percent shortly after the markets opened. The shares came within two dollars of their 52-week high.
Microsoft has struggled in the Ballmer era. When he took the helm in January 2000, Microsoft’s market value stood at more than $601 billion. Today, the company is worth less than half that amount, at nearly $270 billion.
The CEO’s announcement comes less than two months after the company unveiled a sweeping reorganization of its business in an attempt to reignite competition with faster-moving rivals such as Apple and Google.
Among Ballmer’s biggest mistakes, detractors say, were his initial dismissals of emerging threats from Google and Apple. He consistently pooh-poohed Google as a one-trick company during its early years and in 2007 declared: “No chance that the iPhone is going to get any significant market share.”
Google quickly made important inroads in Internet video, online maps, email and mobile computing and contributed to the damage that the iPhone and iPad have done to Microsoft and its partners in the PC market.
Microsoft, along with other companies that thrived in the era of personal computers, is scrambling to transform its business as people increasingly come to rely on smartphones and tablets.
Although it derives some three-quarters of its revenue from sales of software and services to businesses large and small, Microsoft has failed to capture the imagination of consumers who have become more enamored with mobile gadgets than PCs. Response to the newest version of its flagship Windows operating system, Windows 8, has been lukewarm.
In his statement, Ballmer noted that the company is moving in a new direction and needs a CEO that will be there for the longer term.
Microsoft, he added, “has all its best days ahead.”
Ballmer, 57, met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University. He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that IBM would release in 1981.
Ballmer, a zealous executive prone to arm-waving and hollering, did the job so well that he would become Gates’ sounding board and succeed him as CEO in 2000. He has worked at Microsoft for 33 years, matching the tenure of Gates, who left the company in 2008.
“It’s a tad surprising, but every other business head has been rotated out,” said BGC Financial analyst Colin Gillis. “They swapped out all their segment heads over the past few years. The only one they haven’t changed is the CEO.”
Ballmer, a Detroit native, returned to his home state in June to open Microsoft’s first-ever full-service Michigan store inside Troy’s Somerset Collection. Ballmer helped set a party-like atmosphere at the grand opening, and at one point picked a child out of the crowd and gave him a ticket for a new Xbox One.
Though investors cheered the news on Friday, Gillis cautioned that it could be a “tough 12 months” for the company.
The obvious successor — former Windows head Steven Sinofsky — got booted by Ballmer, he said.
Sinofsky left the company shortly after the launch of Windows 8 last year.
Veteran executive Julie Larson-Green, the head of Microsoft’s devices and studios engineering group, has been floated as a potential successor. She was promoted to her most recent position in July, after being tapped in November to lead all Windows software and hardware engineering.
Although the company said Friday that it will consider both internal and external candidates, some analysts are betting that the company’s next leader will come from outside.
Walter Pritchard, an analyst with Citi Investment Research, said Microsoft’s expected focus on external candidates will make it tough to predict who will become the next CEO and what direction they will take it in. He added that the search will likely take a significant amount of time, potentially the entire 12 months Ballmer has said he will stay.
When Ballmer joined Microsoft in 1980, it was populated with geeky programmers, led by Gates and the other founder, Paul Allen. Ballmer had already held a product management job at Procter & Gamble and was attending Stanford University’s graduate school of business when Gates convinced him to move to the Seattle area to whip Microsoft into shape.
Ballmer dropped out of Stanford, but only after Gates agreed to give him an 8.75 percent stake in a then-tiny startup that still hadn’t even incorporated as a company. It turned out to be one of the world’s greatest business partnerships. By late 2012, Ballmer had accumulated an estimated fortune of nearly $16 billion from his initial Microsoft stake and additional stock options he later received.
He also was instrumental in growing Microsoft from a company that had fewer than 40 employees and $12 million in annual revenue when he came aboard. In 2012, Microsoft had 94,000 employees and $74 billion in annual revenue.
When he took to the stage to extol Microsoft, Ballmer often acted more like a crazed cheerleader than the chief executive of an influential company. In one presentation that eventually became a viral sensation on the Internet, Ballmer bounded across the stage, jumping up and down while yelping and imploring the audience to stand up, before breathlessly proclaiming, “I LOVE THIS COMPANY!”
But Microsoft enjoyed its greatest success with Gates at the helm and Ballmer as his sidekick.
Gates turned over the reins to Ballmer in January 2000 in a surprise move, because Ballmer had been considered more of a numbers and sales specialist, not a technology specialist.
The CEO change came just a few weeks after Microsoft’s stock hit a record high of nearly $60, on a split-adjusted basis. While Ballmer was CEO, Microsoft’s stock performed poorly, slashing billions from the company’s market value.
Part of the downfall stemmed from the bursting of a technology bubble that helped inflate Microsoft’s stock just before Ballmer took over.
But Microsoft also has fallen out of favor because many investors had concluded Microsoft was interested in protecting its Windows franchise than coming up with new ideas and products to enter promising new markets on the Web and mobile devices. It didn’t help that Ballmer seemed to initially underestimate the threats posed by a resurgent Apple Inc. and Internet search leader Google Inc.
By the time Ballmer took Google more seriously and began pouring money into trying to build a better Internet search engine, Microsoft already was hopelessly behind. The company’s online division lost billions of dollars without putting a serious dent into Google’s dominance of the field.
Google’s rise riled the quick-tempered Ballmer, especially when key Microsoft engineers began defecting to the then-smaller company. After one Microsoft employee met with Ballmer in November 2004 to tell him he was leaving to join Google, Ballmer threw a chair across his office, according to a sworn declaration filed in a lawsuit. Ballmer then launched into an obscenity-laced tirade In which vowed to “kill” Google.
By 2012, the iPhone was generating more revenue than Microsoft was as an entire company and giving people less reason to replace their PCs. Again, Ballmer had to scramble in an attempt to adapt and ordered a dramatic makeover of Windows so it could run on mobile devices, as well. The new system, Windows 8, borrowed many of its ideas from the software that ran the iPhone, just as Microsoft had copied some of the concepts for its early versions of Windows from Apple’s Macintosh.
The iPhone’s immense popularity helped Apple overtake Microsoft as the world’s most valuable company while Ballmer was CEO.
In midday trading, Microsoft shares rose $1.88, or 6 percent, to $34.27. Over the past 52 weeks, the company’s shares have traded between $26.26 and $36.43.
Friday, August 23, 2013
Nasdaq outage resembles hacker attacks
Story originally appeared on USA Today.
SEATTLE — Officials for the moment say they cannot pinpoint anything malicious about the extraordinary outage of the Nasdaq stock exchange earlier today.
But the incident had all the earmarks of the three waves of denial-of-service attacks that have bedeviled U.S. financial institutions, including stock brokerages, since last September.
An Iranian hacking collective — Cyber Fighters of Izz ad-Din al-Qassam — has claimed credit for orchestrating sophisticated attacks that have overwhelmed the expensive security systems U.S. banks have put into place to keep their online banking services up and secure.
"My first thought is that it is a denial-of-service attack, but I'm not sure," says Gartner banking security analyst Avivah Litan. "It's a very attractive target. It's very visible, and that's what these Iranian state attacks are all about, making a political statement by disrupting a visible website."
More recently, a copycat group of profit-minded hackers has conducted denial-of-service attacks against certain U.S. banks as a smoke screen to divert attention while they execute an Ocean's 11-style wire transfer fraud.
Litan earlier this month blogged about that caper. These bad guys, she says, set into motion sophisticated denial-of-service attacks that overwhelmed pretty sturdy bank network security. While tech staff labored manually to get the banks' websites back into service, the crooks scrambled behind the scenes to extract funds from a bank employee's privileged account, which they had gained access to.
Instead of getting into one customer account at a time, the criminals used the employee's account to control the master payment switch for wire transfers, and moved as much money as they could from as many accounts as possible for as long as possible, Litan reports.
"Considerable financial damage has resulted from these attacks," says Litan.
However, Litan says those copycats would have a considerably harder time trying to extract funds from a stock exchange, where funds move about in a highly complex process understood only by stock market tech gurus.
It's more plausible that the Iranian ideological hackers would be behind a disruption of Nasdaq, like the three-hour outage that began shortly after noon, Eastern time, Litan reasons.
The first wave of denial-of-service attacks attributed to the Cyber Fighters of Izz ad-Din al-Qassam began last September and lasted about six weeks. Knocked offline for various periods of time were Wells Fargo, U.S. Bank, Bank of America, JPMorgan Chase & Co. and PNC Bank.
The second wave commenced in December and lasted seven weeks, knocking out mid-tier banks and credit unions.
And a third wave of high-powered denial-of-service attacks commenced in March targeting credit card companies and financial brokerages.
"I don't have any inside knowledge, but I think this one (Nasdaq) is political, as well," Litan says.
Nasdaq has been hit by hackers before. In 2011, the FBI disclosed that they discovered suspicious files lurking in a server supporting Nasdaq's Directors Desk, a cloud-based collaboration service for company board members and senior executives.
Hackers often embed such files to snoop for valuable data, in this case possibly to gain information to make trades using insider knowledge.
Nasdaq at the time issued a statement saying "there is no evidence that any Directors Desk customer information was accessed or acquired by hackers."
However, it typically takes weeks to months for forensics experts to unravel where expert hackers have roamed in a breached network.
Security experts also note that brokerage Goldman Sachs reported a startling Internet-related glitch on Tuesday.
The giant brokerage house reported a system programming error that set incorrect price limits and selling algorithms affecting contracts for companies such as JPMorgan Chase & Co., Johnson & Johnson and Kellogg Co., according to Reuters.
The timing of today's Nasdaq outage -- occurring within 48 hours of the Goldman Sachs glitch -- strikes Roel Schouwenberg, senior researcher at Kaspersky Lab, as peculiar.
"It's definitely possible that either cybercriminals or hacktivists were responsible for either of these incidents," Schouwenberg says. "So that means it could either be an operation which is financially motivated or an operation which is aimed at sabotage. However, this is speculation. These could all just be glitches of sorts, but the timing is definitely strange."
Sean Sullivan, a security adviser at F-Secure, concurs.
"Well, so far this week there's been a computer error that caused Goldman Sachs to sell options for a dollar, and now this," Sullivan observes. "It really, really makes me wonder about the undisclosed details surrounding the Nasdaq forum hack."
SEATTLE — Officials for the moment say they cannot pinpoint anything malicious about the extraordinary outage of the Nasdaq stock exchange earlier today.
But the incident had all the earmarks of the three waves of denial-of-service attacks that have bedeviled U.S. financial institutions, including stock brokerages, since last September.
An Iranian hacking collective — Cyber Fighters of Izz ad-Din al-Qassam — has claimed credit for orchestrating sophisticated attacks that have overwhelmed the expensive security systems U.S. banks have put into place to keep their online banking services up and secure.
"My first thought is that it is a denial-of-service attack, but I'm not sure," says Gartner banking security analyst Avivah Litan. "It's a very attractive target. It's very visible, and that's what these Iranian state attacks are all about, making a political statement by disrupting a visible website."
More recently, a copycat group of profit-minded hackers has conducted denial-of-service attacks against certain U.S. banks as a smoke screen to divert attention while they execute an Ocean's 11-style wire transfer fraud.
Litan earlier this month blogged about that caper. These bad guys, she says, set into motion sophisticated denial-of-service attacks that overwhelmed pretty sturdy bank network security. While tech staff labored manually to get the banks' websites back into service, the crooks scrambled behind the scenes to extract funds from a bank employee's privileged account, which they had gained access to.
Instead of getting into one customer account at a time, the criminals used the employee's account to control the master payment switch for wire transfers, and moved as much money as they could from as many accounts as possible for as long as possible, Litan reports.
"Considerable financial damage has resulted from these attacks," says Litan.
However, Litan says those copycats would have a considerably harder time trying to extract funds from a stock exchange, where funds move about in a highly complex process understood only by stock market tech gurus.
It's more plausible that the Iranian ideological hackers would be behind a disruption of Nasdaq, like the three-hour outage that began shortly after noon, Eastern time, Litan reasons.
The first wave of denial-of-service attacks attributed to the Cyber Fighters of Izz ad-Din al-Qassam began last September and lasted about six weeks. Knocked offline for various periods of time were Wells Fargo, U.S. Bank, Bank of America, JPMorgan Chase & Co. and PNC Bank.
The second wave commenced in December and lasted seven weeks, knocking out mid-tier banks and credit unions.
And a third wave of high-powered denial-of-service attacks commenced in March targeting credit card companies and financial brokerages.
"I don't have any inside knowledge, but I think this one (Nasdaq) is political, as well," Litan says.
Nasdaq has been hit by hackers before. In 2011, the FBI disclosed that they discovered suspicious files lurking in a server supporting Nasdaq's Directors Desk, a cloud-based collaboration service for company board members and senior executives.
Hackers often embed such files to snoop for valuable data, in this case possibly to gain information to make trades using insider knowledge.
Nasdaq at the time issued a statement saying "there is no evidence that any Directors Desk customer information was accessed or acquired by hackers."
However, it typically takes weeks to months for forensics experts to unravel where expert hackers have roamed in a breached network.
Security experts also note that brokerage Goldman Sachs reported a startling Internet-related glitch on Tuesday.
The giant brokerage house reported a system programming error that set incorrect price limits and selling algorithms affecting contracts for companies such as JPMorgan Chase & Co., Johnson & Johnson and Kellogg Co., according to Reuters.
The timing of today's Nasdaq outage -- occurring within 48 hours of the Goldman Sachs glitch -- strikes Roel Schouwenberg, senior researcher at Kaspersky Lab, as peculiar.
"It's definitely possible that either cybercriminals or hacktivists were responsible for either of these incidents," Schouwenberg says. "So that means it could either be an operation which is financially motivated or an operation which is aimed at sabotage. However, this is speculation. These could all just be glitches of sorts, but the timing is definitely strange."
Sean Sullivan, a security adviser at F-Secure, concurs.
"Well, so far this week there's been a computer error that caused Goldman Sachs to sell options for a dollar, and now this," Sullivan observes. "It really, really makes me wonder about the undisclosed details surrounding the Nasdaq forum hack."
Tuesday, August 20, 2013
Facebook CEO Zuckerberg's profile hacked
Story originally appeared on USA Today.
SAN FRANCISCO -- Facebook CEO Mark Zuckerberg, whose company prides itself on benevolent hackathons, has been the target of a hacker.
A Palestinian man posted a message on Zuckerberg's page last week after he said repeated attempts were made to report the security hole on the social-networking site.
"First, sorry for breaking your privacy and post(ing) to your wall, I (had) no other choice to make after all the reports I sent to (the) Facebook team," Khalil Shreateh wrote on Zuckerberg's wall.
Shreateh is a self-described unemployed security researcher. Shreateh posted a series of email exchanges he said were between him and Facebook's security team.
The Palestinian researcher said he discovered a security hole allowing him to post to any members page.
Facebook's security team, which awards cash to so-called white hat hackers that report flaws, said the reports from Shreateh were unclear amid the hundreds of daily reports it receives.
"Had he included the video initially, we would have caught this much more quickly," wrote Matt Jones, a member of Facebook's security team, on YCombinator's Hacker News.
Facebook is located in Menlo Park, Calif., on an office park whose street is named Hacker Way. The company posted a hacker manifesto of sorts in its preliminary prospectus outlining its company.
Facebook fixed the flaw on Thursday.
SAN FRANCISCO -- Facebook CEO Mark Zuckerberg, whose company prides itself on benevolent hackathons, has been the target of a hacker.
A Palestinian man posted a message on Zuckerberg's page last week after he said repeated attempts were made to report the security hole on the social-networking site.
"First, sorry for breaking your privacy and post(ing) to your wall, I (had) no other choice to make after all the reports I sent to (the) Facebook team," Khalil Shreateh wrote on Zuckerberg's wall.
Shreateh is a self-described unemployed security researcher. Shreateh posted a series of email exchanges he said were between him and Facebook's security team.
The Palestinian researcher said he discovered a security hole allowing him to post to any members page.
Facebook's security team, which awards cash to so-called white hat hackers that report flaws, said the reports from Shreateh were unclear amid the hundreds of daily reports it receives.
"Had he included the video initially, we would have caught this much more quickly," wrote Matt Jones, a member of Facebook's security team, on YCombinator's Hacker News.
Facebook is located in Menlo Park, Calif., on an office park whose street is named Hacker Way. The company posted a hacker manifesto of sorts in its preliminary prospectus outlining its company.
Facebook fixed the flaw on Thursday.
Monday, August 19, 2013
Does Google have a case of Microsoft Fever?
Story originally appeared on USA Today.
SAN FRANCISCO — Recent changes made by Google to its Gmail application remind me of something Microsoft did more than a decade ago, just before the software giant began to suffer its long slowdown in growth.
The e-mail product updates suggest the search giant's overwhelming success in dominating its markets has spawned a corporate disease that ultimately may harm Google more than any rival can.
The affliction — let's call it Microsoft Fever — is a patronizing belief that Google now knows what its users want better than those users themselves and can solve any user problem — real or imagined — by throwing more features at them.
Yet the history of consumer software reveals that when product engineers run amok, interface design suffers, leaving users often alienated by updates they never asked for, and which make a program harder to use.
I can still remember the first time I vowed to stop using all Microsoft software — just as soon as I could make a living without it.
It occurred at the turn of the last century, when Microsoft dumped on users of its PC operating system what is arguably the most unloved animated character in the history of office software.
I'm referring of course to the too-cute digital paper clip (alternately known as "Bob" or "Clippy") which first popped up on Microsoft Office desktops in 1997, a time when the company's revenue and stock price were both soaring.
Clippy, as we'll call it, used to waft over the text on my screen like Casper the Friendly Ghost — bringing along innocuous advice designed to be helpful but which in reality was almost always annoying and unwelcome.
Even though the feature was supposed to be a support tool, Clippy was far more distracting than anything else.
The engineers who designed it presumably assumed that they knew more about what I wanted to do with the software than I did, even though I was the one using it.
They didn't, and I wasn't the only user who felt that way, which is why Clippy was sent to its rightful demise after being included as a standard feature in Office versions from 1997 until 2003 (or 2004 for the Macintosh version.)
The fact that Clippy lasted even six years foretold much that was wrong at Microsoft.
Just three years after Clippy's retirement, Microsoft rolled out a sweeping update of its operating system that CEO Steve Ballmer once touted as the company's most innovative product since Windows 95.
Yet the new version of the OS, dubbed Vista, was both bulky and unstable, slowing down PCs so much that Microsoft began letting customers swap it out for free within a year.
Because media companies aren't exactly on the leading edge of technological change, it took me years to rid my livelihood of Microsoft software. By the time I did, however, the company's revenue growth had withered significantly.
As with the appearance of Clippy, the recent Gmail updates have me looking — for the first time — for an alternative to the program, which I've used exclusively for work for almost five years.
Google's decision to sort my mail into three buckets, called "primary," "social" and "promotions" has been a hassle, for several reasons.
To share just one example, if I now want to see which of my columns has garnered me more followers on Twitter — a key consideration in my trade — I now have to go looking for that data on a separate screen than the one I'm usually using.
Likewise with the way that Google keeps trying to guide me over to its own social network, dubbed Google+, when I'm logging into Gmail from my smartphone.
It seems pretty clear Google made the changes to promote Google+ and give its own ads and coupon offers an advantage of placement over those sent to my inbox from other companies.
That doesn't bother me, because we live in a capitalist system and Google exists to make a profit and not be evil, as its founders once naively asserted in their IPO registration document.
No, my biggest beef with these updates is that Google didn't get my permission before significantly changing the first screen I see at the start of every workday.
Instead, one day I logged on and, instead of seeing my familiar inbox, I saw a screen that had across its top a series of tabs that divided up my e-mail in a way that Google thought was best.
That paternalistic (or cavalier) attitude toward users — similar to when Google collected data from private WiFi networks for its Street View product — seems not only slightly evil but also off the mark.
As with Microsoft's paper clip, the changes to Gmail have annoyed more than just one cranky tech journalist.
A growing list of Google's e-mail marketing partners, ranging from Gap to Groupon to Delta Airlines, have begun sending their customers detailed instructions on how to move e-mails back into their primary inboxes — where they're more likely to see them.
I've made the same changes, but the fact that I have to spend extra time undoing what Google has done is why I'm now looking for another program to use every day.
Dominant tech companies don't fade away overnight. Rather, they and their products persist for decades — long after they stop being helpful and innovative.
But dominance leads to arrogance, which can cause companies to forget to put their users first.
After seeing what Google has done to Gmail, I strongly suspect that within the Googleplex are floating the first spores of Microsoft Fever, the same disease that spawned Clippy and presaged the end of the software giant's glory days.
SAN FRANCISCO — Recent changes made by Google to its Gmail application remind me of something Microsoft did more than a decade ago, just before the software giant began to suffer its long slowdown in growth.
The e-mail product updates suggest the search giant's overwhelming success in dominating its markets has spawned a corporate disease that ultimately may harm Google more than any rival can.
The affliction — let's call it Microsoft Fever — is a patronizing belief that Google now knows what its users want better than those users themselves and can solve any user problem — real or imagined — by throwing more features at them.
Yet the history of consumer software reveals that when product engineers run amok, interface design suffers, leaving users often alienated by updates they never asked for, and which make a program harder to use.
I can still remember the first time I vowed to stop using all Microsoft software — just as soon as I could make a living without it.
It occurred at the turn of the last century, when Microsoft dumped on users of its PC operating system what is arguably the most unloved animated character in the history of office software.
I'm referring of course to the too-cute digital paper clip (alternately known as "Bob" or "Clippy") which first popped up on Microsoft Office desktops in 1997, a time when the company's revenue and stock price were both soaring.
Clippy, as we'll call it, used to waft over the text on my screen like Casper the Friendly Ghost — bringing along innocuous advice designed to be helpful but which in reality was almost always annoying and unwelcome.
Even though the feature was supposed to be a support tool, Clippy was far more distracting than anything else.
The engineers who designed it presumably assumed that they knew more about what I wanted to do with the software than I did, even though I was the one using it.
They didn't, and I wasn't the only user who felt that way, which is why Clippy was sent to its rightful demise after being included as a standard feature in Office versions from 1997 until 2003 (or 2004 for the Macintosh version.)
The fact that Clippy lasted even six years foretold much that was wrong at Microsoft.
Just three years after Clippy's retirement, Microsoft rolled out a sweeping update of its operating system that CEO Steve Ballmer once touted as the company's most innovative product since Windows 95.
Yet the new version of the OS, dubbed Vista, was both bulky and unstable, slowing down PCs so much that Microsoft began letting customers swap it out for free within a year.
Because media companies aren't exactly on the leading edge of technological change, it took me years to rid my livelihood of Microsoft software. By the time I did, however, the company's revenue growth had withered significantly.
As with the appearance of Clippy, the recent Gmail updates have me looking — for the first time — for an alternative to the program, which I've used exclusively for work for almost five years.
Google's decision to sort my mail into three buckets, called "primary," "social" and "promotions" has been a hassle, for several reasons.
To share just one example, if I now want to see which of my columns has garnered me more followers on Twitter — a key consideration in my trade — I now have to go looking for that data on a separate screen than the one I'm usually using.
Likewise with the way that Google keeps trying to guide me over to its own social network, dubbed Google+, when I'm logging into Gmail from my smartphone.
It seems pretty clear Google made the changes to promote Google+ and give its own ads and coupon offers an advantage of placement over those sent to my inbox from other companies.
That doesn't bother me, because we live in a capitalist system and Google exists to make a profit and not be evil, as its founders once naively asserted in their IPO registration document.
No, my biggest beef with these updates is that Google didn't get my permission before significantly changing the first screen I see at the start of every workday.
Instead, one day I logged on and, instead of seeing my familiar inbox, I saw a screen that had across its top a series of tabs that divided up my e-mail in a way that Google thought was best.
That paternalistic (or cavalier) attitude toward users — similar to when Google collected data from private WiFi networks for its Street View product — seems not only slightly evil but also off the mark.
As with Microsoft's paper clip, the changes to Gmail have annoyed more than just one cranky tech journalist.
A growing list of Google's e-mail marketing partners, ranging from Gap to Groupon to Delta Airlines, have begun sending their customers detailed instructions on how to move e-mails back into their primary inboxes — where they're more likely to see them.
I've made the same changes, but the fact that I have to spend extra time undoing what Google has done is why I'm now looking for another program to use every day.
Dominant tech companies don't fade away overnight. Rather, they and their products persist for decades — long after they stop being helpful and innovative.
But dominance leads to arrogance, which can cause companies to forget to put their users first.
After seeing what Google has done to Gmail, I strongly suspect that within the Googleplex are floating the first spores of Microsoft Fever, the same disease that spawned Clippy and presaged the end of the software giant's glory days.
Hacking assaults on media sites intensify
Story originally appeared on USA Today.
SEATTLE — Middle Eastern hackers infiltrated a popular Internet news delivery service, giving them possible access to some of the largest U.S. news sites on Thursday.
An online group called The Syrian Electronic Army, representing supporters of Syrian President Bashar al-Assad, hacked the Internet service of Outbrain, a content recommendation company whose software "widget" is embedded in the websites of several major publications.
As a result, the websites operated by three Outbrain clients — The Washington Post, Time and CNN — contained messages that referred to the SEA.
USA TODAY is also an Outbrain client, but its site was not affected.
That development — combined with the hack of the Twitter accounts of several New York Post reporters on Tuesday and the website outage of The New York Times on Wednesday — is being viewed by some security experts as evidence that major U.S. news outlets have now emerged as prime targets for nation-state adversaries of the U.S.
The New York Times attributed its outage to a server problem.
"It's starting to look like there's an organized campaign targeting major U.S. media outlets," says Tom Kellermann, Trend Micro's vice president of cybersecurity. "It's not clear whether their end game is to target reporters' sources or to use the news sites as watering holes (to infect patrons.)"
In a statement, Emilio Garcia-Ruiz, managing editor of The Washington Post, confirmed that "some articles on our website were re-directed to the Syrian Electronic Army's site for a period of about 30 minutes" Thursday morning.
Garcia-Ruiz pointed out a tweet by SEA that claimed it used Outbrain as a vehicle for the attack. "We have taken defensive measures and removed the offending module," Garcia-Ruiz wrote. "At this time, we believe there are no other issues affecting the site."
A few days ago, Post newsroom employees were targets of a phishing attack that was allegedly by the Syrian Electronic Army, Garcia-Ruiz said. "The attack resulted in one staff writer's personal account being used to send out a Syrian Electronic Army message," he said.
CNN also confirmed Thursday that an Outbrain headline widget used by its international website, CNNi.com, ran headlines referring to SEA. The widget was subsequently removed. Its main website, CNN.com, was not affected, the company said.
"The security of a vendor plug-in that appeared on CNNi.com was briefly compromised today. The issue was quickly identified and (the) plug-in disabled," said CNN spokesman Matt Dornic.
In a statement, Time Inc. said "content provided by Outbrain that appeared on some of our sites was impacted by the hacking activity at Outbrain. We're no longer running that content."
Outbrain issued this statement: "We are aware that Outbrain was hacked earlier today. In an effort to protect our publishers and readers, we took down service as soon as it was apparent. The breach now seems to be secured and the hackers blocked out, but we are keeping the service down for a little longer until we can be sure it's safe to turn it back on securely. We are working hard to prevent future attacks of this nature."
Gunter Ollmann, chief technology officer at computer security firm IOActive, observes that as websites continue to embed content streams from third parties and other affiliates, "this type of hack can taint many of the more secure and popular sites on the Internet."
Starting last fall, U.S. financial institutions have been hit by three waves of massive denial-of-services attacks, shutting down their consumer websites for extended periods, despite heavy investments in security technology. An Islamic group claimed responsibility. Experts say that those outages may have helped cover large-scale hijacking of funds from online accounts.
"Now we're seeing our geopolitical adversaries moving on to wage a campaign against major U.S. media outlets," says Kellermann. "The U.S. military cannot protect private corporations from these types of attacks. So targeting media is a cultural vulnerability being exploited by the enemies of the U.S. The irony is that we believe in freedom of speech. Our enemies are showing they can control that."
Embedding software from partner vendors is a common practice for media websites. That innovation poses potential dangers for U.S. media companies, as it exposes a vast security weakness intrinsic to the loose-knit trust relationships on which online promotions and advertising has been built.
Third-party partnerships to promote content and direct advertising to specific audiences support the multibillion-dollar online advertising industry. This Internet-enabled collaborative effort to match your Web-surfing habits to things you might buy is wide open to the spreading of malicious coding, experts say.
"From a hacker's perspective, this represents a (form of) soft attack for compromising high value and prestige websites — and we can expect them to be targeted with increased vigor over the next few years," Ollmann said.
The SEA clearly took pains to analyze the supply chain partners of the media giants. And with a bit more digging, anyone can discover which of the thousands of smaller ad networks and third-party affiliates, such as Outbrain, are looped in.
"You can go through and see which are the most vulnerable and which ones have the highest presence on the most news media sites," says Darien Kindlund, manager of threat intelligence at network security firm FireEye. "If I were a large media organization, I'd want to review all of the trust relationships I have with ad partners and make sure none of them are vulnerable in the same way as Outbrain."
SEATTLE — Middle Eastern hackers infiltrated a popular Internet news delivery service, giving them possible access to some of the largest U.S. news sites on Thursday.
An online group called The Syrian Electronic Army, representing supporters of Syrian President Bashar al-Assad, hacked the Internet service of Outbrain, a content recommendation company whose software "widget" is embedded in the websites of several major publications.
As a result, the websites operated by three Outbrain clients — The Washington Post, Time and CNN — contained messages that referred to the SEA.
USA TODAY is also an Outbrain client, but its site was not affected.
That development — combined with the hack of the Twitter accounts of several New York Post reporters on Tuesday and the website outage of The New York Times on Wednesday — is being viewed by some security experts as evidence that major U.S. news outlets have now emerged as prime targets for nation-state adversaries of the U.S.
The New York Times attributed its outage to a server problem.
"It's starting to look like there's an organized campaign targeting major U.S. media outlets," says Tom Kellermann, Trend Micro's vice president of cybersecurity. "It's not clear whether their end game is to target reporters' sources or to use the news sites as watering holes (to infect patrons.)"
In a statement, Emilio Garcia-Ruiz, managing editor of The Washington Post, confirmed that "some articles on our website were re-directed to the Syrian Electronic Army's site for a period of about 30 minutes" Thursday morning.
Garcia-Ruiz pointed out a tweet by SEA that claimed it used Outbrain as a vehicle for the attack. "We have taken defensive measures and removed the offending module," Garcia-Ruiz wrote. "At this time, we believe there are no other issues affecting the site."
A few days ago, Post newsroom employees were targets of a phishing attack that was allegedly by the Syrian Electronic Army, Garcia-Ruiz said. "The attack resulted in one staff writer's personal account being used to send out a Syrian Electronic Army message," he said.
CNN also confirmed Thursday that an Outbrain headline widget used by its international website, CNNi.com, ran headlines referring to SEA. The widget was subsequently removed. Its main website, CNN.com, was not affected, the company said.
"The security of a vendor plug-in that appeared on CNNi.com was briefly compromised today. The issue was quickly identified and (the) plug-in disabled," said CNN spokesman Matt Dornic.
In a statement, Time Inc. said "content provided by Outbrain that appeared on some of our sites was impacted by the hacking activity at Outbrain. We're no longer running that content."
Outbrain issued this statement: "We are aware that Outbrain was hacked earlier today. In an effort to protect our publishers and readers, we took down service as soon as it was apparent. The breach now seems to be secured and the hackers blocked out, but we are keeping the service down for a little longer until we can be sure it's safe to turn it back on securely. We are working hard to prevent future attacks of this nature."
Gunter Ollmann, chief technology officer at computer security firm IOActive, observes that as websites continue to embed content streams from third parties and other affiliates, "this type of hack can taint many of the more secure and popular sites on the Internet."
Starting last fall, U.S. financial institutions have been hit by three waves of massive denial-of-services attacks, shutting down their consumer websites for extended periods, despite heavy investments in security technology. An Islamic group claimed responsibility. Experts say that those outages may have helped cover large-scale hijacking of funds from online accounts.
"Now we're seeing our geopolitical adversaries moving on to wage a campaign against major U.S. media outlets," says Kellermann. "The U.S. military cannot protect private corporations from these types of attacks. So targeting media is a cultural vulnerability being exploited by the enemies of the U.S. The irony is that we believe in freedom of speech. Our enemies are showing they can control that."
Embedding software from partner vendors is a common practice for media websites. That innovation poses potential dangers for U.S. media companies, as it exposes a vast security weakness intrinsic to the loose-knit trust relationships on which online promotions and advertising has been built.
Third-party partnerships to promote content and direct advertising to specific audiences support the multibillion-dollar online advertising industry. This Internet-enabled collaborative effort to match your Web-surfing habits to things you might buy is wide open to the spreading of malicious coding, experts say.
"From a hacker's perspective, this represents a (form of) soft attack for compromising high value and prestige websites — and we can expect them to be targeted with increased vigor over the next few years," Ollmann said.
The SEA clearly took pains to analyze the supply chain partners of the media giants. And with a bit more digging, anyone can discover which of the thousands of smaller ad networks and third-party affiliates, such as Outbrain, are looped in.
"You can go through and see which are the most vulnerable and which ones have the highest presence on the most news media sites," says Darien Kindlund, manager of threat intelligence at network security firm FireEye. "If I were a large media organization, I'd want to review all of the trust relationships I have with ad partners and make sure none of them are vulnerable in the same way as Outbrain."
Washington Post Site Hacked by Syrian Group
Story originally appeared on New York Times.
Visitors to some articles on The Washington Post’s Web site Thursday morning were being redirected to the site of the Syrian Electronic Army, a hacker collective that supports the Syrian president, Bashar al-Assad.
The Post said on Thursday afternoon the episode was over and under control. “We have taken defensive measures and removed the offending module,” Emilio Garcia-Ruiz, The Post’s managing editor, wrote in an editor’s note on the site. “At this time, we believe there are no other issues affecting the Post site.”
The paper reported that the Syrian collective had said in a Twitter post that it had also attacked Time magazine and CNN, suggesting it had tried to carry out a coordinated attack on American news outlets.
Mr. Assad has faced intense media scrutiny for the government’s role in the long, bloody civil war taking place in Syria, but the collective did not make it clear whether it targeted The Post because it was displeased with its coverage. An article in the newspaper indicated that it was mostly foreign coverage affected by the breach.
In the editor’s note, Mr. Garcia-Ruiz said the Syrian Electronic Army had said in a tweet that it gained access to the site by hacking one of its business partners called Outbrain. A third-party content recommendation service, Outbrain works by embedding a widget on Web sites filled with sponsored links. Time and CNN also use the service.
A spokeswoman for Time, Jane Lehman, said the company’s sites were not hacked and the security was not compromised. “The content on some of our sites provided by Outbrain was impacted by the hacking activity at Outbrain,” she said.
CNN also said its sites were not directly penetrated. “The security of a vendor plug-in that appeared on CNNi.com was briefly compromised today,” it said in a statement. “The issue was quickly identified and plug-in disabled.”
According to The Atlantic Wire, which also employs Outbrain, the recommendation service sent a statement to its business partners saying in part: “This morning, the Outbrain service was attacked, and as a result, we have taken the service down temporarily as a precautionary measure.”
Mr. Garcia-Ruiz’s post provided this background on the security breach: “A few days ago, The Syrian Electronic Army, allegedly, subjected Post newsroom employees to a sophisticated phishing attack to gain password information. The attack resulted in one staff writer’s personal Twitter account being used to send out a Syrian Electronic Army message. For 30 minutes this morning, some articles on our Web site were redirected to the Syrian Electronic Army’s site. The Syrian Electronic Army, in a tweet, claimed they gained access to elements of our site by hacking one of our business partners, Outbrain.”
On Wednesday, The New York Times’s site was down for several hours. The Times cited technical problems and said there was no indication the site was hacked.
Visitors to some articles on The Washington Post’s Web site Thursday morning were being redirected to the site of the Syrian Electronic Army, a hacker collective that supports the Syrian president, Bashar al-Assad.
The Post said on Thursday afternoon the episode was over and under control. “We have taken defensive measures and removed the offending module,” Emilio Garcia-Ruiz, The Post’s managing editor, wrote in an editor’s note on the site. “At this time, we believe there are no other issues affecting the Post site.”
The paper reported that the Syrian collective had said in a Twitter post that it had also attacked Time magazine and CNN, suggesting it had tried to carry out a coordinated attack on American news outlets.
Mr. Assad has faced intense media scrutiny for the government’s role in the long, bloody civil war taking place in Syria, but the collective did not make it clear whether it targeted The Post because it was displeased with its coverage. An article in the newspaper indicated that it was mostly foreign coverage affected by the breach.
In the editor’s note, Mr. Garcia-Ruiz said the Syrian Electronic Army had said in a tweet that it gained access to the site by hacking one of its business partners called Outbrain. A third-party content recommendation service, Outbrain works by embedding a widget on Web sites filled with sponsored links. Time and CNN also use the service.
A spokeswoman for Time, Jane Lehman, said the company’s sites were not hacked and the security was not compromised. “The content on some of our sites provided by Outbrain was impacted by the hacking activity at Outbrain,” she said.
CNN also said its sites were not directly penetrated. “The security of a vendor plug-in that appeared on CNNi.com was briefly compromised today,” it said in a statement. “The issue was quickly identified and plug-in disabled.”
According to The Atlantic Wire, which also employs Outbrain, the recommendation service sent a statement to its business partners saying in part: “This morning, the Outbrain service was attacked, and as a result, we have taken the service down temporarily as a precautionary measure.”
Mr. Garcia-Ruiz’s post provided this background on the security breach: “A few days ago, The Syrian Electronic Army, allegedly, subjected Post newsroom employees to a sophisticated phishing attack to gain password information. The attack resulted in one staff writer’s personal Twitter account being used to send out a Syrian Electronic Army message. For 30 minutes this morning, some articles on our Web site were redirected to the Syrian Electronic Army’s site. The Syrian Electronic Army, in a tweet, claimed they gained access to elements of our site by hacking one of our business partners, Outbrain.”
On Wednesday, The New York Times’s site was down for several hours. The Times cited technical problems and said there was no indication the site was hacked.
Monday, August 05, 2013
Japan sends talking robot into space as part of program to help lonely people
Story originally appeared on PC World.
Kirobo, a talking robot that also recognizes faces, was launched Sunday on a cargo transfer vehicle and will reach the International Space Station in six days.
The robot is part of a program that aims to provide companionship using such devices to people living alone including the elderly.
Kirobo boarded the Kounotori 4 cargo transfer vehicle launched from the Japan Aerospace Exploration Agency's Tanegashima Space Center atop an H-IIB launch vehicle on Sunday morning, the Kibo Robot Project, which counts Toyota and Robo Garage as two of the project partners, said on its website.
The black and white robot, with red boots, is a little over 13-inches (34 centimeters) tall, and combines speech, voice and face recognition and other communications functions. Its first task will be to communicate with Koichi Wakata, a Japanese astronaut who joins the robot in November, according to reports. Backup crew member Mirata, who stays back in Japan, has similar capabilities.
"The Kibo robot has a special mission: To help solve the problems brought about by a society that has become more individualized and less communicative," the project wrote on its website.
Japanese-speaking Kirobo will spend 18 months on the ISS, talking to Wakata.
The project earlier asked people to suggest names for both the robots, and got 2,452 entries from 1,226 people.
Kirobo, a talking robot that also recognizes faces, was launched Sunday on a cargo transfer vehicle and will reach the International Space Station in six days.
The robot is part of a program that aims to provide companionship using such devices to people living alone including the elderly.
Kirobo boarded the Kounotori 4 cargo transfer vehicle launched from the Japan Aerospace Exploration Agency's Tanegashima Space Center atop an H-IIB launch vehicle on Sunday morning, the Kibo Robot Project, which counts Toyota and Robo Garage as two of the project partners, said on its website.
The black and white robot, with red boots, is a little over 13-inches (34 centimeters) tall, and combines speech, voice and face recognition and other communications functions. Its first task will be to communicate with Koichi Wakata, a Japanese astronaut who joins the robot in November, according to reports. Backup crew member Mirata, who stays back in Japan, has similar capabilities.
"The Kibo robot has a special mission: To help solve the problems brought about by a society that has become more individualized and less communicative," the project wrote on its website.
Japanese-speaking Kirobo will spend 18 months on the ISS, talking to Wakata.
The project earlier asked people to suggest names for both the robots, and got 2,452 entries from 1,226 people.
Wednesday, July 24, 2013
Alibaba Building China Delivery Net in Shift to Consumers
Story Originally Appeared in Bloomberg
In her apartment in Tibet, Lu Ping sits back and clicks an order for about 1,000 yuan ($161) of cosmetics. At the other end of China, online retailer Jian Weiqing receives the order in his office near a Shanghai airport and prepares Lu’s shipment, which will arrive in the distant province within four days.
Standing between the two is Alibaba Group Holding Ltd., the Chinese Internet juggernaut heading toward what analysts expect to be the biggest initial public offering since Facebook Inc. (FB)
After starting as a business-to-business marketplace where companies trade anything from shoelaces to steel, Alibaba has morphed into a far more consumer-focused operation. The company now gets the bulk of its sales and most of its growth selling to individuals across China, from villagers in places without supermarkets and malls to sophisticated consumers in Beijing and Shanghai seeking to avoid pollution and traffic.
“Foreign brands are just not that common here,” said Lu, who owns a hostel in Lhasa, the provincial capital of Tibet. “Online, I can get almost anything I want. And it’s so cheap” -- at least 20 percent less than department stores, she says.
Alibaba, which takes a cut of goods sold and charges retailers such as Jian to run ads on the site, says it generates about 70 percent of package deliveries in China. Consumers bought at least 1 trillion yuan in goods via Alibaba last year, a figure equivalent to almost 2 percent of China’s GDP.
Retail Engine
As Alibaba becomes a vital retail engine for China, founder Jack Ma understands he can’t keep growing without adequate distribution of the goods sold on his sites. So his next big initiative is the creation of a delivery network that can reach virtually any place in China within 24 hours.
To make that happen, Alibaba joined with five delivery companies and other partners to found Cainiao Internet Technology Ltd. Alibaba has said Cainiao will invest as much as 100 billion yuan within eight years to develop and manage a logistics network.
Though Cainiao has been vague about its plans, Cao Lei, a director at the China E-Business Research Center in Hangzhou, speculates that it will tap Alibaba’s data-crunching capabilities to help distribution companies optimize storage and delivery schedules and ensure their trucks take the cheapest and fastest routes.
“The smaller delivery companies have to join forces with Alibaba, because if they don’t they will be eliminated,” Cao said.
FedEx Rivals
Ma’s goal is to help Chinese delivery companies gain the kind of scale and efficiency enjoyed by United Parcel Service Inc. (UPS) and FedEx Corp. (FDX) in the U.S. In China, the American delivery giants are smaller than many domestic rivals because they mostly serve multinationals and charge higher prices.
“FedEx and UPS are very small players in China and cater to a different group of customers,” said Richard Tai, an analyst at consulting firm China Research & Intelligence in Shanghai.
Since Ma founded the company in his Hangzhou apartment in 1999 with only two dozen items for sale, he has expanded to 24,000 employees and marketplaces selling millions of products. The company said yesterday it was collaborating with Wasu Media Holding Co. on a set-top box connecting TVs to the Internet.
Alibaba’s earnings more than tripled to $669 million in the March quarter on sales that surged 71 percent to $1.4 billion. The company posted more revenue in the period than Yahoo! Inc. (YHOO), which owns a 24 percent stake in Alibaba, and its profit margin is wider than Apple Inc.’s.
$120 Billion IPO
Ma, whose fortune is estimated at $3.4 billion by the Bloomberg Billionaires Index, last year said he was considering an initial public offering. If it keeps its momentum, Alibaba’s operating profit could reach $4.3 billion this year, and $7.1 billion in 2014, according to Evercore Group LLC. An IPO could value Alibaba at $120 billion, Evercore predicts, which would make it the biggest tech IPO in history, eclipsing last year’s $104 billion pricetag for Facebook Inc.
Alibaba has no timetable for an IPO and hasn’t hired bankers, according to John Spelich, a spokesman for Alibaba in Hong Kong.
The company itself doesn’t sell merchandise; It provides a marketplace for online retailers that sell more than $3 billion in goods a day on its sites. The two most popular are Taobao Marketplace, which links individual buyers and sellers, and Tmall.com, which connects consumers to retail brands such as Microsoft Corp. (MSFT), Procter & Gamble Co. (PG), and Japanese clothing chain Uniqlo.
Millionaire E-Tailers
“Malls and department stores no longer attract me,” said Wang Lin, an English teacher in southwestern Sichuan province. “I just lie in bed comfortably, and I can shop around the country and even the world.”
Many Taobao store owners have become millionaires. Jian, who runs Chen Chen Cosmetic, the supplier of Lu Ping’s face creams, is one. The 38-year-old has expanded his online business from a one-man operation to a staff of nearly 50 in the past eight years. Last year, he sold more than 30 million yuan of beauty products.
“Jack Ma is really something,” said Jian. “Without him, my company wouldn’t exist.”
In her apartment in Tibet, Lu Ping sits back and clicks an order for about 1,000 yuan ($161) of cosmetics. At the other end of China, online retailer Jian Weiqing receives the order in his office near a Shanghai airport and prepares Lu’s shipment, which will arrive in the distant province within four days.
Standing between the two is Alibaba Group Holding Ltd., the Chinese Internet juggernaut heading toward what analysts expect to be the biggest initial public offering since Facebook Inc. (FB)
After starting as a business-to-business marketplace where companies trade anything from shoelaces to steel, Alibaba has morphed into a far more consumer-focused operation. The company now gets the bulk of its sales and most of its growth selling to individuals across China, from villagers in places without supermarkets and malls to sophisticated consumers in Beijing and Shanghai seeking to avoid pollution and traffic.
“Foreign brands are just not that common here,” said Lu, who owns a hostel in Lhasa, the provincial capital of Tibet. “Online, I can get almost anything I want. And it’s so cheap” -- at least 20 percent less than department stores, she says.
Alibaba, which takes a cut of goods sold and charges retailers such as Jian to run ads on the site, says it generates about 70 percent of package deliveries in China. Consumers bought at least 1 trillion yuan in goods via Alibaba last year, a figure equivalent to almost 2 percent of China’s GDP.
Retail Engine
As Alibaba becomes a vital retail engine for China, founder Jack Ma understands he can’t keep growing without adequate distribution of the goods sold on his sites. So his next big initiative is the creation of a delivery network that can reach virtually any place in China within 24 hours.
To make that happen, Alibaba joined with five delivery companies and other partners to found Cainiao Internet Technology Ltd. Alibaba has said Cainiao will invest as much as 100 billion yuan within eight years to develop and manage a logistics network.
Though Cainiao has been vague about its plans, Cao Lei, a director at the China E-Business Research Center in Hangzhou, speculates that it will tap Alibaba’s data-crunching capabilities to help distribution companies optimize storage and delivery schedules and ensure their trucks take the cheapest and fastest routes.
“The smaller delivery companies have to join forces with Alibaba, because if they don’t they will be eliminated,” Cao said.
FedEx Rivals
Ma’s goal is to help Chinese delivery companies gain the kind of scale and efficiency enjoyed by United Parcel Service Inc. (UPS) and FedEx Corp. (FDX) in the U.S. In China, the American delivery giants are smaller than many domestic rivals because they mostly serve multinationals and charge higher prices.
“FedEx and UPS are very small players in China and cater to a different group of customers,” said Richard Tai, an analyst at consulting firm China Research & Intelligence in Shanghai.
Since Ma founded the company in his Hangzhou apartment in 1999 with only two dozen items for sale, he has expanded to 24,000 employees and marketplaces selling millions of products. The company said yesterday it was collaborating with Wasu Media Holding Co. on a set-top box connecting TVs to the Internet.
Alibaba’s earnings more than tripled to $669 million in the March quarter on sales that surged 71 percent to $1.4 billion. The company posted more revenue in the period than Yahoo! Inc. (YHOO), which owns a 24 percent stake in Alibaba, and its profit margin is wider than Apple Inc.’s.
$120 Billion IPO
Ma, whose fortune is estimated at $3.4 billion by the Bloomberg Billionaires Index, last year said he was considering an initial public offering. If it keeps its momentum, Alibaba’s operating profit could reach $4.3 billion this year, and $7.1 billion in 2014, according to Evercore Group LLC. An IPO could value Alibaba at $120 billion, Evercore predicts, which would make it the biggest tech IPO in history, eclipsing last year’s $104 billion pricetag for Facebook Inc.
Alibaba has no timetable for an IPO and hasn’t hired bankers, according to John Spelich, a spokesman for Alibaba in Hong Kong.
The company itself doesn’t sell merchandise; It provides a marketplace for online retailers that sell more than $3 billion in goods a day on its sites. The two most popular are Taobao Marketplace, which links individual buyers and sellers, and Tmall.com, which connects consumers to retail brands such as Microsoft Corp. (MSFT), Procter & Gamble Co. (PG), and Japanese clothing chain Uniqlo.
Millionaire E-Tailers
“Malls and department stores no longer attract me,” said Wang Lin, an English teacher in southwestern Sichuan province. “I just lie in bed comfortably, and I can shop around the country and even the world.”
Many Taobao store owners have become millionaires. Jian, who runs Chen Chen Cosmetic, the supplier of Lu Ping’s face creams, is one. The 38-year-old has expanded his online business from a one-man operation to a staff of nearly 50 in the past eight years. Last year, he sold more than 30 million yuan of beauty products.
“Jack Ma is really something,” said Jian. “Without him, my company wouldn’t exist.”
Ask Matt: Is Google a tech or ad company?
Story Originally Appeared in USA TODAY
USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.
Q: Is Google an advertising company or a tech company?
A: It can be difficult sometimes to decide what label to put on a company. That's why investors need to follow the money.
While Google might get attention for some of its technology gadgets, including Google Glass, the company is by far an advertising company first and foremost. Google gets its money by tracking its users and using the data it collects to sell targeted ads to companies.
The numbers tell the story. Last year, Google hauled in total revenue of $50 billion. Of that, a majority, 60%, came from selling ads for the desktop search product, says researcher Trefis.com. After Google's desktop search business, the next important was mobile search advertising, at 13%. That's not to mention the ad-driven YouTube business, at 8% of revenue.
The rest of Google's business drops off pretty quickly after the core advertising business. The next largest is Google's interest in Motorola cellular, which accounts for 11.8% of its business.
Analysts expect Google, which is an ad company today, to remain one. By 2015, Trefis estimates that 49% of the company's revenue will be from PC search ads, and 23% from mobile.
USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com.
Q: Is Google an advertising company or a tech company?
A: It can be difficult sometimes to decide what label to put on a company. That's why investors need to follow the money.
While Google might get attention for some of its technology gadgets, including Google Glass, the company is by far an advertising company first and foremost. Google gets its money by tracking its users and using the data it collects to sell targeted ads to companies.
The numbers tell the story. Last year, Google hauled in total revenue of $50 billion. Of that, a majority, 60%, came from selling ads for the desktop search product, says researcher Trefis.com. After Google's desktop search business, the next important was mobile search advertising, at 13%. That's not to mention the ad-driven YouTube business, at 8% of revenue.
The rest of Google's business drops off pretty quickly after the core advertising business. The next largest is Google's interest in Motorola cellular, which accounts for 11.8% of its business.
Analysts expect Google, which is an ad company today, to remain one. By 2015, Trefis estimates that 49% of the company's revenue will be from PC search ads, and 23% from mobile.
Monday, July 22, 2013
Yahoo nears Microsoft's '08 buyout bid price
Story Originally Appeared in USA TODAY
Microsoft's bid for Yahoo in 2008 isn't looking so crazy now.
Shares of Yahoo, the struggling Internet portal trying to regain relevance in an era of mobile communications and Internet search, have soared almost 50% this year to a stock price above $29. While the stock's runup looks impressive and is drawing praise for CEO Marissa Mayer's first year on the job, it is only getting Yahoo shares close to the $31 a share that Microsoft bid for the company in 2008 -- an offer that was rejected by Yahoo at the time as being too low.
So finally crossing that $31-a-share level will hardly be reason for Yahoo shareholders to celebrate.
"If there's this notion that somehow (the stock's recent rise) validates Yahoo's decision making over the past five to five-and-a-half years, emphatically say, it does not," says Scott Kessler, analyst at S&P Capital IQ.
Three reasons why:
• Yahoo's value is well below Microsoft's bid. Microsoft's $31 a share bid was actually worth $44.6 billion, which is nearly 40% higher than Yahoo's current $32.1 billion market value. Why the discrepancy? Yahoo has reduced its number of shares outstanding by selling part of its ownership of Chinese Web site Alibaba, says Martin Pyykkonen, analyst at Wedge Partners.
• Most of Yahoo's value has nothing to do with its business. Roughly 75% of Yahoo's market value is linked to the company's ownership stakes of Alibaba and Yahoo Japan, Pyykkonen says. The stock's moves are most closely linked to the fact Yahoo may be able to raise money from its stakes in those businesses, not because of its core business, he says.
• Investor pain in the meantime. Investors know money received now is worth more than dollars gained in the future. Even if Yahoo's market value were to soar 40% to match the $44.6 billion Microsoft bid, that would have been more than five years of painful waiting for investors, Kessler says. Meanwhile, Yahoo shares are essentially flat from the date of the buyout offer, while the Standard & Poor's 500 is up more than 25%.
"It's almost a different era for (Yahoo) versus 2008 so I don't think it can be said that the Board did the right thing by rejecting (Microsoft) at that time," Pyykkonen says. "Just because the stock is back up five (plus) years later doesn't vindicate that decision."
Microsoft's bid for Yahoo in 2008 isn't looking so crazy now.
Shares of Yahoo, the struggling Internet portal trying to regain relevance in an era of mobile communications and Internet search, have soared almost 50% this year to a stock price above $29. While the stock's runup looks impressive and is drawing praise for CEO Marissa Mayer's first year on the job, it is only getting Yahoo shares close to the $31 a share that Microsoft bid for the company in 2008 -- an offer that was rejected by Yahoo at the time as being too low.
So finally crossing that $31-a-share level will hardly be reason for Yahoo shareholders to celebrate.
"If there's this notion that somehow (the stock's recent rise) validates Yahoo's decision making over the past five to five-and-a-half years, emphatically say, it does not," says Scott Kessler, analyst at S&P Capital IQ.
Three reasons why:
• Yahoo's value is well below Microsoft's bid. Microsoft's $31 a share bid was actually worth $44.6 billion, which is nearly 40% higher than Yahoo's current $32.1 billion market value. Why the discrepancy? Yahoo has reduced its number of shares outstanding by selling part of its ownership of Chinese Web site Alibaba, says Martin Pyykkonen, analyst at Wedge Partners.
• Most of Yahoo's value has nothing to do with its business. Roughly 75% of Yahoo's market value is linked to the company's ownership stakes of Alibaba and Yahoo Japan, Pyykkonen says. The stock's moves are most closely linked to the fact Yahoo may be able to raise money from its stakes in those businesses, not because of its core business, he says.
• Investor pain in the meantime. Investors know money received now is worth more than dollars gained in the future. Even if Yahoo's market value were to soar 40% to match the $44.6 billion Microsoft bid, that would have been more than five years of painful waiting for investors, Kessler says. Meanwhile, Yahoo shares are essentially flat from the date of the buyout offer, while the Standard & Poor's 500 is up more than 25%.
"It's almost a different era for (Yahoo) versus 2008 so I don't think it can be said that the Board did the right thing by rejecting (Microsoft) at that time," Pyykkonen says. "Just because the stock is back up five (plus) years later doesn't vindicate that decision."
Friday, July 19, 2013
58 Analysis: Why investors still believe in Microsoft
Story Originally Appeared in USA TODAY
SEATTLE — With global PC sales in an accelerating slump, Microsoft on Thursday missed Wall Street's earning expectations for the software giant's fiscal fourth quarter.
Microsoft reported net income of $4.97 billion, or 59 cents per share, which contrasts a loss of $492 million in the same period a year ago, when the company wrote down $6 billion — roughly the entire value of its ill-fated 2007 purchase of digital advertising company aQuantive.
For the reporting period ending June 30, 2013, the company took a $900 million write-down for slashing the price of its Surface RT tablet.
Excluding the Surface charge, earnings were 66 cents per share, short of the 75 cents per share expected by analysts polled by FactSet. Revenue grew 10% to $19.9 billion, but that was also below the $20.7 million expected.
Shares fell more than 6% in after-hours trading to $33.03. They closed in regular trading at $35.44, down 30 cents.
Tech industry analysts say the jury is still out with respect to major moves triggered by CEO Steve Ballmer in recent months. In addition to discounting Surface, the company unveiled Xbox One and implemented a massive management restructuring.
Many of the big institutional investors who own large blocks of Microsoft shares are likely to stand pat, on the hopes that the release of Windows 8.1, the first major upgrade of Windows 8, will begin to undergird Ballmer's struggle to reposition Microsoft as a devices and services company.
"Microsoft is far from on death's door," says Gartner tech industry analyst David Cearley. "They are aggressively addressing a wide range of market challenges. Yes, they still have significant execution challenges, but, going forward, they remain a strong player in the market."
A top Microsoft European executive, Janet Gibbons, director of the company's U.K. and Ireland partner programs, told The Channel tech blog that Windows 8 hardware manufacturers are 18 months behind where Microsoft would like them to be.
Microsoft may be counting on a boost from the arrival of Intel's new Haswell chips.
"There could be a real difference as PCs and notebooks based on Intel's Haswell CPUs make their way further into the market," says Charles King, principal analyst at tech consultancy Pund-IT. "That silicon is made to support key features Windows 8 depends on, such as touch enablement and enhanced battery life, plus new voice and gesture-recognition capabilities."
Walls Street will keep a keen eye in the months ahead to gauge how well Windows 8.1 addresses concerns, and even outright resistance to the shift to a touch plus mouse-and-keyboard interface.
"If the redesign is successful, I expect we'll see a significant boost in new PC and
notebook sales," says King. "If it isn't, no amount of executive shuffling will be able
to save it."
Al Hilwa, application development software analyst at IDC, says Ballmer's reshuffling of the company's senior executives to make them more accountable for engineering decisions shows "the right priorities, but it will take time to translate organizational shift to products and services."
Hilwa is watching for tangible progress in the company's server and tools business, which continues to perform strongly. "The investments they are making in cloud data centers and the services they are rolling out today are very well targeted and extremely competitive," says Hilwa. "We have to wait and see how successful they are at blending these services in enterprise agreements for their large customers."
The biggest potential pitfall, moving forward? "Not moving fast enough to roll out new products," says Hilwa. "The biggest issue they have to tackle on the platform side is to what degree phone and tablet have to be converged for users and developers. Today this is a fragmented play."
Pund-IT's King says uninspired execution could yet trip up the company. "Microsoft's business and culture are so deeply wedded to a failing world-view that it is impossible for them to clearly perceive and execute a successful strategy," says King. "The innovations of Windows 8.1, which should have been incorporated in the original version, and the musical chairs-style reorg are both proof of that."
SEATTLE — With global PC sales in an accelerating slump, Microsoft on Thursday missed Wall Street's earning expectations for the software giant's fiscal fourth quarter.
Microsoft reported net income of $4.97 billion, or 59 cents per share, which contrasts a loss of $492 million in the same period a year ago, when the company wrote down $6 billion — roughly the entire value of its ill-fated 2007 purchase of digital advertising company aQuantive.
For the reporting period ending June 30, 2013, the company took a $900 million write-down for slashing the price of its Surface RT tablet.
Excluding the Surface charge, earnings were 66 cents per share, short of the 75 cents per share expected by analysts polled by FactSet. Revenue grew 10% to $19.9 billion, but that was also below the $20.7 million expected.
Shares fell more than 6% in after-hours trading to $33.03. They closed in regular trading at $35.44, down 30 cents.
Tech industry analysts say the jury is still out with respect to major moves triggered by CEO Steve Ballmer in recent months. In addition to discounting Surface, the company unveiled Xbox One and implemented a massive management restructuring.
Many of the big institutional investors who own large blocks of Microsoft shares are likely to stand pat, on the hopes that the release of Windows 8.1, the first major upgrade of Windows 8, will begin to undergird Ballmer's struggle to reposition Microsoft as a devices and services company.
"Microsoft is far from on death's door," says Gartner tech industry analyst David Cearley. "They are aggressively addressing a wide range of market challenges. Yes, they still have significant execution challenges, but, going forward, they remain a strong player in the market."
A top Microsoft European executive, Janet Gibbons, director of the company's U.K. and Ireland partner programs, told The Channel tech blog that Windows 8 hardware manufacturers are 18 months behind where Microsoft would like them to be.
Microsoft may be counting on a boost from the arrival of Intel's new Haswell chips.
"There could be a real difference as PCs and notebooks based on Intel's Haswell CPUs make their way further into the market," says Charles King, principal analyst at tech consultancy Pund-IT. "That silicon is made to support key features Windows 8 depends on, such as touch enablement and enhanced battery life, plus new voice and gesture-recognition capabilities."
Walls Street will keep a keen eye in the months ahead to gauge how well Windows 8.1 addresses concerns, and even outright resistance to the shift to a touch plus mouse-and-keyboard interface.
"If the redesign is successful, I expect we'll see a significant boost in new PC and
notebook sales," says King. "If it isn't, no amount of executive shuffling will be able
to save it."
Al Hilwa, application development software analyst at IDC, says Ballmer's reshuffling of the company's senior executives to make them more accountable for engineering decisions shows "the right priorities, but it will take time to translate organizational shift to products and services."
Hilwa is watching for tangible progress in the company's server and tools business, which continues to perform strongly. "The investments they are making in cloud data centers and the services they are rolling out today are very well targeted and extremely competitive," says Hilwa. "We have to wait and see how successful they are at blending these services in enterprise agreements for their large customers."
The biggest potential pitfall, moving forward? "Not moving fast enough to roll out new products," says Hilwa. "The biggest issue they have to tackle on the platform side is to what degree phone and tablet have to be converged for users and developers. Today this is a fragmented play."
Pund-IT's King says uninspired execution could yet trip up the company. "Microsoft's business and culture are so deeply wedded to a failing world-view that it is impossible for them to clearly perceive and execute a successful strategy," says King. "The innovations of Windows 8.1, which should have been incorporated in the original version, and the musical chairs-style reorg are both proof of that."
Google earnings clipped in mobile headwinds
Story Originally Appeared in USA TODAY
SAN FRANCISCO -- With Google's business under pressure from mobile advertising prices, CEO Larry Page talked up the potential for none other than the Internet giant's mobile businesses.
Google on Thursday missed Wall Street's expectations for both profit and revenue, sending shares 5% lower in after hours. Concerns continue about so-called cost-per-click prices that advertisers pay Google for Internet-search advertising.
That didn't stop the soft-spoken Page, who in May disclosed vocal chord paralysis issues, from touting the promise of Google's mobile strategy and teasing interest in a coming next-generation of mobile products.
"There's so much excitement around new devices today, and the potential for innovation is tremendous," Page said on a conference call with analysts, investors and members of the media. "I know you are all eagerly anticipating what Motorola is launching soon."
Google purchased Motorola Mobility in a $12.4 billion deal last year and has captured the attention of Silicon Valley watchers awaiting the debut of its Moto X phone. A rare U.S.-made device, Google's Moto X aims to compete with Apple's iPhone and Samsung's Galaxy lineup.
Google's average cost-per-click, which includes clicks related to ads served on Google sites and the sites of its network members, decreased about 6% in the quarter compared with a year ago. Analysts had predicted prices would drop about 3% in the period.
Enormous popularity for mobile computing devices has radically shifted the Internet business landscape in recent years. Companies such as Facebook, Microsoft and Zynga have sounded the alarm in shifting to a mobile focus to meet the rising demands from consumers. Microsoft has mostly missed the mobile bandwagon with low uptake for products running its operating system, while Zynga's CEO has stepped aside amid revenue declines.
"It's hard to fault them (Google), because everyone is still searching for their mobile business model. I think we've figured out that merely transplanting the desktop model to the mobile business is not working," said independent analyst Jonathan Yarmis.
Google reported second-quarter net income of $3.23 billion compared with $2.79 billion a year ago. Revenue in the quarter rose 19% to $14.1 billion.
Analysts were expecting Google to report net income of $3.6 billion on $14.41 billion in revenue for the quarter, according to the survey of estimates from Thomson Reuters.
SAN FRANCISCO -- With Google's business under pressure from mobile advertising prices, CEO Larry Page talked up the potential for none other than the Internet giant's mobile businesses.
Google on Thursday missed Wall Street's expectations for both profit and revenue, sending shares 5% lower in after hours. Concerns continue about so-called cost-per-click prices that advertisers pay Google for Internet-search advertising.
That didn't stop the soft-spoken Page, who in May disclosed vocal chord paralysis issues, from touting the promise of Google's mobile strategy and teasing interest in a coming next-generation of mobile products.
"There's so much excitement around new devices today, and the potential for innovation is tremendous," Page said on a conference call with analysts, investors and members of the media. "I know you are all eagerly anticipating what Motorola is launching soon."
Google purchased Motorola Mobility in a $12.4 billion deal last year and has captured the attention of Silicon Valley watchers awaiting the debut of its Moto X phone. A rare U.S.-made device, Google's Moto X aims to compete with Apple's iPhone and Samsung's Galaxy lineup.
Google's average cost-per-click, which includes clicks related to ads served on Google sites and the sites of its network members, decreased about 6% in the quarter compared with a year ago. Analysts had predicted prices would drop about 3% in the period.
Enormous popularity for mobile computing devices has radically shifted the Internet business landscape in recent years. Companies such as Facebook, Microsoft and Zynga have sounded the alarm in shifting to a mobile focus to meet the rising demands from consumers. Microsoft has mostly missed the mobile bandwagon with low uptake for products running its operating system, while Zynga's CEO has stepped aside amid revenue declines.
"It's hard to fault them (Google), because everyone is still searching for their mobile business model. I think we've figured out that merely transplanting the desktop model to the mobile business is not working," said independent analyst Jonathan Yarmis.
Google reported second-quarter net income of $3.23 billion compared with $2.79 billion a year ago. Revenue in the quarter rose 19% to $14.1 billion.
Analysts were expecting Google to report net income of $3.6 billion on $14.41 billion in revenue for the quarter, according to the survey of estimates from Thomson Reuters.
Tuesday, July 16, 2013
Yahoo’s Mayer Impresses Investors More Than Advertisers
Originally Appeared in Bloomberg News
Yahoo! CEO Marissa Mayer speaks about the company's acquisition of Tumblr at a press conference in Times Square, New York, on May 20, 2013. Photographer: Mario Tama/Getty Images
Marissa Mayer, the Google Inc. (GOOG) executive brought in a year ago to restore Yahoo! Inc. (YHOO)’s lost luster, has revamped products, shaken up management and presided over a 75 percent rally in the stock.
Even so, Yahoo’s fifth chief executive officer in four years has struggled where it matters most: luring advertisers whose spending will put revenue back on a growth path.
While Yahoo’s shares have soared in the past year on optimism over Mayer’s turnaround plan and the value of its Asian assets, analysts are bracing for another quarter of stagnant sales when the company reports earnings today.
That’s because Mayer so far hasn’t convinced advertisers to spend more money to reach users of the largest U.S. Web portal. Marketers, who continue to shift online-ad budgets to rivals Google and Facebook Inc. (FB), say Mayer’s strategy of buying startups and lavishing perks on employees has ignored the needs of advertisers contributing the bulk of Yahoo’s sales.
“As they continue to acquire more products, how are they going to bring it together?” said Marla Kaplowitz, CEO of MEC North America, a media agency that has worked with Yahoo advertisers such as Visa Inc. (V) and Viacom Inc. (VIAB)’s Paramount Pictures. “Everyone is trying to figure out, how does it all come together and what do they truly stand for?”
Yahoo is projected to report sales, minus revenue passed on to partner sites, of $1.08 billion, in line with results from a year ago, according to the average of analysts’ estimates compiled by Bloomberg. First-quarter revenue was also little changed from a year earlier.
Share Rally
Sara Gorman, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment on advertiser spending.
Since Mayer’s first day as CEO on July 17, 2012, Yahoo has surged 75 percent, a better run than 93 percent of companies in the Standard & Poor’s 500 Index.
Yahoo’s stock has rallied more than it had during any of Mayer’s recent predecessors in their inaugural years. Carol Bartz presided over a 38 percent rise in 2009, her first year; shares fell 27 percent in Terry Semel’s first year, 2001; and co-founder Jerry Yang’s 2007 debut as CEO saw the stock slide 18 percent.
Still, most of Yahoo’s gains in the past year were driven by the appreciation of its stakes in Alibaba Group Holding Ltd. and Yahoo Japan Corp. (4689), according to Mark Mahaney, an analyst at RBC Capital Markets in San Francisco.
“The vast majority of the move in the stock is due to improved perception of the value of Yahoo’s stakes in Asia,” said Mahaney, who rates the shares outperform, the equivalent of a buy. Mayer “has been a small part of the rise,” he said.
Shopping Spree
After selling half its stake in Alibaba last year, Yahoo currently owns 23 percent of the Hangzhou, China-based online marketplace, which could hold an IPO in Hong Kong this year. Alibaba’s value probably doubled in the past year to about $80 billion, according to Brian Weiser, an analyst at Pivotal Research Group LLC.
Emboldened by proceeds of the Alibaba sale, Mayer embarked on a shopping spree that comprised at least 17 companies, including her $1.1 billion purchase of blogging platform Tumblr Inc., as well as mobile-application makers Stamped Inc. and Jybe Inc. and Summly Ltd., the news-reading application created by teenager Nick D’Aloisio. Earlier this month, Yahoo paid about $70 million for Xobni Corp., a maker of contact-management software, two people said at the time.
The acquisitions have created confusion for some marketers, who are still unclear about whether to shift their spending to ads on Tumblr and Yahoo’s other new properties, said Rob Norman, chief digital officer of media agency GroupM, which works with Yahoo advertisers including Volkswagen AG. GroupM is the media planning and buying division of WPP Plc, which also owns MEC.
Ad Strategy
“The acquisition strategy is either not especially clever or too clever for me,” Norman wrote in an e-mail. “I am negative on Tumblr, as I don’t believe it’s truly social.”
Mayer discussed a restructuring of the sales staff on a conference call with analysts in January. The initiative, led by Chief Operating Officer Henrique de Castro, will create sales teams that serve all clients in a particular industry, such as consumer-packaged goods, Mayer said.
“Customers felt it was sometimes confusing and cumbersome to do business with us,” Mayer said in January. “Looking at our sales organization through the eyes of our clients, we aligned into a solutions focused team that offers a single point of contact for each customer.”
Investor Doubt
While Mayer takes time to hone her pitch to advertisers, Google and Facebook are winning Yahoo’s business. Yahoo’s share of the $17.5 billion market for display ads, its core business, will slip to 7.9 percent in 2013 from 9.2 percent last year, estimates researcher EMarketer Inc. Google will climb almost three percentage points to 18 percent, while Facebook will increase about two points to 17 percent, EMarketer said.
Part of the advantage those two rivals have accumulated is in mobile ads, where Yahoo has yet to create a compelling offering to marketers, said Clark Fredricksen, vice president at New York-based EMarketer.
“Yahoo appears to have a ways to go before it can stand side by side with Google and Facebook in the mobile space,” Fredricksen said in an interview.
Skepticism of Mayer’s strategy is also reflected in the options market, where investors are betting that Yahoo shares are more likely to decline in the coming months. Puts protecting against a 10 percent drop in Yahoo shares cost 3.67 points more than calls betting on a 10 percent gain, according to one-month data compiled by Bloomberg.
“Increasingly, investors are going to want to see some top-line growth,” said Kevin Stadtler, president of Fort Worth, Texas-based Stadtler Capital Management LLC, who manages $16.3 million in assets, including Yahoo shares. “You’ve acquired a number of properties -- let’s see some revenue growth.”
Yahoo! CEO Marissa Mayer speaks about the company's acquisition of Tumblr at a press conference in Times Square, New York, on May 20, 2013. Photographer: Mario Tama/Getty Images
Marissa Mayer, the Google Inc. (GOOG) executive brought in a year ago to restore Yahoo! Inc. (YHOO)’s lost luster, has revamped products, shaken up management and presided over a 75 percent rally in the stock.
Even so, Yahoo’s fifth chief executive officer in four years has struggled where it matters most: luring advertisers whose spending will put revenue back on a growth path.
While Yahoo’s shares have soared in the past year on optimism over Mayer’s turnaround plan and the value of its Asian assets, analysts are bracing for another quarter of stagnant sales when the company reports earnings today.
That’s because Mayer so far hasn’t convinced advertisers to spend more money to reach users of the largest U.S. Web portal. Marketers, who continue to shift online-ad budgets to rivals Google and Facebook Inc. (FB), say Mayer’s strategy of buying startups and lavishing perks on employees has ignored the needs of advertisers contributing the bulk of Yahoo’s sales.
“As they continue to acquire more products, how are they going to bring it together?” said Marla Kaplowitz, CEO of MEC North America, a media agency that has worked with Yahoo advertisers such as Visa Inc. (V) and Viacom Inc. (VIAB)’s Paramount Pictures. “Everyone is trying to figure out, how does it all come together and what do they truly stand for?”
Yahoo is projected to report sales, minus revenue passed on to partner sites, of $1.08 billion, in line with results from a year ago, according to the average of analysts’ estimates compiled by Bloomberg. First-quarter revenue was also little changed from a year earlier.
Share Rally
Sara Gorman, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment on advertiser spending.
Since Mayer’s first day as CEO on July 17, 2012, Yahoo has surged 75 percent, a better run than 93 percent of companies in the Standard & Poor’s 500 Index.
Yahoo’s stock has rallied more than it had during any of Mayer’s recent predecessors in their inaugural years. Carol Bartz presided over a 38 percent rise in 2009, her first year; shares fell 27 percent in Terry Semel’s first year, 2001; and co-founder Jerry Yang’s 2007 debut as CEO saw the stock slide 18 percent.
Still, most of Yahoo’s gains in the past year were driven by the appreciation of its stakes in Alibaba Group Holding Ltd. and Yahoo Japan Corp. (4689), according to Mark Mahaney, an analyst at RBC Capital Markets in San Francisco.
“The vast majority of the move in the stock is due to improved perception of the value of Yahoo’s stakes in Asia,” said Mahaney, who rates the shares outperform, the equivalent of a buy. Mayer “has been a small part of the rise,” he said.
Shopping Spree
After selling half its stake in Alibaba last year, Yahoo currently owns 23 percent of the Hangzhou, China-based online marketplace, which could hold an IPO in Hong Kong this year. Alibaba’s value probably doubled in the past year to about $80 billion, according to Brian Weiser, an analyst at Pivotal Research Group LLC.
Emboldened by proceeds of the Alibaba sale, Mayer embarked on a shopping spree that comprised at least 17 companies, including her $1.1 billion purchase of blogging platform Tumblr Inc., as well as mobile-application makers Stamped Inc. and Jybe Inc. and Summly Ltd., the news-reading application created by teenager Nick D’Aloisio. Earlier this month, Yahoo paid about $70 million for Xobni Corp., a maker of contact-management software, two people said at the time.
The acquisitions have created confusion for some marketers, who are still unclear about whether to shift their spending to ads on Tumblr and Yahoo’s other new properties, said Rob Norman, chief digital officer of media agency GroupM, which works with Yahoo advertisers including Volkswagen AG. GroupM is the media planning and buying division of WPP Plc, which also owns MEC.
Ad Strategy
“The acquisition strategy is either not especially clever or too clever for me,” Norman wrote in an e-mail. “I am negative on Tumblr, as I don’t believe it’s truly social.”
Mayer discussed a restructuring of the sales staff on a conference call with analysts in January. The initiative, led by Chief Operating Officer Henrique de Castro, will create sales teams that serve all clients in a particular industry, such as consumer-packaged goods, Mayer said.
“Customers felt it was sometimes confusing and cumbersome to do business with us,” Mayer said in January. “Looking at our sales organization through the eyes of our clients, we aligned into a solutions focused team that offers a single point of contact for each customer.”
Investor Doubt
While Mayer takes time to hone her pitch to advertisers, Google and Facebook are winning Yahoo’s business. Yahoo’s share of the $17.5 billion market for display ads, its core business, will slip to 7.9 percent in 2013 from 9.2 percent last year, estimates researcher EMarketer Inc. Google will climb almost three percentage points to 18 percent, while Facebook will increase about two points to 17 percent, EMarketer said.
Part of the advantage those two rivals have accumulated is in mobile ads, where Yahoo has yet to create a compelling offering to marketers, said Clark Fredricksen, vice president at New York-based EMarketer.
“Yahoo appears to have a ways to go before it can stand side by side with Google and Facebook in the mobile space,” Fredricksen said in an interview.
Skepticism of Mayer’s strategy is also reflected in the options market, where investors are betting that Yahoo shares are more likely to decline in the coming months. Puts protecting against a 10 percent drop in Yahoo shares cost 3.67 points more than calls betting on a 10 percent gain, according to one-month data compiled by Bloomberg.
“Increasingly, investors are going to want to see some top-line growth,” said Kevin Stadtler, president of Fort Worth, Texas-based Stadtler Capital Management LLC, who manages $16.3 million in assets, including Yahoo shares. “You’ve acquired a number of properties -- let’s see some revenue growth.”
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